Ladies and gentlemen, thank you for joining us, and welcome to the Third Quarter 2025 Hamilton Insurance Group Limited Conference Call. [Operator Instructions] I will now hand the conference over to Darian Niforatos, Vice President, Investor Relations and Finance. Darian, please go ahead.

Thanks, operator. Hi, everyone, and welcome to the Hamilton Insurance Group third quarter 2025 earnings conference call. The Hamilton executives leading today's call are Pina Albo, Group Chief Executive Officer; and Craig Howie, Group Chief Financial Officer. We are also joined by other members of the Hamilton management team. Before we begin, note that Hamilton financial disclosures, including our earnings release, contain important information regarding forward-looking statements. Management comments regarding potential future developments are subject to the risks and uncertainties as detailed. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I'll hand it over to Pina.

Thank you, Darian, and welcome to everyone joining us today. I'm pleased to report that Hamilton had another very strong quarter with $136 million of net income, representing an annualized return on average equity of 21%. This impressive result started with strong performance from our core activity, namely underwriting, where we reported a combined ratio of 87.8% and underwriting income of $64 million in the quarter. These results are a direct consequence of the balanced and diversified portfolio that we have curated over the years as well as our disciplined underwriting approach. Investment income of $98 million was also significant this quarter with contributions from both our Two Sigma Hamilton Fund and our fixed income portfolios. So in short, both our underwriting and investment played a part in our excellent results this quarter. Before providing more commentary on our performance and reflections on the market in general, I want to speak to some of our recent management appointments. Hamilton continues to shine as a true magnet for top-tier talent. In addition to developing and promoting from within our ranks, we continue to attract exceptional leaders from outside the organization. On the latter note, we were thrilled to welcome Mike Mulray as Chief Underwriting Officer at Hamilton Select. Mike brings over 25 years of underwriting expertise and strong market relationships, which will prove opportune as we continue to grow our U.S. E&S platform. With respect to drawing from our bench strength, we are also delighted to announce the well-deserved promotion of Susan Steinhoff to Chief Underwriting Officer of Hamilton Re effective January 1, 2026. Susan has more than 20 years of industry experience and is one of the longest-serving underwriters at Hamilton, having joined the company in 2014. Turning now to some of our highlights for the third quarter. Hamilton continues…

Thank you, Pina, and hello, everyone. Hamilton had another strong quarter of financial results with net income of $136 million, equal to $1.32 per diluted share, producing an annualized return on average equity of 21%. We had operating income of $123 million, equal to $1.20 per diluted share. producing an annualized operating return on average equity of 19%. We also increased book value per share by 6% in the quarter and 18% year-to-date to a record $27.06. These results compare favorably to net income of $78 million or $0.74 per diluted share, an annualized return on average equity of 14% and operating income of $17 million or $0.16 per diluted share and an annualized operating return on average equity of 3% in the third quarter of 2024. For our underwriting results, Hamilton continues to grow its top line at an impressive double-digit rate. Our 2025 year-to-date gross premiums written increased to $2.3 billion compared to $1.9 billion this time last year, an increase of 20%. All 3 of our operating platforms, Hamilton Global Specialty, Hamilton Select and Hamilton Re were able to strategically grow in the lines of business that were most attractive while shrinking those lines that did not meet our underwriting targets. In terms of our underwriting performance, our year-to-date combined ratio was 95.2%. Now for some more detail on our quarterly underwriting figures. Hamilton had underwriting income of $64 million for the third quarter compared to underwriting income of $29 million in the third quarter last year. The group combined ratio was 87.8% compared to 93.6% in the third quarter of 2024. In the third quarter, the loss ratio decreased 7.7 points to 53.3% compared to 61.0% in the prior period. The decrease was primarily driven by no catastrophe losses in the quarter compared to 8.5 points…

[Operator Instructions] Your first question comes from the line of Hristian Getsov with Wells Fargo.

