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What changed in Hamilton Insurance Group, Ltd.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hamilton Insurance Group, Ltd.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+585 added−900 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-27)

Top changes in Hamilton Insurance Group, Ltd.'s 2025 10-K

585 paragraphs added · 900 removed · 396 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

147 edited+146 added−438 removed43 unchanged
Biggest changeThese risks include the following: • challenges from competitors, including those arising from industry consolidation and technological advancements; • unpredictable catastrophic events, global climate change and/or emerging claim and coverage issues; • our ability, or those of the third parties on which we rely, to ensure reserves are adequate to cover actual losses and to accurately evaluate underwriting risk, models, assessments and/or pricing of risks; • our ability to defend our intellectual property rights, including our proprietary technology platforms, to comply with our obligations under our license and technology agreements or to license rights to technology or data on reasonable terms; • the impact of risks associated with human error, fraud, model uncertainties, cybersecurity threats such as cyber-attacks and security breaches and our reliance on third-party IT systems that can fail or need replacement; • our ability to secure necessary credit facilities, or additional types of credit, on favorable terms or at all; • our limited financial and operating flexibility due to the covenants in our existing credit facilities; • our exposure to the credit risk of the intermediaries on which we rely; • our failure to pay claims in a timely manner or the need to sell investments under unfavorable conditions to meet liquidity requirements; • downgrades, potential downgrades or other negative actions by rating agencies; • our ability to manage risks associated with macroeconomic conditions resulting from geopolitical and global economic events, including current or anticipated military conflicts, public health crises, terrorism, sanctions, rising energy prices, inflation and interest rates and other global events; • the cyclical nature of the insurance and reinsurance business, which may cause the pricing and terms for our products to decline; • our results of operations potentially fluctuating significantly from period to period and not being indicative of our long-term prospects; • our ability to execute our strategy and to modify our business and strategic plan without shareholder approval; • our dependence on key executives, including the potential loss of Bermudian personnel, and our ability to attract qualified personnel, particularly in very competitive hiring conditions; • foreign operational risk such as foreign currency risk and political risk; • our ability to identify and execute opportunities for growth, to complete transactions as planned or realize the anticipated benefits of any acquisitions or other investments; • our management of alternative reinsurance platforms on behalf of investors in entities managed by Hamilton Strategic Partnerships; • our inability to control the allocations to, and/or the performance of, the TS Hamilton Fund investment portfolio and our limited ability to withdraw our capital accounts; • the impact of risks from conflicts of interest among the Managing Member, Two Sigma and their respective affiliates affecting our business; • the historical performance of Two Sigma not being indicative of the future results of the TS Hamilton Fund’s investment portfolio and/or of our future results; • the impacts of risks associated with our investment strategy, including that such risks are greater than those faced by our competitors; • 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 PFIC; 46 • our potentially becoming subject to U.S. withholding and information reporting requirements under FATCA provisions; • our ability to compete effectively in a heavily regulated industry in light of new domestic or international laws and regulations, including accounting practices, and the impact of new interpretations of current laws and regulations; • the suspension or revocation of our subsidiaries’ insurance licenses; • significant legal, governmental or regulatory proceedings; • our insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to us being restricted by law; • challenges related to compliance with the applicable laws, rules and regulations related to being a public company, which is expensive and time consuming; • the limited ability of investors to influence corporate matters due to our multiple class common share structure and the voting provisions of our Bye-laws; • the risk that anti-takeover provisions in our Bye-laws could discourage, delay, or prevent a change in control, even if the change in control would be beneficial to our shareholders; • the difficulties investors may face in protecting their interests and serving process or enforcing judgments against us in the United States; and • our current strategy does not include paying cash dividends on our Class B common shares in the near term.
Biggest changeThese risks include, but may not necessarily be limited to, the following: • challenges from competitors, including those arising from industry consolidation, alternative capital and technological advancements, including the increasing use of advanced analytics and AI; • unpredictable events, including natural catastrophes and man‑made disasters, global climate change and emerging claim, litigation and coverage issues that may increase loss severity or expand coverage obligations; • our ability, or that of the third parties on which we rely, to ensure reserves are adequate to cover actual losses and to accurately assess underwriting risk, models, assumptions, data quality and the pricing of risks, particularly in long‑tail, low‑frequency or emerging lines of business; • our ability to defend and protect our intellectual property rights, including our proprietary technology platforms and data, to comply with obligations under license and technology agreements or to obtain or renew licenses to technology or data on reasonable terms; • the impact of risks associated with human error, misconduct or fraud, model uncertainty, cybersecurity threats such as cyber‑attacks and security breaches, misuse of AI and our reliance on third‑party information technology systems that may fail, be disrupted or require replacement; • our ability to secure necessary credit facilities, letters of credit or other forms of financing or collateral on favorable terms or at all; • our limited financial and operational flexibility due to covenants and other restrictions in our existing or future credit facilities and debt arrangements; • our exposure to the credit risk of insurance and reinsurance intermediaries on which we rely for the collection of premiums and payment of claims; • our failure to pay claims in a timely manner, significant reserve strengthening, or the need to sell investments under unfavorable market or other conditions in order to meet liquidity requirements; • downgrades, potential downgrades or other negative actions by rating agencies, including changes in rating agency methodologies; • our ability to manage risks associated with adverse macroeconomic conditions, geopolitical instability and global events, including current or anticipated military conflicts, public health crises, terrorism, sanctions, inflation, rising interest rates, energy price volatility and other disruptions; • the cyclical nature of the insurance and reinsurance business, which may result in declines in pricing and more competitive terms and conditions; • our results of operations fluctuating significantly from period to period and not being indicative of our long‑term prospects; • our ability to execute our strategy and to adapt our business and strategic plans in response to changing market, regulatory and competitive conditions; • our dependence on key executives and other personnel, including the potential loss of Bermudian or other critical personnel, and our ability to attract and retain qualified employees in highly competitive labor markets; • foreign operational risks, including foreign currency risk, political instability, regulatory uncertainty and differing legal regimes in jurisdictions where we operate; • our ability to identify, execute and integrate growth opportunities, including acquisitions or other strategic transactions, and to realize the anticipated benefits of such initiatives; • risks arising from our management of alternative reinsurance platforms and vehicles for third‑party investors; • our inability to control the asset allocation, investment decisions or performance of the TS Hamilton Fund and our limited ability to withdraw capital from the TS Hamilton Fund; • conflicts of interest, governance, operational or regulatory risks involving Two Sigma, the TS Hamilton Fund or their respective affiliates that could adversely affect investment performance or our business; 48 • the historical performance of Two Sigma or the TS Hamilton Fund not being indicative of future performance or our future results; • risks associated with our investment strategy, including the use of leverage, derivatives, illiquid assets and concentration risk, which may be greater than those faced by some of our competitors; • our potentially becoming subject to additional or increased taxation, including U.S. federal income tax, Bermuda tax or other taxes, as a result of changes in tax laws, interpretations or our operations; • the potential classification of us or our subsidiaries as a passive foreign investment company or becoming subject to U.S. withholding and information reporting requirements under FATCA; • our ability to compete effectively in a highly regulated industry in light of new or changing domestic or international laws and regulations, including accounting standards and evolving regulatory interpretations; • the suspension, limitation or revocation of licenses or approvals required by our insurance and reinsurance subsidiaries; • significant legal, regulatory or governmental proceedings or investigations; • restrictions on our insurance and reinsurance subsidiaries’ ability to pay dividends or make other distributions to us; • challenges and costs associated with compliance with public company disclosure, governance and internal control requirements; • the limited ability of investors to influence corporate matters due to our multi‑class share structure and the voting provisions in our Bye‑laws; • the risk that anti‑takeover provisions in our Bye‑laws or Bermuda law could discourage, delay or prevent a change in control, even if beneficial to shareholders; and • difficulties investors may face in enforcing judgments or protecting their interests against us or our directors and officers. 49 Risk Factors Investing in Hamilton involves risk.
We establish losses and loss adjustment expenses, or LAE, reserves for the best estimate of the ultimate payment of all claims that have been incurred, or could be incurred in the future, and the related costs of adjusting those claims, as of the date of our financial statements.
We establish losses and loss adjustment expenses ("LAE"), reserves for the best estimate of the ultimate payment of all claims that have been incurred, or could be incurred in the future, and the related costs of adjusting those claims, as of the date of our financial statements.
We cannot assure investors that premium rates will not decrease in future, and if demand for our products falls or the supply of competing capacity rises, our prospects for potential growth may be adversely affected.
We cannot assure investors that premium rates will not decrease in the future, and if demand for our products falls or the supply of competing capacity rises, our prospects for potential growth may be adversely affected.
This exemption is only available to an "MNE Group" (i) that has constituent entities located in five or fewer jurisdictions outside the "reference jurisdiction" (ii) that has, with respect to all constituent entities in all jurisdictions except the "reference jurisdiction," less than EUR 50 million in tangible assets, and 77 (iii) no parent entity is required to apply an income inclusion rule ("IIR") with respect to a constituent entity of the "MNE Group" located in Bermuda.
This exemption is only available to an "MNE Group" (i) that has constituent entities located in five or fewer jurisdictions outside the "reference jurisdiction" (ii) that has, with respect to all constituent entities in all jurisdictions except the "reference jurisdiction", less than EUR 50 million in tangible assets, and (iii) no parent entity is required to apply an income inclusion rule ("IIR") with respect to a constituent entity of the "MNE Group" located in Bermuda.
It is therefore possible that an offeror may gain control of the Company in circumstances where non-selling shareholders do not receive, or are not given the opportunity to receive, the benefit of any control premium paid to selling shareholders. The Bye-laws contain certain anti-takeover provisions, although these will not provide the full protections afforded by the Takeover Code.
It is therefore possible that an offeror may gain control of the Company in circumstances where non-selling shareholders do not receive, or are not given the opportunity to receive, the benefit of any control premium paid to selling shareholders. Our Bye-laws contain certain anti-takeover provisions, although these will not provide the full protections afforded by the Takeover Code.
In addition, because of the legal uncertainties relating to how the 2021 Regulations will be interpreted and the form in which the proposed 2021 Regulations may be finalized, no 72 assurance can be given that the Company will not qualify as a PFIC under final IRS guidance or any future regulatory proposal or interpretation that may be subsequently introduced and promulgated.
In addition, because of the legal uncertainties relating to how the 2021 Regulations will be interpreted and the form in which the proposed 2021 Regulations may be finalized, no assurance can be given that the Company will not qualify as a PFIC under final IRS guidance or any future regulatory proposal or interpretation that may be subsequently introduced and promulgated.
If the Company is considered a PFIC, it could have material adverse tax consequences for an investor that is subject to U.S. federal income taxation. Investors should consult their tax advisors as to the effects of the PFIC rules and the possibility of making a “protective” QEF election or “mark-to-market” election. U.S.
If the Company is considered a PFIC, it could have material adverse tax consequences for an investor that is subject to U.S. federal income taxation. Investors should consult their tax advisors as to the effects of the PFIC rules and the possibility of making a “protective” QEF election or “mark-to-market” election. 64 U.S.
It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information. If any such agents exceed their authority or engage in fraudulent activities, our financial condition and results of operations could be materially adversely affected.
It is possible that we could misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information. If any such agents exceed their authority or engage in fraudulent activities, our business, financial condition and results of operations could be materially adversely affected.
Risk Factors Investing in Hamilton involves risk. In deciding whether to invest in Hamilton, you should carefully consider the following risk factors. Any of these risk factors could have a significant or material adverse effect on our businesses, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities.
In deciding whether to invest in Hamilton, you should carefully consider the following risk factors. Any of these risk factors could have a significant or material adverse effect on our businesses, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of our securities.
If the Company were characterized as a PFIC during a given year, each U.S. Holder would be subject to a penalty tax at the time of the taxable disposition at a gain of, or receipt of an “excess distribution” with respect to their shares, unless such person is a 10% U.S.
If the Company were characterized as a PFIC during a given year, each U.S. Holder would be subject to a penalty tax at the time of the taxable disposition of a gain of, or receipt of an “excess distribution” with respect to its shares, unless such person is a 10% U.S.
The effect of the UTPR to Hamilton Group could be to require the Group’s Irish and U.K. entities to pay a top-up tax to Ireland and/or the U.K., respectively, pursuant to an allocation formula prescribed in the applicable legislation unless the Group is eligible for the respective exemption under that jurisdiction's legislation.
The effect of the UTPR to the Company could be to require the Group’s Irish and U.K. entities to pay a top-up tax to Ireland and/or the U.K., respectively, pursuant to an allocation formula prescribed in the applicable legislation unless the Group is eligible for the respective exemption under that jurisdiction's legislation.
Shareholders own (directly, indirectly through non-U.S. entities or by attribution by application of the constructive ownership rules of Section 958(b) of the Code (i.e., “constructively”)) more than 50% of the total combined voting power of all classes of stock of such non-U.S. corporation, or more than 50% of the total value of all stock of such corporation.
Holders own (directly, indirectly through non-U.S. entities or by attribution by application of the constructive ownership rules of Section 958(b) of the Code (i.e., “constructively”)) more than 50% of the total combined voting power of all classes of stock of such non-U.S. corporation, or more than 50% of the total value of all stock of such corporation.
We, and our managing general agents, general agents and other agents who have the ability to bind our policies, rely on information provided by insureds or their representatives when underwriting insurance policies. While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information.
We, our MGAs, general agents and other agents who have the ability to bind our policies rely on information provided by insureds or their representatives when underwriting insurance policies. While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information.
Our investments are subject to a variety of financial and capital market risks including, but not limited to, changes in interest rates, credit spreads, equity and commodity prices, foreign currency exchange rates, increasing market volatility and risks inherent to particular securities.
Our investments are subject to a variety of financial and capital market risks including, but not limited to, changes in interest rates, credit spreads, equity and commodity prices, foreign currency exchange rates, increasing market volatility and risks inherent to particular financial instruments.
Additionally, from time to time, various regulatory and governmental agencies review the transactions and practices of us and our subsidiaries and in connection with industry-wide and other inquiries into, among other matters, the business practices of current and former operating insurance company subsidiaries.
Additionally, from time to time, various regulatory and governmental agencies review our transactions and practices and those of our subsidiaries in connection with industry-wide and other inquiries into, among other matters, the business practices of current and former operating insurance company subsidiaries.
The Company believes that, based on the implementation of its business plan and the application of the look-through rule and the exceptions set out under Section 1297 of the Code, none of the income and assets of the Company's non-U.S. insurance company subsidiaries should be treated as passive pursuant to the 25% Test, and thus the Company should not be characterized as a PFIC under current law for the current taxable year or for foreseeable future years, but because of the legal uncertainties, as well as factual uncertainties with respect to the Company’s planned operations, there is a risk that the Company will be characterized as a PFIC for U.S. federal income tax purposes.
The Company believes that, based on the implementation of its business plan and the application of the look-through rule and the exceptions set out under Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”), none of the income and assets of the Company's non-U.S. insurance company subsidiaries should be treated as passive pursuant to the 25% Test, and thus the Company should not be characterized as a PFIC under current law for the current taxable year or for foreseeable future years, but because of the legal uncertainties, as well as factual uncertainties with respect to the Company’s planned operations, there is a risk that the Company will be characterized as a PFIC for U.S. federal income tax purposes.
The Council of the European Union also temporarily added Bermuda to its “grey list” from February 2022 until October 2022. The “grey list” is a list of jurisdictions that have made sufficient commitments to reform their tax practices but remain subject to close monitoring while they are executing on their commitments. Bermuda taxation applicable to the Company.
