UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 2, 2011
Alterra Capital Holdings Limited
(Exact name of registrant as specified in its charter)
Bermuda | 000-33047 | 98-0584464 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) | ||
Alterra House, 2 Front Street, Hamilton, Bermuda |
HM 11 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (441) 295-8800
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On August 2, 2011, the Registrant issued a news release announcing financial results for the three and six months ended June 30, 2011. In addition, on the same date, the Alterra Capital Holdings Limited Investor Financial Supplement for the quarter ended June 30, 2011 was made available on the Registrants website.
A copy of the news release and financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
In accordance with general instruction B.2 to Form 8-K, the information set forth in this Item 2.02 (including Exhibit 99.1 and Exhibit 99.2) shall be deemed furnished and not filed with the Securities and Exchange Commission for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended.
Item 8.01 | Other Events. |
On August 2, 2011, the Registrant issued a news release announcing the declaration by the Board of Directors of a dividend of $0.14 per share. The news release is attached hereto as Exhibit 99.3 and incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
99.1 | News Release of Alterra Capital Holdings Limited, dated August 2, 2011, announcing financial results. | |
99.2 | Investor Financial Supplement for the quarter ended June 30, 2011. | |
99.3 | News Release of Alterra Capital Holdings Limited, dated August 2, 2011, announcing a dividend declaration. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Alterra Capital Holdings Limited | ||||
August 2, 2011 | By: | /S/ PETER A. MINTON | ||
Name: | Peter A. Minton | |||
Title: | Executive Vice President and Chief Operating Officer |
Exhibit Index
99.1 | News Release of Alterra Capital Holdings Limited, dated August 2, 2011, announcing financial results. | |
99.2 | Investor Financial Supplement for the quarter ended June 30, 2011. | |
99.3 | News Release of Alterra Capital Holdings Limited, dated August 2, 2011, announcing a dividend declaration. |
Exhibit 99.1
ALTERRA CAPITAL REPORTS SECOND QUARTER 2011 RESULTS
Net Operating Income of $0.37 per Diluted Share
Diluted Book Value per Share Increase of 2.5%
HAMILTON, BERMUDA, August 2, 2011Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (Alterra) today reported net income of $32.6 million, or $0.30 per diluted share, for the second quarter of 2011, compared to net income of $103.4 million, or $1.13 per diluted share, for the same quarter of 2010.
Net operating income for the second quarter of 2011 was $39.6 million, or $0.37 per diluted share, compared to net operating income of $58.8 million, or $0.64 per diluted share, for the same quarter of 2010. Annualized net operating return on average shareholders equity for the second quarter of 2011 was 5.7%.
For the six months ended June 30, 2011, Alterra reported a net loss of $14.1 million, or $0.13 per diluted share, compared to net income of $139.8 million, or $1.88 per diluted share, for the same period of 2010. Net operating income for the six months ended June 30, 2011 was $14.8 million, or $0.14 per diluted share, compared to net operating income of $99.5 million, or $1.33 per diluted share, for the same period of 2010. Annualized net operating return on average shareholders equity for the six months ended June 30, 2011 was 1.1%.
Alterras 2010 results include the results of operations for the former Harbor Point Limited (Harbor Point) companies from May 12, 2010. Accordingly, a comparison of Alterras gross premiums written and other results of operations for current and prior periods are not meaningful. Selected pro forma combined results of operations for periods prior to the merger for the reinsurance segment are provided in Alterras second quarter financial supplement available on Alterras website at www.alterracap.com.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: Alterra achieved a solid $39.6 million of net operating income in the second quarter despite recognizing over $49 million of property catastrophe net losses. In a year that continues to be heavily influenced by the size and frequency of major property catastrophe events, Alterras diversified underwriting platform has performed very well. Net operating earnings for the first six months of the year are in positive territory and our capital position has improved over the most recent quarter, putting Alterra in what we believe is a strong position going into the U.S. hurricane season.
Second quarter 2011 results for Alterra include:
| Property and casualty gross premiums written of $563.0 million, representing an increase of $164.8 million, or 41.4%; net premiums written of $426.5 million, representing an increase of $108.0 million, or 33.9%; and net premiums earned of $348.1 million, representing an increase of $55.6 million, or 19.0%; each as compared to the same quarter of 2010. These increases primarily reflect the impact of the merger with Harbor Point - whose premiums are not included for the entire 2010 quarter; |
| A combined ratio on property and casualty business of 93.7% compared to 83.3% for the same quarter of 2010; |
| Property catastrophe event and significant per-risk net losses of $50.5 million ($49.6 million net of reinstatement premiums) compared to $20.3 million in the same quarter of 2010. Losses net of reinsurance and reinstatements include $42.5 million for natural disasters in the U.S., which comprise the series of tornadoes, other severe weather and flooding along the Mississippi River during the second quarter of 2011. The remainder of the net losses relate to increased loss estimates on first quarter loss events, which remain within previously announced ranges. Property catastrophe losses principally affected the reinsurance and Alterra at Lloyds segments; |
| Net favorable development on prior years loss reserves of $48.5 million, or 14.0 combined ratio points, compared to $24.1 million, or 8.3 combined ratio points, in the same quarter of 2010; |
| Net investment income of $59.7 million compared to $53.3 million in the same quarter of 2010, |
an increase of 12.0%; and |
| Net operating income of $39.6 million, or $0.37 per diluted share, representing an annualized net operating return on average shareholders equity of 5.7%. |
Gross premiums written from property and casualty underwriting for the second quarter of 2011 were $563.0 million, generated by the segments as follows: insurance - $141.3 million, an increase of $2.2 million, or 1.6%; reinsurance - $248.8 million, an increase of $129.2 million, or 108.0%; U.S. specialty - $99.4 million, an increase of $8.7 million, or 9.6%; and Alterra at Lloyds - $73.5 million, an increase of $24.7 million, or 50.6%; each as compared to the same quarter of 2010.
Combined ratios for the second quarter of 2011 by segment were 70.8% for insurance, 98.0% for reinsurance, 101.1% for U.S. specialty and 93.8% for Alterra at Lloyds.
Results for the six months ended June 30, 2011 include:
| Property and casualty gross premiums written of $1,190.4 million, representing an increase of $421.9 million, or 54.9%; net premiums written of $916.5 million, representing an increase of $380.9 million, or 71.1%; and net premiums earned of $727.6 million, representing an increase of $241.6 million, or 49.7%; each as compared to the same period of 2010. These increases primarily reflect the impact of the merger with Harbor Point - whose premiums are not included for the entire 2010 period; |
| A combined ratio on property and casualty business of 103.5% compared to 86.2% for the same period of 2010; |
| Property catastrophe event and significant per-risk net losses of $165.9 million ($155.8 million net of reinstatement premiums) compared to $29.9 million in the same period of 2010. Property catastrophe losses principally affected the reinsurance and Alterra at Lloyds segments; |
| Net favorable development on prior years loss reserves of $78.7 million, or 10.9 combined ratio points, compared to $41.2 million, or 8.5 combined ratio points, in the same period of 2010; |
| Net investment income of $117.4 million compared to $101.7 million in the same period of 2010, an increase of 15.5%; |
| A loss of principal of $25.0 million on a catastrophe bond investment triggered by the Japan earthquake and tsunami, included within net realized and unrealized losses on investments; and |
| Net operating income of $14.8 million, or $0.14 per diluted share, representing an annualized net operating return on average shareholders equity of 1.1%. |
Gross premiums written from property and casualty underwriting for the six months ended June 30, 2011 were $1,190.4 million, generated by the segments as follows: insurance - $212.5 million, an increase of $4.1 million, or 2.0%; reinsurance - $623.8 million, an increase of $349.3 million, or 127.3%; U.S. specialty - $169.8 million, an increase of $5.2 million, or 3.1%; and Alterra at Lloyds - $184.3 million, an increase of $63.3 million, or 52.4%; each as compared to the same period of 2010.
Combined ratios for the six months ended June 30, 2011 by segment were 76.7% for insurance, 106.0% for reinsurance, 100.1% for U.S. specialty and 126.9% for Alterra at Lloyds.
Balance Sheet
Total invested assets, including cash and cash equivalents, were $7,952.7 million as of June 30, 2011, an increase of $91.4 million from December 31, 2010. As of June 30, 2011, 96.6% of the fixed maturities portfolio (by carrying value) was investment-grade, an increase from 96.0% as of December 31, 2010. As of June 30, 2011, the weighted average book yield of Alterras cash and fixed maturities portfolio was 3.33% and the weighted average duration was 4.1 years.
Under the Board-approved share repurchase authorization, Alterra repurchased 311,000 common shares during the second quarter of 2011 at an average price of $21.51 per share for a total of $6.7 million. Share repurchases under the Board-approved share repurchase authorization for the six months ended June 30,
2011 were 6,497,150 common shares at an average price of $21.89 per share for a total of $142.2 million. As of June 30, 2011, $185.5 million remained under the Board-approved share repurchase authorization.
Shareholders equity was $2,793.1 million as of June 30, 2011, an increase of 2.6% from March 31, 2011. Diluted book value per share as of June 30, 2011 was $25.98, an increase of 2.5% from March 31, 2011.
A copy of Alterras second quarter financial supplement is available on Alterras website at www.alterracap.com.
Alterra will host a conference call on Wednesday, August 3, 2011 at 10:00am (EDT) to discuss these results and related matters with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-713-4217 (toll-free U.S.) or 1-617-213-4869 (international) and using access code 53692386. A live broadcast of the conference call will also be available through Alterras website at www.alterracap.com.
Alterra Capital Holdings Limited is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers.
Non-GAAP Financial Measures
In presenting Alterras results, management has included and discussed net operating income, net operating income per diluted share, annualized net operating return on average shareholders equity and diluted tangible book value per share. These measures are non-GAAP financial measures as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of Alterras business. These measures, however, should not be viewed as a substitute for those measures determined in accordance with U.S. GAAP. The reconciliation of these measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements that reflect Alterras current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements. For further information regarding cautionary statements and factors affecting Alterras future results, please refer to the most recent reports on Form 10-K and Form 10-Q and other documents filed by Alterra with the SEC. Alterra undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise.
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
June 30, 2011 | December 31, 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 987,057 | $ | 905,606 | ||||
Fixed maturities, trading at fair value |
218,481 | 244,872 | ||||||
Fixed maturities, available for sale at fair value |
5,403,312 | 5,392,643 | ||||||
Fixed maturities, held to maturity at amortized cost (fair value $1,049,782) |
993,691 | 940,104 | ||||||
Other investments, at fair value |
350,193 | 378,128 | ||||||
Accrued interest income |
70,777 | 75,414 | ||||||
Premiums receivable |
870,287 | 588,537 | ||||||
Losses and benefits recoverable from reinsurers |
1,058,724 | 956,115 | ||||||
Deferred acquisition costs |
171,517 | 111,901 | ||||||
Prepaid reinsurance premiums |
215,392 | 149,252 | ||||||
Trades pending settlement |
9,168 | 32,393 | ||||||
Goodwill and intangible assets |
58,094 | 59,076 | ||||||
Other assets |
90,671 | 83,247 | ||||||
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Total assets |
$ | 10,497,364 | $ | 9,917,288 | ||||
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LIABILITIES |
||||||||
Property and casualty losses |
$ | 4,230,290 | $ | 3,906,134 | ||||
Life and annuity benefits |
1,317,527 | 1,275,580 | ||||||
Deposit liabilities |
147,428 | 147,612 | ||||||
Funds withheld from reinsurers |
122,705 | 121,107 | ||||||
Unearned property and casualty premiums |
1,203,024 | 905,487 | ||||||
Reinsurance balances payable |
137,910 | 102,942 | ||||||
Accounts payable and accrued expenses |
104,917 | 99,680 | ||||||
Trades pending settlement |
| | ||||||
Senior notes |
440,482 | 440,476 | ||||||
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Total liabilities |
7,704,283 | 6,999,018 | ||||||
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SHAREHOLDERS EQUITY |
||||||||
Common shares (par value $1.00) 105,794,521 (2010 - 110,963,160) shares issued and outstanding |
105,795 | 110,963 | ||||||
Additional paid-in capital |
1,911,979 | 2,026,045 | ||||||
Accumulated other comprehensive income |
132,218 | 98,946 | ||||||
Retained earnings |
643,089 | 682,316 | ||||||
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Total shareholders equity |
2,793,081 | 2,918,270 | ||||||
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Total liabilities and shareholders equity |
$ | 10,497,364 | $ | 9,917,288 | ||||
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Book value per share |
$ | 26.40 | $ | 26.30 | ||||
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Diluted book value per share |
$ | 25.98 | $ | 25.99 | ||||
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Diluted tangible book value per share [a] |
$ | 25.44 | $ | 25.46 | ||||
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Diluted shares outstanding |
107,500,490 | 112,290,968 |
[a] | Non-GAAP financial measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES |
||||||||||||||||
Gross premiums written |
$ | 563,907 | $ | 398,981 | $ | 1,191,755 | $ | 770,120 | ||||||||
Reinsurance premiums ceded |
(136,626 | ) | (79,715 | ) | (273,983 | ) | (232,935 | ) | ||||||||
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Net premiums written |
$ | 427,281 | $ | 319,266 | $ | 917,772 | $ | 537,185 | ||||||||
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Earned premiums |
$ | 443,008 | $ | 391,723 | $ | 932,270 | $ | 696,720 | ||||||||
Earned premiums ceded |
(94,067 | ) | (98,463 | ) | (203,442 | ) | (209,220 | ) | ||||||||
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Net premiums earned |
348,941 | 293,260 | 728,828 | 487,500 | ||||||||||||
Net investment income |
59,665 | 53,277 | 117,431 | 101,667 | ||||||||||||
Net realized and unrealized losses on investments |
(5,774 | ) | (14,786 | ) | (24,592 | ) | (8,364 | ) | ||||||||
Total other-than-temporary impairment losses |
(187 | ) | (1,167 | ) | (1,311 | ) | (1,865 | ) | ||||||||
Portion of loss recognized in other comprehensive income (loss), before taxes |
(166 | ) | 867 | (71 | ) | 1,145 | ||||||||||
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Net impairment losses recognized in earnings |
(353 | ) | (300 | ) | (1,382 | ) | (720 | ) | ||||||||
Other income |
591 | 275 | 1,906 | 619 | ||||||||||||
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Total revenues |
403,070 | 331,726 | 822,191 | 580,702 | ||||||||||||
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LOSSES AND EXPENSES |
||||||||||||||||
Net losses and loss expenses |
211,133 | 159,817 | 515,539 | 284,782 | ||||||||||||
Claims and policy benefits |
15,570 | 13,943 | 30,280 | 31,602 | ||||||||||||
Acquisition costs |
64,680 | 48,798 | 135,288 | 73,042 | ||||||||||||
Interest expense |
10,630 | 7,916 | 19,089 | 12,858 | ||||||||||||
Net foreign exchange gains (losses) |
3,090 | (634 | ) | 2,212 | (3,086 | ) | ||||||||||
Merger and acquisition expenses |
| (54,570 | ) | | (49,826 | ) | ||||||||||
General and administrative expenses |
69,659 | 50,649 | 140,862 | 87,177 | ||||||||||||
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Total losses and expenses |
374,762 | 225,919 | 843,270 | 436,549 | ||||||||||||
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INCOME (LOSS) BEFORE TAXES |
28,308 | 105,807 | (21,079 | ) | 144,153 | |||||||||||
Income tax (benefit) expense |
(4,327 | ) | 2,360 | (7,027 | ) | 4,325 | ||||||||||
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NET INCOME (LOSS) [a] |
32,635 | 103,447 | (14,052 | ) | 139,828 | |||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax |
42,820 | 60,525 | 28,234 | 94,656 | ||||||||||||
Foreign currency translation adjustment |
165 | (7,629 | ) | 5,038 | (17,369 | ) | ||||||||||
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COMPREHENSIVE INCOME [a] |
$ | 75,620 | $ | 156,343 | $ | 19,220 | $ | 217,115 | ||||||||
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Net income per share |
$ | 0.31 | $ | 1.14 | $ | (0.13 | ) | $ | 1.90 | |||||||
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Net income per diluted share |
$ | 0.30 | $ | 1.13 | $ | (0.13 | ) | $ | 1.88 | |||||||
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Net operating income per diluted share [b] |
$ | 0.37 | $ | 0.64 | $ | 0.14 | $ | 1.33 | ||||||||
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Weighted average shares outstanding - basic |
105,604,786 | 91,042,301 | 106,385,007 | 73,779,447 | ||||||||||||
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Weighted average shares outstanding - diluted |
107,111,909 | 91,661,430 | 106,385,007 | 74,524,919 | ||||||||||||
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[a] | Includes the results of Harbor Point Limited from May 12, 2010. |
[b] | Non-GAAP measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30 | ||||||||
2011 | 2010 | |||||||
Common shares |
||||||||
Balance, beginning of period |
$ | 110,963 | $ | 55,867 | ||||
Issuance of common shares, net |
1,406 | 64,983 | ||||||
Repurchase of common shares |
(6,574 | ) | (2,207 | ) | ||||
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Balance, end of period |
105,795 | 118,643 | ||||||
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Additional paid-in capital |
||||||||
Balance, beginning of period |
2,026,045 | 752,309 | ||||||
Issuance of common shares, net |
610 | 1,417,316 | ||||||
Stock based compensation expense |
22,587 | 30,241 | ||||||
Repurchase of common shares |
(137,263 | ) | (42,166 | ) | ||||
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Balance, end of period |
1,911,979 | 2,157,700 | ||||||
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Accumulated other comprehensive income |
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Unrealized holding gains (losses) on investments: |
||||||||
Balance, beginning of period |
118,197 | 36,791 | ||||||
Holding gains on available for sale securities arising in period [a] |
31,281 | 99,001 | ||||||
Net realized gains on available for sale securities included in net income [a] |
(3,118 | ) | (3,200 | ) | ||||
Portion of other-than-temporary impairment losses recognised in other comprehensive income [a] |
71 | (1,145 | ) | |||||
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Balance, end of period |
146,431 | 131,447 | ||||||
Cumulative foreign currency translation adjustment: |
||||||||
Balance, beginning of period |
(19,251 | ) | (11,360 | ) | ||||
Foreign currency translation adjustments |
5,038 | (17,369 | ) | |||||
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Balance, end of period |
(14,213 | ) | (28,729 | ) | ||||
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Total accumulated other comprehensive income |
132,218 | 102,718 | ||||||
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Retained earnings |
||||||||
Balance, beginning of period |
682,316 | 731,026 | ||||||
Net (loss) income |
(14,052 | ) | 139,828 | |||||
Dividends |
(25,175 | ) | (322,948 | ) | ||||
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Balance, end of period |
643,089 | 547,906 | ||||||
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Total shareholders equity |
$ | 2,793,081 | $ | 2,926,967 | ||||
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[a] | Net of tax |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30 | ||||||||
2011 | 2010 | |||||||
OPERATING ACTIVITIES |
||||||||
Net (loss) income |
$ | (14,052 | ) | $ | 139,828 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
||||||||
Stock based compensation |
22,587 | 30,241 | ||||||
Amortization of premium on fixed maturities |
9,801 | 4,798 | ||||||
Accretion of deposit liabilities |
3,176 | 2,754 | ||||||
Net realized and unrealized losses on investments |
24,592 | 8,364 | ||||||
Net impairment losses recognized in earnings |
1,382 | 720 | ||||||
Negative goodwill gain |
| (95,788 | ) | |||||
Changes in: |
||||||||
Accrued interest income |
4,724 | 5,133 | ||||||
Premiums receivable |
(278,695 | ) | 150,598 | |||||
Losses and benefits recoverable from reinsurers |
(99,028 | ) | (4,706 | ) | ||||
Deferred acquisition costs |
(58,894 | ) | (22,681 | ) | ||||
Prepaid reinsurance premiums |
(65,487 | ) | (25,170 | ) | ||||
Other assets |
(8,544 | ) | 6,412 | |||||
Property and casualty losses |
304,109 | (212,784 | ) | |||||
Life and annuity benefits |
(31,203 | ) | (19,532 | ) | ||||
Funds withheld from reinsurers |
1,598 | (19,754 | ) | |||||
Unearned property and casualty premiums |
293,029 | 94,146 | ||||||
Reinsurance balances payable |
34,849 | 146,084 | ||||||
Accounts payable and accrued expenses |
4,761 | (14,882 | ) | |||||
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Cash provided by operating activities |
148,705 | 173,781 | ||||||
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INVESTING ACTIVITIES |
||||||||
Purchases of available for sale securities |
(1,153,670 | ) | (1,030,431 | ) | ||||
Sales of available for sale securities |
709,314 | 264,405 | ||||||
Redemptions/maturities of available for sale securities |
485,128 | 527,854 | ||||||
Purchases of trading securities |
(28,065 | ) | (27,913 | ) | ||||
Sales of trading securities |
24,563 | 1,153 | ||||||
Redemptions/maturities of trading securities |
35,969 | 12,975 | ||||||
Purchases of held to maturity securities |
(2,580 | ) | (14,682 | ) | ||||
Redemptions/maturities of held to maturity securities |
18,251 | 16,570 | ||||||
Net purchases/sales of other investments |
5,532 | 59,897 | ||||||
Acquisition of subsidiary, net of cash acquired |
| 446,819 | ||||||
|
|
|
|
|||||
Cash provided by investing activities |
94,442 | 256,647 | ||||||
|
|
|
|
|||||
FINANCING ACTIVITIES |
||||||||
Net proceeds from issuance of common shares |
2,016 | 1,075 | ||||||
Repurchase of common shares |
(143,837 | ) | (44,373 | ) | ||||
Dividends paid |
(25,175 | ) | (321,396 | ) | ||||
Additions to deposit liabilities |
583 | 2,997 | ||||||
Payment of deposit liabilities |
(3,643 | ) | (9,873 | ) | ||||
|
|
|
|
|||||
Cash used in financing activities |
(170,056 | ) | (371,570 | ) | ||||
|
|
|
|
|||||
Effect of exchange rate changes on foreign currency cash and cash equivalents |
8,360 | (19,452 | ) | |||||
Net increase in cash and cash equivalents |
81,451 | 39,406 | ||||||
Cash and cash equivalents, beginning of period |
905,606 | 702,278 | ||||||
|
|
|
|
|||||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 987,057 | $ | 741,684 | ||||
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $14,382 and $9,918 for the six months ended June 30, 2011 and 2010, respectively.