Okay. My first question is on the Bermuda underlying loss ratio. So if I exclude the refinery fire, so it ticked up about 1.8 points year-over-year. And I understand in part that's a little bit driven by mix towards casualty. But I guess as we go into '26 in casualty, just given what they're seeing in terms of rate versus kind of the rest of the book, particularly property, like how should we think about that underlying margin trending as we kind of see that mix shift continue?

This is Craig. We certainly see that the same exact thing that you're seeing is that is a mix of business. That's what's driving that loss pick. So again, because of mix of business, you're going to see that change in the loss ratio. You'll also see the change in the acquisition expense ratio. What I would say to you is it really depends on the continuous change in the mix of business, but we still continue to write a diversified book of business, and we continue to grow property as well as specialty in the same book. So what I would say is continue to look at it in the same realm that you're looking at it on a year-to-date basis for this year, not necessarily on a quarterly basis.

Got it. And then in terms of -- can you guys maybe provide a little bit color on changes you're seeing in loss trends, particularly within your casualty insurance and reinsurance portfolio versus prior quarters? And maybe if you could provide some further color on how you're managing those exposures. I mean we understand that line is getting good rate, but it's obviously for a good reason just given what you're seeing with social inflation. But like what's kind of your process in managing those exposures away from just generally keeping limits a little bit lower?

Yes. Why don't I take that? We have seen some growth both in our reinsurance portfolio and also to a lesser extent in our insurance portfolio on the casualty classes. From the reinsurance portfolio, let's remember, we started from a very, very low base of casualty. And although we've had growth, that growth has been in recent years when the rates have improved. We have a very strong feedback loop across pricing -- underwriting, pricing and reserving. And those are the guardrails that we operate in when we are looking to onboard this kind of business. We still feel comfortable that the rate increases that we are seeing in casualty are keeping place with a trend. So -- and that actually same view transcends to our casualty insurance book. If you look just at Hamilton Select, we have a significant growth in casualty insurance in our Select operations. Remember, however, that is a very specific book of hard-to-place niche business. And there, we get to tailor the coverages and set pricing terms. And there, we also see attractive increases in casualty pricing, and that's what makes us comfortable to write this business. Just one note, just to back up from just a moment to remember, we're an underwriting shop. So we have this ability to lean in when the leaning is good and back away when it's less the case. So if I look just across property, when property increased back in the reset, our -- we leaned into property and grew our book on a group basis by 60%. On the casualty side, again, starting from a low base, when casualty pricing started getting better, we leaned into casualty and grew our casualty business from about 2022 onwards by around 80%. However, that was always done in the context of a well-balanced portfolio. So if you look at our total casualty writing today versus 2022, it's more or less the same as a percentage of our portfolio. That's how we manage this business.

Your next question comes from the line of Daniel Cohen with BMO.

I think I'll start in the Bermuda casualty growth, just unpacking this number. Can you maybe quantify the larger renewal moving from 2Q to 3Q, so we can get a normalized sense of that impact? And also if there was a meaningful AM Best contribution that you'd like to call out as we think of growth getting more moderate in this line?

Sure. Why don't I start with that one? Maybe just by way of background again, the AM Best upgrade was a gamechanger for this organization, and it came at a very opportune time and increased opportunities for us across several lines of business, including casualty. It was also a very important validation of how far Hamilton has evolved as a company. So that's by way of background on AM Best. I'm going to let Craig to dive in more detail on the numbers here. So Craig, over to you.

Thanks, Pina. We continue to see new and renewal business since the upgrade, and we continue to see top line premium based on our written patterns coming through our financials, some of which is attributable to the rating upgrade from AM Best. As you're aware, a large portion of this business is pro rata casualty reinsurance business. So when you look at that, the way it's booked on a GAAP basis, GAAP accounting basis throughout the year, you can take an example, if we wrote $40 million of business at January 1, you would expect to see $10 million come through each quarter on a pro rata basis. Having said that, we saw about $50 million recorded in the third quarter. We expect to see a similar amount come through again in the fourth quarter. And after that, it would be difficult probably to attribute either any renewal business strictly to the rating upgrade compared to our ongoing client relationships. And then, the other thing that you asked about was specifically the renewal that changed from period to period. We had a renewal that changed from the second quarter renewal to a third quarter renewal, and that was about $20 million of the growth in Bermuda this quarter, again, in the casualty line.