The Council of the European Union also temporarily added Bermuda to its “grey list” from February 2022 until October 2022. The “grey list” is a list of jurisdictions that have made sufficient commitments to reform their tax practices but remain subject to close monitoring while they are executing on their commitments.
However, the 2017 Act limits the insurance income exception to a non-U.S. insurance company that is a qualifying insurance corporation that would be taxable as an insurance company if it were a U.S. corporation and maintains insurance liabilities of more than 25% of such company’s assets for a taxable year (the “25% Test”) or maintains insurance liabilities that at least equal or exceed 10% of its assets, is predominantly engaged in an insurance business and satisfies a facts-and-circumstances test that requires a showing that the failure to exceed the 25% threshold is due to runoff-related or rating-related circumstances (the “10% Test,” and together with the 25% Test, the “Reserve Test”).
However, the 2017 Tax Cuts and Jobs Act (the “TCJA”) limits the insurance income exception to a non-U.S. insurance company that is a qualifying insurance corporation that would be taxable as an insurance company if it were a U.S. corporation and maintains insurance liabilities of more than 25% of such company’s assets for a taxable year (the “25% Test”) or maintains insurance liabilities that at least equal or exceed 10% of its assets, is predominantly engaged in an insurance business and satisfies a facts-and-circumstances test that requires a showing that the failure to exceed the 25% threshold is due to runoff-related or rating-related circumstances (the “10% Test”, and together with the 25% Test, the “Reserve Test”).
Shareholder of a non-U.S. corporation that is a CFC during a taxable year and that owns shares in the CFC, directly or indirectly through non-U.S. entities, on the last day of the non-U.S. corporation’s taxable year that the non-U.S. corporation is a CFC, generally must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC’s “subpart F income,” and global intangible low taxed income (“GILTI”), even if the subpart F income or GILTI is not distributed.
Holder of a non-U.S. corporation that is a CFC during a taxable year and that owns shares in the CFC, directly or indirectly through non-U.S. entities, on the last day of the non-U.S. corporation’s taxable year that the non-U.S. corporation is a CFC, generally must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC’s “subpart F income”, and global intangible low taxed income (“GILTI”), even if the subpart F income or GILTI is not distributed.
As prescribed in the Bermuda law, a fair value calculation of Hamilton Group’s Bermuda assets and liabilities (including certain intangible assets not included in the GAAP balance sheet) was conducted as of September 30, 2023 and to the extent the fair value exceeded the book value, a deferred tax asset (“DTA”) was booked on the Bermuda balance sheet.
As prescribed in the Bermuda law, a fair value calculation of the Company’s Bermuda assets and liabilities (including certain intangible assets not included in the GAAP balance sheet) was conducted as of September 30, 2023, and to the extent the fair value exceeded the book value, a deferred tax asset (“DTA”) was booked on the Bermuda balance sheet.
If we misunderstand and/or inadequately quantify the nature and extent of the risks, we may fail to establish appropriate premium rates which could adversely affect our future financial results. In addition, our employees, including members of management and underwriters, make decisions and choices in the ordinary course of business that involve exposing us to risk.
If we misunderstand and/or inadequately quantify the nature and extent of the risks, we may fail to establish appropriate premium rates which could materially adversely affect our business, financial condition and results of operations. In addition, our employees, including members of management and underwriters, make decisions and choices in the ordinary course of business that involve exposing us to risk.
When Hamilton Group becomes subject to the UTPR on its Bermuda earnings, it is possible that it will incur a top-up tax liability if the Bermuda constituent entities do not achieve a 15% minimum effective tax rate.
When the Company becomes subject to the UTPR on its Bermuda earnings, it is possible that it will incur a top-up tax liability if the Bermuda constituent entities do not achieve a 15% minimum effective tax rate.
Our Bye-laws generally provide that the Class A and Class B shareholders have one vote per common share held by them and are entitled to vote together as a single class on all matters on which shareholders are entitled to vote generally, except as otherwise required by law or by our Bye-laws to vote as separate classes.
Our Bye-laws generally provide that holders of Class A and Class B common shares have one vote per common share held by them and are entitled to vote together as a single class on all matters on which shareholders are entitled to vote generally, except as otherwise required by law or by our Bye-laws to vote as separate classes.
Shareholders on any day of the taxable year of such corporation, if the gross amount of premiums or other consideration for the reinsurance or the issuing of insurance or annuity contracts exceeds 75% of the gross amount of all premiums or other consideration in respect of all risks. A 10% U.S. Shareholder is a U.S.
Holders on any day of the taxable year of such corporation, if the gross amount of premiums or other consideration for the reinsurance or the issuing of insurance or annuity contracts exceeds 75% of the gross amount of all premiums or other consideration in respect of all risks. A 10% U.S. Holder is a U.S.
Shareholder (as defined below) subject to tax under the CFC rules or such person made a “qualified electing fund” (“QEF”) election or, if the Class B common shares are treated as “marketable stock” in such year, such person made a mark-to-market election.
Holder subject to tax under the CFC rules or such person made a “qualified electing fund” (“QEF”) election or, if the Class B common shares are treated as “marketable stock” in such year, such person made a mark-to-market election.
The adoption of new laws or amendments to existing regulations may increase compliance costs, limit our ability to introduce new products, restrict underwriting or pricing practices, or require modifications to our existing policies and systems. Additionally, inconsistent regulatory approaches across jurisdictions may create operational complexity and increase the risk of non-compliance.
New laws or amendments to existing regulations may increase compliance costs, restrict underwriting or pricing practices, require modifications to models and systems, or limit our ability to introduce new products. Inconsistent regulatory approaches across jurisdictions may create operational complexity and raise the risk of non‑compliance.
Additionally, we may not collect all amounts due from our reinsurers under our existing reinsurance arrangements. As part of our risk management, we are reliant on the purchase of reinsurance for our own account from third parties, including retrocession coverage (i.e., the reinsurance of reinsurance). However, the availability and cost of reinsurance is subject to market conditions beyond our control.
Additionally, we may not collect all amounts due from our reinsurers under our existing reinsurance arrangements. As part of our risk management strategy, we rely on purchasing reinsurance for our own account from third parties, including retrocession coverage (i.e., reinsurance of reinsurance). However, the availability and cost of reinsurance are subject to market conditions beyond our control.
The DTA is expected to reduce Hamilton Group’s Bermuda tax liability in future years when it becomes subject to the Bermuda Corporate Income Tax regime.
The DTA is expected to reduce the Company’s Bermuda tax liability in future years when it becomes subject to the Bermuda Corporate Income Tax regime.
The Council of the European Union temporarily added Bermuda to the list of non-cooperative jurisdictions for tax purposes from March 2019 to May 2019, when Bermuda adopted economic substance legislation that the Council of the European Union deemed compliant with its requirements.
The Council of the European Union temporarily added Bermuda to the list of non-cooperative jurisdictions for tax purposes from March 2019 until May 2019, at which time Bermuda adopted economic substance legislation that the Council of the European Union deemed compliant with its requirements.
However, no assurance can be made that the Company will meet the requirement in all applicable jurisdictions in future years and could become subject to the UTPR if it does not achieve a 15% effective tax rate, inclusive of any corporate income taxes paid to Bermuda. The Bermuda corporate income tax is expected to limit Hamilton Group’s exposure to UTPR.
However, no assurance can be made that the Company will meet the requirement in 66 all applicable jurisdictions in future years and could become subject to the UTPR if it does not achieve a 15% effective tax rate, inclusive of any corporate income taxes paid to Bermuda.
Our Class C common shares will automatically convert into shares of our Class B common shares, on a share-for-share basis, upon future transfers (unless transferred to a permitted transferee as provided in our Bye-laws).
Our Class A and C common shares will automatically convert into shares of our Class B common shares, on a share-for-share basis, upon future transfers (unless transferred to a “permitted transferee” as provided in our Bye-laws).
Risks Relating to Taxation––Bermuda Tax Risks We may become subject to additional tax compliance in Bermuda and other countries should Bermuda be reinstated on the EU’s list of non-cooperative jurisdictions for tax purposes.
The Company may become subject to additional tax compliance in Bermuda and other countries should Bermuda be reinstated on the EU’s list of non-cooperative jurisdictions for tax purposes.
Because the United States and some other jurisdictions do not permit insurance companies to take credit on their statutory financial statements for reinsurance obtained from unlicensed or non-admitted insurers unless appropriate security mechanisms are in place, our reinsurance clients in these jurisdictions typically require Hamilton Re to provide letters of credit or other collateral.
Because the United States and some other jurisdictions do not permit insurance companies to take credit on their statutory financial statements for reinsurance obtained from unlicensed or non-admitted insurers unless appropriate security mechanisms are in place, and although Hamilton Re has obtained certified reinsurer and reciprocal jurisdiction in certain U.S. states, our reinsurance clients in certain jurisdictions typically require Hamilton Re to provide letters of credit or other collateral.
These disagreements could continue to affect Two Sigma’s ability to retain or attract employees (including very senior employees) and could continue to impact the ability of employees to fully implement key research, engineering, or corporate business initiatives. If such disagreement were to continue, Two Sigma’s ability to achieve the TS Hamilton Fund mandate could be impacted over time.
These disagreements have affected Two Sigma’s ability to retain and attract employees (including very senior employees) and could continue to impact the ability of Two Sigma employees to fully implement key research, engineering, or corporate business initiatives. As such disagreements continue, Two Sigma’s ability to achieve the mandate of the TS Hamilton Fund could be impacted over time.
In addition, our Board of Directors may, in its absolute discretion, make adjustments to the voting power of its shares to the extent necessary or advisable in order (i) to prevent (or reduce the magnitude of) a share voting limitation violation and (ii) to avoid adverse tax, legal or regulatory consequences to the Company, any subsidiary of the Company or any shareholder or its affiliates. 83 The multiple class structure of our common shares may limit investors’ ability to influence corporate matters.
In addition, our Board of Directors may, in its absolute discretion, make adjustments to the voting power of its shares to the extent necessary or advisable in order (i) to prevent (or reduce the magnitude of) a share voting limitation violation and (ii) to avoid adverse tax, legal or regulatory consequences to the Company, any subsidiary of the Company or any shareholder or its affiliates.
If holders of our non-voting Class C common shares effectuate transfers that result in conversion of Class C common shares to Class B common shares or if Class C common shares are redesignated as Class B common shares upon request from a holder of Class C common shares and approved by our Board of Directors, this will have the effect of decreasing the voting power of the holders of our Class B common shares, which may limit the ability of holders of Class B common shares to influence corporate matters.
If holders of our non-voting Class C common shares effectuate transfers that result in conversion of Class C common shares to Class B common shares or if Class C common shares are redesignated as Class B common shares upon request from a holder of Class C common shares and approved by our Board of Directors, this will have the effect of decreasing the voting power of the holders of our Class B common shares, which may limit the ability of holders of Class B common shares to influence corporate matters. 70 Anti-takeover provisions in our Bye-laws could delay management changes or limit share price.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See “Special Note Regarding Forward-Looking Information.” Risks Related to Our Business and Industry We operate in a highly competitive environment. Competition and consolidation in the insurance and reinsurance industry could adversely impact us.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below. See “Special Note Regarding Forward-Looking Information.” Risks Related to Our Business and Industry Competition and consolidation in the insurance and reinsurance industry could materially adversely affect our business, financial condition and results of operations.
We do not have fixed-term employment agreements with many of our key employees or key person life insurance and the loss of one or more of these key employees could adversely affect our business, results of operations and financial condition. Our success also depends on the ability to hire and retain additional personnel.
We do not have fixed-term employment agreements with many key employees, nor do we maintain key person life insurance. The loss of one or more key employees could materially adversely affect our business, results of operations, and financial condition. Our success also depends on hiring and retaining additional personnel.
Our business could be materially adversely affected if we do not accurately assess our underwriting risk. Our profitability is dependent on our ability to accurately assess the risks associated with the business we underwrite. We rely on the experience of our underwriting staff in assessing those risks, the accuracy of pricing tools and the clarity of our contract wording.
Our profitability is dependent on our ability to accurately assess the risks associated with the business we underwrite. We rely on the experience of our underwriting staff in assessing those risks, the accuracy of pricing tools and the clarity of our contract wording.
On January 15th, 2025, the OECD issued additional guidance relating to the calculation of tax liabilities pursuant to the UTPR. Specifically, it provides that the reductions of tax due to the economic transition adjustment (“ETA”) allowed under Bermuda tax law will be limited for calculating the UTPR.
The Bermuda corporate income tax is expected to limit the Company’s exposure to UTPR. On January 15, 2025, the OECD issued guidance relating to the calculation of tax liabilities pursuant to the UTPR. Specifically, it provides that the reductions of tax due to the economic transition adjustment (“ETA”) allowed under Bermuda tax law will be limited for calculating the UTPR.
Shareholder, in which case such U.S. Holder may be subject to taxation under the CFC rules. 73 U.S. Persons who own or are treated as owning Class B common shares may be subject to U.S. income taxation at ordinary income rates on their proportionate share of RPII of the Company's non-U.S. subsidiaries.
Persons who own or are treated as owning Class B common shares may be subject to U.S. income taxation at ordinary income rates on their proportionate share of RPII of the Company's non-U.S. subsidiaries.
As at January 1, 2025, our modeled 100-Year Occurrence Exceedance Probability for Atlantic Hurricanes in Florida was $202.1 million and our modeled 250-Year Occurrence Exceedance Probability for U.S. Mainland Earthquakes in California was $277.8 million. Our biggest concentration of exposure to U.S.
As of January 1, 2026, our modeled 100-Year Occurrence Exceedance Probability for Atlantic Hurricanes in Florida was $242.3 million and our modeled 250-Year Occurrence Exceedance Probability for U.S. Mainland Earthquakes in California was $292.3 million. Our biggest concentration of exposure to U.S.
Treasury Department recently issued final and proposed regulations intended to clarify the application of the insurance income exception to the classification of a non-U.S. insurer as a PFIC and provide guidance on a range of issues relating to PFICs, and recently issued proposed regulations that would expand the scope of the RPII rules.
Further, the Treasury Department issued final and proposed regulations intended to clarify the application of the insurance income exception to the classification of a non-U.S. insurer as a PFIC and provide guidance on a range of issues relating to PFICs (the “2021 Regulations”).
The exemption is similar to the exemption allowed in Bermuda and accordingly, Hamilton Group intends to meet the exemption requirements for the entirety of the five years and be exempt from applying the UTPR to its Bermuda entities until January 1, 2030.
The exemption is similar to the exemption allowed in Bermuda and accordingly the Company intends to meet the exemption requirements and be exempt from applying the UTPR to its Bermuda entities until January 1, 2030.
The legislation generally requires that U.K. domiciled entities pay a top-up tax for subsidiary companies in non-U.K. jurisdictions whose effective tax rate is less than 15%, Income Inclusion Rule (“IIR”) and a top-up tax for UK domiciled entities whose effective rate is less than 15%, Qualified Domestic Top-up Tax (“QDMTT”).
The U.K. has passed legislation conforming to the OECD BEPS Pillar 2 framework, which generally requires that U.K. domiciled entities pay a top-up tax for subsidiary companies in non-U.K. jurisdictions whose effective tax rate is less than 15% (the Income Inclusion Rule or “IIR”) and a top-up tax for U.K. domiciled entities whose effective rate is less than 15%, (the Qualified Domestic Top-up Tax or “QDMTT”).
Under these provisions, some shareholders may have the right to exercise their voting rights limited to less than one vote per common share that they own. Moreover, these provisions could have the effect of reducing the voting power of some shareholders who would not otherwise be subject to the limitation by virtue of their direct Class B common share ownership.
