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August 7, 2024 Reinsurance

Second Quarter 2024 Financial Supplement

U.S. Markets via PUBT

Hamilton Insurance Group, Ltd. Supplementary Financial Information

June 30, 2024

Investor Contact

[email protected]

Hamilton Insurance Group, Ltd.
Table of Contents
	Page
I.Basis of Presentation	1

Financial Highlights

	Financial Highlights	4
	Key Operating and Financial Metrics	5
III.	Summary Consolidated Results
	Statements of Operations	6
	Consolidated Balance Sheets	7
	Reconciliation of Consolidated GAAP Balance Sheet to Unconsolidated Balance Sheet	8
	Net Investment Return	9
	Fixed Maturity andShort-TermInvestments	10
IV. Segment Results
	Consolidated Underwriting Results	11
	5Q Consolidated Underwriting Results - Group	13
	5Q Underwriting Results - International	14
	5Q Underwriting Results - Bermuda	15
V.	Other Information
	Modeled Exposure to Catastrophe Losses (PML)	16
	Non-GAAPMeasures	17

Basis of Presentation

All financial information contained herein is unaudited, however, certain information relating to the consolidated balance sheet at the most recent year end is derived from or agrees to audited financial information. Unless otherwise noted, all data is in thousands, except for share and per share amounts and ratio information.

This information is being provided for informational purposes only. It should be read in conjunction with the documents filed by Hamilton Insurance Group, Inc. ("Hamilton") with the U.S Securities and Exchange Commission, including its Form 10-Q.

Special Note Regarding Forward-Looking Statements

This information includes "forward looking statements" pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of terms such as "believes," "expects," "may," "will," "target," "should," "could," "would," "seeks," "intends," "plans," "contemplates," "estimates," or "anticipates," or similar expressions which conceour strategy, plans, projections or intentions. These forward-looking statements appear in a number of places throughout and relate to matters such as our industry, growth strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. By their nature, forward-looking statements: speak only as of the date they are made; are not statements of historical fact or guarantees of future performance; and are subject to risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from the forward-looking statements contained herein. Such risks, uncertainties, and other important factors include, among others, the risks, uncertainties and factors set forth in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K") and other subsequent periodic reports filed with the Securities and Exchange Commission and the following:

our results of operations and financial condition could be adversely affected by unpredictable catastrophic events, global climate change or emerging claim and coverage issues;
our business could be materially adversely affected if we do not accurately assess our underwriting risk, our reserves are inadequate to cover our actual losses, our models or assessments and pricing of risks are incorrect or we lose important broker relationships;
the insurance and reinsurance business is historically cyclical and the pricing and terms for our products may decline, which would affect our profitability and ability to maintain or grow premiums;
we have significant foreign operations that expose us to certain additional risks, including foreign currency risks and political risk;
we do not control the allocations to and/or the performance of the Two Sigma Hamilton Fund, LLC ("TS Hamilton Fund")'s investment portfolio, and its performance depends on the ability of its investment manager, Two Sigma Investments, LP ("Two Sigma"), to select and manage appropriate investments and we have a limited ability to withdraw our capital accounts;
Two Sigma Principals, LLC, Two Sigma and their respective affiliates have potential conflicts of interest that could adversely affect us;
the historical performance of Two Sigma is not necessarily indicative of the future results of the TS Hamilton Fund's investment portfolio or of our future results;

Basis of Presentation (continued)

