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HAMILTON INSURANCE GROUP APRIL 2018 Table of Contents INTRODUCTION AND HIGHLIGHTS BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE INSURANCE AND REINSURANCE OPERATIONS TWO SIGMA APPENDIX 2 Introduction
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HAMILTON INSURANCE GROUP APRIL 2018 Table of Contents INTRODUCTION AND HIGHLIGHTS BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE INSURANCE AND REINSURANCE OPERATIONS TWO SIGMA APPENDIX 2 Introduction and Highlights 3 Mission and First Principles OUR MISSION We're writing the future of risk. FIRST PRINCIPLES Be smart. Be sensible. Be open. and above all else... Be more. STRATEGY STATEMENT We will create a unique, diversified insurance company embracing data science and technology, on both sides of the balance sheet, to create superior shareholder value over the long term. EMPLOYEE VALUE PROPOSITION In good company. 4 Meet Pina Albo CHIEF EXECUTIVE OFFICER, HAMILTON INSURANCE GROUP Pina began her career as a lawyer in Toronto, Canada. After practicing in real estate, corporate finance and M&A, she accepted a position at Munich Re as a claims expert. During her 25-year career at Munich Re, Pina held increasingly senior positions, which included Head of Casualty Unit, North America/UK and International D&O/EPL; Head of Casualty Operations at Munich Reinsurance Company of Canada and Temple Insurance Company; Executive Head of Department UK and Ireland; President, National Clients Division, Munich Re America; and President, Reinsurance Division, Munich Reinsurance America. Pina s most recent position at Munich Re was Member of the Board of Executive Management, where her responsibilities included P&C business and operations in Europe and Latin America. Pina currently sits on the Board of Directors for the IFG Companies, Blue Marble Microinsurance and Attune Insurance. She also serves as an ambassador for the Insurance Supper Club (ISC). Pina has been a member of many industry boards, including the Board of the Insurance Information Institute (III), the Board of the Reinsurance Association of America (RAA) and the National Board of the Insurance Industry Charitable Foundation (IICF). 5 A Powerful Partnership Hamilton was launched in December 2013 by a team led by insurance industry veteran Brian Duperreault. A New York-based technology and investment company with unique experience and capabilities in the area of advanced analytics, which it Our Group CEO is Pina Albo. applies to data-driven investing We re executing a strategy to leverage analytics and research to Assets under management of over $50 billion create superior underwriting and investment value for our clients and shareholders. Generated positive alpha and net returns every year since inception 16 consecutive years We re differentiated by: our startup mindset coupled with a deeply experienced management 1,270+ employees, two thirds of whom are modelers and engineers team Has distinguished itself as an innovator and leader in investment our commitment to leveraging technology and data science management our relationship with Two Sigma, a technology and investment company no legacy (financial or systems) issues As of November 30, 2017, Hamilton has over $1.6 billion in shareholders equity. 6 Established book of business in Hamilton Underwriting Limited, Joint venture between Hamilton, Partnership with Hamilton sixth year of growth Shareholder s equity over $1.5 billion at November 30, 2017 a Lloyd s Managing Agency, controls Syndicate 3334 Wrote over $130 million of gross AIG and Two Sigma Building a market-leading, technology-based platform in Manages majority of Hamilton s capital in its proprietary funds Wrote over $350 million of gross premiums in 2017; forecast to write approximately $375 million in 2018 premiums in 2017; forecast to write approximately $200 million in 2018 Benefits from Lloyd s ratings the $150 billion Small to Medium Enterprise (SME) market Led by CEO James Hobson, former COO of OnDeck Capital Leverages data