Hamilton Insurance Group, Ltd.
For the period ended Dec 31, 2025. Filed Feb 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 25, 2026
HG$37.36+1.1%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001593275-25-000023
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-25.
0001593275-26-000021
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 337 previous paragraphs and 228 current paragraphs.
38 unchanged; 80 reworded; 105 added; 214 removed; 5 previous and 5 current paragraphs rearranged.
Tables are not compared: 1 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (105)
Current report
•unpredictable events, including natural catastrophes and man‑made disasters, global climate change and emerging claim, litigation and coverage issues that may increase loss severity or expand coverage obligations;
Current report
•foreign operational risks, including foreign currency risk, political instability, regulatory uncertainty and differing legal regimes in jurisdictions where we operate;
Current report
•risks arising from our management of alternative reinsurance platforms and vehicles for third‑party investors;
Current report
•conflicts of interest, governance, operational or regulatory risks involving Two Sigma, the TS Hamilton Fund or their respective affiliates that could adversely affect investment performance or our business;
Current report
•the suspension, limitation or revocation of licenses or approvals required by our insurance and reinsurance subsidiaries;
Current report
•significant legal, regulatory or governmental proceedings or investigations;
Current report
•challenges and costs associated with compliance with public company disclosure, governance and internal control requirements;
Current report
Competition is further shaped by consolidation among insurers, reinsurers, customers and intermediaries. Larger, consolidated entities often leverage their scale and capital strength to negotiate lower pricing, demand broader coverage terms, increase line sizes or reduce their reliance on reinsurance. Consolidation among intermediaries may also affect our ability to access business and could increase pressure on pricing and commissions, limiting our flexibility in certain markets. Other companies, including our competitors, may seek to write business without what we believe to be the appropriate regard for risk and profitability, especially during periods of intense competition for premium. During these times, it is very difficult to grow or maintain premium volume without sacrificing underwriting income.
Current report
In addition, rapid technological innovation, including advanced data analytics, digital platforms and AI, is intensifying competitive pressures across the industry. Competitors that deploy these technologies more effectively can deliver superior pricing models, faster claims handling and enhanced customer experiences, positioning themselves to gain market share at our expense. Keeping pace requires ongoing investment in technology and innovation, which may involve significant capital and operational resources without any guarantee of achieving the intended benefits. Failure to adapt quickly could leave us at a disadvantage in an increasingly digital marketplace.
Current report
Finally, we rely on a limited number of intermediaries for a significant portion of our business. Competitors with stronger ratings, broader product portfolios or longer-standing relationships may attract or influence these intermediaries, reducing our distribution reach and limiting growth opportunities. If we are unable to compete effectively on these fronts, our business, financial condition and results of operations could be materially adversely affected.
Current report
Reserving is particularly complex for long-tail lines, emerging risks and new products, where claims may take years to develop and historical data may be limited. We review historical patterns and consider factors such as inflation, litigation trends and regulatory changes, but there is no precise method to predict future outcomes. As additional information becomes available, reserve estimates may change, potentially requiring material strengthening. This process involves significant judgment and is influenced by external factors beyond our control, making reserve adequacy a continuing challenge.
Current report
If our reserves ultimately prove inadequate, we would need to increase them, which could reduce net income and shareholders’ equity in the period identified and potentially affect liquidity, capital position and financial strength ratings. In addition, significant reserve adjustments may impact market perception of our financial stability and could increase the cost of capital or limit our ability to write new business. Future loss experience substantially in excess of established reserves could have a material adverse effect on our business, financial condition and results of operations. Conversely, we may prove to be too conservative in our reserving estimates which could contribute to factors which may impede our ability to grow in respect of new markets or perils or in connection with our current portfolio of coverages.
Current report
The extent of these losses depends on both the severity of events and the concentration and correlation of insured exposures. Changes in global temperatures, weather patterns, and sea levels may increase both the frequency and severity of natural catastrophes and the resulting losses in the future. Additionally, increases in the values and concentrations of insured property, particularly in coastal regions, and increases in the cost of construction materials required to rebuild affected properties, could increase the impact of natural catastrophe events. Catastrophic events may also increase claims handling costs, disrupt operations and adversely affect investment markets. Significant catastrophe losses could materially adversely affect our business, financial condition and results of operations and could limit our ability to write new business.
Current report
Beyond the risks associated with natural and non-natural catastrophe accumulations, underwriting risk may arise from incorrect assumptions about inflation, claims practices, or social trends. Many of our lines lack sufficient historical claims data to accurately estimate future costs, requiring significant underwriting and actuarial judgment. This risk is heightened in low-frequency, high-severity classes and in our U.S. E&S business, where pricing data is often more limited than in admitted markets. If we misunderstand or inadequately quantify underwriting risk, fail to identify accumulations or misprice risks due to inflation, social trends or other factors, our business, financial condition and results of operations could be materially adversely affected.
Current report
In addition, increasing adoption of AI technologies by our insureds may create new or evolving sources of risk. AI systems can produce unintended or unpredictable outcomes, automate decisions that lead to errors, or otherwise cause losses that may fall within the scope of our policies, including where coverage was not originally intended. To the extent our policies implicitly or explicitly respond to such exposures, losses arising from our insureds’ use of AI may be difficult to assess, model or price due to rapidly developing liability standards and limited historical loss data. These factors could result in higher‑than‑expected claims, unforeseen risk accumulations or inadequate pricing, which could materially adversely affect our business, financial condition and results of operations.
Current report
Significant model and data uncertainty could result in losses materially exceeding our estimates.
Current report
We use multiple models to simulate potential claims outcomes, including pricing, reserving, accumulation and catastrophe models for both natural and man-made events. For natural catastrophe risk, we rely on third-party vendor models (e.g., Verisk and Risk Management Solutions) and proprietary tools such as our HARP platform to estimate probable maximum losses. These models depend on broad assumptions, such as storm surge, demand surge, zone density and secondary uncertainty, and do not cover all territories or perils. Natural catastrophe modeling is inherently uncertain due to event probability, parameter risk and limitations in historical data, particularly for low-frequency, high-severity events.
Current report
Man-made catastrophe models, including those addressing terrorism, cyber risk and political violence, are generally less developed and rely heavily on economic, scientific and policy assumptions, adding further uncertainty. These models often lack robust historical loss data and may not fully capture evolving risk dynamics, such as changes in technology, geopolitical conditions or regulatory frameworks. As a result, modeled outputs may understate or overstate potential exposures.