As a result, some shareholders may have their voting rights limited to less than one vote per common share and these provisions may also have the effect of reducing the voting power of some shareholders who would not otherwise be subject to the limitation by virtue of their direct Class B common share ownership.
Each Class A common share and Class B common share is generally entitled to one vote per share as outlined above, while our Class C common shares have no voting rights, except as otherwise required by law.
The multiple-class structure of our common shares may limit investors’ ability to influence corporate matters. Each Class A common share and Class B common share is generally entitled to one vote per share as outlined above, while our Class C common shares have no voting rights, except as otherwise required by law.
If we cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating plans and our business, financial condition or results of operations could be materially adversely affected. 57 The covenants in our debt agreements limit our financial and operational flexibility, which could have an adverse effect on our financial condition.
If we cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating plans and our business, financial condition or results of operations could be materially adversely affected.
As a result, in general, we do not expect to have recourse to Two Sigma for our losses and the value of capital accounts of Hamilton Re in the TS Hamilton Fund could be reduced in the event that Two Sigma (or its affiliates) incur losses, all of which could have a material and adverse impact on our financial conditions and results of operations.
As a result, in general, we do not expect to have recourse to Two Sigma for our losses and the value of capital accounts of Hamilton Re in the TS Hamilton Fund could be reduced in the event that Two Sigma (or its affiliates) incur losses, all of which could have a material adverse effect on our business, financial condition and results of operations. 62 Conflicts of interest and regulatory scrutiny may adversely affect trade allocation, execution and performance.
Our credit facilities are used to post letters of credit. However, if our credit facilities are not sufficient or if we are unable to renew our credit facilities or arrange for other types of security on commercially affordable terms, Hamilton Re could be limited in its ability to write business for some of our clients.
However, if our credit facilities are not sufficient or if we are unable to renew our credit facilities or arrange for other types of security on commercially affordable terms, Hamilton Re could be limited in its ability to write business for some of our clients which could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Our Investment Strategy Our business, prospects, financial condition or results of operations may be adversely affected by reductions in the aggregate value of our investment portfolio. Our operating results depend in part on the performance of our investment portfolio, including our investment in the TS Hamilton Fund.
Risks Related to Our Investment Strategy Reductions in the value of our investment portfolio could materially adversely affect our business, results of operations and financial condition. Our operating results depend in part on the performance of our investment portfolio, including our investment in the TS Hamilton Fund.
If we need to raise additional capital, equity or debt financing may not be available at all or may be available only on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result.
If we need to raise additional capital, equity or debt financing may not be available at all or may be available only on terms that are not favorable to us.
The Irish legislation also included a provision, effective January 1, 2025, that generally requires a top-up tax be paid by Irish entities on related non-Irish entities of a consolidated group that are not already subject to a top-up tax pursuant to the IIR and QDMTT, and have not achieved a minimum tax rate of 15%, Under Tax Payment Rule (“UTPR”).
A top-up tax must also be paid by U.K. entities on related non-U.K. entities of a consolidated group that are not already subject to a top-up tax pursuant to the IIR and QDMTT and have not achieved a minimum tax rate of 15% (Under-Taxed Payment Rule or “UTPR”).
As a result, any such downgrade could have a material adverse effect on our business, financial condition, results of operations and prospects. We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
Any unfavorable changes to our ratings, or increases in market‑required minimum ratings, could therefore have a material adverse effect on our business, financial condition and results of operations. 57 We may require additional capital in the future, which may not be available or may only be available on unfavorable terms.
“Excess Profits” for any given fiscal year (or other such accounting period) means the net profits over 10% for such fiscal year, net of management fees and expenses and gross of incentive allocations, but only after recouping previously unrecouped net losses.
Excess Profits for any given fiscal year (or other accounting period) means the net profits over 10%, net of management fees and expenses and gross of incentive allocations, but only after recouping previously unrecouped net losses. Those fees and incentives can materially reduce net returns and exacerbate drawdowns after loss periods.
In addition, after a large catastrophic event or circumstance, we may record significant amounts of reinstatement premium, which can cause quarterly, non-recurring fluctuations in both our written and earned premiums. Any of the foregoing may increase the volatility of our short-term, financial results relative to our long-term prospects.
In particular, we seek to underwrite products and make investments to achieve long-term results. In addition, after a large catastrophic event or circumstance, we may record significant amounts of reinstatement premium, which can cause quarterly, non-recurring fluctuations in both our written and earned premiums.
Prolonged and severe disruptions in the public debt and equity markets, including, among other things, volatility of interest rates, widening of credit spreads, bankruptcies, defaults, significant ratings downgrades, geopolitical instability, and a decline in equity or commodity markets, may cause significant losses in our investment portfolio.
Disruptions in the public debt and equity markets, including, among other things, volatility of interest rates, widening of credit spreads, bankruptcies, defaults, significant ratings downgrades, geopolitical instability, and a decline in equity or commodity markets, may cause significant losses in our investment portfolio. Market volatility can make it difficult to value certain financial instruments if their trading becomes infrequent.
Any such development could significantly and negatively affect our operations. Our business is subject to certain laws and regulations relating to sanctions and foreign corrupt practices, the violation of which could adversely affect our operations.
Any significant regulatory development or enforcement action could materially adversely affect our business, financial condition and results of operations. 67 Our business is subject to certain laws and regulations relating to sanctions and foreign corrupt practices, the violation of which could adversely affect our business, financial condition and results of operations.
We must comply with all applicable economic sanctions and anti-bribery laws and regulations of the United States and non-U.S. jurisdictions where we operate, including Bermuda, the U.K., Ireland and the EU.
We must comply with all applicable economic sanctions and anti-bribery laws and regulations in the United States and other jurisdictions where we operate, including Bermuda, the U.K., Ireland and the EU. U.S. laws and regulations applicable to us include economic trade sanctions administered by the Office of Foreign Assets Control ("OFAC") and certain laws administered by the U.S.
Risks Related to Liquidity, Capital and Credit Our external financial strength credit ratings could be downgraded. Third-party rating agencies assess and rate the claims-paying ability of insurers and reinsurers based upon criteria established by the rating agencies.
Risks Related to Liquidity, Capital and Credit Our external financial strength credit ratings could be downgraded. Independent rating agencies evaluate the claims-paying ability of insurers and reinsurers using their own methodologies and criteria.
Further, the Commitment Agreement provides that none of Two Sigma, the Managing Member or TS Hamilton Fund are responsible for any performance of their obligations thereunder to the extent such obligations would reasonably conflict with their fiduciary duties to other clients or investors in such clients or are reasonably expected to result in materially adverse legal or regulatory risk, as determined in any such party’s sole discretion on the advice of its internal or external counsel.
The Commitment Agreement provides that Two Sigma will not be responsible for performance of its obligations under the Commitment Agreement to the extent that such obligations (x) would reasonably conflict with Two Sigma's fiduciary duties to other clients or investors in such clients or (y) are reasonably expected to result in materially adverse legal or regulatory risk, as determined in Two Sigma's sole discretion, which may limit opportunities for the TS Hamilton Fund.
The Corporate Income Tax Act 2023 could, if applicable to the Company, have a material adverse effect on the Company's financial condition and results of operations. The Corporate Income Tax Act 2023 provides an exemption (for up to five years) from the tax charging provisions of the legislation for "MNE Groups" with a limited international footprint.
The Corporate Income Tax Act 2023 provides an exemption (for up to five years) from the tax charging provisions of the legislation for "MNE Groups" with a limited international footprint.
We are incorporated under the laws of Bermuda and a substantial portion of our assets are located outside the United States. As a result, it may not be possible to enforce court judgments of U.S. courts, including judgments predicated upon civil liability provisions of the U.S. federal securities law.
As a result, it may not be possible to enforce court judgments of U.S. courts, including judgments predicated upon civil liability provisions of the U.S. federal securities law.
Such challenges of assessing risk and pricing premiums are often increased in our U.S. E&S business lines, where there may be more limited historical claims and underwriting data than in admitted insurance markets.
Such challenges of assessing risk and pricing premiums are often increased in our U.S. E&S business lines, where there may be more limited historical claims and underwriting data than in admitted insurance markets. Beyond the risks associated with natural and non-natural catastrophe accumulations, underwriting risk may arise from incorrect assumptions about inflation, claims practices, or social trends.
In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur.
Our ability to pay dividends may also be limited by covenants in existing or future indebtedness.
Any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors and will depend on, among others, our results of operations, financial condition, cash requirements, contractual restrictions pursuant to our debt agreements, our indebtedness, restrictions imposed by applicable law and other factors that our Board of Directors may deem relevant, including, but not limited to, applicable law.
Any future decision regarding the declaration and payment of dividends will be made by our Board of Directors at its discretion and will depend on a variety of factors, including our results of operations, financial condition, cash requirements, contractual restrictions under our debt agreements, applicable law, and other considerations the Board may deem relevant.
In addition, we are subject to the Foreign Corrupt Practices Act of 1977 and other anti-bribery laws su ch as the Irish Criminal Justice (Corruption Offences) Act, the Bermuda Bribery Act and the U.K. Bribery Act, that generally prohibit corrupt payments or improper gifts to non-U.S. governments or officials.
We are also subject to anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act, the Bermuda Bribery Act and the Irish Criminal Justice (Corruption Offences) Act. These laws generally prohibit improper payments or gifts to government officials and impose strict recordkeeping and internal control requirements.
In recent years, a number of investment managers and other financial institutions have suffered material losses due to, for example, the actions of traders executing unauthorized trades or other employee misconduct. It is not always possible to deter or fully prevent employee misconduct and the precautions Two Sigma takes to prevent and detect this activity may not always be effective.
In recent years, a number of investment managers and other financial institutions have suffered material losses due to, for example, the actions of traders executing unauthorized trades or other employee misconduct.
Purchasing reinsurance does not relieve us of our underlying obligations to policyholders or ceding companies, so any inability to collect amounts due from reinsurers could adversely affect our financial condition and results of operations. We face the risk of not collecting amounts due from reinsurers if they choose to withhold payment due to disputes or other factors beyond our control.
Purchasing reinsurance does not relieve us of our underlying obligations to policyholders or ceding companies. Therefore, any inability to collect amounts due from reinsurers could materially adversely affect our business, financial condition and results of operations.
As discussed further below, we are contractually required to maintain an investment in the TS Hamilton Fund pursuant to the Commitment Agreement, which represents a material portion of our investment portfolio, and which Commitment Agreement remains in effect in accordance with its terms even if the TS Hamilton Fund incurs substantial losses or otherwise does not meet our investment objectives. 61 We maintain a fixed income portfolio which could be impacted by interest rate and credit risk.
These effects could materially adversely affect our business, financial condition and results of operations. 60 Additionally, we are contractually required to maintain an investment in the TS Hamilton Fund pursuant to the Commitment Agreement with Two Sigma, which represents a material portion of our investment portfolio, and which Commitment Agreement remains in effect in accordance with its terms even if the TS Hamilton Fund incurs substantial losses or otherwise does not meet our investment objectives.
Our Bye-laws provide a mechanism under which we shall, before a vote of the shareholders on any matter, in certain circumstances reallocate a proportion of the voting rights held by or attributed to certain shareholders among other shareholders so as to ensure that those certain shareholders and their affiliates are not deemed to own shares possessing voting power comprising more than 9.5% of the total combined voting power conferred by the common shares (or, in the case of holders of our Class B common shares when voting as a class (for example, in respect of the election or removal of directors other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws), such voting power may be reduced to a maximum of 14.92% of the total combined voting power, calculated by multiplying (a) 9.5% and (b) the quotient reached by dividing (x) the total number of directors by (y) the number of directors elected by holders of Class B common shares, to avoid certain adverse tax, legal or regulatory consequences (each, “a share voting limitation violation”).
For votes where Class B holders vote as a separate class (for example, in respect of the election or removal of directors other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws), such voting power may be reduced by an amount calculated by multiplying (a) 9.5% and (b) the quotient reached by dividing (x) the total number of directors by (y) the number of directors elected by holders of Class B common shares, to avoid certain adverse tax, legal or regulatory consequences (each, “a share voting limitation violation”).
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. The insurance and reinsurance industry has historically been cyclical by product and market.
Any of the foregoing may increase the volatility of our short-term, financial results relative to our long-term prospects. 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, or agents we have appointed, may act based on inaccurate or incomplete information regarding the accounts we underwrite, or such agents may exceed their authority or commit fraud when binding policies on our behalf.
Any significant increase in claims costs or expansion of coverage obligations could materially adversely affect our business, financial condition and results of operations. We, or agents we have appointed, may act based on inaccurate or incomplete information regarding the accounts we underwrite, or such agents may exceed their authority or commit fraud when binding policies on our behalf.
In the normal course of our business, we are subject to regulatory and governmental investigations and civil actions, litigation and other forms of dispute resolution in various jurisdictions.
In the normal course of our business, we are subject to regulatory and governmental investigations and civil actions, litigation and other forms of dispute resolution in various jurisdictions. We are occasionally involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims.
Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage, purchase of reinsurance and expansion of supportive collateralized capacity, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that we expect. 49 Our most material natural catastrophe accumulation risks are from Atlantic Hurricanes and U.S Mainland Earthquakes.
Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage and the purchase of reinsurance, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that we expect which could have a material adverse effect on our business, financial condition and results of operations. 51 Our business, financial condition and results of operations could be materially adversely affected if we do not accurately assess our underwriting risk.
Our performance substantially depends on the efforts and abilities of our management team and other executive officers and key employees. Furthermore, much of our competitive advantage is based on the expertise, experience and know-how of our key management personnel.
Risks Related to Our Business Strategy We depend on our key personnel to manage our business effectively and they may be difficult to replace. Our performance depends on the efforts and abilities of our management team, executive officers, and other key employees. Much of our competitive advantage is based on their expertise and experience.
The law includes a provision that exempts consolidated groups from the UTPR until January 1, 2030 so long as they operate in six or less jurisdictions and have less than EUR 50 million in tangible assets. The U.K. passed legislation during 2024, effective January 1, 2025.
The law includes transitional provisions that exempt consolidated groups from the UTPR, so long as they operate in six or fewer jurisdictions and have less than EUR 50 million in tangible assets. Ireland has also passed similar conforming legislation, which is substantially similar to the U.K. legislation.
Risks Related to Regulation The regulatory framework under which we operate, and potential changes thereto could have a material adverse effect on our business. Our activities are subject to extensive regulation under the laws and regulations of the United States, the United Kingdom, Ireland and Bermuda, and the other jurisdictions in which we operate.
Risks Related to Regulation Compliance with existing regulations and potential changes in the regulatory landscape may have a material adverse effect on our business, financial condition and results of operations. We operate under extensive regulation in the U.S., U.K., Ireland, Bermuda and other jurisdictions.
In the case of debt financings, we may be subject to covenants that restrict our ability to freely operate our business.
In the case of equity financings, our shareholders may experience dilution, or we may issue securities that have rights, preferences and privileges that are senior to those of our other securities. In the case of debt financings, we may be subject to covenants that restrict our ability to freely operate our business.
Such criminal or civil sanctions, penalties, other sanctions, and damage to our business and reputation could adversely affect our financial condition and results of operations. Our business is subject to cybersecurity, privacy and data protection laws, rules and regulations in the jurisdictions in which we operate, which can increase the cost of doing business, compliance risks and potential liability.
