Hamilton Insurance Group Ltd

For the period ended Mar 31, 2024. Filed May 9, 2024.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 31, 2024 · Filed May 9, 2024

HG$36.94-0.1%Stored close · as of Nov 6, 2026

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Contents

Summary Results of Operations

Consolidated Results of Operations

The following is a comparison of selected data for our consolidated results of operations for the three months ended March 31, 2024 and 2023 and book value per share and balance sheet data as at March 31, 2024 and December 31, 2023.

	For the Three Months Ended March 31,
($ in thousands, except per share amounts)	2024	2023
Gross premiums written	$721,941	$538,164
Net premiums written	$514,880	$348,498
Net premiums earned	$385,303	$283,902
Third party fee income(1)	7,478	3,004
Claims and Expenses
Losses and loss adjustment expenses	232,352	148,561
Acquisition costs	84,554	65,140
Other underwriting expenses(2)	43,353	39,142
Underwriting income (loss)(3)	32,522	34,063
Net realized and unrealized gains (losses) on investments	255,371	35,133
Net investment income (loss)(4)	12,618	2,359
Total net realized and unrealized gains (losses) on investments and net investment income (loss)	267,989	37,492
Other income (loss), excluding third party fee income(1)	—	29
Net foreign exchange gains (losses)	(2,125)	(2,046)
Corporate expenses(2)	11,502	6,664
Amortization of intangible assets	3,252	2,770
Interest expense	5,708	5,529
Income tax expense (benefit)	592	1,573
Net income (loss)	277,332	53,002
Net income (loss) attributable to non-controlling interest(5)	120,158	1,510
Net income (loss) attributable to common shareholders	$157,174	$51,492
Diluted income (loss) per share attributable to common shareholders	$1.38	$0.49
Key Ratios
Attritional loss ratio - current year	57.2%	49.1%
Attritional loss ratio - prior year development	3.1%	0.6%
Catastrophe loss ratio - current year	0.0%	1.8%
Catastrophe loss ratio - prior year development	0.0%	0.8%
Loss and loss adjustment expense ratio	60.3%	52.3%
Acquisition cost ratio	21.9%	22.9%
Other underwriting expense ratio	9.3%	12.7%
Combined ratio	91.5%	87.9%
Return on average common shareholders' equity	7.4%	3.0%

	As at
Book Value	March 31, 2024	December 31, 2023
Tangible book value per common share	$19.07	$17.75
Change in tangible book value per common share	7.4%
Book value per common share	$19.90	$18.58
Change in book value per common share	7.1%
Balance Sheet Data
Total assets	$7,349,025	$6,671,355
Total shareholders' equity	$2,209,505	$2,047,850

(1) Third party fee income is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to other income (loss), the most comparable GAAP financial measure, also included other income (loss), excluding third party fee income of less than $0.1 million for each of the three months ended March 31, 2024 and 2023. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures' for further details.

(2) Other underwriting expenses is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. The reconciliation to general and administrative expenses, the most comparable GAAP financial measure, also included corporate expenses of $11.5 million, and $6.7 million for the three months ended March 31, 2024 and 2023, respectively. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures' for further details.

(3) Underwriting income (loss) is a non-GAAP financial measure as defined in Item 10(e) of SEC Regulation S-K. Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Measures' for further details.

(4) Net investment income (loss) is presented net of investment management fees.

(5) Refer to 'Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidated Results of Operations—Corporate and Other' for further details.

Operating Highlights

The following significant items impacted the consolidated results of operations for the three months ended March 31, 2024 and 2023:

Gross premiums written Gross premiums written were $721.9 million and $538.2 million for the three months ended March 31, 2024 and 2023, respectively. The increase in gross premiums written was primarily driven by our property reinsurance, specialty reinsurance and casualty insurance and reinsurance business. The growth was a result of new business, increased participation on existing business and a strong rate environment across multiple classes of business.

Underwriting results The combined ratio was 91.5% and 87.9% for the three months ended March 31, 2024 and 2023, respectively. The increase was primarily driven by an increase in the attritional loss ratio, partially offset by decreases in both the other underwriting expense ratio and acquisition cost ratio.

