The fact that we are nimble and diversified across insurance, reinsurance, and multiple lines of business allows us to do that. Let me break down how this approach showed up across our three underwriting platforms. Starting with Bermuda, our Bermuda segment grew 27% this quarter, driven by casualty reinsurance, which is predominantly written on a quota share basis. This business continues to enjoy healthy underlying rate increases, which in turn flow through to us. Our growth this quarter came from a combination of new business written earlier in the year earning in, largely general liability and professional lines, and expanded participations on renewal business with our targeted key clients.
As a reminder, unlike many of our peers, our growth in casualty was recent, started from a small base, and occurred during a period when underlying rates have been improving considerably. Turning to the property book we write in Bermuda, and evidencing the flip side of cycle management, we continued to reduce our participations on large property D&F insurance accounts where competition was strong and consequently pricing did not meet our required thresholds. Moving to International, which houses Hamilton Global Specialty and Hamilton Select, gross premiums written grew 20% in the quarter. Starting with Hamilton Global Specialty, gross premiums written were up 21% driven by specialty and casualty classes in lines where we leaned into attractive opportunities.
For example, we grew mergers and acquisitions and marine lines, with a particular boost from the recent launch of our new marine cargo offering. On the other hand, and similar to what we did in Bermuda, we pared back our writings of large property D&F insurance accounts which did not meet our return expectations. And finally, Hamilton Select. Our U.S. E&S platform, which focused solely on casualty classes in 2025, grew 19% in the quarter. Growth was driven by excess casualty, products and contractors, and small business, where we were able to secure attractive pricing, terms, and conditions, but we wrote less professional liability business as we were not satisfied with the pricing environment.
Now that is cycle management in action. Let me now turn to the January 1 renewal season. Overall, we entered the renewal period from a position of strength. Our capital is robust, our underwriting discipline unwavering, and our relationships with clients and brokers strong. Consequently, this was a constructive renewal for us, one where we were able to deploy capital while protecting margins. Starting with property cat. The renewal season was defined by abundant capacity and strong competition, particularly on the higher layers. As you will have heard from my peers, pricing for global property catastrophe business declined at 1/1, but discipline prevailed to keep terms, conditions, and attachment points largely consistent with post-reset levels.
We focused our capital deployment on well-performing property accounts where risk-adjusted pricing remained attractive. We also leveraged cost-effective retrocession—we benefited from double-digit rate reductions—to maintain adequate margins even as headline rates declined. Turning to casualty. Competition on casualty reinsurance was more measured. Going into 1/1, strong underlying insurance rate increases that flow through to the proportional business we support continue apace, and ceding commissions were generally flat. In fact, given the attractiveness of underlying rates, some cedents chose to retain more of their own business, but we still managed to grow our modest shares on core key clients, a factor that contributed to our growth.
As I have said in prior calls, our focus in the casualty area continues to be on those clients who retain a large percentage of their business, provide us good data, and continue to invest in their in-house claims handling. In specialty reinsurance, conditions remained favorable for buyers with increased reinsurer appetite and limited growth opportunities overall, though the picture varied meaningfully by class. Our key client cross-class engagement shone through here, providing some increased signings and new business opportunities, including in our relatively new credit, bond, and political risk offering.
Overall for 1/1, the good news for us was that we were able to secure our targeted signings in a competitive market where even our clients looking to retain more of their own business net. As I look further into 2026, we expect the market to remain competitive but that pricing across the lines of business that we target to remain largely risk adequate. Consequently, while we are confident in our ability to continue to find attractive opportunities, I expect our growth going forward to be more measured than it was in the past. In other words, in areas where the market gets too competitive, we will not chase top line at the expense of the bottom line.
This disciplined approach will ensure we deliver sustainable results. And with that, I will turn the call over to Craig for some more depth into our financials for the quarter and 2025. Thank you, Pina, and hello, everyone.