Special Note Regarding Forward-Looking Statements (continued)

our ability to manage risks associated with macroeconomic conditions resulting from geopolitical and global economic events, including public health crises, current or anticipated military conflicts, terrorism, sanctions, rising energy prices, inflation and interest rates and other global events;
our ability to compete successfully with more established competitors and risks relating to consolidation in the reinsurance and insurance industries;
downgrades, potential downgrades or other negative actions by rating agencies;
our dependence on key executives, including the potential loss of Bermudian personnel as a result of Bermuda employment restrictions, and the inability to attract qualified personnel, particularly in very competitive hiring conditions;
our dependence on letter of credit facilities that may not be available on commercially acceptable terms;
our potential need for additional capital in the future and the potential unavailability of such capital to us on favorable terms or at all;
the suspension or revocation of our subsidiaries' insurance licenses;
risks associated with our investment strategy, including such risks being greater than those faced by competitors;
changes in the regulatory environment and the potential for greater regulatory scrutiny of the Company going forward;
a cyclical downtuof the reinsurance industry;
operational failures, failure of information systems or failure to protect the confidentiality of customer information, including by service providers, or losses due to defaults, errors or omissions by third parties or our affiliates;
we are a holding company with no direct operations, and our insurance and reinsurance subsidiaries' ability to pay dividends and other distributions to us is restricted by law;
risks relating to our ability to identify and execute opportunities for growth or our ability to complete transactions as planned or realize the anticipated benefits of our acquisitions or other investments;
our potentially becoming subject to U.S. federal income taxation, Bermuda taxation or other taxes as a result of a change of tax laws or otherwise;
the potential characterization of us and/or any of our subsidiaries as a passive foreign investment company, or PFIC;
our potentially becoming subject to U.S. withholding and information reporting requirements under the U.S. Foreign Account Tax Compliance Act, or FATCA, provisions;
our costs will increase as a result of operating as a public company, and our management will be required to devote substantial time to complying with public company regulations;
if we were to identify a material weakness and were unable to remediate such material weakness, or fail to achieve and maintain effective internal controls, our operating results and financial condition could be impacted and the market price of our Class B common shares may be negatively affected;
the lack of a prior public market for our Class B common shares means our share price may be volatile and anti-takeover provisions contained in our organizational documents could delay management changes;
the potential that the market price of our Class B common shares could decline due to future sales of shares by our existing shareholders;
applicable insurance laws, which could make it difficult to effect a change of control of our company; and
investors may have difficulties in serving process or enforcing judgments against us in the United States.

There may be other factors that could cause our actual results to differ materially from the forward-looking statements, including factors disclosed under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Form 10-K and other subsequent periodic reports filed with the Securities and Exchange Commission. You should evaluate all forward-looking statements made herein in the context of these risks and uncertainties.

Basis of Presentation (continued)

Special Note Regarding Forward-Looking Statements (continued)

You should read this information completely and with the understanding that actual future results may be materially different from expectations. We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements contained herein apply only as of the date hereof and are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

Financial Highlights

	Three Months Ended June 30,			Six Months Ended June 30,			Year Ended
($ in thousands)		2024			2023			2024			2023	2023
Net income (loss) attributable to common shareholders	$	131,085	$	36,787	$	288,259	$	88,279	$	258,727
Underwriting income (loss)
Gross premiums written	$	603,304	$	504,960	$	1,325,245	$	1,043,124	$	1,951,038
Net premiums written		475,068			384,708			989,948			733,206	1,480,438
Net premiums earned		418,764			331,460			804,067			615,362	1,318,533
Underwriting income (loss)	$	65,299	$	34,894	$	97,825	$	68,956	$	129,851

Key Ratios:
Attritional loss ratio - current year	51.6%	51.0%	54.3%	50.1%	52.2%
Attritional loss ratio - prior year development	(0.4%)	(1.6%)	1.3%	(0.6%)	(0.8%)
Catastrophe loss ratio - current year	0.0%	5.0%	0.0%	3.6%	3.2%
Catastrophe loss ratio - prior year development	0.0%		(0.3%)		0.0%	0.2%	(0.4%)
Loss and loss adjustment expense ratio	51.2%	54.1%	55.6%	53.3%	54.2%
Acquisition cost ratio	23.0%	23.2%	22.5%	23.1%	23.4%
Other underwriting expense ratio	10.2%		12.2%		9.8%	12.4%	12.5%
Combined ratio	84.4%	89.5%	87.9%	88.8%	90.1%

