Hamilton makes preliminary filing for IPO

Bermuda-based Hamilton Insurance Group, which was reported to be looking at strategic options including an initial public offering or a private sale, appears to have decided to go public.

The specialty re/insurer said today that it has submitted, on a confidential basis,

a draft registration statement on Form S-1 with the US Securities and Exchange Commission (“SEC”), relating to a proposed underwritten initial public offering of its common shares.

The company said initial public offering is subject to market and other conditions and the completion of the SEC’s review process.

It said the number of common shares to be offered and the price range for the proposed offering have not yet been determined.

Reuters news agency reported in June that Hamilton, which was founded by insurance industry icon Brian Duperreault in 2013, was considering strategic options including an IPO and a private sale.

Reuters said then that the transaction could value Hamilton at more than $2 billion, quoting one of its sources. The group reported a book value of nearly $1.7 billion at the end of December. Listed peers trade at a premium to their book value.

That report said an IPO was more likely to happen after hurricane season ends in November.

According to a filing with the Bermuda Monetary Authority for the year ending December, 2022, Hamilton lost $29.9 million for the year, largely due to a drop in investment income from $308 million to $64 million. For the 12 months to November, 2021, Hamilton had net income of $249 million.

The company had gross written premiums of $1.6 billion in 2022, up from $1.45 billion in 2021.

Shareholders’ equity was $1.66 billion and it had assets of $5.8 billion. The company increased its reserves for losses and loss adjustment expenses to $2.85 billion from $2.4 billion.

Reuters noted in June that the timing of the strategic discussions comes after shares in Skyward Specialty soared after their New York debut in January. Bermuda-based Everest Re successfully raised about $1.5 billion to fund growth last month. Bermuda-based Fidelis Insurance raised $100 million in an IPO which closed in July.

Private sales have also returned, most notably the near-$3 billion sale by AIG of its reinsurance unit Validus Re in May  to RenaissanceRe.

A property and casualty insurer and reinsurer, Hamilton was established in 2013 and was run by Duperreault until he departed in 2017 to become CEO of American International Group.

It has since been led by Pina Albo (pictured), with Hamilton deriving the bulk of its revenues from business in the US followed by Britain, where it is active in the Lloyd's of London insurance market.

Hamilton has a partnership with Two Sigma, whereby the assets which Hamilton generates are managed by the US hedge fund.

Reuters said a sale could be complicated by Hamilton's convoluted governance structure. No one shareholder in Hamilton owns more than 11% of the group, while all investors have their voting rights capped at 9.5%, according to its 2022 financial condition report.