Current report
We use these models to manage risk accumulation, inform capital requirements and optimize portfolio risk/return. However, given modeling limitations, incomplete or inaccurate exposure data and the inherent unpredictability of catastrophic events, actual losses may differ materially from modeled estimates. Since there is no industry standard for assumptions and preparation of insured data for use in these models, our modeled losses may not be comparable to estimates made by other companies. In certain circumstances, we could experience unanticipated risk concentrations or losses significantly exceeding expectations, which could materially adversely affect our business, financial condition and results of operations. In addition, reliance on models introduces operational risk, including the potential for human error in data input, interpretation or application of assumptions. Any material deviation between modeled and actual outcomes could impair our ability to price accurately, allocate capital efficiently and maintain targeted risk tolerances, which could have a material adverse effect on our business, financial condition and results of operations.
Current report
Our reliance on third-party assessment extends to reinsurance treaties, where we generally do not evaluate each underlying risk. We depend on ceding companies’ underwriting decisions and are exposed to the risk that cedents may misprice or inadequately assess exposures, resulting in premiums that do not compensate for assumed risk. This reliance could materially adversely affect our business, financial condition and results of operations.
Current report
Unanticipated legal developments and changes in social conditions may lead to unexpected coverage obligations or increases in claim frequency and severity. These developments can impose obligations beyond our underwriting intent or expand interpretations of policy language, resulting in higher losses and greater uncertainty in pricing and reserving.
Current report
We have observed adverse impacts from trends such as claims-level fraud, litigation abuses and social inflation, which may persist or intensify. In casualty and specialty lines, these effects often emerge gradually, making them difficult to anticipate and quantify. Industry experience during the COVID-19 pandemic illustrates how unforeseen events can generate significant losses despite contractual exclusions. Courts and arbitration panels may interpret policy language unpredictably, and some market participants increasingly challenge contract wording. Efforts to exclude certain exposures could also reduce market acceptance of our products, limiting growth opportunities.
Current report
The full impact of emerging claim and coverage issues is difficult to predict and may not be known for years after a policy is issued. Our exposure to these uncertainties may grow as our long-tail casualty reserves increase, since claims can arise over extended periods and may be subject to evolving legal standards. While we strive to improve contract language, underwriting discipline and claims practices, these measures may not fully mitigate the risk of adverse developments. Any significant increase in claims costs or expansion of coverage obligations could materially adversely affect our business, financial condition and results of operations.
Current report
Operational risks, including human error, model uncertainty and reliance on third-party systems, could materially adversely affect our business, financial condition and results of operations.
Current report
Operational risks, including human error, the inherent uncertainty of models and reliance on third-party IT systems, are inherent in our business. Failures or outages in these systems, or the need to replace or upgrade them, could disrupt critical functions such as underwriting, claims processing and financial reporting. Operational losses may also result from fraud, employee or vendor errors, inadequate documentation or authorization, regulatory non-compliance or IT failures. Misuse of customer or proprietary information or breaches of internal controls could cause financial loss, reputational harm and regulatory scrutiny.
Current report
In addition, we license systems and data from third-party providers and cannot guarantee continued access or proper functioning. Replacing or transitioning providers could slow underwriting response times and impair service delivery. As our operations evolve, we must invest in new technologies and may face integration challenges, particularly when implementing complex platforms across multiple jurisdictions. Our business operations rely on the continuous availability of our computer systems as well as those of certain third parties. A major defect or failure in internal controls or IT systems could interrupt underwriting, distract management, harm our reputation, delay revenues, increase costs and trigger regulatory inquiries or litigation. Any significant operational disruption could materially adversely affect our business, financial condition and results of operations. If we do not effectively develop, implement and monitor our outsourcing and third-party risk management strategies, third-party providers do not perform as anticipated, or we or they experience technological or other problems with a migration or in operations, we may not realize productivity improvements or cost efficiencies and may experience operational difficulties, liabilities for breaches of confidential information, increased costs and a loss of business.
Current report
Interruptions to or failures of the information technology systems upon which we rely, including those resulting from cybersecurity attacks and security breaches, could materially adversely affect our business, financial condition and results of operations.
Current report
Our business operations rely on the availability, integrity and confidentiality of our information technology systems as well as those of certain third parties. Among other things, we rely on information technology systems to process sensitive personal and proprietary information and conduct electronic transactions with brokers, clients, service providers and other stakeholders. These systems could be damaged or interrupted by natural disasters, telecommunications failures, acts of war or terrorism, computer viruses and malware, and cybersecurity incidents, such as physical or electronic security breaches, breaches by computer hackers and cyber-terrorists, intentional or inadvertent user misuse or error, or similar events or disruptions that impact the availability, reliability, speed, accuracy or other proper functioning of our systems, thereby disrupting business operations. A breach of our systems could also jeopardize the personal information of our employees, consultants and vendors, or sensitive and confidential information regarding our business and other information processed and stored within these systems. Like other companies, we have from time to time experienced, and are likely to continue to experience, security events and data intrusions, and while none of these events have had a material adverse effect on our business, financial condition and results of operations to date, no assurances can be made that such attacks or security events will not have a material adverse effect on our business, financial condition and results of operations in the future.
Current report
Cyber threats are increasingly sophisticated, persistent and difficult to detect, originating from organized criminal groups, nation states and other actors. Attacks such as ransomware, malware, phishing, credential stuffing and social engineering could disrupt operations, expose confidential data and lead to litigation, fines or loss of customers. Incidents affecting third-party systems that store or process our data could similarly result in material harm. There is also an increasing prevalence of insider threats to systems and data, including through prolific remote work schemes in which individuals deliberately misrepresent their physical location to obtain or keep jobs restricted to certain countries or regions. We also view the cyber threat landscape as steadily increasing as a result of the increased turbulence of world events, such as the ongoing war in Ukraine, events in Gaza, and other areas of geopolitical conflict.
Current report
As AI capabilities improve and are increasingly adopted, they may be used by bad actors to identify vulnerabilities and craft increasingly sophisticated cybersecurity attacks including adversarial attacks, data poisoning and manipulation of automated decision-making models. In addition, vulnerabilities may be introduced from the use of AI by the Company, its counterparties, vendors and other business partners and third-party providers. Misuse of AI by us or third parties could result in unauthorized disclosure of confidential information or personal data, causing reputational harm, regulatory scrutiny and legal exposure.