Our business is subject to cybersecurity, privacy and data protection laws, rules and regulations in the jurisdictions in which we operate, which can increase the cost of doing business, compliance risks and potential liability. We operate in a complex and rapidly evolving regulatory environment governing cybersecurity, privacy and data protection across multiple jurisdictions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile there have been no material cybersecurity incidents that have affected Hamilton for the period covered by this annual report, there can be no guarantee that (i) our policies and procedures will be properly followed in every instance or that those policies and procedures will be effective or (ii) that there will not be incidents in the future or that they will not materially affect us, including our strategy, results of operations, or financial condition.
Biggest changeAlthough we routinely identify and respond to lower‑level security events as part of normal cybersecurity risk‑management processes, to date we have not identified any direct or third‑party cybersecurity incidents, or otherwise identified cybersecurity threats, that have materially affected or are reasonably likely to materially affect Hamilton, including our business strategy, results of operations, or financial condition. 72 While there have been no material cybersecurity incidents affecting Hamilton during the period covered by this annual report, no assurance can be given that our policies and procedures will be properly followed in every instance or will be fully effective, or that future incidents will not materially affect us.
Both our management and Board of Directors recognize the importance of developing, implementing and maintaining appropriate cybersecurity measures and, as described below, are actively involved in cybersecurity and overall enterprise risk management. Cybersecurity Risk Management and Strategy We maintain a cybersecurity risk management program that is an important part of, and integrated into, our enterprise risk management function.
Both our management and Board of Directors recognize the importance of developing, implementing, and maintaining appropriate cybersecurity measures and, as described below, are actively involved in cybersecurity and overall enterprise risk management. Cybersecurity Risk Management and Strategy We maintain a cybersecurity risk management program that is integrated into our enterprise risk management function.
Item 1C. Cybersecurity Managing risk related to cybersecurity is a top priority for Hamilton, and we concentrate on assessing, identifying, and managing material risks associated with “cybersecurity threats,” as such term is defined in Item 106(a) of Regulation S-K.
Item 1C. Cybersecurity Managing risks related to cybersecurity is a priority for Hamilton, and we focus on assessing, identifying, and managing material risks associated with “cybersecurity threats,” as such term is defined in Item 106(a) of Regulation S‑K.
The program is designed to assess, identify, manage and protect our information systems and data from unauthorized access, use, disclosure, disruption, modification or destruction. Identifying, assessing, and managing cybersecurity risk shares common methodologies, reporting channels and governance processes that apply across our risk management process, including other legal, compliance, strategic, operational and financial risk areas.
The program is designed to assess, identify, manage, and protect our information systems and data from unauthorized access, use, disclosure, disruption, modification, or destruction. Identifying, assessing, and managing cybersecurity risk within Hamilton utilizes the same or similar methodologies, reporting channels, and governance processes as those in our broader risk management program, including legal, compliance, strategic, operational, and financial risk areas.
Thereafter, we annually follow up with approved vendors for updated certifications. 86 As discussed above, we maintain an incident response plan to address cybersecurity incidents, which identifies key stakeholders, defines escalation processes and sets the thresholds above which our cybersecurity, legal and crisis management teams will inform senior management as well as our Board of Directors of a cybersecurity incident.
We maintain an incident response plan to address cybersecurity incidents, which identifies key stakeholders, defines escalation processes, and sets the thresholds above which our cybersecurity, legal, and crisis‑management teams will inform senior management and our Board of Directors of a cybersecurity incident.
For cybersecurity incidents below these crisis thresholds, we maintain subordinate incident response plans and standard operating procedures used by our security incident response team.
For incidents below those thresholds, subordinate incident response plans and standard operating procedures are used by our security incident response team.
Additionally, to stay current on cybersecurity matters affecting the insurance industry and the marketplace in general, our Chief Information Security Officer & Global Head of IT Operations ("CISO") is an active member of the ISC2 organization and regularly participates in cybersecurity-focused conferences and forums, including serving on the Chief Information Security Officers Committee of Lloyd’s Market Association.
To stay current on cybersecurity matters affecting the insurance industry and marketplace generally, our Chief Information Security Officer (“CISO”) is an active member of the International Information System Security Certification Consortium and regularly participates in cybersecurity‑focused conferences and forums, including serving on the Chief Information Security Officers Committee of the Lloyd’s Market Association.
These processes involve six stages: 1) detection, 2) analysis, 3) containment, 4) eradication, 5) recovery, and 6) notification. Security events and data incidents are evaluated for severity and impact on our operations, business, and data, and our response is prioritized accordingly. Our security team collaborates with stakeholders across the Company and forms strategies for addressing identified issues.
These processes include six stages: (1) detection, (2) analysis, (3) containment, (4) eradication, (5) recovery, and (6) notification. Security events and data incidents are evaluated for severity and potential impact on our operations, business, and data, and responses are prioritized accordingly.
To protect against, detect, and respond to cybersecurity incidents, we, among other things, require our employees to undergo annual cybersecurity awareness training, monitor emerging laws and regulations related to data protection and information security and utilize a variety of multilayered technical tools to conduct proactive privacy and cybersecurity vulnerability assessments of our systems and applications, including scanning for and resolving open tickets.
We require employees to undergo annual cybersecurity awareness training, monitor emerging laws and regulations relating to data protection and information security, and use multilayered technical tools to perform proactive privacy and cybersecurity vulnerability assessments of our systems and applications, including scanning for and addressing identified risks.
Senior management, including our Chief Technology Officer & Chief Data Officer ("CTO") and our CISO, in coordination with our legal and compliance teams, are responsible for implementing our cybersecurity risk management program, as well as being involved in all aspects of incident response and breach management processes.
In 2025, following the retirement of our Chief Technology Officer, responsibility for technology leadership transitioned to our Chief Information Officer (“CIO”). The CIO, together with the CISO and in coordination with our legal and compliance teams, is responsible for implementing our cybersecurity risk management program and is involved in all aspects of incident response and breach‑management processes.
This involves regularly testing, as part of our business continuity and disaster recovery strategies, our ability to restore our systems if they are impacted by a cybersecurity event or incident. In addition, as part of the foregoing processes, we annually engage third-party advisors to perform penetration tests against our infrastructure.
As part of our business continuity and disaster recovery strategies, we regularly test our ability to restore systems impacted by a cybersecurity event or incident. We also engage third‑party advisors annually to perform penetration tests of our infrastructure. As part of our risk management program, we assess third‑party risks, including risks posed by vendors, suppliers, and other business partners.
For a further discussion of the risks associated with cybersecurity threats see "Risk Factors — Risks Related to Our Business and Industry—We are subject to cybersecurity risks, including cyber-attacks, security breaches and other similar incidents with respect to our and our service providers’ information technology systems, which could result in regulatory scrutiny, legal liability or reputational harm, and we may incur increasing costs to minimize those risks” and "Risk Factors—Risks Related to Regulation — Our business is subject to cybersecurity, privacy and data protection laws, rules and regulations in the jurisdictions in which we operate, which can increase the cost of doing business, compliance risks and potential liability." Cybersecurity Board Oversight and Governance Cybersecurity is important to our Board of Directors and management.
For further discussion of risks associated with cybersecurity threats, see “Risk Factors—Risks Related to Our Business and Industry—Interruptions to or failures of the information technology systems upon which we rely, including those resulting from cybersecurity attacks and security breaches, could materially adversely affect our business, financial condition and results of operations” and “Risk Factors—Risks Related to Regulation—Our business is subject to cybersecurity, privacy and data protection laws, rules and regulations in the jurisdictions in which we operate, which can increase the cost of doing business, compliance risks and potential liability. ” Cybersecurity Board Oversight and Governance Cybersecurity is a component of our Board’s oversight responsibilities.
Specifically, before engaging new critical IT vendors, we require them to complete questionnaires concerning their IT and security processes, controls, and certifications.
Cybersecurity practices and risks are evaluated when selecting third‑party service providers and when negotiating contractual provisions relating to security and privacy, including information‑security audit rights. Before engaging new critical IT vendors, we require them to complete questionnaires concerning their IT and security processes, controls, and certifications.
We also routinely conduct internal IT audits around our cybersecurity posture as well as scenario-based cybersecurity risk assessments to ensure the right controls are in place to address identified risks.
We have implemented and maintain several safeguards and processes designed to identify cybersecurity risks and protect our information systems from cybersecurity threats. We also conduct internal IT audits of our cybersecurity posture and perform scenario‑based cybersecurity risk assessments to ensure that appropriate controls are in place.
The responses in these questionnaires are then reviewed by our CISO and assessed against a checklist of minimum requirements that must be met for Hamilton to consider the service provider to be a vendor of trust whose services may be used by our organization.
The CISO or designated members of the cybersecurity team review responses against a checklist of minimum requirements that must be met for Hamilton to consider the service provider a trusted vendor. We then follow up with approved vendors annually for updated certifications.
He has reported on, among other things, cybersecurity risks and incidents, a business continuity and disaster recovery exercise, completed and ongoing cyber audits, security metrics and key performance indicators, penetration testing results and remediation progress, the status of Hamilton’s data governance program, and cyber insurance coverage.
The Technology Committee receives regular reports from our CIO, CISO, and other senior management regarding cybersecurity risks and incidents, business continuity exercises, completed and ongoing cyber audits, security metrics, penetration‑testing results and remediation progress, data‑governance initiatives, and cyber‑insurance coverage. The Audit Committee retains primary responsibility for oversight of enterprise‑level cybersecurity risk.
Our CISO has two decades of professional experience in various senior roles, such as Linux information systems engineer, Senior Network Engineer, Director of IT, Senior Leader Infrastructure Engineering and VP/CTO, within the financial services industry. He holds a Bachelor’s degree in computer and network science and an electronics engineering degree. 87
Our CISO has approximately two decades of experience in senior engineering, infrastructure, and information-security roles within the financial services industry, providing deep technical knowledge to support cybersecurity risk management.
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We have implemented and maintain several safeguards and processes designed to identify cybersecurity risks and protect our information systems from cybersecurity threats. For example, we have implemented internal IT general controls such as data encryption, monitoring, data storage, identity / authentication controls and anti-malware and anti-virus solutions.
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In 2025, the Board established a Technology Committee to assist the Board in its oversight of the Company's technology strategy, technology service delivery, technology governance and cybersecurity risk management program.
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As part of our risk management program, we also assess third-party risks, including risks posed by vendors, suppliers, and other business partners. Cybersecurity practices and risks are evaluated when selecting third-party service providers and when negotiating contractual provisions related to security and privacy, including information security audit rights.
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Significant matters identified by the Technology Committee, CIO, CISO, or senior management are escalated to the Audit Committee. Both the Technology Committee and the Audit Committee report to the full Board, which maintains ultimate responsibility for oversight of the Company’s risk‑management framework.
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Although we identify and respond to small security events and risks as a normal part of our cybersecurity risk management processes, to date, we are not aware of any direct or third-party cybersecurity incidents or otherwise identified any ongoing or previous risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect Hamilton, including its business strategy, results of operations, or financial condition.
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At the management level, cybersecurity oversight is supported by our cross-functional Risk Management Working Group, which is part of our enterprise risk-management program.
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On a quarterly basis, our CISO reports on cybersecurity matters to a risk committee comprised of a cross-functional management team (“Risk Committee”).
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On at least a quarterly basis—and more frequently as needed—the CIO, CISO, and other senior personnel provide updates to the Risk Management Working Group, Technology Committee, and Audit Committee regarding cybersecurity risk assessments, emerging threats, incident readiness, audit findings, remediation progress, business continuity and disaster recovery testing, regulatory developments, and the status of key information-security initiatives.
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The Risk Committee escalates important issues identified in these reports to our Audit Committee, to which our full Board of Directors, while having ultimate responsibility for risk management oversight generally, has delegated primary oversight of cybersecurity risks.
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Material issues are escalated to the Technology and Audit Committees to ensure alignment and timely action. Senior management responsible for managing material cybersecurity risks have extensive cybersecurity and IT experience.
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In addition to quarterly reports to the Risk Committee, senior management, including our CTO and CISO, are responsible for directly reporting to the Audit Committee on cybersecurity matters.
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Our CIO previously served in multiple senior technology leadership roles in the insurance and financial sectors and was inducted into the CIO Hall of Fame in 2018, reflecting recognized expertise in enterprise technology and information security.
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This includes reporting, on a quarterly basis and as significant matters arise, about existing and new cybersecurity risks, how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any), and status on key information security initiatives. The Audit Committee convenes prior to each quarterly Board meeting to discuss cybersecurity risks and other information security matters.
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The Audit Committee also periodically reviews our processes and policies for managing material risks from cybersecurity threats. Any material risks, cybersecurity incidents or other matters are subsequently discussed with the full Board at the Board meeting. The members of senior management involved in managing our material risks from cybersecurity threats have extensive cybersecurity and IT experience.
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For example, prior to joining Hamilton, over the past two and a half decades, our CTO has held leadership roles in the areas of software development, IT governance, IT operations, and security operations, ranging from executive director to chief technology officer.
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This experience spanned various companies, including an expert network/knowledge broker, an educational publishing company, a financial data vendor, a media conglomerate, and an investment bank. Among other things, he has provided leadership in building out global technology platforms, which have operated with multi-jurisdictional cybersecurity policies.
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He holds a Bachelor of Science degree in electronics and communications engineering, holds a Master’s degree in computer science, is a Certified Information Systems Security Professional and serves as a director on the board of ACORD, which is an organization responsible for setting digital standards for insurance and reinsurance companies globally.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The information required by this Item relating to legal proceedings is incorporated herein by reference to information included in Note 15, Commitments and Contingencies of the accompanying notes to our accompanying audited consolidated financial statements. Item 4. Mine Safety Disclosures None. 88 Part II
Biggest changeItem 3. Legal Proceedings The information required by this Item relating to legal proceedings is incorporated herein by reference to information included in Note 15, Commitments and Contingencies of the accompanying notes to our accompanying audited consolidated financial statements. Item 4. Mine Safety Disclosures None. 73 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur ability to pay cash dividends on our Class B common shares may also be limited by the terms of the existing (or future) agreements governing our indebtedness as well as any future debt securities we may issue.
Biggest changeOur ability to pay cash dividends on our common shares may also be limited by the terms of the existing (or future) agreements governing our indebtedness as well as any future debt securities we may issue. 74 Performance Graph The following information is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Act of 1933, as amended, or the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such filing.
Performance Graph The following graph compares the cumulative total shareholder return on our Class B common shares from November 13, 2023 to December 31, 2024, to the cumulative total return, assuming reinvestment of dividends, of (1) S&P 500 Composite Stock Index ("S&P 500") and (2) the S&P 500 Property & Casualty Insurance Index ("S&P 500 P&C").
The following graph compares the cumulative total shareholder return on our Class B common shares from November 13, 2023 to December 31, 2025, to the cumulative total return, assuming reinvestment of dividends, of (1) the S&P 500 Composite Stock Index ("S&P 500") and (2) the S&P 500 Property & Casualty Insurance Index ("S&P 500 P&C").
As of February 20, 2025, there were approximately 2, 154 and 3 holders of record of our Class A, B and C common shares, respectively. These figures do not represent the actual number of beneficial owners of our common shares because shares are frequently held in "street name" by securities dealers and other financial institutions on behalf of our shareholders.
As of February 19, 2026, there were approximately 2, 128 and 2 holders of record of our Class A, B and C common shares, respectively. These figures do not represent the actual number of beneficial owners of our common shares because shares are frequently held in "street name" by securities dealers and other financial institutions on behalf of our shareholders.
Our Class A and Class C common shares are not listed or traded on any securities exchange and there is currently no established public trading market for our Class A or C common shares. Dividends We have not declared or paid any dividends on any class of our common shares to date.
Our Class A and Class C common shares are not listed or traded on any securities exchange and there is currently no established public trading market for our Class A or C common shares. Dividends We have not historically declared or paid regular cash dividends on any class of our common shares.
