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 7, 2012
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 7, 2012, the Registrant issued a news release announcing financial results for the three and six months ended June 30, 2012. In addition, on the same date, the Alterra Capital Holdings Limited Investor Financial Supplement for the quarter ended June 30, 2012 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 7, 2012, the Registrant issued a news release announcing the declaration by the Board of Directors of a dividend of $0.16 per share and the approval by the Board of Directors of an increase in the Registrants share repurchase plan by an additional $100.0 million resulting in an aggregate amount currently authorized under the share repurchase plan of $204.6 million.
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 7, 2012, announcing financial results. | |
99.2 | Investor Financial Supplement for the quarter ended June 30, 2012. | |
99.3 | News Release of Alterra Capital Holdings Limited, dated August 7, 2012, announcing a dividend declaration and increase in share repurchase authorization. |
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 7, 2012 | 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 7, 2012, announcing financial results. | |
99.2 | Investor Financial Supplement for the quarter ended June 30, 2012. | |
99.3 | News Release of Alterra Capital Holdings Limited, dated August 7, 2012, announcing a dividend declaration and increase in share repurchase authorization. |
Exhibit 99.1
ALTERRA CAPITAL REPORTS SECOND QUARTER 2012 RESULTS
Net Operating Income of $0.68 per Diluted Share
Diluted Book Value per Share Growth including Dividends of 4.2%
HAMILTON, BERMUDA, August 7, 2012Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (Alterra) today reported net income of $78.9 million, or $0.77 per diluted share, for the second quarter of 2012, compared to net income of $32.6 million, or $0.30 per diluted share, for the same quarter of 2011.
Net operating income for the second quarter of 2012 was $69.0 million, or $0.68 per diluted share, compared to net operating income of $39.6 million, or $0.37 per diluted share, for the same quarter of 2011. Annualized net operating return on average shareholders equity for the second quarter of 2012 was 9.7%.
For the six months ended June 30, 2012, Alterra reported net income of $158.0 million, or $1.54 per diluted share, compared to net loss of $14.1 million, or $0.13 per diluted share, for the same period of 2011. Net operating income for the six months ended June 30, 2012 was $136.7 million, or $1.33 per diluted share, compared to net operating income of $14.8 million, or $0.14 per diluted share, for the same period of 2011. Annualized net operating return on average shareholders equity for the six months ended June 30, 2012 was 9.6%.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: We are pleased to report another solid quarter for Alterra. Despite a challenging market environment, we achieved an annualized net operating return on equity close to 10% for the quarter, while continuing to maintain a conservative philosophy on our newer product lines and teams. While we would prefer to see rates increasing at a faster pace, we are pleased that overall firming continues. Over the last twelve months, we have supplemented our 7.7% operating return on equity with significant share repurchases at a discount to diluted book value, contributing to a 12.5% increase in diluted book value per share, including dividends, since June 30, 2011. We expect to continue to use share repurchases as an important capital management tool for maximizing shareholder value until rate increases enable us to more effectively deploy any excess capital in our underwriting operations.
Second quarter 2012 results for Alterra include:
| Property and casualty gross premiums written of $565.8 million, representing an increase of $2.8 million, or 0.5%, compared to the same quarter of 2011; |
| Net premiums written of $376.1 million, representing a decrease of $50.4 million, or 11.8%, compared to the same quarter of 2011. This decrease reflects increased property reinsurance premiums ceded in order to manage aggregate property exposures across all segments; |
| A combined ratio on property and casualty business of 86.6%, compared to 93.7% for the same quarter of 2011; |
| A nominal level of property catastrophe event net losses, compared to net losses of $49.6 million, net of reinstatement premiums, in the same quarter of 2011; |
| Net favorable development on prior years loss reserves of $20.4 million, or 5.8 combined ratio points, compared to $48.5 million, or 13.9 combined ratio points, in the same quarter of 2011; |
| Net investment income of $54.7 million, compared to $59.7 million in the same quarter of 2011, a decrease of 8.3%; and |
| Income of $7.4 million from New Point Re IV Limited, a sidecar in which Alterra has an indirect 34.8% equity interest, consisting of fees and equity share earnings. Gross premiums written by New Point Re IV Limited were $4.1 million for the second quarter of 2012. |
Gross premiums written and net premiums written from property and casualty underwriting for the second quarter of 2012 are shown in the following table, with the increase/decrease compared to the same quarter of 2011:
Segment ($ in millions) |
GPW | % Inc/(Dec) | NPW | % Inc/(Dec) | Combined Ratio | |||||||||||||||
Global Insurance |
$ | 125.3 | (4.3 | )% | $ | 72.1 | (4.9 | )% | 63.0 | % | ||||||||||
Reinsurance |
246.8 | 0.8 | % | 193.7 | (10.9 | )% | 80.9 | % | ||||||||||||
U.S. Insurance |
112.2 | 2.2 | % | 60.7 | (25.6 | )% | 99.8 | % | ||||||||||||
Alterra at Lloyds |
72.0 | (0.6 | )% | 44.9 | (5.4 | )% | 104.6 | % | ||||||||||||
Latin America |
9.5 | 91.9 | % | 4.8 | 9.1 | % | 116.4 | % | ||||||||||||
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Total |
$ | 565.8 | 0.5 | % | $ | 376.1 | (11.8 | )% | 86.6 | % | ||||||||||
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Results for the six months ended June 30, 2012 include:
| Property and casualty gross premiums written of $1,226.7 million, representing an increase of $36.3 million, or 3.0%, compared to the same period of 2011; |
| Net premiums written of $812.5 million, representing a decrease of $104.0 million, or 11.3%, compared to the same period of 2011. This decrease reflects increased property reinsurance premiums ceded in order to manage aggregate property exposures across all segments, and a decrease in net premiums written on the contract binding business in the U.S. insurance segment resulting from the sale of the renewal rights for this business in 2011; |
| A combined ratio on property and casualty business of 89.5%, compared to 103.5% for the same period of 2011; |
| A nominal level of property catastrophe event net losses, compared to net losses of $155.8 million, net of reinstatement premiums, in the same period of 2011; |
| Net favorable development on prior years loss reserves of $31.2 million, or 4.5 combined ratio points, compared to $78.7 million, or 10.8 combined ratio points, in the same period of 2011; |
| Net investment income of $113.4 million, compared to $117.4 million in the same period of 2011, a decrease of 3.4%; and |
| Income of $16.6 million from New Point Re IV Limited consisting of fees and equity share earnings. Gross premiums written by New Point Re IV Limited were $84.3 million for the first six months of 2012. |
Gross premiums written and net premiums written from property and casualty underwriting for the six months ended June 30, 2012 are shown in the following table, with the increase/decrease compared to the same period of 2011:
Segment ($ in millions) |
GPW | % Inc/(Dec) | NPW | % Inc/(Dec) | Combined Ratio | |||||||||||||||
Global Insurance |
$ | 192.0 | (1.4 | )% | $ | 95.6 | (5.5 | )% | 57.7 | % | ||||||||||
Reinsurance |
565.2 | (6.7 | )% | 452.5 | (16.6 | )% | 86.9 | % | ||||||||||||
U.S. Insurance |
216.5 | 15.4 | % | 94.5 | (22.0 | )% | 101.5 | % | ||||||||||||
Alterra at Lloyds |
218.2 | 21.0 | % | 152.5 | 15.3 | % | 106.5 | % | ||||||||||||
Latin America |
34.8 | 57.7 | % | 17.5 | (10.0 | )% | 116.3 | % | ||||||||||||
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Total |
$ | 1,226.7 | 3.0 | % | $ | 812.5 | (11.3 | )% | 89.5 | % | ||||||||||
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Balance Sheet
Total invested assets, including cash and cash equivalents, were $7,886.0 million as of June 30, 2012, an increase of $71.2 million from December 31, 2011. As of June 30, 2012, 96.4% of the fixed maturities portfolio (by carrying value) was investment-grade, an increase from 94.4% as of December 31, 2011. As of June 30, 2012, the weighted average book yield of Alterras cash and fixed maturities portfolio was 3.26%, and the weighted average duration was 4.1 years.
Under a Board-approved share repurchase authorization, Alterra repurchased 3,639,100 common shares during the second quarter of 2012 at an average price of $22.70 per share for a total of $82.6 million. Share repurchases under the Board-approved share repurchase authorization for the six months ended June 30, 2012 were 5,704,977 common shares at an average price of $23.01 per share for a total of $131.3 million. As of June 30, 2012, $123.0 million remained under the Board-approved share repurchase authorization.
Shareholders equity was $2,851.7 million as of June 30, 2012, an increase of 1.5% from December 31, 2011. Diluted book value per share as of June 30, 2012 was $28.68. Including dividends declared, diluted book value per share growth for the second quarter of 2012 was 4.2%, and was 12.5% for the twelve months ended June 30, 2012. Not included in shareholders equity as of June 30, 2012 were $157.5 million of unrecognized gains on held-to-maturity securities, which represented $1.58 in unrecognized diluted book value per share.
Subsequent Event - Agriculture losses
Based on recent reports on U.S. current and expected crop conditions and crop prices and Alterras geographical spread of risk, Alterra estimates a net underwriting loss for the third quarter of 2012 on its agriculture reinsurance business in the range of $15 million to $25 million, pretax and net of reinsurance. Actual losses may vary materially from this estimate due to the inherent uncertainties in making such determinations resulting from several factors, including but not limited to, the preliminary nature of available information and the potential inaccuracies and inadequacies in the data provided by clients and brokers.
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 8, 2012 at 11:00 am (EDT) to discuss these results and related matters. The conference call can be accessed via telephone by dialing 1-888-680-0892 (toll-free U.S.) or 1-617-213-4858 (international) and using access code 27125669. 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 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. In particular, statements regarding future rate movements are forward looking statements. 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, 2012 | December 31, 2011 | |||||||
(Unaudited) | ||||||||
ASSETS |
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Cash and cash equivalents |
$ | 763,957 | $ | 922,844 | ||||
Fixed maturities, trading, at fair value |
211,796 | 229,206 | ||||||
Fixed maturities, available for sale, at fair value |
5,709,850 | 5,501,925 | ||||||
Fixed maturities, held to maturity, at amortized cost (fair value $991,538) |
833,990 | 874,259 | ||||||
Other investments, at fair value |
366,404 | 286,515 | ||||||
Accrued interest income |
65,252 | 71,322 | ||||||
Premiums receivable |
991,927 | 715,154 | ||||||
Losses and benefits recoverable from reinsurers |
1,083,840 | 1,068,119 | ||||||
Deferred acquisition costs |
170,904 | 145,850 | ||||||
Prepaid reinsurance premiums |
326,014 | 212,238 | ||||||
Trades pending settlement |
31,925 | 22,887 | ||||||
Goodwill and intangible assets |
55,431 | 56,111 | ||||||
Other assets |
85,296 | 79,417 | ||||||
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Total assets |
$ | 10,696,586 | $ | 10,185,847 | ||||
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LIABILITIES |
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Property and casualty losses |
$ | 4,308,316 | $ | 4,216,538 | ||||
Life and annuity benefits |
1,148,304 | 1,190,697 | ||||||
Deposit liabilities |
158,412 | 151,035 | ||||||
Funds withheld from reinsurers |
93,510 | 112,469 | ||||||
Unearned property and casualty premiums |
1,281,406 | 1,020,639 | ||||||
Reinsurance balances payable |
260,351 | 134,354 | ||||||
Accounts payable and accrued expenses |
116,575 | 110,380 | ||||||
Trades pending settlement |
37,455 | | ||||||
Senior notes |
440,521 | 440,500 | ||||||
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Total liabilities |
7,844,850 | 7,376,612 | ||||||
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SHAREHOLDERS EQUITY |
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Common shares (par value $1.00 per share); |
96,853 | 102,102 | ||||||
Additional paid-in capital |
1,729,311 | 1,847,034 | ||||||
Accumulated other comprehensive income |
202,229 | 166,957 | ||||||
Retained earnings |
823,343 | 693,142 | ||||||
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Total shareholders equity |
2,851,736 | 2,809,235 | ||||||
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Total liabilities and shareholders equity |
$ | 10,696,586 | $ | 10,185,847 | ||||
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Book value per share |
$ | 29.44 | $ | 27.51 | ||||
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Diluted book value per share |
$ | 28.68 | $ | 26.91 | ||||
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Diluted tangible book value per share [a] |
$ | 28.12 | $ | 26.37 | ||||
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Diluted shares outstanding |
99,429,181 | 104,406,779 |
[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, |
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2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUES |
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Gross premiums written |
$ | 566,857 | $ | 563,907 | $ | 1,228,187 | $ | 1,191,755 | ||||||||
Reinsurance premiums ceded |
(189,879 | ) | (136,626 | ) | (414,341 | ) | (273,983 | ) | ||||||||
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Net premiums written |
$ | 376,978 | $ | 427,281 | $ | 813,846 | $ | 917,772 | ||||||||
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Earned premiums |
$ | 496,839 | $ | 443,008 | $ | 974,706 | $ | 932,270 | ||||||||
Earned premiums ceded |
(146,061 | ) | (94,067 | ) | (285,753 | ) | (203,442 | ) | ||||||||
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Net premiums earned |
350,778 | 348,941 | 688,953 | 728,828 | ||||||||||||
Net investment income |
54,729 | 59,665 | 113,407 | 117,431 | ||||||||||||
Net realized and unrealized gains (losses) on investments |
13,481 | (5,774 | ) | 38,974 | (24,592 | ) | ||||||||||
Total other-than-temporary impairment losses |
(420 | ) | (187 | ) | (5,887 | ) | (1,311 | ) | ||||||||
Portion of loss recognized in other comprehensive income (loss), before taxes |
(150 | ) | (166 | ) | (52 | ) | (71 | ) | ||||||||
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Net impairment losses recognized in earnings |
(570 | ) | (353 | ) | (5,939 | ) | (1,382 | ) | ||||||||
Other income |
1,928 | 591 | 7,290 | 1,906 | ||||||||||||
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Total revenues |
420,346 | 403,070 | 842,685 | 822,191 | ||||||||||||
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LOSSES AND EXPENSES |
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Net losses and loss expenses |
196,764 | 211,133 | 402,793 | 515,539 | ||||||||||||
Claims and policy benefits |
13,272 | 15,570 | 26,738 | 30,280 | ||||||||||||
Acquisition costs |
62,171 | 64,680 | 121,895 | 135,288 | ||||||||||||
Interest expense |
9,635 | 10,630 | 18,263 | 19,089 | ||||||||||||
Net foreign exchange losses |
25 | 3,090 | (7 | ) | 2,212 | |||||||||||
General and administrative expenses |
58,777 | 69,659 | 118,859 | 140,862 | ||||||||||||
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Total losses and expenses |
340,644 | 374,762 | 688,541 | 843,270 | ||||||||||||
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INCOME (LOSS) BEFORE TAXES |
79,702 | 28,308 | 154,144 | (21,079 | ) | |||||||||||
Income tax expense (benefit) |
762 | (4,327 | ) | (3,820 | ) | (7,027 | ) | |||||||||
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NET INCOME (LOSS) |
78,940 | 32,635 | 157,964 | (14,052 | ) | |||||||||||
Holding gains on available for sale securities arising in period [a] |
35,262 | 43,274 | 59,937 | 31,281 | ||||||||||||
Net realized gains on available for sale securities included in net income[a] |
(11,968 | ) | (620 | ) | (19,726 | ) | (3,118 | ) | ||||||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income[a] |
150 | 166 | 52 | 71 | ||||||||||||
Foreign currency translation adjustment |
(6,361 | ) | 165 | (4,991 | ) | 5,038 | ||||||||||
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Other comprehensive income (loss) |
17,083 | 42,985 | 35,272 | 33,272 | ||||||||||||
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COMPREHENSIVE INCOME |
$ | 96,023 | $ | 75,620 | $ | 193,236 | $ | 19,220 | ||||||||
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Net income (loss) per share |
$ | 0.79 | $ | 0.31 | $ | 1.58 | $ | (0.13 | ) | |||||||
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Net income (loss) per diluted share |
$ | 0.77 | $ | 0.30 | $ | 1.54 | $ | (0.13 | ) | |||||||
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Net operating income per diluted share [b] |
$ | 0.68 | $ | 0.37 | $ | 1.33 | $ | 0.14 | ||||||||
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Weighted average common shares outstandingbasic |
99,563,474 | 105,604,786 | 100,283,266 | 106,385,007 | ||||||||||||
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Weighted average common shares outstandingdiluted |
101,957,882 | 107,111,909 | 102,556,070 | 106,385,007 | ||||||||||||
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[a] | Net of tax. |
[b] | Non-GAAP financial 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, | ||||||||
2012 | 2011 | |||||||
Common shares |
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Balance, beginning of period |
$ | 102,102 | $ | 110,963 | ||||
Issuance of common shares, net |
694 | 1,406 | ||||||
Repurchase of shares |
(5,943 | ) | (6,574 | ) | ||||
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Balance, end of period |
96,853 | 105,795 | ||||||
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Additional paid-in capital |
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Balance, beginning of period |
1,847,034 | 2,026,045 | ||||||
Issuance of common shares, net |
464 | 610 | ||||||
Stock based compensation expense |
12,814 | 22,587 | ||||||
Repurchase of shares |
(131,001 | ) | (137,263 | ) | ||||
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Balance, end of period |
1,729,311 | 1,911,979 | ||||||
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Accumulated other comprehensive income |
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Unrealized holdings gains on investments: |
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Balance, beginning of period |
204,301 | 118,197 | ||||||
Holding gains on available for sale fixed maturities arising in period, net of tax |
59,937 | 31,281 | ||||||
Net realized gains on available for sale securities included in net income, net of tax |
(19,726 | ) | (3,118 | ) | ||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of tax |
52 | 71 | ||||||
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Balance, end of period |
244,564 | 146,431 | ||||||
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Cumulative foreign currency translation adjustment: |
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Balance, beginning of period |
(37,344 | ) | (19,251 | ) | ||||
Foreign currency translation adjustment |
(4,991 | ) | 5,038 | |||||
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Balance, end of period |
(42,335 | ) | (14,213 | ) | ||||
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Total accumulated other comprehensive income, end of period |
202,229 | 132,218 | ||||||
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Retained earnings |
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Balance, beginning of period |
693,142 | 682,316 | ||||||
Net income (loss) |
157,964 | (14,052 | ) | |||||
Dividends |
(27,763 | ) | (25,175 | ) | ||||
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Balance, end of period |
823,343 | 643,089 | ||||||
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Total shareholders equity |
$ | 2,851,736 | $ | 2,793,081 | ||||
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ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASHFLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30, | ||||||||
2012 | 2011 | |||||||
OPERATING ACTIVITIES |
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Net income (loss) |
$ | 157,964 | $ | (14,052 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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Stock based compensation |
12,814 | 22,587 | ||||||
Amortization of premium on fixed maturities |
13,088 | 9,801 | ||||||
Accretion of deposit liabilities |
2,197 | 3,176 | ||||||
Net realized and unrealized (gains) losses on investments |
(38,974 | ) | 24,592 | |||||
Net impairment losses recognized in earnings |
5,939 | 1,382 | ||||||
Changes in: |
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Accrued interest income |
6,098 | 4,724 | ||||||
Premiums receivable |
(266,262 | ) | (278,695 | ) | ||||
Losses and benefits recoverable from reinsurers |
(16,937 | ) | (99,028 | ) | ||||
Deferred acquisition costs |
(24,445 | ) | (58,894 | ) | ||||
Prepaid reinsurance premiums |
(113,344 | ) | (65,487 | ) | ||||
Other assets |
(9,935 | ) | (8,544 | ) | ||||
Property and casualty losses |
90,385 | 304,109 | ||||||
Life and annuity benefits |
(23,132 | ) | (31,203 | ) | ||||
Funds withheld from reinsurers |
(18,959 | ) | 1,598 | |||||
Unearned property and casualty premiums |
257,868 | 293,029 | ||||||
Reinsurance balances payable |
125,378 | 34,849 | ||||||
Accounts payable and accrued expenses |
5,634 | 4,761 | ||||||
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Cash provided by operating activities |
165,377 | 148,705 | ||||||
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INVESTING ACTIVITIES |
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Purchases of available for sale securities |
(1,216,292 | ) | (1,165,503 | ) | ||||
Sales of available for sale securities |
551,740 | 709,314 | ||||||
Redemptions/maturities of available for sale securities |
538,261 | 485,128 | ||||||
Purchases of trading securities |
(77,881 | ) | (28,065 | ) | ||||
Sales of trading securities |
72,756 | 24,563 | ||||||
Redemptions/maturities of trading securities |
24,922 | 35,969 | ||||||
Purchases of held to maturity securities |
| (2,580 | ) | |||||
Redemptions/maturities of held to maturity securities |
21,679 | 18,251 | ||||||
Net (purchases) sales of other investments |
(70,397 | ) | 17,365 | |||||
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Cash (used in) provided by investing activities |
(155,212 | ) | 94,442 | |||||
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FINANCING ACTIVITIES |
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Net proceeds from issuance of common shares |
1,158 | 2,016 | ||||||
Repurchase of common shares |
(136,944 | ) | (143,837 | ) | ||||
Dividends paid |
(27,406 | ) | (25,175 | ) | ||||
Additions to deposit liabilities |
482 | 583 | ||||||
Payments of deposit liabilities |
(2,927 | ) | (3,643 | ) | ||||
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Cash used in financing activities |
(165,637 | ) | (170,056 | ) | ||||
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Effect of exchange rate changes on foreign currency cash and cash equivalents |
(3,415 | ) | 8,360 | |||||
Net (decrease) increase in cash and cash equivalents |
(158,887 | ) | 81,451 | |||||
Cash and cash equivalents, beginning of period |
922,844 | 905,606 | ||||||
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CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 763,957 | $ | 987,057 | ||||
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid totaled $14,532 and $14,382 for the six months ended June 30, 2012 and 2011, respectively.