analytics and modeling skills to advance the science of underwriting risk Net earnings of $877 million* and dividends paid to Hamilton Insurance Group of $232 million since launch in 2012 A.M. Best: A- (Excellent) from A.M. Best A (Excellent); Fitch AA- (Very Strong); and S&P A+ (Strong) Represents an unprecedented partnership that leverages data science, technology, brand awareness and a small business pipeline Dedicated staff at Two Sigma Insurance Quantified (TSIQ) work closely with Attune and Hamilton on data science projects Entities affiliated with principals of Two Sigma are significant shareholders at Hamilton * Stated on a legal entity basis. Net earnings excluding intercompany reinsurance is higher. 7 Hamilton: one of a kind Management Renowned Board of Directors, with diverse backgrounds Proven management team Strategy Uniquely embraces data science and technology on both sides of the balance sheet Early adopter of insurtech through partnership with Two Sigma Nimble organizational structure in Bermuda and Lloyd s markets; accesses US insurance through Attune Differentiated by relationship with AIG Performance Favourable loss results following 2017 storm season; praised for rapid, client-focused response Proprietary AI-based analytics Superior financial strength Meeting or exceeding profitability expectations targets positive returns for both underwriting and investment Disciplined growth Poised to continue to generate superior returns Efficiency in operating systems across the group Talent Highly skilled, cross-functional and collaborative teams Engaged employees committed to company mission Expert risk management Consistent performance through market volatility 8 Hamilton Group Growth in BV and SE BOOK VALUE PER SHARE CONSOLIDATED SHAREHOLDERS' EQUITY $9.83 $16.22 $16.07 $796 $1,655 $1, DEC NOV DEC NOV-17 Hamilton was funded pursuant to a private placement offering at $10.00 per share on December 23, Certain founding shareholders exercised a $250 million greenshoe right, effective January 1, Board of Directors and Executive Committee 10 Industry-Renowned Leadership BOARD OF DIRECTORS Bill Freda Chairman, Hamilton Insurance Group; Chairman, Audit Committee Chairman of The Guardian Life Insurance Company of America Retired as Vice Chairman, Deloitte LLP after a distinguished 40-year career with the firm Member of the Board of Directors of The Guardian Insurance Company of America and State Street Corporation Pina Albo CEO, Hamilton Insurance Group Worked 25 years at Munich Re, most recently sitting on the board of management with responsibility for Europe and Latin America ( ) Practiced law at Tory s, a leading Canadian law firm Recognized as advocate for women in the workplace Member of board of directors for IFG Companies Mark Barrenechea CEO, CTO and board member of OpenText Board member of Dick s Sporting Goods Formerly president, CEO and board member of Silicon Graphics International Corporation; vice president, technology and business development of Tesseract Corporation; and senior vice president of applications development of Oracle Named Top New CEO of the Year by Canadian Business magazine in 2015 Earned BSc in computer science from Saint Michael s College in Vermont Joan Lamm-Tennant Chief Executive Officer of Blue Marble Microinsurance, an insurance industry collaborative announced in January 2015 to provide protection to the underserved Prior to Blue Marble, served as Global Chief Economist and Risk Strategist, Guy Carpenter & Company, LLC Faculty Member of the Wharton School, University of Pennsylvania David Brown Chairman, Finance and Governance Committee Founder & Chief Executive Officer of Flagstone Re Chief Executive Officer, Centre Solutions Former Partner, EY Chairman of the Board of Bermuda Stock Exchange John Overdeck Chairman, Underwriting and Risk Committee Co-founder of Two Sigma and former Managing Director, D.E. Shaw & Co. International Mathematics Olympiad Silver Medalist for the US who holds a B.S. in Mathematics (with distinction) and an M.S. in Statistics from