Income taxes paid totaled $165 and $729 for the six months ended June 30, 2011 and 2010, respectively.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATATHREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Quarter Segment Information: |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | 141,255 | $ | 248,754 | $ | 99,448 | $ | 73,520 | $ | 562,977 | $ | 930 | $ | | $ | 563,907 | ||||||||||||||||
Reinsurance premiums ceded |
(56,002 | ) | (28,247 | ) | (27,358 | ) | (24,918 | ) | (136,525 | ) | (101 | ) | | (136,626 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 85,253 | $ | 220,507 | $ | 72,090 | $ | 48,602 | $ | 426,452 | $ | 829 | $ | | $ | 427,281 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 97,296 | $ | 209,212 | $ | 73,840 | $ | 61,730 | $ | 442,078 | $ | 930 | $ | | $ | 443,008 | ||||||||||||||||
Earned premiums ceded |
(44,338 | ) | (12,305 | ) | (22,783 | ) | (14,540 | ) | (93,966 | ) | (101 | ) | | (94,067 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
52,958 | 196,907 | 51,057 | 47,190 | 348,112 | 829 | | 348,941 | ||||||||||||||||||||||||
Net losses and loss expenses |
(28,992 | ) | (125,592 | ) | (32,709 | ) | (23,840 | ) | (211,133 | ) | | | (211,133 | ) | ||||||||||||||||||
Claims and policy benefits |
| | | | | (15,570 | ) | | (15,570 | ) | ||||||||||||||||||||||
Acquisition costs |
361 | (44,366 | ) | (9,644 | ) | (10,909 | ) | (64,558 | ) | (122 | ) | | (64,680 | ) | ||||||||||||||||||
General and administrative expenses |
(8,859 | ) | (22,937 | ) | (9,289 | ) | (9,536 | ) | (50,621 | ) | (259 | ) | | (50,880 | ) | |||||||||||||||||
Other income |
139 | 548 | | 165 | 852 | (23 | ) | | 829 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income (loss) |
$ | 15,607 | $ | 4,560 | $ | (585 | ) | $ | 3,070 | $ | 22,652 | n/a | | n/a | ||||||||||||||||||
Net investment income |
12,545 | 47,120 | 59,665 | |||||||||||||||||||||||||||||
Net realized and unrealized losses on investments |
(1,299 | ) | (4,475 | ) | (5,774 | ) | ||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(353 | ) | (353 | ) | ||||||||||||||||||||||||||||
Corporate other income |
(238 | ) | (238 | ) | ||||||||||||||||||||||||||||
Interest expense |
(10,630 | ) | (10,630 | ) | ||||||||||||||||||||||||||||
Net foreign exchange losses |
(3,090 | ) | (3,090 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(18,779 | ) | (18,779 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
(Loss) income before taxes |
$ | (3,899 | ) | $ | 9,555 | $ | 28,308 | |||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
54.7 | % | 63.8 | % | 64.1 | % | 50.5 | % | 60.7 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
(0.7 | %) | 22.5 | % | 18.9 | % | 23.1 | % | 18.5 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] |
16.7 | % | 11.6 | % | 18.2 | % | 20.2 | % | 14.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio [d] |
70.8 | % | 98.0 | % | 101.1 | % | 93.8 | % | 93.7 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATASIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Period Segment Information: |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | 212,527 | $ | 623,774 | $ | 169,836 | $ | 184,253 | $ | 1,190,390 | $ | 1,365 | $ | | $ | 1,191,755 | ||||||||||||||||
Reinsurance premiums ceded |
(99,248 | ) | (65,564 | ) | (60,953 | ) | (48,097 | ) | (273,862 | ) | (121 | ) | | (273,983 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 113,279 | $ | 558,210 | $ | 108,883 | $ | 136,156 | $ | 916,528 | $ | 1,244 | $ | | $ | 917,772 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 196,240 | $ | 459,113 | $ | 147,017 | $ | 128,535 | $ | 930,905 | $ | 1,365 | $ | | $ | 932,270 | ||||||||||||||||
Earned premiums ceded |
(89,068 | ) | (32,500 | ) | (46,633 | ) | (35,120 | ) | (203,321 | ) | (121 | ) | | (203,442 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
107,172 | 426,613 | 100,384 | 93,415 | 727,584 | 1,244 | | 728,828 | ||||||||||||||||||||||||
Net losses and loss expenses |
(63,656 | ) | (312,477 | ) | (64,084 | ) | (75,322 | ) | (515,539 | ) | | | (515,539 | ) | ||||||||||||||||||
Claims and policy benefits |
| | | | | (30,280 | ) | | (30,280 | ) | ||||||||||||||||||||||
Acquisition costs |
177 | (93,509 | ) | (17,710 | ) | (23,965 | ) | (135,007 | ) | (281 | ) | | (135,288 | ) | ||||||||||||||||||
General and administrative expenses |
(18,684 | ) | (46,195 | ) | (18,686 | ) | (19,259 | ) | (102,824 | ) | (436 | ) | | (103,260 | ) | |||||||||||||||||
Other income |
951 | 548 | | 380 | 1,879 | (23 | ) | | 1,856 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income (loss) |
$ | 25,960 | $ | (25,020 | ) | $ | (96 | ) | $ | (24,751 | ) | $ | (23,907 | ) | n/a | | n/a | |||||||||||||||
Net investment income |
24,888 | 92,543 | 117,431 | |||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
1,508 | (26,100 | ) | (24,592 | ) | |||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(1,382 | ) | (1,382 | ) | ||||||||||||||||||||||||||||
Corporate other income |
50 | 50 | ||||||||||||||||||||||||||||||
Interest expense |
(19,089 | ) | (19,089 | ) | ||||||||||||||||||||||||||||
Net foreign exchange losses |
(2,212 | ) | (2,212 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(37,602 | ) | (37,602 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
(Loss) income before taxes |
$ | (3,380 | ) | $ | 6,208 | $ | (21,079 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
59.4 | % | 73.2 | % | 63.8 | % | 80.6 | % | 70.9 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
(0.2 | %) | 21.9 | % | 17.6 | % | 25.7 | % | 18.6 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] |
17.4 | % | 10.8 | % | 18.6 | % | 20.6 | % | 14.1 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio [d] |
76.7 | % | 106.0 | % | 100.1 | % | 126.9 | % | 103.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. |
[b] | The acquisition cost ratio is calculated by dividing acquisitions costs by net premiums earned. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned. |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
Percentage totals may not add due to rounding.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATATHREE MONTHS ENDED JUNE 30, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance [e] |
Reinsurance | U.S. Specialty [e] |
Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Quarter Segment Information: |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | 139,026 | $ | 119,578 | $ | 90,773 | $ | 48,802 | $ | 398,179 | $ | 802 | $ | | $ | 398,981 | ||||||||||||||||
Reinsurance premiums ceded |
(47,437 | ) | (13,348 | ) | (5,672 | ) | (13,233 | ) | (79,690 | ) | (25 | ) | | (79,715 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 91,589 | $ | 106,230 | $ | 85,101 | $ | 35,569 | $ | 318,489 | $ | 777 | $ | | $ | 319,266 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 104,841 | $ | 174,729 | $ | 71,065 | $ | 40,286 | $ | 390,921 | $ | 802 | $ | | $ | 391,723 | ||||||||||||||||
Earned premiums ceded |
(45,211 | ) | (19,054 | ) | (27,053 | ) | (7,120 | ) | (98,438 | ) | (25 | ) | | (98,463 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
59,630 | 155,675 | 44,012 | 33,166 | 292,483 | 777 | | 293,260 | ||||||||||||||||||||||||
Net losses and loss expenses |
(38,296 | ) | (82,441 | ) | (26,683 | ) | (12,397 | ) | (159,817 | ) | | | (159,817 | ) | ||||||||||||||||||
Claims and policy benefits |
| | | | | (13,943 | ) | | (13,943 | ) | ||||||||||||||||||||||
Acquisition costs |
(821 | ) | (32,673 | ) | (9,111 | ) | (6,070 | ) | (48,675 | ) | (123 | ) | | (48,798 | ) | |||||||||||||||||
General and administrative expenses |
(8,132 | ) | (14,820 | ) | (6,355 | ) | (5,826 | ) | (35,133 | ) | (642 | ) | | (35,775 | ) | |||||||||||||||||
Other income |
97 | 155 | | 173 | 425 | | | 425 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income |
$ | 12,478 | $ | 25,896 | $ | 1,863 | $ | 9,046 | $ | 49,283 | n/a | | n/a | |||||||||||||||||||
Net investment income |
12,420 | 40,857 | 53,277 | |||||||||||||||||||||||||||||
Net realized and unrealized losses on investments |
(1,860 | ) | (12,926 | ) | (14,786 | ) | ||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(300 | ) | (300 | ) | ||||||||||||||||||||||||||||
Corporate other income |
(150 | ) | (150 | ) | ||||||||||||||||||||||||||||
Interest expense |
(7,916 | ) | (7,916 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains |
634 | 634 | ||||||||||||||||||||||||||||||
Merger and acquisition expenses |
54,570 | 54,570 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(14,874 | ) | (14,874 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
(Loss) income before taxes |
$ | (3,371 | ) | $ | 59,895 | $ | 105,807 | |||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
64.2 | % | 53.0 | % | 60.6 | % | 37.4 | % | 54.6 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
1.4 | % | 21.0 | % | 20.7 | % | 18.3 | % | 16.6 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] |
13.6 | % | 9.5 | % | 14.4 | % | 17.6 | % | 12.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio [d] |
79.2 | % | 83.5 | % | 95.8 | % | 73.2 | % | 83.3 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATASIX MONTHS ENDED JUNE 30, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance [e] |
Reinsurance | U.S. Specialty [e] |
Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Period Segment Information: |
||||||||||||||||||||||||||||||||
Gross premiums written |
$ | 208,432 | $ | 274,429 | $ | 164,675 | $ | 120,919 | $ | 768,455 | $ | 1,665 | $ | | $ | 770,120 | ||||||||||||||||
Reinsurance premiums ceded |
(87,088 | ) | (58,699 | ) | (53,824 | ) | (33,192 | ) | (232,803 | ) | (132 | ) | | (232,935 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 121,344 | $ | 215,730 | $ | 110,851 | $ | 87,727 | $ | 535,652 | $ | 1,533 | $ | | $ | 537,185 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 206,587 | $ | 270,472 | $ | 140,250 | $ | 77,746 | $ | 695,055 | $ | 1,665 | $ | | $ | 696,720 | ||||||||||||||||
Earned premiums ceded |
(94,041 | ) | (35,012 | ) | (65,446 | ) | (14,589 | ) | (209,088 | ) | (132 | ) | | (209,220 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
112,546 | 235,460 | 74,804 | 63,157 | 485,967 | 1,533 | | 487,500 | ||||||||||||||||||||||||
Net losses and loss expenses |
(77,742 | ) | (132,506 | ) | (45,879 | ) | (28,655 | ) | (284,782 | ) | | | (284,782 | ) | ||||||||||||||||||
Claims and policy benefits |
| | | | | (31,602 | ) | | (31,602 | ) | ||||||||||||||||||||||
Acquisition costs |
(504 | ) | (47,639 | ) | (12,793 | ) | (11,837 | ) | (72,773 | ) | (269 | ) | | (73,042 | ) | |||||||||||||||||
General and administrative expenses |
(14,979 | ) | (23,779 | ) | (13,877 | ) | (8,539 | ) | (61,174 | ) | (1,299 | ) | | (62,473 | ) | |||||||||||||||||
Other income |
91 | 155 | | 351 | 597 | (28 | ) | | 569 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income |
$ | 19,412 | $ | 31,691 | $ | 2,255 | $ | 14,477 | $ | 67,835 | n/a | | n/a | |||||||||||||||||||
Net investment income |
25,519 | 76,148 | 101,667 | |||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
4,056 | (12,420 | ) | (8,364 | ) | |||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(720 | ) | (720 | ) | ||||||||||||||||||||||||||||
Corporate other income |
50 | 50 | ||||||||||||||||||||||||||||||
Interest expense |
(12,858 | ) | (12,858 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains |
3,086 | 3,086 | ||||||||||||||||||||||||||||||
Merger and acquisition expenses |
49,826 | 49,826 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(24,704 | ) | (24,704 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
(Loss) income before taxes |
$ | (2,090 | ) | $ | 78,408 | $ | 144,153 | |||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
69.1 | % | 56.3 | % | 61.3 | % | 45.4 | % | 58.6 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
0.4 | % | 20.2 | % | 17.1 | % | 18.7 | % | 15.0 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] |
13.3 | % | 10.1 | % | 18.6 | % | 13.5 | % | 12.6 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio [d] |
82.8 | % | 86.6 | % | 97.0 | % | 77.6 | % | 86.2 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. [b] The acquisition cost ratio is calculated by dividing acquisitions costs by net premiums earned. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned. |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
[e] | Insurance and U.S. specialty segment amounts for the comparative 2010 periods have been reclassified to conform with the current periods presentation. |
Percentage totals may not add due to rounding.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL PREMIUM DATASIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30, 2011 | Six Months Ended June 30, 2010 | |||||||||||||||||||||
Gross Premiums Written |
Percentage of Total Gross Premiums Written |
Movement on Prior Year Period |
Gross Premiums Written |
Percentage of Total Gross Premiums Written |
||||||||||||||||||
Gross Premiums Written by Type of Risk: |
||||||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||
Insurance [a]: |
||||||||||||||||||||||
Aviation |
S | $ | 5,230 | 0.4 | % | (41.7 | %) | $ | 8,964 | 1.2 | % | |||||||||||
Excess Liability |
L | 68,777 | 5.8 | % | 6.4 | % | 64,634 | 8.4 | % | |||||||||||||
Professional Liability |
L | 92,813 | 7.8 | % | (2.0 | %) | 94,700 | 12.3 | % | |||||||||||||
Property |
S | 45,707 | 3.8 | % | 13.9 | % | 40,134 | 5.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
212,527 | 17.8 | % | 2.0 | % | 208,432 | 27.1 | % | |||||||||||||||
Reinsurance [b]: |
||||||||||||||||||||||
Agriculture |
S | 29,498 | 2.5 | % | (11.4 | %) | 33,293 | 4.3 | % | |||||||||||||
Auto |
S | 70,265 | 5.9 | % | n/m | 66 | 0.0 | % | ||||||||||||||
Aviation |
S | 984 | 0.1 | % | (92.6 | %) | 13,383 | 1.7 | % | |||||||||||||
Credit/ Surety |
S | 25,982 | 2.2 | % | n/m | (1,491 | ) | (0.2 | %) | |||||||||||||
General Casualty |
L | 38,292 | 3.2 | % | 214.0 | % | 12,194 | 1.6 | % | |||||||||||||
Marine & Energy |
S | 16,474 | 1.4 | % | 81.0 | % | 9,104 | 1.2 | % | |||||||||||||
Medical Malpractice |
L | 28,805 | 2.4 | % | (17.6 | %) | 34,968 | 4.5 | % | |||||||||||||
Other |
S | 2,206 | 0.2 | % | 104.1 | % | 1,081 | 0.1 | % | |||||||||||||
Professional Liability |
L | 99,146 | 8.3 | % | 125.7 | % | 43,924 | 5.7 | % | |||||||||||||
Property |
S | 256,042 | 21.5 | % | 139.3 | % | 106,991 | 13.9 | % | |||||||||||||
Whole Account |
S/L | 35,338 | 3.0 | % | n/m | 4,935 | 0.6 | % | ||||||||||||||
Workers Compensation |
L | 20,742 | 1.7 | % | 29.8 | % | 15,981 | 2.1 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
623,774 | 52.3 | % | 127.3 | % | 274,429 | 35.6 | % | |||||||||||||||
U.S. Specialty [a]: |
||||||||||||||||||||||
General Liability |
L | 36,270 | 3.0 | % | (15.4 | %) | 42,852 | 5.6 | % | |||||||||||||
Marine |
S | 42,498 | 3.6 | % | 24.8 | % | 34,059 | 4.4 | % | |||||||||||||
Professional Liability |
L | 9,249 | 0.8 | % | 131.2 | % | 4,001 | 0.5 | % | |||||||||||||
Property |
S | 81,819 | 6.9 | % | (2.3 | %) | 83,763 | 10.9 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
169,836 | 14.3 | % | 3.1 | % | 164,675 | 21.4 | % | |||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||
Accident & Health |
S | 21,924 | 1.8 | % | 12.8 | % | 19,432 | 2.5 | % | |||||||||||||
Aviation |
S | 3,577 | 0.3 | % | (48.7 | %) | 6,968 | 0.9 | % | |||||||||||||
Financial Institutions |
L | 15,477 | 1.3 | % | 41.5 | % | 10,934 | 1.4 | % | |||||||||||||
International Casualty |
L | 42,346 | 3.6 | % | 113.2 | % | 19,866 | 2.6 | % | |||||||||||||
Professional Liability |
L | 18,388 | 1.5 | % | 66.3 | % | 11,057 | 1.4 | % | |||||||||||||
Property |
S | 82,560 | 6.9 | % | 56.8 | % | 52,662 | 6.8 | % | |||||||||||||
Surety |
S | (19 | ) | 0.0 | % | n/m | | 0.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
184,253 | 15.5 | % | 52.4 | % | 120,919 | 15.7 | % | |||||||||||||||
|
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|
|
|
|
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|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 1,190,390 | 99.9 | % | 54.9 | % | $ | 768,455 | 99.8 | % | ||||||||||||
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|
|||||||||||||
Life & Annuity: |
||||||||||||||||||||||
Annuity |
$ | 607 | 0.1 | % | n/m | $ | 6 | 0.0 | % | |||||||||||||
Life |
758 | 0.1 | % | (54.3 | %) | 1,659 | 0.2 | % | ||||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Life & Annuity |
$ | 1,365 | 0.1 | % | (18.0 | %) | $ | 1,665 | 0.2 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 1,191,755 | 100.0 | % | 54.7 | % | $ | 770,120 | 100.0 | % | ||||||||||||
|
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|
|
|
|
|
|
|
|
|||||||||||||
S = Short tail lines |
$ | 702,416 | 59.0 | % | $ | 410,877 | 53.5 | % | ||||||||||||||
L = Long tail lines |
487,974 | 41.0 | % | 357,578 | 46.5 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||
Aggregate Property & Casualty |
$ | 1,190,390 | $ | 768,455 | ||||||||||||||||||
|
|
|
|
[a] | Insurance and U.S. specialty segment amounts for the comparative 2010 periods have been reclassified to conform with the current periods presentation. |
[b] | Includes the results of Harbor Point Limited from May 12, 2010. |
Percentage totals may not add due to rounding.
n/m Not meaningful.
ALTERRA CAPITAL HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (Unaudited)
Net Operating Income and Net Operating Income per Diluted Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) before tax |
$ | 28,308 | $ | 105,807 | $ | (21,079 | ) | $ | 144,153 | |||||||
Net realized and unrealized losses on non-hedge fund investments, before tax [a] |
4,249 | 11,763 | 27,263 | 13,131 | ||||||||||||
Foreign exchange losses (gains), before tax |
3,090 | (634 | ) | 2,212 | (3,086 | ) | ||||||||||
Merger and acquisition expenses, before tax |
| (54,570 | ) | | (49,826 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income before tax |
$ | 35,647 | $ | 62,366 | $ | 8,396 | $ | 104,372 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | |||||||
Net realized and unrealized losses on non-hedge fund investments, net of tax [a] |
4,711 | 11,540 | 27,313 | 12,776 | ||||||||||||
Foreign exchange losses (gains), net of tax |
2,212 | (298 | ) | 1,572 | (1,978 | ) | ||||||||||
Merger and acquisition expenses, net of tax |
| (55,915 | ) | | (51,171 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income |
$ | 39,558 | $ | 58,774 | $ | 14,833 | $ | 99,455 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per diluted share |
$ | 0.30 | $ | 1.13 | $ | (0.13 | ) | $ | 1.88 | |||||||
Net realized and unrealized losses on non-hedge fund investments, net of tax [a] |
0.04 | 0.12 | 0.26 | 0.17 | ||||||||||||
Foreign exchange losses (gains), net of tax |
0.02 | | 0.01 | (0.03 | ) | |||||||||||
Merger and acquisition expenses, net of tax |
| (0.61 | ) | | (0.69 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income per diluted share |
$ | 0.37 | $ | 0.64 | $ | 0.14 | $ | 1.33 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - basic |
105,604,786 | 91,042,301 | 106,385,007 | 73,779,447 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - diluted |
107,111,909 | 91,661,430 | 106,385,007 | 74,524,919 | ||||||||||||
|
|
|
|
|
|
|
|
[a] | Net realized and unrealized (gains) losses on non-hedge fund investments includes realized and unrealized (gains) losses on trading securities, realized (gains) losses on available for sale securities, net impairment losses recognized in earnings, earnings from equity method investments and changes in fair value of investment derivatives, catastrophe bonds and structured deposits. |
Per share totals may not add due to rounding.