Income taxes paid totaled $4,868 and $165 for the six months ended June 30, 2012 and 2011, respectively.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED JUNE 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance |
Corporate | Consolidated | |||||||||||||||||||||||||||||||||
Global Insurance |
U.S. Insurance |
Reinsurance | Alterra at Lloyds |
Latin America |
Total | |||||||||||||||||||||||||||||||
Gross premiums written |
$ | 125,276 | $ | 112,186 | $ | 246,838 | $ | 72,008 | $ | 9,495 | $ | 565,803 | $ | 1,054 | $ | | $ | 566,857 | ||||||||||||||||||
Reinsurance premiums ceded |
(53,224 | ) | (51,524 | ) | (53,185 | ) | (27,068 | ) | (4,723 | ) | (189,724 | ) | (155 | ) | | (189,879 | ) | |||||||||||||||||||
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Net premiums written |
$ | 72,052 | $ | 60,662 | $ | 193,653 | $ | 44,940 | $ | 4,772 | $ | 376,079 | $ | 899 | $ | | $ | 376,978 | ||||||||||||||||||
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Earned premiums |
$ | 92,803 | $ | 100,300 | $ | 210,413 | $ | 69,330 | $ | 22,939 | $ | 495,785 | $ | 1,054 | $ | | $ | 496,839 | ||||||||||||||||||
Earned premiums ceded |
(45,367 | ) | (44,490 | ) | (29,097 | ) | (23,108 | ) | (3,844 | ) | (145,906 | ) | (155 | ) | | (146,061 | ) | |||||||||||||||||||
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Net premiums earned |
47,436 | 55,810 | 181,316 | 46,222 | 19,095 | 349,879 | 899 | | 350,778 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(22,745 | ) | (37,333 | ) | (89,607 | ) | (33,030 | ) | (14,049 | ) | (196,764 | ) | | | (196,764 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (13,272 | ) | | (13,272 | ) | |||||||||||||||||||||||||
Acquisition costs |
(239 | ) | (6,169 | ) | (42,708 | ) | (7,443 | ) | (5,456 | ) | (62,015 | ) | (156 | ) | | (62,171 | ) | |||||||||||||||||||
General and administrative expenses |
(6,913 | ) | (12,215 | ) | (14,339 | ) | (7,856 | ) | (2,722 | ) | (44,045 | ) | (119 | ) | | (44,164 | ) | |||||||||||||||||||
Other income |
1 | | 1,895 | 7 | | 1,903 | | | 1,903 | |||||||||||||||||||||||||||
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Underwriting income (loss) |
$ | 17,540 | $ | 93 | $ | 36,557 | $ | (2,100 | ) | $ | (3,132 | ) | $ | 48,958 | n/a | | n/a | |||||||||||||||||||
Net investment income |
13,466 | 41,263 | 54,729 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains on investments |
13,481 | 13,481 | ||||||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(570 | ) | (570 | ) | ||||||||||||||||||||||||||||||||
Corporate other income |
25 | 25 | ||||||||||||||||||||||||||||||||||
Interest expense |
(9,635 | ) | (9,635 | ) | ||||||||||||||||||||||||||||||||
Net foreign exchange losses |
(25 | ) | (25 | ) | ||||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(14,613 | ) | (14,613 | ) | ||||||||||||||||||||||||||||||||
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Income before taxes |
$ | 818 | $ | 29,926 | $ | 79,702 | ||||||||||||||||||||||||||||||
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Loss ratio (a) |
47.9 | % | 66.9 | % | 49.4 | % | 71.5 | % | 73.6 | % | 56.2 | % | ||||||||||||||||||||||||
Acquisition cost ratio (b) |
0.5 | % | 11.1 | % | 23.6 | % | 16.1 | % | 28.6 | % | 17.7 | % | ||||||||||||||||||||||||
General and administrative expense ratio (c) |
14.6 | % | 21.9 | % | 7.9 | % | 17.0 | % | 14.3 | % | 12.6 | % | ||||||||||||||||||||||||
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Combined ratio (d) |
63.0 | % | 99.8 | % | 80.9 | % | 104.6 | % | 116.4 | % | 86.6 | % | ||||||||||||||||||||||||
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SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - SIX MONTHS ENDED JUNE 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance |
Corporate | Consolidated | |||||||||||||||||||||||||||||||||
Global Insurance |
U.S. Insurance |
Reinsurance | Alterra at Lloyds |
Latin America |
Total | |||||||||||||||||||||||||||||||
Gross premiums written |
$ | 192,047 | $ | 216,468 | $ | 565,192 | $ | 218,151 | $ | 34,835 | $ | 1,226,693 | $ | 1,494 | $ | | $ | 1,228,187 | ||||||||||||||||||
Reinsurance premiums ceded |
(96,475 | ) | (122,018 | ) | (112,678 | ) | (65,658 | ) | (17,339 | ) | (414,168 | ) | (173 | ) | | (414,341 | ) | |||||||||||||||||||
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Net premiums written |
$ | 95,572 | $ | 94,450 | $ | 452,514 | $ | 152,493 | $ | 17,496 | $ | 812,525 | $ | 1,321 | $ | | $ | 813,846 | ||||||||||||||||||
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Earned premiums |
$ | 186,906 | $ | 196,541 | $ | 405,074 | $ | 142,229 | $ | 42,462 | $ | 973,212 | $ | 1,494 | $ | | $ | 974,706 | ||||||||||||||||||
Earned premiums ceded |
(92,500 | ) | (84,946 | ) | (55,850 | ) | (43,157 | ) | (9,127 | ) | (285,580 | ) | (173 | ) | | (285,753 | ) | |||||||||||||||||||
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Net premiums earned |
94,406 | 111,595 | 349,224 | 99,072 | 33,335 | 687,632 | 1,321 | | 688,953 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(40,806 | ) | (74,897 | ) | (190,802 | ) | (71,705 | ) | (24,583 | ) | (402,793 | ) | | | (402,793 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (26,738 | ) | | (26,738 | ) | |||||||||||||||||||||||||
Acquisition costs |
(298 | ) | (13,865 | ) | (81,369 | ) | (16,877 | ) | (9,211 | ) | (121,620 | ) | (275 | ) | | (121,895 | ) | |||||||||||||||||||
General and administrative expenses |
(13,394 | ) | (24,472 | ) | (31,391 | ) | (16,951 | ) | (4,981 | ) | (91,189 | ) | (153 | ) | | (91,342 | ) | |||||||||||||||||||
Other income |
816 | 81 | 6,336 | 7 | | 7,240 | | | 7,240 | |||||||||||||||||||||||||||
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Underwriting income (loss) |
$ | 40,724 | $ | (1,558 | ) | $ | 51,998 | $ | (6,454 | ) | $ | (5,440 | ) | $ | 79,270 | n/a | | n/a | ||||||||||||||||||
Net investment income |
28,242 | 85,165 | 113,407 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains on investments |
38,974 | 38,974 | ||||||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(5,939 | ) | (5,939 | ) | ||||||||||||||||||||||||||||||||
Corporate other income |
50 | 50 | ||||||||||||||||||||||||||||||||||
Interest expense |
(18,263 | ) | (18,263 | ) | ||||||||||||||||||||||||||||||||
Net foreign exchange gains |
7 | 7 | ||||||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(27,517 | ) | (27,517 | ) | ||||||||||||||||||||||||||||||||
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Income before taxes |
$ | 2,397 | $ | 72,477 | $ | 154,144 | ||||||||||||||||||||||||||||||
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Loss ratio (a) |
43.2 | % | 67.1 | % | 54.6 | % | 72.4 | % | 73.7 | % | 58.6 | % | ||||||||||||||||||||||||
Acquisition cost ratio (b) |
0.3 | % | 12.4 | % | 23.3 | % | 17.0 | % | 27.6 | % | 17.7 | % | ||||||||||||||||||||||||
General and administrative expense ratio (c) |
14.2 | % | 21.9 | % | 9.0 | % | 17.1 | % | 14.9 | % | 13.3 | % | ||||||||||||||||||||||||
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Combined ratio (d) |
57.7 | % | 101.5 | % | 86.9 | % | 106.5 | % | 116.3 | % | 89.5 | % | ||||||||||||||||||||||||
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(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 acquisition 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. |
n/a | Not applicable |
Percentage totals may not add due to rounding.
Segment Re-presentation
Effective January 1, 2012, the Company redefined its operating and reporting segments. Reinsurance business written within Latin America, which was previously reported within the reinsurance or Alterra at Lloyds segments, has been reclassified to a new Latin America segment. In addition, business written by the Companys recently incorporated Brazilian reinsurance company, Alterra Resseguradora do Brasil S.A. (Alterra Brazil), is included in the Latin America segment. Insurance business written by Alterra Insurance USA Inc., which was previously reported within the global insurance segment (formerly the insurance segment), has been reclassified to the U.S. insurance segment (formerly the U.S. specialty segment). Re-presented comparative financial information was filed on a Form 8-K on April 20, 2012.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | ||||||||||||||||||||||||||||||||||||
Global Insurance |
U.S. Insurance |
Reinsurance | Alterra at Lloyds |
Latin America |
Total | Life & Annuity Reinsurance |
Corporate | Consolidated | ||||||||||||||||||||||||||||
Gross premiums written |
$ | 130,909 | $ | 109,794 | $ | 244,899 | $ | 72,428 | $ | 4,947 | $ | 562,977 | $ | 930 | $ | | $ | 563,907 | ||||||||||||||||||
Reinsurance premiums ceded |
(55,133 | ) | (28,227 | ) | (27,675 | ) | (24,918 | ) | (572 | ) | (136,525 | ) | (101 | ) | | (136,626 | ) | |||||||||||||||||||
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Net premiums written |
$ | 75,776 | $ | 81,567 | $ | 217,224 | $ | 47,510 | $ | 4,375 | $ | 426,452 | $ | 829 | $ | | $ | 427,281 | ||||||||||||||||||
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Earned premiums |
$ | 88,892 | $ | 82,244 | $ | 203,470 | $ | 58,117 | $ | 9,355 | $ | 442,078 | $ | 930 | $ | | $ | 443,008 | ||||||||||||||||||
Earned premiums ceded |
(43,286 | ) | (23,835 | ) | (11,815 | ) | (14,540 | ) | (490 | ) | (93,966 | ) | (101 | ) | | (94,067 | ) | |||||||||||||||||||
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Net premiums earned |
45,606 | 58,409 | 191,655 | 43,577 | 8,865 | 348,112 | 829 | | 348,941 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(23,689 | ) | (38,012 | ) | (122,576 | ) | (21,072 | ) | (5,784 | ) | (211,133 | ) | | | (211,133 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (15,570 | ) | | (15,570 | ) | |||||||||||||||||||||||||
Acquisition costs |
1,117 | (10,400 | ) | (42,947 | ) | (9,946 | ) | (2,382 | ) | (64,558 | ) | (122 | ) | | (64,680 | ) | ||||||||||||||||||||
General and administrative expenses |
(6,774 | ) | (11,374 | ) | (21,647 | ) | (7,773 | ) | (3,053 | ) | (50,621 | ) | (259 | ) | | (50,880 | ) | |||||||||||||||||||
Other income |
85 | 54 | 548 | 165 | | 852 | (23 | ) | | 829 | ||||||||||||||||||||||||||
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Underwriting income (loss) |
$ | 16,345 | $ | (1,323 | ) | $ | 5,033 | $ | 4,951 | $ | (2,354 | ) | $ | 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 | ) | ||||||||||||||||||||||||||||||||
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(Loss) income before taxes |
$ | (3,899 | ) | $ | 9,555 | $ | 28,308 | |||||||||||||||||||||||||||||
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Loss ratio (a) |
51.9 | % | 65.1 | % | 64.0 | % | 48.4 | % | 65.2 | % | 60.7 | % | ||||||||||||||||||||||||
Acquisition cost ratio (b) |
(2.4 | )% | 17.8 | % | 22.4 | % | 22.8 | % | 26.9 | % | 18.5 | % | ||||||||||||||||||||||||
General and administrative expense ratio (c) |
14.9 | % | 19.5 | % | 11.3 | % | 17.8 | % | 34.4 | % | 14.5 | % | ||||||||||||||||||||||||
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Combined ratio (d) |
64.3 | % | 102.4 | % | 97.7 | % | 89.0 | % | 126.6 | % | 93.7 | % | ||||||||||||||||||||||||
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SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - SIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | ||||||||||||||||||||||||||||||||||||
Global Insurance |
U.S. Insurance |
Reinsurance | Alterra at Lloyds |
Latin America |
Total | Life & Annuity Reinsurance |
Corporate | Consolidated | ||||||||||||||||||||||||||||
Gross premiums written |
$ | 194,804 | $ | 187,559 | $ | 605,626 | $ | 180,318 | $ | 22,083 | $ | 1,190,390 | $ | 1,365 | $ | | $ | 1,191,755 | ||||||||||||||||||
Reinsurance premiums ceded |
(93,657 | ) | (66,544 | ) | (62,927 | ) | (48,097 | ) | (2,637 | ) | (273,862 | ) | (121 | ) | | (273,983 | ) | |||||||||||||||||||
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Net premiums written |
$ | 101,147 | $ | 121,015 | $ | 542,699 | $ | 132,221 | $ | 19,446 | $ | 916,528 | $ | 1,244 | $ | | $ | 917,772 | ||||||||||||||||||
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Earned premiums |
$ | 179,543 | $ | 163,714 | $ | 447,810 | $ | 121,281 | $ | 18,557 | $ | 930,905 | $ | 1,365 | $ | | $ | 932,270 | ||||||||||||||||||
Earned premiums ceded |
(84,065 | ) | (51,636 | ) | (31,716 | ) | (35,120 | ) | (784 | ) | (203,321 | ) | (121 | ) | | (203,442 | ) | |||||||||||||||||||
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Net premiums earned |
95,478 | 112,078 | 416,094 | 86,161 | 17,773 | 727,584 | 1,244 | | 728,828 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(55,313 | ) | (72,427 | ) | (306,484 | ) | (69,515 | ) | (11,800 | ) | (515,539 | ) | | | (515,539 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (30,280 | ) | | (30,280 | ) | |||||||||||||||||||||||||
Acquisition costs |
853 | (18,386 | ) | (90,707 | ) | (22,598 | ) | (4,169 | ) | (135,007 | ) | (281 | ) | | (135,288 | ) | ||||||||||||||||||||
General and administrative expenses |
(14,726 | ) | (22,644 | ) | (43,919 | ) | (16,026 | ) | (5,509 | ) | (102,824 | ) | (436 | ) | | (103,260 | ) | |||||||||||||||||||
Other income |
814 | 137 | 548 | 380 | | 1,879 | (23 | ) | | 1,856 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Underwriting income (loss) |
$ | 27,106 | $ | (1,242 | ) | $ | (24,468 | ) | $ | (21,598 | ) | $ | (3,705 | ) | $ | (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) |
57.9 | % | 64.6 | % | 73.7 | % | 80.7 | % | 66.4 | % | 70.9 | % | ||||||||||||||||||||||||
Acquisition cost ratio (b) |
(0.9 | )% | 16.4 | % | 21.8 | % | 26.2 | % | 23.5 | % | 18.6 | % | ||||||||||||||||||||||||
General and administrative expense ratio (c) |
