Hamilton Insurance : First Quarter 2024 Financial Supplement

Hamilton Insurance Group, Ltd. Supplementary Financial Information

March 31, 2024

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

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 and Short-TermInvestments	10
IV. Segment Results
	Consolidated Underwriting Results	11
	5Q Consolidated Underwriting Results - Group	12
	5Q Underwriting Results - International	13
	5Q Underwriting Results - Bermuda	14
V.	Other Information
	Modeled Exposure to Catastrophe Losses (PML)	15
	Non-GAAPMeasures	16

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 concern our 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;

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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 downturn of 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.

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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.

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Financial Highlights

	Three Months Ended March 31,
($ in thousands)		2024			2023
Net income (loss) attributable to common shareholders	$	157,174	$	51,492
Underwriting income (loss)
Gross premiums written	$	721,941	$	538,164
Net premiums written		514,880			348,498
Net premiums earned		385,303			283,902
Underwriting income (loss)	$	32,522	$	34,063

Key Ratios:
Attritional loss ratio - current year	57.2%	49.1%
Attritional loss ratio - prior year development	3.1%	0.6%
Catastrophe loss ratio - current year	0.0%	1.8%
Catastrophe loss ratio - prior year development	0.0%		0.8%
Loss and loss adjustment expense ratio	60.3%	52.3%
Acquisition cost ratio	21.9%	22.9%
Other underwriting expense ratio	9.3%		12.7%
Combined ratio	91.5%	87.9%

Investments
Total assets	$	7,349,025	$	6,114,260
Total cash and invested assets(1)		4,195,642			3,482,726
Total investment return(2)	$	147,831	$	35,982
Two Sigma Hamilton Fund
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - TSHF	$	262,821	$	10,064
Net income (loss) attributable to non-controllinginterest - TSHF		120,158			1,510
	$	142,663	$	8,554
Two Sigma Hamilton Fund return, net of investment management fees and performance incentive allocations
	8.3%			0.5%
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	$	5,168	$	27,428

1. 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).
2. Net realized and unrealized gains (losses) on investments, plus net investment income (loss), less non-controlling interest.

4

Financial Highlights

Key Operating and Financial Metrics

		Three Months Ended March 31,
($ in thousands, except per share amounts)		2024			2023
Income (loss) per share attributable to common shareholders - basic	$	1.42	$	0.50
Income (loss) per share attributable to common shareholders - diluted	$	1.38	$	0.49
Weighted average common shares outstanding - basic		110,921			103,732
Weighted average common shares outstanding - diluted		114,246			104,625
Return on average common shareholders' equity - annualized		29.5%			12.2%
		At March 31,		At December 31,
		2024			2023
Closing common shareholders' equity less intangible assets	$	2,116,854	$	1,956,854
Closing common shareholders' equity	$	2,209,505	$	2,047,850
Tangible book value per common share	$	19.07	$	17.75
Book value per common share	$	19.90	$	18.58
Year-to-datechange in tangible book value per common share		7.4%			16.0%
Year-to-datechange in book value per common share		7.1%			15.1%

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Summary Consolidated Results

Statements of Operations

($ in thousands, except per share amounts)	Three Months Ended March 31,
	2024			2023
Revenues
Gross premiums written	$	721,941	$	538,164
Reinsurance premiums ceded		(207,061)			(189,666)
.......................................................................................................................................................................................................Net premiums written		514,880			348,498
Net change in unearned premiums		(129,577)			(64,596)
......................................................................................................................................................................................................Net premiums earned		385,303			283,902
Net realized and unrealized gains (losses) on investments		255,371			35,133
Net investment income (loss)		12,618			2,359
.................................................................Total net realized and unrealized gains (losses) on investments and net investment income (loss)		267,989			37,492
Third party fee income		7,478			3,004
Other income (loss), excluding third-partyfee income		-			29
Net foreign exchange gains (losses)		(2,125)			(2,046)
................................................................................................................................................................................................................Total revenues		658,645			322,381
Expenses
Losses and loss adjustment expenses		232,352			148,561
Acquisition costs		84,554			65,140
Other underwriting expenses		43,353			39,142
Corporate expenses		11,502			6,664
Amortization of intangible assets		3,252			2,770
Interest expense		5,708			5,529
................................................................................................................................................................................................................Total expenses		380,721			267,806
Income (loss) before income tax		277,924			54,575
Income tax expense (benefit)		592			1,573
...........................................................................................................................................................................................................Net income (loss)		277,332			53,002
Net income (loss) attributable to non-controllinginterest		120,158			1,510
Net income (loss) and other comprehensive income (loss) attributable to common shareholders	$	157,174	$	51,492
Per share data
Income (loss) per share attributable to common shareholders - basic	$	1.42	$	0.50
Income (loss) per share attributable to common shareholders - diluted	$	1.38	$	0.49
Return on average common shareholders' equity - annualized		29.5%			12.2%

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Summary Consolidated Results