Current report
Although we make efforts to maintain effective safeguards, policies and insurance coverage to prevent, detect, manage, and mitigate the impact of data breaches and cybersecurity incidents, we cannot offer complete assurance that these measures will fully protect against the financial or non-financial consequences of future incidents.
Current report
We expect the use of AI and generative AI by us, third parties acting on our behalf and other market participants, including our competitors, to increase substantially. However, the deployment of these technologies introduces significant risks and uncertainties. AI systems rely on complex algorithms and large datasets, which may contain biases, inaccuracies or incomplete information. Models may produce unintended or unpredictable outputs, and errors in training data or model design could lead to flawed decision-making. Generative AI, in particular, can create synthetic content that may be inaccurate, misleading or infringe intellectual property rights. Misuse of AI, whether intentional or inadvertent, could expose us to legal liability, regulatory enforcement actions, contractual disputes or reputational harm.
Current report
The relative newness of these technologies, the speed of adoption and the absence of comprehensive laws, regulations or industry standards governing AI use amplify these risks. Regulatory frameworks are evolving globally, and future requirements could impose additional compliance obligations, increase costs or restrict certain applications of AI. In addition, stakeholders, including customers, investors and regulators, are increasingly focused on ethical AI practices, transparency and accountability. Failure to meet these expectations could damage our reputation and competitive position. Our vendors may incorporate generative AI tools into their offerings without disclosing this use to us, and the providers of these generative AI tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit our vendors’ ability to maintain an adequate level of service and experience.
Current report
AI also introduces cybersecurity and data privacy vulnerabilities. Adversarial attacks, data poisoning and manipulation of automated decision-making models could compromise system integrity or lead to unauthorized disclosure of confidential information. Integration of AI into critical business processes may increase operational complexity and create dependencies on third-party vendors, heightening exposure to technology failures or service disruptions.
Current report
Although we implement controls and governance frameworks to manage these risks, such measures may not fully prevent adverse outcomes. Any significant failure, misuse or regulatory breach related to AI could materially adversely affect our business, financial condition and results of operations.
Current report
We may be unable to adequately protect or enforce our intellectual property rights, or we may face claims alleging infringement of third-party rights.
Current report
Our success depends in part on our intellectual property, including our brand, proprietary technology and data. We rely on laws and contractual protections to safeguard these rights, but these measures may not prevent unauthorized use, copying, reverse engineering or misappropriation. While we have certain registered rights in connection with our brand, we also rely heavily on a combination of common law rights, trade secrets, proprietary methodologies, contractual arrangements and licensed intellectual property to support and protect our business operations. These protections may be insufficient to prevent unauthorized use, copying, reverse engineering or misappropriation of our intellectual property and monitoring and enforcing our rights can be costly, time‑consuming and uncertain. If we fail to protect or enforce our intellectual property adequately, our brand, proprietary assets and competitive position could be harmed.
Current report
We also depend on licenses for certain technology and data. If we fail to comply with the terms of these licenses, or if a licensor challenges our rights, terminates an agreement or elects not to renew on commercially reasonable terms, we could lose access to critical technology or data, experience business disruptions or incur additional costs to replace such rights. Future licenses may not be available on reasonable terms, or at all.
Current report
Additionally, third parties may claim we infringe or misappropriate their intellectual property. Any such claims could result in costly litigation and significant diversion of management resources. Adverse determinations could require us to pay damages, obtain licenses (which may include substantial royalty obligations or unfavorable terms), stop using certain technology or offering certain products or services, or otherwise alter our business practices. Any of these events could materially adversely affect our business, financial condition and results of operations.
Current report
Changes in global climate patterns may increase the frequency, severity and volatility of extreme weather events. Climate change may result in higher loss costs associated with hurricanes, floods, wildfires, storms and other weather-related events, and may impair the reliability of historical data and catastrophe models used to assess risk. These changes could also lead to shifts in geographic risk concentrations and create challenges in pricing, reserving and capital allocation.
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Removed paragraphs (214)
Previous report
•unpredictable catastrophic events, global climate change and/or emerging claim and coverage issues;
Previous report
•foreign operational risk such as foreign currency risk and political risk;
Previous report
•our management of alternative reinsurance platforms on behalf of investors in entities managed by Hamilton Strategic Partnerships;
Previous report
•the impact of risks from conflicts of interest among the Managing Member, Two Sigma and their respective affiliates affecting our business;
Previous report
•the potential characterization of us and/or any of our subsidiaries as a PFIC;
Previous report
•the suspension or revocation of our subsidiaries’ insurance licenses;
Previous report
•challenges related to compliance with the applicable laws, rules and regulations related to being a public company, which is expensive and time consuming;
Previous report
•our current strategy does not include paying cash dividends on our Class B common shares in the near term.
Previous report
We expect competition to continue to increase over time. It is possible that new or alternative capital could cause reductions in prices of our products or reduce the duration or amplitude of attractive portions of market cycles. New entrants or existing competitors, which may include government-sponsored funds or other vehicles, may attempt to replicate all or part of our business model and provide further competition in the markets in which we participate. The tax policies of the countries where our customers operate, as well as government-sponsored or -backed insurance companies and catastrophe funds, may also affect the demand for insurance and reinsurance, sometimes significantly.
Previous report
Along with increased competition, there has also been significant consolidation in the insurance and reinsurance industry over the last several years, including among our competitors, customers and brokers. These consolidated enterprises may try to use their enhanced market power or better capitalization to negotiate price reductions for our products and services or obtain a larger market share through increased line sizes. If competitive pressures decrease the prices for our products, we would generally expect to reduce our future underwriting activities, resulting in lower premium volume and profitability. Insurance and reinsurance intermediaries may also continue to consolidate, potentially adversely impacting our ability to access business and distribute our products.
Previous report
As the insurance industry consolidates, we expect competition for customers to become more intense, and sourcing and properly servicing each customer to become even more important. We could incur greater expenses relating to customer acquisition and retention, further reducing our operating margins. In addition, insurance companies that merge may be able to spread their risks across a consolidated, larger capital base so that they require less reinsurance. Any of the foregoing could adversely affect our business or results of operations.