	For the Three Months Ended
($ in thousands)	Current year	% of net premiums earned	Prior year development	% of net premiums earned	Losses and loss adjustment expenses	% of net premiums earned
Attritional losses	$220,295	57.2%	$11,892	3.1%	$232,187	60.3%
Catastrophe losses	—	0.0%	165	0.0%	165	0.0%
Total	$220,295	57.2%	$12,057	3.1%	$232,352	60.3%
Attritional losses	$139,275	49.1%	$1,797	0.6%	$141,072	49.7%
Catastrophe losses	5,281	1.8%	2,208	0.8%	7,489	2.6%
Total	$144,556	50.9%	$4,005	1.4%	$148,561	52.3%

Attritional loss ratio - current year for the three months ended March 31, 2024 was 57.2% compared to 49.1% for the three months ended March 31, 2023, an increase of 8.1 percentage points. The increase is primarily driven by losses of $37.9 million arising from the Francis Scott Key Baltimore Bridge collapse, which impacted our insurance and reinsurance classes in both our International and Bermuda segments.

Attritional loss ratio - prior year for the three months ended March 31, 2024 was an unfavorable 3.1% compared to an unfavorable 0.6% for the three months ended March 31, 2023, an increase of 2.5 percentage points. The attritional loss ratio - prior year for the three months ended March 31, 2024 was driven by unfavorable development in specialty classes in both our International and Bermuda segments, primarily related to two specific large losses, partially offset by various smaller reserve releases across classes as a result of reduced loss estimates and benign claims experience. In addition, casualty business protected by the loss portfolio transfer ("LPT"), discussed in Note 6, Reinsurance, benefited from $0.9 million in amortization of the associated deferred gain partially offset by unfavorable development in the underlying reserves of $0.1 million, for a total net positive earnings impact of $0.8 million. The attritional loss ratio - prior year for the three months ended March 31, 2023 was primarily driven by unfavorable prior year development in property classes in the Bermuda segment, partially offset by favorable development in our International and Bermuda specialty classes.

Catastrophe losses - current year and prior year development for the three months ended March 31, 2024 included $Nil current year losses and $0.2 million of prior year development. Catastrophe losses for the three months ended March 31, 2023 were driven by the wind and thunderstorm events which impacted states in both the Southern and Midwest U.S. during March 2023 ($5.3 million), and unfavorable prior year development of $2.2 million.

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - TSHF(1)	$262,821	$10,064
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other	5,168	27,428
	$267,989	$37,492
Net income (loss) attributable to non-controlling interest - TSHF	$120,158	$1,510

(1) Prior to non-controlling interest performance incentive allocation

Total net realized and unrealized gains (losses) on investments and net investment income (loss) -TSHF, prior to non-controlling interest, returned income of $262.8 million and $10.1 million for the three months ended March 31, 2024 and 2023, respectively. This includes the fund's returns, net of investment management fees.

Net investment income, net of non-controlling interest - TSHF, returned income of $142.7 million and $8.6 million for the three months ended March 31, 2024 and 2023, respectively. This includes the fund's returns, net of investment management fees and performance incentive allocations. The aggregate incentive allocation to which the investment manager is entitled is included in "Net income attributable to non-controlling interests" in our GAAP financial statements.

TS Hamilton Fund produced returns, net of investment management fees and performance incentive allocations, of 8.3% and 0.5% for the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, gains in TS Hamilton Fund were led by macroeconomic trading in Two Sigma Futures Portfolio, LLC (“FTV”). Within FTV, equities, commodities, fixed income, currencies, and credit all made positive contributions to returns, in decreasing order. TS Hamilton Fund also received positive contributions from single name equities trading. In single name equities trading, gains were led by U.S. equities within Two Sigma Spectrum Portfolio, LLC ("STV"), followed by non-U.S. equities within Two Sigma Equity Spectrum Portfolio, LLC (“ESTV”). Within ESTV, East Asia, Europe, Pan-America, and China all made positive contributions to returns, in decreasing order.

For the three months ended March 31, 2023, gains in TS Hamilton Fund were led by single name equities trading and partially offset by losses in macroeconomic trading. In single name equities trading, gains were led by U.S. equities within STV, followed by non-U.S. equities within ESTV. Within ESTV, Europe, China, East Asia, and Pan-America all made positive contributions to returns, in decreasing order. Macro losses in FTV were led by equities and commodities.

Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other, returned income of $5.2 million and $27.4 million for the three months ended March 31, 2024 and 2023, respectively. Income for the three months ended March 31, 2024 was primarily driven by investment income on higher yielding assets, largely offset by negative price returns as a result of rising U.S. treasury interest rates in the first quarter of 2024. Income for the three months ended March 31, 2023 was primarily driven by holding higher yielding assets during 2023 as a result of portfolio reinvestments during the 2022 rising interest rate environment, combined with falling U.S. treasury interest rates in the first quarter of 2023.

Segment Information

We have determined our reportable business segments based on the information used by management in assessing performance and allocating resources to underwriting operations. We have identified two reportable business segments - International and Bermuda. Each of our identified reportable segments has a Chief Executive Officer who is responsible for the overall profitability of their segment and who regularly reports and is directly accountable to the chief operating decision maker: the Chief Executive Officer of the consolidated group.

We evaluate the performance of reportable segments based on their respective underwriting income or loss. Underwriting income or loss is calculated as net premiums earned less losses and loss adjustment expenses, acquisition costs, and other underwriting expenses (net of third party fee income). General and administrative expenses not incurred by the reportable segments are included in corporate and other expenses as part of the reconciliation of net underwriting income or loss to net income or loss attributable to common shareholders. As we do not manage our assets by reportable segment, investment income and assets are not allocated to reportable segments.

Our core business is underwriting and our underwriting results are reflected in our reportable segments: (1) International, which is comprised of property, casualty and specialty insurance and reinsurance classes of business originating from the Company’s London, Dublin, and Hamilton Select operations; and (2) Bermuda, which is comprised of property, casualty and specialty insurance and reinsurance classes of business originating from Hamilton Re, Bermuda and Hamilton Re US and subsidiaries. We consider many factors, including the nature of each segment’s products, client types, production sources, distribution methods and the regulatory environment, in determining the aggregated operating segments.

Corporate includes net realized and unrealized gains (losses) on investments, net investment income (loss), other income (loss) not incurred by the reportable segments, net foreign exchange gains (losses), general and administrative expenses not incurred by the reportable segments, amortization of intangible assets, interest expense, and income tax expense (benefit).

International Segment

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Gross premiums written	$320,841	$247,114
Net premiums written	$185,033	$122,019
Net premiums earned	$196,814	$149,515
Third party fee income	3,586	2,902
Claims and Expenses
Losses and loss adjustment expenses	116,162	70,393
Acquisition costs	47,720	37,193
Other underwriting expenses	31,203	28,461
Underwriting income (loss)	$5,315	$16,370
Attritional losses - current year	$110,197	$74,631
Attritional losses - prior year development	5,773	(6,333)
Catastrophe losses - current year	—	—
Catastrophe losses - prior year development	192	2,095
Losses and loss adjustment expenses	$116,162	$70,393
Attritional loss ratio - current year	56.0%	49.9%
Attritional loss ratio - prior year development	2.9%	(4.2)%
Catastrophe loss ratio - current year	0.0%	0.0%
Catastrophe loss ratio - prior year development	0.1%	1.4%
Losses and loss adjustment expense ratio	59.0%	47.1%
Acquisition cost ratio	24.2%	24.9%
Other underwriting expense ratio	14.0%	17.1%
Combined ratio	97.2%	89.1%

Gross Premiums Written

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Property	$37,704	$23,908
Casualty	121,165	92,581
Specialty	161,972	130,625
Total	$320,841	$247,114

Gross premiums written increased by $73.7 million, or 29.8%, from $247.1 million for the three months ended March 31, 2023 to $320.8 million for the three months ended March 31, 2024, primarily driven by growth and improved pricing in specialty reinsurance and casualty and property insurance classes.

Net Premiums Earned

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Property	$34,974	$22,917
Casualty	72,928	57,495
Specialty	88,912	69,103
Total	$196,814	$149,515

Net premiums earned increased by $47.3 million, or 31.6%, from $149.5 million for the three months ended March 31, 2023 to $196.8 million for the three months ended March 31, 2024, reflecting growth across property, casualty and specialty insurance classes, primarily driven by growth in property insurance binders and D&F, casualty insurance professional lines and excess casualty, and by political violence, fine art & specie and marine & energy in specialty insurance classes. Specialty reinsurance growth was primarily driven by growth in surety and treaty lines, respectively.

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Third party fee income	$3,586	$2,902

Third party fee income increased by $0.7 million, or 23.6%, from $2.9 million for the three months ended March 31, 2023 to $3.6 million for the three months ended March 31, 2024. The increase was due to more favorable terms of renewed syndicate management fees, partially offset by a decrease in consortium fees.