Consolidated Balance Sheets

		At March 31,		At December 31,		At September 30,			At June 30,			At March 31,
($ in thousands)		2024			2023			2023			2023			2023
Assets
Fixed maturity investments, at fair value (amortized cost March 31, 2024: 1,926,329)	$	1,877,130	$	1,831,268	$	1,631,471	$	1,451,249	$	1,377,937
Short-term investments, at fair value (amortized cost March 31, 2024: 351,035)		352,068			428,878			348,968			336,587			387,826
Investments in Two Sigma Funds, at fair value (cost March 31, 2024: 753,967)		953,659			851,470			979,986			868,486			656,643
................................................................................................................................Total investments		3,182,857			3,111,616			2,960,425			2,656,322			2,422,406
Cash and cash equivalents		1,085,038			794,509			804,548			818,522			945,610
Restricted cash and cash equivalents		95,565			106,351			98,979			106,696			139,205
Premiums receivable		856,111			658,363			689,042			756,275			659,722
Paid losses recoverable		169,469			145,202			138,314			132,528			72,091
Deferred acquisition costs		190,883			156,895			151,314			145,280			136,094
Unpaid losses and loss adjustment expenses recoverable		1,167,504			1,161,077			1,157,123			1,162,940			1,192,283
Receivables for investments sold		17,777			42,419			19,044			36			33,618
Prepaid reinsurance		285,984			194,306			232,211			251,818			251,727
Intangible assets		92,651			90,996			89,589			88,770			87,026
Other assets		205,186			209,621			164,015			161,364			174,478
........................................................................................................................................Total assets	$	7,349,025		$	6,671,355		$	6,504,604		$	6,280,551		$	6,114,260
Liabilities, non-controlling interest, and shareholders' equity
Liabilities
Reserve for losses and loss adjustment expenses	$	3,148,782	$	3,030,037	$	2,948,822	$	2,899,100	$	2,891,512
Unearned premiums		1,132,477			911,222			951,596			924,723			871,333
Reinsurance balances payable		367,123			272,310			367,954			381,678			313,286
Payables for investments purchased		55,071			66,606			117,836			18,670			53,889
Term loan, net of issuance costs		149,859			149,830			149,801			149,772			149,744
Accounts payable and accrued expenses		155,684			186,887			159,681			149,833			113,832
Payables to related parties		75,797			6,480			9,060			4,497			4,104
....................................................................................................................................Total liabilities		5,084,793			4,623,372			4,704,750			4,528,273			4,397,700
Non-controllinginterest - TS Hamilton Fund		54,727			133			129			124			120
Shareholders' equity
Common shares:
Class A, authorized (March 31, 2024: 28,644,807), par value 0.01; issued and outstanding		286			286			305			305			305
(March 31, 2024: 28,644,807)
Class B, authorized (March 31, 2024: 72,337,352), par value 0.01; issued and outstanding		568			560			427			426			427
(March 31, 2024: 56,813,977)
Class C, authorized (March 31, 2024: 25,544,229), par value 0.01; issued and outstanding		255			255			305			305			305
(March 31, 2024: 25,544,229)
Additional paid-in-capital		1,255,055			1,249,817			1,128,553			1,124,566			1,121,334
Accumulated other comprehensive loss		(4,441)			(4,441)			(4,441)			(4,441)			(4,441)
Retained earnings		957,782			801,373			674,576			630,993			598,510
..............................................................................................................Total shareholders' equity		2,209,505			2,047,850			1,799,725			1,752,154			1,716,440
Total liabilities, non-controlling interest, and shareholders' equity
$	7,349,025		$	6,671,355		$	6,504,604		$	6,280,551		$	6,114,260

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Summary Consolidated Results

Reconciliation of Consolidated GAAP Balance Sheet to Unconsolidated Balance Sheet

				At March 31, 2024
		Consolidated			Two Sigma			Unconsolidated
		GAAP Balance			Hamilton Fund
($ in thousands)						Balance Sheet(1)
	Sheet			Balances
Assets
Fixed maturity investments, at fair value	$	1,877,130	$	-	$	1,877,130
Short-terminvestments, at fair value		352,068			(348,155)			3,913
Investments in Two Sigma Funds, at fair value		953,659			911,182			1,864,841
.................................................................................................................................................................................................................Total investments		3,182,857			563,027			3,745,884
Cash and cash equivalents		1,085,038			(706,969)			378,069
Restricted cash and cash equivalents		95,565			-			95,565
Premiums receivable		856,111			-			856,111
Paid losses recoverable		169,469			-			169,469
Deferred acquisition costs		190,883			-			190,883
Unpaid losses and loss adjustment expenses recoverable		1,167,504			-			1,167,504
Receivables for investments sold		17,777			(13,868)			3,909
Prepaid reinsurance		285,984			-			285,984
Intangible assets		92,651			-			92,651
Other assets		205,186			(1,024)			204,162
.........................................................................................................................................................................................................................Total assets	$	7,349,025		$	(158,834)		$	7,190,191
Liabilities, non-controlling interest, and shareholders' equity
Liabilities
Reserve for losses and loss adjustment expenses	$	3,148,782	$	-	$	3,148,782
Unearned premiums		1,132,477			-			1,132,477
Reinsurance balances payable		367,123			-			367,123
Payables for investments purchased		55,071			(28,132)			26,939
Term loan, net of issuance costs		149,859			-			149,859
Accounts payable and accrued expenses		155,684			(178)			155,506
Payables to related parties		75,797			(75,797)			-
....................................................................................................................................................................................................................Total liabilities		5,084,793			(104,107)			4,980,686
Non-controllinginterest - TS Hamilton Fund		54,727			(54,727)			-
Shareholders' equity
Common shares:
Class A, par value $0.01		286			-			286
Class B, par value $0.01		568			-			568
Class C, par value $0.01		255			-			255
Additional paid-in-capital		1,255,055			-			1,255,055
Accumulated other comprehensive loss		(4,441)			-			(4,441)
Retained earnings		957,782			-			957,782
..............................................................................................................................................................................................Total shareholders' equity		2,209,505			-			2,209,505
Total liabilities, non-controlling interest, and shareholders' equity
$	7,349,025		$	(158,834)		$	7,190,191

1. 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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