Hamilton Insurance Group, Ltd.HG
Hamilton Insurance Group, Ltd. Fair Value Disclosure
Fair Value
The carrying values of cash and cash equivalents, restricted cash and cash equivalents, accrued investment income, receivables for investments sold, certain other assets, payables for investments purchased, and certain other liabilities approximate their fair values.
Financial Instruments Subject to Fair Value Measurements
Accounting guidance over fair value measurements requires that a fair value measurement reflect the assumptions market participants would use in pricing an asset or liability based on the best information available. Assumptions include the risks inherent in a particular valuation technique (such as a pricing model) and/or the risks inherent in the inputs to the model. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the "exit price"). Instruments that the Company owns are marked to bid prices.
Basis of Fair Value Measurements
Fair value measurement accounting guidance also establishes a fair value hierarchy that prioritizes the inputs to the respective valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). An asset or liability’s classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. The three levels of the fair value hierarchy are:
•Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;
•Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and
•Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Assets Recorded at Fair Value - Fixed Maturity and Short-term Investments
The following section describes the valuation methodologies used to determine the fair value of the Company’s fixed maturity and short-term investments by asset class:
•U.S. government treasuries: fair value based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances and benchmark yields;
•U.S. states, territories and municipalities: fair value based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
•Non-U.S. sovereign governments and supranationals: fair value based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads, and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;
•Corporate: fair value based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
•Asset-backed and mortgage-backed securities: fair value based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads; and
•Short-term investments: fair value based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances and benchmark yields.
The following table presents the financial instruments measured at fair value on a recurring basis:
| December 31, 2025 | |||||||||||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| U.S. government treasuries | $ | — | $ | 797,834 | $ | — | $ | 797,834 | |||||||||||||||
| U.S. states, territories and municipalities | — | 12,960 | — | 12,960 | |||||||||||||||||||
| Non-U.S. sovereign governments and supranationals | — | 110,861 | — | 110,861 | |||||||||||||||||||
| Corporate | — | 1,584,144 | — | 1,584,144 | |||||||||||||||||||
| Residential mortgage-backed securities - Agency | — | 365,650 | — | 365,650 | |||||||||||||||||||
| Residential mortgage-backed securities - Non-agency | — | 32,545 | — | 32,545 | |||||||||||||||||||
| Commercial mortgage-backed securities - Non-agency | — | 94,698 | — | 94,698 | |||||||||||||||||||
| Other asset-backed securities | — | 239,851 | — | 239,851 | |||||||||||||||||||
| Total fixed maturities | — | 3,238,543 | — | 3,238,543 | |||||||||||||||||||
Short-term investments | — | 200,459 | — | 200,459 | |||||||||||||||||||
| Total | $ | — | $ | 3,439,002 | $ | — | $ | 3,439,002 | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
($ in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| U.S. government treasuries | $ | — | $ | 711,103 | $ | — | $ | 711,103 | |||||||||||||||
| U.S. states, territories and municipalities | — | 13,231 | — | 13,231 | |||||||||||||||||||
| Non-U.S. sovereign governments and supranationals | — | 67,527 | — | 67,527 | |||||||||||||||||||
| Corporate | — | 1,143,060 | — | 1,143,060 | |||||||||||||||||||
| Residential mortgage-backed securities - Agency | — | 272,611 | — | 272,611 | |||||||||||||||||||
| Residential mortgage-backed securities - Non-agency | — | 16,754 | — | 16,754 | |||||||||||||||||||
| Commercial mortgage-backed securities - Non-agency | — | 39,686 | — | 39,686 | |||||||||||||||||||
| Other asset-backed securities | — | 113,890 | — | 113,890 | |||||||||||||||||||
| Total fixed maturities | — | 2,377,862 | — | 2,377,862 | |||||||||||||||||||
| Short-term investments | — | 497,110 | — | 497,110 | |||||||||||||||||||
| Total | $ | — | $ | 2,874,972 | $ | — | $ | 2,874,972 | |||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 7, 2024 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.