By Michael Loney

Feb 27 - (The Insurer) - Hamilton Insurance Group has estimated its net loss from the Los Angeles wildfires at $120 million to $150 million, which caused the Bermudian (re)insurer’s share price to close up 5% despite its Q4 earnings miss.

Discussing the Los Angeles wildfires on an investor call on Thursday, Hamilton CEO Pina Albo said her company’s early views indicate a range of $120 million to $150 million loss net of reinsurance and reinstatement premiums, based on an industry insured loss range of $35 billion to $45 billion.

She added: “Our loss estimate for this event is within our modeled expectations for market share, in this case, about 0.3%.”

The estimated losses for this event will be reported in Hamilton’s Q1 2025 financial results.

New York-listed Hamilton’s share price closed up 5.2% on Thursday at $19.36.

Citizens equity analyst Matthew Carletti in a research note commented that the bank views the wildfires loss estimate “as a very favorable outcome for Hamilton”. Carletti reaffirmed Citizens’ “market outperform” rating and increased its price target to $27 from $25.

After markets closed on Wednesday, Hamilton reported operating earnings per share of $0.26 for the fourth quarter, which missed the consensus analyst estimate of $0.56.

Its combined ratio increased by 5.2 percentage points in Q4 2024 to 95.4%, while gross written premiums rose 25.4% to $543.9 million.

For Q4 2024, net catastrophe losses were $49.1 million, driven by Hurricane Milton ($37.8 million), Hurricane Helene ($18.7 million) and the Calgary hailstorms ($0.6 million), partially offset by favourable prior-year development ($8 million).

On the investor call, Albo noted that Hamilton in the full year 2024 had gross premiums written of over $2.4 billion, a 24% increase over 2023.

Albo described the 91.3% combined ratio for the year as “impressive”, resulting in nearly $150 million of underwriting income in a year with significant insured loss activity.

“One of the reasons for this underwriting result is the diversification of our business,” she said. “For the full year 2024, Hamilton's business was split 45% casualty, 30% specialty and 25% property.”

For the full year 2024, Hamilton’s international segment wrote $1.3 billion of gross premiums and reported a 95.6% combined ratio.

Within international, Hamilton Global Specialty wrote $1.2 billion of gross premiums, which Albo said was “continuing a path of thoughtful double-digit growth”.

E&S platform Hamilton Select wrote $117 million, which was “slightly ahead of where we thought it would be and reflective of the momentum they have achieved in the strong U.S. E&S market where they source their business”.

Hamilton Select is focused on hard-to-place small to mid-sized commercial casualty risks. Albo said the platform continues “to see strong and increasing submission flow and attractive opportunities, particularly in general and excess casualty”.

She added: “Despite increased competition in the E&S space, pricing levels remain attractive for the risks we are writing, and we see sufficient growth opportunities for our business.”

Albo said that Hamilton continues to see attractive opportunities across many classes within the international portfolio, and in particular in some of the specialty insurance lines of business that have long had a natural home in Lloyd's.

“We will, for example, continue to expand our marine offering, which includes hull, liability and cargo lines,” she said. “The Lloyd's market has a robust ecosystem for marine classes built over many years and Syndicate 4000 is an active participant with a skilled team in place.

“We also see opportunities to grow our property insurance lines and have recently added underwriting talent in this area.”

The Bermuda segment comprising Hamilton Re and Hamilton Re U.S. wrote $1.1 billion in gross premiums and reported a combined ratio of 87% for the full year 2024, the second consecutive year with a combined ratio in the 80s.

Albo said that Hamilton “fared very well at our January 1 renewals”.

“For property cat, we saw the dynamics described by many of our peers with an oversupply of capacity at 1.1 and rates experiencing some downward pressure,” she said. “That said, the step change in terms of terms and conditions and specifically the elevated attachment points remained intact, a very important point.”

For casualty reinsurance, Albo said that, while commissions generally remained flat, “underlying rates continue to improve and will flow through to us since the majority of our business is quota share.”

Looking ahead to the mid-year property cat renewals, Hamilton anticipates a higher level of demand.

“Also, given that many programs impacted by the wildfires and 2024 hurricanes renew midyear, we expect an increase in rates for loss-affected accounts,” she said. “Otherwise, we expect stable renewals.”