The Company may repurchase shares through open market repurchases and/or privately negotiated transactions. The Authorization will expire when the Company has repurchased the full value of shares authorized, unless terminated earlier by the Board of Directors. To the extent there is any repurchase activity under the Authorization, it is disclosed in Note 11, Share Capital .
The Authorization will expire when the Company has repurchased the full value of shares authorized, unless terminated earlier by the Board of Directors. To the extent there is any repurchase activity under the Authorization, it is also disclosed in Note 11, Share Capital . Repurchases under the Authorization totaled $7.7 million for the quarter ended December 31, 2025.
Repurchases under the Authorization totaled $18.1 million for the quarter ended December 31, 2024. (2) Other shares purchased represents common shares repurchased and cancelled in respect of withholding tax obligations on vested awards. Item 6. Reserved 90
(2) Other shares purchased represents common shares repurchased and cancelled in respect of withholding tax obligations on vested awards. Item 6. Reserved 76
Shares purchased under publicly announced repurchase program (1) Other shares purchased (2) Total shares purchased Maximum $ amount still available under repurchase program ($ in thousands, except per share information) Shares Average price per share Shares Average price per share Shares Average price per share Available for repurchase $ 139,998 October 1 - 31, 2024 — $ — — $ — — $ — $ 139,998 November 1 - 30, 2024 251,595 $ 18.56 500,195 $ 17.80 751,790 $ 18.05 $ 135,328 December 1 - 31, 2024 704,169 $ 19.01 — $ — 704,169 $ 19.01 $ 121,942 Total 955,764 500,195 1,455,959 $ 121,942 (1) On August 7, 2024, the Board of Directors authorized the repurchase of the Company's common shares in the aggregate amount of $150 million (the “Authorization”).
Shares purchased under publicly announced repurchase program (1) Other shares purchased (2) Total shares purchased Maximum $ amount still available under repurchase program (1) ($ in thousands, except per share information) Shares Average price per share Shares Average price per share Shares Average price per share Available for repurchase $ 186,172 October 1 - 31, 2025 — $ — — $ — — $ — $ 186,172 November 1 - 30, 2025 284,491 $ 26.10 480,148 $ 26.08 764,639 $ 26.09 $ 178,747 December 1 - 31, 2025 9,490 $ 26.26 — $ — 9,490 $ 26.26 $ 178,497 Total 293,981 480,148 774,129 $ 178,497 (1) On November 4, 2025, the Board of Directors authorized the repurchase of the Company's common shares in the aggregate amount of $150 million, in addition to remaining amounts under the prior authorization (collectively, the "Authorization"), under which the Company may repurchase shares through open market repurchases and/or privately negotiated transactions.
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We anticipate that we will retain our future earnings to finance the further development and expansion of our business and do not intend to declare or pay cash dividends in the foreseeable future.
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On February 18, 2026 our Board of Directors declared a special one-time cash dividend of $2.00 per common share payable on March 30, 2026 to shareholders of record on March 6, 2026. However, we do not have a policy of paying regular cash dividends and currently anticipate retaining earnings to finance the further development and expansion of our business.
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The share price performance presented below is not necessarily indicative of future results. 89 Issuer Repurchases of Equity Securities Set forth below is information regarding securities issued or granted by us during the period covered by this Annual Report on Form 10-K that were not registered under the Securities Act.
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This graph assumes $100 was invested on November 13, 2023, in each of Hamilton Insurance Group, Ltd's common stock and the indicated indices.
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The share price performance presented below is not necessarily indicative of future results. 75 Issuer Repurchases of Equity Securities The following table provides information about purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our Class B common shares during the three months ended December 31, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 90 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 91 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 143 Item 8. Financial Statements and Supplementary Data 145 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 145 Item 9A. Controls and Procedures 146 Item 9B.
Biggest changeItem 6. Reserved 76 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 77 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 126 Item 8. Financial Statements and Supplementary Data 128 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 128 Item 9A. Controls and Procedures 129 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeEffective January 1, 2025, the Company amended its existing investment in Two Sigma Funds to include an allocation to the following portfolios: Two Sigma Absolute Return Portfolio, LLC ("ATV"), Two Sigma Horizon Portfolio, LLC ("HTV"), Two Sigma Navigator Portfolio, LLC ("NTV"), and Two Sigma Kuiper Portfolio, LLC ("KTV"). • ATV primarily utilizes a global equity market neutral systematic strategy, predominantly trading equity securities, equity-related derivatives, and foreign exchange contracts. • KTV primarily utilizes non-systematic, discretionary strategies that combine human discretion with quantitative analysis to trade futures, futures options, foreign currency spot, forward and option contracts, exchange-traded products ("ETPs") and ETP options, debt securities, and various types of derivatives and other instruments. • HTV utilizes systematic strategies and non-systematic, discretionary strategies to trade futures, futures options, foreign currency spot, forward and option contracts, ETPs and ETP options, debt securities, and various types of derivatives and other instruments. • NTV utilizes non-systematic, discretionary macro strategies that combine human discretion with quantitative analysis for purposes of trading globally across various asset classes.
Biggest changeAt December 31, 2024, the Company's investment in the Two Sigma Funds consisted of STV, ESTV and FTV; effective January 1, 2025, the Company amended its existing investment in Two Sigma Funds to include an allocation to ATV, HTV, NTV and KTV. • STV primarily utilizes systematic strategies to trade U.S.-listed equity securities, exchange traded funds, money market funds, swap contracts and government debt securities. • ESTV primarily utilizes systematic strategies to trade non-U.S.-listed equity securities, swap contracts, money market funds, government debt securities, futures and foreign currency forward contracts. • ATV primarily utilizes systematic strategies to trade a diversified, global, equity market neutral portfolio, predominantly of equity securities, equity-related derivatives and other related instruments. • FTV primarily utilizes systematic macro strategies to trade exchange traded funds, exchange memberships, government debt securities, money market funds, option contracts, swap contracts, futures and forward contracts. • HTV primarily utilizes systematic strategies and non-systematic discretionary strategies to trade futures, futures options, foreign currency spot, forward and option contracts, exchange-traded products ("ETPs") and ETP options, debt securities, and various types of derivatives and other instruments. • NTV primarily utilizes non-systematic discretionary macro strategies that combine human discretion with quantitative analysis for purposes of trading globally across various asset classes. • KTV primarily utilizes non-systematic discretionary strategies that combine human discretion with quantitative analysis to trade futures, futures options, foreign currency spot, forward and option contracts, ETPs and ETP options, debt securities, and various types of derivatives and other instruments. 117 The Company’s investments in Two Sigma Funds are as follows: December 31, 2025 December 31, 2024 ($ in thousands) Cost Net Unrealized Gains (Losses) Fair Value Cost Net Unrealized Gains (Losses) Fair Value Two Sigma Spectrum Portfolio, LLC $ 500,616 $ 131,996 $ 632,612 $ 360,997 $ 102,267 $ 463,264 Two Sigma Equity Spectrum Portfolio, LLC 187,718 49,906 237,624 136,565 47,011 183,576 Two Sigma Absolute Return Portfolio, LLC 93,092 8,882 101,974 — — — Two Sigma Futures Portfolio, LLC 192,064 44,998 237,062 308,061 (15,520) 292,541 Two Sigma Horizon Portfolio, LLC 241,090 4,585 245,675 — — — Two Sigma Navigator Portfolio, LLC 110,577 (9,585) 100,992 — — — Two Sigma Kuiper Portfolio, LLC 30,406 1,313 31,719 — — — Total $ 1,355,563 $ 232,095 $ 1,587,658 $ 805,623 $ 133,758 $ 939,381 The increase in the total fair value of the Company’s investments in Two Sigma Funds from $939.4 million at December 31, 2024 to $1.6 billion at December 31, 2025 is primarily driven by investment gains, asset allocations and collateral management within TS Hamilton Fund.
Within ESTV, trading was most profitable in Europe, followed by East Asia and Pan-America, while China experienced losses. Within FTV, losses were driven by commodities, fixed income, and equities, partially offset by gains in currencies and credit.
Within ESTV, trading was most profitable in Europe, followed by East Asia and Pan-America, while China experienced losses. Within FTV, losses were driven by commodities, fixed income, and equities, partially offset by gains in currencies and credit.
We operate three principal underwriting platforms (Hamilton Global Specialty, Hamilton Select and Hamilton Re) that are categorized into two reporting business segments (International and Bermuda): • International : International consists of business written out of our Lloyd’s syndicate and subsidiaries based in the United Kingdom, Ireland, and the United States, and includes the Hamilton Global Specialty and Hamilton Select platforms. • Hamilton Global Specialty focuses predominantly on commercial specialty and casualty insurance for medium to large-sized accounts and specialty reinsurance products written by Lloyd’s Syndicate 4000 and HIDAC.
We operate three principal underwriting platforms (Hamilton Global Specialty, Hamilton Select and Hamilton Re) that are categorized into two reporting business segments (International and Bermuda): • International : International consists of business written out of our Lloyd’s syndicate and subsidiaries based in the United Kingdom, Ireland, and the United States, and includes the Hamilton Global Specialty and Hamilton Select platforms. • Hamilton Global Specialty focuses predominantly on commercial specialty and casualty insurance for medium to large-sized accounts and specialty reinsurance products written by Lloyd’s Syndicate 4000 and Hamilton Insurance DAC ("HIDAC").
We plan to continue to optimize our investment portfolio through a balanced allocation of invested assets and maintain the flexibility to adjust this allocation as needed. We believe our strategy of disciplined underwriting growth, balanced with our investment platform, will drive our ability to create shareholder value. We have a unique and long-term investment management relationship with Two Sigma.
We will continue to optimize our investment portfolio through a balanced allocation of invested assets and maintain the flexibility to adjust this allocation as needed. We believe our strategy of disciplined underwriting growth, balanced with our investment platform, will drive our ability to create shareholder value. We have a unique and long-term investment management relationship with Two Sigma.
The Company's high quality and liquid fixed maturities and short-term investments portfolio is structured to focus primarily on the preservation of capital and the availability of liquidity to meet the Company’s claims obligations, to be well diversified across market sectors, and to generate relatively attractive returns on a risk-adjusted basis over time.
The Company's high quality and liquid fixed maturities and short-term investments trading portfolio is structured to focus primarily on the preservation of capital and the availability of liquidity to meet the Company’s claims obligations, to be well diversified across market sectors, and to generate relatively attractive returns on a risk-adjusted basis over time.
On December 5, 2018 and December 27, 2018, Hamilton Re, Ltd. entered into a Master Agreement for Issuance of Payment Instruments and a Facility Letter for Issuance of Payment Instruments respectively, with CitiBank Europe Plc ("CitiBank Europe"), under which CitiBank Europe agreed to provide an uncommitted secured letter of credit facility for the issuance of standby letters of credit or similar instruments in multiple currencies.
On December 5, 2018 and December 27, 2018, Hamilton Re entered into a Master Agreement for Issuance of Payment Instruments and a Facility Letter for Issuance of Payment Instruments respectively, with CitiBank Europe Plc ("CitiBank Europe"), under which CitiBank Europe agreed to provide an uncommitted secured letter of credit facility for the issuance of standby letters of credit or similar instruments in multiple currencies.
IBNR is calculated by deducting incurred losses (i.e. paid losses and case reserves) from management’s best estimate of the ultimate losses. Unlike case reserves, which are established at the contract level, IBNR reserves are generally established at an aggregate level and cannot be identified as reserves for a particular loss event or contract.
IBNR is calculated by deducting incurred losses (i.e. paid losses and case reserves) from management’s best estimate of the ultimate losses. Unlike case reserves, which are established at the claim or contract level, IBNR reserves are generally established at an aggregate level and cannot be identified as reserves for a particular loss event or contract.
Although the method tends to provide less volatile indications at early stages of development and reflects changes in the external environment, it can be slow to react to emerging loss development and may, if the IELR proves to be inaccurate, produce loss estimates which take longer to converge with the final settlement value of loss; and • Loss development method: The loss development method uses actual loss data and the historical development profiles on older underwriting years to project more recent, less developed years to their ultimate position. 99 Our actuaries may use other approaches in addition to those described, and supplement these methods with judgement where they deem appropriate, depending upon the characteristics of the class of business and available data.
Although the method tends to provide less volatile indications at early stages of development and reflects changes in the external environment, it can be slow to react to emerging loss development and may, if the IELR proves to be inaccurate, produce loss estimates which take longer to converge with the final settlement value of loss; and • Loss development method: The loss development method uses actual loss data and the historical development profiles on older underwriting years to project more recent, less developed years to their ultimate position. 85 Our actuaries may use other approaches in addition to those described, and supplement these methods with judgement where they deem appropriate, depending upon the characteristics of the class of business and available data.
We maintain trusted and long-standing relationships with our clients and brokers, who we believe will continue to provide us with increased access to attractive business. We see growth opportunities in both the insurance and reinsurance markets in which we operate and intend to pursue disciplined growth across our underwriting platforms.
We maintain trusted and long-standing relationships with our clients and brokers, who we believe will continue to provide us with increased access to attractive business. We see continued growth opportunities in both the insurance and reinsurance markets in which we operate and intend to pursue disciplined growth across our underwriting platforms.
The three levels of the fair value hierarchy are: • Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and • Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 105 The Company’s fixed maturities and short-term investments trading portfolio is primarily priced using pricing services, such as index providers and pricing vendors, as well as broker quotations.
The three levels of the fair value hierarchy are: • Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and • Level 3 - Inputs that are both significant to the fair value measurement and unobservable. 91 The Company’s fixed maturities and short-term investments trading portfolio is primarily priced using pricing services, such as index providers and pricing vendors, as well as broker quotations.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the "Selected Consolidated Financial Data" and our audited consolidated financial statements and related notes thereto included in the Group's Annual Report on Form 10-K (the "Form 10-K").
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the "Selected Consolidated Financial Data" and our audited consolidated financial statements and related notes thereto included in the Group's Annual Report on Form 10-K ("Annual Report" or "Form 10-K").
Consequently, cumulative adverse development subsequent to the signing of the LPT may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. 104 In December 2023, Hamilton Group sponsored a new industry loss index-triggered catastrophe bond through the issuance of Series 2024-1 Class A Principal-at-Risk Variable Rate Notes by Bermuda-domiciled Easton Re Ltd.
Consequently, cumulative adverse development subsequent to the signing of the LPT may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. 90 In December 2023, Hamilton Group sponsored a new industry loss index-triggered catastrophe bond through the issuance of Series 2024-1 Class A Principal-at-Risk Variable Rate Notes by Bermuda domiciled Easton Re Ltd.
Catastrophe losses - current year and prior year of $24.3 million for the year ended December 31, 2023 were primarily driven by wind and thunderstorm events which impacted states in both the Southern and Midwest U.S. during March 2023 ($11.0 million), the Hawaii wildfires ($9.2 million), severe convective storms in June 2023 ($7.1 million), Hurricane Idalia ($3.6 million) and various flood events ($0.5 million), partially offset by favorable prior year development of $7.1 million.
Catastrophe losses for the year ended December 31, 2023 were primarily driven by wind and thunderstorm events which impacted states in both the Southern and Midwest U.S. during March 2023 ($11.0 million), the Hawaii wildfires ($9.2 million), severe convective storms in June 2023 ($7.1 million), Hurricane Idalia ($3.6 million) and various flood events ($0.5 million), partially offset by favorable prior year development of $7.1 million.