15.4 | % | 20.2 | % | 10.6 | % | 18.6 | % | 31.0 | % | 14.1 | % | ||||||||||||||||||||||||
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|
|
|||||||||||||||||||||||||
Combined ratio (d) |
72.5 | % | 101.2 | % | 106.0 | % | 125.5 | % | 120.8 | % | 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 acquisition 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. |
n/a | Not applicable |
Percentage totals may not add due to rounding.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL PREMIUM DATA - SIX MONTHS ENDED JUNE 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30, 2012 | Six Months Ended June 30, 2011 | |||||||||||||||||||||
Gross Premiums Written |
Percentage of Total Gross Premiums Written |
Movement on Prior Year Period |
Gross Premiums Written [a] |
Percentage of Total Gross Premiums Written [a] |
||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||
Global Insurance: |
||||||||||||||||||||||
Aviation |
S | $ | 5,256 | 0.4 | % | 0.5 | % | $ | 5,230 | 0.4 | % | |||||||||||
Excess Liability |
L | 56,621 | 4.6 | % | (0.6 | )% | 56,936 | 4.8 | % | |||||||||||||
Professional Liability |
L | 83,873 | 6.8 | % | (3.5 | )% | 86,931 | 7.3 | % | |||||||||||||
Property |
S | 46,297 | 3.8 | % | 1.3 | % | 45,707 | 3.8 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
192,047 | 15.6 | % | (1.4 | )% | 194,804 | 16.3 | % | |||||||||||||||
U.S. Insurance: |
||||||||||||||||||||||
General/Excess Liability |
L | 58,350 | 4.8 | % | 21.3 | % | 48,111 | 4.0 | % | |||||||||||||
Marine |
S | 53,835 | 4.4 | % | 26.7 | % | 42,498 | 3.6 | % | |||||||||||||
Professional Liability |
L | 24,341 | 2.0 | % | 60.9 | % | 15,131 | 1.3 | % | |||||||||||||
Property |
S | 79,942 | 6.5 | % | (2.3 | )% | 81,819 | 6.9 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
216,468 | 17.6 | % | 15.4 | % | 187,559 | 15.7 | % | |||||||||||||||
Reinsurance: |
||||||||||||||||||||||
Agriculture |
S | 22,803 | 1.9 | % | (22.7 | )% | 29,498 | 2.5 | % | |||||||||||||
Auto |
S | 40,102 | 3.3 | % | (42.8 | )% | 70,096 | 5.9 | % | |||||||||||||
Aviation |
S | 11,271 | 0.9 | % | n/m | 984 | 0.1 | % | ||||||||||||||
Credit/Surety |
S | 33,628 | 2.7 | % | 44.5 | % | 23,278 | 2.0 | % | |||||||||||||
General Casualty |
L | 36,689 | 3.0 | % | (2.1 | )% | 37,472 | 3.1 | % | |||||||||||||
Marine & Energy |
S | 17,969 | 1.5 | % | 13.2 | % | 15,871 | 1.3 | % | |||||||||||||
Medical Malpractice |
L | 19,381 | 1.6 | % | (32.7 | )% | 28,805 | 2.4 | % | |||||||||||||
Other |
S | 4,986 | 0.4 | % | 133.0 | % | 2,140 | 0.2 | % | |||||||||||||
Professional Liability |
L | 96,704 | 7.9 | % | (2.5 | )% | 99,146 | 8.3 | % | |||||||||||||
Property |
S | 253,408 | 20.6 | % | 4.6 | % | 242,256 | 20.3 | % | |||||||||||||
Whole Account |
S/L | 1,599 | 0.1 | % | (95.5 | )% | 35,338 | 3.0 | % | |||||||||||||
Workers Compensation |
L | 26,652 | 2.2 | % | 28.5 | % | 20,742 | 1.7 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
565,192 | 46.0 | % | (6.7 | )% | 605,626 | 50.8 | % | |||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||
Accident & Health |
S | 25,682 | 2.1 | % | 17.1 | % | 21,924 | 1.8 | % | |||||||||||||
Agriculture |
S | 20,983 | 1.7 | % | n/m | | | |||||||||||||||
Aviation |
S | 5,706 | 0.5 | % | 59.5 | % | 3,577 | 0.3 | % | |||||||||||||
Financial Institutions |
L | 12,304 | 1.0 | % | (20.5 | )% | 15,477 | 1.3 | % | |||||||||||||
International Casualty |
L | 57,691 | 4.7 | % | 37.2 | % | 42,052 | 3.5 | % | |||||||||||||
Marine |
S | 5,008 | 0.4 | % | n/m | | | |||||||||||||||
Professional Liability |
L | 11,536 | 0.9 | % | (37.3 | )% | 18,388 | 1.5 | % | |||||||||||||
Property |
S | 79,241 | 6.5 | % | 0.4 | % | 78,900 | 6.6 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
218,151 | 17.8 | % | 21.0 | % | 180,318 | 15.1 | % | |||||||||||||||
Latin America: |
||||||||||||||||||||||
Aviation |
S | 74 | | n/m | | | ||||||||||||||||
General Casualty |
L | 1,892 | 0.2 | % | 60.3 | % | 1,180 | 0.1 | % | |||||||||||||
Marine |
S | 2,036 | 0.2 | % | 237.6 | % | 603 | 0.1 | % | |||||||||||||
Property |
S | 25,345 | 2.1 | % | 43.9 | % | 17,616 | 1.5 | % | |||||||||||||
Surety |
S | 5,488 | 0.4 | % | 104.5 | % | 2,684 | 0.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
34,835 | 2.8 | % | 57.7 | % | 22,083 | 1.9 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | 99.9 | % | 3.0 | % | $ | 1,190,390 | 99.9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Life & Annuity: |
||||||||||||||||||||||
Annuity |
$ | | | n/m | $ | 607 | 0.1 | % | ||||||||||||||
Life |
1,494 | 0.1 | % | 97.1 | % | 758 | 0.1 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Life & Annuity |
$ | 1,494 | 0.1 | % | 9.5 | % | $ | 1,365 | 0.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 1,228,187 | 100.0 | % | 3.1 | % | $ | 1,191,755 | 100.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
S = Short tail lines |
$ | 739,860 | 60.3 | % | $ | 702,350 | 59.0 | % | ||||||||||||||
L = Long tail lines |
486,833 | 39.7 | % | 488,040 | 41.0 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | $ | 1,190,390 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||||
Property [b] |
$ | 484,233 | 39.5 | % | $ | 466,298 | 39.2 | % | ||||||||||||||
Casualty [c] |
486,034 | 39.6 | % | 470,371 | 39.5 | % | ||||||||||||||||
Specialty [d] |
256,426 | 20.9 | % | 253,721 | 21.3 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | $ | 1,190,390 | ||||||||||||||||||
|
|
|
|
[a] | Comparative period has been re-presented to conform with the current periods presentation. |
[b] | Property includes property lines of business. |
[c] | Casualty includes excess liability, financial institutions, general liability, international casualty, medical malpractice, professional liability and workers compensation lines of business. |
[d] | Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business. |
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, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net income (loss) before tax |
$ | 79,702 | $ | 28,308 | $ | 154,144 | $ | (21,079 | ) | |||||||
Net realized and unrealized (gains) losses on investments not included in operating income, before tax [a] |
(10,177 | ) | 4,249 | (21,728 | ) | 27,263 | ||||||||||
Foreign exchange losses (gains), before tax |
25 | 3,090 | (7 | ) | 2,212 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income before tax |
$ | 69,550 | $ | 35,647 | $ | 132,409 | $ | 8,396 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | |||||||
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] |
(9,987 | ) | 4,711 | (21,267 | ) | 27,313 | ||||||||||
Foreign exchange losses (gains), net of tax |
7 | 2,212 | (14 | ) | 1,572 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income |
$ | 68,960 | $ | 39,558 | $ | 136,683 | $ | 14,833 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per diluted share |
$ | 0.77 | $ | 0.30 | $ | 1.54 | $ | (0.13 | ) | |||||||
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] |
(0.10 | ) | 0.04 | (0.21 | ) | 0.26 | ||||||||||
Foreign exchange losses (gains), net of tax |
| 0.02 | | 0.01 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net operating income per diluted share |
$ | 0.68 | $ | 0.37 | $ | 1.33 | $ | 0.14 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - basic |
99,563,474 | 105,604,786 | 100,283,266 | 106,385,007 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding - diluted |
101,957,882 | 107,111,909 | 102,556,070 | 106,385,007 | ||||||||||||
|
|
|
|
|
|
|
|
[a] | Net realized and unrealized (gains) losses on investments not included in operating income 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 in run-off and changes in fair value of 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, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net income (loss) |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | |||||||
Annualized net income (loss) |
315,760 | 130,540 | 315,928 | (28,104 | ) | |||||||||||
Net operating income |
$ | 68,960 | $ | 39,558 | $ | 136,683 | $ | 14,833 | ||||||||
Annualized net operating income |
275,840 | 158,232 | 273,366 | 29,666 | ||||||||||||
Average shareholders equity [b] |
$ | 2,851,499 | $ | 2,758,200 | $ | 2,840,874 | $ | 2,789,435 | ||||||||
Annualized return on average shareholders equity |
11.1 | % | 4.7 | % | 11.1 | % | (1.0 | )% | ||||||||
Annualized net operating return on average shareholders equity |
9.7 | % | 5.7 | % | 9.6 | % | 1.1 | % |
[b] | Average shareholders equity is computed as the average of the quarterly average shareholders equity balances. |
Diluted Tangible Book Value Per Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
June 30, 2012 | December 31, 2011 | |||||||
Shareholders equity |
$ | 2,851,736 | $ | 2,809,235 | ||||
Goodwill and intangible assets |
55,431 | 56,111 | ||||||
|
|
|
|
|||||
Tangible book value |
$ | 2,796,305 | $ | 2,753,124 | ||||
|
|
|
|
|||||
Diluted shares outstanding |
99,429,181 | 104,406,779 | ||||||
Diluted tangible book value per share |
$ | 28.12 | $ | 26.37 |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA - JUNE 30, 2012 (UNAUDITED)
(Expressed in thousands of United States Dollars)
Type of Investment |
As of June 30, 2012 |
Investment Distribution |
As of December 31, 2011 |
Investment Distribution |
||||||||||||
Cash and cash equivalents |
$ | 763,957 | 9.7 | % | $ | 922,844 | 11.8 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies |
$ | 779,270 | 9.9 | % | $ | 751,806 | 9.6 | % | ||||||||
Non-U.S. governments |
217,341 | 2.8 | % | 164,621 | 2.1 | % | ||||||||||
Corporate securities |
2,571,697 | 32.6 | % | 2,646,358 | 33.9 | % | ||||||||||
Municipal securities |
281,884 | 3.6 | % | 263,007 | 3.4 | % | ||||||||||
Asset-backed securities |
349,715 | 4.4 | % | 247,965 | 3.2 | % | ||||||||||
Residential mortgage-backed securities |
1,322,785 | 16.8 | % | 1,296,277 | 16.6 | % | ||||||||||
Commercial mortgage-backed securities |
398,954 | 5.1 | % | 361,097 | 4.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at fair value |
$ | 5,921,646 | 75.1 | % | $ | 5,731,131 | 73.3 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
U.S. government and agencies |
$ | 27,616 | 0.4 | % | $ | 29,201 | 0.4 | % | ||||||||
Non-U.S. governments |
509,819 | 6.5 | % | 524,449 | 6.7 | % | ||||||||||
Corporate securities |
295,639 | 3.7 | % | 319,609 | 4.1 | % | ||||||||||
Asset-backed securities |
916 | | 1,000 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at amortized cost |
$ | 833,990 | 10.6 | % | $ | 874,259 | 11.2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other investments |
$ | 366,404 | 4.6 | % | $ | 286,515 | 3.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total invested assets |
$ | 7,885,997 | 100.0 | % | $ | 7,814,749 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
Credit Rating |
As of June 30, 2012 |
Ratings Distribution |
As of December 31, 2011 |
Ratings Distribution |
||||||||||||
U.S. government and agencies [a] |
$ | 2,020,993 | 29.9 | % | $ | 1,869,405 | 28.3 | % | ||||||||
AAA |
1,179,378 | 17.5 | % | 948,861 | 14.4 | % | ||||||||||
AA |
741,038 | 11.0 | % | 883,783 | 13.4 | % | ||||||||||
A |
1,388,280 | 20.5 | % | 1,378,361 | 20.9 | % | ||||||||||
BBB |
349,968 | 5.2 | % | 281,983 | 4.3 | % | ||||||||||
BB |
57,532 | 0.9 | % | 84,803 | 1.3 | % | ||||||||||
B |
139,370 | 2.1 | % | 131,159 | 2.0 | % | ||||||||||
CCC or lower |
35,026 | 0.5 | % | 53,157 | 0.8 | % | ||||||||||
Not rated |
10,061 | 0.1 | % | 99,619 | 1.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at fair value |
$ | 5,921,646 | 87.7 | % | $ | 5,731,131 | 86.8 | % | ||||||||
U.S. government and agencies |
$ | 27,616 | 0.4 | % | $ | 29,201 | 0.4 | % | ||||||||
AAA |
575,679 | 8.5 | % | 619,832 | 9.4 | % | ||||||||||
AA |
92,778 | 1.4 | % | 82,511 | 1.2 | % | ||||||||||
A |
108,610 | 1.6 | % | 117,600 | 1.8 | % | ||||||||||
BBB |
26,962 | 0.4 | % | 24,117 | 0.4 | % | ||||||||||
Not rated |
2,345 | | 998 | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities at amortized cost |
$ | 833,990 | 12.3 | % | $ | 874,259 | 13.2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total fixed maturities |
$ | 6,755,636 | 100.0 | % | $ | 6,605,390 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
[a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,241,723 (December 31, 2011: $1,117,599) |
Percentage totals may not add due to rounding.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net investment income |
$ | 54,729 | $ | 59,665 | $ | 113,407 | $ | 117,431 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Realized and unrealized gains (losses) on trading fixed maturities |
587 | 1,432 | 1,653 | (395 | ) | |||||||||||
Net realized gains on available for sale fixed maturities |
11,990 | 54 | 19,749 | 3,423 | ||||||||||||
(Decrease) increase in fair value of hedge funds |
(2,894 | ) | (1,879 | ) | 785 | 1,288 | ||||||||||
Decrease in fair value of catastrophe bonds |
| (251 | ) | | (25,641 | ) | ||||||||||
(Decrease) increase in fair value of structured deposit |
(655 | ) | (1,284 | ) | (290 | ) | 50 | |||||||||
Income (loss) from equity method investments |
5,583 | (12 | ) | 10,510 | (157 | ) | ||||||||||
(Decrease) increase in fair value of derivatives |
(1,130 | ) | (3,834 | ) | 6,567 | (3,160 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net realized and unrealized gains (losses) on investments |
$ | 13,481 | $ | (5,774 | ) | $ | 38,974 | $ | (24,592 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Net impairment losses recognized in earnings |
$ | (570 | ) | $ | (353 | ) | $ | (5,939 | ) | $ | (1,382 | ) | ||||
|
|
|
|
|
|
|
|
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 2012
(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; (13) the integration of new business ventures Alterra may enter into; and (14) 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.
