Hamilton Insurance Group, Ltd. Class B (HG) Risk Analysis

Certain of our subsidiaries manage alternative reinsurance platforms and owe legal and regulatory duties to third-party investors. The failure of these entities to comply with applicable laws or internal policies could result in significant liabilities, penalties or reputational harm. Additionally, these managed entities depend on substantial third-party capital, and the loss or withdrawal of this capital could negatively affect our financial condition and growth prospects. We may also be unable to attract additional third-party capital for existing or new entities, limiting fee income opportunities. In addition, if we return collateral to investors before the maturity specified in the underlying agreements, we may not have sufficient funds to cover future claims should losses exceed expectations. Any of these circumstances could materially adversely affect our business, financial condition and results of operations.

Two Sigma and its affiliates manage multiple client and proprietary accounts with overlapping strategies, creating actual or perceived conflicts in trade allocation and execution. Decisions made for other clients, including deleveraging or liquidation, may negatively impact positions held by the TS Hamilton Fund. The Commitment Agreement provides that Two Sigma will not be responsible for performance of its obligations under the Commitment Agreement to the extent that such obligations (x) would reasonably conflict with Two Sigma's fiduciary duties to other clients or investors in such clients or (y) are reasonably expected to result in materially adverse legal or regulatory risk, as determined in Two Sigma's sole discretion, which may limit opportunities for the TS Hamilton Fund. In addition, evolving regulation of alternative managers, derivatives, leverage and short selling may impose new restrictions, reporting obligations or emergency measures with little notice, impairing liquidity and strategy execution. Adverse developments involving Two Sigma's regulatory status or potential conflicts with other client mandates could limit its ability to implement investment decisions or execute trades for the TS Hamilton Fund, which may negatively affect the TS Hamilton Fund's performance and, in turn, our business, financial condition and results of operations.

If, with respect to any of the Company's non-U.S. insurance subsidiaries, (i) 20% or more of the gross income in any taxable year is attributable to insurance or reinsurance policies of which the direct or indirect insureds are direct or indirect U.S. Holders (regardless of the number of shares owned by those shareholders) or persons related to such U.S. Holders and (ii) direct or indirect insureds, whether or not U.S. Persons, and persons related to such insureds own directly or indirectly 20% or more (by vote or value) of the Company, U.S. Holders would most likely be required to include their allocable share of the RPII of the applicable subsidiary for the taxable year in their income, even if no distributions are made. Proposed Treasury Regulations published in January 2022 would aggregate all U.S. Holders for purposes of the 50% CFC ownership test above, which would significantly increase the likelihood that such U.S. Holders would be subject to RPII. These proposed regulations also address the RPII treatment of certain cross-insurance arrangements and pass-through entities. Especially in light of these proposed regulations, a direct or indirect U.S. Holder may be required to include amounts in its income in respect of RPII in any taxable year.

Our Bye-laws generally provide that holders of Class A and Class B common shares have one vote per common share held by them and are entitled to vote together as a single class on all matters on which shareholders are entitled to vote generally, except as otherwise required by law or by our Bye-laws to vote as separate classes. For example, only holders of our Class B common shares may vote for the election or removal of directors, other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws. Our Bye-laws also include a mechanism that, prior to any shareholder vote, may reallocate voting rights among shareholders in certain circumstances to ensure that specified shareholders and their affiliates are not deemed to hold more than 9.5% of the total combined voting power of the common shares. For votes where Class B holders vote as a separate class (for example, in respect of the election or removal of directors other than for directors who are appointed by certain shareholders pursuant to the Shareholders Agreement and our Bye-laws), such voting power may be reduced by an amount calculated by multiplying (a) 9.5% and (b) the quotient reached by dividing (x) the total number of directors by (y) the number of directors elected by holders of Class B common shares, to avoid certain adverse tax, legal or regulatory consequences (each, "a share voting limitation violation"). As a result, some shareholders may have their voting rights limited to less than one vote per common share and these provisions may also have the effect of reducing the voting power of some shareholders who would not otherwise be subject to the limitation by virtue of their direct Class B common share ownership. We are not required to notify shareholders of any adjustment to their voting power resulting from these provisions. In addition, our Board of Directors may, in its absolute discretion, make adjustments to the voting power of its shares to the extent necessary or advisable in order (i) to prevent (or reduce the magnitude of) a share voting limitation violation and (ii) to avoid adverse tax, legal or regulatory consequences to the Company, any subsidiary of the Company or any shareholder or its affiliates.