As with general economic inflation, the actual effects of inflation on reserves for losses and loss adjustment expenses and results of operations cannot be accurately known until all of the underlying claims are ultimately settled. 94 Taxes On December 27, 2023, the Bermuda Government enacted a 15% corporate income tax that generally became effective for Bermuda domiciled entities on or after January 1, 2025.
As with general economic inflation, the actual effects of inflation on reserves for losses and loss adjustment expenses and results of operations cannot be accurately known until all of the underlying claims are ultimately settled. 80 Taxes On December 27, 2023, the Bermuda Government enacted a 15% corporate income tax that generally became effective for Bermuda domiciled entities on or after January 1, 2025.
For a portion of the Company’s insurance business, which comprises 53% of total gross premiums written, a fixed premium specified in the policy is recorded when the policy incepts. This premium may be adjusted if underlying insured values change. Management actively monitors underlying insured values and any resulting premium adjustments are recognized in the period in which they are determined.
For a portion of the Company’s insurance business, which comprises 50% of total gross premiums written, a fixed premium specified in the policy is recorded when the policy incepts. This premium may be adjusted if underlying insured values change. Management actively monitors underlying insured values and any resulting premium adjustments are recognized in the period in which they are determined.
The modest increase was primarily driven by a change in the mix of business, including more proportional business written in our casualty reinsurance and property reinsurance classes.
The modest increase was primarily driven by a change in business mix, including more proportional business written in our casualty reinsurance and property reinsurance classes.
The Commitment Period consists of a 3-year rolling term that automatically renews on an annual basis unless Hamilton Re or the Managing Member provide advance notice of non-renewal. Two Sigma is a United States Securities and Exchange Commission registered investment adviser specializing in quantitative analysis.
The Commitment Period consists of a three-year rolling term that automatically renews on an annual basis unless Hamilton Re or the Managing Member provide advance notice of non-renewal. Two Sigma is a United States Securities and Exchange Commission registered investment adviser specializing in quantitative analysis.
The CODM's responsibilities include providing leadership to all levels of employees; developing culture, values, and ethos; setting the Company's strategy, vision and direction; and overall responsibility for the success and profitability of the Company, including evaluating segment performance. The CODM evaluates reportable segment performance based on the segment's respective underwriting income or loss.
The CODM's responsibilities include providing leadership to all levels of employees; developing culture, values, and ethos; setting the Company's strategy, vision and direction; and overall responsibility for the success and profitability of the Company, including evaluating segment performance. The CODM evaluates reportable segment performance based on the segments' respective underwriting income or loss.
The cash and short-term investment balances within TS Hamilton Fund are not managed by the Company, nor can they be removed from TS Hamilton Fund as they support the underlying investment strategies within the three trading vehicles. The balance may fluctuate significantly from period to period as a result of movements in the underlying funds.
The cash and short-term investment balances within TS Hamilton Fund are not managed by the Company, nor can they be removed from TS Hamilton Fund as they support the underlying investment strategies within the seven trading vehicles. The balance may fluctuate significantly from period to period as a result of movements in the underlying funds.
The TS Hamilton Fund is a dedicated fund-of-one managed by Two Sigma with exposures to certain Two Sigma macro and equity strategies and is designed to provide low-correlated absolute returns, primarily by combining multiple hedged and leveraged systematic investment strategies with proprietary risk management investment optimization and execution techniques.
The TS Hamilton Fund is a dedicated fund of one managed by Two Sigma with exposures to certain Two Sigma equity and macro strategies and is designed to provide low-correlated absolute returns, primarily by combining multiple hedged and leveraged systematic and non-systematic investment strategies with proprietary risk management and execution techniques.
A combined ratio under 100% indicates an underwriting profit, while a combined ratio over 100% indicates an underwriting loss. 130 Financial Condition, Liquidity and Capital Resources Financial Condition Investment Philosophy The Company maintains two segregated investment portfolios: a fixed maturities and short-term investments trading portfolio and an investment in Two Sigma Hamilton Fund ("TS Hamilton Fund").
A combined ratio under 100% indicates an underwriting profit, while a combined ratio over 100% indicates an underwriting loss. 113 Financial Condition, Liquidity and Capital Resources Financial Condition Investment Philosophy The Company maintains two segregated investment portfolios: a fixed maturities and short-term investments trading portfolio and an investment in Two Sigma Hamilton Fund ("TS Hamilton Fund").
The Company believes that the recorded reserve for losses and loss adjustment expenses represents management’s best estimate of the cost to settle the ultimate liabilities based on information available at December 31, 2024. See Critical Accounting Estimates — Reserve for Losses and Loss Adjustment Expenses for a detailed discussion of losses and loss adjustment expenses.
The Company believes that the recorded reserve for losses and loss adjustment expenses represents management’s best estimate of the cost to settle the ultimate liabilities based on information available at December 31, 2025. See Critical Accounting Estimates — Reserve for Losses and Loss Adjustment Expenses for a detailed discussion of losses and loss adjustment expenses.
In 2022, the Company changed its fiscal year from November 30 to December 31. The following tables set forth our selected consolidated financial data and other financial information at the end of and for each of the years in the five-year period ended December 31, 2024.
In 2022, the Company changed its fiscal year from November 30 to December 31. The following tables set forth our selected consolidated financial data and other financial information at the end of and for each of the years in the five-year period ended December 31, 2025.
A higher expected loss ratio results in a higher ultimate loss estimate, and vice versa; and • changes to the loss development patterns used in the Company’s reserving process at December 31, 2024, which represent claims reporting that is either slower or faster than the reporting patterns used.
A higher expected loss ratio results in a higher ultimate loss estimate, and vice versa; and • changes to the loss development patterns used in the Company’s reserving process at December 31, 2025, which represent claims reporting that is either slower or faster than the reporting patterns used.
The cash and short-term investment balances are not managed by the Company, nor can they be removed from TS Hamilton Fund as they support the underlying investment strategies within the three trading vehicles. The following table represents the total assets and total liabilities of TS Hamilton Fund.
The cash and short-term investment balances are not managed by the Company, nor can they be removed from TS Hamilton Fund as they support the underlying investment strategies within the seven trading vehicles. The following table represents the total assets and total liabilities of TS Hamilton Fund.
Catastrophe losses - current year and prior year of $60.9 million for the year ended December 31, 2024 were driven by Hurricane Helene ($33.0 million), Hurricane Milton ($25.0 million), the Calgary hailstorms ($12.9 million), and Hurricane Debby ($4.1 million), partially offset by favorable prior year development of $14.1 million.
Catastrophe losses for the year ended December 31, 2024 were driven by Hurricane Helene ($33.0 million), Hurricane Milton ($25.0 million), the Calgary hailstorms ($12.9 million), and Hurricane Debby ($4.1 million), partially offset by favorable prior year development of $14.1 million.
Catastrophe losses - current year and prior year of $26.7 million for the year ended December 31, 2024 were driven by Hurricane Helene ($19.6 million), Hurricane Milton ($12.8 million), and Hurricane Debby ($1.5 million), partially offset by favorable prior year development of $7.2 million.
Catastrophe losses for the year ended December 31, 2024 were driven by Hurricane Helene ($19.6 million), Hurricane Milton ($12.8 million), and Hurricane Debby ($1.5 million), partially offset by favorable prior year development of $7.2 million.
The decrease was primarily driven by $9.2 million of Value Appreciation Pool ("VAP") expense recorded for the year ended December 31, 2024, compared to $30.4 million of VAP expense recorded for the year ended December 31, 2023, partially offset by certain variable performance based compensation costs, an increased headcount and an increase in professional fees and insurance costs associated with operating as a public company.
The decrease was primarily driven by $9.2 million of VAP expense recorded for the year ended December 31, 2024, compared to $30.4 million of VAP expense recorded for the year ended December 31, 2023, partially offset by certain variable performance based compensation costs, an increased headcount and an increase in professional fees and insurance costs associated with operating as a public company.
General and administrative expenses, the most comparable GAAP financial measure to other underwriting expenses, also includes corporate expenses.
General and administrative expenses, the most directly comparable GAAP financial measure to other underwriting expenses, also includes corporate expenses.
(3) Refer to Note 15, Commitments and Contingencies in our audited consolidated financial statements for further detail on our lease commitments. Transactions with Related Parties The discussion of transactions with related parties is included in Note 16, Related Party Transactions in the accompanying audited consolidated financial statements. 142
(3) Refer to Note 15, Commitments and Contingencies in our audited consolidated financial statements for further detail on our lease commitments. Transactions with Related Parties The discussion of transactions with related parties is included in Note 16, Related Party Transactions in the accompanying audited consolidated financial statements. 125
The tables below summarize, by reportable segment, the effect of reasonably likely scenarios on the key actuarial assumptions used to estimate the Company’s reserve for losses and loss adjustment expenses at December 31, 2024.
The tables below summarize, by reportable segment, the effect of reasonably likely scenarios on the key actuarial assumptions used to estimate the Company’s reserve for losses and loss adjustment expenses at December 31, 2025.
However, each holder of Class A common shares and Class B common shares is limited to voting (directly, indirectly or constructively, as determined for U.S. federal income tax purposes) that number of common shares equal to 9.5% of the total combined voting power of all classes of shares of the Company (or, in the case of a class vote by the holders of our Class B common shares, such as in respect of the election or removal of directors other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws, a maximum of 14.92% of the total combined voting power, calculated by multiplying (a) 9.5% and (b) the quotient of dividing (x) the total number of directors by (y) the number of directors elected by holders of Class B common shares).
However, each holder of Class A common shares and Class B common shares is limited to voting (directly, indirectly or constructively, as determined for U.S. federal income tax purposes) that number of common shares equal to 9.5% of the total combined voting power of all classes of shares of the Company (or, in the case of a class vote by the holders of our Class B common shares, such as in respect of the election or removal of directors other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws, an amount calculated by multiplying (a) 9.5% and (b) the quotient of dividing (x) the total number of directors by (y) the number of directors elected by holders of Class B common shares).
As a result of these considerations, the selected reserve estimate may be higher or lower than the external actuarial indicated estimate. 100 The Company’s best estimates are point estimates within a range of reasonable actuarial estimates.
As a result of these considerations, the selected reserve estimate may be higher or lower than the indicated external actuarial estimate. 86 The Company’s best estimates are point estimates within a range of reasonable actuarial estimates.
The reconciliation to other income (loss), the most comparable GAAP financial measure, also included other income (loss), excluding third party fee income of $Nil, $0.4 million and $(0.3) million for the years ended December 31, 2024, 2023 and 2022, respectively, and less than $0.1 million for each of the years ended November 30, 2021 and 2020.
The reconciliation to other income (loss), the most comparable GAAP financial measure, also included other income (loss), excluding third party fee income of $Nil, $Nil, $0.4 million, and $(0.3) million for each of the years ended December 31, 2025, 2024, 2023 and 2022, respectively, and less than $0.1 million for the year ended November 30, 2021.
Hamilton Re has a commitment with TS Hamilton Fund to maintain an amount up to the lesser of (i) $1.8 billion or (ii) 60% of Hamilton Insurance Group’s net tangible assets in TS Hamilton Fund, such lesser amount, the "Minimum Commitment Amount", for a three-year period (the "Initial Term") and for rolling three-year periods thereafter (each such three-year period the "Commitment Period"), subject to certain circumstances and the liquidity options described below, with the Commitment Period ending on June 30, 2027.
Hamilton Re has a commitment with TS Hamilton Fund to maintain an amount up to the lesser of (i) $1.8 billion or (ii) 60% of Hamilton Group’s net tangible assets in TS Hamilton Fund, such lesser amount, the "Minimum Commitment Amount", for a three-year period (the "Initial Term") and for rolling three-year periods thereafter (each such three-year period the "Commitment Period"), subject to certain circumstances and the liquidity options described below, with the current Commitment Period ending on June 30, 2028.
The scenarios shown in the tables illustrate the effect of: • changes to the expected loss ratio selections used at December 31, 2024, which represent loss ratio point increases or decreases to the expected loss ratios used.
The scenarios shown in the tables illustrate the effect of: • changes to the expected loss ratio selections used at December 31, 2025, which represent loss ratio point increases or decreases to the expected loss ratios used.
Catastrophe losses - current year and prior year of $12.6 million for the year ended December 31, 2023 were driven by the Vermont floods ($4.5 million), Hurricane Idalia ($2.9 million), Hawaii wildfires ($2.8 million), and other wind events ($0.5 million), in addition to unfavorable prior year development of $1.9 million.
Catastrophe losses for the year ended December 31, 2023 were driven by the Vermont floods ($4.5 million), Hurricane Idalia ($2.9 million), Hawaii wildfires ($2.8 million), and other wind events ($0.5 million), in addition to unfavorable prior year development of $1.9 million.
The increase was primarily driven by the higher net income attributable to common shareholders for the year ended December 31, 2023. 128 Non-GAAP Measures We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance.
The increase was primarily driven by the higher net income attributable to common shareholders for the year ended December 31, 2024. 111 Non-GAAP Measures We present our results of operations in a way that we believe will be the most meaningful and useful to investors, analysts, rating agencies and others who use our financial information to evaluate our performance.
For both short and long-tail lines, management supplements these general approaches with analytically based judgments. 101 Sensitivity Analysis While management believes that the reserve for losses and loss adjustment expenses at December 31, 2024 is adequate, new information, events or circumstances may result in ultimate losses that are materially greater or less than initially recorded.
For both short and long-tail lines, management supplements these general approaches with analytically based judgments. 87 Sensitivity Analysis While management believes that the reserve for losses and loss adjustment expenses at December 31, 2025 is adequate, new information, events or circumstances may result in ultimate losses that are materially greater or less than initially recorded.
The Company accounts for its investment in Two Sigma Funds under the variable interest model at NAV as a practical expedient for fair value in the consolidated balance sheets.
The Company accounts for its investment in Two Sigma Funds under the variable interest model at NAV as a practical expedient for fair value in the consolidated balance sheet.
The legislation defers the effective date until January 1, 2030 for so long as the consolidated group operates in six or fewer jurisdictions, has less than €50 million in tangible assets and none of its Bermuda entities are subject to the Income Inclusion Rule in any other jurisdiction.
The legislation defers the effective date until January 1, 2030 for so long as the consolidated group operates in six or fewer jurisdictions, has less than €50 million in tangible assets and none of its Bermuda entities are subject to the Income Inclusion Rule in any other jurisdiction ("Limited International Footprint Exemption").
The estimated loss ratio may be based on pricing information and/or industry data and/or historical claims experience revalued to the year under review; • Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method uses as a starting point an assumed IELR and blends in the loss ratio, which is implied by the claims experience to date using benchmark loss development patterns on paid claims data or reported claims data.
The estimated loss ratio may be based on pricing information and/or industry data and/or historical claims experience revalued to the year under review; • Bornhuetter-Ferguson method: The Bornhuetter-Ferguson method uses as a starting point an assumed IELR and blends in the claims experience to date using historical or benchmark loss development patterns on paid claims data or reported claims data.
The decrease was primarily driven by favorable development in both the Bermuda and International specialty classes and International property classes, partially offset by unfavorable development in Bermuda property classes and casualty classes in both our Bermuda and International segments.
The decrease was primarily driven by favorable development in both our Bermuda and International property and specialty classes, partially offset by unfavorable development in certain Bermuda casualty classes.
Management believes that each of the Company’s insurance subsidiaries and branches exceeded the minimum solvency, capital and surplus requirements in their applicable jurisdictions at December 31, 2024. Certain of the subsidiaries and branches are required to file Financial Condition Reports ("FCR"), with their regulators, which provide details on solvency and financial performance.