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 |
17 | |||
Gross Premiums Written by Line of Business - Year to date |
25 | |||
Investment Portfolio |
26 | |||
New Point IV Summary |
31 | |||
Shareholder Return Analysis |
32 | |||
Earnings Per Share Information |
33 | |||
Operating Income Reconciliation |
34 | |||
Book Value per Share |
35 | |||
Regulation G |
36 |
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, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | Previous Year Quarter Change |
Previous Year to Date Change |
|||||||||||||||||||
HIGHLIGHTS |
||||||||||||||||||||||||
Net income (loss) |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | 141.9 | % | n/m | ||||||||||||
Net operating income [a] |
68,960 | 39,558 | 136,683 | 14,833 | 74.3 | % | 821.5% | |||||||||||||||||
Operating cashflow |
97,335 | 101,796 | 166,377 | 148,705 | (4.4 | %) | 11.9% | |||||||||||||||||
Gross premiums written |
566,857 | 563,907 | 1,228,187 | 1,191,755 | 0.5 | % | 3.1% | |||||||||||||||||
Net premiums earned |
350,778 | 348,941 | 688,953 | 728,828 | 0.5 | % | (5.5% | ) | ||||||||||||||||
Total assets |
10,696,586 | 10,497,364 | 10,696,586 | 10,497,364 | 1.9 | % | 1.9% | |||||||||||||||||
Total shareholders equity |
2,851,736 | 2,793,081 | 2,851,736 | 2,793,081 | 2.1 | % | 2.1% | |||||||||||||||||
PER SHARE |
||||||||||||||||||||||||
Basic earnings per share |
||||||||||||||||||||||||
Net income (loss) |
$ | 0.79 | $ | 0.31 | $ | 1.58 | $ | (0.13 | ) | |||||||||||||||
Net operating income [a] |
0.69 | 0.37 | 1.36 | 0.14 | ||||||||||||||||||||
Diluted earnings per share |
||||||||||||||||||||||||
Net income (loss) |
$ | 0.77 | $ | 0.30 | $ | 1.54 | $ | (0.13 | ) | |||||||||||||||
Net operating income [a] |
0.68 | 0.37 | 1.33 | 0.14 | ||||||||||||||||||||
Weighted average shares outstanding - basic |
99,563,474 | 105,604,786 | 100,283,266 | 106,385,007 | ||||||||||||||||||||
Weighted average shares outstanding - diluted |
101,957,882 | 107,111,909 | 102,556,070 | 106,385,007 | ||||||||||||||||||||
Book value per common share [b] |
$ | 29.44 | $ | 26.40 | $ | 29.44 | $ | 26.40 | 11.5 | % | 11.5 | % | ||||||||||||
Diluted book value per share (treasury stock method) [b] |
28.68 | 25.98 | 28.68 | 25.98 | 10.4 | % | 10.4 | % | ||||||||||||||||
Diluted tangible book value per share (treasury stock method) [b] |
28.12 | 25.44 | 28.12 | 25.44 | 10.5 | % | 10.5 | % | ||||||||||||||||
RATIOS |
||||||||||||||||||||||||
Annualized return on average shareholders equity [c] |
11.1 | % | 4.7 | % | 11.1 | % | (1.0 | %) | ||||||||||||||||
Annualized net operating return on average shareholders equity [c] |
9.7 | % | 5.7 | % | 9.6 | % | 1.1 | % | ||||||||||||||||
Loss ratio [d] |
56.2 | % | 60.7 | % | 58.6 | % | 70.9 | % | ||||||||||||||||
Acquisition cost ratio [d] |
17.7 | % | 18.5 | % | 17.7 | % | 18.6 | % | ||||||||||||||||
General and administrative expense ratio [d] |
12.6 | % | 14.5 | % | 13.3 | % | 14.1 | % | ||||||||||||||||
Combined ratio [d] |
86.6 | % | 93.7 | % | 89.5 | % | 103.5 | % |
[a] | Non-GAAP financial measure. For definition and calculation see page 34. |
[b] | For calculations see page 35. |
[c] | Non-GAAP financial measure. For calculations see page 32. |
[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, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
$ | 763,957 | $ | 844,743 | $ | 922,844 | $ | 869,975 | $ | 987,057 | ||||||||||
Fixed maturities, trading at fair value |
211,796 | 223,592 | 229,206 | 227,753 | 218,481 | |||||||||||||||
Fixed maturities, available for sale at fair value |
5,709,850 | 5,518,102 | 5,501,925 | 5,662,869 | 5,403,312 | |||||||||||||||
Fixed maturities, held to maturity at amortized cost |
833,990 | 885,214 | 874,259 | 926,916 | 993,691 | |||||||||||||||
Other investments, at fair value |
366,404 | 332,884 | 286,515 | 311,633 | 350,193 | |||||||||||||||
Accrued interest income |
65,252 | 64,295 | 71,322 | 71,038 | 70,777 | |||||||||||||||
Premiums receivable |
991,927 | 869,800 | 715,154 | 777,980 | 870,287 | |||||||||||||||
Losses and benefits recoverable from reinsurers |
1,083,840 | 1,108,036 | 1,068,119 | 1,079,035 | 1,058,724 | |||||||||||||||
Deferred acquisition costs |
170,904 | 176,199 | 145,850 | 166,353 | 171,517 | |||||||||||||||
Prepaid reinsurance premiums |
326,014 | 299,163 | 212,238 | 214,132 | 215,392 | |||||||||||||||
Trades pending settlement |
31,925 | 111,194 | 22,887 | 34,158 | 9,168 | |||||||||||||||
Goodwill and intangible assets |
55,431 | 55,771 | 56,111 | 56,652 | 58,094 | |||||||||||||||
Other assets |
85,296 | 86,785 | 79,417 | 73,836 | 90,671 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 10,696,586 | $ | 10,575,778 | $ | 10,185,847 | $ | 10,472,330 | $ | 10,497,364 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LIABILITIES |
||||||||||||||||||||
Property and casualty losses |
$ | 4,308,316 | $ | 4,322,847 | $ | 4,216,538 | $ | 4,205,057 | $ | 4,230,290 | ||||||||||
Life and annuity benefits |
1,148,304 | 1,203,752 | 1,190,697 | 1,230,344 | 1,317,527 | |||||||||||||||
Deposit liabilities |
158,412 | 151,058 | 151,035 | 147,493 | 147,428 | |||||||||||||||
Funds withheld from reinsurers |
93,510 | 92,793 | 112,469 | 124,631 | 122,705 | |||||||||||||||
Unearned property and casualty premiums |
1,281,406 | 1,221,788 | 1,020,639 | 1,149,108 | 1,203,024 | |||||||||||||||
Reinsurance balances payable |
260,351 | 201,409 | 134,354 | 178,560 | 137,910 | |||||||||||||||
Accounts payable and accrued expenses |
116,575 | 90,359 | 110,380 | 110,527 | 104,917 | |||||||||||||||
Trades pending settlement |
37,455 | | | 41,383 | | |||||||||||||||
Senior notes |
440,521 | 440,510 | 440,500 | 440,489 | 440,482 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
7,844,850 | 7,724,516 | 7,376,612 | 7,627,592 | 7,704,283 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
SHAREHOLDERS EQUITY |
||||||||||||||||||||
Common shares (par value $1.00) |
96,853 | 100,707 | 102,102 | 104,324 | 105,795 | |||||||||||||||
Additional paid-in capital |
1,729,311 | 1,807,287 | 1,847,034 | 1,890,763 | 1,911,979 | |||||||||||||||
Accumulated other comprehensive income |
202,229 | 185,146 | 166,957 | 173,025 | 132,218 | |||||||||||||||
Retained earnings |
823,343 | 758,122 | 693,142 | 676,626 | 643,089 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total shareholders equity |
2,851,736 | 2,851,262 | 2,809,235 | 2,844,738 | 2,793,081 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and shareholders equity |
$ | 10,696,586 | $ | 10,575,778 | $ | 10,185,847 | $ | 10,472,330 | $ | 10,497,364 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Book value per share |
$ | 29.44 | $ | 28.31 | $ | 27.51 | $ | 27.27 | $ | 26.40 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted book value per share (treasury stock method) |
$ | 28.68 | $ | 27.67 | $ | 26.91 | $ | 27.18 | $ | 25.98 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted tangible book value per share (treasury stock method) [a] |
$ | 28.12 | $ | 27.13 | $ | 26.37 | $ | 26.64 | $ | 25.44 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Debt-to-capital ratio [b] |
13.4 | % | 13.4 | % | 13.6 | % | 13.4 | % | 13.6 | % |
[a] | Non-GAAP financial measure. For calculations see page 35. |
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, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 [g] | |||||||||||||||||||
REVENUES |
||||||||||||||||||||||||
Gross premiums written |
$ | 566,857 | $ | 661,330 | $ | 325,983 | $ | 386,328 | $ | 563,907 | $ | 398,981 | ||||||||||||
Reinsurance premiums ceded |
(189,879 | ) | (224,462 | ) | (107,203 | ) | (90,891 | ) | (136,626 | ) | (79,715 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 376,978 | $ | 436,868 | $ | 218,780 | $ | 295,437 | $ | 427,281 | $ | 319,266 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 496,839 | $ | 477,867 | $ | 460,636 | $ | 452,931 | $ | 443,008 | $ | 391,723 | ||||||||||||
Earned premiums ceded |
(146,061 | ) | (139,692 | ) | (111,532 | ) | (105,889 | ) | (94,067 | ) | (98,463 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
350,778 | 338,175 | 349,104 | 347,042 | 348,941 | 293,260 | ||||||||||||||||||
Net investment income |
54,729 | 58,678 | 57,080 | 60,335 | 59,665 | 53,277 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
13,481 | 25,493 | (5,775 | ) | (7,972 | ) | (5,774 | ) | (14,786 | ) | ||||||||||||||
Total other-than-temporary impairment losses |
(420 | ) | (5,467 | ) | (703 | ) | (692 | ) | (187 | ) | (1,167 | ) | ||||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes |
(150 | ) | 98 | 1 | (169 | ) | (166 | ) | 867 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net impairment losses recognized in earnings |
(570 | ) | (5,369 | ) | (702 | ) | (861 | ) | (353 | ) | (300 | ) | ||||||||||||
Other income |
1,928 | 5,362 | 2,017 | 1,473 | 591 | 275 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
420,346 | 422,339 | 401,724 | 400,017 | 403,070 | 331,726 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
LOSSES AND EXPENSES |
||||||||||||||||||||||||
Net losses and loss expenses |
196,764 | 206,029 | 231,533 | 198,521 | 211,133 | 159,817 | ||||||||||||||||||
Claims and policy benefits |
13,272 | 13,466 | 14,564 | 14,538 | 15,570 | 13,943 | ||||||||||||||||||
Acquisition costs |
62,171 | 59,724 | 64,380 | 61,434 | 64,680 | 48,798 | ||||||||||||||||||
Interest expense |
9,635 | 8,628 | 13,296 | 11,303 | 10,630 | 7,916 | ||||||||||||||||||
Net foreign exchange losses (gains) |
25 | (32 | ) | (753 | ) | (147 | ) | 3,090 | (634 | ) | ||||||||||||||
Merger and acquisition expenses |
| | | | | (54,570 | ) | |||||||||||||||||
General and administrative expenses |
58,777 | 60,082 | 54,657 | 61,555 | 69,659 | 50,649 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total losses and expenses |
340,644 | 347,897 | 377,677 | 347,204 | 374,762 | 225,919 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME BEFORE TAXES |
79,702 | 74,442 | 24,047 | 52,813 | 28,308 | 105,807 | ||||||||||||||||||
Income tax expense (benefit) |
762 | (4,582 | ) | (6,901 | ) | 4,427 | (4,327 | ) | 2,360 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME |
78,940 | 79,024 | 30,948 | 48,386 | 32,635 | 103,447 | ||||||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax |
23,444 | 16,819 | (3,670 | ) | 61,540 | 42,820 | 60,525 | |||||||||||||||||
Foreign currency translation adjustment |
(6,361 | ) | 1,370 | (2,398 | ) | (20,733 | ) | 165 | (7,629 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
COMPREHENSIVE INCOME |
$ | 96,023 | $ | 97,213 | $ | 24,880 | $ | 89,193 | $ | 75,620 | $ | 156,343 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
KEY RATIOS/PER SHARE DATA |
||||||||||||||||||||||||
Loss ratio [a] |
56.2 | % | 61.0 | % | 66.5 | % | 57.3 | % | 60.7 | % | 54.6 | % | ||||||||||||
Acquisition cost ratio [b] |
17.7 | % | 17.6 | % | 18.5 | % | 17.7 | % | 18.5 | % | 16.6 | % | ||||||||||||
General and administrative expense ratio [c] |
12.6 | % | 14.0 | % | 12.4 | % | 12.7 | % | 14.5 | % | 12.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio [d] |
86.6 | % | 92.6 | % | 97.4 | % | 87.7 | % | 93.7 | % | 83.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income per share |
$ | 0.79 | $ | 0.78 | $ | 0.30 | $ | 0.46 | $ | 0.31 | $ | 1.14 | ||||||||||||
Net income per diluted share |
$ | 0.77 | $ | 0.77 | $ | 0.30 | $ | 0.46 | $ | 0.30 | $ | 1.13 | ||||||||||||
Net operating income per share - diluted [e] |
$ | 0.68 | $ | 0.66 | $ | 0.30 | $ | 0.47 | $ | 0.37 | $ | 0.64 | ||||||||||||
Annualized ROAE [f] |
11.1 | % | 11.2 | % | 4.4 | % | 6.9 | % | 4.7 | % | 17.8 | % | ||||||||||||
Annualized net operating ROAE [f] |
9.7 | % | 9.6 | % | 4.5 | % | 7.1 | % | 5.7 | % | 10.1 | % |
[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, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 34 for calculation of net operating income per share - diluted. |
[f] | Non-GAAP financial measure. See page 32 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. |
Percentage totals may not add due to rounding.
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, 2012 | June 30, 2011 | June 30, 2010 [g] | Dec. 31, 2011 | Dec. 31, 2010 [g] | ||||||||||||||||
REVENUES |
||||||||||||||||||||
Gross premiums written |
$ | 1,228,187 | $ | 1,191,755 | $ | 770,120 | $ | 1,904,066 | $ | 1,410,731 | ||||||||||
Reinsurance premiums ceded |
(414,341 | ) | (273,983 | ) | (232,935 | ) | (472,077 | ) | (371,163 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 813,846 | $ | 917,772 | $ | 537,185 | $ | 1,431,989 | $ | 1,039,568 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 974,706 | $ | 932,270 | $ | 696,720 | $ | 1,845,837 | $ | 1,578,647 | ||||||||||
Earned premiums ceded |
(285,753 | ) | (203,442 | ) | (209,220 | ) | (420,863 | ) | (406,161 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
688,953 | 728,828 | 487,500 | 1,424,974 | 1,172,486 | |||||||||||||||
Net investment income |
113,407 | 117,431 | 101,667 | 234,846 | 222,458 | |||||||||||||||
Net realized and unrealized gains (losses) on investments |
38,974 | (24,592 | ) | (8,364 | ) | (38,339 | ) | 16,872 | ||||||||||||
Total other-than-temporary impairment losses |
(5,887 | ) | (1,311 | ) | (1,865 | ) | (2,706 | ) | (5,873 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes |
(52 | ) | (71 | ) | 1,145 | (239 | ) | 3,228 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net impairment losses recognized in earnings |
(5,939 | ) | (1,382 | ) | (720 | ) | (2,945 | ) | (2,645 | ) | ||||||||||
Other income |
7,290 | 1,906 | 619 | 5,396 | 4,808 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
842,685 | 822,191 | 580,702 | 1,623,932 | 1,413,979 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
LOSSES AND EXPENSES |
||||||||||||||||||||
Net losses and loss expenses |
402,793 | 515,539 | 284,782 | 945,593 | 654,841 | |||||||||||||||
Claims and policy benefits |
26,738 | 30,280 | 31,602 | 59,382 | 65,213 | |||||||||||||||
Acquisition costs |
121,895 | 135,288 | 73,042 | 261,102 | 187,464 | |||||||||||||||
Interest expense |
18,263 | 19,089 | 12,858 | 43,688 | 28,275 | |||||||||||||||
Net foreign exchange (gains) losses |
(7 | ) | 2,212 | (3,086 | ) | 1,312 | (115 | ) | ||||||||||||
Merger and acquisition expenses |
| | (49,826 | ) | | (48,776 | ) | |||||||||||||
General and administrative expenses |
118,859 | 140,862 | 87,177 | 257,074 | 220,586 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total losses and expenses |
688,541 | 843,270 | 436,549 | 1,568,151 | 1,107,488 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME BEFORE TAXES |
154,144 | (21,079 | ) | 144,153 | 55,781 | 306,491 | ||||||||||||||
Income tax (benefit) expense |
(3,820 | ) | (7,027 | ) | 4,325 | (9,501 | ) | 4,156 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME (LOSS) |
157,964 | (14,052 | ) | 139,828 | 65,282 | 302,335 | ||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax |
40,263 | 28,234 | 94,656 | 86,104 | 81,406 | |||||||||||||||
Foreign currency translation adjustment |
(4,991 | ) | 5,038 | (17,369 | ) | (18,093 | ) | (7,891 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
COMPREHENSIVE INCOME |
$ | 193,236 | $ | 19,220 | $ | 217,115 | $ | 133,293 | $ | 375,850 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
KEY RATIOS/PER SHARE DATA |
||||||||||||||||||||
Loss ratio [a] |
58.6 | % | 70.9 | % | 58.6 | % | 58.6 | % | 56.1 | % | ||||||||||
Acquisition cost ratio [b] |
17.7 | % | 18.6 | % | 15.0 | % | 17.7 | % | 16.0 | % | ||||||||||
General and administrative expense ratio [c] |
13.3 | % | 14.1 | % | 12.6 | % | 13.3 | % | 13.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio [d] |
89.5 | % | 103.5 | % | 86.2 | % | 89.5 | % | 85.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) per share - basic |
$ | 1.58 | $ | (0.13 | ) | $ | 1.90 | $ | 0.62 | $ | 3.19 | |||||||||
Net income (loss) per share - diluted |
$ | 1.54 | $ | (0.13 | ) | $ | 1.88 | $ | 0.61 | $ | 3.17 | |||||||||
Net operating income per share - diluted [e] |
$ | 1.33 | $ | 0.14 | $ | 1.33 | $ | 0.91 | $ | 2.64 | ||||||||||
Annualized ROAE [f] |
11.1 | % | (1.0 | %) | 14.3 | % | 2.3 | % | 12.3 | % | ||||||||||
Annualized Net Operating ROAE [f] |
9.6 | % | 1.1 | % | 10.2 | % | 3.4 | % | 10.2 | % |
[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, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 34 for calculation of net operating income per share - diluted. |
[f] | Non-GAAP financial measure. See page 32 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. |
Percentage totals may not add due to rounding.
7
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATATHREE MONTHS ENDED JUNE 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance |
Corporate | Consolidated | |||||||||||||||||||||||||||||||||
Global Insurance |
U.S. Insurance | Reinsurance | Alterra at Lloyds |
Latin America | Total | |||||||||||||||||||||||||||||||
Gross premiums written |
$ | 125,276 | $ | 112,186 | $ | 246,838 | $ | 72,008 | $ | 9,495 | $ | 565,803 | $ | 1,054 | $ | | $ | 566,857 | ||||||||||||||||||
Reinsurance premiums ceded |
(53,224 | ) | (51,524 | ) | (53,185 | ) | (27,068 | ) | (4,723 | ) | (189,724 | ) | (155 | ) | | (189,879 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net premiums written |
$ | 72,052 | $ | 60,662 | $ | 193,653 | $ | 44,940 | $ | 4,772 | $ | 376,079 | $ | 899 | $ | | $ | 376,978 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Earned premiums |
$ | 92,803 | $ | 100,300 | $ | 210,413 | $ | 69,330 | $ | 22,939 | $ | 495,785 | $ | 1,054 | $ | | $ | 496,839 | ||||||||||||||||||
Earned premiums ceded |
(45,367 | ) | (44,490 | ) | (29,097 | ) | (23,108 | ) | (3,844 | ) | (145,906 | ) | (155 | ) | | (146,061 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net premiums earned |
47,436 | 55,810 | 181,316 | 46,222 | 19,095 | 349,879 | 899 | | 350,778 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(22,745 | ) | (37,333 | ) | (89,607 | ) | (33,030 | ) | (14,049 | ) | (196,764 | ) | | | (196,764 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (13,272 | ) | | (13,272 | ) | |||||||||||||||||||||||||
Acquisition costs |
(239 | ) | (6,169 | ) | (42,708 | ) | (7,443 | ) | (5,456 | ) | (62,015 | ) | (156 | ) | | (62,171 | ) | |||||||||||||||||||
General and administrative expenses |
(6,913 | ) | (12,215 | ) | (14,339 | ) | (7,856 | ) | (2,722 | ) | (44,045 | ) | (119 | ) | | (44,164 | ) | |||||||||||||||||||
Other income |
1 | | 1,895 | 7 | | 1,903 | | | 1,903 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Underwriting income (loss) |
$ | 17,540 | $ | 93 | $ | 36,557 | $ | (2,100 | ) | $ | (3,132 | ) | $ | 48,958 | n/a | | n/a | |||||||||||||||||||
Net investment income |
13,466 | 41,263 | 54,729 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains on investments |
13,481 | 13,481 | ||||||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(570 | ) | (570 | ) | ||||||||||||||||||||||||||||||||
Corporate other income |
25 | 25 | ||||||||||||||||||||||||||||||||||
Interest expense |
(9,635 | ) | (9,635 | ) | ||||||||||||||||||||||||||||||||
Net foreign exchange losses |
(25 | ) | (25 | ) | ||||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(14,613 | ) | (14,613 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||||||
Income before taxes |
$ | 818 | $ | 29,926 | $ | 79,702 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Loss ratio [a] |
47.9 | % | 66.9 | % | 49.4 | % | 71.5 | % | 73.6 | % | 56.2 | % | ||||||||||||||||||||||||
Acquisition cost ratio [b] |
0.5 | % | 11.1 | % | 23.6 | % | 16.1 | % | 28.6 | % | 17.7 | % | ||||||||||||||||||||||||
General and administrative expense ratio [c] |
14.6 | % | 21.9 | % | 7.9 | % | 17.0 | % | 14.3 | % | 12.6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Combined ratio [d] |
63.0 | % | 99.8 | % | 80.9 | % | 104.6 | % | 116.4 | % | 86.6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[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. |
Percentage totals may not add due to rounding.
Effective January 1, 2012, the Company redefined its operating and reporting segments. Reinsurance business written within Latin America, which was previously reported within the reinsurance or Alterra at Lloyds segments, has been reclassified to a new Latin America segment. In addition, business written by the Companys recently incorporated Brazilian reinsurance company, Alterra Resseguradora do Brasil S.A. (Alterra Brazil), is included in the Latin America segment. Insurance business written by Alterra Insurance USA Inc., which was previously reported within the global insurance segment (formerly the insurance segment), has been reclassified to the U.S. insurance segment (formerly the U.S. specialty segment). Re-presented comparative financial information was filed on Form 8-K on April 20, 2012.
8
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2012 (Unaudited)
Property & Casualty | ||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyds | Latin America | Total | |||||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||||||
Loss ratio |
47.9 | % | 66.9 | % | 49.4 | % | 71.5 | % | 73.6 | % | 56.2 | % | ||||||||||||
Acquisition cost ratio |
0.5 | % | 11.1 | % | 23.6 | % | 16.1 | % | 28.6 | % | 17.7 | % | ||||||||||||
General and administrative expense ratio |
14.6 | % | 21.9 | % | 7.9 | % | 17.0 | % | 14.3 | % | 12.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
63.0 | % | 99.8 | % | 80.9 | % | 104.6 | % | 116.4 | % | 86.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT |
|
|||||||||||||||||||||||
FAVORABLE / (UNFAVORABLE) |
|
|||||||||||||||||||||||
Loss ratio [a] |
21.3 | % | | 7.3 | % | | (15.8 | %) | 5.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT |
|
|||||||||||||||||||||||
UNDERWRITING RATIOS |
|
|||||||||||||||||||||||
Loss ratio |
69.3 | % | 66.9 | % | 56.8 | % | 71.5 | % | 57.8 | % | 62.1 | % | ||||||||||||
Acquisition cost ratio |
0.5 | % | 11.1 | % | 23.6 | % | 16.1 | % | 28.6 | % | 17.7 | % | ||||||||||||
General and administrative expense ratio |
14.6 | % | 21.9 | % | 7.9 | % | 17.0 | % | 14.3 | % | 12.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
84.4 | % | 99.8 | % | 88.2 | % | 104.6 | % | 100.6 | % | 92.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
|
| |||||||||||||||||||||||
Property & Casualty | ||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyds | Latin America | Total | |||||||||||||||||||
UNDERWRITING RATIOS |
||||||||||||||||||||||||
Loss ratio |
51.9 | % | 65.1 | % | 64.0 | % | 48.4 | % | 65.2 | % | 60.7 | % | ||||||||||||
Acquisition cost ratio |
(2.4 | %) | 17.8 | % | 22.4 | % | 22.8 | % | 26.9 | % | 18.5 | % | ||||||||||||
General and administrative expense ratio |
14.9 | % | 19.5 | % | 11.3 | % | 17.8 | % | 34.4 | % | 14.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
64.3 | % | 102.4 | % | 97.7 | % | 89.0 | % | 126.6 | % | 93.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT |
|
|||||||||||||||||||||||
FAVORABLE / (UNFAVORABLE) |
|
|||||||||||||||||||||||
Loss ratio [a] |
32.3 | % | | 12.5 | % | 22.7 | % | | 13.9 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT |
|
|||||||||||||||||||||||
UNDERWRITING RATIOS |
|
|||||||||||||||||||||||
Loss ratio |
84.2 | % | 65.1 | % | 76.4 | % | 71.1 | % | 65.2 | % | 74.6 | % | ||||||||||||
Acquisition cost ratio |
(2.4 | %) | 17.8 | % | 22.4 | % | 22.8 | % | 26.9 | % | 18.5 | % | ||||||||||||
General and administrative expense ratio |
14.9 | % | 19.5 | % | 11.3 | % | 17.8 | % | 34.4 | % | 14.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
96.6 | % | 102.4 | % | 110.1 | % | 111.7 | % | 126.6 | % | 107.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
Percentage totals may not add due to rounding.