Annualized Net Operating Return on Average Shareholders Equity
(Expressed in thousands of United States Dollars)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income (loss) |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | |||||||
Annualized net income (loss) |
130,540 | 413,788 | (28,104 | ) | 279,656 | |||||||||||
Net operating income |
$ | 39,558 | $ | 58,774 | $ | 14,833 | $ | 99,455 | ||||||||
Annualized net operating income |
158,232 | 235,096 | 29,666 | 198,910 | ||||||||||||
Average shareholders equity [b] |
$ | 2,758,154 | $ | 2,321,687 | $ | 2,789,443 | $ | 1,955,281 | ||||||||
Annualized return on average shareholders equity |
4.7 | % | 17.8 | % | (1.0 | %) | 14.3 | % | ||||||||
Annualized net operating return on average shareholders equity |
5.7 | % | 10.1 | % | 1.1 | % | 10.2 | % |
[b] | Average shareholders equity is computed as the average of the quarterly average shareholders equity balances. The averages for the three and six months ended June 30, 2010 have been weighted to include Harbor Point Limited from May 12, 2010. |
Diluted Tangible Book Value Per Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
June 30, 2011 | December 31, 2010 | |||||||
Shareholders equity |
$ | 2,793,081 | $ | 2,918,270 | ||||
Goodwill and intangible assets |
58,094 | 59,076 | ||||||
|
|
|
|
|||||
Tangible book value |
$ | 2,734,987 | $ | 2,859,194 | ||||
|
|
|
|
|||||
Diluted shares outstanding |
107,500,490 | 112,290,968 | ||||||
Diluted tangible book value per share |
$ | 25.44 | $ | 25.46 |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Type of Investment |
As of June 30, 2011 |
Investment Distribution |
As of December 31, 2010 |
Investment Distribution |
||||||||||||
Cash and cash equivalents |
$ | 987,057 | 12.4 | % | $ | 905,606 | 11.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies |
744,465 | 9.4 | % | 995,546 | 12.7 | % | ||||||||||
Non-U.S. governments |
168,290 | 2.1 | % | 79,111 | 1.0 | % | ||||||||||
Corporate securities |
2,743,228 | 34.5 | % | 2,735,366 | 34.8 | % | ||||||||||
Municipal securities |
218,370 | 2.7 | % | 238,014 | 3.0 | % | ||||||||||
Asset-backed securities |
203,598 | 2.6 | % | 86,937 | 1.1 | % | ||||||||||
Residential mortgage-backed securities |
1,159,922 | 14.6 | % | 1,168,390 | 14.9 | % | ||||||||||
Commercial mortgage-backed securities |
383,920 | 4.8 | % | 334,151 | 4.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at fair value |
$ | 5,621,793 | 70.7 | % | $ | 5,637,515 | 71.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies |
$ | 29,694 | 0.4 | % | $ | 29,687 | 0.4 | % | ||||||||
Non-U.S. governments |
584,039 | 7.3 | % | 538,274 | 6.8 | % | ||||||||||
Corporate securities |
378,958 | 4.8 | % | 371,143 | 4.7 | % | ||||||||||
Asset-backed securities |
1,000 | 0.0 | % | 1,000 | 0.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at amortized cost |
$ | 993,691 | 12.5 | % | $ | 940,104 | 12.0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other investments |
$ | 350,193 | 4.4 | % | $ | 378,128 | 4.8 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total invested assets |
$ | 7,952,734 | 100.0 | % | $ | 7,861,353 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Credit Rating |
As of June
30, 2011 |
Ratings Distribution |
As of December 31, 2010 |
Ratings Distribution |
||||||||||||
U.S. government and agencies [a] |
$ | 1,866,591 | 28.2 | % | $ | 2,060,116 | 31.3 | % | ||||||||
AAA |
1,199,207 | 18.1 | % | 1,076,680 | 16.4 | % | ||||||||||
AA |
656,570 | 9.9 | % | 657,867 | 10.0 | % | ||||||||||
A |
1,406,390 | 21.3 | % | 1,353,945 | 20.6 | % | ||||||||||
BBB |
266,150 | 4.0 | % | 226,849 | 3.4 | % | ||||||||||
BB |
24,165 | 0.4 | % | 32,021 | 0.5 | % | ||||||||||
B |
106,444 | 1.6 | % | 138,703 | 2.1 | % | ||||||||||
CCC or lower |
46,565 | 0.7 | % | 45,469 | 0.7 | % | ||||||||||
Not rated |
49,711 | 0.8 | % | 45,865 | 0.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at fair value |
$ | 5,621,793 | 85.0 | % | $ | 5,637,515 | 85.7 | % | ||||||||
U.S. government and agencies |
$ | 29,694 | 0.4 | % | $ | 29,687 | 0.5 | % | ||||||||
AAA |
696,439 | 10.5 | % | 641,437 | 9.8 | % | ||||||||||
AA |
117,851 | 1.8 | % | 113,140 | 1.7 | % | ||||||||||
A |
135,249 | 2.0 | % | 141,683 | 2.2 | % | ||||||||||
BBB |
14,458 | 0.2 | % | 12,744 | 0.2 | % | ||||||||||
Not rated |
| | 1,413 | 0.0 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at amortized cost |
$ | 993,691 | 15.0 | % | $ | 940,104 | 14.3 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total fixed maturities |
$ | 6,615,484 | 100.0 | % | $ | 6,577,619 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
[a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,122,126 (December 31, 2010: $1,064,570) |
Percentage totals may not add due to rounding.
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net investment income |
$ | 59,665 | $ | 53,277 | $ | 117,431 | $ | 101,667 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Realized and unrealized gains (losses) on trading fixed maturities |
1,432 | (1,284 | ) | (395 | ) | (1,466 | ) | |||||||||
Net realized gains on available for sale fixed maturities |
54 | 2,425 | 3,423 | 3,263 | ||||||||||||
(Decrease) increase in fair value of hedge funds |
(1,878 | ) | (3,323 | ) | 1,289 | 4,048 | ||||||||||
Decrease in fair value of non-hedge fund other investments |
(5,382 | ) | (12,604 | ) | (28,909 | ) | (14,209 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized losses on investments |
$ | (5,774 | ) | $ | (14,786 | ) | $ | (24,592 | ) | $ | (8,364 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net impairment losses recognized in earnings |
$ | (353 | ) | $ | (300 | ) | $ | (1,382 | ) | $ | (720 | ) | ||||
|
|
|
|
|
|
|
|
Contacts
Susan Spivak Bernstein, 1-212-898-6640
Senior Vice President
susan.spivak@alterra-bm.com
or
Kekst and Company
Peter Hill or Melissa Sheer, 1-212-521-4800
peter-hill@kekst.com / melissa-sheer@kekst.com
Exhibit 99.2
ALTERRA CAPITAL HOLDINGS LIMITED
Investor Financial Supplement
Second Quarter 2011 (Unaudited) |
This supplement is for information purposes only. It should be read in conjunction with documents filed by Alterra Capital
Holdings Limited with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act 1934.
Alterra Capital Holdings Limited
Investors:
Susan Spivak Bernstein, +1-212-898-6640
or
Media:
Kekst and Company
Peter Hill or Melissa Sheer, +1-212-521-4800
ALTERRA CAPITAL HOLDINGS LIMITED
Cautionary note regarding forward-looking information
This financial supplement may include forward-looking statements that reflect Alterras current views with respect to future events and financial performance. Statements that include the words expect, intend, plan, believe, project, anticipate, will, may and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause actual results to differ materially from those indicated in such statements and you should not place undue reliance on any such statements.
These factors include, but are not limited to, the following: (1) the adequacy of loss reserves and the need to adjust such reserves as claims develop over time; (2) the failure of any of the loss limitation methods employed; (3) the effect of cyclical trends, including with respect to demand and pricing in the insurance and reinsurance markets; (4) changes in general economic conditions, including changes in capital and credit markets; (5) any lowering or loss of financial ratings; (6) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding expectations; (7) actions by competitors, including consolidation; (8) the effects of emerging claims and coverage issues; (9) the loss of business provided to Alterra by its major brokers; (10) the effect on Alterras investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors; (11) tax and regulatory changes and conditions; (12) retention of key personnel; and (13) the integration of new business ventures Alterra may enter into; as well as managements response to any of the aforementioned factors.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in Alterras most recent reports on Form 10-K and Form 10-Q and other documents on file with the U.S. Securities and Exchange Commission. Any forward-looking statements made in this financial supplement are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Alterra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Alterra or its business or operations. Alterra undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
2
ALTERRA CAPITAL HOLDINGS LIMITED
FINANCIAL SUPPLEMENT TABLE OF CONTENTS
Page | ||||
Financial Highlights |
4 | |||
Consolidated Balance Sheets |
5 | |||
Consolidated Statements of Operations - Quarterly |
6 | |||
Consolidated Statements of Operations - Year to date |
7 | |||
Segment Data and Ratios - Quarterly |
8 | |||
Gross Premiums Written by Line of Business - Quarterly |
16 | |||
Segment Data and Ratios - Year to date |
18 | |||
Gross Premiums Written by Line of Business - Year to date |
25 | |||
Investment Portfolio |
26 | |||
Shareholder Return Analysis |
29 | |||
Earnings Per Share Information |
30 | |||
Operating Income Reconciliation |
31 | |||
Book Value per Share |
32 | |||
Regulation G |
33 | |||
Reclassified Historical Segment Information |
34 | |||
Pro forma Consolidated Statements of Income |
38 |
3
ALTERRA CAPITAL HOLDINGS LIMITED
FINANCIAL HIGHLIGHTS
(Expressed in thousands of United States Dollars, except per share and share amounts)
For The Quarters Ended | For The Six Months Ended | |||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | Previous Year Quarter Change |
Previous Year to Date Change |
|||||||||||||||||||
HIGHLIGHTS |
||||||||||||||||||||||||
Net income (loss) |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | (68.5 | %) | (110.0 | %) | |||||||||||
Net operating income [a] |
39,558 | 58,774 | 14,833 | 99,455 | (32.7 | %) | (85.1 | %) | ||||||||||||||||
Operating cashflow |
101,796 | 126,981 | 148,705 | 173,781 | (19.8 | %) | (14.4 | %) | ||||||||||||||||
Gross premiums written |
563,907 | 398,981 | 1,191,755 | 770,120 | 41.3 | % | 54.7 | % | ||||||||||||||||
Net premiums earned |
348,941 | 293,260 | 728,828 | 487,500 | 19.0 | % | 49.5 | % | ||||||||||||||||
Total assets |
10,497,364 | 9,974,936 | 10,497,364 | 9,974,936 | 5.2 | % | 5.2 | % | ||||||||||||||||
Total shareholders equity |
2,793,081 | 2,926,967 | 2,793,081 | 2,926,967 | (4.6 | %) | (4.6 | %) | ||||||||||||||||
PER SHARE |
||||||||||||||||||||||||
Basic earnings per share |
||||||||||||||||||||||||
Net income (loss) |
$ | 0.31 | $ | 1.14 | $ | (0.13 | ) | $ | 1.90 | |||||||||||||||
Net operating income [a] |
0.37 | 0.65 | 0.14 | 1.35 | ||||||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||||||
Net income (loss) |
$ | 0.30 | $ | 1.13 | $ | (0.13 | ) | $ | 1.88 | |||||||||||||||
Net operating income [a] |
0.37 | 0.64 | 0.14 | 1.33 | ||||||||||||||||||||
Weighted average shares outstanding - basic |
105,604,786 | 91,042,301 | 106,385,007 | 73,779,447 | ||||||||||||||||||||
Weighted average shares outstanding - diluted |
107,111,909 | 91,661,430 | 106,385,007 | 74,524,919 | ||||||||||||||||||||
Book value per common share [b] |
$ | 26.40 | $ | 24.67 | $ | 26.40 | $ | 24.67 | 7.0 | % | 7.0 | % | ||||||||||||
Diluted book value per share (treasury stock method) [b] |
25.98 | 24.55 | 25.98 | 24.55 | 5.8 | % | 5.8 | % | ||||||||||||||||
Diluted tangible book value per share (treasury stock method) [b] |
25.44 | 24.04 | 25.44 | 24.04 | 5.8 | % | 5.8 | % | ||||||||||||||||
RATIOS |
||||||||||||||||||||||||
Annualized return on average shareholders equity [c] |
4.7 | % | 17.8 | % | (1.0 | %) | 14.3 | % | ||||||||||||||||
Annualized net operating return on average shareholders equity [c] |
5.7 | % | 10.1 | % | 1.1 | % | 10.2 | % | ||||||||||||||||
Loss ratio [d] |
60.7 | % | 54.6 | % | 70.9 | % | 58.6 | % | ||||||||||||||||
Acquisition cost ratio [d] |
18.5 | % | 16.6 | % | 18.6 | % | 15.0 | % | ||||||||||||||||
General and administrative expense ratio [d] |
14.5 | % | 12.0 | % | 14.1 | % | 12.6 | % | ||||||||||||||||
Combined ratio [d] |
93.7 | % | 83.3 | % | 103.5 | % | 86.2 | % |
[a] | Net operating income represents net income excluding, as applicable, after-tax net realized and unrealized gains and losses on non-hedge fund investments, after-tax net foreign exchange gains or losses, and after-tax merger and acquisition expenses. |
[b] | For detailed calculations see page 32. |
[c] | For detailed calculations see page 29. |
[d] | For property and casualty business only. |
4
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 987,057 | $ | 1,001,051 | $ | 905,606 | $ | 925,752 | $ | 741,684 | ||||||||||
Fixed maturities, trading, at fair value |
218,481 | 214,807 | 244,872 | 243,158 | 230,251 | |||||||||||||||
Fixed maturities, available for sale, at fair value |
5,403,312 | 5,290,684 | 5,392,643 | 5,425,955 | 5,451,969 | |||||||||||||||
Fixed maturities, held to maturity, at amortized cost |
993,691 | 983,207 | 940,104 | 954,623 | 871,651 | |||||||||||||||
Other investments, at fair value |
350,193 | 357,655 | 378,128 | 411,275 | 436,757 | |||||||||||||||
Accrued interest income |
70,777 | 69,497 | 75,414 | 73,622 | 67,561 | |||||||||||||||
Premiums receivable |
870,287 | 809,483 | 588,537 | 664,603 | 780,025 | |||||||||||||||
Losses and benefits recoverable from reinsurers |
1,058,724 | 1,053,223 | 956,115 | 976,819 | 962,442 | |||||||||||||||
Deferred acquisition costs |
171,517 | 149,197 | 111,901 | 106,728 | 89,881 | |||||||||||||||
Prepaid reinsurance premiums |
215,392 | 176,918 | 149,252 | 173,140 | 207,102 | |||||||||||||||
Trades pending settlement |
9,168 | | 32,393 | 24,364 | | |||||||||||||||
Goodwill and intangible assets |
58,094 | 58,585 | 59,076 | 60,670 | 60,670 | |||||||||||||||
Other assets |
90,671 | 86,072 | 83,247 | 78,225 | 74,943 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 10,497,364 | $ | 10,250,379 | $ | 9,917,288 | $ | 10,118,934 | $ | 9,974,936 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LIABILITIES |
||||||||||||||||||||
Property and casualty losses |
$ | 4,230,290 | $ | 4,185,230 | $ | 3,906,134 | $ | 3,847,366 | $ | 3,772,622 | ||||||||||
Life and annuity benefits |
1,317,527 | 1,316,287 | 1,275,580 | 1,299,190 | 1,209,031 | |||||||||||||||
Deposit liabilities |
147,428 | 147,424 | 147,612 | 147,212 | 147,727 | |||||||||||||||
Funds withheld from reinsurers |
122,705 | 122,072 | 121,107 | 119,859 | 120,324 | |||||||||||||||
Unearned property and casualty premiums |
1,203,024 | 1,065,160 | 905,487 | 1,015,831 | 1,090,323 | |||||||||||||||
Reinsurance balances payable |
137,910 | 127,299 | 102,942 | 122,184 | 295,979 | |||||||||||||||
Accounts payable and accrued expenses |
104,917 | 103,376 | 99,680 | 90,282 | 81,846 | |||||||||||||||
Trades pending settlement |
| 19,855 | | | 39,641 | |||||||||||||||
Bank loans |
| | | | 200,000 | |||||||||||||||
Senior notes |
440,482 | 440,482 | 440,476 | 440,473 | 90,476 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
7,704,283 | 7,527,185 | 6,999,018 | 7,082,397 | 7,047,969 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
SHAREHOLDERS EQUITY |
||||||||||||||||||||
Common shares (par value $1.00) 105,794,521 shares issued and outstanding |
105,795 | 105,734 | 110,963 | 115,899 | 118,643 | |||||||||||||||
Additional paid-in capital |
1,911,979 | 1,905,144 | 2,026,045 | 2,113,732 | 2,157,700 | |||||||||||||||
Accumulated other comprehensive income |
132,218 | 89,233 | 98,946 | 190,325 | 102,718 | |||||||||||||||
Retained earnings |
643,089 | 623,083 | 682,316 | 616,581 | 547,906 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total shareholders equity |
2,793,081 | 2,723,194 | 2,918,270 | 3,036,537 | 2,926,967 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 10,497,364 | $ | 10,250,379 | $ | 9,917,288 | $ | 10,118,934 | $ | 9,974,936 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Book value per share |
$ | 26.40 | $ | 25.76 | $ | 26.30 | $ | 26.20 | $ | 24.67 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted book value per share (treasury stock method) |
$ | 25.98 | $ | 25.34 | $ | 25.99 | $ | 25.88 | $ | 24.55 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted tangible book value per share (treasury stock method) [a] |
$ | 25.44 | $ | 24.79 | $ | 25.46 | $ | 25.37 | $ | 24.04 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Debt-to-capital ratio [b] |
13.6 | % | 13.9 | % | 13.1 | % | 12.7 | % | 9.0 | % |
[a] | Non-GAAP financial measure. For detailed calculations see page 32. |
[b] | Calculated as debt, being bank loans and senior notes, divided by shareholders equity plus debt. |
5
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - QUARTERLY (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 [g] |
June 30, 2009 |
|||||||||||||||||||
REVENUES |
||||||||||||||||||||||||
Gross premiums written |
$ | 563,907 | $ | 627,848 | $ | 315,398 | $ | 325,213 | $ | 398,981 | $ | 396,509 | ||||||||||||
Reinsurance premiums ceded |
(136,626 | ) | (137,357 | ) | (77,617 | ) | (60,611 | ) | (79,715 | ) | (129,669 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 427,281 | $ | 490,491 | $ | 237,781 | $ | 264,602 | $ | 319,266 | $ | 266,840 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 443,008 | $ | 489,262 | $ | 445,683 | $ | 436,244 | $ | 391,723 | $ | 354,620 | ||||||||||||
Earned premiums ceded |
(94,067 | ) | (109,375 | ) | (103,129 | ) | (93,812 | ) | (98,463 | ) | (125,835 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
348,941 | 379,887 | 342,554 | 342,432 | 293,260 | 228,785 | ||||||||||||||||||
Net investment income |
59,665 | 57,766 | 61,080 | 59,711 | 53,277 | 41,755 | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments |
(5,774 | ) | (18,818 | ) | 9,825 | 15,411 | (14,786 | ) | 21,472 | |||||||||||||||
Total other-than-temporary impairment losses |
(187 | ) | (1,124 | ) | (3,918 | ) | (90 | ) | (1,167 | ) | (5,190 | ) | ||||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes |
(166 | ) | 95 | 2,144 | (61 | ) | 867 | 3,176 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net impairment losses recognized in earnings |
(353 | ) | (1,029 | ) | (1,774 | ) | (151 | ) | (300 | ) | (2,014 | ) | ||||||||||||
Other income |
591 | 1,315 | 2,862 | 1,327 | 275 | 974 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
403,070 | 419,121 | 414,547 | 418,730 | 331,726 | 290,972 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
LOSSES AND EXPENSES |
||||||||||||||||||||||||
Net losses and loss expenses |
211,133 | 304,406 | 179,047 | 191,012 | 159,817 | 122,228 | ||||||||||||||||||
Claims and policy benefits |
15,570 | 14,710 | 18,551 | 15,060 | 13,943 | 55,407 | ||||||||||||||||||
Acquisition costs |
64,680 | 70,608 | 53,563 | 60,859 | 48,798 | 25,059 | ||||||||||||||||||
Interest expense |
10,630 | 8,459 | 7,866 | 7,551 | 7,916 | 4,744 | ||||||||||||||||||
Net foreign exchange losses (gains) |
3,090 | (878 | ) | (382 | ) | 3,353 | (634 | ) | (3,404 | ) | ||||||||||||||