Management believes that each of the Company’s insurance subsidiaries and branches exceeded the minimum solvency, capital and surplus requirements in their applicable jurisdictions at December 31, 2025. Certain of the subsidiaries and branches are required to file Financial Condition Reports ("FCRs"), with their regulators, which provide details on solvency and financial performance.
Accordingly, when Hamilton Group becomes subject to Pillar 2 taxation on its Bermuda earnings, expected in 2030, it is possible that a top-up tax liability will arise to the extent that it does not achieve a 15% minimum ETR on its Bermuda taxable earnings, excluding the ETA deduction.
Accordingly, when Hamilton Group becomes subject to the UTPR, expected in 2030, it is possible that a top-up tax liability will arise to the extent that it does not achieve a 15% minimum ETR on its Bermuda taxable earnings, excluding the ETA deduction.
The facility bears a fee of 140 basis points on the total available capacity. In addition, on October 28, 2024, Hamilton Re amended the unsecured letter of credit facility agreement that it utilizes to provide Funds at Lloyd's ("FAL") ("FAL LOC Facility") to support the FAL requirements of Syndicate 4000.
The facility bears a fee of 140 basis points on the total available capacity. In addition, on October 20, 2025, Hamilton Re amended the unsecured letter of credit facility agreement that it utilizes to provide Funds at Lloyd's ("FAL") ("FAL LOC Facility") to support the FAL requirements of Syndicate 4000.
The TS Hamilton Fund investment strategy is focused on delivering non-market correlated investment income and total return through all market cycles while maintaining appropriate portfolio liquidity and credit quality to meet the requirements of customers, rating agencies and regulators. Cash and Investments At December 31, 2024 and 2023, total cash and investments was $4.9 billion and $4.0 billion, respectively.
The TS Hamilton Fund investment strategy is focused on delivering non-market correlated investment income and total return through all market cycles while maintaining appropriate portfolio liquidity and credit quality to meet the requirements of customers, rating agencies and regulators. Cash and Investments At December 31, 2025 and 2024, total cash and investments was $6.2 billion and $4.9 billion, respectively.
Gross premiums written on a fixed premium basis accounted for 26.9%, 30.2% and 28.6% of the Company’s gross premiums written for the years ended December 31, 2024, 2023 and 2022, respectively. Some of this business is written through MGAs, third parties granted authority to bind risks on the Company’s behalf in accordance with defined underwriting guidelines.
Gross premiums written on a fixed premium basis accounted for 26.7%, 26.9% and 30.2% of the Company’s gross premiums written for the years ended December 31, 2025, 2024 and 2023, respectively. Some of this business is written through MGAs, third parties granted authority to bind risks on the Company’s behalf in accordance with defined underwriting guidelines.
Net Foreign Exchange Gains (Losses) For the Years Ended December 31, ($ in thousands) 2024 2023 2022 Net foreign exchange gains (losses) $ (3,231) $ (6,185) $ 6,137 Our functional currency is the U.S. Dollar. We may conduct routine underwriting operations or invest a portion of our cash and other investable assets in currencies other than U.S. Dollars.
Net Foreign Exchange Gains (Losses) For the Years Ended December 31, ($ in thousands) 2025 2024 2023 Net foreign exchange gains (losses) $ (5,985) $ (3,231) $ (6,185) Our functional currency is the U.S. dollar. We may conduct routine underwriting operations or invest a portion of our cash and other investable assets in currencies other than U.S. dollars.
In addition, casualty business protected by the LPT discussed in Note 7, Reinsurance , benefited from favorable development in the underlying reserves of $15.3 million, which was partially offset by a change in the deferred gain of $9.4 million, for a total net positive earnings impact of $5.9 million.
In addition, casualty business protected by the LPT benefited from favorable development in the underlying reserves of $15.3 million, which was partially offset by a change in the deferred gain of $9.4 million, for a total net positive earnings impact of $5.9 million.
The increase was primarily driven by the Company’s net income attributable to common shareholders of $400.4 million and the accretive impact of share repurchases (see Note 11, Share Capital in the accompanying audited consolidated financial statements for further details).
The increase was primarily driven by the Company’s net income attributable to common shareholders of $576.7 million and the accretive impact of share repurchases. See Note 11, Share Capital in the accompanying audited consolidated financial statements for further details.
In addition, the Company’s reinsurance business participates in “common account” retrocessional arrangements for certain pro rata treaties. Such arrangements reduce the effect of individual or aggregate losses to all companies participating on such treaties, including the reinsurers and the ceding company.
In addition, the Company’s reinsurance business participates in "common account" retrocessional arrangements for certain pro rata treaties. Such arrangements reduce the effect of individual or aggregate losses to all companies participating on such treaties, including the reinsurers and the ceding company.
The aggregate incentive allocation to which the investment manager is entitled is included in "Net income (loss) attributable to non-controlling interests" in our GAAP financial statements. TS Hamilton Fund produced returns, net of investment management fees and performance incentive allocations, of 16.3%, 7.6% and 4.6% for each of the years ended December 31, 2024, 2023 and 2022, respectively.
The aggregate incentive allocation to which the investment manager is entitled is included in "Net income (loss) attributable to non-controlling interest" in our GAAP financial statements. TS Hamilton Fund produced returns, net of investment management fees and performance incentive allocations, of 16.0%, 16.3% and 7.6% for each of the years ended December 31, 2025, 2024 and 2023, respectively.
Under the Unsecured Facility, the lenders have agreed to provide up to an aggregate of $415 million of letter of credit capacity for Hamilton Re, up to $150 million of which may be utilized for revolving loans to be issued to Hamilton Group. At December 31, 2024, there were no loan amounts outstanding under this facility.
Under the Unsecured Facility, the lenders have agreed to provide up to an aggregate of $450 million of letter of credit capacity for Hamilton Re, up to $150 million of which may be utilized for revolving loans to be issued to Hamilton Group. At December 31, 2025, there were no loan amounts outstanding under the Unsecured Facility.
The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $61.1 million, $76.7 million, $20.1 million, $22.5 million and $22.9 million for the years ended December 31, 2024, 2023 and 2022, and November 30, 2021 and 2020, respectively.
The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $57.2 million, $61.1 million, $76.7 million, $20.1 million and $22.5 million for years ended December 31, 2025, 2024, 2023 and 2022, and November 30, 2021, respectively.
On a consolidated basis, reinsurance premiums ceded represented 20.7%, 24.1% and 25.8% of gross premiums written for the years ended December 31, 2024, 2023 and 2022, respectively. Ceded reinsurance contracts do not relieve the Company of its primary obligation to policyholders.
On a consolidated basis, reinsurance premiums ceded represented 21.7%, 20.7% and 24.1% of gross premiums written for the years ended December 31, 2025, 2024 and 2023, respectively. Ceded reinsurance contracts do not relieve the Company of its primary obligation to policyholders.
The Facility matures on June 23, 2025, unless accelerated pursuant to the terms of the Facility, and it contains usual and customary representations, warranties, conditions and covenants for bank loan facilities of this type.
The Facility matures on June 9, 2028, unless accelerated pursuant to the terms of the Facility, and it contains usual and customary representations, warranties, conditions and covenants for bank loan facilities of this type.
The primary driver of the increase in total capital was the Company's net income attributable to common shareholders of $400.4 million for the year ended December 31, 2024, partially offset by share repurchases (see Note 11, Share Capital in the accompanying audited consolidated financial statements for further details).
The primary driver of the increase in total capital was the Company's net income attributable to common shareholders of $576.7 million for the year ended December 31, 2025, partially offset by share repurchases (see Note 11, Share Capital in the accompanying audited consolidated financial statements for further details).
Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures' for further details. (3) Underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures' for further details.
(3) Underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures' for further details. (4) Net investment income (loss) is presented net of investment management fees.
This includes the fund's returns, net of investment management fees. Net investment income, net of non-controlling interest - TSHF , returned income of $274.5 million, $122.1 million and $77.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. This includes the fund's returns, net of investment management fees and performance incentive allocations.
This includes the fund's returns, net of investment management fees. Net investment income, net of non-controlling interest - TSHF , returned income of $300.9 million, $274.5 million and $122.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. This includes the fund's returns, net of investment management fees and performance incentive allocations.
This includes the fund's returns, net of investment management fees. Net investment income, net of non-controlling interest - TSHF , returned income of $274.5 million, $122.1 million and $77.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. This includes the fund's returns, net of investment management fees and performance incentive allocations.
This includes the fund's returns, net of investment management fees. Net investment income, net of non-controlling interest - TSHF , returned income of $300.9 million, $274.5 million and $122.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. This includes the fund's returns, net of investment management fees and performance incentive allocations.
Gross premiums written for proportional reinsurance contracts, including adjustments to premium estimates established in prior years, accounted for 24.4%, 20.7% and 19.0% of the Company’s gross premiums written for the years ended December 31, 2024, 2023 and 2022, respectively.
Gross premiums written for proportional reinsurance contracts, including adjustments to premium estimates established in prior years, accounted for 27.9%, 24.4% and 20.7% of the Company’s gross premiums written for the years ended December 31, 2025, 2024 and 2023, respectively.
Gross premiums written for excess of loss reinsurance contracts accounted for 22.9%, 22.3% and 24.0% of the Company’s gross premiums written for the years ended December 31, 2024, 2023 and 2022, respectively. 103 Many of the Company’s excess of loss reinsurance contracts also include provisions for automatic reinstatement of coverage in the event of a loss that has exhausted the initial amount of cover provided.
Gross premiums written for excess of loss reinsurance contracts accounted for 21.8%, 22.9% and 22.3% of the Company’s gross premiums written for the years ended December 31, 2025, 2024 and 2023, respectively. 89 Many of the Company’s excess of loss reinsurance contracts also include provisions for automatic reinstatement of coverage in the event of a loss that has exhausted the initial amount of cover provided.
In FTV, gains were led by equities, credit, and fixed income. For the year ended December 31, 2023, TS Hamilton Fund generated positive returns in single name equities trading in STV and ESTV, partially offset by losses in macroeconomic trading in FTV. In single name equities trading, STV and ESTV both made positive contributions.
For the year ended December 31, 2023, TS Hamilton Fund generated positive returns in single name equities trading in STV and ESTV, partially offset by losses in macroeconomic trading in FTV. In single name equities trading, STV and ESTV both made positive contributions.
Gross premiums written on a line slip or proportional basis accounted for 25.8%, 26.8% and 28.4% of the Company’s gross premiums written for the years ended December 31, 2024, 2023 and 2022, respectively. The Company’s reinsurance business, which comprises 47% of total gross premiums written, generally provides cover to cedants on an excess of loss or on a proportional basis.
Gross premiums written on a line slip or proportional basis accounted for 23.6%, 25.8% and 26.8% of the Company’s gross premiums written for the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s reinsurance business, which comprises 50% of total gross premiums written, generally provides cover to cedants on an excess of loss or on a proportional basis.
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other returned income of $87.5 million and $96.4 million and a loss of $73.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other returned income of $210.9 million, $87.5 million and $96.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other returned income of $87.5 million and $96.4 million and a loss of $73.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other returned income of $210.9 million, $87.5 million and $96.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Corporate Expenses For the Years Ended December 31, ($ in thousands) 2024 2023 2022 Corporate expenses $ 61,111 $ 76,691 $ 20,142 Corporate expenses for the years ended December 31, 2024, 2023 and 2022, were $61.1 million, $76.7 million and $20.1 million, respectively, and typically consist of certain executive and Board compensation costs and professional fees.
Corporate Expenses For the Years Ended December 31, ($ in thousands) 2025 2024 2023 Corporate expenses $ 57,167 $ 61,111 $ 76,691 Corporate expenses for the years ended December 31, 2025, 2024 and 2023, were $57.2 million, $61.1 million and $76.7 million, respectively, and typically consist of certain executive and Board compensation costs and professional fees.
Net cash provided by (used in) financing activities was $(362.7) million, $59.0 million and $(69.6) million for the years ended December 31, 2024, 2023 and 2022, respectively. Net cash used in financing activities for the year ended December 31, 2024 was primarily driven by incentive allocations paid to TS Hamilton Fund and share repurchases.
Net cash provided by (used in) financing activities was $(376.2) million, $(362.7) million and $59.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Net cash used in financing activities for the year ended December 31, 2025 was primarily driven by incentive allocations paid to TS Hamilton Fund and open market share repurchases.
Catastrophe losses - current and prior year development were $87.6 million, $36.9 million and $168.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Catastrophe losses - current and prior year development were $159.0 million, $87.6 million and $36.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
In addition, casualty business protected by the LPT discussed in Note 7, Reinsurance , benefited from favorable development in the underlying reserves of $15.3 million, which was partially offset by a change in the deferred gain of $9.4 million, for a total net positive earnings impact of $5.9 million.
In addition, casualty business protected by the LPT discussed in Note 7, Reinsurance , benefited from favorable development in the underlying reserves of $2.5 million, which was partially offset by a change in the deferred gain of $0.8 million, for a total net positive earnings impact of $1.7 million.
Other Underwriting Expenses and Other Underwriting Expense Ratios For the Years Ended December 31, ($ in thousands) 2024 2023 2022 Other underwriting expenses $ 148,824 $ 127,402 $ 108,239 Other underwriting expense ratio 14.9 % 16.7 % 15.5 % Other underwriting expenses are general and administrative costs incurred by our reportable segments.
Other Underwriting Expenses and Other Underwriting Expense Ratios For the Years Ended December 31, ($ in thousands) 2025 2024 2023 Other underwriting expenses $ 167,221 $ 148,824 $ 127,402 Other underwriting expense ratio 14.7 % 14.9 % 16.7 % Other underwriting expenses are general and administrative costs incurred by our reportable segments.
The table below reconciles third party fee income to other income (loss), the most comparable GAAP financial measure: For the Years Ended December 31, ($ in thousands) 2024 2023 2022 Third party fee income $ 23,752 $ 18,234 $ 11,631 Other income (loss), excluding third party fee income — 397 (315) Other income (loss) $ 23,752 $ 18,631 $ 11,316 129 Other Underwriting Expenses Other underwriting expenses include those general and administrative expenses that are incremental and/or directly attributable to our underwriting operations.
The following table reconciles third party fee income to other income (loss), the most directly comparable GAAP financial measure: For the Years Ended December 31, ($ in thousands) 2025 2024 2023 Third party fee income $ 26,601 $ 23,752 $ 18,234 Other income (loss), excluding third party fee income — — 397 Other income (loss) $ 26,601 $ 23,752 $ 18,631 112 Other Underwriting Expenses Other underwriting expenses include those general and administrative expenses that are incremental and/or directly attributable to our underwriting operations.
Attritional loss ratio - prior year for the year ended December 31, 2024 was an unfavorable 0.5% compared to an unfavorable 2.3% for the year ended December 31, 2023, a decrease of 1.8 percentage points.
Attritional loss ratio - prior year for the year ended December 31, 2025 was a favorable 1.6% compared to an unfavorable 0.5% for the year ended December 31, 2024, a decrease of 2.1 percentage points.
Underwriting results The combined ratio was 91.3% and 90.1% for the years ended December 31, 2024 and 2023, respectively. The modest increase was driven by an increase in the catastrophe loss ratio and attritional loss ratio, partially offset by a decrease in the other underwriting expense ratio and acquisition cost ratio.
Underwriting results The combined ratio was 92.9% and 91.3% for the years ended December 31, 2025 and 2024, respectively. The increase was primarily driven by an increase in the catastrophe loss ratio and the acquisition cost ratio, partially offset by a decrease in the attritional loss ratio and other underwriting expense ratio.
The increase was primarily driven by the higher net income attributable to common shareholders for the year ended December 31, 2024. ROACE was 13.9% for the year ended December 31, 2023, compared to (5.7)% for the year ended December 31, 2022.