9
ALTERRA CAPITAL HOLDINGS LIMITED
GLOBAL INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 125,276 | $ | 66,771 | $ | 97,660 | $ | 73,297 | $ | 130,909 | $ | 132,312 | ||||||||||||
Reinsurance premiums ceded |
(53,224 | ) | (43,251 | ) | (50,172 | ) | (37,625 | ) | (55,133 | ) | (46,257 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 72,052 | $ | 23,520 | $ | 47,488 | $ | 35,672 | $ | 75,776 | $ | 86,055 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 92,803 | $ | 94,103 | $ | 91,077 | $ | 93,467 | $ | 88,892 | $ | 99,874 | ||||||||||||
Earned premiums ceded |
(45,367 | ) | (47,133 | ) | (42,827 | ) | (48,456 | ) | (43,286 | ) | (43,676 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
47,436 | 46,970 | 48,250 | 45,011 | 45,606 | 56,198 | ||||||||||||||||||
Net losses and loss expenses |
(22,745 | ) | (18,061 | ) | (15,152 | ) | (21,288 | ) | (23,689 | ) | (35,927 | ) | ||||||||||||
Acquisition costs |
(239 | ) | (59 | ) | (1,084 | ) | 748 | 1,117 | (797 | ) | ||||||||||||||
General and administrative expenses |
(6,913 | ) | (6,481 | ) | (6,952 | ) | (6,699 | ) | (6,774 | ) | (6,501 | ) | ||||||||||||
Other income (loss) |
1 | 815 | (128 | ) | | 85 | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income |
$ | 17,540 | $ | 23,184 | $ | 24,934 | $ | 17,772 | $ | 16,345 | $ | 12,973 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
47.9 | % | 38.5 | % | 31.4 | % | 47.3 | % | 51.9 | % | 63.9 | % | ||||||||||||
Acquisition cost ratio |
0.5 | % | 0.1 | % | 2.2 | % | (1.7 | %) | (2.4 | %) | 1.4 | % | ||||||||||||
General and administrative expense ratio |
14.6 | % | 13.8 | % | 14.4 | % | 14.9 | % | 14.9 | % | 11.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
63.0 | % | 52.4 | % | 48.1 | % | 60.5 | % | 64.3 | % | 76.9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
10
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 112,186 | $ | 104,282 | $ | 102,279 | $ | 84,858 | $ | 109,794 | $ | 97,487 | ||||||||||||
Reinsurance premiums ceded |
(51,524 | ) | (70,494 | ) | (45,443 | ) | (30,579 | ) | (28,227 | ) | (6,852 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 60,662 | $ | 33,788 | $ | 56,836 | $ | 54,279 | $ | 81,567 | $ | 90,635 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 100,300 | $ | 96,241 | $ | 90,048 | $ | 83,279 | $ | 82,244 | $ | 76,032 | ||||||||||||
Earned premiums ceded |
(44,490 | ) | (40,456 | ) | (34,078 | ) | (28,004 | ) | (23,835 | ) | (28,588 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
55,810 | 55,785 | 55,970 | 55,275 | 58,409 | 47,444 | ||||||||||||||||||
Net losses and loss expenses |
(37,333 | ) | (37,564 | ) | (45,129 | ) | (36,002 | ) | (38,012 | ) | (29,052 | ) | ||||||||||||
Acquisition costs |
(6,169 | ) | (7,696 | ) | (8,349 | ) | (9,669 | ) | (10,400 | ) | (9,135 | ) | ||||||||||||
General and administrative expenses |
(12,215 | ) | (12,257 | ) | (12,299 | ) | (10,228 | ) | (11,374 | ) | (7,986 | ) | ||||||||||||
Other income (loss) |
| 81 | 84 | 58 | 54 | 97 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income (loss) |
$ | 93 | $ | (1,651 | ) | $ | (9,723 | ) | $ | (566 | ) | $ | (1,323 | ) | $ | 1,368 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
66.9 | % | 67.3 | % | 80.6 | % | 65.1 | % | 65.1 | % | 61.2 | % | ||||||||||||
Acquisition cost ratio |
11.1 | % | 13.8 | % | 14.9 | % | 17.5 | % | 17.8 | % | 19.3 | % | ||||||||||||
General and administrative expense ratio |
21.9 | % | 22.0 | % | 22.0 | % | 18.5 | % | 19.5 | % | 16.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
99.8 | % | 103.1 | % | 117.5 | % | 101.1 | % | 102.4 | % | 97.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
11
ALTERRA CAPITAL HOLDINGS LIMITED
REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 246,838 | $ | 318,354 | $ | 88,397 | $ | 121,329 | $ | 244,899 | $ | 117,614 | ||||||||||||
Reinsurance premiums ceded |
(53,185 | ) | (59,493 | ) | (1,670 | ) | (11,055 | ) | (27,675 | ) | (13,348 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 193,653 | $ | 258,861 | $ | 86,727 | $ | 110,274 | $ | 217,224 | $ | 104,266 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 210,413 | $ | 194,661 | $ | 207,129 | $ | 206,698 | $ | 203,470 | $ | 174,442 | ||||||||||||
Earned premiums ceded |
(29,097 | ) | (26,753 | ) | (17,718 | ) | (17,146 | ) | (11,815 | ) | (19,054 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
181,316 | 167,908 | 189,411 | 189,552 | 191,655 | 155,388 | ||||||||||||||||||
Net losses and loss expenses |
(89,607 | ) | (101,195 | ) | (97,328 | ) | (108,135 | ) | (122,576 | ) | (82,278 | ) | ||||||||||||
Acquisition costs |
(42,708 | ) | (38,661 | ) | (42,026 | ) | (41,781 | ) | (42,947 | ) | (32,604 | ) | ||||||||||||
General and administrative expenses |
(14,339 | ) | (17,052 | ) | (14,585 | ) | (16,470 | ) | (21,647 | ) | (13,975 | ) | ||||||||||||
Other income (loss) |
1,895 | 4,441 | (100 | ) | 777 | 548 | 155 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income |
$ | 36,557 | $ | 15,441 | $ | 35,372 | $ | 23,943 | $ | 5,033 | $ | 26,686 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
49.4 | % | 60.3 | % | 51.4 | % | 57.0 | % | 64.0 | % | 53.0 | % | ||||||||||||
Acquisition cost ratio |
23.6 | % | 23.0 | % | 22.2 | % | 22.0 | % | 22.4 | % | 21.0 | % | ||||||||||||
General and administrative expense ratio |
7.9 | % | 10.2 | % | 7.7 | % | 8.7 | % | 11.3 | % | 9.0 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
80.9 | % | 93.4 | % | 81.3 | % | 87.8 | % | 97.7 | % | 82.9 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
12
ALTERRA CAPITAL HOLDINGS LIMITED
ALTERRA AT LLOYDS SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 72,008 | $ | 146,143 | $ | 27,933 | $ | 44,816 | $ | 72,428 | $ | 41,308 | ||||||||||||
Reinsurance premiums ceded |
(27,068 | ) | (38,590 | ) | (8,888 | ) | (6,723 | ) | (24,918 | ) | (13,233 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 44,940 | $ | 107,553 | $ | 19,045 | $ | 38,093 | $ | 47,510 | $ | 28,075 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 69,330 | $ | 72,899 | $ | 52,850 | $ | 50,534 | $ | 58,117 | $ | 40,195 | ||||||||||||
Earned premiums ceded |
(23,108 | ) | (20,049 | ) | (14,952 | ) | (10,850 | ) | (14,540 | ) | (7,120 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
46,222 | 52,850 | 37,898 | 39,684 | 43,577 | 33,075 | ||||||||||||||||||
Net losses and loss expenses |
(33,030 | ) | (38,675 | ) | (64,346 | ) | (24,462 | ) | (21,072 | ) | (12,322 | ) | ||||||||||||
Acquisition costs |
(7,443 | ) | (9,434 | ) | (7,977 | ) | (6,230 | ) | (9,946 | ) | (6,059 | ) | ||||||||||||
General and administrative expenses |
(7,856 | ) | (9,095 | ) | (7,271 | ) | (8,007 | ) | (7,773 | ) | (4,717 | ) | ||||||||||||
Other income (loss) |
7 | | 851 | (27 | ) | 165 | 173 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting (loss) income |
$ | (2,100 | ) | $ | (4,354 | ) | $ | (40,845 | ) | $ | 958 | $ | 4,951 | $ | 10,150 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
71.5 | % | 73.2 | % | 169.8 | % | 61.6 | % | 48.4 | % | 37.3 | % | ||||||||||||
Acquisition cost ratio |
16.1 | % | 17.9 | % | 21.0 | % | 15.7 | % | 22.8 | % | 18.3 | % | ||||||||||||
General and administrative expense ratio |
17.0 | % | 17.2 | % | 19.2 | % | 20.2 | % | 17.8 | % | 14.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
104.6 | % | 108.2 | % | 210.0 | % | 97.5 | % | 89.0 | % | 69.8 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
13
ALTERRA CAPITAL HOLDINGS LIMITED
LATIN AMERICA SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 9,495 | $ | 25,340 | $ | 8,545 | $ | 61,206 | $ | 4,947 | $ | 9,458 | ||||||||||||
Reinsurance premiums ceded |
(4,723 | ) | (12,616 | ) | (876 | ) | (4,819 | ) | (572 | ) | | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 4,772 | $ | 12,724 | $ | 7,669 | $ | 56,387 | $ | 4,375 | $ | 9,458 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 22,939 | $ | 19,523 | $ | 18,363 | $ | 18,131 | $ | 9,355 | $ | 378 | ||||||||||||
Earned premiums ceded |
(3,844 | ) | (5,283 | ) | (1,803 | ) | (1,343 | ) | (490 | ) | | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
19,095 | 14,240 | 16,560 | 16,788 | 8,865 | 378 | ||||||||||||||||||
Net losses and loss expenses |
(14,049 | ) | (10,534 | ) | (9,578 | ) | (8,634 | ) | (5,784 | ) | (238 | ) | ||||||||||||
Acquisition costs |
(5,456 | ) | (3,755 | ) | (4,813 | ) | (4,357 | ) | (2,382 | ) | (80 | ) | ||||||||||||
General and administrative expenses |
(2,722 | ) | (2,259 | ) | (2,105 | ) | (2,431 | ) | (3,053 | ) | (1,954 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting (loss) income |
$ | (3,132 | ) | $ | (2,308 | ) | $ | 64 | $ | 1,366 | $ | (2,354 | ) | $ | (1,894 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
73.6 | % | 74.0 | % | 57.8 | % | 51.4 | % | 65.2 | % | 62.9 | % | ||||||||||||
Acquisition cost ratio |
28.6 | % | 26.4 | % | 29.1 | % | 26.0 | % | 26.9 | % | 21.2 | % | ||||||||||||
General and administrative expense ratio |
14.3 | % | 15.9 | % | 12.7 | % | 14.5 | % | 34.4 | % | n/m | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
116.4 | % | 116.2 | % | 99.6 | % | 91.9 | % | 126.6 | % | n/m | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||
Gross premiums written |
$ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 930 | $ | 802 | ||||||||||||
Reinsurance premiums ceded |
(155 | ) | (18 | ) | (154 | ) | (90 | ) | (101 | ) | (25 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums written |
$ | 899 | $ | 422 | $ | 1,015 | $ | 732 | $ | 829 | $ | 777 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earned premiums |
$ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 930 | $ | 802 | ||||||||||||
Earned premiums ceded |
(155 | ) | (18 | ) | (154 | ) | (90 | ) | (101 | ) | (25 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net premiums earned |
899 | 422 | 1,015 | 732 | 829 | 777 | ||||||||||||||||||
Net investment income |
13,466 | 14,776 | 11,515 | 12,131 | 12,545 | 12,420 | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments |
| | (5,509 | ) | (6,407 | ) | (1,299 | ) | (1,860 | ) | ||||||||||||||
Other income (loss) |
| | 413 | (8 | ) | (23 | ) | | ||||||||||||||||
Claims and policy benefits |
(13,272 | ) | (13,466 | ) | (14,564 | ) | (14,538 | ) | (15,570 | ) | (13,943 | ) | ||||||||||||
Acquisition costs |
(156 | ) | (119 | ) | (131 | ) | (145 | ) | (122 | ) | (123 | ) | ||||||||||||
General and administrative expenses |
(119 | ) | (34 | ) | (67 | ) | (145 | ) | (259 | ) | (642 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before taxes |
$ | 818 | $ | 1,579 | $ | (7,328 | ) | $ | (8,380 | ) | $ | (3,899 | ) | $ | (3,371 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | June 30, 2011 | June 30, 2010 | |||||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||||||
Global Insurance: |
||||||||||||||||||||||||||
Aviation |
S | $ | 3,954 | $ | 1,302 | $ | 20,410 | $ | 6,736 | $ | 3,814 | $ | 6,615 | |||||||||||||
Excess Liability |
L | 31,435 | 25,186 | 21,281 | 20,365 | 34,659 | 33,198 | |||||||||||||||||||
Professional Liability |
L | 59,407 | 24,466 | 40,360 | 30,590 | 62,402 | 65,216 | |||||||||||||||||||
Property |
S | 30,480 | 15,817 | 15,609 | 15,606 | 30,034 | 27,283 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
125,276 | 66,771 | 97,660 | 73,297 | 130,909 | 132,312 | |||||||||||||||||||||
U.S. Insurance: |
||||||||||||||||||||||||||
General/ Excess Liability |
L | 23,683 | 34,667 | 31,618 | 24,925 | 25,118 | 27,625 | |||||||||||||||||||
Marine |
S | 28,634 | 25,201 | 23,806 | 22,189 | 25,389 | 17,996 | |||||||||||||||||||
Professional Liability |
L | 13,133 | 11,208 | 15,720 | 13,318 | 8,509 | 3,667 | |||||||||||||||||||
Property |
S | 46,736 | 33,206 | 31,135 | 24,426 | 50,778 | 48,199 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
112,186 | 104,282 | 102,279 | 84,858 | 109,794 | 97,487 | |||||||||||||||||||||
Reinsurance [a]: |
||||||||||||||||||||||||||
Agriculture |
S | 5,298 | 17,505 | 186 | 998 | 8,713 | (2,513 | ) | ||||||||||||||||||
Auto |
S | 39,590 | 512 | 20,548 | 7,716 | 55,072 | 5 | |||||||||||||||||||
Aviation |
S | 5,811 | 5,460 | 337 | 14,440 | 80 | 8,561 | |||||||||||||||||||
Credit/ Surety |
S | 2,219 | 31,409 | 1,801 | 98 | 571 | (1,891 | ) | ||||||||||||||||||
General Casualty |
L | 24,168 | 12,521 | 12,951 | 20,923 | 22,045 | (857 | ) | ||||||||||||||||||
Marine & Energy |
S | 6,262 | 11,707 | 2,918 | 1,647 | (678 | ) | 4,894 | ||||||||||||||||||
Medical Malpractice |
L | 8,105 | 11,276 | 1,673 | 6,867 | 11,223 | 7,813 | |||||||||||||||||||
Other |
S | 549 | 4,437 | (181 | ) | 1,112 | 447 | 92 | ||||||||||||||||||
Professional Liability |
L | 37,246 | 59,458 | 20,270 | 39,877 | 39,462 | 32,005 | |||||||||||||||||||
Property |
S | 108,995 | 144,413 | 18,731 | 22,115 | 103,390 | 59,665 | |||||||||||||||||||
Whole Account |
S/L | 191 | 1,408 | 2,408 | (1,946 | ) | 268 | 2,362 | ||||||||||||||||||
Workers Compensation |
L | 8,404 | 18,248 | 6,755 | 7,482 | 4,306 | 7,478 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
246,838 | 318,354 | 88,397 | 121,329 | 244,899 | 117,614 | |||||||||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||||||
Accident & Health |
S | 8,250 | 17,432 | 5,646 | 9,523 | 8,380 | 6,022 | |||||||||||||||||||
Agriculture |
S | 613 | 20,370 | | | | | |||||||||||||||||||
Aviation |
S | 3,220 | 2,486 | 5,562 | 4,130 | 1,810 | 2,565 | |||||||||||||||||||
Financial Institutions |
L | 5,400 | 6,904 | 8,137 | 3,591 | 6,441 | 4,846 | |||||||||||||||||||
International Casualty |
L | 8,423 | 49,268 | 1,947 | 7,903 | 8,263 | 6,173 | |||||||||||||||||||
Marine |
S | 2,282 | 2,726 | 1,493 | | | | |||||||||||||||||||
Professional Liability |
L | 6,108 | 5,428 | 1,868 | 440 | 10,466 | 4,161 | |||||||||||||||||||
Property |
S | 37,712 | 41,529 | 3,280 | 19,229 | 37,068 | 17,541 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
72,008 | 146,143 | 27,933 | 44,816 | 72,428 | 41,308 | |||||||||||||||||||||
Latin America: |
||||||||||||||||||||||||||
Aviation |
S | 9 | 65 | | 230 | | | |||||||||||||||||||
General Liability |
L | (543 | ) | 2,435 | 179 | 1,947 | 223 | 9 | ||||||||||||||||||
Marine |
S | 348 | 1,688 | 489 | 2,484 | 59 | 110 | |||||||||||||||||||
Property |
S | 8,634 | 16,711 | 2,914 | 48,159 | 3,681 | 8,939 | |||||||||||||||||||
Surety |
S | 1,047 | 4,441 | 4,963 | 8,386 | 984 | 400 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
9,495 | 25,340 | 8,545 | 61,206 | 4,947 | 9,458 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty |
$ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 562,977 | $ | 398,179 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Life & Annuity: |
||||||||||||||||||||||||||
Annuity |
$ | (353 | ) | $ | 353 | $ | 770 | $ | 449 | $ | 271 | $ | 6 | |||||||||||||
Life |
1,407 | 87 | 399 | 373 | 659 | 796 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Life & Annuity |
$ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 930 | $ | 802 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 566,857 | $ | 661,330 | $ | 325,983 | $ | 386,328 | $ | 563,907 | $ | 398,981 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
S = Short tail lines |
$ | 340,739 | $ | 399,121 | $ | 160,851 | $ | 208,251 | $ | 329,726 | $ | 205,664 | ||||||||||||||
L = Long tail lines |
225,064 | 261,769 | 163,963 | 177,255 | 233,251 | 192,515 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty |
$ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 562,977 | $ | 398,179 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Property [b] |
$ | 232,557 | $ | 251,676 | $ | 71,669 | $ | 129,535 | $ | 224,951 | $ | 161,627 | ||||||||||||||
Casualty [c] |
224,969 | 261,065 | 162,759 | 178,228 | 233,117 | 191,334 | ||||||||||||||||||||
Specialty [d] |
108,277 | 148,149 | 90,386 | 77,743 | 104,909 | 45,218 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Aggregate Property & Casualty |
$ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 562,977 | $ | 398,179 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Includes the results of HarborPoint from May 12, 2010. |
[b] | Property includes property lines of business. |
[c] | Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers compensation lines of business. |
[d] | Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business. |
16