	For the Three Months Ended
($ in thousands)	Current year	% of net premiums earned	Prior year development	% of net premiums earned	Losses and loss adjustment expenses	% of net premiums earned
Attritional losses	$110,197	56.0%	$5,773	2.9%	$115,970	58.9%
Catastrophe losses	—	0.0%	192	0.1%	192	0.1%
Total	$110,197	56.0%	$5,965	3.0%	$116,162	59.0%
Attritional losses	$74,631	49.9%	$(6,333)	(4.2)%	$68,298	45.7%
Catastrophe losses	—	0.0%	2,095	1.4%	2,095	1.4%
Total	$74,631	49.9%	$(4,238)	(2.8)%	$70,393	47.1%

The loss ratio for the three months ended March 31, 2024 was 59.0%, compared to 47.1% for the three months ended March 31, 2023, an increase of 11.9 percentage points. The increase was driven by higher current year attritional losses and unfavorable prior year attritional loss development for the three months ended March 31, 2024, compared to favorable prior year attritional loss development for the three months ended March 31, 2023.

Attritional loss ratio - current year for the three months ended March 31, 2024 was 56.0% compared to 49.9% for the three months ended March 31, 2023, an increase of 6.1 percentage points. The increase in the current year attritional loss ratio was primarily driven by $11.8 million of losses arising from the Baltimore Bridge collapse, which impacted our insurance and reinsurance classes, with no comparable large losses for three months ended March 31, 2023.

Attritional loss ratio - prior year for the three months ended March 31, 2024 was an unfavorable 2.9% compared to a favorable 4.2% for the three months ended March 31, 2023, an increase of 7.1 percentage points. The unfavorable prior year development for the current quarter is primarily driven by unfavorable development on two large losses in our specialty insurance class, partially offset by various smaller reserve releases across classes as a result of reduced loss estimates and benign claims experience. In addition, casualty business protected by the loss portfolio transfer ("LPT") discussed in Note 6, Reinsurance benefited from $0.9 million in amortization of the associated deferred gain partially offset by unfavorable development in the underlying reserves of $0.1 million, for a total net positive earnings impact of $0.8 million.

Catastrophe losses - current year and prior yearfor the three months ended March 31, 2024 included $Nil current year losses and $0.2 million of prior year development. Catastrophe losses - current year and prior year of $2.1 million for the three months ended March 31, 2023 were primarily driven by unfavorable prior year development of $2.1 million.

Acquisition Costs

	For the Three Months Ended
Acquisition Costs · % of Net Premiums Earned
($ in thousands)	March 31, 2024	March 31, 2023	March 31, 2024	March 31, 2023	'24 vs '23point r
Property	$11,536	$8,206	33.0%	35.8%	(2.8)
Casualty	9,742	6,820	13.4%	11.9%	1.5
Specialty	26,442	22,167	29.7%	32.1%	(2.4)
Total	$47,720	$37,193	24.2%	24.9%	(0.7)

For the three months ended March 31, 2024, the acquisition cost ratio was 24.2%, compared to 24.9% for three months ended March 31, 2023, a decrease of 0.7 percentage points. The modest decrease was primarily driven by a decrease in specialty reinsurance, as a result of lower commission expense.

Other Underwriting Expenses and Other Underwriting Expense Ratios

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Other underwriting expenses	$31,203	$28,461
Other underwriting expense ratio	14.0%	17.1%

Other underwriting expenses are general and administrative costs incurred by our reportable segments.

Other underwriting expenses were $31.2 million for the three months ended March 31, 2024, an increase of $2.7 million, or 9.6%, compared to $28.5 million for the three months ended March 31, 2023. The increase was primarily driven by increased headcount as we built out underwriting teams supporting the corresponding increase in premium volume, and professional fees.

The other underwriting expense ratio for the three months ended March 31, 2024 and 2023 decreased over the same period from 17.1% to 14.0%, as a result of the growth in the premium base.

