Given strong growth in Bermuda Casualty and a modest reserve charge, does management still see attractive opportunities in Casualty Reinsurance, and what drove the reserve charge?

Growth in Bermuda Casualty was driven by prior-bound business and increased shares with key clients. The casualty rate environment is buoyed by economic and social inflation. The $16 million reserve charge was modest, with 1/3 from a 2018 loss and 2/3 from 2022-2023, and is considered small given current market inflation, indicating confidence in loss picks. “The casualty rate environment in general is buoyed by concerns about economic and social inflation those drivers continue in the current market environment. So we believe that the conditions on casualty insurance will continue with rate increases because of those drivers remaining intact. ... it was pretty modest. It was only about $16 million. And I have to say 1/3 of that, about $5 million came from additional information on 1 loss from the year 2018 and about 2/3 of that review came from the years 2022 and 2023.”

What are the longer-term growth expectations for Hamilton Select, and is there any consideration of spinning it off?

Hamilton Select grew 18% in Q2, and its expansion strategy is a natural evolution, bolstered by the A.M. Best upgrade. Thoughtful growth is expected, with more significant expansion likely in 2027 as new teams are hired. Management views Select as a strategic and diversifying part of the platform, with no intent to spin it off. “You'll probably see more growth on the expansion strategy into 2027. ... we see Select as an incredibly strategic part of our platform and it adds to the diversification of our business and I think makes Hamilton Group a very attractive proposition.”

How does the Hamilton Select expansion, particularly with the A.M. Best upgrade, meaningfully expand the total addressable market (TAM) and potential growth trajectory?

The expansion into the middle market, beyond hard-to-place risks, means the average premium for Hamilton Select could double from the current $20,000. This strategy, combined with the A.M. Best upgrade, significantly broadens the market opportunity. New product classes like property have rolled out, with life sciences next, and distribution relationships will expand over time. “We will continue our hard-to-place strategy. And you know there the aberration for the business we're righting there about $20,000. And in average premium with this select expansion moving into the middle market space and looking at risks that are not hard to place. You could probably look at average premium above doubling.”

Hamilton (HG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 7, 2026

Source: earnings call transcript

Executive summary

Hamilton Q2 FY26 — Strong Profitability Amidst Market Transition

Hamilton delivered solid Q2 FY26 results, marked by strong profitability and strategic growth in specialty lines, despite geopolitical tensions and a competitive market. The company is navigating market transitions by focusing on underwriting discipline and selective capital allocation, while expanding its Hamilton Select platform. AI adoption is enhancing productivity and intelligence across operations.

Highlights

Net income of $144 million, translating to an annualized return on average equity of 21%.
Gross premiums written increased by 17% for the quarter, with H1 FY26 GWP up 14% to $1.8 billion.
International segment gross premiums written grew 22% to $420 million.
Hamilton Select platform grew 18%, supported by an A.M. Best upgrade to A, enabling expansion into new market segments.
Strong investment income of $141 million, including a 5.1% net return from the 2 Sigma Hamilton Fund.

Concerns

Combined ratio increased to 95.0% from 86.8% in Q2 FY25, primarily due to $50 million in catastrophe losses.
A modest $16 million reserve charge was taken on certain casualty lines following a deep dive, representing 0.8% of net casualty reserves.
Property business continues to face pressure from competition and decreased rates, leading to reduced writings in some areas.