Craig William Howie: In 2025, Hamilton Insurance Group, Ltd. had a very strong year of financial results, with record net income of $577,000,000, 44% above the $400,000,000 of net income in 2024. We had a return on average equity of 22% compared to 18% in the prior year, and we grew book value per share by 24% over the prior year to a record $28.50. For the fourth quarter of 2025, Hamilton reported net income of $172,000,000, equal to $1.69 per diluted share, producing an annualized return on average equity of 25%. We had operating income of $168,000,000, equal to $1.65 per diluted share, producing an annualized operating return on average equity of 25%.
These results include strong underwriting income, solid investment returns, as well as a tax benefit from the reversal of valuation allowances against some of our deferred tax assets and the Bermuda substance-based tax credit. Without these two tax items, the annualized operating return on average equity would still have been a healthy 18%. I will discuss this more in detail shortly. These quarterly results compare favorably to 2024 fourth quarter net income of $34,000,000, or $0.32 per diluted share, an annualized return on average equity of 6%, operating income of $87,000,000, or $0.82 per diluted share, and an annualized operating return on average equity of 15%.
Before I move on to our underwriting results, I want to talk through the two tax items: one, the Bermuda substance-based tax credit, and two, the tax benefit in our income tax line. The Bermuda Tax Credit Act became effective on December 11. Under this framework, we qualify for the new substance-based tax credit, which is designed to reward insurers that demonstrate meaningful local economic activity in Bermuda. As a reminder, this credit enhances the competitive advantage for Hamilton Insurance Group, Ltd. since we are exempt from the Bermuda 15% global minimum tax until the year 2030. The credit was driven by both jobs-based and expense-based components and is applied against the Bermuda group’s tax liability.
The program includes a transition schedule allowing recognition of 50% of the credit in 2025, 75% in 2026, and the full 100% benefit for fiscal years beginning in 2027. In 2025, we accrued the full credit in the fourth quarter when the Bermuda tax law was passed. Going forward, we will accrue the credit over a 12-month period, reporting it quarterly, based on qualifying payroll and eligible expenses. In our financial statements, the credit flows through as a contra expense to the other underwriting expense and corporate expense line items. For 2025, we recorded a Bermuda substance-based tax credit of $20,700,000.
In the Bermuda segment, this was a $17,300,000 offset to the other underwriting expenses, and in corporate expenses, a $3,400,000 offset. For 2026, all things staying about the same, we would expect the Bermuda credit of about $27,000,000 based on a 75% phase-in for the year. We will also no longer have a value appreciation pool expense in 2026, since the VAP program ended in 2025. Turning to the tax benefit on our income tax line, we recorded a net tax benefit of $28,000,000 arising from the net release of valuation allowances against deferred tax assets in the United Kingdom and the United States, jurisdictions which had previously accumulated deferred tax assets due to tax net operating loss carryforwards.
This tax benefit came through the income tax line on our income statement. Moving on to underwriting results. For the full year 2025, Hamilton Insurance Group, Ltd. continued to grow its top line at an impressive double-digit rate. Our gross premiums written increased to a record $2,900,000,000, compared to $2,400,000,000 this time last year, an increase of 21%. Each of our platforms, Hamilton Global Specialty, Hamilton Select, and Hamilton Re, expanded where there were attractive opportunities and pulled back from underperforming lines to maintain margins and drive profitability. In terms of underwriting performance, our 2025 year-end combined ratio was 92.9%. Now for some more detail on our quarterly underwriting figures.
Hamilton had underwriting income of $76,000,000 for the fourth quarter, compared to underwriting income of $22,000,000 in the fourth quarter last year. The group combined ratio was 87% compared to 95.4% in 2024. In the fourth quarter, our loss ratio improved to 54.6%, down 5.5 points from 60.1% in the prior period. The improvement was driven by meaningfully lower net catastrophe losses, which were 9.0 points better than 2024. This was partially offset by higher attritional losses of 56.5% compared to 51.2% in the prior period. The increase in attritional was driven by more large losses compared to the same period in 2024 and the change in business mix, including increased casualty reinsurance business.