Merger and acquisition expenses |
| | 500 | 550 | (54,570 | ) | 4,785 | |||||||||||||||||
General and administrative expenses |
69,659 | 71,203 | 76,759 | 56,650 | 50,649 | 36,105 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total losses and expenses |
374,762 | 468,508 | 335,904 | 335,035 | 225,919 | 244,924 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME (LOSS) BEFORE TAXES |
28,308 | (49,387 | ) | 78,643 | 83,695 | 105,807 | 46,048 | |||||||||||||||||
Income tax (benefit) expense |
(4,327 | ) | (2,700 | ) | (1,027 | ) | 858 | 2,360 | 2,290 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME (LOSS) |
32,635 | (46,687 | ) | 79,670 | 82,837 | 103,447 | 43,758 | |||||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax |
42,820 | (14,586 | ) | (87,633 | ) | 74,383 | 60,525 | 36,933 | ||||||||||||||||
Foreign currency translation adjustment |
165 | 4,873 | (3,746 | ) | 13,224 | (7,629 | ) | 20,925 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
COMPREHENSIVE INCOME (LOSS) |
$ | 75,620 | $ | (56,400 | ) | $ | (11,709 | ) | $ | 170,444 | $ | 156,343 | $ | 101,616 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
KEY RATIOS/PER SHARE DATA |
||||||||||||||||||||||||
Loss ratio [a] |
60.7 | % | 80.2 | % | 52.5 | % | 56.0 | % | 54.6 | % | 65.1 | % | ||||||||||||
Acquisition cost ratio [b] |
18.5 | % | 18.6 | % | 15.7 | % | 17.8 | % | 16.6 | % | 13.0 | % | ||||||||||||
General and administrative expense ratio [c] |
14.5 | % | 13.8 | % | 16.6 | % | 12.2 | % | 12.0 | % | 12.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio [d] |
93.7 | % | 112.5 | % | 84.8 | % | 86.0 | % | 83.3 | % | 90.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per share |
$ | 0.31 | $ | (0.44 | ) | $ | 0.70 | $ | 0.71 | $ | 1.14 | $ | 0.77 | |||||||||||
Net income (loss) per diluted share |
$ | 0.30 | $ | (0.44 | ) | $ | 0.69 | $ | 0.70 | $ | 1.13 | $ | 0.76 | |||||||||||
Net operating income (loss) per share - diluted [e] |
$ | 0.37 | $ | (0.23 | ) | $ | 0.66 | $ | 0.64 | $ | 0.64 | $ | 0.83 | |||||||||||
Annualized ROAE [f] |
4.7 | % | (6.6 | %) | 10.7 | % | 11.1 | % | 17.8 | % | 13.3 | % | ||||||||||||
Annualized net operating ROAE [f] |
5.7 | % | (3.5 | %) | 10.2 | % | 10.2 | % | 10.1 | % | 14.6 | % |
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 31 for calculation of net operating income per share - diluted. |
[f] | Non-GAAP financial measure. See page 29 for calculation of annualized return on average shareholders equity (ROAE) and annualized net operating ROAE |
[g] | Includes the results for Harbor Point Limited (Harbor Point) from May 12, 2010. |
6
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - YEAR TO DATE AND PRIOR YEARS (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
SIX MONTHS ENDED | YEAR ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 [g] |
June 30, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||||||||||
REVENUES |
||||||||||||||||||||
Gross premiums written |
$ | 1,191,755 | $ | 770,120 | $ | 830,782 | $ | 1,410,731 | $ | 1,375,001 | ||||||||||
Reinsurance premiums ceded |
(273,983 | ) | (232,935 | ) | (294,048 | ) | (371,163 | ) | (480,481 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 917,772 | $ | 537,185 | $ | 536,734 | $ | 1,039,568 | $ | 894,520 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 932,270 | $ | 696,720 | $ | 664,002 | $ | 1,578,647 | $ | 1,318,949 | ||||||||||
Earned premiums ceded |
(203,442 | ) | (209,220 | ) | (244,935 | ) | (406,161 | ) | (484,593 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
728,828 | 487,500 | 419,067 | 1,172,486 | 834,356 | |||||||||||||||
Net investment income |
117,431 | 101,667 | 82,243 | 222,458 | 169,741 | |||||||||||||||
Net realized and unrealized (losses) gains on investments |
(24,592 | ) | (8,364 | ) | 39,913 | 16,872 | 81,765 | |||||||||||||
Total other-than-temporary impairment losses |
(1,311 | ) | (1,865 | ) | (5,190 | ) | (5,873 | ) | (5,315 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes |
(71 | ) | 1,145 | 3,176 | 3,228 | 2,237 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net impairment losses recognized in earnings |
(1,382 | ) | (720 | ) | (2,014 | ) | (2,645 | ) | (3,078 | ) | ||||||||||
Net realized gain on retirement of senior notes |
| | | | 111 | |||||||||||||||
Other income |
1,906 | 619 | 2,280 | 4,808 | 2,903 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
822,191 | 580,702 | 541,489 | 1,413,979 | 1,085,798 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LOSSES AND EXPENSES |
||||||||||||||||||||
Net losses and loss expenses |
515,539 | 284,782 | 246,951 | 654,841 | 493,599 | |||||||||||||||
Claims and policy benefits |
30,280 | 31,602 | 69,739 | 65,213 | 101,093 | |||||||||||||||
Acquisition costs |
135,288 | 73,042 | 45,689 | 187,464 | 96,874 | |||||||||||||||
Interest expense |
19,089 | 12,858 | 8,683 | 28,275 | 21,339 | |||||||||||||||
Net foreign exchange losses (gains) |
2,212 | (3,086 | ) | (6,880 | ) | (115 | ) | (5,772 | ) | |||||||||||
Merger and acquisition expenses |
| (49,826 | ) | 10,008 | (48,776 | ) | (31,566 | ) | ||||||||||||
General and administrative expenses |
140,862 | 87,177 | 75,165 | 220,586 | 153,995 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total losses and expenses |
843,270 | 436,549 | 449,355 | 1,107,488 | 829,562 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
(LOSS) INCOME BEFORE TAXES |
(21,079 | ) | 144,153 | 92,134 | 306,491 | 256,236 | ||||||||||||||
Income tax (benefit) expense |
(7,027 | ) | 4,325 | 3,837 | 4,156 | 10,021 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET (LOSS) INCOME |
(14,052 | ) | 139,828 | 88,297 | 302,335 | 246,215 | ||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax |
28,234 | 94,656 | (29,165 | ) | 81,406 | 50,544 | ||||||||||||||
Foreign currency translation adjustment |
5,038 | (17,369 | ) | 24,834 | (7,891 | ) | 20,286 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
COMPREHENSIVE INCOME |
$ | 19,220 | $ | 217,115 | $ | 83,966 | $ | 375,850 | $ | 317,045 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
KEY RATIOS/PER SHARE DATA |
||||||||||||||||||||
Loss ratio [a] |
70.9 | % | 58.6 | % | 65.4 | % | 56.1 | % | 62.4 | % | ||||||||||
Acquisition cost ratio [b] |
18.6 | % | 15.0 | % | 11.9 | % | 16.0 | % | 12.1 | % | ||||||||||
General and administrative expense ratio [c] |
14.1 | % | 12.6 | % | 13.0 | % | 13.6 | % | 13.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio [d] |
103.5 | % | 86.2 | % | 90.3 | % | 85.7 | % | 88.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) per share - basic |
$ | (0.13 | ) | $ | 1.90 | $ | 1.55 | $ | 3.19 | $ | 4.32 | |||||||||
Net income (loss) per share - diluted |
$ | (0.13 | ) | $ | 1.88 | $ | 1.54 | $ | 3.17 | $ | 4.26 | |||||||||
Net operating income per share - diluted [e] |
$ | 0.14 | $ | 1.33 | $ | 1.65 | $ | 2.64 | $ | 3.62 | ||||||||||
Annualized ROAE [f] |
(1.0 | %) | 14.3 | % | 13.7 | % | 12.3 | % | 17.6 | % | ||||||||||
Annualized Net Operating ROAE [f] |
1.1 | % | 10.2 | % | 14.7 | % | 10.2 | % | 14.9 | % |
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 31 for calculation of net operating income per share - diluted. |
[f] | See page 29 for calculation of annualized return on average shareholders equity (ROAE) and annualized net operating ROAE |
[g] | Includes the results for Harbor Point from May 12, 2010. |
7
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATATHREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty |
Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written |
$ | 141,255 | $ | 248,754 | $ | 99,448 | $ | 73,520 | $ | 562,977 | $ | 930 | $ | | $ | 563,907 | ||||||||||||||||
Reinsurance premiums ceded |
(56,002 | ) | (28,247 | ) | (27,358 | ) | (24,918 | ) | (136,525 | ) | (101 | ) | | (136,626 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 85,253 | $ | 220,507 | $ | 72,090 | $ | 48,602 | $ | 426,452 | $ | 829 | $ | | $ | 427,281 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 97,296 | $ | 209,212 | $ | 73,840 | $ | 61,730 | $ | 442,078 | $ | 930 | $ | | $ | 443,008 | ||||||||||||||||
Earned premiums ceded |
(44,338 | ) | (12,305 | ) | (22,783 | ) | (14,540 | ) | (93,966 | ) | (101 | ) | | (94,067 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
52,958 | 196,907 | 51,057 | 47,190 | 348,112 | 829 | | 348,941 | ||||||||||||||||||||||||
Net losses and loss expenses |
(28,992 | ) | (125,592 | ) | (32,709 | ) | (23,840 | ) | (211,133 | ) | | | (211,133 | ) | ||||||||||||||||||
Claims and policy benefits |
| | | | | (15,570 | ) | | (15,570 | ) | ||||||||||||||||||||||
Acquisition costs |
361 | (44,366 | ) | (9,644 | ) | (10,909 | ) | (64,558 | ) | (122 | ) | | (64,680 | ) | ||||||||||||||||||
General and administrative expenses |
(8,859 | ) | (22,937 | ) | (9,289 | ) | (9,536 | ) | (50,621 | ) | (259 | ) | | (50,880 | ) | |||||||||||||||||
Other income |
139 | 548 | | 165 | 852 | (23 | ) | | 829 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income (loss) |
15,607 | 4,560 | (585 | ) | 3,070 | 22,652 | n/a | | n/a | |||||||||||||||||||||||
Net investment income |
12,545 | 47,120 | 59,665 | |||||||||||||||||||||||||||||
Net realized and unrealized losses on investments |
(1,299 | ) | (4,475 | ) | (5,774 | ) | ||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(353 | ) | (353 | ) | ||||||||||||||||||||||||||||
Corporate other income |
(238 | ) | (238 | ) | ||||||||||||||||||||||||||||
Interest expense |
(10,630 | ) | (10,630 | ) | ||||||||||||||||||||||||||||
Net foreign exchange losses |
(3,090 | ) | (3,090 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(18,779 | ) | (18,779 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Income (loss) before taxes |
$ | (3,899 | ) | $ | 9,555 | $ | 28,308 | |||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
54.7 | % | 63.8 | % | 64.1 | % | 50.5 | % | 60.7 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
(0.7 | %) | 22.5 | % | 18.9 | % | 23.1 | % | 18.5 | % | ||||||||||||||||||||||
General and administrative expense ratio [c] |
16.7 | % | 11.6 | % | 18.2 | % | 20.2 | % | 14.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio [d] |
70.8 | % | 98.0 | % | 101.1 | % | 93.8 | % | 93.7 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned for the property & casualty business. |
Percentage totals may not add due to rounding.
8
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyds | Total | ||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
54.7 | % | 63.8 | % | 64.1 | % | 50.5 | % | 60.7 | % | ||||||||||
Acquisition cost ratio |
(0.7 | %) | 22.5 | % | 18.9 | % | 23.1 | % | 18.5 | % | ||||||||||
General and administrative expense ratio |
16.7 | % | 11.6 | % | 18.2 | % | 20.2 | % | 14.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
70.8 | % | 98.0 | % | 101.1 | % | 93.8 | % | 93.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
||||||||||||||||||||
Loss ratio [a] |
27.8 | % | 12.1 | % | 0.0 | % | 21.0 | % | 14.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
82.5 | % | 75.9 | % | 64.1 | % | 71.5 | % | 74.6 | % | ||||||||||
Acquisition cost ratio |
(0.7 | %) | 22.5 | % | 18.9 | % | 23.1 | % | 18.5 | % | ||||||||||
General and administrative expense ratio |
16.7 | % | 11.6 | % | 18.2 | % | 20.2 | % | 14.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
98.6 | % | 110.1 | % | 101.1 | % | 114.8 | % | 107.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2010 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Insurance [b] | Reinsurance | U.S. Specialty [b] | Alterra at Lloyds | Total | ||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
64.2 | % | 53.0 | % | 60.6 | % | 37.4 | % | 54.6 | % | ||||||||||
Acquisition cost ratio |
1.4 | % | 21.0 | % | 20.7 | % | 18.3 | % | 16.6 | % | ||||||||||
General and administrative expense ratio |
13.6 | % | 9.5 | % | 14.4 | % | 17.6 | % | 12.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
79.2 | % | 83.5 | % | 95.8 | % | 73.2 | % | 83.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
||||||||||||||||||||
Loss ratio [a] |
15.8 | % | 7.4 | % | 0.0 | % | 9.3 | % | 8.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
80.0 | % | 60.4 | % | 60.6 | % | 46.6 | % | 62.9 | % | ||||||||||
Acquisition cost ratio |
1.4 | % | 21.0 | % | 20.7 | % | 18.3 | % | 16.6 | % | ||||||||||
General and administrative expense ratio |
13.6 | % | 9.5 | % | 14.4 | % | 17.6 | % | 12.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
95.0 | % | 90.9 | % | 95.8 | % | 82.5 | % | 91.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
[b] | Insurance and U.S. Specialty segment amounts for the comparative 2010 period have been reclassified to conform with the current periods presentation. |
Percentage totals may not add due to rounding.
9
ALTERRA CAPITAL HOLDINGS LIMITED
INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 [a] |
Sept. 30, 2010 [a] |
June 30, 2010 [a] |
June 30, 2009 [a] |
|||||||||||||||||||
Gross premiums written |
$ | 141,255 | $ | 71,272 | $ | 113,236 | $ | 77,944 | $ | 139,026 | $ | 139,226 | ||||||||||||
Reinsurance premiums ceded |
(56,002 | ) | (43,246 | ) | (56,728 | ) | (36,875 | ) | (47,437 | ) | (47,972 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 85,253 | $ | 28,026 | $ | 56,508 | $ | 41,069 | $ | 91,589 | $ | 91,254 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 97,296 | $ | 98,944 | $ | 106,169 | $ | 102,640 | $ | 104,841 | $ | 105,576 | ||||||||||||
Earned premiums ceded |
(44,338 | ) | (44,730 | ) | (43,847 | ) | (42,796 | ) | (45,211 | ) | (51,129 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
52,958 | 54,214 | 62,322 | 59,844 | 59,630 | 54,447 | ||||||||||||||||||
Net losses and loss expenses |
(28,992 | ) | (34,664 | ) | (35,687 | ) | (26,679 | ) | (38,296 | ) | (39,901 | ) | ||||||||||||
Acquisition costs |
361 | (184 | ) | (1,765 | ) | (1,382 | ) | (821 | ) | 230 | ||||||||||||||
General and administrative expenses |
(8,859 | ) | (9,825 | ) | (11,812 | ) | (7,717 | ) | (8,132 | ) | (6,693 | ) | ||||||||||||
Other income |
139 | 812 | 68 | 1,108 | 97 | 219 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income |
$ | 15,607 | $ | 10,353 | $ | 13,126 | $ | 25,174 | $ | 12,478 | $ | 8,302 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
54.7 | % | 63.9 | % | 57.3 | % | 44.6 | % | 64.2 | % | 73.3 | % | ||||||||||||
Acquisition cost ratio |
(0.7 | %) | 0.3 | % | 2.8 | % | 2.3 | % | 1.4 | % | (0.4 | %) | ||||||||||||
General and administrative expense ratio |
16.7 | % | 18.1 | % | 19.0 | % | 12.9 | % | 13.6 | % | 12.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
70.8 | % | 82.4 | % | 79.0 | % | 59.8 | % | 79.2 | % | 85.2 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
See page 34 for additional information.
10
ALTERRA CAPITAL HOLDINGS LIMITED
REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 [a] |
June 30, 2009 |
|||||||||||||||||||
Gross premiums written |
$ | 248,754 | $ | 375,020 | $ | 110,620 | $ | 124,004 | $ | 119,578 | $ | 95,196 | ||||||||||||
Reinsurance premiums ceded |
(28,247 | ) | (37,317 | ) | (2,908 | ) | (2,524 | ) | (13,348 | ) | (18,085 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 220,507 | $ | 337,703 | $ | 107,712 | $ | 121,480 | $ | 106,230 | $ | 77,111 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 209,212 | $ | 249,901 | $ | 215,261 | $ | 213,510 | $ | 174,729 | $ | 112,550 | ||||||||||||
Earned premiums ceded |
(12,305 | ) | (20,195 | ) | (21,082 | ) | (15,533 | ) | (19,054 | ) | (22,825 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
196,907 | 229,706 | 194,179 | 197,977 | 155,675 | 89,725 | ||||||||||||||||||
Net losses and loss expenses |
(125,592 | ) | (186,885 | ) | (97,639 | ) | (117,671 | ) | (82,441 | ) | (57,813 | ) | ||||||||||||
Acquisition costs |
(44,366 | ) | (49,143 | ) | (38,406 | ) | (45,069 | ) | (32,673 | ) | (15,734 | ) | ||||||||||||
General and administrative expenses |
(22,937 | ) | (23,258 | ) | (24,714 | ) | (17,580 | ) | (14,820 | ) | (7,223 | ) | ||||||||||||
Other income |
548 | | (216 | ) | 61 | 155 | 12 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income (loss) |
$ | 4,560 | $ | (29,580 | ) | $ | 33,204 | $ | 17,718 | $ | 25,896 | $ | 8,967 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
63.8 | % | 81.4 | % | 50.3 | % | 59.4 | % | 53.0 | % | 64.4 | % | ||||||||||||
Acquisition cost ratio |
22.5 | % | 21.4 | % | 19.8 | % | 22.8 | % | 21.0 | % | 17.5 | % | ||||||||||||
General and administrative expense ratio |
11.6 | % | 10.1 | % | 12.7 | % | 8.9 | % | 9.5 | % | 8.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
98.0 | % | 112.9 | % | 82.8 | % | 91.1 | % | 83.5 | % | 90.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Includes the results for Harbor Point from May 12, 2010. |
11
ALTERRA CAPITAL HOLDINGS LIMITED
PRO FORMA ALTERRA REINSURANCE SEGMENT SELECTED FINANCIAL INFORMATION [a] (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||||||||||
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
Mar. 31, 2010 |
Dec. 31, 2009 |
Sept. 30, 2009 |
June 30, 2009 |
Mar. 31, 2009 |
|||||||||||||||||||||||||
Gross premiums written |
$ | 110,620 | $ | 124,004 | $ | 197,146 | $ | 460,618 | $ | 125,447 | $ | 210,882 | $ | 262,938 | $ | 461,141 | ||||||||||||||||
Net premiums earned |
194,179 | 197,977 | 226,291 | 215,050 | 230,516 | 238,953 | 221,120 | 220,103 | ||||||||||||||||||||||||
Net losses and loss expenses |
97,639 | 117,671 | 136,158 | 129,727 | 108,941 | 113,625 | 118,613 | 115,706 | ||||||||||||||||||||||||
Acquisition costs |
38,406 | 45,069 | 47,179 | 42,689 | 46,708 | 50,167 | 42,586 | 43,280 | ||||||||||||||||||||||||
General and administrative expenses |
24,714 | 17,580 | 16,527 | 16,824 | 23,680 | 19,726 | 18,520 | 19,201 | ||||||||||||||||||||||||
Loss ratio |
50.3 | % | 59.4 | % | 60.2 | % | 60.3 | % | 47.3 | % | 47.6 | % | 53.6 | % | 52.6 | % | ||||||||||||||||
Acquisition cost ratio |
19.8 | % | 22.8 | % | 20.8 | % | 19.9 | % | 20.3 | % | 21.0 | % | 19.3 | % | 19.7 | % | ||||||||||||||||
General and administrative expense ratio |
12.7 | % | 8.9 | % | 7.3 | % | 7.8 | % | 10.3 | % | 8.3 | % | 8.4 | % | 8.7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Combined ratio |
82.8 | % | 91.1 | % | 88.3 | % | 88.0 | % | 77.8 | % | 76.8 | % | 81.3 | % | 81.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[a] | This information is based on historical Alterra reinsurance segment financial information adjusted to include Harbor Point historical financial information as though the amalgamation with Harbor Point had occurred on January 1, 2009. The financial information also includes adjustments to eliminate any intercompany transactions and to reflect the amortization of certain acquisition accounting fair value adjustments. |
The pro forma information is provided for informational purposes only. The pro forma information does not necessarily represent results that would have occurred if the amalgamation had occurred on January 1, 2009, nor is it necessarily indicative of future results.