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATASIX MONTHS ENDED JUNE 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance |
Corporate | Consolidated | |||||||||||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyds | Latin America | Total | |||||||||||||||||||||||||||||||
Gross premiums written |
$ | 192,047 | $ | 216,468 | $ | 565,192 | $ | 218,151 | $ | 34,835 | $ | 1,226,693 | $ | 1,494 | $ | | $ | 1,228,187 | ||||||||||||||||||
Reinsurance premiums ceded |
(96,475 | ) | (122,018 | ) | (112,678 | ) | (65,658 | ) | (17,339 | ) | (414,168 | ) | (173 | ) | | (414,341 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net premiums written |
$ | 95,572 | $ | 94,450 | $ | 452,514 | $ | 152,493 | $ | 17,496 | $ | 812,525 | $ | 1,321 | $ | | $ | 813,846 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Earned premiums |
$ | 186,906 | $ | 196,541 | $ | 405,074 | $ | 142,229 | $ | 42,462 | $ | 973,212 | $ | 1,494 | $ | | $ | 974,706 | ||||||||||||||||||
Earned premiums ceded |
(92,500 | ) | (84,946 | ) | (55,850 | ) | (43,157 | ) | (9,127 | ) | (285,580 | ) | (173 | ) | | (285,753 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net premiums earned |
94,406 | 111,595 | 349,224 | 99,072 | 33,335 | 687,632 | 1,321 | | 688,953 | |||||||||||||||||||||||||||
Net losses and loss expenses |
(40,806 | ) | (74,897 | ) | (190,802 | ) | (71,705 | ) | (24,583 | ) | (402,793 | ) | | | (402,793 | ) | ||||||||||||||||||||
Claims and policy benefits |
| | | | | | (26,738 | ) | | (26,738 | ) | |||||||||||||||||||||||||
Acquisition costs |
(298 | ) | (13,865 | ) | (81,369 | ) | (16,877 | ) | (9,211 | ) | (121,620 | ) | (275 | ) | | (121,895 | ) | |||||||||||||||||||
General and administrative expenses |
(13,394 | ) | (24,472 | ) | (31,391 | ) | (16,951 | ) | (4,981 | ) | (91,189 | ) | (153 | ) | | (91,342 | ) | |||||||||||||||||||
Other income |
816 | 81 | 6,336 | 7 | | 7,240 | | | 7,240 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Underwriting income (loss) |
40,724 | (1,558 | ) | 51,998 | (6,454 | ) | (5,440 | ) | 79,270 | n/a | | n/a | ||||||||||||||||||||||||
Net investment income |
28,242 | 85,165 | 113,407 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains on investments |
38,974 | 38,974 | ||||||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings |
(5,939 | ) | (5,939 | ) | ||||||||||||||||||||||||||||||||
Corporate other income |
50 | 50 | ||||||||||||||||||||||||||||||||||
Interest expense |
(18,263 | ) | (18,263 | ) | ||||||||||||||||||||||||||||||||
Net foreign exchange gains |
7 | 7 | ||||||||||||||||||||||||||||||||||
Corporate general and administrative expenses |
(27,517 | ) | (27,517 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Income before taxes |
$ | 2,397 | $ | 72,477 | $ | 154,144 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Loss ratio [a] |
43.2 | % | 67.1 | % | 54.6 | % | 72.4 | % | 73.7 | % | 58.6 | % | ||||||||||||||||||||||||
Acquisition cost ratio [b] |
0.3 | % | 12.4 | % | 23.3 | % | 17.0 | % | 27.6 | % | 17.7 | % | ||||||||||||||||||||||||
General and administrative expense ratio [c] |
14.2 | % | 21.9 | % | 9.0 | % | 17.1 | % | 14.9 | % | 13.3 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Combined ratio [d] |
57.7 | % | 101.5 | % | 86.9 | % | 106.5 | % | 116.3 | % | 89.5 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[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. |
17
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS - SIX MONTHS ENDED JUNE 30, 2012 (Unaudited)
Property & Casualty | ||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyds | Latin America | Total | |||||||||||||||||||
UNDERWRITING RATIOS |
| |||||||||||||||||||||||
Loss ratio |
43.2 | % | 67.1 | % | 54.6 | % | 72.4 | % | 73.7 | % | 58.6 | % | ||||||||||||
Acquisition cost ratio |
0.3 | % | 12.4 | % | 23.3 | % | 17.0 | % | 27.6 | % | 17.7 | % | ||||||||||||
General and administrative expense ratio |
14.2 | % | 21.9 | % | 9.0 | % | 17.1 | % | 14.9 | % | 13.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
57.7 | % | 101.5 | % | 86.9 | % | 106.5 | % | 116.3 | % | 89.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
| |||||||||||||||||||||||
Loss ratio [a] |
30.1 | % | (0.9 | %) | 3.5 | % | (4.5 | %) | (12.4 | %) | 4.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
| |||||||||||||||||||||||
Loss ratio |
73.3 | % | 66.2 | % | 58.2 | % | 68.0 | % | 61.3 | % | 63.1 | % | ||||||||||||
Acquisition cost ratio |
0.3 | % | 12.4 | % | 23.3 | % | 17.0 | % | 27.6 | % | 17.7 | % | ||||||||||||
General and administrative expense ratio |
14.2 | % | 21.9 | % | 9.0 | % | 17.1 | % | 14.9 | % | 13.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
87.8 | % | 100.6 | % | 90.5 | % | 102.0 | % | 103.9 | % | 94.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[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, 2011 (Unaudited)
Property & Casualty | ||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyds | Latin America | Total | |||||||||||||||||||
UNDERWRITING RATIOS |
| |||||||||||||||||||||||
Loss ratio |
57.9 | % | 64.6 | % | 73.7 | % | 80.7 | % | 66.4 | % | 70.9 | % | ||||||||||||
Acquisition cost ratio |
(0.9 | %) | 16.4 | % | 21.8 | % | 26.2 | % | 23.5 | % | 18.6 | % | ||||||||||||
General and administrative expense ratio |
15.4 | % | 20.2 | % | 10.6 | % | 18.6 | % | 31.0 | % | 14.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
72.5 | % | 101.2 | % | 106.0 | % | 125.5 | % | 120.8 | % | 103.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) |
| |||||||||||||||||||||||
Loss ratio [a] |
23.1 | % | | 11.2 | % | 11.5 | % | | 10.8 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS |
| |||||||||||||||||||||||
Loss ratio |
81.0 | % | 64.6 | % | 84.9 | % | 92.2 | % | 66.4 | % | 81.7 | % | ||||||||||||
Acquisition cost ratio |
(0.9 | %) | 16.4 | % | 21.8 | % | 26.2 | % | 23.5 | % | 18.6 | % | ||||||||||||
General and administrative expense ratio |
15.4 | % | 20.2 | % | 10.6 | % | 18.6 | % | 31.0 | % | 14.1 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Combined ratio |
95.6 | % | 101.2 | % | 117.2 | % | 137.0 | % | 120.8 | % | 114.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years contracts. |
Percentage | totals may not add due to rounding. |
18
ALTERRA CAPITAL HOLDINGS LIMITED
GLOBAL INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 192,047 | $ | 194,804 | $ | 198,733 | $ | 365,761 | $ | 370,120 | ||||||||||
Reinsurance premiums ceded |
(96,475 | ) | (93,657 | ) | (84,833 | ) | (181,454 | ) | (170,608 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 95,572 | $ | 101,147 | $ | 113,900 | $ | 184,307 | $ | 199,512 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 186,906 | $ | 179,543 | $ | 196,915 | $ | 364,087 | $ | 391,716 | ||||||||||
Earned premiums ceded |
(92,500 | ) | (84,065 | ) | (90,922 | ) | (175,348 | ) | (173,123 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
94,406 | 95,478 | 105,993 | 188,739 | 218,593 | |||||||||||||||
Net losses and loss expenses |
(40,806 | ) | (55,313 | ) | (73,206 | ) | (91,753 | ) | (128,823 | ) | ||||||||||
Acquisition costs |
(298 | ) | 853 | (488 | ) | 517 | (3,381 | ) | ||||||||||||
General and administrative expenses |
(13,394 | ) | (14,726 | ) | (12,398 | ) | (28,377 | ) | (28,615 | ) | ||||||||||
Other income (loss) |
816 | 814 | (11 | ) | 686 | 760 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting income |
$ | 40,724 | $ | 27,106 | $ | 19,890 | $ | 69,812 | $ | 58,534 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
43.2 | % | 57.9 | % | 69.1 | % | 48.6 | % | 58.9 | % | ||||||||||
Acquisition cost ratio |
0.3 | % | (0.9 | %) | 0.5 | % | (0.3 | %) | 1.5 | % | ||||||||||
General and administrative expense ratio |
14.2 | % | 15.4 | % | 11.7 | % | 15.0 | % | 13.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
57.7 | % | 72.5 | % | 81.2 | % | 63.4 | % | 73.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
19
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 216,468 | $ | 187,559 | $ | 174,374 | $ | 374,696 | $ | 323,990 | ||||||||||
Reinsurance premiums ceded |
(122,018 | ) | (66,544 | ) | (56,079 | ) | (142,566 | ) | (98,576 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 94,450 | $ | 121,015 | $ | 118,295 | $ | 232,130 | $ | 225,414 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 196,541 | $ | 163,714 | $ | 149,922 | $ | 337,041 | $ | 311,950 | ||||||||||
Earned premiums ceded |
(84,946 | ) | (51,636 | ) | (68,565 | ) | (113,718 | ) | (125,218 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
111,595 | 112,078 | 81,357 | 223,323 | 186,732 | |||||||||||||||
Net losses and loss expenses |
(74,897 | ) | (72,427 | ) | (50,415 | ) | (153,558 | ) | (118,337 | ) | ||||||||||
Acquisition costs |
(13,865 | ) | (18,386 | ) | (12,809 | ) | (36,404 | ) | (28,444 | ) | ||||||||||
General and administrative expenses |
(24,472 | ) | (22,644 | ) | (16,458 | ) | (45,171 | ) | (36,015 | ) | ||||||||||
Other income |
81 | 137 | 102 | 279 | 507 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting (loss) income |
$ | (1,558 | ) | $ | (1,242 | ) | $ | 1,777 | $ | (11,531 | ) | $ | 4,443 | |||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
67.1 | % | 64.6 | % | 62.0 | % | 68.8 | % | 63.4 | % | ||||||||||
Acquisition cost ratio |
12.4 | % | 16.4 | % | 15.7 | % | 16.3 | % | 15.2 | % | ||||||||||
General and administrative expense ratio |
21.9 | % | 20.2 | % | 20.2 | % | 20.2 | % | 19.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
101.5 | % | 101.2 | % | 97.9 | % | 105.3 | % | 97.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
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, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 565,192 | $ | 605,626 | $ | 272,443 | $ | 815,352 | $ | 487,100 | ||||||||||
Reinsurance premiums ceded |
(112,678 | ) | (62,927 | ) | (58,699 | ) | (75,652 | ) | (63,991 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 452,514 | $ | 542,699 | $ | 213,744 | $ | 739,700 | $ | 423,109 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 405,074 | $ | 447,810 | $ | 270,179 | $ | 861,637 | $ | 692,303 | ||||||||||
Earned premiums ceded |
(55,850 | ) | (31,716 | ) | (35,012 | ) | (66,580 | ) | (71,596 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
349,224 | 416,094 | 235,167 | 795,057 | 620,707 | |||||||||||||||
Net losses and loss expenses |
(190,802 | ) | (306,484 | ) | (132,339 | ) | (511,947 | ) | (344,063 | ) | ||||||||||
Acquisition costs |
(81,369 | ) | (90,707 | ) | (47,569 | ) | (174,514 | ) | (129,242 | ) | ||||||||||
General and administrative expenses |
(31,391 | ) | (43,919 | ) | (21,807 | ) | (74,974 | ) | (62,730 | ) | ||||||||||
Other income |
6,336 | 548 | 155 | 1,225 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting income (loss) |
$ | 51,998 | $ | (24,468 | ) | $ | 33,607 | $ | 34,847 | $ | 84,672 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
54.6 | % | 73.7 | % | 56.3 | % | 64.4 | % | 55.4 | % | ||||||||||
Acquisition cost ratio |
23.3 | % | 21.8 | % | 20.2 | % | 21.9 | % | 20.8 | % | ||||||||||
General and administrative expense ratio |
9.0 | % | 10.6 | % | 9.3 | % | 9.4 | % | 10.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
86.9 | % | 106.0 | % | 85.8 | % | 95.8 | % | 86.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
21
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, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 218,151 | $ | 180,318 | $ | 113,425 | $ | 253,067 | $ | 179,774 | ||||||||||
Reinsurance premiums ceded |
(65,658 | ) | (48,097 | ) | (33,192 | ) | (63,708 | ) | (37,448 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 152,493 | $ | 132,221 | $ | 80,233 | $ | 189,359 | $ | 142,326 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 142,229 | $ | 121,281 | $ | 77,655 | $ | 224,665 | $ | 164,648 | ||||||||||
Earned premiums ceded |
(43,157 | ) | (35,120 | ) | (14,589 | ) | (60,922 | ) | (35,793 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
99,072 | 86,161 | 63,066 | 163,743 | 128,855 | |||||||||||||||
Net losses and loss expenses |
(71,705 | ) | (69,515 | ) | (28,580 | ) | (158,323 | ) | (55,190 | ) | ||||||||||
Acquisition costs |
(16,877 | ) | (22,598 | ) | (11,826 | ) | (36,805 | ) | (22,447 | ) | ||||||||||
General and administrative expenses |
(16,951 | ) | (16,026 | ) | (7,430 | ) | (31,304 | ) | (23,965 | ) | ||||||||||
Other income |
7 | 380 | 351 | 1,204 | 2,534 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting (loss) income |
$ | (6,454 | ) | $ | (21,598 | ) | $ | 15,581 | $ | (61,485 | ) | $ | 29,787 | |||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
72.4 | % | 80.7 | % | 45.3 | % | 96.7 | % | 42.8 | % | ||||||||||
Acquisition cost ratio |
17.0 | % | 26.2 | % | 18.8 | % | 22.5 | % | 17.4 | % | ||||||||||
General and administrative expense ratio |
17.1 | % | 18.6 | % | 11.8 | % | 19.1 | % | 18.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
106.5 | % | 125.5 | % | 75.9 | % | 138.3 | % | 78.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
22
ALTERRA CAPITAL HOLDINGS LIMITED
LATIN AMERICA SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE SIX MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
June 30, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 34,835 | $ | 22,083 | $ | 9,480 | $ | 91,834 | $ | 44,812 | ||||||||||
Reinsurance premiums ceded |
(17,339 | ) | (2,637 | ) | | (8,332 | ) | (140 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 17,496 | $ | 19,446 | $ | 9,480 | $ | 83,502 | $ | 44,672 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 42,462 | $ | 18,557 | $ | 384 | $ | 55,051 | $ | 13,095 | ||||||||||
Earned premiums ceded |
(9,127 | ) | (784 | ) | | (3,930 | ) | (31 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
33,335 | 17,773 | 384 | 51,121 | 13,064 | |||||||||||||||
Net losses and loss expenses |
(24,583 | ) | (11,800 | ) | (242 | ) | (30,012 | ) | (8,428 | ) | ||||||||||
Acquisition costs |
(9,211 | ) | (4,169 | ) | (81 | ) | (13,339 | ) | (3,589 | ) | ||||||||||
General and administrative expenses |
(4,981 | ) | (5,509 | ) | (3,081 | ) | (10,045 | ) | (7,909 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Underwriting loss |
$ | (5,440 | ) | $ | (3,705 | ) | $ | (3,020 | ) | $ | (2,275 | ) | $ | (6,862 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss ratio |
73.7 | % | 66.4 | % | 63.0 | % | 58.7 | % | 64.5 | % | ||||||||||
Acquisition cost ratio |
27.6 | % | 23.5 | % | 21.1 | % | 26.1 | % | 27.5 | % | ||||||||||
General and administrative expense ratio |
14.9 | % | 31.0 | % | n/m | 19.6 | % | 60.5 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Combined ratio |
116.3 | % | 120.8 | % | n/m | 104.5 | % | 152.5 | % | |||||||||||
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|
|
|
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, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written |
$ | 1,494 | $ | 1,365 | $ | 1,665 | $ | 3,356 | $ | 4,935 | ||||||||||
Reinsurance premiums ceded |
(173 | ) | (121 | ) | (132 | ) | (365 | ) | (400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums written |
$ | 1,321 | $ | 1,244 | $ | 1,533 | $ | 2,991 | $ | 4,535 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earned premiums |
$ | 1,494 | $ | 1,365 | $ | 1,665 | $ | 3,356 | $ | 4,935 | ||||||||||
Earned premiums ceded |
(173 | ) | (121 | ) | (132 | ) | (365 | ) | (400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
1,321 | 1,244 | 1,533 | 2,991 | 4,535 | |||||||||||||||
Net investment income |
28,242 | 24,888 | 25,519 | 48,534 | 49,785 | |||||||||||||||
Net realized and unrealized gains (losses) on investments |
| 1,508 | 4,056 | (10,408 | ) | 11,358 | ||||||||||||||
Other income (loss) |
| (23 | ) | (28 | ) | 382 | 286 | |||||||||||||
Claims and policy benefits |
(26,738 | ) | (30,280 | ) | (31,602 | ) | (59,382 | ) | (65,213 | ) | ||||||||||
Acquisition costs |
(275 | ) | (281 | ) | (269 | ) | (557 | ) | (361 | ) | ||||||||||
General and administrative expenses |
(153 | ) | (436 | ) | (1,299 | ) | (648 | ) | (2,964 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before taxes |
$ | 2,397 | $ | (3,380 | ) | $ | (2,090 | ) | $ | (19,088 | ) | $ | (2,574 | ) | ||||||
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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, 2012 | June 30, 2011 | June 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||||
