Hamilton Insurance Group (HG)

Specialty insurance company Hamilton Insurance Group (NYSE:HG) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 27.7% year on year to $728.3 million. Its non-GAAP profit of $1.65 per share was 56.4% above analysts’ consensus estimates.

Company Overview

Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE:HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.

This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. The primary headwind remains the immense and concentrated exposure to large-scale catastrophe losses, as the growing impact of climate change challenges traditional risk models and creates significant earnings volatility. Additionally, they face the risk of adverse prior-year reserve development, where claims prove more costly than anticipated, while the eventual influx of new capital from alternative sources threatens to soften the market and compress future returns.

Hamilton Insurance Group competes with established specialty insurers and reinsurers including Arch Capital Group Ltd., AXIS Capital Holdings Limited, Beazley plc, Hiscox Ltd, Lancashire Holdings Limited, Markel Corporation, and RenaissanceRe Holdings Ltd., as well as various Lloyd's syndicates that operate in the specialty insurance market.

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Luckily, Hamilton Insurance Group’s revenue grew at an incredible 27% compounded annual growth rate over the last three years. Its growth beat the average insurance company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. Hamilton Insurance Group’s annualized revenue growth of 36% over the last two years is above its three-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Hamilton Insurance Group reported robust year-on-year revenue growth of 27.7%, and its $728.3 million of revenue topped Wall Street estimates by 12.9%.

Net premiums earned made up 78.6% of the company’s total revenue during the last four years, meaning insurance operations are Hamilton Insurance Group’s largest source of revenue.

Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration.

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

Hamilton Insurance Group’s net premiums earned has grown at a 23.5% annualized rate over the last three years, much better than the broader insurance industry but slower than its total revenue.

When analyzing Hamilton Insurance Group’s net premiums earned over the last two years, we can see that growth accelerated to 26.5% annually. Since two-year net premiums earned grew slower than total revenue over this period, it’s implied that other line items such as investment income grew at a faster rate. These extra revenue streams are important to the bottom line, yet their performance can be inconsistent. Some firms have been more successful and consistent in managing their float, but sharp fluctuations in the fixed income and equity markets can dramatically affect short-term results.

Hamilton Insurance Group’s net premiums earned came in at $576.7 million this quarter, up a hearty 19.7% year on year.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For insurance companies, we look at the combined ratio rather than the operating expenses and margins that define sectors such as consumer, tech, and industrials.

The combined ratio is:

• The costs of underwriting (salaries, commissions, overhead) + what an insurer pays out in claims, all divided by net premiums earned

If a company boasts a combined ratio under 100%, it is underwriting profitably. If above 100%, it is losing money on its core operations of selling insurance policies.

Given the calculation, a lower expense ratio is better. Over the last two years, Hamilton Insurance Group’s combined ratio has increased by 3.3 percentage points, going from 90% to 93.3%. Said differently, the company’s expenses have increased at a faster rate than revenue, which usually raises questions unless the company is in high-growth mode and reinvesting its profits into attractive ventures.

In Q4, Hamilton Insurance Group’s combined ratio was 87%, close to analysts’ expectations. This result was 8 percentage points better than the same quarter last year.

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality because it reflects long-term capital growth and is harder to manipulate than more commonly-used metrics like EPS.

To investors’ benefit, Hamilton Insurance Group’s BVPS grew at an exceptional 23.9% annual clip over the last two years.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

Hamilton Insurance Group currently has $149.7 million of debt and $2.82 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 0.1×. We think this is safe and raises no red flags. In general, we’re comfortable with any ratio below 1.0× for an insurance business. Anything below 0.5× is a bonus.

It was good to see Hamilton Insurance Group beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 6.2% to $31.15 immediately after reporting.

Updated: February 19, 2026 at 11:59 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Hamilton Insurance Group.

Hamilton Insurance Group isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was exceptional over the last three years, it’s expected to deteriorate over the next 12 months and its projected EPS for the next year is lacking. And while the company’s net premiums earned growth was exceptional over the last three years, the downside is its declining EPS over the last one years makes it a less attractive asset to the public markets.

Hamilton Insurance Group’s P/B ratio based on the next 12 months is 0.9x. While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $30.07 on the company (compared to the current share price of $32.60).