12
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. SPECIALTY SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 [a] |
Sept. 30, 2010 [a] |
June 30, 2010 [a] |
June 30, 2009 [a] |
|||||||||||||||||||
Gross premiums written |
$ | 99,448 | $ | 70,388 | $ | 65,625 | $ | 64,198 | $ | 90,773 | $ | 75,701 | ||||||||||||
Reinsurance premiums ceded |
(27,358 | ) | (33,595 | ) | (15,956 | ) | (18,713 | ) | (5,672 | ) | (52,938 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 72,090 | $ | 36,793 | $ | 49,669 | $ | 45,485 | $ | 85,101 | $ | 22,763 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 73,840 | $ | 73,177 | $ | 74,683 | $ | 73,337 | $ | 71,065 | $ | 59,053 | ||||||||||||
Earned premiums ceded |
(22,783 | ) | (23,850 | ) | (26,140 | ) | (26,071 | ) | (27,053 | ) | (41,271 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
51,057 | 49,327 | 48,543 | 47,266 | 44,012 | 17,782 | ||||||||||||||||||
Net losses and loss expenses |
(32,709 | ) | (31,375 | ) | (31,878 | ) | (29,295 | ) | (26,683 | ) | (11,057 | ) | ||||||||||||
Acquisition costs |
(9,644 | ) | (8,066 | ) | (8,618 | ) | (6,763 | ) | (9,111 | ) | (2,483 | ) | ||||||||||||
General and administrative expenses |
(9,289 | ) | (9,397 | ) | (7,552 | ) | (8,693 | ) | (6,355 | ) | (4,357 | ) | ||||||||||||
Other income |
| | | | | 153 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting (loss) income |
$ | (585 | ) | $ | 489 | $ | 495 | $ | 2,515 | $ | 1,863 | $ | 38 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
64.1 | % | 63.6 | % | 65.7 | % | 62.0 | % | 60.6 | % | 62.2 | % | ||||||||||||
Acquisition cost ratio |
18.9 | % | 16.4 | % | 17.8 | % | 14.3 | % | 20.7 | % | 14.0 | % | ||||||||||||
General and administrative expense ratio |
18.2 | % | 19.1 | % | 15.6 | % | 18.4 | % | 14.4 | % | 24.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
101.1 | % | 99.0 | % | 99.0 | % | 94.7 | % | 95.8 | % | 100.6 | % | ||||||||||||
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[a] | Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
See page 34 for additional information.
13
ALTERRA CAPITAL HOLDINGS LIMITED
ALTERRA AT LLOYDS SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
June 30, 2009 |
|||||||||||||||||||
Gross premiums written |
$ | 73,520 | $ | 110,733 | $ | 23,980 | $ | 57,734 | $ | 48,802 | $ | 45,363 | ||||||||||||
Reinsurance premiums ceded |
(24,918 | ) | (23,179 | ) | (1,859 | ) | (2,397 | ) | (13,233 | ) | (10,647 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 48,602 | $ | 87,554 | $ | 22,121 | $ | 55,337 | $ | 35,569 | $ | 34,716 | ||||||||||||
|
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|
|
|
|
|
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|
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|
|||||||||||||
Earned premiums |
$ | 61,730 | $ | 66,805 | $ | 47,633 | $ | 45,424 | $ | 40,286 | $ | 36,418 | ||||||||||||
Earned premiums ceded |
(14,540 | ) | (20,580 | ) | (11,894 | ) | (9,310 | ) | (7,120 | ) | (10,583 | ) | ||||||||||||
|
|
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|
|
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|
|
|
|||||||||||||
Net premiums earned |
47,190 | 46,225 | 35,739 | 36,114 | 33,166 | 25,835 | ||||||||||||||||||
Net losses and loss expenses |
(23,840 | ) | (51,482 | ) | (13,843 | ) | (17,367 | ) | (12,397 | ) | (13,457 | ) | ||||||||||||
Acquisition costs |
(10,909 | ) | (13,056 | ) | (4,853 | ) | (7,474 | ) | (6,070 | ) | (6,395 | ) | ||||||||||||
General and administrative expenses |
(9,536 | ) | (9,723 | ) | (12,186 | ) | (7,806 | ) | (5,826 | ) | (5,712 | ) | ||||||||||||
Other income |
165 | 215 | 2,006 | 177 | 173 | 436 | ||||||||||||||||||
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|
|||||||||||||
Underwriting income (loss) |
$ | 3,070 | $ | (27,821 | ) | $ | 6,863 | $ | 3,644 | $ | 9,046 | $ | 707 | |||||||||||
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|||||||||||||
Loss ratio |
50.5 | % | 111.4 | % | 38.7 | % | 48.1 | % | 37.4 | % | 52.1 | % | ||||||||||||
Acquisition cost ratio |
23.1 | % | 28.2 | % | 13.6 | % | 20.7 | % | 18.3 | % | 24.8 | % | ||||||||||||
General and administrative expense ratio |
20.2 | % | 21.0 | % | 34.1 | % | 21.6 | % | 17.6 | % | 22.1 | % | ||||||||||||
|
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|
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|
|
|
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|||||||||||||
Combined ratio |
93.8 | % | 160.7 | % | 86.4 | % | 90.4 | % | 73.2 | % | 99.0 | % | ||||||||||||
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14
ALTERRA CAPITAL HOLDINGS LIMITED
LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
June 30, 2009 |
|||||||||||||||||||
Gross premiums written |
$ | 930 | $ | 435 | $ | 1,937 | $ | 1,333 | $ | 802 | $ | 41,023 | ||||||||||||
Reinsurance premiums ceded |
(101 | ) | (20 | ) | (166 | ) | (102 | ) | (25 | ) | (27 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 829 | $ | 415 | $ | 1,771 | $ | 1,231 | $ | 777 | $ | 40,996 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 930 | $ | 435 | $ | 1,937 | $ | 1,333 | $ | 802 | $ | 41,023 | ||||||||||||
Earned premiums ceded |
(101 | ) | (20 | ) | (166 | ) | (102 | ) | (25 | ) | (27 | ) | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
829 | 415 | 1,771 | 1,231 | 777 | 40,996 | ||||||||||||||||||
Net investment income |
12,545 | 12,343 | 12,084 | 12,182 | 12,420 | 12,917 | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments |
(1,299 | ) | 2,807 | 3,981 | 3,321 | (1,860 | ) | 9,346 | ||||||||||||||||
Other income |
(23 | ) | | 357 | (43 | ) | | | ||||||||||||||||
Claims and policy benefits |
(15,570 | ) | (14,710 | ) | (18,551 | ) | (15,060 | ) | (13,943 | ) | (55,407 | ) | ||||||||||||
Acquisition costs |
(122 | ) | (159 | ) | 79 | (171 | ) | (123 | ) | (677 | ) | |||||||||||||
General and administrative expenses |
(259 | ) | (177 | ) | (1,088 | ) | (577 | ) | (642 | ) | (657 | ) | ||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss) income before taxes |
$ | (3,899 | ) | $ | 519 | $ | (1,367 | ) | $ | 883 | $ | (3,371 | ) | $ | 6,518 | |||||||||
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15
ALTERRA CAPITAL HOLDINGS LIMITED
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||||
June 30, 2011 |
Mar. 31, 2011 |
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
June 30, 2009 |
|||||||||||||||||||||
Gross Premiums Written by Type of Risk: |
||||||||||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||||||
Insurance [a]: |
||||||||||||||||||||||||||
Aviation |
S | $ | 3,814 | $ | 1,416 | $ | 22,677 | $ | 8,247 | $ | 6,615 | $ | 10,634 | |||||||||||||
Excess Liability |
L | 41,390 | 27,387 | 27,361 | 21,579 | 38,001 | 38,667 | |||||||||||||||||||
Professional Liability |
L | 66,017 | 26,796 | 51,199 | 37,151 | 67,127 | 63,258 | |||||||||||||||||||
Property |
S | 30,034 | 15,673 | 11,999 | 10,967 | 27,283 | 26,667 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
141,255 | 71,272 | 113,236 | 77,944 | 139,026 | 139,226 | |||||||||||||||||||||
Reinsurance [b]: |
||||||||||||||||||||||||||
Agriculture |
S | $ | 8,713 | $ | 20,785 | $ | (1,406 | ) | $ | (2,665 | ) | $ | (2,513 | ) | (233 | ) | ||||||||||
Auto |
S | 55,105 | 15,160 | 22,585 | 10,251 | 66 | | |||||||||||||||||||
Aviation |
S | 80 | 904 | 2,596 | 15,313 | 8,561 | 10,699 | |||||||||||||||||||
Credit/ Surety |
S | 1,556 | 24,426 | 1,118 | 2,569 | (1,491 | ) | | ||||||||||||||||||
General Casualty |
L | 22,045 | 16,247 | 17,658 | 18,505 | (857 | ) | (2,016 | ) | |||||||||||||||||
Marine & Energy |
S | (619 | ) | 17,093 | (1,549 | ) | 8,826 | 5,004 | (343 | ) | ||||||||||||||||
Medical Malpractice |
L | 11,223 | 17,582 | 19,554 | (3,131 | ) | 7,813 | 17,437 | ||||||||||||||||||
Other |
S | 447 | 1,759 | 520 | 1,183 | 92 | 402 | |||||||||||||||||||
Professional Liability |
L | 39,462 | 59,684 | 28,538 | 37,965 | 32,005 | 15,219 | |||||||||||||||||||
Property |
S | 106,168 | 149,874 | 6,296 | 34,859 | 61,058 | 33,692 | |||||||||||||||||||
Whole Account |
S/L | 268 | 35,070 | 426 | (232 | ) | 2,362 | 1,588 | ||||||||||||||||||
Workers Compensation |
L | 4,306 | 16,436 | 14,284 | 561 | 7,478 | 18,751 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
248,754 | 375,020 | 110,620 | 124,004 | 119,578 | 95,196 | |||||||||||||||||||||
U.S. Specialty [a]: |
||||||||||||||||||||||||||
General Liability |
L | $ | 18,387 | $ | 17,883 | $ | 19,914 | $ | 18,371 | $ | 22,822 | 17,501 | ||||||||||||||
Marine |
S | 25,389 | 17,109 | 17,758 | 15,637 | 17,996 | 14,968 | |||||||||||||||||||
Professional Liability |
L | 4,894 | 4,355 | (534 | ) | 3,135 | 1,756 | | ||||||||||||||||||
Property |
S | 50,778 | 31,041 | 28,487 | 27,055 | 48,199 | 43,232 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
99,448 | 70,388 | 65,625 | 64,198 | 90,773 | 75,701 | |||||||||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||||||
Accident & Health |
S | $ | 8,380 | $ | 13,544 | $ | 5,570 | $ | 5,919 | $ | 6,022 | 5,255 | ||||||||||||||
Aviation |
S | 1,810 | 1,767 | 5,224 | 3,946 | 2,565 | | |||||||||||||||||||
Financial Institutions |
L | 6,441 | 9,036 | 384 | 8,130 | 4,846 | 7,679 | |||||||||||||||||||
International Casualty |
L | 8,486 | 33,860 | 2,213 | 4,095 | 6,182 | | |||||||||||||||||||
Professional Liability |
L | 10,466 | 7,922 | 4,204 | 4,330 | 4,161 | 6,530 | |||||||||||||||||||
Property |
S | 37,937 | 44,623 | 5,946 | 26,945 | 25,026 | 25,899 | |||||||||||||||||||
Surety |
S | | (19 | ) | 439 | 4,369 | | | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
73,520 | 110,733 | 23,980 | 57,734 | 48,802 | 45,363 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty |
$ | 562,977 | $ | 627,413 | $ | 313,461 | $ | 323,880 | $ | 398,179 | $ | 355,486 | ||||||||||||||
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|
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|
|
|
|
|||||||||||||||
Life & Annuity: |
||||||||||||||||||||||||||
Annuity |
$ | 271 | $ | 336 | $ | 1,129 | $ | | $ | 6 | $ | | ||||||||||||||
Life |
659 | 99 | 808 | 1,333 | 796 | 41,023 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Life & Annuity |
930 | 435 | 1,937 | 1,333 | 802 | 41,023 | ||||||||||||||||||||
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|
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|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 563,907 | $ | 627,848 | $ | 315,398 | $ | 325,213 | $ | 398,981 | $ | 396,509 | ||||||||||||||
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|
[a] | Insurance and U.S. specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
[b] | Includes the results for Harbor Point from May 12, 2010. |
S = Short tail lines |
$ | 329,726 | $ | 372,690 | $ | 128,473 | $ | 173,305 | $ | 205,664 | $ | 171,666 | ||||||||||||
L = Long tail lines |
233,251 | 254,723 | 184,988 | 150,575 | 192,515 | 183,820 | ||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 562,977 | $ | 627,413 | $ | 313,461 | $ | 323,880 | $ | 398,179 | $ | 355,486 | ||||||||||||
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16
ALTERRA CAPITAL HOLDINGS LIMITED
PRO FORMA ALTERRA REINSURANCE SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS [a] (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||||||||||||
Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
Mar. 31, 2010 |
Dec. 31, 2009 |
Sept. 30, 2009 |
June 30, 2009 |
Mar. 31, 2009 |
|||||||||||||||||||||||||||
Gross Premiums Written by Type of Risk: |
||||||||||||||||||||||||||||||||||
Agriculture |
S | $ | (1,406 | ) | $ | (2,665 | ) | $ | (4,643 | ) | $ | 55,944 | $ | 2,153 | $ | (96 | ) | $ | (262 | ) | $ | 91,196 | ||||||||||||
Auto |
S | 22,585 | 10,251 | 14,359 | 18,063 | 19,531 | 12,828 | 11,288 | 15,148 | |||||||||||||||||||||||||
Aviation |
S | 2,596 | 15,313 | 8,586 | 6,191 | 9,395 | 18,154 | 10,760 | 4,509 | |||||||||||||||||||||||||
Credit/ Surety |
S | 1,118 | 2,569 | 1,530 | 23,555 | 9,058 | 369 | 2,440 | 8,828 | |||||||||||||||||||||||||
General Casualty |
L | 17,658 | 18,505 | 6,724 | 42,398 | 15,607 | 31,167 | 10,225 | 36,892 | |||||||||||||||||||||||||
Marine & Energy |
S | (1,549 | ) | 8,826 | 5,220 | 21,128 | 4,033 | 8,565 | (3,731 | ) | 37,799 | |||||||||||||||||||||||
Medical Malpractice |
L | 19,554 | (3,131 | ) | 6,424 | 33,804 | 11,093 | 7,077 | 21,783 | 36,417 | ||||||||||||||||||||||||
Other |
S | 520 | 1,183 | 294 | 5,664 | 168 | (57 | ) | 485 | 3,011 | ||||||||||||||||||||||||
Professional Liability |
L | 28,538 | 37,965 | 51,615 | 55,812 | 37,407 | 60,373 | 53,705 | 50,629 | |||||||||||||||||||||||||
Property |
S | 6,296 | 34,859 | 96,745 | 138,958 | 2,260 | 34,240 | 118,581 | 142,118 | |||||||||||||||||||||||||
Whole Account |
S/L | 426 | (232 | ) | 3,095 | 47,135 | 6,578 | 4,569 | 18,503 | 5,369 | ||||||||||||||||||||||||
Workers Compensation |
L | 14,284 | 561 | 7,197 | 11,966 | 8,164 | 33,693 | 19,161 | 29,225 | |||||||||||||||||||||||||
|
|
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|
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|
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|
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|
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|
|
|
|
|
|||||||||||||||||||
Aggregate Pro Forma |
$ | 110,620 | $ | 124,004 | $ | 197,146 | $ | 460,618 | $ | 125,447 | $ | 210,882 | $ | 262,938 | $ | 461,141 | ||||||||||||||||||
|
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|
[a] | This information is based on historical Alterra reinsurance segment gross premiums written adjusted to include Harbor Point historical gross premiums written as though the amalgamation with Harbor Point had occurred on January 1, 2009. The financial information also includes adjustments to eliminate any intercompany transactions. |
The pro forma information is provided for informational purposes only. The pro forma information does not necessarily represent results that would have occurred if the amalgamation with Harbor Point had occurred on January 1, 2009, nor is it necessarily indicative of future results.
17
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATASIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity |
Corporate | Consolidated | |||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty |
Alterra at Lloyds |
Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written |
$ | 212,527 | $ | 623,774 | $ | 169,836 | $ | 184,253 | $ | 1,190,390 | $ | 1,365 | $ | | $ | 1,191,755 | ||||||||||||||||
Reinsurance premiums ceded |
(99,248 | ) | (65,564 | ) | (60,953 | ) | (48,097 | ) | (273,862 | ) | (121 | ) | | (273,983 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums written |
$ | 113,279 | $ | 558,210 | $ | 108,883 | $ | 136,156 | $ | 916,528 | $ | 1,244 | $ | | $ | 917,772 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Earned premiums |
$ | 196,240 | $ | 459,113 | $ | 147,017 | $ | 128,535 | $ | 930,905 | $ | 1,365 | $ | | $ | 932,270 | ||||||||||||||||
Earned premiums ceded |
(89,068 | ) | (32,500 | ) | (46,633 | ) | (35,120 | ) | (203,321 | ) | (121 | ) | | (203,442 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net premiums earned |
107,172 | 426,613 | 100,384 | 93,415 | 727,584 | 1,244 | | 728,828 | ||||||||||||||||||||||||
Net losses and loss expenses |
(63,656 | ) | (312,477 | ) | (64,084 | ) | (75,322 | ) | (515,539 | ) | | (515,539 | ) | |||||||||||||||||||
Claims and policy benefits |
| | | | | (30,280 | ) | (30,280 | ) | |||||||||||||||||||||||
Acquisition costs |
177 | (93,509 | ) | (17,710 | ) | (23,965 | ) | (135,007 | ) | (281 | ) | (135,288 | ) | |||||||||||||||||||
General and administrative expenses |
(18,684 | ) | (46,195 | ) | (18,686 | ) | (19,259 | ) | (102,824 | ) | (436 | ) | (103,260 | ) | ||||||||||||||||||
Other income |
951 | 548 | | 380 | 1,879 | (23 | ) | 1,856 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Underwriting income (loss) |
25,960 | (25,020 | ) | (96 | ) | (24,751 | ) | (23,907 | ) | n/a | | n/a | ||||||||||||||||||||
Net investment income |
24,888 | 92,543 | 117,431 | |||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
1,508 | (26,100 | ) | (24,592 | ) | |||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(1,382 | ) | (1,382 | ) | ||||||||||||||||||||||||||||
Corporate other income |
50 | 50 | ||||||||||||||||||||||||||||||
Interest expense |
(19,089 | ) | (19,089 | ) | ||||||||||||||||||||||||||||
Net foreign exchange losses |
(2,212 | ) | (2,212 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(37,602 | ) | (37,602 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Income (loss) before taxes |
$ | (3,380 | ) | $ | 6,208 | $ | (21,079 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss ratio [a] |
59.4 | % | 73.2 | % | 63.8 | % | 80.6 | % | 70.9 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] |
(0.2 | %) | 21.9 | % | 17.6 | % | 25.7 | % | 18.6 | % | ||||||||||||||||||||||
General and administrative expense ratio [c] |
17.4 | % | 10.8 | % | 18.6 | % | 20.6 | % | 14.1 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Combined ratio |
76.7 | % | 106.0 | % | 100.1 | % | 126.9 | % | 103.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned for the property & casualty business. |
Percentage totals may not add due to rounding.