Guidance & targets

Category	Target	Timeline	Confidence
Gross Premiums Written Growth	low double-digit range high materiality	FY26	Medium
International Attritional Loss Ratio	about 54.5% medium materiality	FY26	High
Group Attritional Loss Ratio	55% medium materiality	FY26	High
Bermuda Attritional Loss Ratio	56% medium materiality	FY26	High
Combined Ratio	low to mid-90s high materiality	average throughout the cycle	Medium
Return on Equity (ROE)	in the teens high materiality	average throughout the cycle	Medium
Hamilton Select Growth	more growth on the expansion strategy medium materiality	into 2027 · FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
International Growth driven by specialty and casualty classes, particularly Accident and Health due to seasonality. Pulled back on larger commercial D&F property insurance due to unmet return thresholds. Hamilton Select grew 18% driven by excess casualty, excess property, products and contractors, but was more selective on medical and professional lines. Gross Premiums Written (Q2 FY26): $420 millionGross Premiums Written (YoY growth Q2 FY26): 22%Gross Premiums Written (H1 FY26): $863 millionGross Premiums Written (H1 FY26 YoY growth): 21%Underwriting Income (Q2 FY26): $9 millionCombined Ratio (Q2 FY26): 97.0%Combined Ratio (Q2 FY25): 89.3%Catastrophe Losses (Q2 FY26): $34 million (11.1 points)Current Year Attritional Loss Ratio (Q2 FY26): 51.1%Prior Year Attritional Loss Ratio (Q2 FY26): Favorable 4.6 pointsExpense Ratio (Q2 FY26): 39.4%Expense Ratio (Q2 FY25): 40.0%	—	—	—	—
Bermuda Growth primarily from casualty and specialty reinsurance classes (aviation). Property reinsurance premiums fell due to decreased rates, partially offset by better signings. Reduced writings in large account property D&F book due to pricing pressure. Gross Premiums Written (Q2 FY26): $411 millionGross Premiums Written (YoY growth Q2 FY26): 12%Gross Premiums Written (H1 FY26): $908 millionGross Premiums Written (H1 FY26 YoY growth): 8%Underwriting Income (Q2 FY26): $20 millionUnderwriting Income (Q2 FY25): $40 millionCombined Ratio (Q2 FY26): 93.0%Combined Ratio (Q2 FY25): 84.3%Catastrophe Losses (Q2 FY26): $16 million (5.8 points)Current Year Attritional Loss Ratio (Q2 FY26): 55.7%Current Year Attritional Loss Ratio (Q2 FY25): 54.2%Prior Year Attritional Loss Ratio (Q2 FY26): Unfavorable 4.6 pointsReserve Charge (Q2 FY26): $16 millionExpense Ratio (Q2 FY26): 26.9%Expense Ratio (Q2 FY25): 28.0%	—	—	—	—

Product announcements

Product	Type	Timeline	Details
Property product	launch	April
Life sciences product	roadmap	future

Deals & partnerships

Various Casualty sidecar

Recently launched casualty sidecar used for strategic outwards protection across the portfolio.

Risks & headwinds

Geopolitical Tensions and Conflict Q2 FY26 and ongoing

$46 million (7.8 points) of catastrophe losses in Q2 FY26 from Middle East conflict

Mitigation:Strong underwriting expertise in affected lines (political violence, marine energy), careful exposure management, and outwards protection in place.

Social and Economic Inflation Ongoing

Contributes to reserve charges; $16 million reserve charge on certain casualty lines in Q2 FY26

Mitigation:Proactive reserving philosophy of quick reaction to adverse development indications and slow to release reserves; regular casualty deep dives.

Competitive Market Environment Ongoing

Pressure on pricing and decreased rates in property business; combined ratio increased to 95.0% from 86.8% YoY

Mitigation:Focus on preserving margin quality, astute risk selection, supporting key clients, and strategic use of retro and the casualty sidecar. Selective growth in lines with attractive margins.

Casualty Reserve Development Q2 FY26

Unfavorable 4.6 points on Bermuda's prior year attritional loss ratio; $16 million reserve charge on certain casualty lines

Mitigation:Regularly scheduled casualty deep dives, proactive strengthening of reserves based on internal review, and a philosophy of quick reaction to adverse trends.

What to watch in Q3 FY26

Hamilton Select Expansion Growth

2027

Current 18% growth in Q2 FY26

Target Continued thoughtful growth, especially in new classes like life sciences

Why it matters

Key to becoming the 'third leg' of the company's underwriting platforms and diversifying business, impacting long-term growth.

