Investment gains drive Hamilton to triple its profit
A seven-fold increase in net realized and unrealized gains on investments drove Hamilton Insurance Group to triple its first quarter net income, offsetting a drop in its international segment's underwriting profit.
The Bermuda-based specialty insurer said net income for the first quarter was $157 million compared to $51 million in the same period in 2023.
The news came as the company announced it was buying back the shares of investor Blackstone for $109 million. (See related story)
The improvement was largely driven by the increase in net realized and unrealized gains of $255 million compared to $35 million in 2023 and improved investment income, which rose from $2.3 million to $12 million.
That offset a 4.4% drop in underwriting income, which slipped from $34 million to $32.5 million despite big jumps in gross written premium.
The company was also hit by $37.9 million in losses due to the Baltimore Bridge collapse.
“I am very proud of Hamilton’s financial results for the first quarter," said Pina Albo, CEO of Hamilton. "Not only did we generate strong underwriting and investment returns but also, this quarter marks our sixth consecutive quarter of underwriting profitability. I am also extremely pleased about our ability to take advantage of market opportunities with another quarter of double-digit growth, a momentum we expect will be enhanced by our recent AM Best ratings upgrade.”
Gross written premiums rose 34.1% to $721.9 million, while net premiums earned increased to $$385.3 million, an increase of 35.7%.
The company's combined ratio deteriorated to 91.5% from 87.9%, largely because of the drop in underwriting income in the international segment.
In the international segment, Hamilton said the attritional loss ratio for the current current year, net of reinsurance, was 56%, an increase of 6.1 points compared to the same period in 2023. This was largely driven by net losses of $11.8 million, or 6.0 points, arising from the Baltimore Bridge collapse.
Net unfavorable attritional prior year reserve development, net of reinsurance, was $5.8 million, primarily driven by two specific large losses on its specialty insurance class.
The international segment's underwriting profit dropped 67.5% to $5.3 million from $16.3 million while its combined ratio rose to 97.2% from 89.1%.
In its Bermuda segment, the attritional loss ratio (current year), net of reinsurance, was 58.4%. The increase of 10.3 points compared to the same period in 2023 was primarily driven by net losses of $26.1 million, or 13.8 points, arising from the Baltimore Bridge collapse.
Net unfavourable attritional prior year reserve development, net of reinsurance, was $5.8 million, primarily driven by two specific large losses on its specialty insurance class.
The Bermuda segment recorded an underwriting profit of $27.2 million compared to $17.6 million while it combined ratio improved to 85.5% from 86.9%.
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