And then switching gears to Hamilton Select. I think you said 26% growth there and still healthy submission flows, but that is quite the decel from the first half of '25. Is that just you pulling back from professional lines? Or are rates impacting that step down as well?

Sorry, I'll take that one. That growth of 26% this quarter for Select it involved a 50% growth in casualty, where we're seeing the most opportunity. It involves writing less of some business that we thought was not attractively priced. But that growth, that 26% growth is completely in line with our plans.

Okay. And if I could sneak one more in on just the fee income, so we get a better sense of that after the Lloyd's MGA moving out. Is this quarter the right run rate for that number? Or should we be thinking about that going to 0 over time, just in international?

Okay. I'll kick off here, Dan. Maybe just by way of background, and then I'm going to have Craig talk about the modeling part. We derive fee income from our -- the consortia business that we write out of London. Now this is business -- these are business arrangements, where others have recognized our expertise in certain classes and allow us to write on their behalf. In other words, they're leveraging our core competency, which is underwriting, and we're driving fee income from that. The same is the case for our third-party capital operation where we also derive fee income. The third-party syndicate management was part of our 2019 acquisition and the decision to cease managing that third-party syndicates was made because unlike underwriting, it's not a core -- not seen as core to our operations, and that is why we ceased that. But Craig, why don't I pass to you for general how to model fee income?

I think as Pina said, on the international side, Dan, that was your specific question. I think what you should expect going forward is about $2 million per quarter. On the Bermuda side, as you may recall, for our iOS platform, A, [indiscernible] we booked or plan for about $0.5 million per quarter. So for the full group, about $2.5 million per quarter. That's a baseline. That's before any performance-based fees, which are a little bit harder to plan for. So about $2.5 million per quarter for the group.

Your next question comes from the line of Bob Hung with Morgan Stanley.

This is Sid on for Bob. Going back to Hamilton Select, you guys mentioned the new Chief Underwriting Officer you guys hired. Can you just give some color on like what are the objectives for the business going forward and how we should think about growth and underwriting profitability there?

Sure, Bob. I'll take that one. We're actually thrilled to have onboarded Mike to our Hamilton Select operations. Many of us have interacted with Mike in, for years, in different capacities, and Craig worked directly with him when he was at Everest. So he's a known quantity to this group. And just as a reminder, Hamilton Select, the operation he's joining, the book there is purely U.S. E&S. We do not write admitted business. And Select's objectives in that class are no different than the objectives of our other underwriting platforms, and they start with producing sustainable underwriting profitability. So in the context of our underwriting strategy, our disciplined underwriting culture and our reserve philosophy, we're confident that Hamilton Select is going to continue to thrive and are, again, thrilled to have Mike on board.

And then kind of just looking a little bit more broadly, I was wondering what you guys are seeing in the like MGA market space and any competition there? Any color you can give would be helpful.

Yes. Certainly, as you've seen or heard from others in the market, some of those MGAs are providing increased competition in the U.S. insurance market. Just as a reminder, we only have a limited amount of MGA relationships, and they're predominantly out of our London operations. And these are relationships that we've had for several years, so tried and tested. We do not give away the pen. For example, at Hamilton Select, that is all our own underwriting, but we do see some irresponsible behavior in the market with those players out there. We don't let them hold our pen.

Your next question comes from the line of [ Patrick Marshall ] with Citi.

Just a quick question on your disclosure around the decreased duration in your portfolio and how it relates to your increase in casualty? And how should we think about kind of where the property -- where your portfolio will move if your casualty mix goes forward -- increases going forward?

Go ahead, Craig.

Patrick, this is Craig. So first of all, the duration of the overall fixed income portfolio only just -- it basically just ticked down from 3.4 years to 3.3 years. It's really more of a rounding. But I agree with you, as we go longer in the portfolio or business mix change more towards casualty. But what you just heard Pina say is our mix really hasn't changed overall. Our book is still fully diversified and the amount of casualty business we're writing now compared to just 3 years ago is about the same mix in our book. So I really don't see a major change in the overall duration of the entire fixed income portfolio.

