In the case of a hammer, you will see the relatively circular corallite (the stony part the polyp sits in) start to pinch in at a few places, as it prepares to divide itself. It's a slow process, so you just have to sit back and wait to see if it really is dividing or it's just lumpy around the edges.
Euphyllia corals, like hammer and frogspawn, also send off small polyps from areas below the main polyps. You'll see these little bumps on the side develop into tiny polyps, then become nice big ones.