8-K

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) February 19, 2008

HCC INSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13790	76-0336636
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

13403 Northwest Freeway
Houston, Texas	77040-6094
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (713) 690-7300

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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o 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 February 19, 2008, HCC Insurance Holdings, Inc. (the “Company”) announced its results for the Fourth Quarter of 2007 and for the full year ended December 31, 2007. A press release setting forth the announcement is furnished as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

No.		Exhibit
	99.1	Earnings Press Release dated February 19, 2008

     The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

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.

	HCC INSURANCE HOLDINGS, INC.
Date: February 19, 2008	By:	/s/ Frank J. Bramanti
		Frank J. Bramanti,
		Chief Executive Officer

EXHIBIT INDEX

No.		Exhibit
	99.1	Earnings Press Release dated February 19, 2008

EX-99.1

Exhibit 99.1

HCC INSURANCE HOLDINGS REPORTS RECORD
RESULTS FOR FOURTH QUARTER AND FULL YEAR 2007

HOUSTON (February 19, 2008) . . .
HCC Insurance Holdings, Inc. (NYSE: HCC) today reported record earnings for the fourth quarter and full year ended December 31, 2007.

Net earnings increased 23 percent during the fourth quarter of 2007 to $99.6 million, compared with $80.7 million during the fourth quarter of 2006. Net earnings per diluted share also increased 23 percent to $0.85 per share from $0.69 per share for the fourth quarter of 2006.

For the full year of 2007, net earnings increased 16 percent to $395.4 million from $342.3 million in the previous year. Diluted earnings per share increased 15 percent to $3.38 per share from $2.93 per share in 2006.

“The results achieved during 2007 reflect the true talent of our underwriting focused organization. What should stand out about HCC is that we have good businesses run by great people executing a consistently conservative business plan that generated a return on beginning equity for 2007 of 19.4 percent and an average return on equity of 16.5 percent for the last six years,” HCC Chief Executive Officer Frank J. Bramanti said.

Revenues for the fourth quarter of 2007 totaled $614.4 million, compared to $599.1 million in the fourth quarter of 2006. Total revenue for the full year increased 15 percent to $2.4 billion from $2.1 billion in 2006. This increase was primarily due to an increase in net earned premium and higher investment income.

Other operating income was $7.9 million for the fourth quarter of 2007, compared to $17.9 million for the same period in 2006 where the sale of two strategic investments generated $14.2 million.

Net earned premium of the Company’s insurance company subsidiaries continued to show growth during 2007, rising 16 percent to $2.0 billion, compared with $1.7 billion in 2006. During the 12-month period, gross and net written premium increased 10 percent to $2.5 billion and $2.0 billion, respectively. Both gross and net written premium growth came from an acquisition in the medical stop-loss line of business, and organic growth in surety, credit and the Company’s other specialty lines.

The GAAP combined ratio of the Company’s insurance company subsidiaries was 85.1 percent for the fourth quarter of 2007, compared with 87.7 percent for the fourth quarter

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of 2006. The GAAP combined ratio was 83.4 percent for the 2007 full year, compared with 84.2 percent for 2006.

Fee and commission income rose slightly during 2007 to $140.1 million from $137.1 million in 2006. Fee and commission income for the fourth quarter of 2007 was $34.1 million, compared with $32.7 million in the fourth quarter of the previous year.

Net investment income increased 35 percent during 2007 to $206.5 million, from $152.8 million in 2006. This growth was due primarily to increased investment assets.

There were no impairment losses in HCC’s investment portfolio in the fourth quarter or full year of 2007. As of December 31, 2007, HCC’s fixed income investment portfolio had an average rating of AAA, duration of five years and an average tax equivalent yield of 5.4 percent. HCC owns no CDO or CLO securities.

“Our assets continue to be managed by outside firms that specialize in the insurance industry. These managers, together with our conservative investment policy, kept our exposures to the current credit turmoil to a minimum,” Mr. Bramanti said.

The attached tables include information related to the Company’s subprime exposure with respect to its investments and its underwriting.

As of December 31, 2007, total investments had increased 19 percent to $4.7 billion; total assets had risen 6 percent to $8.1 billion; shareholders’ equity had increased 19 percent to $2.4 billion; and book value per share had increased 16 percent to $21.21; all compared to December 31, 2006. In addition, the Company’s debt to total capital ratio remained very conservative at 11.7 percent. (See attached tables.)

“As we enter 2008, HCC is well positioned with the best capital position in its history. The softening market makes our experienced, disciplined approach the key to avoiding the pitfalls of the deteriorating underwriting environment,” Mr. Bramanti said.

