Hamilton Re eyes selective casualty growth

Hamilton Re is prepared to “lean in and out” between casualty subclasses as the reinsurance market enters a period of transition, according to CEO Adrian Daws, with profitable underwriting taking precedence over further scale.

Daws says the wider Hamilton business had evolved from “a relatively small and subscale Bermuda-based reinsurer into what is now a thriving global platform”, spanning Hamilton Re, Hamilton Global Specialty and Hamilton Select.

In April, Hamilton announced a new casualty reinsurance sidecar, with ceded premium over a multi-year duration projected to $300m. Investor capital is provided by investment firm Sixth Street.

“Over the past few years, coupled with the rating upgrade that we had in 2024 and the hardening market, we’ve grown our casualty reinsurance portfolio fairly materially,” he says.

“We’ve seen increased investor appetite for sidecars, and we looked at doing this sidecar as a way of enabling us to keep writing business in that casualty space and continuing to grow.”

Casualty sees most opportunities

Hamilton’s growth has coincided with favourable market conditions and increased financial strength, with Daws noting a 78% increase in book value per share since the group’s November 2023 listing.

“The reinsurance book particularly has grown in the casualty space because that’s where we’ve seen the majority of the opportunities,” he says.

“We’ve worked with key clients across the spectrum. We offer them support across a number of lines of business, and those strong relationships and our consistency of appetite have really helped us to win in that space.”

However, Daws suggests market conditions were becoming increasingly differentiated. “It’s very clear that the market is in a period of transition. Not all the market, not all subclasses, are seeing the same pressures on rates,” he says.

“We still see pockets of opportunities, but we have to be mindful of the technical price adequacy of risk. Having that diversified portfolio enables us to lean in and out of various subclasses where we do or do not see that price adequacy.”

Within US casualty, Hamilton has limited appetite for auto and sees differing conditions between professional lines and injury-related classes. International casualty is an area where appetite remains “much more limited”, Daws explains.

“We started to grow our book at a period of time where people were reassessing their portfolio and their risk appetite, so I think initially that was helpful for us,” he says.

“Now I think we would definitely consider ourselves an established player in that market.”

Bottom line focus

Hamilton has not needed to make major recent withdrawals after earlier work to clean up its underwriting portfolio, but will continue adjusting appetite as conditions change.

Daws says: “The property insurance space is one where we’re seeing rate being given up at a pace, and that’s certainly an area that we’re keeping an eye on.”

Specialty reinsurance has also been softening, although losses including Ukraine, Baltimore and recent Middle East events could slow that trend, he suggests.

As Hamilton grows relative to peers – rising four places to 29 among AM Best’s ranking of the largest reinsurers, globally – Daws rejects the notion that scale is a strategic target.

“Scale in and of itself is definitely not the objective,” he says. “The objective is always bottom line focused and writing profitable business that’s going to be accretive to that. We’re absolutely laser focused on the bottom line.”