Previous report
Modern innovation is also leading to increased competition, with traditional insurance companies and newer market participants increasingly focusing on the use of technological and digital advancements (including AI, digital platforms and data analytics) to optimize underwriting, claims processing, customer engagement and risk management. If our competitors adopt or develop technologies, including the application of AI in our industry, more effectively or efficiently than we do, they may be able to offer more competitive pricing, faster claims handling, and superior customer experiences, gaining significant market share at our expense. We will also need to continue to invest significant time and resources in new technologies and new ways to deliver our products and services in order to maintain a competitive position, which may divert management’s attention from other business concerns and lead to significant costs associated with such an investment. There is also no guarantee that such an investment will result in the anticipated cost savings, revenue growth, or any competitive advantages.
Previous report
We also derive a significant portion of our business through a limited number of insurance and reinsurance intermediaries, such as managing general agents, general agents and reinsurance brokers. Some of our competitors have higher financial strength ratings, offer a larger variety of products, set lower prices for insurance coverage, offer higher commissions and/or have had longer-term relationships with the brokers we use than we have. This may adversely impact our ability to attract and retain brokers to sell our insurance products or brokers may increasingly promote products offered by other companies. The failure or inability of brokers to market our insurance products successfully, or the loss of all or a substantial portion of the business provided by these brokers, could have a material adverse impact on our business, financial condition and results of operations.
Previous report
•claims inflation, which is the sustained increase in cost of raw materials, labor, medical services and other components of claims costs;
Previous report
•claims development patterns by line of business, as well as frequency and severity trends;
Previous report
These variables are affected by both internal and external events that could increase our exposure to losses, and we continually monitor our loss reserves using new information on reported claims and a variety of statistical techniques and modeling simulations. This process assumes that past experience, adjusted for the effects of current developments, anticipated trends and market conditions, is an appropriate basis for predicting future events. There is, however, no precise method for evaluating the impact of any specific factor on the adequacy of loss reserves, and actual results may deviate, perhaps substantially, from our reserve estimates. For instance, the following uncertainties may have an impact on the adequacy of our reserves:
Previous report
•When a claim is received, it may take considerable time to appreciate fully the extent of the covered loss suffered by the insured, and consequently, estimates of loss associated with specific claims can increase over time as new information emerges, which could cause the reserves for the claim to become inadequate;
Previous report
•Court enforcement of new theories of liability;
Previous report
•Deterioration or volatility in the financial markets, economic events, general economic conditions and other external factors may result in an increase in the number of claims and/or severity of the claims reported. In addition, elevated inflationary conditions would, among other things, cause loss costs to increase; or
Previous report
•If claims were to become more frequent, even if we had no liability for those claims, the cost of evaluating such potential claims could escalate beyond the amount of the reserves we have established. As we enter new lines of business, or as a result of new theories of claims, we may encounter an increase in claims frequency and greater claims handling costs than we had anticipated.
Previous report
In addition to the Company’s internal reserving process, an independent actuarial review is carried out semi-annually by a leading independent actuarial consulting firm in order to provide additional insight into the reserving process, specific industry trends and the overall level of the Company’s loss reserves. Management reviews the information provided in the independent actuarial review in determining its own best estimate of reserves.
Previous report
If any of our reserves should prove to be inadequate, we will be required to increase our reserves resulting in a reduction in our net income and shareholders’ equity in the period in which the deficiency is identified. Future loss experience substantially in excess of established reserves could also have a material adverse effect on our future earnings and liquidity and/or our financial rating.
Previous report
Unpredictable catastrophic events could adversely affect our results of operations and financial condition.
Previous report
There is widespread consensus in the scientific community that there is a long-term upward trend in global air and sea temperatures which is likely to increase the severity and frequency of severe weather events over the coming decades. Rising sea levels are also expected to add to the risks associated with coastal flooding in many geographical areas. Large-scale climate change could also increase both the frequency and severity of natural catastrophes and our loss costs associated with property damage and business interruption due to storms, floods, wildfires (including in California) and other weather-related events. In addition, global climate change could impair our ability to predict the costs associated with future weather events and could also give rise to new environmental liability claims in the energy, manufacturing and other industries we serve.
Previous report
Given the scientific uncertainties involved in predicting the effects of climate cycles and global climate change on the frequency and severity of natural catastrophes and the lack of adequate predictive tools, we may not be able to adequately model the associated exposures and potential losses in connection with such catastrophes which could have a material adverse effect on our business, financial condition or operating results.
Previous report
Aside from the specific risks around accumulating events for natural and non-natural perils discussed above, an inadequate assessment of underwriting risk could arise from an incorrect estimation of past and/or future inflationary trends, claims practices, or other factors, including social factors. We underwrite many lines of business across all underwriting platforms where the volume of relevant claims data is insufficient to accurately estimate the cost of future claims, and therefore underwriting and/or actuarial judgment is frequently applied. The risk of mispricing underwriting risk is heightened in many of our lines due to this limited data. For example, data is often limited in many of our insurance and reinsurance lines across all underwriting platforms where policies are protecting low frequency and high severity events. Another example is that the U.S. E&S business that we write often has more limited relevant data for pricing than in admitted insurance markets.
Previous report
Given the inherent uncertainty of our models, and of the exposure data that we rely upon to parameterize our models, the usefulness of such models as a tool to evaluate risk is subject to a high degree of uncertainty. Furthermore, it is likely that our models do not conceive of all possible exposures and accumulations that could arise from our underwriting operation. Therefore, we could experience actual losses that are materially different than our modelled estimates, and our financial results may be adversely impacted, perhaps significantly.
Previous report
We use many models to simulate possible claims outcomes within our business, including pricing models, reserving models, accumulation models, natural catastrophe models and man-made catastrophe models.
Previous report
For natural catastrophe risk, similar to our peers, we use third-party vendor analytic and modeling capabilities, including global property catastrophe models from Verisk, and Risk Management Solutions Inc., or RMS, and our own proprietary models, including our catastrophe modeling and portfolio management platform, known as HARP to calculate expected PMLs from various natural catastrophe scenarios. The models are dependent upon many broad economic and scientific assumptions, with examples including storm surge (the water that is pushed toward the shore by the force of a windstorm), demand surge (the localized increase in prices of goods and services that often follows a catastrophe) and zone density (the percentage of insured perils that would be affected in a region by a catastrophe). Third-party modeling software also does not provide information for all territories or perils (e.g., tsunami) in and for which we write business. Natural catastrophe modeling is inherently uncertain due to process risk (i.e., the probability and magnitude of the underlying event) and parameter risk (i.e., the probability of making inaccurate model assumptions).