In addition to reporting its fourth quarter and year-end 2007 results today, HCC is also providing earnings guidance for 2008 and announcing quarterly release dates during the year. The Company’s management estimates HCC will achieve net earnings in the range of $2.90 to $3.20 per share for the full year of 2008, versus 2007 guidance of $3.10 to $3.25 per share. These estimated results assume, for the full year, net written premium of $2.0 billion, total revenue of $2.3 billion, a combined ratio of 85 percent, and average fully diluted shares outstanding of 118.5 million.

The Company’s earnings announcements in 2008 will be made after the market closes on: May 6, 2008 for First Quarter 2008; August 5, 2008 for Second Quarter 2008; and November 4, 2008 for Third Quarter 2008. HCC will hold an open conference call at 8:00 a.m. Central Time on the morning following each quarterly earnings announcement to discuss the results. Conference call information will be posted on the Company’s

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website (www.hcc.com) approximately two weeks prior to each call. Each conference call will also be available by webcast through the HCC website.

HCC will hold an open conference call beginning at 8:00 a.m. Central Time tomorrow, Wednesday, February 20, 2008 to discuss these results. To participate, the number for domestic calls will be (800) 374-0290 and the number for international calls will be (706) 634-1303. There will also be a live webcast available on a listen-only basis that can be accessed through the HCC website at www.hcc.com. A replay of the webcast will be available on the website until Friday, March 14, 2008.

Headquartered in Houston, Texas, HCC Insurance Holdings, Inc. (HCC) is a leading international specialty insurance group with offices across the United States and in Bermuda, Spain, Ireland and the United Kingdom. HCC has assets of nearly $8.1 billion, shareholders’ equity in excess of $2.4 billion and is rated AA (Very Strong) by Standard & Poor’s, AA (Very Strong) by Fitch Ratings and A+ (Superior) by A.M. Best Company.

For more information, visit our website at www.hcc.com.

Contact: Barney White, HCC Vice President of Investor Relations
Telephone: (713) 744-3719

Forward-looking statements contained in this press release are made under “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission.

* * * * *

3

HCC Insurance Holdings, Inc. and Subsidiaries
Financial Highlights
December 31, 2007

(Unaudited, in thousands except per share data)

	Three months ended December 31,
	2007			2006
Gross written premium	$	593,415		$	607,435
Net written premium		485,144			513,438
Net earned premium		500,178			504,248
Fee and commission income		34,097			32,722
Net investment income		58,409			43,845
Other operating income		7,934			17,941
Total revenue		614,407			599,108
Net earnings		99,642			80,742
Earnings per share (diluted)		0.85			0.69
Cash flow from operations		111,577			293,682
Weighted average shares outstanding (diluted)		117,085			117,115
GAAP net loss ratio		59.7	%		64.0	%
GAAP combined ratio		85.1	%		87.7	%
Paid loss ratio		49.5	%		22.3	%

	December 31, 2007			December 31, 2006
Total investments	$	4,672,277		$	3,927,995
Total assets		8,074,645			7,630,132
Shareholders’ equity		2,440,365			2,042,803
Debt to total capital		11.7	%		13.1	%
Book value per share	$	21.21		$	18.28

4

HCC Insurance Holdings, Inc. and Subsidiaries
Financial Highlights
December 31, 2007

(Unaudited, in thousands except per share data)

	Twelve months ended December 31,
	2007			2006
Gross written premium	$	2,451,179		$	2,235,648
Net written premium		1,985,609			1,812,552
Net earned premium		1,985,086			1,709,189
Fee and commission income		140,092			137,131
Net investment income		206,462			152,804
Other operating income		43,545			77,012
Total revenue		2,388,373			2,075,295
Net earnings		395,429			342,285
Earnings per share (diluted)		3.38			2.93
Cash flow from operations		726,436			653,388
Weighted average shares outstanding (diluted)		116,997			116,736
GAAP net loss ratio		59.6	%		59.2	%
GAAP combined ratio		83.4	%		84.2	%
Paid loss ratio		47.9	%		34.1	%

	December 31, 2007			December 31, 2006
Total investments	$	4,672,277		$	3,927,995
Total assets		8,074,645			7,630,132
Shareholders’ equity		2,440,365			2,042,803
Debt to total capital		11.7	%		13.1	%
Book value per share	$	21.21		$	18.28
Return on beginning equity		19.4	%		20.2	%