Bermuda Segment

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Gross premiums written	$401,100	$291,050
Net premiums written	$329,847	$226,479
Net premiums earned	$188,489	$134,387
Third party fee income	3,892	102
Claims and Expenses
Losses and loss adjustment expenses	116,190	78,168
Acquisition costs	36,834	27,947
Other underwriting expenses	12,150	10,681
Underwriting income (loss)	$27,207	$17,693
Attritional losses - current year	$110,098	$64,644
Attritional losses - prior year development	6,119	8,130
Catastrophe losses - current year	—	5,281
Catastrophe losses - prior year development	(27)	113
Losses and loss adjustment expenses	$116,190	$78,168
Attritional loss ratio - current year	58.4%	48.1%
Attritional loss ratio - prior year development	3.2%	6.1%
Catastrophe loss ratio - current year	0.0%	3.9%
Catastrophe loss ratio - prior year development	0.0%	0.1%
Losses and loss adjustment expense ratio	61.6%	58.2%
Acquisition cost ratio	19.5%	20.8%
Other underwriting expense ratio	4.4%	7.9%
Combined ratio	85.5%	86.9%

Gross Premiums Written

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Property	$190,472	$132,081
Casualty	130,729	100,825
Specialty	79,899	58,144
Total	$401,100	$291,050

For the three months ended March 31, 2024, gross premiums written increased by $110.1 million, or 37.8%, from $291.1 million for the three months ended March 31, 2023 to $401.1 million for the three months ended March 31, 2024. The growth was a result of new business, increased participation on existing business and a strong rate environment across multiple classes of business.

Net Premiums Earned

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Property	$71,734	$47,541
Casualty	86,181	61,927
Specialty	30,574	24,919
Total	$188,489	$134,387

For the three months ended March 31, 2024, the Bermuda segment's net premiums earned increased by $54.1 million, or 40.3%, from $134.4 million for the three months ended March 31, 2023 to $188.5 million for the three months ended March 31, 2024. The increase was primarily driven by new business, volume growth and rate increases in casualty and property reinsurance. The most significant drivers of the increase were general liability, professional lines and property treaty classes.

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Third party fee income	$3,892	$102

Third party fee income increased by $3.8 million, from $0.1 million for the three months ended March 31, 2023 to $3.9 million for the three months ended March 31, 2024. The increase was primarily driven by certain performance based management fees recognized by Ada Capital Management Limited for services provided to Ada Re, Ltd.

	For the Three Months Ended
($ in thousands)	Current year	% of net premiums earned	Prior year development	% of net premiums earned	Losses and loss adjustment expenses	% of net premiums earned
Attritional losses	$110,098	58.4%	$6,119	3.2%	$116,217	61.6%
Catastrophe losses	—	0.0%	(27)	0.0%	(27)	0.0%
Total	$110,098	58.4%	$6,092	3.2%	$116,190	61.6%
Attritional losses	$64,644	48.1%	$8,130	6.1%	$72,774	54.2%
Catastrophe losses	5,281	3.9%	113	0.1%	5,394	4.0%
Total	$69,925	52.0%	$8,243	6.2%	$78,168	58.2%

The loss ratio for the three months ended March 31, 2024 was 61.6%, compared to 58.2% for the three months ended March 31, 2023, an increase of 3.4 percentage points. The increase was driven by higher current year attritional losses for the three months ended March 31, 2024.

Attritional loss ratio - current year for the three months ended March 31, 2024 was 58.4% compared to 48.1% for the three months ended March 31, 2023, an increase of 10.3 percentage points. The increase in the current year attritional loss ratio was primarily driven by $26.1 million of losses arising from the Baltimore Bridge collapse, which impacted our insurance and reinsurance classes, with no comparable losses for three months ended March 31, 2023.

Attritional loss ratio - prior year for the three months ended March 31, 2024 was an unfavorable 3.2%, compared to an unfavorable 6.1% for the three months ended March 31, 2023, a decrease of 2.9 percentage points. The unfavorable attritional loss ratio - prior year is primarily driven by unfavorable development in specialty reinsurance classes relating to one specific large loss.

Catastrophe losses - current year and prior yearfor the three months ended March 31, 2024 included $Nil current year losses and an insignificant movement on prior year. Catastrophe losses - current year and prior year of $5.4 million for the three months ended March 31, 2023 were primarily driven by wind and thunderstorm events which impacted states in both the Southern and Midwest U.S. during March 2023 ($5.3 million) and unfavorable prior year development of $0.1 million.