Property & Casualty: |
||||||||||||||||||||||
Global Insurance [a]: |
||||||||||||||||||||||
Aviation |
S | $ | 5,256 | $ | 5,230 | $ | 8,964 | $ | 32,376 | $ | 39,888 | |||||||||||
Excess Liability |
L | 56,621 | 56,936 | 56,846 | 98,582 | 89,933 | ||||||||||||||||
Professional Liability |
L | 83,873 | 86,931 | 92,789 | 157,881 | 177,199 | ||||||||||||||||
Property |
S | 46,297 | 45,707 | 40,134 | 76,922 | 63,100 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
192,047 | 194,804 | 198,733 | 365,761 | 370,120 | ||||||||||||||||||
U.S. Insurance [a]: |
||||||||||||||||||||||
General Liability |
L | 58,350 | 48,111 | 50,639 | 104,655 | 104,777 | ||||||||||||||||
Marine |
S | 53,835 | 42,498 | 34,059 | 88,493 | 67,454 | ||||||||||||||||
Professional Liability |
L | 24,341 | 15,131 | 5,913 | 44,168 | 12,454 | ||||||||||||||||
Property |
S | 79,942 | 81,819 | 83,763 | 137,380 | 139,305 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
216,468 | 187,559 | 174,374 | 374,696 | 323,990 | ||||||||||||||||||
Reinsurance [b]: |
||||||||||||||||||||||
Agriculture |
S | 22,803 | 29,498 | 33,293 | 30,682 | 29,222 | ||||||||||||||||
Auto |
S | 40,102 | 70,096 | 5 | 98,360 | 32,285 | ||||||||||||||||
Aviation |
S | 11,271 | 984 | 13,383 | 15,761 | 31,211 | ||||||||||||||||
Credit/ Surety |
S | 33,628 | 23,278 | (1,891 | ) | 25,177 | (1,025 | ) | ||||||||||||||
General Casualty |
L | 36,689 | 37,472 | 12,194 | 71,346 | 47,987 | ||||||||||||||||
Marine & Energy |
S | 17,969 | 15,871 | 8,994 | 20,436 | 14,546 | ||||||||||||||||
Medical Malpractice |
L | 19,381 | 28,805 | 34,968 | 37,345 | 51,391 | ||||||||||||||||
Other |
S | 4,986 | 2,140 | 1,081 | 3,071 | 2,729 | ||||||||||||||||
Professional Liability |
L | 96,704 | 99,146 | 43,924 | 159,293 | 110,388 | ||||||||||||||||
Property |
S | 253,408 | 242,256 | 105,576 | 283,102 | 133,669 | ||||||||||||||||
Whole Account |
S/L | 1,599 | 35,338 | 4,935 | 35,800 | 3,871 | ||||||||||||||||
Workers Compensation |
L | 26,652 | 20,742 | 15,981 | 34,979 | 30,826 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
565,192 | 605,626 | 272,443 | 815,352 | 487,100 | ||||||||||||||||||
Alterra at Lloyds: |
||||||||||||||||||||||
Accident & Health |
S | 25,682 | 21,924 | 19,432 | 37,093 | 30,921 | ||||||||||||||||
Agriculture |
S | 20,983 | | | | | ||||||||||||||||
Aviation |
S | 5,706 | 3,577 | 6,968 | 13,269 | 16,138 | ||||||||||||||||
Financial Institutions |
L | 12,304 | 15,477 | 10,934 | 27,205 | 18,763 | ||||||||||||||||
International Casualty |
L | 57,691 | 42,052 | 19,857 | 51,902 | 26,174 | ||||||||||||||||
Marine |
S | 5,008 | | | 1,493 | | ||||||||||||||||
Professional Liability |
L | 11,536 | 18,388 | 11,057 | 20,696 | 19,591 | ||||||||||||||||
Property |
S | 79,241 | 78,900 | 45,177 | 101,409 | 68,187 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
218,151 | 180,318 | 113,425 | 253,067 | 179,774 | ||||||||||||||||||
Latin America: |
||||||||||||||||||||||
Aviation |
S | 74 | | | 230 | 81 | ||||||||||||||||
General Liability |
L | 1,892 | 1,180 | 9 | 3,306 | 2,407 | ||||||||||||||||
Marine |
S | 2,036 | 603 | 110 | 3,576 | 1,835 | ||||||||||||||||
Property |
S | 25,345 | 17,616 | 8,961 | 68,688 | 32,460 | ||||||||||||||||
Surety |
S | 5,488 | 2,684 | 400 | 16,034 | 8,029 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
34,835 | 22,083 | 9,480 | 91,834 | 44,812 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | $ | 1,190,390 | $ | 768,455 | $ | 1,900,710 | $ | 1,405,796 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Life & Annuity: |
||||||||||||||||||||||
Annuity |
$ | | $ | 607 | $ | 6 | $ | 1,826 | $ | 1,135 | ||||||||||||
Life |
1,494 | 758 | 1,659 | 1,530 | 3,800 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Life & Annuity |
$ | 1,494 | $ | 1,365 | $ | 1,665 | $ | 3,356 | $ | 4,935 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty and Life & Annuity |
$ | 1,228,187 | $ | 1,191,755 | $ | 770,120 | $ | 1,904,066 | $ | 1,410,731 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
S = Short tail lines |
$ | 739,860 | $ | 702,350 | $ | 410,877 | $ | 1,071,452 | $ | 711,971 | ||||||||||||
L = Long tail lines |
486,833 | 488,040 | 357,578 | 829,258 | 693,825 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | $ | 1,190,390 | $ | 768,455 | $ | 1,900,710 | $ | 1,405,796 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property [c] |
$ | 484,233 | 39.5 | % | $ | 667,501 | 38.5 | % | ||||||||||||||
Casualty [d] |
486,034 | 39.6 | % | 811,358 | 37.8 | % | ||||||||||||||||
Specialty [e] |
256,426 | 20.9 | % | 421,851 | 23.7 | % | ||||||||||||||||
|
|
|
|
|||||||||||||||||||
Aggregate Property & Casualty |
$ | 1,226,693 | $ | 1,900,710 | ||||||||||||||||||
|
|
|
|
[a] | Comparative periods have been re-presented to conform with the current periods presentation. |
[b] | Includes the results for Harbor Point from May 12, 2010. |
[c] | Property includes property lines of business. |
[d] | Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers compensation lines of business. |
[e] | Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business. |
Percentage totals may not add due to rounding.
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, 2012 |
Investment Distribution |
As of Dec. 31, 2011 |
Investment Distribution |
As of June 30, 2012 |
Investment Distribution |
As of Dec. 31, 2011 |
Investment Distribution |
||||||||||||||||||||||||
Cash and cash equivalents |
$ | 763,957 | 9.7 | % | $ | 922,844 | 11.8 | % | $ | 763,957 | 9.5 | % | $ | 922,844 | 11.6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. government and agencies |
779,270 | 9.9 | % | 751,806 | 9.6 | % | 779,270 | 9.7 | % | 751,806 | 9.5 | % | ||||||||||||||||||||
Non-U.S. governments |
217,341 | 2.8 | % | 164,621 | 2.1 | % | 217,341 | 2.7 | % | 164,621 | 2.1 | % | ||||||||||||||||||||
Corporate securities |
2,571,697 | 32.6 | % | 2,646,358 | 33.9 | % | 2,571,697 | 32.0 | % | 2,646,358 | 33.3 | % | ||||||||||||||||||||
Municipal securities |
281,884 | 3.6 | % | 263,007 | 3.4 | % | 281,884 | 3.5 | % | 263,007 | 3.3 | % | ||||||||||||||||||||
Asset-backed securities |
349,715 | 4.4 | % | 247,965 | 3.2 | % | 349,715 | 4.3 | % | 247,965 | 3.1 | % | ||||||||||||||||||||
Residential mortgage-backed securities |
1,322,785 | 16.8 | % | 1,296,277 | 16.6 | % | 1,322,785 | 16.4 | % | 1,296,277 | 16.3 | % | ||||||||||||||||||||
Commercial mortgage-backed securities |
398,954 | 5.1 | % | 361,097 | 4.6 | % | 398,954 | 5.0 | % | 361,097 | 4.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Fixed maturities carried at fair value |
$ | 5,921,646 | 75.1 | % | $ | 5,731,131 | 73.3 | % | $ | 5,921,646 | 73.6 | % | $ | 5,731,131 | 72.1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other investments carried at fair value |
$ | 366,404 | 4.6 | % | $ | 286,515 | 3.7 | % | $ | 366,404 | 4.6 | % | $ | 286,515 | 3.6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total investments carried at fair value |
$ | 7,052,007 | 89.4 | % | $ | 6,940,490 | 88.8 | % | $ | 7,052,007 | 87.7 | % | $ | 6,940,490 | 87.3 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. government and agencies |
$ | 27,616 | 0.4 | % | $ | 29,201 | 0.4 | % | $ | 31,697 | 0.4 | % | $ | 32,906 | 0.4 | % | ||||||||||||||||
Non-U.S. governments |
509,819 | 6.5 | % | 524,449 | 6.7 | % | 618,022 | 7.7 | % | 623,080 | 7.8 | % | ||||||||||||||||||||
Corporate securities |
295,639 | 3.7 | % | 319,609 | 4.1 | % | 340,900 | 4.2 | % | 354,504 | 4.5 | % | ||||||||||||||||||||
Asset-backed securities |
916 | 0.0 | % | 1,000 | 0.0 | % | 919 | 0.0 | % | 1,003 | 0.0 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Fixed maturities carried at amortized cost |
$ | 833,990 | 10.6 | % | $ | 874,259 | 11.2 | % | $ | 991,538 | 12.3 | % | $ | 1,011,493 | 12.7 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total invested assets |
$ | 7,885,997 | 100.0 | % | $ | 7,814,749 | 100.0 | % | $ | 8,043,545 | 100.0 | % | $ | 7,951,983 | 100.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2012, the weighted average book yield of the cash and fixed maturities portfolio was 3.26%, and the weighted average duration was 4.1 years.
Carrying Value | Fair Value | |||||||||||||||||||||||||||||||
Credit Ratings |
As of June 30, 2012 |
Ratings Distribution |
As of Dec. 31, 2011 |
Ratings Distribution |
As of June 30, 2012 |
Ratings Distribution |
As of Dec. 31, 2011 |
Ratings Distribution |
||||||||||||||||||||||||
U.S. government and agencies [a] |
$ | 2,020,993 | 29.9 | % | $ | 1,869,405 | 28.3 | % | $ | 2,020,993 | 29.2 | % | $ | 1,869,405 | 27.7 | % | ||||||||||||||||
AAA |
1,179,378 | 17.5 | % | 948,861 | 14.4 | % | 1,179,378 | 17.1 | % | 948,861 | 14.1 | % | ||||||||||||||||||||
AA |
741,038 | 11.0 | % | 883,783 | 13.4 | % | 741,038 | 10.7 | % | 883,783 | 13.1 | % | ||||||||||||||||||||
A |
1,388,280 | 20.5 | % | 1,378,361 | 20.9 | % | 1,388,280 | 20.1 | % | 1,378,361 | 20.4 | % | ||||||||||||||||||||
BBB |
349,968 | 5.2 | % | 281,983 | 4.3 | % | 349,968 | 5.1 | % | 281,983 | 4.2 | % | ||||||||||||||||||||
BB |
57,532 | 0.9 | % | 84,803 | 1.3 | % | 57,532 | 0.8 | % | 84,803 | 1.3 | % | ||||||||||||||||||||
B |
139,370 | 2.1 | % | 131,159 | 2.0 | % | 139,370 | 2.0 | % | 131,159 | 1.9 | % | ||||||||||||||||||||
CCC or lower |
35,026 | 0.5 | % | 53,157 | 0.8 | % | 35,026 | 0.5 | % | 53,157 | 0.8 | % | ||||||||||||||||||||
Not rated |
10,061 | 0.1 | % | 99,619 | 1.5 | % | 10,061 | 0.1 | % | 99,619 | 1.5 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Fixed maturities carried at fair value |
$ | 5,921,646 | 87.7 | % | $ | 5,731,131 | 86.8 | % | $ | 5,921,646 | 85.7 | % | $ | 5,731,131 | 85.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. government and agencies |
$ | 27,616 | 0.4 | % | $ | 29,201 | 0.4 | % | $ | 31,697 | 0.5 | % | $ | 32,906 | 0.5 | % | ||||||||||||||||
AAA |
575,679 | 8.5 | % | 619,832 | 9.4 | % | 697,991 | 10.1 | % | 733,632 | 10.9 | % | ||||||||||||||||||||
AA |
92,778 | 1.4 | % | 82,511 | 1.2 | % | 102,914 | 1.5 | % | 88,631 | 1.3 | % | ||||||||||||||||||||
A |
108,610 | 1.6 | % | 117,600 | 1.8 | % | 126,183 | 1.8 | % | 129,791 | 1.9 | % | ||||||||||||||||||||
BBB |
26,962 | 0.4 | % | 24,117 | 0.4 | % | 30,634 | 0.4 | % | 25,705 | 0.4 | % | ||||||||||||||||||||
BB |
2,345 | 0.0 | % | 998 | 0.0 | % | 2,119 | 0.0 | % | 828 | 0.0 | % | ||||||||||||||||||||
|
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|
|
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|
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|
|
|||||||||||||||||
Fixed maturities carried at amortized cost |
$ | 833,990 | 12.3 | % | $ | 874,259 | 13.2 | % | $ | 991,538 | 14.3 | % | $ | 1,011,493 | 15.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total fixed maturities |
$ | 6,755,636 | 100.0 | % | $ | 6,605,390 | 100.0 | % | $ | 6,913,184 | 100.0 | % | $ | 6,742,624 | 100.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,241,723 (December 31, 2011: $1,117,599). |
Percentage totals may not add due to rounding.
Quarter Ended June 30, 2012 |
Quarter Ended Mar. 31, 2012 |
Quarter Ended Dec. 31, 2011 |
Quarter Ended Sept. 30, 2011 |
Quarter Ended June 30, 2011 |
Quarter Ended June 30, 2010 |
|||||||||||||||||||
Net investment income |
$ | 54,729 | $ | 58,678 | $ | 57,080 | $ | 60,335 | $ | 59,665 | $ | 53,277 | ||||||||||||
|
|
|
|
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|
|
|
|
|
|
|
|||||||||||||
Realized and unrealized gains (losses) on trading fixed maturities |
$ | 587 | $ | 1,066 | $ | 763 | $ | 1,663 | $ | 1,432 | $ | (1,284 | ) | |||||||||||
Net realized gains (losses) on available for sale fixed maturities |
11,990 | 7,759 | 1,990 | 6,096 | 54 | 2,425 | ||||||||||||||||||
(Decrease) increase in fair value of hedge funds |
(2,894 | ) | 3,679 | (5,415 | ) | (7,669 | ) | (1,878 | ) | (3,323 | ) | |||||||||||||
(Decrease) increase in fair value of catastrophe bonds |
| | | | (251 | ) | 335 | |||||||||||||||||
(Decrease) increase in fair value of structured deposit |
(655 | ) | 365 | (313 | ) | (2,007 | ) | (1,284 | ) | | ||||||||||||||
Income (loss) from equity method investments |
5,583 | 4,927 | 1,024 | 579 | (13 | ) | (572 | ) | ||||||||||||||||
(Decrease) increase in fair value of derivatives |
(1,130 | ) | 7,697 | (3,824 | ) | (6,634 | ) | (3,834 | ) | (12,367 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net realized and unrealized gains (losses) on investments |
$ | 13,481 | $ | 25,493 | $ | (5,775 | ) | $ | (7,972 | ) | $ | (5,774 | ) | $ | (14,786 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net impairment losses recognized in earnings |
$ | (570 | ) | $ | (5,369 | ) | $ | (702 | ) | $ | (861 | ) | $ | (353 | ) | $ | (300 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
26
ALTERRA CAPITAL HOLDINGS LIMITED
INVESTMENT PORTFOLIO (Unaudited)
(Expressed in thousands of United States Dollars)
Periodic Rate of Return | ||||||||||||||||||||
As
of June 30, 2012 |
Last 3 Months |
Year to Date |
Last 12 months |
Last 60 months* |
||||||||||||||||
Cash and fixed maturities |
$ | 7,519,593 | 1.53 | % | 2.70 | % | 5.33 | % | 5.70 | % | ||||||||||
|
|
|||||||||||||||||||
Distressed securities |
$ | 24,659 | (1.11 | %) | 3.65 | % | (1.21 | %) | 2.22 | % | ||||||||||
Diversified arbitrage |
14,004 | 70.00 | % | 6.07 | % | 3.45 | % | (2.70 | %) | |||||||||||
Emerging markets |
3,557 | (3.60 | %) | (27.84 | %) | (28.29 | %) | (5.44 | %) | |||||||||||
Event-driven arbitrage |
7,952 | (0.59 | %) | (15.16 | %) | (32.85 | %) | (9.42 | %) | |||||||||||
Fixed income arbitrage |
| 0.00 | % | 0.00 | % | 0.00 | % | 11.07 | % | |||||||||||
Fund of funds |
28,616 | (0.61 | %) | 3.20 | % | 0.71 | % | 1.62 | % | |||||||||||
Global macro |
36,669 | 1.43 | % | 3.11 | % | 4.82 | % | 4.17 | % | |||||||||||
Long / short credit |
848 | (2.23 | %) | (2.66 | %) | (12.51 | %) | (1.62 | %) | |||||||||||
Long / short equity |
134,194 | (1.84 | %) | 2.76 | % | (0.36 | %) | 4.89 | % | |||||||||||
Opportunistic |
1,660 | 0.00 | % | (2.00 | %) | (2.29 | %) | (24.21 | %) | |||||||||||
|
|
|||||||||||||||||||
Hedge funds ** |
252,159 | (0.91 | %) | 0.41 | % | (3.69 | %) | (0.76 | %) | |||||||||||
Derivatives |
(328 | ) | ||||||||||||||||||
Structured deposits |
24,250 | |||||||||||||||||||
Equity investments |
90,323 | |||||||||||||||||||
|
|
|||||||||||||||||||
Total other investments |
$ | 366,404 | ||||||||||||||||||
|
|
|||||||||||||||||||
Total invested assets |
$ | 7,885,997 | ||||||||||||||||||
|
|
|||||||||||||||||||
Hedge Fund Investment Return Data: |
||||||||||||||||||||
HFRI Fund of Funds Composite Index [a] |
(2.21 | %) | 1.09 | % | (4.40 | %) | (2.02 | %) |
Hedge Fund Performance History 60 months ended June 30, 2012
Monthly performance | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||
January |
1.53 | % | 0.13 | % | 0.79 | % | 2.13 | % | (1.37 | %) | ||||||||||||||
February |
0.02 | % | 0.57 | % | 0.17 | % | 0.65 | % | 1.83 | % | ||||||||||||||
March |
(0.21 | %) | 0.29 | % | 1.02 | % | (0.76 | %) | (2.58 | %) | ||||||||||||||
April |
(0.02 | %) | 0.73 | % | 0.88 | % | (0.84 | %) | (0.13 | %) | ||||||||||||||
May |
(0.41 | %) | (0.28 | %) | (0.73 | %) | 2.45 | % | 2.51 | % | ||||||||||||||
June |
(0.48 | %) | (0.89 | %) | (0.83 | %) | 1.53 | % | 0.93 | % | ||||||||||||||
July |
0.15 | % | 0.36 | % | 1.40 | % | (4.12 | %) | 0.99 | % | ||||||||||||||
August |
(1.37 | %) | (0.28 | %) | 0.78 | % | (2.14 | %) | (1.62 | %) | ||||||||||||||
September |
(1.13 | %) | 1.28 | % | 1.71 | % | (7.31 | %) | 1.85 | % | ||||||||||||||
October |
0.07 | % | 0.84 | % | 1.53 | % | (4.85 | %) | 4.15 | % | ||||||||||||||
November |
(0.19 | %) | 0.40 | % | 0.35 | % | (1.75 | %) | 0.10 | % | ||||||||||||||
December |
(1.67 | %) | 0.31 | % | 0.77 | % | (1.92 | %) | (0.13 | %) | ||||||||||||||
Quarterly performance |
||||||||||||||||||||||||
Q1 |
1.33 | % | 0.98 | % | 1.99 | % | 2.00 | % | (2.15 | %) | ||||||||||||||
Q2 |
(0.91 | %) | (0.45 | %) | (0.69 | %) | 3.14 | % | 3.33 | % | ||||||||||||||
Q3 |
(2.33 | %) | 1.35 | % | 3.94 | % | (13.03 | %) | 1.18 | % | ||||||||||||||
Q4 |
(1.79 | %) | 1.56 | % | 2.66 | % | (8.31 | %) | 4.11 | % | ||||||||||||||
Period return |
0.41 | % | (3.57 | %) | 4.25 | % | 12.27 | % | (19.38 | %) | 5.34 | % |
Past performance should not be considered to be a reliable indicator of future performance.