18
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS - SIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyds | Total | ||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
59.4 | % | 73.2 | % | 63.8 | % | 80.6 | % | 70.9 | % | ||||||||||
Acquisition cost ratio |
(0.2 | %) | 21.9 | % | 17.6 | % | 25.7 | % | 18.6 | % | ||||||||||
General and administrative expense ratio |
17.4 | % | 10.8 | % | 18.6 | % | 20.6 | % | 14.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
76.7 | % | 106.0 | % | 100.1 | % | 126.9 | % | 103.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
||||||||||||||||||||
Loss ratio [a] |
20.5 | % | 10.9 | % | 0.0 | % | 10.6 | % | 10.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
80.0 | % | 84.2 | % | 63.8 | % | 91.2 | % | 81.7 | % | ||||||||||
Acquisition cost ratio |
(0.2 | %) | 21.9 | % | 17.6 | % | 25.7 | % | 18.6 | % | ||||||||||
General and administrative expense ratio |
17.4 | % | 10.8 | % | 18.6 | % | 20.6 | % | 14.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
97.2 | % | 116.9 | % | 100.1 | % | 137.5 | % | 114.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
CONSOLIDATED UNDERWRITING RATIOS - SIX MONTHS ENDED JUNE 30, 2010 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Insurance [b] | Reinsurance [c] | U.S. Specialty [b] | Alterra at Lloyds | Total | ||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
69.1 | % | 56.3 | % | 61.3 | % | 45.4 | % | 58.6 | % | ||||||||||
Acquisition cost ratio |
0.4 | % | 20.2 | % | 17.1 | % | 18.7 | % | 15.0 | % | ||||||||||
General and administrative expense ratio |
13.3 | % | 10.1 | % | 18.6 | % | 13.5 | % | 12.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
82.8 | % | 86.6 | % | 97.0 | % | 77.6 | % | 86.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
||||||||||||||||||||
Loss ratio [a] |
13.3 | % | 8.9 | % | 1.0 | % | 7.5 | % | 8.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
||||||||||||||||||||
Loss ratio |
82.3 | % | 65.1 | % | 62.3 | % | 52.8 | % | 67.1 | % | ||||||||||
Acquisition cost ratio |
0.4 | % | 20.2 | % | 17.1 | % | 18.7 | % | 15.0 | % | ||||||||||
General and administrative expense ratio |
13.3 | % | 10.1 | % | 18.6 | % | 13.5 | % | 12.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
96.1 | % | 95.5 | % | 98.0 | % | 85.1 | % | 94.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
[b] | Insurance and U.S. Specialty segment amounts for the comparative 2010 period have been reclassified to conform with the current periods presentation. |
[c] | Includes the results for Harbor Point from May 12, 2010. |
Percentage totals may not add due to rounding.
19
ALTERRA CAPITAL HOLDINGS LIMITED
INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 [a] |
June 30, 2009 [a] |
Dec. 31, 2010 [a] |
Dec. 31, 2009 [a] |
||||||||||||||||
Gross premiums written |
$ | 212,527 | $ | 208,432 | $ | 230,232 | $ | 399,612 | $ | 447,340 | ||||||||||
Reinsurance premiums ceded |
(99,248 | ) | (87,088 | ) | (104,192 | ) | (180,691 | ) | (218,633 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 113,279 | $ | 121,344 | $ | 126,040 | $ | 218,921 | $ | 228,707 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 196,240 | $ | 206,587 | $ | 211,216 | $ | 415,396 | $ | 434,147 | ||||||||||
Earned premiums ceded |
(89,068 | ) | (94,041 | ) | (104,307 | ) | (180,684 | ) | (216,687 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
107,172 | 112,546 | 106,909 | 234,712 | 217,460 | |||||||||||||||
Net losses and loss expenses |
(63,656 | ) | (77,742 | ) | (78,059 | ) | (140,108 | ) | (140,403 | ) | ||||||||||
Acquisition costs |
177 | (504 | ) | 1,597 | (3,651 | ) | 1,206 | |||||||||||||
General and administrative expenses |
(18,684 | ) | (14,979 | ) | (12,767 | ) | (34,508 | ) | (27,927 | ) | ||||||||||
Other Income |
951 | 91 | 1,435 | 1,267 | 1,620 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting income |
$ | 25,960 | $ | 19,412 | $ | 19,115 | $ | 57,712 | $ | 51,956 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
59.4 | % | 69.1 | % | 73.0 | % | 59.7 | % | 64.6 | % | ||||||||||
Acquisition cost ratio |
(0.2 | %) | 0.4 | % | (1.5 | %) | 1.6 | % | (0.6 | %) | ||||||||||
General and administration expense ratio |
17.4 | % | 13.3 | % | 11.8 | % | 14.6 | % | 12.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
76.7 | % | 82.8 | % | 83.5 | % | 76.0 | % | 76.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
See page 34 for additional information.
20
ALTERRA CAPITAL HOLDINGS LIMITED
REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 [a] |
June 30, 2009 |
Dec. 31, 2010 [a] |
Dec. 31, 2009 |
||||||||||||||||
Gross premiums written |
$ | 623,774 | $ | 274,429 | $ | 328,178 | $ | 509,053 | $ | 489,028 | ||||||||||
Reinsurance premiums ceded |
(65,564 | ) | (58,699 | ) | (69,468 | ) | (64,131 | ) | (80,005 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 558,210 | $ | 215,730 | $ | 258,710 | $ | 444,922 | $ | 409,023 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 459,113 | $ | 270,472 | $ | 236,536 | $ | 699,243 | $ | 476,434 | ||||||||||
Earned premiums ceded |
(32,500 | ) | (35,012 | ) | (49,344 | ) | (71,627 | ) | (88,578 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
426,613 | 235,460 | 187,192 | 627,616 | 387,856 | |||||||||||||||
Net losses and loss expenses |
(312,477 | ) | (132,506 | ) | (124,028 | ) | (347,816 | ) | (254,474 | ) | ||||||||||
Acquisition costs |
(93,509 | ) | (47,639 | ) | (33,197 | ) | (131,114 | ) | (71,074 | ) | ||||||||||
General and administrative expenses |
(46,195 | ) | (23,779 | ) | (14,747 | ) | (66,073 | ) | (31,778 | ) | ||||||||||
Other income |
548 | 155 | 12 | | 12 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting (loss) income |
$ | (25,020 | ) | $ | 31,691 | $ | 15,232 | $ | 82,613 | $ | 30,542 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
73.2 | % | 56.3 | % | 66.3 | % | 55.4 | % | 65.6 | % | ||||||||||
Acquisition cost ratio |
21.9 | % | 20.2 | % | 17.7 | % | 20.9 | % | 18.3 | % | ||||||||||
General and administration expense ratio |
10.8 | % | 10.1 | % | 7.9 | % | 10.5 | % | 8.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
106.0 | % | 86.6 | % | 91.9 | % | 86.8 | % | 92.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Includes the results for Harbor Point from May 12, 2010. |
21
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. SPECIALTY SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 [a] |
June 30, 2009 [a] |
Dec. 31, 2010 [a] |
Dec. 31, 2009 [a] |
||||||||||||||||
Gross premiums written |
$ | 169,836 | $ | 164,675 | $ | 141,210 | $ | 294,498 | $ | 265,905 | ||||||||||
Reinsurance premiums ceded |
(60,953 | ) | (53,824 | ) | (92,320 | ) | (88,493 | ) | (148,546 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 108,883 | $ | 110,851 | $ | 48,890 | $ | 206,005 | $ | 117,359 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 147,017 | $ | 140,250 | $ | 109,966 | $ | 288,270 | $ | 239,613 | ||||||||||
Earned premiums ceded |
(46,633 | ) | (65,446 | ) | (73,197 | ) | (117,657 | ) | (149,008 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
100,384 | 74,804 | 36,769 | 170,613 | 90,605 | |||||||||||||||
Net losses and loss expenses |
(64,084 | ) | (45,879 | ) | (21,448 | ) | (107,052 | ) | (54,764 | ) | ||||||||||
Acquisition costs |
(17,710 | ) | (12,793 | ) | (3,672 | ) | (28,174 | ) | (7,474 | ) | ||||||||||
General and administrative expenses |
(18,686 | ) | (13,877 | ) | (11,168 | ) | (30,122 | ) | (27,925 | ) | ||||||||||
Other income |
| | (68 | ) | | (68 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting (loss) income |
$ | (96 | ) | $ | 2,255 | $ | 413 | $ | 5,265 | $ | 374 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
63.8 | % | 61.3 | % | 58.3 | % | 62.7 | % | 60.4 | % | ||||||||||
Acquisition cost ratio |
17.6 | % | 17.1 | % | 10.0 | % | 16.5 | % | 8.2 | % | ||||||||||
General and administration expense ratio |
18.6 | % | 18.6 | % | 30.4 | % | 17.7 | % | 30.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
100.1 | % | 97.0 | % | 98.7 | % | 96.9 | % | 99.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
See page 34 for additional information.
22
ALTERRA CAPITAL HOLDINGS LIMITED
ALTERRA AT LLOYDS SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 |
June 30, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||||||||||
Gross premiums written |
$ | 184,253 | $ | 120,919 | $ | 89,542 | $ | 202,633 | $ | 128,973 | ||||||||||
Reinsurance premiums ceded |
(48,097 | ) | (33,192 | ) | (27,948 | ) | (37,448 | ) | (32,884 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 136,156 | $ | 87,727 | $ | 61,594 | $ | 165,185 | $ | 96,089 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 128,535 | $ | 77,746 | $ | 64,664 | $ | 170,803 | $ | 125,000 | ||||||||||
Earned premiums ceded |
(35,120 | ) | (14,589 | ) | (17,967 | ) | (35,793 | ) | (29,907 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
93,415 | 63,157 | 46,697 | 135,010 | 95,093 | |||||||||||||||
Net losses and loss expenses |
(75,322 | ) | (28,655 | ) | (23,416 | ) | (59,865 | ) | (43,958 | ) | ||||||||||
Acquisition costs |
(23,965 | ) | (11,837 | ) | (9,547 | ) | (24,164 | ) | (18,136 | ) | ||||||||||
General and administrative expenses |
(19,259 | ) | (8,539 | ) | (10,433 | ) | (28,531 | ) | (19,972 | ) | ||||||||||
Other income |
380 | 351 | 508 | 2,534 | 658 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting (loss) income |
$ | (24,751 | ) | $ | 14,477 | $ | 3,809 | $ | 24,984 | $ | 13,685 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
80.6 | % | 45.4 | % | 50.1 | % | 44.3 | % | 46.2 | % | ||||||||||
Acquisition cost ratio |
25.7 | % | 18.7 | % | 20.4 | % | 17.9 | % | 19.1 | % | ||||||||||
General and administration expense ratio |
20.6 | % | 13.5 | % | 22.3 | % | 21.1 | % | 21.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
126.9 | % | 77.6 | % | 92.9 | % | 83.4 | % | 86.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
23
ALTERRA CAPITAL HOLDINGS LIMITED
LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2011 |
June 30, 2010 |
June 30, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||||||||||
Gross premiums written |
$ | 1,365 | $ | 1,665 | $ | 41,620 | $ | 4,935 | $ | 43,755 | ||||||||||
Reinsurance premiums ceded |
(121 | ) | (132 | ) | (120 | ) | (400 | ) | (413 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 1,244 | $ | 1,533 | $ | 41,500 | $ | 4,535 | $ | 43,342 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 1,365 | $ | 1,665 | $ | 41,620 | $ | 4,935 | $ | 43,755 | ||||||||||
Earned premiums ceded |
(121 | ) | (132 | ) | (120 | ) | (400 | ) | (413 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
1,244 | 1,533 | 41,500 | 4,535 | 43,342 | |||||||||||||||
Net investment income |
24,888 | 25,519 | 24,483 | 49,785 | 50,993 | |||||||||||||||
Net realized and unrealized gains on investments |
1,508 | 4,056 | 17,214 | 11,358 | 37,338 | |||||||||||||||
Other income |
(23 | ) | (28 | ) | | 286 | (120 | ) | ||||||||||||
Claims and policy benefits |
(30,280 | ) | (31,602 | ) | (69,739 | ) | (65,213 | ) | (101,093 | ) | ||||||||||
Acquisition costs |
(281 | ) | (269 | ) | (870 | ) | (361 | ) | (1,396 | ) | ||||||||||
General and administrative expenses |
(436 | ) | (1,299 | ) | (1,351 | ) | (2,964 | ) | (2,786 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before taxes |
$ | (3,380 | ) | $ | (2,090 | ) | $ | 11,237 | $ | (2,574 | ) | $ | 26,278 | |||||||
|
|
|
|
|
|
|
|
|
|
24
ALTERRA CAPITAL HOLDINGS LIMITED
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||||
June 30, 2011 |
June 30, 2010 |
June 30, 2009 |
Dec. 31, 2010 |
Dec. 31, 2009 |
||||||||||||||||||
Gross Premiums Written by Type of Risk: |
||||||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||
Insurance [a]: |
||||||||||||||||||||||
Aviation |
S | $ | 5,230 | $ | 8,964 | $ | 16,819 | $ | 39,888 | $ | 69,834 | |||||||||||
Excess Liability |
L | 68,777 | 64,633 | 76,639 | 113,573 | 133,340 | ||||||||||||||||
Professional Liability |
L | 92,813 | 94,701 | 95,699 | 183,051 | 179,904 | ||||||||||||||||
Property |
S | 45,707 | 40,134 | 41,075 | 63,100 | 64,262 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
212,527 | 208,432 | 230,232 | 399,612 | 447,340 | ||||||||||||||||||
Reinsurance [b]: |
||||||||||||||||||||||
Agriculture |
S | 29,498 | 33,293 | 87,433 | 29,222 | 89,550 | ||||||||||||||||
Auto |
S | 70,265 | 66 | | 32,902 | | ||||||||||||||||
Aviation |
S | 984 | 13,383 | 14,858 | 31,292 | 34,715 | ||||||||||||||||
Credit/ Surety |
S | 25,982 | (1,491 | ) | | 2,196 | | |||||||||||||||
General Casualty |
L | 38,292 | 12,194 | 16,125 | 48,357 | 29,185 | ||||||||||||||||
Marine & Energy |
S | 16,474 | 9,104 | 8,735 | 16,381 | 18,321 | ||||||||||||||||
Medical Malpractice |
L | 28,805 | 34,968 | 53,830 | 51,391 | 67,483 | ||||||||||||||||
Other |
S | 2,206 | 1,081 | 2,268 | 2,784 | 2,297 | ||||||||||||||||
Professional Liability |
L | 99,146 | 43,924 | 24,930 | 110,427 | 71,531 | ||||||||||||||||
Property |
S | 256,042 | 106,991 | 75,873 | 148,146 | 87,039 | ||||||||||||||||
Whole Account |
S/L | 35,338 | 4,935 | 5,963 | 5,129 | 11,456 | ||||||||||||||||
Workers Compensation |
L | 20,742 | 15,981 | 38,163 | 30,826 | 77,451 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
623,774 | 274,429 | 328,178 | 509,053 | 489,028 | ||||||||||||||||||
U.S. Specialty [a]: |
||||||||||||||||||||||
General Liability |
L | 36,270 | 42,852 | 33,120 | 81,137 | 68,209 | ||||||||||||||||
Marine |
S | 42,498 | 34,059 | 29,749 | 67,454 | 61,360 | ||||||||||||||||
Professional Liability |
L | 9,249 | 4,001 | | 6,602 | 576 | ||||||||||||||||
Property |
S | 81,819 | 83,763 | 78,341 | 139,305 | 135,760 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
169,836 | 164,675 | 141,210 | 294,498 | 265,905 | ||||||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||
Accident & Health |
S | 21,924 | 19,432 | 17,665 | 30,921 | 22,602 | ||||||||||||||||
Aviation |
S | 3,577 | 6,968 | | 16,138 | 2,611 | ||||||||||||||||
Financial Institutions |
L | 15,477 | 10,934 | 11,503 | 19,448 | 23,822 | ||||||||||||||||
International Casualty |
L | 42,346 | 19,866 | | 26,174 | | ||||||||||||||||
Professional Liability |
L | 18,388 | 11,057 | 9,315 | 19,591 | 19,889 | ||||||||||||||||
Property |
S | 82,560 | 52,662 | 51,059 | 85,553 | 60,049 | ||||||||||||||||
Surety |
S | (19 | ) | | | 4,808 | | |||||||||||||||
|
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|
|
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|
|||||||||||||
184,253 | 120,919 | 89,542 | 202,633 | 128,973 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 1,190,390 | $ | 768,455 | $ | 789,162 | $ | 1,405,796 | $ | 1,331,246 | ||||||||||||
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|
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|
|||||||||||||
Life & Annuity: |
||||||||||||||||||||||
Annuity |
$ | 607 | $ | 6 | $ | | $ | 1,135 | $ | | ||||||||||||
Life |
758 | 1,659 | 41,620 | 3,800 | 43,755 | |||||||||||||||||
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|
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|
|
|
|
|||||||||||||
Aggregate Life & Annuity |
1,365 | 1,665 | 41,620 | 4,935 | 43,755 | |||||||||||||||||
|
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|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 1,191,755 | $ | 770,120 | $ | 830,782 | $ | 1,410,731 | $ | 1,375,001 | ||||||||||||
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|
|
[a] | Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current periods presentation. |
[b] | Includes the results for Harbor Point from May 12, 2010. |
S = Short tail lines |
$ | 702,416 | $ | 410,877 | $ | 426,857 | $ | 712,655 | $ | 654,128 | ||||||||||
L = Long tail lines |
487,974 | 357,578 | 362,305 | 693,141 | 677,118 | |||||||||||||||
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|||||||||||
Aggregate Property & Casualty |
$ | 1,190,390 | $ | 768,455 | $ | 789,162 | $ | 1,405,796 | $ | 1,331,246 | ||||||||||
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25
ALTERRA CAPITAL HOLDINGS LIMITED
INVESTMENT PORTFOLIO (Unaudited)
(Expressed in thousands of United States Dollars)
Carrying Value | Fair Value | |||||||||||||||||||||||||||||||
Type of Investment |
As of June 30, 2011 |
Investment Distribution |
As of Dec. 31, 2010 |
Investment Distribution |
As of June 30, 2011 |
Investment Distribution |
As of Dec. 31, 2010 |
Investment Distribution |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | 987,057 | 12.4 | % | $ | 905,606 | 11.5 | % | $ | 987,057 | 12.3 | % | $ | 905,606 | 11.4 | % | ||||||||||||||||
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|
|
|||||||||||||||||
U.S. government and agencies |
744,465 | 9.4 | % | 995,546 | 12.7 | % | 744,465 | 9.3 | % | 995,546 | 12.5 | % | ||||||||||||||||||||
Non-U.S. governments |
168,290 | 2.1 | % | 79,111 | 1.0 | % | 168,290 | 2.1 | % | 79,111 | 1.0 | % | ||||||||||||||||||||
Corporate securities |
2,743,228 | 34.5 | % | 2,735,366 | 34.8 | % | 2,743,228 | 34.3 | % | 2,735,366 | 34.5 | % | ||||||||||||||||||||
Municipal securities |
218,370 | 2.7 | % | 238,014 | 3.0 | % | 218,370 | 2.7 | % | 238,014 | 3.0 | % | ||||||||||||||||||||
Asset-backed securities |
203,598 | 2.6 | % | 86,937 | 1.1 | % | 203,598 | 2.5 | % | 86,937 | 1.1 | % | ||||||||||||||||||||
Residential mortgage-backed securities |
1,159,922 | 14.6 | % | 1,168,390 | 14.9 | % | 1,159,922 | 14.5 | % | 1,168,390 | 14.7 | % | ||||||||||||||||||||
Commercial mortgage-backed securities |
383,920 | 4.8 | % | 334,151 | 4.3 | % | 383,920 | 4.8 | % | 334,151 | 4.2 | % | ||||||||||||||||||||
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|||||||||||||||||
Fixed maturities carried at fair value |
$ | 5,621,793 | 70.7 | % | $ | 5,637,515 | 71.7 | % | $ | 5,621,793 | 70.2 | % | $ | 5,637,515 | 71.0 | % | ||||||||||||||||
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|
|||||||||||||||||
Other investments carried at fair value |
$ | 350,193 | 4.4 | % | $ | 378,128 | 4.8 | % | $ | 350,193 | 4.4 | % | $ | 378,128 | 4.8 | % | ||||||||||||||||
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|||||||||||||||||
Total investments carried at fair value |
$ | 6,959,043 | 87.5 | % | $ | 6,921,249 | 88.0 | % | $ | 6,959,043 | 86.9 | % | $ | 6,921,249 | 87.2 | % | ||||||||||||||||
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|
|||||||||||||||||
U.S. government and agencies |
$ | 29,694 | 0.4 | % | $ | 29,687 | 0.4 | % | $ | 30,416 | 0.4 | % | $ | 30,200 | 0.4 | % | ||||||||||||||||
Non-U.S. governments |
584,039 | 7.3 | % | 538,274 | 6.8 | % | 616,403 | 7.7 | % | 587,053 | 7.4 | % | ||||||||||||||||||||
Corporate securities |
378,958 | 4.8 | % | 371,143 | 4.7 | % | 401,959 | 5.0 | % | 397,261 | 5.0 | % | ||||||||||||||||||||
Asset-backed securities |
1,000 | 0.0 | % | 1,000 | 0.0 | % | 1,004 | 0.0 | % | 998 | 0.0 | % | ||||||||||||||||||||
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|||||||||||||||||
Fixed maturities carried at amortized cost |
$ | 993,691 | 12.5 | % | $ | 940,104 | 12.0 | % | $ | 1,049,782 | 13.1 | % | $ | 1,015,512 | 12.8 | % | ||||||||||||||||
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|
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|
|
|||||||||||||||||
Total invested assets |
$ | 7,952,734 | 100.0 | % | $ | 7,861,353 | 100.0 | % | $ | 8,008,825 | 100.0 | % | $ | 7,936,761 | 100.0 | % | ||||||||||||||||
|
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|
|
As of June 30, 2011, the weighted average book yield of the cash and fixed maturities portfolio was 3.33%, and the weighted average duration was 4.1 years.