For the full year 2025, the attritional loss ratio was 54.4% compared to 53.1% in 2024, for the same reasons. In the fourth quarter of 2025, we had favorable prior-year attritional development of 3.1 points, driven by property and specialty classes. This compares to 1.3 points of favorable development in the fourth quarter last year. The expense ratio decreased 2.9 points to 32.4%, compared to 35.3% in the fourth quarter last year. The decrease was mainly driven by the Bermuda substance-based tax credit and third-party fee income which offsets other underwriting expenses. Before I turn to segment results, I wanted to provide guidance on some items for 2026.
Beginning in 2026, we are increasing our catastrophe and headline loss threshold from the current $5,000,000 to $10,000,000. Given the size of Hamilton Insurance Group, Ltd. now, this revised threshold is at a level that is commensurate, focusing on events that are truly headline losses. This means the attritional loss ratio will now include all losses of less than $10,000,000. We would expect the attritional loss ratio to run at about 55% in 2026. On expenses, we expect our other underwriting expense ratio to continue to decrease incrementally in 2026. Our corporate expenses to run between $45,000,000 and $50,000,000 for the year. Next, I will go through the fourth quarter results by segment.
Let us start with the International segment, which includes our specialty insurance businesses, Hamilton Global Specialty and Hamilton Select. In the fourth quarter, International had underwriting income of $12,000,000 and a combined ratio of 96%, compared to underwriting income of $9,000,000 and a combined ratio of 96.3% in the fourth quarter last year. The decrease in the combined ratio was primarily related to the loss ratio decreasing 1.7 points, partially offset by the expense ratio. The current-year attritional loss ratio was 5.5 points higher than the prior period due to large loss activity in the quarter, while the prior period had no large loss activity. The prior-year attritional loss ratio was a favorable 2.3 points.
This was driven by favorable development in our property and specialty classes. The expense ratio increased 1.4 points to 42% compared to 40.6% in the fourth quarter last year. The increase was primarily driven by the acquisition cost ratio due to less ceding commissions and more profit commissions, and a decrease in third-party management fee income. Other underwriting expenses were down 2.3 points. Moving to some full-year figures, in 2025, International grew to $1,500,000,000, up from $1,300,000,000, an increase of 16%. This was driven by growth across all classes: property, specialty, and casualty. The 2025 year-end combined ratio was 95% compared to 95.6% for 2024.
The full-year 2025 current-year attritional loss ratio was 54% compared to 53.5% in 2024 due to a change in business mix. Given the revised threshold for catastrophe and headline large losses, we would expect our International segment to have an attritional loss ratio of around 54.5% in 2026. I will now turn to the Bermuda segment which houses Hamilton Re and Hamilton Re U.S., the entities that predominantly write reinsurance business. In the fourth quarter, Bermuda had underwriting income of $63,000,000 and a combined ratio of 76.4%, compared to underwriting income of $13,000,000 and a combined ratio of 94.3% in the fourth quarter last year.
The decrease in the combined ratio was primarily related to lower catastrophe losses and lower expenses in the quarter, partially offset by an increase in the current-year attritional loss ratio. The Bermuda current-year attritional loss ratio increased 5.0 points to 56.7% in the fourth quarter, compared to 51.7% in the fourth quarter last year. This was primarily driven by more large losses in the quarter compared to the same period in 2024, and a change in business mix, including an increase in the casualty reinsurance business. The Bermuda prior-year attritional loss ratio was a favorable 4.1 points. This was primarily driven by favorable development in our property class.
The Bermuda expense ratio decreased by 8.3 points to 21.2% compared to 29.5% in 2024, driven by a decrease in the other underwriting expense ratio primarily due to the Bermuda substance-based tax credit of $17,000,000 and increased third-party performance-based fee income, partially offset by the acquisition cost ratio due to a change in business mix. Moving to some full-year figures, in 2025, Bermuda grew to $1,400,000,000, up from $1,100,000,000, an increase of 26%. The increase was primarily driven by new and existing business in casualty and specialty reinsurance classes. The 2025 year-end combined ratio was 90.9% compared to 87% in 2024. The full-year 2025 current-year attritional loss ratio was 54.6% compared to 52.7%.