Investments
Total assets	$	7,623,103	$	6,280,551	$	7,623,103	$	6,280,551	$	6,671,355
Total cash and invested assets(1)		4,351,728			3,558,285			4,351,728			3,558,285		3,981,676
Total investment return(2)		95,674			22,196			243,505			58,178		218,506
Two Sigma Hamilton Fund
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - TSHF.		145,183			29,981			408,002			40,045		143,655
Net income (loss) attributable tonon-controllinginterest - TSHF		69,297			4,501			189,455			6,011		21,560
	$	75,886		$	25,480		$	218,547		$	34,034	$	122,095
Two Sigma Hamilton Fund return, net of investment management fees and performance incentive
	4.3%			1.6%			12.9%			2.1%		7.6%
allocations
Fixed income, short term investments and cash and cash equivalents
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other..	$	19,788	$	(3,284)	$	24,958	$	24,144	$	96,411

Total cash and total investments, plus receivables for investments sold, less payables for investments purchased, payables to related parties (TSHF) and non-controlling interest (TSHF).
Net realized and unrealized gains (losses) on investments, plus net investment income (loss), less non-controlling interest.

Financial Highlights

Key Operating and Financial Metrics

	Three Months Ended June 30,			Six Months Ended June 30,			Year Ended
($ in thousands, except per share amounts)		2024			2023			2024			2023	2023
Income (loss) per share attributable to common shareholders - basic	$	1.24	$	0.35	$	2.66	$	0.85	$	2.47
Income (loss) per share attributable to common shareholders - diluted	$	1.20	$	0.35	$	2.57	$	0.84	$	2.44
Weighted average common shares outstanding - basic		105,909			103,732			108,416			103,714	104,563
Weighted average common shares outstanding - diluted		109,603			104,895			112,072			104,741	106,203
Retuon average common shareholders' equity - annualized		23.6%			8.5%			26.9%			10.3%	13.9%
		June 30,		December 31,
		2024			2023
Closing common shareholders' equity less intangible assets	$	2,144,137	$	1,956,854
Closing common shareholders' equity	$	2,238,547	$	2,047,850
Tangible book value per common share	$	21.04	$	17.75
Book value per common share	$	21.96	$	18.58
Year-to-datechange in tangible book value per common share		18.5%			16.0%
Year-to-datechange in book value per common share		18.2%			15.1%

Summary Consolidated Results

Statements of Operations

	Three Months Ended June 30,			Six Months Ended June 30,			Year Ended
($ in thousands, except per share amounts)		2024			2023			2024			2023	2023
Revenues
Gross premiums written	$	603,304	$	504,960	$	1,325,245	$	1,043,124	$	1,951,038
Reinsurance premiums ceded		(128,236)			(120,252)			(335,297)			(309,918)	(470,600)
....................................................................................................................................................Net premiums written		475,068			384,708			989,948			733,206	1,480,438
Net change in unearned premiums		(56,304)			(53,248)			(185,881)			(117,844)	(161,905)
....................................................................................................................................................Net premiums earned		418,764			331,460			804,067			615,362	1,318,533
Net realized and unrealized gains (losses) on investments		151,251			19,406			406,622			54,539	209,610
Net investment income (loss)		13,720			7,291			26,338			9,650	30,456
...............Total net realized and unrealized gains (losses) on investments and net investment income (loss)		164,971			26,697			432,960			64,189	240,066
Third party fee income		5,989			2,449			13,470			5,452	18,234
Other income (loss), excludingthird-partyfee income		-			(29)			-			-	397
Net foreign exchange gains (losses)		(1,782)			(3,341)			(3,911)			(5,387)	(6,185)
..............................................................................................................................................................Total revenues		587,942			357,236			1,246,586			679,616	1,571,045
Expenses
Losses and loss adjustment expenses		214,494			179,416			446,846			327,977	714,603
Acquisition costs		96,305			76,856			180,858			141,995	309,148
Other underwriting expenses		48,655			42,743			92,008			81,886	183,165
Corporate expenses		16,262			6,491			27,764			13,154	76,691
Amortization of intangible assets		3,317			2,305			6,569			5,075	10,783
Interest expense		6,031			5,189			11,738			10,718	21,434
.............................................................................................................................................................Total expenses		385,064			313,000			765,783			580,805	1,315,824
Income (loss) before income tax		202,878			44,236			480,803			98,811	255,221
Income tax expense (benefit)		2,496			2,948			3,089			4,521	(25,066)
.........................................................................................................................................................Net income (loss)		200,382			41,288			477,714			94,290	280,287
Net income (loss) attributable tonon-controllinginterest		69,297			4,501			189,455			6,011	21,560
Net income (loss) and other comprehensive income (loss) attributable to common shareholders	$	131,085	$	36,787	$	288,259	$	88,279	$	258,727
Per share data