Credit Ratings |
As of June 30, 2011 |
Ratings Distribution |
As of Dec. 31, 2010 |
Ratings Distribution |
As of June 30, 2011 |
Ratings Distribution |
As of Dec. 31, 2010 |
Ratings Distribution |
||||||||||||||||||||||||
U.S. government and agencies [a] |
$ | 1,866,591 | 28.2 | % | $ | 2,060,116 | 31.3 | % | $ | 1,866,591 | 28.0 | % | $ | 2,060,116 | 31.0 | % | ||||||||||||||||
AAA |
1,199,207 | 18.1 | % | 1,076,680 | 16.4 | % | 1,199,207 | 18.0 | % | 1,076,680 | 16.2 | % | ||||||||||||||||||||
AA |
656,570 | 9.9 | % | 657,867 | 10.0 | % | 656,570 | 9.8 | % | 657,867 | 9.9 | % | ||||||||||||||||||||
A |
1,406,390 | 21.3 | % | 1,353,945 | 20.6 | % | 1,406,390 | 21.1 | % | 1,353,945 | 20.4 | % | ||||||||||||||||||||
BBB |
266,150 | 4.0 | % | 226,849 | 3.4 | % | 266,150 | 4.0 | % | 226,849 | 3.4 | % | ||||||||||||||||||||
BB |
24,165 | 0.4 | % | 32,021 | 0.5 | % | 24,165 | 0.4 | % | 32,021 | 0.5 | % | ||||||||||||||||||||
B |
106,444 | 1.6 | % | 138,703 | 2.1 | % | 106,444 | 1.6 | % | 138,703 | 2.1 | % | ||||||||||||||||||||
CCC or lower |
46,565 | 0.7 | % | 45,469 | 0.7 | % | 46,565 | 0.7 | % | 45,469 | 0.7 | % | ||||||||||||||||||||
Not rated |
49,711 | 0.8 | % | 45,865 | 0.7 | % | 49,711 | 0.7 | % | 45,865 | 0.7 | % | ||||||||||||||||||||
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|
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|
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|
|
|
|
|
|
|
|
|||||||||||||||||
Fixed maturities carried at fair value |
$ | 5,621,793 | 85.0 | % | $ | 5,637,515 | 85.7 | % | $ | 5,621,793 | 84.3 | % | $ | 5,637,515 | 84.7 | % | ||||||||||||||||
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|||||||||||||||||
U.S. government and agencies |
29,694 | 0.4 | % | 29,687 | 0.5 | % | 30,416 | 0.5 | % | 30,200 | 0.5 | % | ||||||||||||||||||||
AAA |
696,439 | 10.5 | % | 641,437 | 9.8 | % | 737,096 | 11.0 | % | 699,598 | 10.5 | % | ||||||||||||||||||||
AA |
117,851 | 1.8 | % | 113,140 | 1.7 | % | 121,423 | 1.8 | % | 118,276 | 1.8 | % | ||||||||||||||||||||
A |
135,249 | 2.0 | % | 141,683 | 2.2 | % | 143,984 | 2.2 | % | 151,127 | 2.3 | % | ||||||||||||||||||||
BBB |
14,458 | 0.2 | % | 12,744 | 0.2 | % | 16,863 | 0.3 | % | 14,764 | 0.2 | % | ||||||||||||||||||||
Not rated |
| | 1,413 | 0.0 | % | | | 1,547 | 0.0 | % | ||||||||||||||||||||||
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|||||||||||||||||
Fixed maturities carried at amortized cost |
$ | 993,691 | 15.0 | % | $ | 940,104 | 14.3 | % | $ | 1,049,782 | 15.7 | % | $ | 1,015,512 | 15.3 | % | ||||||||||||||||
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|||||||||||||||||
Total fixed maturities |
$ | 6,615,484 | 100.0 | % | $ | 6,577,619 | 100.0 | % | $ | 6,671,575 | 100.0 | % | $ | 6,653,027 | 100.0 | % | ||||||||||||||||
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|
[a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,122,126 (December 31, 2010: $1,064,570) |
Percentage totals may not add due to rounding.
Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | Quarter Ended | |||||||||||||||||||
June 30, 2011 | Mar. 31, 2011 | Dec. 31, 2010 | Sept. 30, 2010 | June 30, 2010 | June 30, 2009 | |||||||||||||||||||
Net investment income |
$ | 59,665 | $ | 57,766 | $ | 61,080 | $ | 59,711 | $ | 53,277 | $ | 41,755 | ||||||||||||
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|
|||||||||||||
Realized and unrealized gains (losses) on trading fixed maturities |
1,432 | (1,827 | ) | (3,893 | ) | 883 | (1,284 | ) | 720 | |||||||||||||||
Net realized gains (losses) on available for sale fixed maturities |
54 | 3,369 | 5,816 | 6,395 | 2,425 | (654 | ) | |||||||||||||||||
(Decrease) increase in fair value of hedge funds |
(1,878 | ) | 3,167 | 5,465 | 4,820 | (3,323 | ) | 21,514 | ||||||||||||||||
(Decrease) increase in fair value of non-hedge fund other investments |
(5,382 | ) | (23,527 | ) | 2,437 | 3,313 | (12,604 | ) | (108 | ) | ||||||||||||||
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|
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|
|||||||||||||
Net realized and unrealized (losses) gains on investments |
$ | (5,774 | ) | $ | (18,818 | ) | $ | 9,825 | $ | 15,411 | $ | (14,786 | ) | $ | 21,472 | |||||||||
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|
|||||||||||||
Net impairment losses recognized in earnings |
$ | (353 | ) | $ | (1,029 | ) | $ | (1,774 | ) | $ | (151 | ) | $ | (300 | ) | $ | (2,014 | ) | ||||||
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26
ALTERRA CAPITAL HOLDINGS LIMITED
INVESTMENT PORTFOLIO (Unaudited)
(Expressed in thousands of United States Dollars)
As of June 30, 2011 |
Periodic Rate of Return | |||||||||||||||||||
Last 3 Months |
Year to Date |
Last 12 months |
Last 60 months* |
|||||||||||||||||
Cash and fixed maturities |
$ | 7,602,541 | 2.04 | % | 3.10 | % | 4.29 | % | 5.67 | % | ||||||||||
|
|
|||||||||||||||||||
Distressed securities |
$ | 34,496 | 1.93 | % | 2.36 | % | 6.16 | % | 5.85 | % | ||||||||||
Diversified arbitrage |
22,532 | (5.41 | %) | (2.07 | %) | 6.52 | % | (3.85 | %) | |||||||||||
Emerging markets |
4,961 | (0.59 | %) | 0.93 | % | 5.15 | % | 4.40 | % | |||||||||||
Event-driven arbitrage |
26,696 | 0.83 | % | (3.62 | %) | (6.56 | %) | 2.78 | % | |||||||||||
Fixed income arbitrage |
| 0.00 | % | 0.00 | % | 0.00 | % | 12.97 | % | |||||||||||
Fund of funds |
44,154 | 0.71 | % | 3.05 | % | 8.75 | % | 1.48 | % | |||||||||||
Global macro |
49,213 | (1.60 | %) | (0.67 | %) | 2.67 | % | 5.72 | % | |||||||||||
Long / short credit |
9,821 | (3.90 | %) | (2.15 | %) | 0.91 | % | 4.21 | % | |||||||||||
Long / short equity |
124,214 | (0.11 | %) | 2.84 | % | 7.00 | % | 6.50 | % | |||||||||||
Opportunistic |
1,699 | (2.05 | %) | (36.60 | %) | (37.63 | %) | (20.52 | %) | |||||||||||
|
|
|||||||||||||||||||
Hedge funds ** |
317,786 | (0.45 | %) | 0.53 | % | 3.48 | % | 2.55 | % | |||||||||||
Derivatives |
456 | |||||||||||||||||||
Structured deposits |
26,859 | |||||||||||||||||||
Equity investments |
5,092 | |||||||||||||||||||
|
|
|||||||||||||||||||
Total other investments |
$ | 350,193 | ||||||||||||||||||
|
|
|||||||||||||||||||
Total invested assets |
$ | 7,952,734 | ||||||||||||||||||
|
|
|||||||||||||||||||
Hedge Fund Investment Return Data: |
||||||||||||||||||||
HFRI Fund of Funds Composite Index [a] |
(1.18 | %) | (0.31 | %) | 6.67 | % | 1.53 | % |
Hedge Fund Performance History 60 months ended June 30, 2011
Monthly performance | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||
January |
0.13 | % | 0.79 | % | 2.13 | % | (1.37 | %) | 1.28 | % | ||||||||||||||
February |
0.57 | % | 0.17 | % | 0.65 | % | 1.83 | % | 1.50 | % | ||||||||||||||
March |
0.29 | % | 1.02 | % | (0.76 | %) | (2.58 | %) | 1.90 | % | ||||||||||||||
April |
0.73 | % | 0.88 | % | (0.84 | %) | (0.13 | %) | 2.30 | % | ||||||||||||||
May |
(0.28 | %) | (0.73 | %) | 2.45 | % | 2.51 | % | 2.59 | % | ||||||||||||||
June |
(0.89 | %) | (0.83 | %) | 1.53 | % | 0.93 | % | 0.85 | % | ||||||||||||||
July |
0.36 | % | 1.40 | % | (4.12 | %) | 0.99 | % | (0.71 | %) | ||||||||||||||
August |
(0.28 | %) | 0.78 | % | (2.14 | %) | (1.62 | %) | 0.02 | % | ||||||||||||||
September |
1.28 | % | 1.71 | % | (7.31 | %) | 1.85 | % | (2.04 | %) | ||||||||||||||
October |
0.84 | % | 1.53 | % | (4.85 | %) | 4.15 | % | 1.37 | % | ||||||||||||||
November |
0.40 | % | 0.35 | % | (1.75 | %) | 0.10 | % | 1.81 | % | ||||||||||||||
December |
0.31 | % | 0.77 | % | (1.92 | %) | (0.13 | %) | 1.96 | % | ||||||||||||||
Quarterly performance |
||||||||||||||||||||||||
Q1 |
0.98 | % | 1.99 | % | 2.00 | % | (2.15 | %) | 4.75 | % | ||||||||||||||
Q2 |
(0.45 | %) | (0.69 | %) | 3.14 | % | 3.33 | % | 5.83 | % | ||||||||||||||
Q3 |
1.35 | % | 3.94 | % | (13.03 | %) | 1.18 | % | (2.72 | %) | ||||||||||||||
Q4 |
1.56 | % | 2.66 | % | (8.31 | %) | 4.11 | % | 5.22 | % | ||||||||||||||
Period return |
0.53 | % | 4.25 | % | 12.27 | % | (19.38 | %) | 16.78 | % | 2.36 | % |
Past performance should not be considered to be a reliable indicator of future performance.
[a] | As reported by HFRI as of August 1, 2011 |
* | Annualized |
** | Net of all fees |
27
ALTERRA CAPITAL HOLDINGS LIMITED
LARGEST 25 CORPORATE HOLDINGS (Unaudited)
(Expressed in thousands of United States Dollars)
As of June 30, 2011 | ||||||||
Issuer | Amortized Cost |
Fair Value |
||||||
Bank of America Corp |
67,068 | 68,365 | ||||||
General Electric |
61,225 | 62,186 | ||||||
JP Morgan Chase & Co |
51,863 | 53,648 | ||||||
Citigroup Inc |
50,704 | 50,831 | ||||||
Wells Fargo & Co |
47,575 | 48,762 | ||||||
Morgan Stanley |
44,468 | 45,990 | ||||||
Lloyds Banking Group plc |
39,680 | 40,976 | ||||||
Credit Suisse Group |
37,238 | 37,769 | ||||||
Pepsico Inc |
35,899 | 37,337 | ||||||
BP plc |
36,137 | 37,027 | ||||||
Novartis AG |
33,051 | 34,476 | ||||||
AT&T Inc |
33,056 | 34,192 | ||||||
Verizon Communications Inc |
32,615 | 34,137 | ||||||
UBS AG |
30,807 | 33,328 | ||||||
Goldman Sachs Group Inc |
32,011 | 32,683 | ||||||
Pfizer Inc |
26,964 | 28,281 | ||||||
Berkshire Hathaway Inc |
27,336 | 27,887 | ||||||
Conoco Philips |
25,553 | 27,028 | ||||||
Hypo Real Estate Holding AG |
26,087 | 26,239 | ||||||
Metlife Inc |
25,301 | 26,164 | ||||||
Barclays plc |
25,776 | 25,299 | ||||||
Wal-Mart Stores Inc |
24,024 | 24,497 | ||||||
HSBC Holdings plc |
23,961 | 24,470 | ||||||
Medtronic Inc. |
22,518 | 23,176 | ||||||
Duke Energy Corp. |
21,602 | 22,711 | ||||||
|
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|
|
|||||
$ | 882,518 | $ | 907,459 | |||||
|
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|
|
28
ALTERRA CAPITAL HOLDINGS LIMITED
SHAREHOLDER RETURN ANALYSIS (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
June 30, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
Dec. 31, 2010 | Dec. 31, 2009 | |||||||||||||||||||
Income and Return on Equity: |
||||||||||||||||||||||||
Net income (loss) |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | $ | 302,335 | $ | 246,215 | |||||||||||
Net operating income |
$ | 39,558 | $ | 58,774 | $ | 14,833 | $ | 99,455 | $ | 251,712 | $ | 208,907 | ||||||||||||
Average shareholders equity |
$ | 2,758,138 | $ | 2,321,687 | $ | 2,789,435 | $ | 1,955,281 | $ | 2,467,429 | $ | 1,398,872 | ||||||||||||
Annualized return on average shareholders equity [a] |
4.7 | % | 17.8 | % | (1.0 | %) | 14.3 | % | 12.3 | % | 17.6 | % | ||||||||||||
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Annualized net operating return on average shareholders equity [a] |
5.7 | % | 10.1 | % | 1.1 | % | 10.2 | % | 10.2 | % | 14.9 | % | ||||||||||||
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Book value and dividends per share: |
||||||||||||||||||||||||
Diluted book value per share |
$ | 25.98 | $ | 24.55 | $ | 25.98 | $ | 24.55 | $ | 25.99 | $ | 27.36 | ||||||||||||
Dividends paid per share |
$ | 0.12 | $ | 2.60 | $ | 0.24 | $ | 2.70 | $ | 2.94 | $ | 0.38 | ||||||||||||
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Change in diluted book value per share |
2.5 | % | (11.9 | %) | (0.0 | %) | (10.3 | %) | (5.0 | %) | 21.8 | % | ||||||||||||
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Dividend payout ratio [b] |
0.5 | % | 19.7 | % | 0.9 | % | 20.6 | % | 22.4 | % | 1.7 | % | ||||||||||||
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Total return to shareholders [c] |
3.0 | % | 7.8 | % | 0.8 | % | 10.3 | % | 17.4 | % | 23.5 | % | ||||||||||||
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[a] | Annualized return on average shareholders equity is defined as annualized net income divided by the average of the quarterly average shareholders equity balances. |
Annualized net operating return on average shareholders equity is defined as annualized net operating income divided by the average of the quarterly average shareholders equity balances.
[b] | Dividend payout ratio is calculated as dividends paid divided by beginning shareholders equity. |
[c] | Total return to shareholders is calculated as the change in diluted book value per share plus the dividend payout ratio. |
29
ALTERRA CAPITAL HOLDINGS LIMITED
EARNINGS PER SHARE INFORMATION (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | Dec. 31, 2010 | Dec. 31, 2009 | |||||||||||||||||||
Net income (loss) available to common shareholders |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | $ | 302,335 | $ | 246,215 | |||||||||||
Denominator: |
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Weighted average shares - basic |
||||||||||||||||||||||||
Outstanding [a] |
105,365,111 | 90,745,497 | 106,171,735 | 73,429,084 | 94,426,055 | 56,615,080 | ||||||||||||||||||
Unvested restricted share units |
239,675 | 296,804 | 213,272 | 350,363 | 256,224 | 391,828 | ||||||||||||||||||
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105,604,786 | 91,042,301 | 106,385,007 | 73,779,447 | 94,682,279 | 57,006,908 | |||||||||||||||||||
Share equivalents: |
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Warrants |
1,247,975 | 420,613 | | 526,539 | 537,399 | 608,161 | ||||||||||||||||||
Options |
148,366 | 193,827 | | 214,258 | 183,258 | 150,669 | ||||||||||||||||||
Employee stock purchase plan |
2,506 | 4,689 | | 4,675 | 2,301 | 1,399 | ||||||||||||||||||
Non participating restricted shares |
108,276 | | | | 54,138 | | ||||||||||||||||||
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Weighted average shares - diluted [b] |
107,111,909 | 91,661,430 | 106,385,007 | 74,524,919 | 95,459,375 | 57,767,137 | ||||||||||||||||||
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Net income (loss) per share |
$ | 0.31 | $ | 1.14 | $ | (0.13 | ) | $ | 1.90 | $ | 3.19 | $ | 4.32 | |||||||||||
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Net income (loss) per diluted share |
$ | 0.30 | $ | 1.13 | $ | (0.13 | ) | $ | 1.88 | $ | 3.17 | $ | 4.26 | |||||||||||
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[a] | Includes weighted average unvested participating restricted shares |
[b] | Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Companys common shares at the average market price during the period of calculation. |
30
ALTERRA CAPITAL HOLDINGS LIMITED
OPERATING INCOME RECONCILIATION (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | Dec. 31, 2010 | Dec. 31, 2009 | |||||||||||||||||||
Before tax |
||||||||||||||||||||||||
Net income (loss) |
$ | 28,308 | $ | 105,807 | $ | (21,079 | ) | $ | 144,153 | $ | 306,491 | $ | 256,236 | |||||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, before tax [a] |
4,249 | 11,763 | 27,263 | 13,131 | 65 | (2,173 | ) | |||||||||||||||||
Foreign exchange losses (gains), before tax |
3,090 | (634 | ) | 2,212 | (3,086 | ) | (115 | ) | (5,772 | ) | ||||||||||||||
Merger and acquisition expenses, before tax |
| (54,570 | ) | | (49,826 | ) | (48,776 | ) | (31,566 | ) | ||||||||||||||
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Net operating income (loss) |
35,647 | 62,366 | 8,396 | 104,372 | 257,665 | 216,725 | ||||||||||||||||||
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Net of tax |
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Net income (loss) |
$ | 32,635 | $ | 103,447 | $ | (14,052 | ) | $ | 139,828 | $ | 302,335 | $ | 246,215 | |||||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] |
4,711 | 11,540 | 27,313 | 12,776 | (865 | ) | (1,411 | ) | ||||||||||||||||
Foreign exchange losses (gains), net of tax |
2,212 | (298 | ) | 1,572 | (1,978 | ) | 363 | (4,331 | ) | |||||||||||||||
Merger and acquisition expenses, net of tax |
| (55,915 | ) | | (51,171 | ) | (50,121 | ) | (31,566 | ) | ||||||||||||||
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Net operating income |
39,558 | 58,774 | 14,833 | 99,455 | 251,712 | 208,907 | ||||||||||||||||||
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Weighted average shares outstanding: |
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Basic |
105,604,786 | 91,042,301 | 106,385,007 | 73,779,447 | 94,682,279 | 57,006,908 | ||||||||||||||||||
Diluted |
107,111,909 | 91,661,430 | 106,385,007 | 74,524,919 | 95,459,375 | 57,767,137 | ||||||||||||||||||
Basic per share data |
||||||||||||||||||||||||
Earnings (losses) per share |
$ | 0.31 | $ | 1.14 | $ | (0.13 | ) | $ | 1.90 | $ | 3.19 | $ | 4.32 | |||||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] |
0.04 | 0.12 | 0.26 | 0.17 | (0.01 | ) | (0.02 | ) | ||||||||||||||||
Foreign exchange losses (gains), net of tax |
0.02 | | 0.01 | (0.03 | ) | 0.01 | (0.08 | ) | ||||||||||||||||
Merger and acquisition expenses, net of tax |
| (0.61 | ) | | (0.69 | ) | (0.53 | ) | (0.56 | ) | ||||||||||||||
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Net operating income (loss) per share |
$ | 0.37 | $ | 0.65 | $ | 0.14 | $ | 1.35 | $ | 2.66 | $ | 3.66 | ||||||||||||
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Diluted per share data |
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Diluted earnings (loss) per share |
$ | 0.30 | $ | 1.13 | $ | (0.13 | ) | $ | 1.88 | $ | 3.17 | $ | 4.26 | |||||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] |
0.04 | 0.12 | 0.26 | 0.17 | (0.01 | ) | (0.02 | ) | ||||||||||||||||
Foreign exchange losses (gains), net of tax |
0.02 | | 0.01 | (0.03 | ) | 0.01 | (0.07 | ) | ||||||||||||||||
Merger and acquisition expenses, net of tax |
| (0.61 | ) | | (0.69 | ) | (0.53 | ) | (0.55 | ) | ||||||||||||||
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Net operating income per diluted share |
$ | 0.37 | $ | 0.64 | $ | 0.14 | $ | 1.33 | $ | 2.64 | $ | 3.62 | ||||||||||||
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[a] | Net realized and unrealized (gains) losses on non-hedge fund investments includes realized and unrealized (gains) losses on trading securities, realized (gains) losses on available for sale securities, net impairment losses recognized in earnings, earnings from equity method investments and changes in fair value of investment derivatives, catastrophe bonds and structured deposits. |
Per share totals may not add due to rounding.