The increase was due to more large losses and business mix shifting toward casualty reinsurance which carries a higher attritional loss ratio. Given the business mix shift and the revised threshold for catastrophe and headline losses, we would expect an attritional loss ratio of about 56% for our Bermuda segment in 2026. Now turning to investment income. Total net investment income for the fourth quarter of 2025 was $98,000,000 compared to investment income of $36,000,000 in 2024. The fixed income portfolio, short-term investments, and cash produced a gain of $42,000,000 in the quarter, compared to a loss of $31,000,000 in 2024.
As a reminder, this includes the realized and unrealized gains and losses that Hamilton Insurance Group, Ltd. reports through net income as part of our trading investment portfolio. The fixed income portfolio had a return of 1.2% or $38,000,000 and a new money yield of 4.2% on the fixed income investments purchased this quarter. The duration of the portfolio remains at 3.4 years. The average yield to maturity on this portfolio was 4.1% compared to 4.7% at year-end 2024. The average credit quality of the portfolio remains strong at AA3. The Two Sigma Hamilton Fund produced a $56,000,000 net return for the fourth quarter of 2025, equal to 2.6%.
For the full year of 2025, the fund had a net return of 16% or $310,000,000. The Two Sigma Hamilton Fund made up about 37% of our total investments including cash at 12/31/2025, compared to 39% at 12/31/2024. Now turning to capital management. As you may have noted in our fourth quarter earnings release, we announced that Hamilton Insurance Group, Ltd.’s Board of Directors has declared a special dividend of $2 per common share, which will result in an aggregate payment of approximately $206,000,000. The decision to pay a special dividend was based on the company’s record earnings in 2025 and our excellent capital position. This dividend represents an effective way of returning excess capital to our shareholders.
For the full year 2025, we also repurchased $93,000,000 worth of shares at an average price of $22.13 per share. Even with this special dividend, we are able to continue repurchasing shares under our current share repurchase authorization, which remains in effect with an unutilized limit of $178,000,000. Both the special dividend and the share repurchases reflect our ongoing commitment for active and effective capital management. Next, I have some comments on our strong balance sheet at year-end 2025. Total assets were $9,600,000,000 at December 31, 2025, up 23% from $7,800,000,000 at year-end 2024. Total investments and cash were $5,900,000,000 at December 31, an increase of 24% from $4,800,000,000 at year-end 2024.
Shareholders’ equity for the group was $2,800,000,000 at year-end 2025, which was a 21% increase from year-end 2024. Our book value per share was $28.50 at December 31, up 24% from year-end 2024. Thank you. And with that, we will open up the call for your questions.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. We ask that you limit yourself to one question plus one follow-up, and then rejoin the queue for any further questions. Our first question comes from the line of Hristian Getsov with Wells Fargo. Your line is open.
Hristian Getsov: Good morning, and congrats on the strong quarter. My first question is on the underlying loss ratio guide for 2026. The 55% for the full year. If you did not change the cat definition threshold, what would that look like versus the 54.4% we saw in 2025? And given the definitional change, is there a new cat load Hamilton Insurance Group, Ltd. will manage to for each of the segments? Thank you.
Craig William Howie: Hi, Hristian. First of all, thanks for the question. So first of all, we did guide to the 55%. Part of that increase over the full year 2025, which was 54.4%, the majority of that increase is the change in the threshold that we have. The business mix for 2026 will remain about the same, so we would expect the attritional to have remained about the same, but that is the change in our threshold from the $5,000,000 to the $10,000,000 threshold that is taking that loss pick up to the 55% guidance.
As far as catastrophe losses, our catastrophe losses will come down slightly, but they will still be in the range of about 6% to 7% for our catastrophe losses for the year.