Previous report
For man-made catastrophe risk, third-party vendor analytics and models are typically less developed, and we use a wide range of external and internal models and insights. Similar to natural catastrophe models, we are dependent upon broad economic, scientific and policy coverage assumptions within these models, which leads to material inherent uncertainties in the accuracy of the modelled representation of claims outcomes.
Previous report
We use these models and software to help us control risk accumulation, inform management and other stakeholders of capital requirements and to improve the risk/return profile or minimize the amount of capital required to cover the risks in each reinsurance contract in our overall portfolio of reinsurance contracts. We use best endeavors to understand the limitations of models, and the materiality of those models is communicated and incorporated within our decision-making. However, given the inherent uncertainty of modeling techniques and the limited data available to calibrate the models, it is possible the models prove inadequate, and we may not accurately address a variety of matters that could impact certain of our coverages. This includes the risk that we experience unanticipated and unmodelled loss accumulations, and that we suffer actual losses that are materially different from our probable maximum loss estimates or other modelled representation of claims outcomes.
Previous report
Our reliance on third-party assessment and pricing of individual risk extends to our reinsurance treaty business. Similar to other reinsurers, we do not separately evaluate each of the individual risks assumed under most reinsurance treaties. We are therefore largely dependent on the original underwriting decisions made by ceding companies. We are subject to the risk that the ceding companies may not have adequately evaluated the risks to be reinsured and that the premiums ceded to us may not adequately compensate us for the risks we assume and the losses we may incur. As a result of this reliance on ceding companies, our operating results and financial condition may be materially adversely affected.
Previous report
Unanticipated developments in the law as well as changes in social conditions could potentially result in unexpected claims for coverage under our insurance and reinsurance contracts, such as those developments that impose additional coverage obligations on us beyond our underwriting intent, or to increases in the number or size of claims to which we are subject.
Previous report
For example, we believe our property results have been adversely impacted over recent periods by increasing primary claims-level fraud and abuses, as well as other forms of social inflation, and that these trends may continue, particularly in certain U.S. jurisdictions in which we focus, including California, Florida and Texas.
Previous report
With respect to our casualty and specialty operations, these legal and social changes and their impact may not become apparent for some time after their occurrence. A recent example in the industry was losses arising out of a pandemic illness, which most insurers had not anticipated or had attempted to contractually exclude. Moreover, irrespective of the clarity and inclusiveness of policy language, we cannot be certain that a court or arbitration panel will enforce policy language or not issue a ruling adverse to us. Our exposure to these uncertainties could be exacerbated by the increased willingness of some market participants to dispute insurance and reinsurance contract and policy wording. Alternatively, potential efforts by us to exclude such exposures could, if successful, reduce the market’s acceptance of our related products. The full effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict. As a result, the full extent of our liability under our coverages may not be known for many years after a contract is issued. Furthermore, we expect that our exposure to this uncertainty may grow as our "long-tail" casualty reserves grow, because within some of these policies claims can be made for many years, making them more susceptible to these trends than our traditional property or catastrophe business, which is typically more "short-tail." While we continually seek to improve the effectiveness of our contracts and claims capabilities, we may fail to mitigate our exposure to these growing uncertainties.
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Reworded paragraphs (80)
Previous wording
Our business is subject to a number of risks, including risks that could prevent us from achieving our business objectives or financial goals or that otherwise could adversely affect our business, results of operations, financial condition and liquidity, that you should carefully consider. These risks are discussed more fully in “Risk Factors” below. These risks include the following:
Current wording
Our business is subject to a number of risks, including risks that could prevent us from achieving our business objectives or financial goals or that otherwise could adversely affect our business, results of operations, financial condition and liquidity, that you should carefully consider. These risks are discussed more fully in “Risk Factors” below. These risks include, but may not necessarily be limited to, the following:
Previous wording
•challenges from competitors, including those arising from industry consolidation and technological advancements;
Current wording
•challenges from competitors, including those arising from industry consolidation, alternative capital and technological advancements, including the increasing use of advanced analytics and AI;
Previous wording
•our ability, or those of the third parties on which we rely, to ensure reserves are adequate to cover actual losses and to accurately evaluate underwriting risk, models, assessments and/or pricing of risks;
Current wording
•our ability, or that of the third parties on which we rely, to ensure reserves are adequate to cover actual losses and to accurately assess underwriting risk, models, assumptions, data quality and the pricing of risks, particularly in long‑tail, low‑frequency or emerging lines of business;
Previous wording
•our ability to defend our intellectual property rights, including our proprietary technology platforms, to comply with our obligations under our license and technology agreements or to license rights to technology or data on reasonable terms;
Current wording
•our ability to defend and protect our intellectual property rights, including our proprietary technology platforms and data, to comply with obligations under license and technology agreements or to obtain or renew licenses to technology or data on reasonable terms;
Previous wording
•the impact of risks associated with human error, fraud, model uncertainties, cybersecurity threats such as cyber-attacks and security breaches and our reliance on third-party IT systems that can fail or need replacement;
Current wording
•the impact of risks associated with human error, misconduct or fraud, model uncertainty, cybersecurity threats such as cyber‑attacks and security breaches, misuse of AI and our reliance on third‑party information technology systems that may fail, be disrupted or require replacement;
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•our ability to secure necessary credit facilities, or additional types of credit, on favorable terms or at all;
Current wording
•our ability to secure necessary credit facilities, letters of credit or other forms of financing or collateral on favorable terms or at all;
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•our limited financial and operating flexibility due to the covenants in our existing credit facilities;
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•our limited financial and operational flexibility due to covenants and other restrictions in our existing or future credit facilities and debt arrangements;
Previous wording
•our exposure to the credit risk of the intermediaries on which we rely;
Current wording
•our exposure to the credit risk of insurance and reinsurance intermediaries on which we rely for the collection of premiums and payment of claims;
Previous wording
•our failure to pay claims in a timely manner or the need to sell investments under unfavorable conditions to meet liquidity requirements;
Current wording
