$3.00
$20.00
bear $3.00
base $15.00
bull $20.00
margin of safety $9.00
market price* $36.21
Hamilton Insurance Group is a Bermuda-based specialty insurer and reinsurer. It writes property, casualty and specialty risks through Hamilton Re (Bermuda), a Lloyd's of London syndicate (Syndicate 4000) and an Irish insurer, and invests part of its capital with Two Sigma. Gross premiums written grew from $1.95 billion in 2023 to $2.42 billion in 2024 and $2.92 billion in 2025, and the combined ratio (claims plus costs as a share of premiums, below 100% meaning an underwriting profit) was 90.1%, 91.3% and 92.9%. Management also reports reserve releases every year since inception, and 2025 included about $65 million of favorable development on prior-year claims. How we measure earnings. We count the cash the business generates from operations, then remove the cash that comes only from collecting premiums before claims are paid (growth in loss reserves, unearned premiums and similar balances), and then subtract share-based pay and capital spending. That leaves what the insurance operation and the interest on its investments actually earn. The result is $0.57 per share in 2023, $0.95 in 2024 and $1.26 in 2025 (2022 was negative at about $(0.70) per share, a pre-IPO year with heavy investment marks). This is far below reported net income of $5.55 per share in 2025 because most reported profit ($687 million of realized and unrealized investment gains in 2025, much of it in the Two Sigma funds and a large part of that belonging to outside investors) is not recurring operating cash and is not something we can point to as repeatable. We deliberately leave those gains out; if the investment funds keep earning high returns, actual shareholder results will be better than our figures, and if they do not, ours will not be affected. Roughly, what we count is underwriting profit (about $149 million in each of 2024 and 2025) plus net investment income ($88 million in 2025, up from $63 million), less corporate costs and interest. Starting level. We use the median of 2023 to 2025, $0.95 per share, because the business only reached its current scale and ratings (AM Best upgraded it to A in April 2024; IPO November 2023) recently, so earlier years describe a different company. 2023 includes a one-time $34.5 million share award triggered by the IPO. We do not use the latest year alone. Growth check. Owner earnings grew about 34% in 2025 ($0.95 to $1.26). Our base case assumes just 10% in year one, below that, and 5% in year two, and then holds flat. The reason for any lift is a fact already on the balance sheet: loss reserves rose $883 million in 2025 and unearned premiums $255 million, so more float is invested going into 2026 than averaged during 2025, which increases investment income. We do not credit further premium growth, share gains or margin improvement, because none of that is contracted or a repeatable process we can point to. Base case, about $15 per share: owner earnings of roughly $1.05 in year one and $1.10 in year two, then flat at that level for about 28 more years. We credit the underwriting franchise, the Lloyd's and Bermuda licenses, and the record of profitable combined ratios for three years, but the earnings are from a pricing cycle, so we do not assume growth beyond the float already in place and we stop crediting earnings after 30 years since nothing we can name extends them. Bear case, about $3 per share: catastrophe losses and softer pricing push the combined ratio to about 100% (it was 92.9% in 2025 with catastrophe losses at 8.4% of premiums, and the property catastrophe and long-tail casualty books are exactly where a bad year or reserve strengthening would hit). Underwriting profit falls to roughly zero, leaving only investment income net of corporate costs and interest, about $0.40 per share, and this continues only about 10 years. Debt is modest (5% of capital), so leverage is not the problem; the risk is claims outrunning reserves. Bull case, about $20 per share: the company simply repeats its 2025 result ($1.26 per share) with the same underwriting discipline, gets the same 10% and 5% lift from float already in place, then holds flat for 28 more years. No new products, market recovery or share gains are assumed. What would make us wrong. If Hamilton's premium growth continues at 20% a year with margins intact, it will have earned far more than we count. If reserves prove too light or a major catastrophe hits, our bear case is closer to reality. Tangible book value is $27.62 per share, well above our earnings-based value, because we do not capitalize investment gains, so investors who value the company on book value would come to a very different figure. Capital spending is not separately disclosed in the filing, so we used a small investing outflow as a stand-in; the effect is under $0.10 per share. Margin-of-safety price. The margin-of-safety price of about $9 per share sits roughly 40% below the base case because results depend on catastrophe experience, reserve accuracy for casualty lines and the insurance pricing cycle.