Hristian Getsov: Got it. All that makes sense. And then could you just give a little bit more color on deciding to deploy a special dividend? I would think given where your shares are at currently, I mean, the gap that has closed versus book value, but still close to or a little bit below. I guess, why not buy back more of your shares? So this is just a more effective way to get rid of that excess capital since it could be an ROE drag? Or how should we think about that? And should we expect maybe a more modest level of buyback in 2026 just given the deployment of the special?
Craig William Howie: Good question. What I would say to you is we have the flexibility to do both of these things. And after a record year of earnings, we decided to return a portion of our capital. A special dividend is an active and an effective way of returning that capital quickly to our shareholders. But we will also be able to continue buying back shares. As you know, we bought back $93,000,000 worth of shares in 2025, and we still have the ability to buy back under our authorization. We still have $178,000,000 to be able to do that. We have a really strong track record of being good stewards of capital.
And when we see and have strong business opportunities to deploy that capital there, we are going to do that. As you know, for example, we have been able to do that by growing our premiums at double-digit levels every year since 2017. But otherwise, we are going to return some of this excess capital to our shareholders and that is what we are doing here with the special dividend as well as the share buybacks. We have the ability to do both.
Hristian Getsov: Got it. Thank you. And if I could sneak in one more on the E&S platform. The growth is moderating a little bit, but in part, that is likely due to a higher base you are growing off. But are you seeing any signs of increased competition on the casualty side from MGAs, fronting companies, or other admitted carriers? We have heard a lot of competition on the property side, but I am not sure if you are seeing that on the casualty side as well. Thank you.
Pina Albo: I will take that, Hristian. Thanks for the question. Firstly, I think it is important to note the growth that we saw on Hamilton Select this quarter has been completely in line and year to date is completely in line with what our expectations were. We continue to see robust pricing, particularly in the areas where we grew more this year. That was, once I mentioned, the excess casualty, products and contractors, and small business. In terms of increased competition, where we are seeing that is on the professional lines side, and that is where we wrote less of this business this quarter.
Overall, I think I take a step back and look at Select, again, completely in line with plans. It is an incredibly important growth engine for us, given the strength of the team that we have assembled there and the relationships they have. You will notice some recent hires recently that we announced that we will be launching in the property space, and that will concentrate on the smaller to mid-sized property business where we are not seeing the robust competition that we have seen in large accounts space where we have shed business. I hope that answers your question.
Hristian Getsov: Yep. Thank you.
Operator: Your next question comes from the line of Thomas Patrick McJoynt-Griffith with KBW. Your line is open. Please go ahead.
Thomas Patrick McJoynt-Griffith: Hey. Good morning, guys. Thanks for taking the questions. What is the optimal premium leverage that you would like to manage to? And is that changing as the portfolio mix leans heavier toward casualty growth after a period when property growth was stronger?
Craig William Howie: Hi, Tommy. It is Craig. You know, our premium leverage has not really changed very much. We have been retaining about 80% of the business on a net basis. But over time, you know, your point is valid. As we go into a transitioning type market, one of the things that we do not want to do is just blindly edge up on the premium leverage for that purpose. You may recall in 2024, we essentially retained more of our business because we had primary proceeds from the IPO that we wanted to put to work.
And in 2025, we actually were able to buy a little bit more reinsurance coverage for the overall book because the quality of business that we had been putting on the books gave us the ability to get lower rates for those reinsurance purchases. So we have been able to do that over time; we have been able to retain, and that retention rate has stayed right around 80%.
Thomas Patrick McJoynt-Griffith: Okay. Got it. And then maybe a question on the data center opportunity. You know, a lot of carriers have been asked about it, and it is going to be a great need for capital over the coming years. I guess the question is, do you guys have sort of the expertise to play in that niche? Are there little pockets of opportunities there, or is it a great, large opportunity? What are you guys doing on the data center side?