•our failure to pay claims in a timely manner, significant reserve strengthening, or the need to sell investments under unfavorable market or other conditions in order to meet liquidity requirements;
Previous wording
•downgrades, potential downgrades or other negative actions by rating agencies;
Current wording
•downgrades, potential downgrades or other negative actions by rating agencies, including changes in rating agency methodologies;
Previous wording
•our ability to manage risks associated with macroeconomic conditions resulting from geopolitical and global economic events, including current or anticipated military conflicts, public health crises, terrorism, sanctions, rising energy prices, inflation and interest rates and other global events;
Current wording
•our ability to manage risks associated with adverse macroeconomic conditions, geopolitical instability and global events, including current or anticipated military conflicts, public health crises, terrorism, sanctions, inflation, rising interest rates, energy price volatility and other disruptions;
Previous wording
•the cyclical nature of the insurance and reinsurance business, which may cause the pricing and terms for our products to decline;
Current wording
•the cyclical nature of the insurance and reinsurance business, which may result in declines in pricing and more competitive terms and conditions;
Previous wording
•our results of operations potentially fluctuating significantly from period to period and not being indicative of our long-term prospects;
Current wording
•our results of operations fluctuating significantly from period to period and not being indicative of our long‑term prospects;
Previous wording
•our ability to execute our strategy and to modify our business and strategic plan without shareholder approval;
Current wording
•our ability to execute our strategy and to adapt our business and strategic plans in response to changing market, regulatory and competitive conditions;
Previous wording
•our dependence on key executives, including the potential loss of Bermudian personnel, and our ability to attract qualified personnel, particularly in very competitive hiring conditions;
Current wording
•our dependence on key executives and other personnel, including the potential loss of Bermudian or other critical personnel, and our ability to attract and retain qualified employees in highly competitive labor markets;
Previous wording
•our ability to identify and execute opportunities for growth, to complete transactions as planned or realize the anticipated benefits of any acquisitions or other investments;
Current wording
•our ability to identify, execute and integrate growth opportunities, including acquisitions or other strategic transactions, and to realize the anticipated benefits of such initiatives;
Previous wording
•our inability to control the allocations to, and/or the performance of, the TS Hamilton Fund investment portfolio and our limited ability to withdraw our capital accounts;
Current wording
•our inability to control the asset allocation, investment decisions or performance of the TS Hamilton Fund and our limited ability to withdraw capital from the TS Hamilton Fund;
Previous wording
•the historical performance of Two Sigma not being indicative of the future results of the TS Hamilton Fund’s investment portfolio and/or of our future results;
Current wording
•the historical performance of Two Sigma or the TS Hamilton Fund not being indicative of future performance or our future results;
Previous wording
•the impacts of risks associated with our investment strategy, including that such risks are greater than those faced by our competitors;
Current wording
•risks associated with our investment strategy, including the use of leverage, derivatives, illiquid assets and concentration risk, which may be greater than those faced by some of our competitors;
Previous wording
•our potentially becoming subject to U.S. federal income taxation, Bermuda taxation or other taxes as a result of a change of tax laws or otherwise;
Current wording
•our potentially becoming subject to additional or increased taxation, including U.S. federal income tax, Bermuda tax or other taxes, as a result of changes in tax laws, interpretations or our operations;
Previous wording
•our potentially becoming subject to U.S. withholding and information reporting requirements under FATCA provisions;
Current wording
•the potential classification of us or our subsidiaries as a passive foreign investment company or becoming subject to U.S. withholding and information reporting requirements under FATCA;
Previous wording
•our ability to compete effectively in a heavily regulated industry in light of new domestic or international laws and regulations, including accounting practices, and the impact of new interpretations of current laws and regulations;
Current wording
•our ability to compete effectively in a highly regulated industry in light of new or changing domestic or international laws and regulations, including accounting standards and evolving regulatory interpretations;
Previous wording
•our insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to us being restricted by law;
Current wording
•restrictions on our insurance and reinsurance subsidiaries’ ability to pay dividends or make other distributions to us;
Previous wording
•the limited ability of investors to influence corporate matters due to our multiple class common share structure and the voting provisions of our Bye-laws;
Current wording
•the limited ability of investors to influence corporate matters due to our multi‑class share structure and the voting provisions in our Bye‑laws;
Previous wording
•the risk that anti-takeover provisions in our Bye-laws could discourage, delay, or prevent a change in control, even if the change in control would be beneficial to our shareholders;
Current wording
•the risk that anti‑takeover provisions in our Bye‑laws or Bermuda law could discourage, delay or prevent a change in control, even if beneficial to shareholders; and
Previous wording
•the difficulties investors may face in protecting their interests and serving process or enforcing judgments against us in the United States; and
Current wording
•difficulties investors may face in enforcing judgments or protecting their interests against us or our directors and officers.
Previous wording
Competition and consolidation in the insurance and reinsurance industry could adversely impact us. We compete with major U.S. and non-U.S. insurers and reinsurers, some of which have greater financial, marketing and management resources than we do. In addition, pension funds, endowments, investment banks, investment managers, hedge funds and other capital markets participants have been active in the insurance and reinsurance market, either through the formation of insurance and reinsurance companies or the use of other financial products intended to compete with traditional insurance and reinsurance. We may also face competition from non-traditional competitors, as well as start-up companies and others seeking access to this industry.
Current wording
We operate in a highly competitive insurance and reinsurance environment that continues to evolve and consolidate. Our competitors include major U.S. and non-U.S. insurers and reinsurers, many of which possess greater financial, distribution and management resources, higher financial strength ratings, broader product offerings and longer operating histories than we do. In addition, pension funds, endowments, investment banks, investment managers, hedge funds and other capital markets participants have entered the market through the formation of insurance and reinsurance companies or through alternative risk transfer structures designed to compete with traditional products. We also face competition from non-traditional entrants and start-ups seeking to disrupt the industry and capture market share.
Previous wording
We devote significant focus, attention and resources to assess the risks related to our businesses as accurately as we can. We establish losses and loss adjustment expenses, or LAE, reserves for the best estimate of the ultimate payment of all claims that have been incurred, or could be incurred in the future, and the related costs of adjusting those claims, as of the date of our financial statements. These values are unknown within our industry, so these items within our financial statements are always based on estimates, and our ultimate liability will almost certainly be greater, or less than, our estimate.
