Hamilton surges on top line, trips on Baltimore bridge & reserves
Bermuda-based insurance group Hamilton grew its top lines by over a third in the first quarter, but saw underwriting income decline as the group set aside nearly $38 million to cover the Baltimore Bridge collapse.
CEO Pina Albo claimed to be “extremely pleased about our ability to take advantage of market opportunities” and assured that double-digit growth momentum “will be enhanced” by a recent ratings upgrade.
The steep rise in premiums was no match for a claims story hit from every side save for the current-year dearth of natural catastrophe. Mark the total loss ratio up 8 points, ahead of a milder 3.6 point rise in the combined ratio to 91.5% after top line growth dampened expense ratios.
The pending bridge losses, pegged by Hamilton against the high-end of the early total industry estimated loss range of $1- 3 billion, accounted for a heady 9.8 combined ratio points.
Unfavourable prior year development also did its worst to the tune of 3.1 ratio points, with management blaming two “specific large losses” in the specialty insurance and reinsurance classes.
The top line glory included 34.1% increase in gross written premium for the group, led by 38% growth for the Bermuda operations where management credited new business, increased participation on existing business and a strong rate environment across multiple classes of business.
The smaller international segment, in turn, grew gross written premium by just under 30%, with management calling out growth and improved pricing in specialty reinsurance and casualty and property insurance classes.
Across the group, Hamilton ceded less of its premium to reinsurers. Net written premium rose nearly 48% y/y across the group, cutting 7.5 points off the cession rate.
The balance on premiums and costs pointed to underwriting income of $32.5 million for the group, down 4.5% year on year.
Following major gains in investment earnings, Hamilton laid claim to a tripling of net income to $157.2 million to render an annualized return on average equity of 29.5%.
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