Pina Albo: I will take that one. We are certainly seeing some more of that business and we see it as an opportunity, and we are taking up some of these opportunities. For example, writing some physical damage-only covers where it only covers contents and does not cover business interruption. I think that although this is an opportunity and we will lean in with our expertise that we have in-house, we are also a little bit cautious here on, you know, accumulation, particularly on the large data centers. So we are monitoring that very closely when we look at our writings. And, also, the whole business interruption area.
Again, the physical damage cover that we are now offering on the insurance side does not include business interruption. So we are looking at this as an opportunity, but also looking at it very cautiously, with those factors in mind.
Justin Lee: Thank you.
Operator: Our next question comes from the line of Daniel Cohen with BMO Capital Markets. Your line is now open. Please go ahead.
Daniel Cohen: Hey, good morning. Thanks for taking my first one, maybe just on reserves. If you could just add a little more color on the years and the classes that the property and specialty favorability came from this quarter. And then maybe just anything on how casualty reserves moved this quarter and if there has been any change in loss trend there? Thanks.
Craig William Howie: Yes. Hi, Daniel. So first of all, overall, our reserves were favorable for the quarter. None of that came from casualty. So overall, casualty was flat for the quarter with no movement. So this was another year of favorable reserve development for Hamilton Insurance Group, Ltd., something that we have been able to achieve each and every year since the inception of the company. But to your point, yes, the favorable development this quarter came from property and specialty, mostly from the property side.
What we typically do on the property side is take a look at those reserves that have been in place or have matured over a period of time for over two years, and we take a look at that. And some of those we were able to release in the fourth quarter and throughout the year as well. We actually have a reserve review done by an outside actuary twice a year on our book of business.
And we consequently take a look at their guidance that they see when they are looking at the industry levels as well as other clients—so other peers of ours—and it gives us an indication of where we stand against what an outside actuary would look at, and we would remain above the midpoint of their estimate consistently year after year.
Daniel Cohen: Right. Thanks. And then, Pina, on the casualty reinsurance side, you just mentioned preferring clients with good data, in-house claims handling. I was just wondering, could you add more color on maybe what differentiates those clients versus maybe some others in the marketplace? And whether or not Hamilton Insurance Group, Ltd. is embedding their own conservative margin on top of where their cedents are picking? Thanks.
Pina Albo: Yes. I will take that question. So just maybe a little bit of a background. Again, we started from a very low base when it came to casualty business. And in the context of our AM Best first positive outlook and then our upgrade, we had targeted in advance the clients that we wished to support on the casualty side. And these are clients that we knew well already from property and specialty placements that we enjoy with them. And those clients there provide us robust data so we can see what they are doing in terms of limits management, pricing versus what they are seeing in trends.
We look at it with respect to what we are seeing and what we anticipate trending to be. So that already is one tick. Then we look at how robustly they handle their claims in-house and how quickly they resolve these claims. So all in all, those are the kinds of clients we target when we look at our reinsurance support, and because we are able to support them broadly across classes, that makes these relationships very resilient.
Daniel Cohen: Thanks. And then, also, I think if I could sneak one more just on the corporate expense line. Craig, I think you said there is going to be no more value appreciation pool expenses there. So outside of that tailwind from the Bermuda tax credit, should we expect this line to continue to tick down? Or how should we think about that?
Craig William Howie: Yeah, Dan. Certainly, that is exactly what you would expect. Certainly, the value appreciation pool expired, and the second tranche of that pool vested in November 2025. So the VAP is no longer there. And the guidance that I have given in the prepared remarks is that you can expect corporate expenses to be in the range of $45 to $50 million.
Operator: Your next question comes from the line of Matthew Heimerman with Citi. Your line is now open. Please go ahead. Your next question comes from the line of Justin Lee with Barclays. Your line is now open. Please go ahead.
Justin Lee: Hi, everyone. Thanks for taking the question. The first one I had was just on the Two Sigma Hamilton Fund. I believe in previous quarters, you guys gave sort of the year-to-date, month-to-date returns. And maybe I might have missed it, but I was just wondering if you guys can provide what returns were as of January.