The increase was primarily driven by the higher net income attributable to common shareholders for the year ended December 31, 2025. ROACE was 18.3% for the year ended December 31, 2024, compared to 13.9% for the year ended December 31, 2023.
(5) Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations - Corporate and Other' for further details. 96 SELECTED CONSOLIDATED FINANCIAL DATA Balance Sheet Data ($ in thousands, except shares and per share amounts) As At December 31, November 30, 2024 2023 2022 2021 2020 Total investments $ 3,814,353 $ 3,111,616 $ 2,286,323 $ 2,464,622 $ 2,174,586 Cash and cash equivalents 996,493 794,509 1,076,420 797,793 642,838 Total investments and cash and cash equivalents 4,810,846 3,906,125 3,362,743 3,262,415 2,817,424 Total assets 7,796,033 6,671,355 5,818,965 5,611,607 4,905,363 Reserve for losses and loss adjustment expenses 3,532,491 3,030,037 2,856,275 2,379,027 2,054,628 Unearned premiums 1,122,277 911,222 718,188 620,994 479,529 Term loan, net of issuance costs 149,945 149,830 149,715 149,875 149,682 Total shareholders' equity $ 2,328,709 $ 2,047,850 $ 1,664,183 $ 1,787,445 $ 1,596,750 Common shares outstanding 101,466,997 110,225,103 103,087,859 102,540,769 102,454,307 Tangible book value per common share $ 22.03 $ 17.75 $ 15.30 $ 16.29 $ 14.46 Book value per common share $ 22.95 $ 18.58 $ 16.14 $ 17.43 $ 15.58 97 Summary of Critical Accounting Estimates The accompanying audited consolidated financial statements have been prepared in accordance with U.S.
(5) Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations - Corporate and Other' for further details. 82 SELECTED CONSOLIDATED FINANCIAL DATA Balance Sheet Data ($ in thousands, except shares and per share amounts) As At December 31, November 30, 2025 2024 2023 2022 2021 Total investments $ 5,026,660 $ 3,814,353 $ 3,111,616 $ 2,286,323 $ 2,464,622 Cash and cash equivalents 1,062,359 996,493 794,509 1,076,420 797,793 Total investments and cash and cash equivalents 6,198,750 4,810,846 3,906,125 3,362,743 3,262,415 Total assets 9,571,613 7,796,033 6,671,355 5,818,965 5,611,607 Reserve for losses and loss adjustment expenses 4,415,176 3,532,491 3,030,037 2,856,275 2,379,027 Unearned premiums 1,377,474 1,122,277 911,222 718,188 620,994 Term loan, net of issuance costs 149,743 149,945 149,830 149,715 149,875 Total shareholders' equity $ 2,822,099 $ 2,328,709 $ 2,047,850 $ 1,664,183 $ 1,787,445 Common shares outstanding 99,029,434 101,466,997 110,225,103 103,087,859 102,540,769 Tangible book value per common share $ 27.62 $ 22.03 $ 17.75 $ 15.30 $ 16.29 Book value per common share $ 28.50 $ 22.95 $ 18.58 $ 16.14 $ 17.43 83 Summary of Critical Accounting Estimates The accompanying audited consolidated financial statements have been prepared in accordance with U.S.
The following table presents net prior year reserve development by reportable segment: Net (favorable) unfavorable prior year reserve development ($ in thousands) International Bermuda Total Year ended December 31, 2024 $ (10,555) $ (9,884) $ (20,439) Year ended December 31, 2023 (22,498) 6,881 (15,617) Year ended December 31, 2022 $ (26,833) $ 6,230 $ (20,603) For a detailed discussion of net (favorable) unfavorable prior year reserve development by reportable segment for the years ended December 31, 2024, 2023 and 2022 see Results of Operations .
The following table presents net prior year reserve development by reportable segment: Net (favorable) unfavorable prior year reserve development ($ in thousands) International Bermuda Total Year ended December 31, 2025 $ (29,561) $ (35,369) $ (64,930) Year ended December 31, 2024 (10,555) (9,884) (20,439) Year ended December 31, 2023 $ (22,498) $ 6,881 $ (15,617) For a detailed discussion of net (favorable) unfavorable prior year reserve development by reportable segment for the years ended December 31, 2025, 2024 and 2023 see Results of Operations .
The following table presents the gross outstanding loan balance, loan fair value and unamortized loan issuance costs: December 31, ($ in thousands) 2024 2023 Outstanding loan balance $ 150,000 $ 150,000 Loan fair value 150,463 150,981 Unamortized loan issuance costs $ 55 $ 170 Debt issuance costs are amortized over the period during which the Facility is outstanding, as an offset to investment income.
The following table presents the gross outstanding loan balance, loan fair value and unamortized loan issuance costs: As at December 31, ($ in thousands) 2025 2024 Outstanding loan balance $ 150,000 $ 150,000 Loan fair value 150,280 150,463 Unamortized loan issuance costs $ 257 $ 55 121 Debt issuance costs are amortized over the period during which the Facility is outstanding, as an offset to net investment income (loss).
The following table reconciles other underwriting expenses to general and administrative expenses, the most comparable GAAP financial measure: For the Years Ended December 31, ($ in thousands) 2024 2023 2022 Other underwriting expenses $ 210,013 $ 183,165 $ 157,540 Corporate expenses 61,111 76,691 20,142 General and administrative expenses $ 271,124 $ 259,856 $ 177,682 Other Underwriting Expense Ratio Other Underwriting Expense Ratio is a measure of the other underwriting expenses (net of third party fee income) incurred by the Company and is expressed as a percentage of net premiums earned.
The following table reconciles other underwriting expenses to general and administrative expenses, the most directly comparable GAAP financial measure: For the Years Ended December 31, ($ in thousands) 2025 2024 2023 Other underwriting expenses $ 221,743 $ 210,013 $ 183,165 Corporate expenses 57,167 61,111 76,691 General and administrative expenses $ 278,910 $ 271,124 $ 259,856 Other Underwriting Expense Ratio Other Underwriting Expense Ratio is a measure of the other underwriting expenses (net of third party fee income) incurred by the Company and is expressed as a percentage of net premiums earned.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following tables summarize the aggregate hypothetical increase (decrease) in the fair value of the Company’s fixed maturity trading portfolio and short-term investments from an immediate parallel shift in credit spreads, assuming the treasury yield curve remains constant, reflecting the use of an immediate time horizon since this presents the worst-case scenario: ($ in thousands) Credit Spread Shift in Basis Points December 31, 2024 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,930,844 $2,902,803 $2,874,972 $2,846,318 $2,817,766 Percentage change in fair value 1.9% 1.0% —% (1.0)% (2.0)% Net increase (decrease) in fair value $55,872 $27,831 $— $(28,654) $(57,206) ($ in thousands) Credit Spread Shift in Basis Points December 31, 2023 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,295,013 $2,277,611 $2,260,146 $2,242,600 $2,224,888 Percentage change in fair value 1.5% 0.8% —% (0.8)% (1.6)% Net increase (decrease) in fair value $34,867 $17,465 $— $(17,546) $(35,258) Investment in Two Sigma Funds At December 31, 2024, we hold investments in the following Two Sigma Funds: FTV, STV and ESTV.
Biggest changeThe following tables summarize the aggregate hypothetical increase (decrease) in the fair value of the Company’s fixed maturity trading portfolio and short-term investments from an immediate parallel shift in credit spreads, assuming the treasury yield curve remains constant, reflecting the use of an immediate time horizon since this presents the worst-case scenario: ($ in thousands) Credit Spread Shift in Basis Points December 31, 2025 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $3,518,544 $3,478,781 $3,439,002 $3,399,076 $3,358,704 Percentage change in fair value 2.3% 1.2% 0.0% (1.2)% (2.3)% Net increase (decrease) in fair value $79,542 $39,779 $— $(39,926) $(80,298) ($ in thousands) Credit Spread Shift in Basis Points December 31, 2024 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,930,844 $2,902,803 $2,874,972 $2,846,318 $2,817,766 Percentage change in fair value 1.9% 1.0% 0.0% (1.0)% (2.0)% Net increase (decrease) in fair value $55,872 $27,831 $— $(28,654) $(57,206) Investment in Two Sigma Funds Our investments in these Two Sigma Funds are stated at their estimated fair values, which generally represent the Company’s proportionate interest in the members’ equity of the Two Sigma Funds as reported by the respective funds based on the NAV provided by the fund administrator.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Qualitative and Quantitative Disclosures About Market Risk Overview We believe the Company’s exposure to market related risk arises primarily from interest rate risk, credit spread risk, foreign currency risk and inflation.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Quantitative and Qualitative Disclosures About Market Risk Overview We believe the Company’s exposure to market related risk arises primarily from interest rate risk, credit spread risk, foreign currency risk and inflation.
The sensitivity analysis performed at December 31, 2024 and 2023 presents hypothetical changes in cash flows, earnings and fair values of market sensitive instruments which were held by the Company on those dates in response to changes in valuation inputs selected by the Company.
The sensitivity analysis performed at December 31, 2025 and 2024 presents hypothetical changes in cash flows, earnings and fair values of market sensitive instruments which were held by the Company on those dates in response to changes in valuation inputs selected by the Company.
We performed a sensitivity analysis to estimate the effects that market risk exposures could have on the future earnings, fair values or cash flows at December 31, 2024 and 2023.
We performed a sensitivity analysis to estimate the effects that market risk exposures could have on the future earnings, fair values or cash flows at December 31, 2025 and 2024.
Recent Accounting Pronouncements At December 31, 2024, there were no recently issued accounting pronouncements that have not yet been adopted that management expects would have a material impact on the Company’s results of operations, financial condition or liquidity. See Note 2(r), Recent Accounting Pronouncements in the accompanying audited consolidated financial statements.
Recent Accounting Pronouncements At December 31, 2025, there were no recently issued accounting pronouncements that have not yet been adopted that management expects would have a material impact on the Company’s results of operations, financial condition or liquidity. See Note 2(s), Recent Accounting Pronouncements in the accompanying audited consolidated financial statements.
Assuming the same hypothetical 10% and 30% increase or decrease as of December 31, 2023, the carrying value of our investments in Two Sigma Funds would have increased or decreased by approximately $85.1 million and $255.4 million, pre-tax, respectively. Foreign Currency Risk The Company’s functional currency for consolidated reporting is the U.S. Dollar.
Assuming the same hypothetical 10% and 30% increase or decrease as of December 31, 2024, the carrying value of our investments in Two Sigma Funds would have increased or decreased by approximately $93.9 million and $281.8 million, pre-tax, respectively. Foreign Currency Risk The Company’s functional currency for consolidated reporting is the U.S. dollar.
Assuming a hypothetical 10% and 30% increase or decrease in the value of our investments in Two Sigma Funds as of December 31, 2024, the carrying value of these investments would have increased or decreased by approximately $93.9 million and $281.8 million, pre-tax, respectively.
Assuming a hypothetical 10% and 30% increase or decrease in the value of our investments in Two Sigma Funds as of December 31, 2025, the carrying value of these investments would have increased or decreased by approximately $158.8 million and $476.3 million, pre-tax, respectively.
The following tables summarize the aggregate hypothetical increase (decrease) in the fair value of the Company’s fixed maturity trading portfolio and short-term investments from an immediate parallel shift in the treasury yield curve, assuming credit spreads remain constant, and reflecting the use of an immediate time horizon, since this presents the worst-case scenario: ($ in thousands) Interest Rate Shift in Basis Points December 31, 2024 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,961,034 $2,917,688 $2,874,972 $2,831,836 $2,789,189 Percentage change in fair value 3.0% 1.5% —% (1.5)% (3.0)% Net increase (decrease) in fair value $86,062 $42,716 $— $(43,136) $(85,783) ($ in thousands) Interest Rate Shift in Basis Points December 31, 2023 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,323,482 $2,291,642 $2,260,146 $2,228,959 $2,197,980 Percentage change in fair value 2.8% 1.4% —% (1.4)% (2.8)% Net increase (decrease) in fair value $63,336 $31,496 $— $(31,187) $(62,166) 143 Credit Spread Risk The Company considers the impact of credit spread movements on the fair value of our fixed maturity and short-term investments trading portfolio.
The following tables summarize the aggregate hypothetical increase (decrease) in the fair value of the Company’s fixed maturity trading portfolio and short-term investments from an immediate parallel shift in the treasury yield curve, assuming credit spreads remain constant, and reflecting the use of an immediate time horizon, since this presents the worst-case scenario: ($ in thousands) Interest Rate Shift in Basis Points December 31, 2025 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $3,555,117 $3,496,766 $3,439,002 $3,381,663 $3,324,422 Percentage change in fair value 3.4% 1.7% 0.0% (1.7)% (3.3)% Net increase (decrease) in fair value $116,115 $57,764 $— $(57,339) $(114,580) ($ in thousands) Interest Rate Shift in Basis Points December 31, 2024 -100 -50 Base 50 100 Fair value of fixed income securities and short-term investments $2,961,034 $2,917,688 $2,874,972 $2,831,836 $2,789,189 Percentage change in fair value 3.0% 1.5% 0.0% (1.5)% (3.0)% Net increase (decrease) in fair value $86,062 $42,716 $— $(43,136) $(85,783) 126 Credit Spread Risk The Company considers the impact of credit spread movements on the fair value of our fixed maturity and short-term investments trading portfolio.
Dollar against select foreign currencies would have had on the carrying value of our net assets: December 31, 2024 2023 ($ in millions) -10% +10% -10% +10% GBP $ (2.0) $ 2.0 $ 3.5 $ (3.5) JPY (0.7) 0.7 (0.2) 0.2 EUR (6.3) 6.3 (1.5) 1.5 CAD (2.6) 2.6 (2.7) 2.7 AUD $ (1.0) $ 1.0 $ (1.6) $ 1.6 Effects of Inflation Historically, inflation has not had a material effect on the Company’s consolidated results of operations.
See Note 2(k), Foreign Exchange in the accompanying audited consolidated financial statements for additional information. 127 The following table summarizes the estimated effects that a hypothetical 10% movement in the value of the U.S. dollar against select foreign currencies would have had on the carrying value of our net assets: December 31, 2025 2024 ($ in millions) -10% +10% -10% +10% GBP $ (3.2) $ 3.2 $ (2.0) $ 2.0 JPY (0.2) 0.2 (0.7) 0.7 EUR (2.8) 2.8 (6.3) 6.3 CAD (2.4) 2.4 (2.6) 2.6 AUD $ 0.1 $ (0.1) $ (1.0) $ 1.0 Effects of Inflation Historically, inflation has not had a material effect on the Company’s consolidated results of operations.
Dollar foreign currency underwriting related assets and liabilities with investments and cash in the same currencies to manage our exposure to foreign currency fluctuations and reduce the volatility of foreign exchange gains and losses on our results of operations. 144 See Note 2(k) Foreign Exchange in the accompanying audited consolidated financial statements for additional information.
Generally, the Company will match its projected non-U.S. dollar foreign currency underwriting related assets and liabilities with investments and cash in the same currencies to manage our exposure to foreign currency fluctuations and reduce the volatility of foreign exchange gains and losses on our results of operations.
Removed
Our investments in these Two Sigma Funds are stated at their estimated fair values, which generally represent the Company’s proportionate interest in the members’ equity of the Two Sigma Funds as reported by the respective funds based on the NAV provided by the fund administrator.
Removed
Generally, the Company will match its projected non-U.S.
Removed
The following table summarizes the estimated effects that a hypothetical 10% movement in the value of the U.S.

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