And then one follow-on. Can you offer any color on the nature of the large losses noted in the press release?

Sure, Patrick. The large loss that we had mentioned in the press release was part of my prepared comments in the call as well. It was related to the Martinez refinery fire. That was a first quarter event. The initial loss estimates of that event were in the $300 million to $800 million range for an industry loss. What we saw in September is that industry loss nearly doubled. And as a result, we revised our estimate in the third quarter for that event. We didn't see any really other -- any significant large losses in the quarter and any other exposure that we had was manageable and included within our attritional loss picks. That was the largest loss. And again, it was about 2.8 points in the Bermuda segment and about 2.2 points on the group.

[Operator Instructions] Your next question comes from the line of Tommy McJoynt from KBW.

With the rate softening and really heightened competition in property lines and in light of the strong opportunity set that it sounds like you still see in casualty and specialty, would you be surprised if property written premium declined in 2026?

Hi, Tommy, Pina here. I'll take that. So let's start with property cat. We do expect to see, as I mentioned in the call, some more competition on property cat in the upper layers. But let's not forget where we started from, right? Rates went up dramatically since the 2023 reset. Terms, conditions and attachment points also improved. And while we're seeing some downward pressure on the cat rates in recent renewals, certainly, they're nowhere near the increases we achieved since 2023. So the way we look at it is, is that business still producing an attractive risk-adjusted return? And if it is, we will continue to write it. And if we have some opportunity, we might even increase our writing of property cat on select clients. In the insurance space, I think what you're going to see is what I said earlier on the larger accounts, those larger shared and layer accounts on the insurance side, we're expecting to see increased competition because they also enjoy back-to-back increases. So that drew attention. You can probably see us reducing there. But on the property insurance side, we have a couple, as I mentioned, of new initiatives in the U.S. E&S space where we're targeting the smaller to midsized property risks, which are still getting attractively priced, and you can see some growth continuing there. Does that answer your question?

Yes, that does. And then switching over, looking at the expense ratio and perhaps more specifically the acquisition cost ratio, you attributed the increase year-over-year to the business mix shift as casualty reinsurance has seen outsized growth. Because there is the lag between written and earned, how much more and how many more quarters should we expect the acquisition cost ratio to continue increasing year-over-year? Or is there a terminal acquisition cost ratio that you should get to with the current business mix?

Tommy, this is Craig. What I would say to you is, again, if you look at where we are on a year-to-date basis compared to where we were for a full year last year, you're seeing a slight uptick, again, because of more casualty business, because of more pro rata business that we've been writing this year. But it's not a huge change. So instead of looking at quarter-to-quarter where you might see some lumpiness. Again, if you look at year-to-date numbers compared to the full year last year, you're just going to see a slight uptick on those acquisition expenses, again, because of the mix of business. So it will continue to come in as we write more business. But as Tina just said about property on that previous question, if we continue to write property, that will keep that ratio down as well.

Your next question is a follow-up from Daniel Cohen with BMO.

Just one quick one on. Do you have an early estimate of your exposure to the cats quarter-to-date just on Jamaica and maybe yesterday's Louisville plane tragedy?

Daniel, this is Craig. A little too early to talk about the plane tragedy from yesterday. I know it's -- it was a plane crash that crushed into a couple of commercial buildings, but a little too early to know about that loss. As far as Hurricane Melissa goes through the Caribbean, we don't have much exposure on that type of a loss that would go through that environment, although it was a very devastating loss and a lot of loss of lives, the industry loss estimate for property and other things for insurance losses is not that great, and we don't expect to have much exposure there at all.

There are no further questions at this time. I will now turn the call back to Pina Albo for closing remarks.

Well, I just want to thank everybody who took the time to join us today to discuss our excellent results for the quarter, and we look forward to speaking to you again with our year-end results in due course. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.