Stanford University Serves on the Boards of the Robin Hood Foundation, the Institute for Advanced Study and, as Vice Chair, of the National Museum of Mathematics Brad Cooper Since 1990, Managing Partner and founding partner of Capital Z Partners Prior to Capital Z, an investment banker in the Financial Institutions Group of Salomon Brothers Board member of Make a Wish Foundation of Metro New York Steve Pacala Frederick D. Petrie Professor of Ecology and Evolutionary Biology at Princeton University; Director of the Princeton Environmental Institute Recipient of the MacArthur Award, Mercer Award and the David Starr Jordan Prize Member of the American Academy of Arts and Sciences and the National Academy of Sciences Russ Fradin Lead Independent Director of Best Buy Co., Inc., and Operating Partner of private equity firm Clayton, Dubilier & Rice Formerly President and Chief Executive Officer of SunGard Data Systems; Chief Executive Officer of the BISYS Group; and Chairman and Chief Executive Officer of Aon Hewitt, where he oversaw merger between Aon Consulting and Hewitt Associates Held senior positions at Automatic Data Processing and McKinsey & Company Earned MBA from Harvard Business School and BSc in Economics and Finance from The Wharton School at the University of Pennsylvania Pauline Richards COO of Armour Group Holdings Limited Former CFO of Lombard Odier Darier Hentsch (Bermuda) Member of the Boards of Wyndham Worldwide and Apollo Global Management and a past member of Cendant Corporation and Butterfield Bank Tom Hill Chairman, Investment Committee President and CEO of the Hedge Funds Solutions Group, a Vice Chairman of The Blackstone Group and Member of the Board of The Blackstone Group Management Began career at First Boston, becoming one of the co-founders of its Mergers & Acquisitions Department Board memberships include the Council on Foreign Relations and Lincoln Center Theatre David Siegel Chairman, Compensation Committee Co-founder of Two Sigma and former Chief Technology Officer and Managing Director, Tudor Investment Corporation First Chief Information Officer, D.E. Shaw & Co. A graduate of Princeton University who holds a PhD in computer science from the Massachusetts Institute of Technology (MIT) Board memberships include the Scratch Foundation, NYC First, NAF, and the Cornell Tech Board of Overseers; serves as a trustee of Carnegie Hall 11 Executive Committee Pina Albo CEO, Hamilton Insurance Group Worked 25 years at Munich Re, most recently on the board of management with responsibility for Europe and Latin America ( ) Practiced law at Tory s, a leading Canadian law firm Recognized as advocate for women in the workplace Member of board of directors for IFG Companies Kathleen Reardon CEO, Hamilton Re Member of the founding management team, with more than 20 years experience in the insurance industry Fellow of the Casualty Actuarial Society CUO International of ACE Tempest Re ( ) Chair, Women in Reinsurance (Bermuda) Dermot O Donohoe CEO, Hamilton Underwriting Limited Held various positions in Torus Group (now Starstone) including Transitional Group CEO and CEO Torus International ( ) 18 years at XL Group in various positions, including Global Head of Specialty Former member of Council of Lloyd s ( ); a Chartered Insurer (ACII) Jonathan Reiss CFO Member of the founding management team, with 25 years experience in the insurance industry Insurance Practice Leader at EY Bermuda ( ) 19 years at EY, including 12 at Partner level dedicated to serving insurance industry clients Pete Skerlj Chief Risk Officer Member of the founding management team, with 20 years experience in risk and analytics Fellow of the Casualty Actuarial Society As a Catastrophe Modeling Consultant at Q Re, created a property retro portfolio management and pricing framework Previous experience includes senior positions with Lancashire Insurance, Partner Re Global and Applied Research Associates Gemma Carreiro General Counsel Associate General Counsel at PartnerRe ( ) Associate at Conyers Dill & Pearman Limited ( ) Associate