[a] | As reported by HFRI as of July 26, 2012 |
* | Annualized |
** | Net of all fees |
27
ALTERRA CAPITAL HOLDINGS LIMITED
LARGEST 25 CORPORATE HOLDINGS [a] (Unaudited)
(Expressed in thousands of United States Dollars)
As of June 30, 2012 | ||||||||
Issuer | Amortized Cost |
Fair Value |
||||||
General Electric Co. |
$ | 85,701 | $ | 90,087 | ||||
JP Morgan Chase & Co |
79,024 | 81,677 | ||||||
European Investment Bank |
60,624 | 67,735 | ||||||
Citigroup Inc |
63,890 | 66,554 | ||||||
KFW |
51,860 | 58,980 | ||||||
Bank of America Corp |
51,739 | 53,370 | ||||||
Wells Fargo & Co |
40,388 | 43,588 | ||||||
Credit Suisse Group AG |
35,259 | 36,410 | ||||||
Morgan Stanley |
36,138 | 36,276 | ||||||
Pepsico Inc |
33,436 | 35,365 | ||||||
Novartis AG |
32,913 | 34,812 | ||||||
Metlife Inc |
30,621 | 33,042 | ||||||
Ally Financial Inc |
31,545 | 31,673 | ||||||
Goldman Sachs Group Inc |
30,877 | 31,671 | ||||||
Canadian Imperial Bank of Commerce |
30,299 | 30,617 | ||||||
Wal-Mart Stores Inc |
28,106 | 29,951 | ||||||
BP plc |
28,191 | 29,526 | ||||||
Barclays plc |
28,618 | 29,076 | ||||||
International Business Machines Corp |
26,364 | 28,481 | ||||||
UBS AG |
25,415 | 28,097 | ||||||
Verizon Communications Inc |
26,135 | 28,085 | ||||||
Conoco Philips |
25,218 | 27,903 | ||||||
Lloyds Banking Group plc |
26,496 | 27,689 | ||||||
AT&T Inc |
24,869 | 26,833 | ||||||
Coca-Cola Co |
24,405 | 26,705 | ||||||
|
|
|
|
|||||
$ | 958,131 | $ | 1,014,203 | |||||
|
|
|
|
[a] | Corporate holdings includes supranationals and government-guaranteed corporate securities. |
28
ALTERRA CAPITAL HOLDINGS LIMITED
EUROPEAN GOVERNMENT AND EUROPEAN BANKING INSTITUTION HOLDINGS (Unaudited)
(Expressed in thousands of United States Dollars)
As of June 30, 2012 | ||||||||
Largest European Government Holdings | Fair Value | % of Total | ||||||
France |
$ | 266,621 | 35.5 | % | ||||
Germany |
256,424 | 34.2 | % | |||||
Netherlands |
146,068 | 19.5 | % | |||||
United Kingdom |
44,971 | 6.0 | % | |||||
Belgium |
20,579 | 2.7 | % | |||||
Norway |
7,075 | 0.9 | % | |||||
Denmark |
4,253 | 0.6 | % | |||||
All Other European Governments |
4,401 | 0.6 | % | |||||
|
|
|
|
|||||
Total European Government Holdings |
$ | 750,392 | 100.0 | % | ||||
|
|
|
|
|||||
As of June 30, 2012 | ||||||||
Largest European Banking Institution Holdings | Fair Value | % of Total | ||||||
European Investment Bank |
$ | 67,735 | 15.5 | % | ||||
KFW |
58,980 | 13.5 | % | |||||
Credit Suisse Group AG |
36,410 | 8.3 | % | |||||
Barclays plc |
29,076 | 6.6 | % | |||||
UBS AG |
28,097 | 6.4 | % | |||||
Lloyds Banking Group plc |
27,689 | 6.3 | % | |||||
BNP Paribas SA |
18,304 | 4.2 | % | |||||
HSBC Holdings plc |
17,895 | 4.1 | % | |||||
Cooperatieve Centrale Raiffeisen-Boerenlee |
16,289 | 3.7 | % | |||||
All Other |
137,079 | 31.4 | % | |||||
|
|
|
|
|||||
Total European Banking Institutions |
$ | 437,554 | 100.0 | % | ||||
|
|
|
|
Percentage totals may not add due to rounding.
29
ALTERRA CAPITAL HOLDINGS LIMITED
EUROPEAN CORPORATE FIXED MATURITIES INVESTMENT EXPOSURES (Unaudited)
(Expressed in thousands of United States Dollars)
As of June 30, 2012 | ||||||||||||||||
Banking Institutions |
Other Financial Institutions |
Other Corporates |
Total | |||||||||||||
Country |
||||||||||||||||
United Kingdom |
$ | 96,898 | $ | 29,384 | $ | 98,154 | $ | 224,436 | ||||||||
Netherlands |
42,027 | 9,045 | 50,978 | 102,050 | ||||||||||||
Germany |
84,557 | | 11,359 | 95,916 | ||||||||||||
France |
37,999 | | 50,401 | 88,400 | ||||||||||||
Supranational |
72,269 | | | 72,269 | ||||||||||||
Switzerland |
61,979 | | 2,038 | 64,017 | ||||||||||||
Sweden |
19,309 | 3,994 | | 23,303 | ||||||||||||
Norway |
16,392 | | 20,253 | 36,645 | ||||||||||||
Ireland |
1,104 | 9,369 | 4,984 | 15,457 | ||||||||||||
Luxembourg |
| | 11,950 | 11,950 | ||||||||||||
Denmark |
5,020 | | | 5,020 | ||||||||||||
New Zealand |
| | 4,363 | 4,363 | ||||||||||||
Spain |
| | 509 | 509 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair value |
$ | 437,554 | $ | 51,792 | $ | 254,989 | $ | 744,335 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance sheet carrying value [a] |
$ | 409,304 | $ | 48,024 | $ | 241,714 | $ | 699,042 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Credit rating |
||||||||||||||||
AAA |
$ | 250,192 | $ | 29,420 | $ | 402 | $ | 280,014 | ||||||||
AA |
46,168 | 8,885 | 48,214 | 103,267 | ||||||||||||
A |
123,667 | 12,993 | 175,584 | 312,244 | ||||||||||||
BBB |
11,432 | | 17,536 | 28,968 | ||||||||||||
BB |
4,429 | 494 | 7,747 | 12,670 | ||||||||||||
B |
1,666 | | 5,506 | 7,172 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair value |
$ | 437,554 | $ | 51,792 | $ | 254,989 | $ | 744,335 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance sheet carrying value [a] |
$ | 409,304 | $ | 48,024 | $ | 241,714 | $ | 699,042 | ||||||||
|
|
|
|
|
|
|
|
[a] | The trading and available for sale portfolios are carried at fair value and the held to maturity portfolio is carried at amortized cost. |
30
ALTERRA CAPITAL HOLDINGS LIMITED
NEW POINT IV SUMMARY (Unaudited)
(Expressed in thousands of United States Dollars)
New Point IV Limited (New Point IV) is a side car vehicle established in 2011 to provide capacity to write property catastrophe collateralized retrocessional coverage. New Point IV is sponsored by Alterra in partnership with Stone Point Capital LLC and other investors. Alterra provides underwriting services to New Point Re IV Limited (New Point Re IV), a wholly-owned subsidiary of New Point IV.
Alterra owns 34.8% of the common shares of New Point IV and accounts for it as an equity method investment.
FOR THE QUARTERS ENDED | FOR THE SIX MONTHS ENDED | |||||||||||||||
June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |||||||||||||
Gross Premiums Written by New Point IV [a] |
$ | 4,095 | $ | | $ | 84,273 | $ | | ||||||||
The following is included in Alterras unaudited interim consolidated financial statements for the respective periods: | ||||||||||||||||
Balance Sheet |
||||||||||||||||
Other investments [b] |
$ | 86,571 | $ | | $ | 86,571 | $ | | ||||||||
Statement of Operations and Comprehensive Income |
||||||||||||||||
Other income [c] |
$ | 1,773 | $ | | $ | 6,121 | $ | | ||||||||
Income from equity method investment [d] |
$ | 5,628 | $ | | $ | 10,522 | $ | |
[a] | New Point IV is not consolidated by Alterra. Consequently, these gross premiums written are not included in Alterras gross premiums written. |
[b] | Represents Alterras 34.8% investment in New Point IV under the equity method of accounting. |
[c] | Represents the underwriting fees and profit commissions earned by Alterra in connection with New Point Re IV. This is included in the reinsurance segment and is included in net operating income. |
[d] | Represents Alterras 34.8% share of the net income of New Point IV. This is included within net realized and unrealized gains on investments in Alterras statement of operations and comprehensive income and is included in net operating income. |
31
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, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Income and Return on Equity: |
||||||||||||||||||||||||
Net income (loss) |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | $ | 65,282 | $ | 302,335 | |||||||||||
Net operating income |
$ | 68,960 | $ | 39,558 | $ | 136,683 | $ | 14,833 | $ | 96,600 | $ | 251,712 | ||||||||||||
Average shareholders equity |
$ | 2,851,499 | $ | 2,758,138 | $ | 2,840,874 | $ | 2,789,435 | $ | 2,806,191 | $ | 2,467,429 | ||||||||||||
Annualized return on average shareholders equity [a] |
11.1 | % | 4.7 | % | 11.1 | % | (1.0 | %) | 2.3 | % | 12.3 | % | ||||||||||||
Annualized net operating return on average shareholders equity [a] |
9.7 | % | 5.7 | % | 9.6 | % | 1.1 | % | 3.4 | % | 10.2 | % | ||||||||||||
Book value and dividends per share: |
||||||||||||||||||||||||
Diluted book value per share |
$ | 28.68 | $ | 25.98 | $ | 28.68 | $ | 25.98 | $ | 26.91 | $ | 25.99 | ||||||||||||
Dividends paid per share |
$ | 0.14 | $ | 0.12 | $ | 0.28 | $ | 0.24 | $ | 0.52 | $ | 2.94 | ||||||||||||
Change in diluted book value per share |
3.7 | % | 2.5 | % | 6.6 | % | 0.0 | % | 3.5 | % | (5.0 | %) | ||||||||||||
Dividend payout ratio [b] |
0.5 | % | 0.5 | % | 1.0 | % | 0.9 | % | 1.9 | % | 22.4 | % | ||||||||||||
Total return to shareholders [c] |
4.1 | % | 3.0 | % | 7.5 | % | 0.8 | % | 5.4 | % | 17.4 | % |
[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. |
Percentage totals may not add due to rounding.
32
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, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Net income (loss) available to common shareholders |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | $ | 65,282 | $ | 302,335 | |||||||||||
Denominator: |
||||||||||||||||||||||||
Weighted average shares - basic |
||||||||||||||||||||||||
Outstanding [a] |
99,242,983 | 105,365,111 | 99,988,898 | 106,171,735 | 105,022,397 | 94,426,055 | ||||||||||||||||||
Unvested restricted share units |
320,491 | 239,675 | 294,368 | 213,272 | 227,286 | 256,224 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
99,563,474 | 105,604,786 | 100,283,266 | 106,385,007 | 105,249,683 | 94,682,279 | |||||||||||||||||||
Share equivalents: |
||||||||||||||||||||||||
Warrants |
1,776,887 | 1,247,975 | 1,854,069 | | 1,023,278 | 537,399 | ||||||||||||||||||
Options |
92,399 | 148,366 | 104,212 | | 124,022 | 183,258 | ||||||||||||||||||
Employee stock purchase plan |
1,460 | 2,506 | 3,933 | | 1,386 | 2,301 | ||||||||||||||||||
Non participating restricted shares |
523,662 | 108,276 | 310,590 | | 104,524 | 54,138 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average shares - diluted [b] |
101,957,882 | 107,111,909 | 102,556,070 | 106,385,007 | 106,502,893 | 95,459,375 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per share |
$ | 0.79 | $ | 0.31 | $ | 1.58 | $ | (0.13 | ) | $ | 0.62 | $ | 3.19 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) per diluted share |
$ | 0.77 | $ | 0.30 | $ | 1.54 | $ | (0.13 | ) | $ | 0.61 | $ | 3.17 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
[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. |
33
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, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Before tax |
||||||||||||||||||||||||
Net income (loss) |
$ | 79,702 | $ | 28,308 | $ | 154,144 | $ | (21,079 | ) | $ | 55,781 | $ | 306,491 | |||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, before tax [a] |
(10,177 | ) | 4,249 | (21,728 | ) | 27,263 | 29,486 | 65 | ||||||||||||||||
Foreign exchange losses (gains), before tax |
25 | 3,090 | (7 | ) | 2,212 | 1,312 | (115 | ) | ||||||||||||||||
Merger and acquisition expenses, before tax |
| | | | | (48,776 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net operating income |
$ | 69,550 | $ | 35,647 | $ | 132,409 | $ | 8,396 | $ | 86,579 | $ | 257,665 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net of tax |
||||||||||||||||||||||||
Net income (loss) |
$ | 78,940 | $ | 32,635 | $ | 157,964 | $ | (14,052 | ) | $ | 65,282 | $ | 302,335 | |||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] |
(9,987 | ) | 4,711 | (21,267 | ) | 27,313 | 30,391 | (865 | ) | |||||||||||||||
Foreign exchange losses (gains), before tax |
7 | 2,212 | (14 | ) | 1,572 | 927 | 363 | |||||||||||||||||
Merger and acquisition expenses, net of tax |
| | | | | (50,121 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net operating income |
$ | 68,960 | $ | 39,558 | $ | 136,683 | $ | 14,833 | $ | 96,600 | $ | 251,712 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted average shares outstanding: |
||||||||||||||||||||||||
Basic |
99,563,474 | 105,604,786 | 100,283,266 | 106,385,007 | 105,249,683 | 94,682,279 | ||||||||||||||||||
Diluted |
101,957,882 | 107,111,909 | 102,556,070 | 106,385,007 | 106,502,893 | 95,459,375 | ||||||||||||||||||
Basic per share data |
||||||||||||||||||||||||
Income (loss) per share |
$ | 0.79 | $ | 0.31 | $ | 1.58 | $ | (0.13 | ) | $ | 0.62 | $ | 3.19 | |||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] |
(0.10 | ) | 0.04 | (0.21 | ) | 0.26 | 0.29 | (0.01 | ) | |||||||||||||||
Foreign exchange losses (gains), net of tax |
| 0.02 | | 0.01 | 0.01 | 0.01 | ||||||||||||||||||
Merger and acquisition expenses, net of tax |
| | | | | (0.53 | ) | |||||||||||||||||
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Net operating income per share |
$ | 0.69 | $ | 0.37 | $ | 1.36 | $ | 0.14 | $ | 0.92 | $ | 2.67 | ||||||||||||
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Diluted per share data |
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Income (loss) per diluted share |
$ | 0.77 | $ | 0.30 | $ | 1.54 | $ | (0.13 | ) | $ | 0.61 | $ | 3.17 | |||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] |
(0.10 | ) | 0.04 | (0.21 | ) | 0.26 | 0.29 | (0.01 | ) | |||||||||||||||
Foreign exchange losses (gains), net of tax |
| 0.02 | | 0.02 | 0.02 | 0.01 | ||||||||||||||||||
Merger and acquisition expenses, net of tax |
| | | | | (0.53 | ) | |||||||||||||||||
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Net operating income per diluted share |
$ | 0.68 | $ | 0.37 | $ | 1.33 | $ | 0.14 | $ | 0.91 | $ | 2.64 | ||||||||||||
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[a] | Net realized and unrealized (gains) losses on investments excluded from operating income 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 in run off and changes in fair value of derivatives, catastrophe bonds and structured deposits. |
Per share totals may not add due to rounding. |
34
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, 2012 | As of Dec. 31, 2011 | |||||||
Price per share at period end |
$ | 23.35 | $ | 23.63 | ||||
Shareholders equity |
$ | 2,851,736 | $ | 2,809,235 | ||||
Goodwill and intangible assets |
$ | 55,431 | $ | 56,111 | ||||
Tangible book value |
$ | 2,796,305 | $ | 2,753,124 | ||||
Basic common shares outstanding [a] |
96,853,334 | 102,101,950 | ||||||
Add: unvested restricted stock units |
373,399 | 241,108 | ||||||
Add: dilutive impact of warrants outstanding |
1,959,863 | 1,938,297 | ||||||
Add: dilutive impact of options outstanding |
96,188 | 125,424 | ||||||
Add: unvested performance based restricted shares |
146,397 | | ||||||
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Diluted shares outstanding [b] |
99,429,181 | 104,406,779 | ||||||
Basic book value per share |
$ | 29.44 | $ | 27.51 | ||||
Diluted book value per share |
$ | 28.68 | $ | 26.91 | ||||
Basic tangible book value per share |
$ | 28.87 | $ | 26.96 | ||||
Diluted tangible book value per share |
$ | 28.12 | $ | 26.37 |
[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. |
35
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 investments excluded from operating income (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 derivatives, catastrophe bonds, structured deposits and earnings from equity method investments in run-off), 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 and the underlying fundamentals of our operations as realized and unrealized gains and losses on non-hedge fund investments and foreign exchange gains and losses may fluctuate from period to period and 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 quarterly average shareholders equity balances. 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.
36
Exhibit 99.3
ALTERRA CAPITAL ANNOUNCES $0.16 DIVIDEND AND INCREASE IN
SHARE REPURCHASE PLAN OF $100 MILLION
HAMILTON, BERMUDA, August 7, 2012Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (Alterra) announced today that Alterras Board of Directors declared a dividend of $0.16 per share, an increase of $0.02, or 14.3%, from the previous dividend. This is the eleventh consecutive year of increasing quarterly dividend payments. The dividend is payable on September 4, 2012, to shareholders of record as of August 21, 2012.
In addition, on August 7, 2012, Alterras Board of Directors authorized an increase in the share repurchase plan of $100.0 million. Following this authorization, the amount available for share repurchases as of August 7, 2012 is $204.6 million.
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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