You'll probably see more growth on the expansion strategy into 2027.

Find out whether HG delivers this. Inve re-checks your case every morning.

Q&A highlights

Have any of the previously provided full-year guidance metrics changed this quarter?

Management confirmed that all prior guidance remains unchanged: International attritional loss ratio at 54.5%, Group at 55%, Bermuda at 56%. Combined ratio is expected to be in the low to mid-90s, ROE in the teens, and top-line growth in the low double-digit range for FY26.

“The guidance that we had given for those attritional loss ratios has remained the same. As you heard me say in my prepared remarks, the international ratio remains at 54.5% the group ratio is at 55% and the Bermuda ratio is at 56%. Those ratios stay the same as far as what I said in my prepared remarks as well. We expect to be able to run the book in the low to mid-90s on a combined ratio on average throughout the cycle. And that's where we are as well. The other piece that you asked about was growth. We still expect to be able to grow this book in the low double-digit range.”

asked by Tommy McJoynt · answered by Craig Howie

3 min read 6 chapters

Detailed narrative

Market Conditions and Underwriting Strategy

The insurance and reinsurance market is in transition, characterized by ongoing geopolitical tensions, social and economic inflation, and robust competition. Property business faces pressure, while casualty remains stable with rate increases. Hamilton is focused on preserving margin quality, astute risk selection, and supporting key clients, making strategic use of outwards protection, including its recently launched casualty sidecar.

The company's diversified portfolio allows it to be nimble and focus on classes with the best risk-adjusted returns.

Hamilton Select Expansion and A.M. Best Upgrade

Hamilton Select, one of the company's three underwriting platforms, received an A.M. Best upgrade to A from A-, aligning with Hamilton's strategy to build a diversified global specialty insurance and reinsurance company. This upgrade supports the platform's vision to become the 'third leg' of the business.

Hamilton Select is expanding its appetite beyond hard-to-place accounts in the U.S. E&S market to include new classes and the lower middle market segment, leveraging its team's expertise and proprietary technology. A soft launch of a property product occurred in April, with life sciences next in line.

Casualty Reserve Review and Philosophy

A regularly scheduled casualty deep dive in Q2 FY26 resulted in a modest reserve charge of $16 million on certain casualty lines. This charge represents only about 0.8% of net casualty reserves and 0.5% of total net reserves. The company emphasized that this action was based on its own review and is consistent with its reserving philosophy of reacting quickly to adverse development indications and being slow to release reserves until certainty is achieved.

The charge was primarily driven by additional information on a 2018 loss and developments in 2022-2023.

Investment Performance and Portfolio

Total investment income for Q2 FY26 was $141 million. The fixed income portfolio, short-term investments, and cash generated a gain of $26 million. The fixed income portfolio had an average yield to maturity of 4.7% (up from 4.1% at year-end 2025), a duration of 4.0 years, and a new money yield of 4.6% on Q2 investments.

The 2 Sigma Hamilton Fund produced a net return of $115 million, or 5.1%, for the quarter, and comprised about 39% of total investments and cash at June 30, 2026.

Technology and AI Adoption

Hamilton views AI as a productivity and intelligence multiplier, enhancing the capabilities of its underwriters, claims professionals, and operations teams. The company is leveraging AI technology for submission ingestion and data extraction, which accelerates the intake process, improves data quality, and allows for quicker risk assessment.

Additionally, its 'smart queuing' technology prioritizes risks with a higher chance of being won, leading to measurable productivity gains and operational benefits across the business.

Middle East Conflict Impact and Response

The ongoing Middle East conflict contributed $46 million, or 7.8 points, to the group's catastrophe losses in Q2 FY26. Despite the dynamic situation, Hamilton has strong underwriting expertise in affected lines such as political violence and marine energy. The company is observing significantly improved pricing terms and conditions in these areas and is thoughtfully underwriting risks to take advantage of market opportunities.

Exposures to such events are carefully managed across the group, with outwards protection in place.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.