at Cox Hallett Wilkinson ( ) Wendy Davis Johnson Chief Communications & Culture Officer Over 25 years' experience in corporate communications and brand development Former SVP, Global Communications, ACE Group (now Chubb) Member of the Insurance Development Forum's Microinsurance Working Group 12 Insurance and Reinsurance Operations 13 Hamilton Re OVERVIEW UNDERWRITING YEAR GPW (2) During the five and half year period July 2012 (inception) to December 31, 2017, this business unit earned $958 million of net income and paid dividends of $232 million to Hamilton Insurance Group. OUR PORTFOLIO SPECIALTY REINSURANCE Kathleen Reardon CEO, Hamilton Re Shareholder s equity over $1.5 billion as of November 30, 2017 Wrote over $350 million in 2017 underwriting year; forecast to write approximately $375 million in 2018 underwriting year Maintains a conservative risk profile, limiting PML to 15% of shareholder s equity in the US and 10% for the rest of the world Through strategic relationship with AIG, provided with opportunity to participate in increased volume of AIG's ceded reinsurance Manages risk exposures through a combination of third-party models and HARP (Hamilton Analytics and Risk Platform), a proprietary risk management platform that: is a collection of software tools used to build, optimize and analyze Hamilton Re s risk portfolio; Specialty Reinsurance Property Reinsurance Casualty Reinsurance Property D&F Insurance Excess Casualty Insurance 21% 33% 37% 3% 6% PROPERTY REINSURANCE SEGMENT Accident & Health Agricultural Financial Lines Marine & Energy Multi-Line Aviation & Space Terror/PV/Cyber WC/PA Cat 4% 8% 31% 21% 17% 12% 3% 4% CASUALTY REINSURANCE CLASS simulates 200,000 iterations of loss scenarios over a multi-year window; and is fully embedded in the frontline risk selection and pricing process. In April 2017, purchased the renewal rights to Sompo Canopius' excess casualty insurance book In June 2017, established Turing Re, a special purpose reinsurer A.M. Best: A- (Excellent) USA Europe & UK Japan Australasia Worldwide Worldwide x USA Caribbean Canada 58% 10% 9% 6% 8% 4% 3% 2% REGION General Liability Excess/Umbrella Casualty Professional Liability Commercial Motor Personal Motor Healthcare Multi-Line 11% 30% 27% 13% 3% 3% 13% CLASS GROSS PREMIUMS WRITTEN (GPW) (1) PROPERTY D&F INSURANCE EXCESS CASUALTY INSURANCE (1) For fiscal year period $264 $ (Nov) $ (Budget) Commercial Industrial Marine & Energy Motor & Rail Agricultural 59% 16% 14% 10% (2) Pie charts reflect in-force portfolio as of 01/01/2018 1% CLASS Energy 27% Motor & Rail 21% Manufacturing/Industrial 12% Utilities 10% Chemicals 7% Consumer Goods 7% Owners, Landlords & Tenants 6% Construction 4% Food & Beverages 4% Other 2% CLASS 14 Hamilton at Lloyd s OVERVIEW 2018 YEAR OF ACCOUNT Global licenses of Lloyd s iconic brand Hamilton Underwriting Limited manages Lloyd s Syndicate 3334 DIRECT & FACULTATIVE PROPERTY TREATY REINSURANCE Dermot O Donohoe CEO, Hamilton Underwriting Limited Wrote over $130 million of gross premiums in 2017; forecast to write approximately $200 million in 2018 Credit ratings: A.M. Best: A (Excellent) Fitch: AA- (Very Strong) USA International Latin America & Caribbean Japan New Zealand Other Countries 43% 37% 12% 4% 3% 1% TERRITORY Property Offshore Energy Onshore Energy Aviation War & Terror Marine & Energy Treaty 39% 19% 9% 5% 6% 22% CLASS S&P: A+ (Strong) Expanding underwriting capabilities across new classes FINANCIAL LINES SPECIALTY Completed Reinsurance to Close (RITC) to transfer legacy business inherited in Sportscover acquisition GROSS PREMIUMS WRITTEN General Liability Directors & Officers Professional Indemnity Cyber Excess Casualty 10% 13% 45% 7% 25% CLASS Personal Accident Contingency Financial Institutions Political Violence 45% 9% 30% 16% CLASS SPACE & AVIATION MARINE & ENERGY LIABILITY $83 $129 $198 Space Aviation 84% 16% CLASS Marine Liability Energy Liability 80% 20% CLASS (Nov) (Budget) 15 Attune is building a marketleading, technology-based platform in the $150 billion Small to Medium