Craig William Howie: Yeah. Hi, Justin. This is Craig. You know, with respect to us having earlier reporting than we have had in the past, it is not as meaningful now for us to provide that type of guidance anymore. So going forward, we are going to report these results on a quarterly basis with no lag, just like we do with the rest of our portfolio. What I will tell you is that Two Sigma has historically outperformed in a volatile market. And as you know, we have been very fortunate to have the partnership that we have with Two Sigma.
We have had a 13% average annualized return every year since the inception of the fund in 2014, and the fund has never had a calendar year loss. So again, going forward, we will report this on a quarterly basis with the same as the rest of our call.
Justin Lee: Got it. Thank you. And second one, more high level. Appreciate your comments around scaling back on the large property side and focusing on areas that are, you know, still getting relatively better pricing versus loss cost. And on the other hand, I am sort of seeing data points that suggest that maybe on the primary side, the pressures on property may be permeating onto the general liability and other lines of casualty side on the pricing front. I was wondering if you can kind of help me square those two dynamics, and how you guys are sort of thinking about growth?
Understand it is going to be more measured, as you said, but just a little bit more color there would be helpful. Thank you.
Pina Albo: Sure. I will take that, and thank you for the question. Firstly, on the property side, you are right. Where we are seeing the most pricing pressure is on those large insurance accounts, those large scheduled accounts, and that is where you have seen us pare back our writings consistent with our disciplined approach to underwriting. On the middle market and the smaller property accounts, we are not seeing that level of pricing pressure, so we are still seeing some attractive opportunities there, and that is where we are seeing some growth. And that is where our new underwriting offering in Hamilton Select will lean into. So that is on property.
On the casualty side, we are still seeing some health increases on the insurance side of the equation. And that is actually supported by the fact that a lot of our cedents, and I mentioned that in my prepared remarks, seeing these robust pricing increases are keeping more of their business net. They are also confident that pricing is keeping pace with the trend that we are seeing out there. So we do not see any signs of that casualty pricing abating. And as long as it is in that area where it is keeping pace with trend, or we feel it is, we will continue to look at that business.
Operator: Our next question comes from the line of David Sedor with Citizens. Your line is now open. Please go ahead.
David Sedor: Hi. Thank you, and good morning. On the special dividend, what will be the source of funds there? Is that cash already on hand or from the Two Sigma fund or fixed income portfolio or maybe a mix of those?
Craig William Howie: Hi, David. This is Craig. Yes. It is from available cash on hand as well as the fixed income portfolio.
David Sedor: Thank you. And then are you able to provide any color on the elevated large losses in both segments from the quarter?
Craig William Howie: Sure. I can do that. So essentially, what happened this quarter in 2025 is we had more large losses in this quarter than we did in 2024. The largest loss that we had this quarter was a satellite loss. It impacted both segments for us in our specialty classes of business. And this is exactly the reason why we changed the threshold in our catastrophe and large headline loss, to the capture of these truly headline losses. We wanted to make sure that we gave guidance on what that impact would be going forward. That is why we gave the guidance going forward for the attritional loss ratio.
But essentially, of these types of losses that come through, it was impacting our attritional loss ratio up and down just based on some of these large losses, and we wanted to make sure that we are taking that into account.
David Sedor: Thank you.
Operator: If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Our next question comes from the line of Matthew Heimerman with Citi. Your line is now open. Please go ahead.
Matthew Heimerman: Hi. Good morning, everybody. Apologies for earlier. I guess first question would be, with respect to the Bermuda tax credit and the significant savings, or offsets to expenses you are getting there, I am curious if there are any thoughts around potentially reinvesting some of that incremental savings on a go-forward basis either for new priorities or accelerating existing investments that might already be on your roadmap?