31
ALTERRA CAPITAL HOLDINGS LIMITED
BOOK VALUE PER SHARE (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
As of June 30, 2011 | As of Mar.31, 2011 | As of Dec. 31, 2010 | ||||||||||
Price per share at period end |
$ | 22.30 | $ | 22.26 | $ | 21.64 | ||||||
Shareholders equity |
$ | 2,793,081 | $ | 2,723,194 | $ | 2,918,270 | ||||||
Goodwill and intangible assets |
$ | 58,094 | $ | 58,585 | $ | 59,076 | ||||||
Tangible book value |
$ | 2,734,987 | $ | 2,664,609 | $ | 2,859,194 | ||||||
Basic common shares outstanding [a] |
105,794,521 | 105,733,610 | 110,963,160 | |||||||||
Add: unvested restricted stock units |
247,179 | 247,179 | 167,971 | |||||||||
Add: dilutive impact of warrants outstanding |
1,334,909 | 1,346,672 | 1,036,442 | |||||||||
Add: dilutive impact of options outstanding |
123,881 | 134,901 | 123,395 | |||||||||
Add: dilutive impact of employee stock purchase plan |
| 4,016 | | |||||||||
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Diluted shares outstanding [b] |
107,500,490 | 107,466,378 | 112,290,968 | |||||||||
Basic book value per share |
$ | 26.40 | $ | 25.76 | $ | 26.30 | ||||||
Diluted book value per share |
$ | 25.98 | $ | 25.34 | $ | 25.99 | ||||||
Basic tangible book value per share |
$ | 25.85 | $ | 25.20 | $ | 25.77 | ||||||
Diluted tangible book value per share |
$ | 25.44 | $ | 24.79 | $ | 25.46 |
[a] | Includes unvested restricted shares |
[b] | Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Companys common shares at the period-end market price. |
32
ALTERRA CAPITAL HOLDINGS LIMITED
REGULATION G
In presenting the Companys results, management has included and discussed net operating income, net operating income per share, net operating income per diluted share, annualized net operating return on average shareholders equity, tangible book value per share and diluted tangible book value per share. These measures are non-GAAP financial measures as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of the Companys business. These measures, however, should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The reconciliation of such measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.
Net operating income is defined as net income excluding after-tax net realized and unrealized gains or losses on non- hedge fund investments (this includes net realized and unrealized gains or losses on trading securities, net realized gains or losses on available for sale securities, net impairment losses recognized in earnings, changes in fair value of investment derivatives, catastrophe bonds, structured deposits and earnings from equity method investments), after-tax net foreign exchange gains or losses and after-tax merger and acquisition expenses. Net operating income per share and per diluted share is defined as the net operating income divided by the weighted average common shares or weighted average diluted common shares, respectively. We believe that this non-GAAP measure provides a better indication of management performance as realized and unrealized gains and losses on fixed maturities may fluctuate from period to period and foreign exchange gains and losses are typically outside the control of management. Merger and acquisition expenses are not indicative of expenses fundamental to the business and may fluctuate from period to period.
Annualized net operating return on average shareholders equity is defined as annualized net operating income divided by the average of the beginning and ending shareholders equity. Tangible book value is defined as shareholders equity excluding goodwill and intangible assets. Tangible book value per share and diluted tangible book value per share is defined as the tangible book value divided by the common shares outstanding or diluted common shares outstanding, respectively. These non-GAAP measures allow management to assess how the Company has performed in terms of wealth generated for its shareholders.
33
ALTERRA CAPITAL HOLDINGS LIMITED
Reclassified Segment Information
Selected Financial Information
34
ALTERRA CAPITAL HOLDINGS LIMITED
RECLASSIFICATION OF INSURANCE AND U.S. SPECIALTY SEGMENTS
(Expressed in thousands of United States Dollars)
INSURANCE SEGMENT
Year ended | Year ended | Year ended | Year ended | |||||||||||||||||||||
Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2009 | |||||||||||||||||||||
(Reclassified) | Reclassified amounts |
(As previously reported) |
(Reclassified) | Reclassified amounts |
(As previously reported) |
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Gross premiums written |
$ | 399,612 | $ | 29,492 | $ | 370,120 | $ | 447,340 | $ | 19,573 | $ | 427,767 | ||||||||||||
Reinsurance premiums ceded |
(180,691 | ) | (10,083 | ) | (170,608 | ) | (218,633 | ) | (6,550 | ) | (212,083 | ) | ||||||||||||
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Net premiums written |
$ | 218,921 | $ | 19,409 | $ | 199,512 | $ | 228,707 | $ | 13,023 | $ | 215,684 | ||||||||||||
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Earned premiums |
$ | 415,396 | $ | 23,680 | $ | 391,716 | $ | 434,147 | $ | 17,057 | $ | 417,090 | ||||||||||||
Earned premiums ceded |
(180,684 | ) | (7,561 | ) | (173,123 | ) | (216,687 | ) | (5,560 | ) | (211,127 | ) | ||||||||||||
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Net premiums earned |
234,712 | 16,119 | 218,593 | 217,460 | 11,497 | 205,963 | ||||||||||||||||||
Net losses and loss expenses |
(140,108 | ) | (11,285 | ) | (128,823 | ) | (140,403 | ) | (8,048 | ) | (132,355 | ) | ||||||||||||
Acquisition costs |
(3,651 | ) | (270 | ) | (3,381 | ) | 1,206 | (27 | ) | 1,233 | ||||||||||||||
General and administrative expenses |
(34,508 | ) | (5,893 | ) | (28,615 | ) | (27,927 | ) | (3,304 | ) | (24,623 | ) | ||||||||||||
Other income |
1,267 | 507 | 760 | 1,620 | 382 | 1,238 | ||||||||||||||||||
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Underwriting income (loss) |
$ | 57,712 | $ | (822 | ) | $ | 58,534 | $ | 51,956 | $ | 500 | $ | 51,456 | |||||||||||
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Loss ratio |
59.7 | % | 58.9 | % | 64.6 | % | 64.3 | % | ||||||||||||||||
Acquisition cost ratio |
1.6 | % | 1.6 | % | (0.6 | %) | (0.6 | %) | ||||||||||||||||
General and administrative expense ratio |
14.7 | % | 13.1 | % | 12.9 | % | 11.9 | % | ||||||||||||||||
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Combined ratio |
76.0 | % | 73.6 | % | 76.9 | % | 75.6 | % | ||||||||||||||||
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U.S. SPECIALTY SEGMENT | ||||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | |||||||||||||||||||||
Dec. 31, 2010 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2009 | |||||||||||||||||||||
(Reclassified) | Reclassified amounts |
(As previously reported) |
(Reclassified) | Reclassified amounts |
(As previously reported) |
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Gross premiums written |
$ | 294,498 | $ | (29,492) | $ | 323,990 | $ | 265,905 | $ | (19,573) | $ | 285,478 | ||||||||||||
Reinsurance premiums ceded |
(88,493 | ) | 10,083 | (98,576 | ) | (148,546 | ) | 6,550 | (155,096 | ) | ||||||||||||||
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Net premiums written |
$ | 206,005 | $ | (19,409) | $ | 225,414 | $ | 117,359 | $ | (13,023) | $ | 130,382 | ||||||||||||
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Earned premiums |
$ | 288,270 | $ | (23,680) | $ | 311,950 | $ | 239,613 | $ | (17,057) | $ | 256,670 | ||||||||||||
Earned premiums ceded |
(117,657 | ) | 7,561 | (125,218 | ) | (149,008 | ) | 5,560 | (154,568 | ) | ||||||||||||||
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Net premiums earned |
170,613 | (16,119 | ) | 186,732 | 90,605 | (11,497) | 102,102 | |||||||||||||||||
Net losses and loss expenses |
(107,052 | ) | 11,285 | (118,337 | ) | (54,764 | ) | 8,048 | (62,812 | ) | ||||||||||||||
Acquisition costs |
(28,174 | ) | 270 | (28,444 | ) | (7,474 | ) | 27 | (7,501 | ) | ||||||||||||||
General and administrative expenses |
(30,122 | ) | 5,893 | (36,015 | ) | (27,925 | ) | 3,304 | (31,229 | ) | ||||||||||||||
Other income |
| (507 | ) | 507 | (68 | ) | (382 | ) | 314 | |||||||||||||||
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Underwriting income (loss) |
$ | 5,265 | $ | 822 | $ | 4,443 | $ | 374 | $ | (500) | $ | 874 | ||||||||||||
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Loss ratio |
62.7 | % | 63.4 | % | 60.4 | % | 61.5 | % | ||||||||||||||||
Acquisition cost ratio |
16.5 | % | 15.2 | % | 8.2 | % | 7.3 | % | ||||||||||||||||
General and administrative expense ratio |
17.7 | % | 19.3 | % | 30.9 | % | 30.7 | % | ||||||||||||||||
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Combined ratio |
96.9 | % | 97.9 | % | 99.5 | % | 99.5 | % | ||||||||||||||||
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|
Effective January 1, 2011, Alterra redefined its Insurance and U.S. Specialty segments based on changes to the internal reporting structure. Insurance business underwritten by Alterra Insurance USA Inc., which was previously reported within the U.S. Specialty segment, has been reclassified to the Insurance segment. Alterra Insurance USA Inc. is a managing general underwriter for Alterra Excess & Surplus Insurance Company and Alterra America Insurance Company, as well as various third party insurance companies, and is Alterras principal insurance underwriting platform for retail distribution in the United States. Segment disclosures for comparative periods have been restated to reflect this reclassification.
35
ALTERRA CAPITAL HOLDINGS LIMITED
INSURANCE SEGMENT Results - as Reclassified (Unaudited)
(Expressed in thousands of United States Dollars)
Dec. 31, 2010 | Sept. 30, 2010 | June 30, 2010 | Mar. 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | June 30, 2009 | Mar. 31, 2009 | |||||||||||||||||||||||||
Gross premiums written |
$ | 113,236 | $ | 77,944 | $ | 139,026 | $ | 69,406 | $ | 126,678 | $ | 90,430 | $ | 139,226 | $ | 91,006 | ||||||||||||||||
Reinsurance premiums ceded |
(56,728 | ) | (36,875 | ) | (47,437 | ) | (39,651 | ) | (71,053 | ) | (43,388 | ) | (47,972 | ) | (56,220 | ) | ||||||||||||||||
Net premiums written |
$ | 56,508 | $ | 41,069 | $ | 91,589 | $ | 29,755 | $ | 55,625 | $ | 47,042 | $ | 91,254 | $ | 34,786 | ||||||||||||||||
Earned premiums |
$ | 106,169 | $ | 102,640 | $ | 104,841 | $ | 101,746 | $ | 114,155 | $ | 108,776 | $ | 105,576 | $ | 105,640 | ||||||||||||||||
Earned premiums ceded |
(43,847 | ) | (42,796 | ) | (45,211 | ) | (48,830 | ) | (56,043 | ) | (56,337 | ) | (51,129 | ) | (53,178 | ) | ||||||||||||||||
Net premiums earned |
62,322 | 59,844 | 59,630 | 52,916 | 58,112 | 52,439 | 54,447 | 52,462 | ||||||||||||||||||||||||
Net losses and loss expenses |
(35,687 | ) | (26,679 | ) | (38,296 | ) | (39,446 | ) | (27,829 | ) | (34,515 | ) | (39,901 | ) | (38,158 | ) | ||||||||||||||||
Acquisition costs |
(1,765 | ) | (1,382 | ) | (821 | ) | 317 | (60 | ) | (331 | ) | 230 | 1,367 | |||||||||||||||||||
General and administrative expenses |
(11,812 | ) | (7,717 | ) | (8,132 | ) | (6,847 | ) | (7,046 | ) | (8,114 | ) | (6,693 | ) | (6,074 | ) | ||||||||||||||||
Other income |
68 | 1,108 | 97 | (6 | ) | 42 | 143 | 219 | 1,216 | |||||||||||||||||||||||
Underwriting income |
$ | 13,126 | $ | 25,174 | $ | 12,478 | $ | 6,934 | $ | 23,219 | $ | 9,622 | $ | 8,302 | $ | 10,813 | ||||||||||||||||
Loss ratio |
57.3 | % | 44.6 | % | 64.2 | % | 74.5 | % | 47.9 | % | 65.8 | % | 73.3 | % | 72.7 | % | ||||||||||||||||
Acquisition cost ratio |
2.8 | % | 2.3 | % | 1.4 | % | (0.6 | %) | 0.1 | % | 0.6 | % | (0.4 | %) | (2.6 | %) | ||||||||||||||||
General and administrative expense ratio |
18.9 | % | 12.9 | % | 13.6 | % | 13.0 | % | 12.1 | % | 15.5 | % | 12.3 | % | 11.6 | % | ||||||||||||||||
Combined ratio |
79.0 | % | 59.8 | % | 79.2 | % | 86.9 | % | 60.1 | % | 81.9 | % | 85.2 | % | 81.7 | % | ||||||||||||||||
36
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. SPECIALTY SEGMENT Results - as Reclassified (Unaudited)
(Expressed in thousands of United States Dollars)
|
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Dec. 31, 2010 |
Sept. 30, 2010 |
June 30, 2010 |
Mar. 31, 2010 |
Dec. 31, 2009 |
Sept. 30, 2009 |
June 30, 2009 |
Mar. 31, 2009 |
|||||||||||||||||||||||||
Gross premiums written |
$ | 65,625 | $ | 64,198 | $ | 90,773 | $ | 73,902 | $ | 64,572 | $ | 60,123 | $ | 75,701 | $ | 65,509 | ||||||||||||||||
Reinsurance premiums ceded |
(15,956 | ) | (18,713 | ) | (5,672 | ) | (48,152 | ) | (31,471 | ) | (24,755 | ) | (52,938 | ) | (39,382 | ) | ||||||||||||||||
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Net premiums written |
$ | 49,669 | $ | 45,485 | $ | 85,101 | $ | 25,750 | $ | 33,101 | $ | 35,368 | $ | 22,763 | $ | 26,127 | ||||||||||||||||
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Earned premiums |
$ | 74,683 | $ | 73,337 | $ | 71,065 | $ | 69,185 | $ | 66,287 | $ | 63,360 | $ | 59,053 | $ | 50,913 | ||||||||||||||||
Earned premiums ceded |
(26,140 | ) | (26,071 | ) | (27,053 | ) | (38,393 | ) | (40,260 | ) | (35,551 | ) | (41,271 | ) | (31,926 | ) | ||||||||||||||||
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Net premiums earned |
48,543 | 47,266 | 44,012 | 30,792 | 26,027 | 27,809 | 17,782 | 18,987 | ||||||||||||||||||||||||
Net losses and loss expenses |
(31,878 | ) | (29,295 | ) | (26,683 | ) | (19,196 | ) | (14,809 | ) | (18,507 | ) | (11,057 | ) | (10,391 | ) | ||||||||||||||||
Acquisition costs |
(8,618 | ) | (6,763 | ) | (9,111 | ) | (3,682 | ) | (1,838 | ) | (1,964 | ) | (2,483 | ) | (1,189 | ) | ||||||||||||||||
General and administrative expenses |
(7,552 | ) | (8,693 | ) | (6,355 | ) | (7,522 | ) | (9,786 | ) | (6,971 | ) | (4,357 | ) | (6,811 | ) | ||||||||||||||||
Other income |
| | | | | | 153 | (221 | ) | |||||||||||||||||||||||
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Underwriting income (loss) |
$ | 495 | $ | 2,515 | $ | 1,863 | $ | 392 | $ | (406 | ) | $ | 367 | $ | 38 | $ | 375 | |||||||||||||||
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Loss ratio |
65.7 | % | 62.0 | % | 60.6 | % | 62.3 | % | 56.9 | % | 66.6 | % | 62.2 | % | 54.7 | % | ||||||||||||||||
Acquisition cost ratio |
17.8 | % | 14.3 | % | 20.7 | % | 12.0 | % | 7.1 | % | 7.1 | % | 14.0 | % | 6.3 | % | ||||||||||||||||
General and administrative expense ratio |
15.5 | % | 18.4 | % | 14.5 | % | 24.4 | % | 37.6 | % | 25.0 | % | 24.4 | % | 35.9 | % | ||||||||||||||||
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Combined ratio |
99.0 | % | 94.7 | % | 95.8 | % | 98.7 | % | 101.6 | % | 98.7 | % | 100.6 | % | 96.9 | % | ||||||||||||||||
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37
ALTERRA CAPITAL HOLDINGS LIMITED
Pro Forma Combined - Alterra Capital Holdings Limited and Harbor Point Limited
Selected Financial Information
The following presentation is for informational purposes only
38
ALTERRA CAPITAL HOLDINGS LIMITED
PRO FORMA COMBINED STATEMENTS OF INCOME [a] (unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2010 | Mar. 31, 2010 | Dec. 31, 2009 | Sept. 30, 2009 | June 30, 2009 | Mar. 31, 2009 | |||||||||||||||||||
REVENUES |
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Gross premiums written |
$ | 476,550 | $ | 676,905 | $ | 337,048 | $ | 382,650 | $ | 564,251 | $ | 662,432 | ||||||||||||
Reinsurance premiums ceded |
(81,333 | ) | (159,515 | ) | (81,627 | ) | (73,703 | ) | (126,503 | ) | (168,155 | ) | ||||||||||||
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Net premiums written |
$ | 395,217 | $ | 517,390 | $ | 255,421 | $ | 308,947 | $ | 437,748 | $ | 494,277 | ||||||||||||
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Net premiums earned |
$ | 368,061 | $ | 338,332 | $ | 347,833 | $ | 351,245 | $ | 366,130 | $ | 317,598 | ||||||||||||
Net investment income |
61,562 | 64,583 | 60,668 | 60,068 | 59,636 | 58,943 | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments |
(13,734 | ) | 13,280 | 18,004 | 29,622 | 22,462 | 20,722 | |||||||||||||||||
Net impairment losses recognized in earnings |
(300 | ) | (420 | ) | (925 | ) | (139 | ) | (2,014 | ) | | |||||||||||||
Net realized gain on retirement of senior notes |
| | 111 | | | | ||||||||||||||||||
Other income |
339 | 480 | 189 | 964 | 1,193 | 1,799 | ||||||||||||||||||
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Total revenues |
415,928 | 416,255 | 425,880 | 441,760 | 447,407 | 399,062 | ||||||||||||||||||
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LOSSES AND EXPENSES |
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Net losses and loss expenses |
213,517 | 210,543 | 166,573 | 181,064 | 186,301 | 178,130 | ||||||||||||||||||
Claims and policy benefits |
13,943 | 17,659 | 16,976 | 14,378 | 55,407 | 14,332 | ||||||||||||||||||
Acquisition costs |
64,315 | 53,998 | 54,042 | 59,613 | 53,317 | 47,611 | ||||||||||||||||||
Interest expense |
8,061 | 5,226 | 6,978 | 6,292 | 5,146 | 4,351 | ||||||||||||||||||
Net foreign exchange (gains) losses |
(1,622 | ) | (869 | ) | 789 | (116 | ) | (5,571 | ) | (1,911 | ) | |||||||||||||
Merger and acquisition expenses |
| | | (41,350 | ) | 4,785 | 5,223 | |||||||||||||||||
General and administrative expenses |
60,137 | 51,611 | 66,157 | 57,048 | 53,979 | 57,508 | ||||||||||||||||||
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Total losses and expenses |
358,351 | 338,168 | 311,515 | 276,929 | 353,364 | 305,244 | ||||||||||||||||||
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INCOME BEFORE TAXES |
57,577 | 78,087 | 114,365 | 164,831 | 94,043 | 93,818 | ||||||||||||||||||
Income tax expense |
4,294 | 1,311 | 5,686 | 2,910 | 3,206 | 1,990 | ||||||||||||||||||
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NET INCOME |
53,283 | 76,776 | 108,679 | 161,921 | 90,837 | 91,828 | ||||||||||||||||||
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[a] | The information presented above is on a combined pro forma basis (after the elimination of intercompany transactions and the amortization of certain acquisition accounting fair value adjustments). The pro forma financial information is provided for informational purposes only to present a summary of the combined results of operations assuming the amalgamation with Harbor Point had occurred at the beginning of each calendar year presented. The pro forma data does not necessarily represent results that would have occurred if the amalgamation had taken place at the beginning of each calendar year presented, nor is it necessarily indicative of the future results. |
39
Exhibit 99.3
ALTERRA CAPITAL ANNOUNCES $0.14 DIVIDEND
Dividend Increase of 16.7% on Prior Quarter
HAMILTON, BERMUDA, August 2, 2011Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (Alterra) announced today that Alterras Board of Directors declared a dividend of $0.14 per share, an increase of $0.02 per share, or 16.7%, from the previous dividend. This is the tenth consecutive year of increasing quarterly dividend payments. The dividend is payable on August 30, 2011, to shareholders of record as of August 16, 2011.
Alterra Capital Holdings Limited is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers.
Contacts Susan Spivak Bernstein Senior Vice President susan.spivak@alterra-bm.com 1-212-898-6640 |
Peter Hill or Melissa Sheer Kekst and Company peter-hill@kekst.com melissa-sheer@kekst.com 1-212-521-4800 |
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