Acquisition Costs

	For the Three Months Ended
Acquisition Costs · % of Net Premiums Earned
($ in thousands)	March 31, 2024	March 31, 2023	March 31, 2024	March 31, 2023	'24 vs '23point r
Property	$9,255	$6,757	12.9%	14.2%	(1.3)
Casualty	21,134	13,867	24.5%	22.4%	2.1
Specialty	6,445	7,323	21.1%	29.4%	(8.3)
Total	$36,834	$27,947	19.5%	20.8%	(1.3)

The acquisition cost ratio for the three months ended March 31, 2024 decreased to 19.5%, compared to 20.8% for the three months ended March 31, 2023, reflecting the change in the mix of business and the impact of profit commissions on the prior period.

Other Underwriting Expenses and Other Underwriting Expense Ratios

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Other underwriting expenses	$12,150	$10,681
Other underwriting expense ratio	4.4%	7.9%

Other underwriting expenses are general and administrative costs incurred by our reportable segments.

For the three months ended March 31, 2024, other underwriting expenses increased by $1.5 million or 13.8%, from $10.7 million for the three months ended March 31, 2023 to $12.2 million for the three months ended March 31, 2024. The increase was primarily driven by an increase in salary and compensation costs and professional fees.

The other underwriting expense ratios for the three months ended March 31, 2024 and 2023 decreased over the same period at 4.4% and 7.9%, respectively, as a result of the growth in premium base and certain performance based management fees recognized by Ada Capital Management Limited in the current quarter for services provided to Ada Re, Ltd.

Corporate and Other

The components of total net realized and unrealized gains (losses) on investments and net investment income (loss) are as follows:

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - TSHF(1)	$262,821	$10,064
Total net realized and unrealized gains (losses) on investments and net investment income (loss) - other	5,168	27,428
	$267,989	$37,492
Net income (loss) attributable to non-controlling interest - TSHF	$120,158	$1,510

(1) Prior to non-controlling interest performance incentive allocation

TS Hamilton Fund produced returns, net of investment management fees and performance incentive allocations, of 8.3% and 0.5% for the three months ended March 31, 2024 and 2023, respectively.

Other Income (Loss)

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Other income (loss), excluding third party fee income	$—	$29

Other income (loss), excluding third party fee income, consists of varying insignificant items in each period.

Net Foreign Exchange Gains (Losses)

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Net foreign exchange gains (losses)	$(2,125)	$(2,046)

Our functional currency is the U.S. Dollar. We may conduct routine underwriting operations or invest a portion of our cash and other investable assets in currencies other than U.S. dollars. Consequently, we may incur foreign exchange gains and losses in our results of operations.

Foreign exchange losses of $2.1 million and $2.0 million for the three months ended March 31, 2024 and 2023, respectively, primarily related to the remeasurement of insurance-related assets and liabilities denominated in Euro, Japanese Yen, Australian and Canadian Dollars and British Pounds.

Corporate Expenses

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Corporate expenses	$11,502	$6,664

Corporate expenses for the three months ended March 31, 2024 were $11.5 million, compared to $6.7 million for the three months ended March 31, 2023, an increase of $4.8 million. The increase was primarily driven by $3.7 million of Value Appreciation Pool ("VAP") expense, an increased headcount, and certain variable performance based compensation costs, as well as an increase in professional fees associated with operating as a public company.

Amortization of Intangible Assets

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Amortization of intangible assets	$3,252	$2,770

Amortization of intangible assets of $3.3 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively, relates to internally developed software and intangible assets acquired in a business combination. Amortization expense increased due to the incremental expense associated with additional technology projects.

Interest Expense

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Interest expense	$5,708	$5,529

Interest expense of $5.7 million and $5.5 million for the three months ended March 31, 2024 and 2023, respectively, relates to interest payments and certain administrative fees associated with our term loan and letter of credit facilities. The modest increase in interest expense is primarily driven by the increase in the Secured Overnight Financing Rate ("SOFR"), which underlies the floating rate associated with the term loan.

Income Tax Expense (Benefit)

	For the Three Months Ended March 31,
($ in thousands)	2024	2023
Income tax expense (benefit)	$592	$1,573

Income tax expense (benefit) for the three months ended March 31, 2024 was an expense of $0.6 million, compared to an expense of $1.6 million for the three months ended March 31, 2023, a decrease of $1.0 million. The current year tax expense is primarily driven by withholding taxes on investment income from TS Hamilton Fund, partially offset by various smaller tax adjustments across the group. The prior year tax expense in our Bermuda segment was primarily driven by withholding taxes on investment income from TS Hamilton Fund.

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