Income (loss) per share attributable to common shareholders - basic	$	1.24	$	0.35	$	2.66	$	0.85	$	2.47
Income (loss) per share attributable to common shareholders - diluted	$	1.20	$	0.35	$	2.57	$	0.84	$	2.44
Retuon average common shareholders' equity - annualized		23.6%			8.5%			26.9%			10.3%	13.9%

Summary Consolidated Results

Consolidated Balance Sheets

		June 30,			March 31,			December 31,			September 30,			June 30,
($ in thousands, except share information)		2024			2024			2023			2023			2023
Assets
Fixed maturity investments, at fair value (amortized cost June 30, 2024: $2,119,739)	$	2,068,930	$	1,877,130	$	1,831,268	$	1,631,471	$	1,451,249
Short-term investments, at fair value (amortized cost June 30, 2024: $461,525)		463,542			352,068			428,878			348,968			336,587
Investments in Two Sigma Funds, at fair value (cost June 30, 2024: $711,236)		923,682			953,659			851,470			979,986			868,486
.......................................................................................................................................................................Total investments		3,456,154			3,182,857			3,111,616			2,960,425			2,656,322
Cash and cash equivalents		1,016,573			1,085,038			794,509			804,548			818,522
Restricted cash and cash equivalents		98,279			95,565			106,351			98,979			106,696
Premiums receivable		933,211			856,111			658,363			689,042			756,275
Paid losses recoverable		147,690			169,469			145,202			138,314			132,528
Deferred acquisition costs		203,279			190,883			156,895			151,314			145,280
Unpaid losses and loss adjustment expenses recoverable		1,160,309			1,167,504			1,161,077			1,157,123			1,162,940
Receivables for investments sold		12,307			17,777			42,419			19,044			36
Prepaid reinsurance		299,574			285,984			194,306			232,211			251,818
Intangible assets		94,410			92,651			90,996			89,589			88,770
Other assets		201,317			205,186			209,621			164,015			161,364
...............................................................................................................................................................................Total assets	$	7,623,103		$	7,349,025		$	6,671,355		$	6,504,604		$	6,280,551
Liabilities, non-controlling interest, and shareholders' equity
Liabilities
Reserve for losses and loss adjustment expenses	$	3,242,893	$	3,148,782	$	3,030,037	$	2,948,822	$	2,899,100
Unearned premiums		1,202,371			1,132,477			911,222			951,596			924,723
Reinsurance balances payable		399,633			367,123			272,310			367,954			381,678
Payables for investments purchased		111,280			55,071			66,606			117,836			18,670
Term loan, net of issuance costs		149,887			149,859			149,830			149,801			149,772
Accounts payable and accrued expenses		158,187			155,684			186,887			159,681			149,833
Payables to related parties		43,030			75,797			6,480			9,060			4,497
...........................................................................................................................................................................Total liabilities		5,307,281			5,084,793			4,623,372			4,704,750			4,528,273
Non-controllinginterest - TS Hamilton Fund		77,275			54,727			133			129			124
Shareholders' equity
Common shares:
Class A, authorized (June 30, 2024: 28,644,807), par value $0.01; issued and outstanding (June 30, 2024:		195			286			286			305			305
19,520,078)
Class B, authorized (June 30, 2024: 72,837,352), par value $0.01; issued and outstanding (June 30, 2024:		574			568			560			427			426
57,358,464)
Class C, authorized (June 30, 2024: 25,044,229), par value $0.01; issued and outstanding (June 30, 2024:		250			255			255			305			305
25,044,229)
Additionalpaid-in-capital		1,171,585			1,255,055			1,249,817			1,128,553			1,124,566
Accumulated other comprehensive loss		(4,441)			(4,441)			(4,441)			(4,441)			(4,441)
Retained earnings		1,070,384			957,782			801,373			674,576			630,993
.....................................................................................................................................................Total shareholders' equity		2,238,547			2,209,505			2,047,850			1,799,725			1,752,154
Total liabilities, non-controlling interest, and shareholders' equity
$	7,623,103		$	7,349,025		$	6,671,355		$	6,504,604		$	6,280,551

