EX-12 2 h84360exv12.htm EX-12 exv12
Exhibit 12
HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
                                 
    Nine months ended September 30,     Three months ended September 30,  
    2011     2010     2011     2010  
Net loss ratio
                                
Loss and loss adjustment expense, net
   $ 1,062,240     $ 922,645     $ 380,372     $ 297,138  
Net earned premium
     1,576,987       1,532,138       544,256       516,166  
Net loss ratio (1)
     67.4 %     60.2 %     69.9 %     57.6 %
(Net loss ratio = incurred loss and loss adjustment expense divided by net earned premium)
                                
 
                                
Expense ratio
                                
Segment underwriting expense (2)
   $ 397,802     $ 394,286     $ 126,928     $ 128,724  
Segment revenue (3)
     1,600,915       1,564,961       553,630       523,855  
Expense ratio
     24.8 %     25.2 %     22.9 %     24.6 %
(Expense ratio = segment underwriting expense divided by segment revenue)
                                
 
                                
Combined ratio
     92.2 %     85.4 %     92.8 %     82.2 %
(Combined ratio = net loss ratio plus expense ratio)
                                
 
                                
Accident year loss ratio
                                
Loss and loss adjustment expense, net
   $ 1,062,240     $ 922,645     $ 380,372     $ 297,138  
Add: Favorable (adverse) development
     (21,623 )     (1,259 )     643       907  
 
                        
Accident year net loss and loss adjustment expense
   $ 1,040,617     $ 921,386     $ 381,015     $ 298,045  
 
                        
 
                                
Net earned premium
   $ 1,576,987     $ 1,532,138     $ 544,256     $ 516,166  
Add: Prior year reinstatement premium
     —       3,177       —       —  
 
                        
Accident year net earned premium
   $ 1,576,987     $ 1,535,315     $ 544,256     $ 516,166  
 
                        
Accident year net loss ratio
     66.0 %     60.0 %     70.0 %     57.7 %
(Accident year net loss ratio = accident year net loss and loss adjustment expense divided by accident year net earned premium)
                                
 
(1)   Calculated for our insurance companies using financial data reported in accordance with generally accepted accounting principles.
 
(2)   Sum of Other Expense for each of our insurance segments.
 
(3)   Sum of Segment Revenue for each of our insurance segments.

 

Exhibit 12
HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
                                 
    Nine months ended September 30,     Three months ended September 30,  
    2011     2010     2011     2010  
Ratio of earnings to fixed charges
                                
Interest factor of rent expense (4)
   $ 4,077     $ 4,045     $ 1,346     $ 1,381  
Interest expense
     16,597       15,907       5,610       5,280  
Capitalized interest
     345       —       160       —  
 
                        
Total fixed charges
   $ 21,019     $ 19,952     $ 7,116     $ 6,661  
 
                        
 
Earnings before income tax expense
   $ 242,576     $ 354,790     $ 82,792     $ 132,012  
Interest factor of rent expense (4)
     4,077       4,045       1,346       1,381  
Interest expense
     16,597       15,907       5,610       5,280  
 
                        
 
                                
Earnings per calculation
   $ 263,250     $ 374,742     $ 89,748     $ 138,673  
 
                        
Ratio of earnings to fixed charges (5)
     12.52       18.78       12.61       20.82  
 
                        
 
(4)   Estimated to be 33% of total rent expense.
 
(5)   Earnings per calculation divided by total fixed charges.