Each Class A common share and Class B common share is generally entitled to one vote per share as outlined above, while our Class C common shares have no voting rights, except as otherwise required by law. Our Class A and C common shares will automatically convert into shares of our Class B common shares, on a share-for-share basis, upon future transfers (unless transferred to a "permitted transferee" as provided in our Bye-laws). In addition, our Bye-laws provide that, upon request from a holder of Class C common shares to the Company and upon approval of such request by our Board of Directors, such Class C common shares shall be redesignated as Class B common shares. If holders of our non-voting Class C common shares effectuate transfers that result in conversion of Class C common shares to Class B common shares or if Class C common shares are redesignated as Class B common shares upon request from a holder of Class C common shares and approved by our Board of Directors, this will have the effect of decreasing the voting power of the holders of our Class B common shares, which may limit the ability of holders of Class B common shares to influence corporate matters.

As the Company is incorporated under the laws of Bermuda, it is subject to Bermuda law. The English Takeover Code (the "Takeover Code") does not apply to the Company. Subject to limited exceptions, Bermuda law does not include provisions comparable to those in certain other jurisdictions that regulate the conduct of takeovers. It is therefore possible that an offeror may gain control of the Company in circumstances where non-selling shareholders do not receive, or are not given the opportunity to receive, the benefit of any control premium paid to selling shareholders. Our Bye-laws contain certain anti-takeover provisions, although these will not provide the full protections afforded by the Takeover Code. These provisions provide for: - requiring advance notice for shareholder proposals and nominations for persons to serve as directors and placing limitations on shareholders to submit resolutions to a shareholder vote and requisition special general meetings;- a large number of authorized but unissued shares which may be issued by the Board of Directors without further shareholder action;- requiring majority of the Board of Directors voting in the affirmative and directors representing less than fifteen percent of the entire Board of Directors voting in opposition to enter into or consummate any transaction or series of transactions involving a merger, amalgamation, consolidation, exchange, scheme of arrangement, recapitalization or similar business combination transaction, other than any merger or consolidation solely between or among any two or more of the Company's wholly-owned subsidiaries that are not material subsidiaries; and - requiring majority of the Board of Directors voting in the affirmative and directors representing less than fifteen percent of the entire Board of Directors voting in opposition to enter into or consummate any transaction or series of transactions involving any sale, pledge, transfer or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries. These provisions in our Bye-laws may discourage takeover offers which would be considered favorable and that could in turn adversely affect the value of the Class B common shares. Even in the absence of a takeover attempt, these provisions may adversely affect the value of the Class B common shares if they are viewed as discouraging takeover attempts in the future.

We are incorporated under the laws of Bermuda and a material portion of our assets are located outside the United States. There is no treaty in effect between the U.S. and Bermuda providing for the enforcement of judgments of U.S. courts, and there are grounds upon which Bermuda courts may not enforce judgments of U.S. courts. As a result, it may not be possible to enforce court judgments of U.S. courts, including judgments predicated upon civil liability provisions of the U.S. federal securities law. For enforcement of any judgment against the Company or its directors or officers, or for the settlement of any dispute, it may be necessary to institute legal proceedings outside the United States, and no assurances can be given that any such proceedings can be initiated. No claim may be brought in Bermuda against the Company or its directors and officers in the first instance for violation of U.S. federal securities laws. If such proceedings are initiated, there may be doubt as to the enforceability in non-U.S. jurisdictions, either in original actions or for enforcement of judgments of U.S. courts, for liabilities predicated upon U.S. federal securities laws.