Q4 2024 Earnings Summary
- Strong Financial Performance in 2024: Hamilton Insurance Group reported a record net income of $400 million, up 55% over the prior year, with a return on average equity of 18.3% compared to 13.9% in the prior year. The company also grew book value per share by 24% over the prior year.
- Consistent Growth and Diversification: The company achieved gross premiums written of over $2.4 billion, an increase of 24% over 2023, with business split 45% Casualty, 30% Specialty, and 25% Property, indicating a well-diversified global book of business. Both underwriting segments reported strong results, with Bermuda gross premiums growing 32% to $1.1 billion.
- Ratings Upgrades and Capital Management: In 2024, Hamilton received an upgrade to A from A.M. Best and an initial published rating of A- from Fitch, enhancing its ability to attract profitable business. The company also repurchased 10.6 million shares at a total cost of $138 million, demonstrating responsible capital management and increasing shareholder value.
- Hamilton expects significant losses of $120 million to $150 million from the Los Angeles wildfires, impacting Q1 2025 results. This estimate is based on an industry insured loss range of $35 billion to $45 billion.
- In Q4 2024, net income decreased to $34 million from $127 million in Q4 2023, and the combined ratio increased to 95.4% from 90.2%, primarily due to higher catastrophe losses. This indicates increased exposure to natural disasters and potential pressure on profitability.
- The company anticipates downward pressure on property catastrophe reinsurance rates in the January 1 renewals, suggesting a potential softening of the market, which may affect future profitability in this segment.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +15% | The increase from 495,162K USD to 570,493K USD was driven by strong growth in premium income, underpinned by robust performance in both the International (350.54M USD) and Bermuda (193.43M USD) segments, which indicates a diversified revenue base and effective market penetration despite challenging external factors. |
Operating Income | -24% | Operating income fell from 101,375K USD to 76,693K USD mainly due to increased expense pressures and margin compression; despite higher revenue, rising operational costs and underwriting challenges eroded profitability compared to the prior period. |
Net Income | -44% | Net income dropped from 133,349K USD to 74,409K USD as a result of significant margin pressure from higher underwriting expenses and possibly increased claims, reflecting the difficulty of converting revenue growth into bottom-line improvements compared to the previous period. |
Earnings Per Share (Basic) | -72% | EPS declined sharply from 1.2 USD to 0.33 USD due to the combined effect of substantially lower net income and potential changes in the shares outstanding, demonstrating that reduced profitability has had an outsized impact on shareholder returns relative to past performance. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Corporate Expenses | Q1 2025 | no prior guidance | $50 million to $55 million per year | no prior guidance |
Growth from A.M. Best Rating Upgrade | Q1 2025 | no prior guidance | Additional $80 million in gross premiums written with total growth of about $160 million tied to the upgrade | no prior guidance |
Mid-Year Property Cat Renewals | Q1 2025 | no prior guidance | Higher level of demand with increased rates for loss-affected accounts due to wildfires and hurricanes in 2024 | no prior guidance |
International Segment Opportunities | Q1 2025 | no prior guidance | Attractive opportunities in specialty insurance lines – especially in marine (hull, liability, cargo) and property; expanding marine offerings | no prior guidance |
Hamilton Select Platform | Q1 2025 | no prior guidance | Strong and increasing submission flow in U.S. E&S market, particularly in general and excess casualty | no prior guidance |
Loss Reserves | Q1 2025 | no prior guidance | Will monitor and adjust for inflationary trends—especially U.S. social inflation in casualty lines—and maintain a disciplined reserving philosophy | no prior guidance |
International Segment Premium Growth | FY 2024 | no prior guidance | 15% to 20% premium growth | no prior guidance |
Impact of AM Best Rating Upgrade | FY 2024 | no prior guidance | 15% to 20% premium uplift for Bermuda reinsurance business on a run-rate basis | no prior guidance |
Expense Ratio | FY 2024 | no prior guidance | Targeted continued improvement in the expense ratio, with consistent reductions since 2019 | no prior guidance |
Research analysts covering Hamilton Insurance Group.