Enterprise (SME) market Represents an unprecedented partnership that leverages data science, technology, brand awareness and a small business pipeline 16 Two Sigma 17 Two Sigma (1) is a process-driven, systematic investment manager primarily focused on global liquid markets. Two Sigma applies its technology and expertise in financial markets to seek to consistently generate uncorrelated alpha across a wide range of market conditions. Computing Power & Data: WHERE WE ARE TODAY 6,150+ servers in our computing environment, with 236,706 vcpus and 1,695 terabytes of memory WHAT WE DO 35+ petabytes of data and growing 10K+ data sources including public and proprietary Deploy and seek to continuously improve intelligent investment management systems first created in 2001 Manage approximately $51.3 billion of assets for a global, diversified client base in absolute return and benchmark-relative investment mandates (2) Trade equities, futures, FX and derivatives in 40+ countries utilizing a highly diversified set of systematic strategies Tap the talents of 1,270+ employees headquartered in New York with additional offices in Houston, London, and Hong Kong (2) Operate as a Registered Investment Adviser with the SEC (3) Human Capital 3,300+ person years of R&D Two thirds of staff consist of Engineers and Modelers 60% non-financial backgrounds 97% voluntary employee retention, since inception Performance (4) Created positive net alpha every year since inception (15 Years) 96% of investors have earned positive alpha 80% positive (net alpha) product quarters Note: For illustration purposes only. Not an offer to buy or sell securities. Two Sigma may modify its investment approach and portfolio parameters in the future in any manner that it believes is consistent with its fiduciary duty to its clients. There is no guarantee that Two Sigma or its products will be successful in achieving any or all of their investment objectives. Moreover, all investments involve some degree of risk, not all of which will be successfully mitigated. (1) As referenced on this slide, Two Sigma or the Firm generally refers collectively to Two Sigma Investments, LP and Two Sigma Advisers, LP and their affiliates. (2) AuM and employee count are approximate as of June 1, (3) Two Sigma Investments, LP and Two Sigma Advisers, LP are registered with the U.S. Securities and Exchange Commission (the SEC ). Registration does not imply review, endorsement or approval by the SEC. (4) Net alpha is measured against zero for absolute return products and against the applicable benchmark for beta-1 products and is net of management fees, incentive allocations and all other fund and trading expenses, in each case, to the extent applicable. Statistics regarding investor and product performance are dollar-weighted by AuM as of December 31, Performance statistics only include performance of unaffiliated investors. Net alpha product quarters is an asset weighted figure derived by (i) taking the sum of the average notional AuM of each Two Sigma-managed product group by quarter and (ii) dividing the sum of the average notional AuM for the positive net alpha product quarters by (i). 18 Appendix FINANCIAL HIGHLIGHTS CORPORATE ORGANIZATIONAL CHARTS 19 Hamilton Insurance Group Financial Highlights CONSOLIDATED BALANCE SHEETS November 30, 2017 December 31, 2016 December 31, 2015 ($ in millions) Audited Audited Audited Cash and investments $ 2,082 $ 1,917 $ 1,819 Premiums receivable Losses and LAE recoverable Other Total assets 2,713 2,319 2,116 Reserve for losses and LAE Unearned premiums Payable to related parties Notes payable Other Total liabilities 1, Non-controlling interest 11 Shareholders equity 1,628 1,655 1,565 Total liabilities and shareholders equity $ 2,713 $ 2,319 $ 2,116 20 Hamilton Re Financial Highlights CONSOLIDATED BALANCE SHEETS November 30, 2017 December 31, 2016 December 31, 2015 ($ in millions) Audited Audited Audited Cash and investments $ 2,026 $ 1,802 $ 1,746 Premiums receivable Losses and LA
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