Summary Consolidated Results

Reconciliation of Consolidated GAAP Balance Sheet to Unconsolidated Balance Sheet

					June 30, 2024
	Consolidated GAAP			Two Sigma			Unconsolidated
			Hamilton Fund
($ in thousands)					Balance Sheet(1)
	Balance Sheet			Balances
Assets
Fixed maturity investments, at fair value	$	2,068,930	$	-	$	2,068,930
Short-terminvestments, at fair value		463,542			(463,542)			-
Investments in Two Sigma Funds, at fair value		923,682			907,044			1,830,726
.........................................................................................................................................................................................................................Total investments		3,456,154			443,502			3,899,656
Cash and cash equivalents		1,016,573			(650,671)			365,902
Restricted cash and cash equivalents		98,279			-			98,279
Premiums receivable		933,211			-			933,211
Paid losses recoverable		147,690			-			147,690
Deferred acquisition costs		203,279			-			203,279
Unpaid losses and loss adjustment expenses recoverable		1,160,309			-			1,160,309
Receivables for investments sold		12,307			-			12,307
Prepaid reinsurance		299,574			-			299,574
Intangible assets		94,410			-			94,410
Other assets		201,317			(1,029)			200,288
.................................................................................................................................................................................................................................Total assets	$	7,623,103		$	(208,198)		$	7,414,905
Liabilities, non-controlling interest, and shareholders' equity
Liabilities
Reserve for losses and loss adjustment expenses	$	3,242,893	$	-	$	3,242,893
Unearned premiums		1,202,371			-			1,202,371
Reinsurance balances payable		399,633			-			399,633
Payables for investments purchased		111,280			(87,716)			23,564
Term loan, net of issuance costs		149,887			-			149,887
Accounts payable and accrued expenses		158,187			(177)			158,010
Payables to related parties		43,030			(43,030)			-
............................................................................................................................................................................................................................Total liabilities		5,307,281			(130,923)			5,176,358
Non-controllinginterest - TS Hamilton Fund		77,275			(77,275)			-
Shareholders' equity
Common shares:
Class A, par value $0.01		195			-			195
Class B, par value $0.01		574			-			574
Class C, par value $0.01		250			-			250
Additionalpaid-in-capital		1,171,585			-			1,171,585
Accumulated other comprehensive loss		(4,441)			-			(4,441)
Retained earnings		1,070,384			-			1,070,384
......................................................................................................................................................................................................Total shareholders' equity		2,238,547			-			2,238,547
Total liabilities, non-controlling interest, and shareholders' equity
$	7,623,103		$	(208,198)		$	7,414,905

We present our balance sheet on an unconsolidated basis above, which we believe is meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance. The unconsolidated balances are non-GAAP financial measures, with the above table providing an appropriate reconciliation to comparable GAAP measures.

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Disclaimer

Hamilton Insurance Group Ltd. published this content on 07 August 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2024 20:22:11 UTC.

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