Current wording
We devote significant focus, attention and resources to assess the risks related to our businesses as accurately as we can. We establish losses and loss adjustment expenses ("LAE"), reserves for the best estimate of the ultimate payment of all claims that have been incurred, or could be incurred in the future, and the related costs of adjusting those claims, as of the date of our financial statements. These estimates are inherently uncertain and subject to numerous variables, including claims inflation, frequency and severity trends, judicial and legislative developments, economic conditions, social inflation and evolving claims practices. The estimation of loss reserves is more difficult during times of adverse economic and market conditions due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties or increased frequency of small claims. Actual losses may differ, possibly materially, from our estimates.
Previous wording
The extent of catastrophe losses is a function of both the severity of the event and total amount of insured exposure affected by the event. We expect that increases in the value and concentration of insured property or insured employees, the effects of inflation, changes in weather patterns, such as climate change, and increased terrorism could increase the future frequency and/or severity of claims from catastrophic events. Claims from catastrophic events could materially adversely affect our cash flows and results of operations and financial condition. Our ability to write new reinsurance contracts and insurance policies could also be impacted as a result of corresponding reductions in our capital levels.
Current wording
Unpredictable catastrophic events could materially adversely affect our business, financial condition and results of operations.
Previous wording
We write reinsurance contracts and insurance policies that cover unpredictable catastrophic events. These include natural catastrophes and other disasters, such as hurricanes, earthquakes, windstorms, floods, wildfires, and severe winter weather. We have exposure to major earthquakes and windstorms mainly in the United States, Europe, Japan, Australia and New Zealand. Catastrophes can also include man-made disasters, such as terrorist attacks and other destructive acts, war, political unrest, explosions, cyber-attacks, nuclear, biological, chemical or radiological events and infrastructure failures. We are also exposed to losses caused by these types of catastrophic events in lines of business beyond property, such as in marine and energy, aviation, crisis management, satellite, trade credit, political violence, political risk, accident and health as well as other specialty and casualty classes, including from pandemic risk.
Current wording
We write insurance and reinsurance that cover unpredictable catastrophic events, including, but not limited to, natural catastrophes such as hurricanes, earthquakes, windstorms, floods, wildfires and severe winter weather, as well as man-made disasters such as terrorism, war, political unrest, cyber-attacks, pandemics and infrastructure failures. We have exposure to such events across multiple geographic regions and lines of business, including property, marine and energy, aviation, crisis management, political risk, accident and health and other specialty and casualty classes.
Previous wording
Our most material natural catastrophe accumulation risks are from Atlantic Hurricanes and U.S Mainland Earthquakes. As at January 1, 2025, our modeled 100-Year Occurrence Exceedance Probability for Atlantic Hurricanes in Florida was $202.1 million and our modeled 250-Year Occurrence Exceedance Probability for U.S. Mainland Earthquakes in California was $277.8 million. Our biggest concentration of exposure to U.S. Mainland Earthquakes is in California, while our exposure to Atlantic Hurricanes is material in many regions, including Florida, other Gulf Coast states, as well as the Mid-Atlantic and Northeastern regions of the U.S. In terms of man-made catastrophe exposure, we have experienced losses related to the conflict between Russia and Ukraine and the ongoing conflict in the Middle East has the potential to continue to escalate into an event that could impact our cash flows and results of operations.
Current wording
Our most material natural catastrophe accumulation risks are from Atlantic Hurricanes and U.S. Mainland Earthquakes. As of January 1, 2026, our modeled 100-Year Occurrence Exceedance Probability for Atlantic Hurricanes in Florida was $242.3 million and our modeled 250-Year Occurrence Exceedance Probability for U.S. Mainland Earthquakes in California was $292.3 million. Our biggest concentration of exposure to U.S. Mainland Earthquakes is in California, while our exposure to Atlantic Hurricanes is material in many regions, including Florida, other Gulf Coast states, as well as the Mid-Atlantic and Northeastern regions of the U.S. Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage and the purchase of reinsurance, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that we expect which could have a material adverse effect on our business, financial condition and results of operations.
Previous wording
Our business could be materially adversely affected if we do not accurately assess our underwriting risk.
Current wording
Our business, financial condition and results of operations could be materially adversely affected if we do not accurately assess our underwriting risk.
Previous wording
Our profitability is dependent on our ability to accurately assess the risks associated with the business we underwrite. We rely on the experience of our underwriting staff in assessing those risks, the accuracy of pricing tools and the clarity of our contract wording. If we misunderstand and/or inadequately quantify the nature and extent of the risks, we may fail to establish appropriate premium rates which could adversely affect our future financial results. In addition, our employees, including members of management and underwriters, make decisions and choices in the ordinary course of business that involve exposing us to risk. Such challenges of assessing risk and pricing premiums are often increased in our U.S. E&S business lines, where there may be more limited historical claims and underwriting data than in admitted insurance markets.
Current wording
Our profitability is dependent on our ability to accurately assess the risks associated with the business we underwrite. We rely on the experience of our underwriting staff in assessing those risks, the accuracy of pricing tools and the clarity of our contract wording. If we misunderstand and/or inadequately quantify the nature and extent of the risks, we may fail to establish appropriate premium rates which could materially adversely affect our business, financial condition and results of operations. In addition, our employees, including members of management and underwriters, make decisions and choices in the ordinary course of business that involve exposing us to risk. Such challenges of assessing risk and pricing premiums are often increased in our U.S. E&S business lines, where there may be more limited historical claims and underwriting data than in admitted insurance markets.
Previous wording
We authorize MGAs, general agents, coverholders and other producers to write business on our behalf from time to time within the underwriting authorities that we prescribe. We rely on the underwriting controls of these agents, coverholders and producers to write business within the underwriting authorities we provide. Although we monitor our underwriting on an ongoing basis, our monitoring efforts may not be adequate and our agents, coverholders and producers may exceed their underwriting authorities or otherwise breach obligations owed to us. There is also the risk that we may be held responsible for obligations that arise from the acts or omissions of third parties if they are deemed to have acted on our behalf. In addition, our agents, coverholders, producers, insureds or other third parties may commit fraud or otherwise breach their obligation to us. To the extent that our agents, coverholders, producers, insureds or other third parties exceed their authorities, commit fraud or otherwise breach obligations owed to us, our operating results and financial condition may be materially adversely affected.
Current wording
We authorize MGAs, general agents, coverholders and other producers to write business on our behalf within prescribed underwriting authorities and we could be held responsible for the acts or omissions of these or other third parties deemed to act on our behalf. In particular, fraud or misconduct by agents, coverholders, producers, insureds or other third parties could materially adversely affect our business, financial condition and results of operations.