Craig William Howie: Yeah. Thanks, Matt. You know, the credit is really designed to reward insurers that demonstrate meaningful local economic activity in Bermuda. This credit really keeps Bermuda as an attractive place to do business. And there are two components that we are able to take advantage of under this credit, which are jobs-based and expense-based components. We are going to continue to invest in our projects, our operations, and our technology to operate at scale in Bermuda. And for a company the size of Hamilton Insurance Group, Ltd., we have a large footprint, a significant presence in Bermuda with over 100 people in our office there, and we also hold all of our board meetings in Bermuda.
So while we are not specifically designating these funds to a particular purpose, they will serve to reduce our overall operating expenses. And, again, this shows up as a contra expense in our other underwriting expenses in the Bermuda segment as well as in our corporate expenses.
Pina Albo: And, Matt, maybe I will just add on to that. I think if you look at our history, we have a very strong track record of investing in our underwriting capabilities and in adding new lines of business, whether it is on the reinsurance side over the years, most recently in our credit and bond offering, but also prior to that by adding per risk and proportional, and also on the insurance side by adding attractive lines of business, be that in our Hamilton Global Specialty platform or also in Hamilton Select. So I think you will see that continue in our future.
Matthew Heimerman: Thanks for that. I guess the other question would be, just can you remind us the guiding principles that you have with respect to technology and underwriting to help us better frame as you invest in new technologies and implement AI, more use cases just how to frame that?
Pina Albo: Sure. I will take that. And, Craig, if you want to add anything, be my guest. But I think you start with the fact that we have, and we are very proud of the fact that we have, very robust underwriting tools and underwriting frameworks that are regularly calibrated for what we are seeing in the market. And we calibrate them because we meet very regularly as a team, both on the platform side, but at the executive level and then across the group, to share insights, monitor pricing expectations, and all of that gets retooled into our underwriting tools. If I segue from there to how we are embracing AI, I say that we are embracing AI.
I think I have mentioned on a prior couple of prior calls that we are already deploying AI in several use cases across our platform, both on the underwriting and the claims side. The use cases are predominantly for efficiency purposes, and what that means is it allows us to extract data, populate our underwriting workbenches, summarize some very complex reports, and what that does is it allows us to get to more business more quickly. In Hamilton Select, you will have heard, in addition to this populating of workbenches, we are looking to roll out in the course of 2026 a smart queuing feature which will allow us to triage the risk better.
That means not only just getting more hits at bat, but getting more swings at balls we know we are going to hit. So that is how we look at AI. I think the other thing you should know in this context is our guiding principle here is to ensure at the same time as we are embracing AI that we have a robust control framework in place to avoid any unintended consequences of this new technology.
Matthew Heimerman: Thanks for that. One of the things—just one quick follow-up. One of the things I am struggling with is one of the benefits clearly is efficiency, and you mentioned that. And, obviously, that can take the form of doing more with the same or doing the same with less, and many permutations. So I am curious when you think about the efficiency savings, like, how concentrated they are to Bermuda relative to the rest of your platform? And I am kind of asking that in the context of just talking about the tax credits, which are supposed to spur investment there. And this obviously allows you to do.
Just curious if those are in contrast with the others specifically, but more broadly, as we think about how you staff and how you invest, how that might look differently around your platform.
Pina Albo: Yeah. We have not yet come up with a number in terms of savings we are going to achieve in dollar terms from this technology, but we are seeing benefits of the technology across all three platforms. In Bermuda, we have been deploying AI technology for a couple of years now, and we are also using it increasingly, again, across our Hamilton Select and Hamilton Global Specialty platforms for our insurance business. Over time, we will continue to see the benefit of this technology, but it is across all three of our platforms.
Matthew Heimerman: Thank you for that.
Operator: Thank you. That will conclude our question-and-answer session for today. I will now turn the call back over to Pina Albo.
Pina Albo: Thank you. I want to just take a minute to thank everybody here for joining our call today and engaging with us as you have. We are once again incredibly proud of the results we achieved this year, and we look forward to speaking to you in the very near future.
Operator: This concludes today’s call. Thank you for attending. You may now disconnect.
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Hamilton (HG) Q4 2025 Earnings Call Transcript was originally published by The Motley Fool