Previous wording
Emerging claim and coverage issues, or other litigation, could adversely affect us.
Current wording
Emerging claim and coverage issues, or other litigation, could materially adversely affect our business, financial condition and results of operations.
Previous wording
We, and our managing general agents, general agents and other agents who have the ability to bind our policies, rely on information provided by insureds or their representatives when underwriting insurance policies. While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information. It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information. If any such agents exceed their authority or engage in fraudulent activities, our financial condition and results of operations could be materially adversely affected.
Current wording
We, our MGAs, general agents and other agents who have the ability to bind our policies rely on information provided by insureds or their representatives when underwriting insurance policies. While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information. It is possible that we could misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information. If any such agents exceed their authority or engage in fraudulent activities, our business, financial condition and results of operations could be materially adversely affected.
Previous wording
We are subject to cybersecurity risks, including cyber-attacks, security breaches and other similar incidents with respect to our and our service providers’ information technology systems, which could result in regulatory scrutiny, legal liability or reputational harm, and we may incur increasing costs to minimize those risks.
Current wording
We face significant cybersecurity risks, including cybersecurity attacks and security breaches, and other incidents that may affect our information technology systems and those of our service providers. Such events could result in regulatory scrutiny, legal liability, reputational harm, operational disruption, and increased compliance costs.
Previous wording
The use or anticipated use of AI technologies, including generative AI, by us or third parties, may increase or create new operational risks.
Current wording
The use or anticipated use of AI technologies, including generative AI, by us or third parties, may increase or create new operational, legal and reputational risks.
Previous wording
Global climate change may have a material adverse effect on our operating results and financial condition if we do not adequately assess and price for any increased frequency and severity of catastrophes resulting from these environmental factors.
Current wording
Global climate change may have a material adverse effect on our business, financial condition and results of operations.
Previous wording
As part of our risk management, we are reliant on the purchase of reinsurance for our own account from third parties, including retrocession coverage (i.e., the reinsurance of reinsurance). However, the availability and cost of reinsurance is subject to market conditions beyond our control. As a result, we may not be able or willing to obtain sufficient reinsurance and are subject to the risk that the coverage provided by our reinsurance arrangements may be inadequate to cover our future liabilities. As a result, we may not be able to successfully alleviate risk through these arrangements, which could have a material adverse effect on our results of operations and financial condition.
Current wording
As part of our risk management strategy, we rely on purchasing reinsurance for our own account from third parties, including retrocession coverage (i.e., reinsurance of reinsurance). However, the availability and cost of reinsurance are subject to market conditions beyond our control. Consequently, we may be unable or unwilling to obtain sufficient reinsurance, and the coverage we do secure may be inadequate to cover future liabilities. Failure to obtain or maintain adequate reinsurance could have a material adverse effect on our business, financial condition and results of operations.
Showing the first 40 of 80 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Competition and consolidation in the insurance and reinsurance industry could materially adversely affect our business, financial condition and results of operations.
Current report — wording carried from elsewhere
Risks Related to Our Business Strategy
Current report — wording carried from elsewhere
The effect of the UTPR to the Company could be to require the Group’s Irish and U.K. entities to pay a top-up tax to Ireland and/or the U.K., respectively, pursuant to an allocation formula prescribed in the applicable legislation unless the Group is eligible for the respective exemption under that jurisdiction's legislation. The exemption is similar to the exemption allowed in Bermuda and accordingly the Company intends to meet the exemption requirements and be exempt from applying the UTPR to its Bermuda entities until January 1, 2030. However, no assurance can be made that the Company will meet the requirement in all applicable jurisdictions in future years and could become subject to the UTPR if it does not achieve a 15% effective tax rate, inclusive of any corporate income taxes paid to Bermuda. The Bermuda corporate income tax is expected to limit the Company’s exposure to UTPR.
Current report — wording carried from elsewhere
On January 15, 2025, the OECD issued guidance relating to the calculation of tax liabilities pursuant to the UTPR. Specifically, it provides that the reductions of tax due to the economic transition adjustment (“ETA”) allowed under Bermuda tax law will be limited for calculating the UTPR. The ETA is a provision in the Bermuda law which was intended to provide a fair and equitable transition into the tax regime. As prescribed in the Bermuda law, a fair value calculation of the Company’s Bermuda assets and liabilities (including certain intangible assets not included in the GAAP balance sheet) was conducted as of September 30, 2023, and to the extent the fair value exceeded the book value, a deferred tax asset (“DTA”) was booked on the Bermuda balance sheet. The DTA is expected to reduce the Company’s Bermuda tax liability in future years when it becomes subject to the Bermuda Corporate Income Tax regime. The OECD guidance provides that taxable income used to calculate UTPR top-up tax shall only allow for 20% of the total DTA recorded as part of the ETA adjustment and may only recognize this over a two-year period (2025 and 2026). When the Company becomes subject to the UTPR on its Bermuda earnings, it is possible that it will incur a top-up tax liability if the Bermuda constituent entities do not achieve a 15% minimum effective tax rate.
Current report — wording carried from elsewhere
In the normal course of our business, we are subject to regulatory and governmental investigations and civil actions, litigation and other forms of dispute resolution in various jurisdictions. We are occasionally involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•significant legal, governmental or regulatory proceedings;
Previous report — wording carried elsewhere
We operate in a highly competitive environment.
Previous report — wording carried elsewhere
Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage, purchase of reinsurance and expansion of supportive collateralized capacity, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that we expect.
Previous report — wording carried elsewhere
“Reserve Test”). The Company believes that the Company's non-U.S. insurance subsidiaries have met this Reserve Test and will continue to do so in the foreseeable future, in which case the Company would not be expected to be a PFIC, although no assurance may be given that the Reserve Test will be met by the Company's non-U.S. insurance subsidiaries in future years.
Previous report — wording carried elsewhere
The Corporate Income Tax Act 2023 provides an exemption (for up to five years) from the tax charging provisions of the legislation for "MNE Groups" with a limited international footprint. This exemption is only available to an "MNE Group" (i) that has constituent entities located in five or fewer jurisdictions outside the "reference jurisdiction" (ii) that has, with respect to all constituent entities in all jurisdictions except the "reference jurisdiction," less than EUR 50 million in tangible assets, and