5

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

	December 31,		December 31,
	2007		2006
ASSETS
Investments:
Fixed income securities	$	3,666,705	$	3,007,193
Short-term investments		783,650		714,685
Other investments		221,922		206,117
Total investments		4,672,277		3,927,995
Cash		39,135		48,290
Restricted cash and cash investments		193,151		176,424
Premium, claims and other receivables		763,401		864,705
Reinsurance recoverables		956,665		1,169,934
Ceded unearned premium		244,684		226,125
Ceded life and annuity benefits		66,199		70,923
Deferred policy acquisition costs		192,773		182,410
Goodwill		776,046		742,677
Other assets		170,314		220,649
Total assets	$	8,074,645	$	7,630,132
LIABILITIES
Loss and loss adjustment expense payable	$	3,227,080	$	3,097,051
Life and annuity policy benefits		66,199		70,923
Reinsurance balances payable		129,838		122,805
Unearned premium		943,946		920,350
Deferred ceding commissions		68,968		64,949
Premium and claims payable		497,974		646,224
Notes payable		324,714		308,887
Accounts payable and accrued liabilities		375,561		356,140
Total liabilities		5,634,280		5,587,329
SHAREHOLDERS’ EQUITY
Common stock		115,069		111,731
Additional paid-in capital		831,419		798,213
Retained earnings		1,445,995		1,098,887
Accumulated other comprehensive income		47,882		33,972
Total shareholders’ equity		2,440,365		2,042,803
Total liabilities and shareholders’ equity	$	8,074,645	$	7,630,132

6

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings

(Unaudited, in thousands except per share data)

	Twelve months ended					Three months ended
	December 31,					December 31,
	2007		2006			2007		2006
REVENUE
Net earned premium	$	1,985,086	$	1,709,189		$	500,178	$	504,248
Fee and commission income		140,092		137,131			34,097		32,722
Net investment income		206,462		152,804			58,409		43,845
Net realized investment gain (loss)		13,188		(841	)		13,789		352
Other operating income		43,545		77,012			7,934		17,941
Total revenue		2,388,373		2,075,295			614,407		599,108
EXPENSE
Loss and loss adjustment expense, net		1,183,947		1,011,856			298,400		322,734
Policy acquisition costs, net		366,610		319,885			98,832		88,873
Other operating expense		241,642		222,324			72,416		66,045
Interest expense		10,304		11,396			3,138		3,484
Total expense		1,802,503		1,565,461			472,786		481,136
Earnings before income tax expense		585,870		509,834			141,621		117,972
Income tax expense		190,441		167,549			41,979		37,230
Net earnings	$	395,429	$	342,285		$	99,642	$	80,742
Basic earnings per share data:
Net earnings per share	$	3.50	$	3.08		$	0.87	$	0.72
Weighted average shares outstanding		112,873		111,309			114,641		111,635
Diluted earnings per share data:
Net earnings per share	$	3.38	$	2.93		$	0.85	$	0.69
Weighted average shares outstanding		116,997		116,736			117,085		117,115
Cash dividends declared, per share	$	0.42	$	0.375		$	0.11	$	0.10

7

HCC Insurance Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Twelve months ended						Three months ended
	December 31,						December 31,
	2007			2006			2007			2006
Cash flows from operating activities:
Net earnings	$	395,429		$	342,285		$	99,642		$	80,742
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in premium, claims and other receivables		97,304			40,955			33,567			4,329
Change in reinsurance recoverables		213,353			192,049			90,881			136,018
Change in ceded unearned premium		(18,436	)		13,291			9,489			17,878
Change in loss and loss adjustment expense payable		129,203			136,520			(40,338	)		42,614
Change in reinsurance balances payable		7,002			(54,834	)		17,514			(17,325	)
Change in unearned premium		21,498			109,280			(25,315	)		(4,358	)
Change in premium and claims payable, net of restricted cash		(164,977	)		(126,027	)		(91,298	)		(47,734	)
Change in trading portfolio		9,362			(19,919	)		(4,764	)		79,274
Depreciation and amortization expense		15,982			14,980			4,357			2,738
Stock-based compensation expense		12,011			13,126			2,820			3,663
Other, net		8,705			(8,318	)		15,022			(4,157	)
Cash provided by operating activities		726,436			653,388			111,577			293,682
Cash flows from investing activities:
Sales of fixed income securities		438,057			338,927			216,235			154,752
Maturity or call of fixed income securities		302,876			247,072			68,441			72,314
Cost of securities acquired		(1,377,750	)		(1,389,984	)		(366,003	)		(431,162	)
Change in short-term investments		(72,279	)		129,919			(62,090	)		(41,279	)
Sale of strategic investments		46,612			63,285			3,615			22,931
Payments for purchase of subsidiaries, net of cash received		(65,112	)		(45,722	)		(11,425	)		9,568
Other, net		(9,741	)		(11,971	)		(2,662	)		(3,359	)
Cash used by investing activities		(737,337	)		(668,474	)		(153,889	)		(216,235	)
Cash flows from financing activities:
Advances on line of credit		232,000			140,000			170,000			—
Payments on notes payable and line of credit		(205,763	)		(140,616	)		(149,400	)		(84,270	)
Sale of common stock		24,533			18,999			5,196			4,026
Dividends paid		(46,158	)		(38,923	)		(12,528	)		(11,149	)
Other, net		(2,866	)		9,981			1,648			2,598
Cash provided (used) by financing activities		1,746			(10,559	)		14,916			(88,795	)
Net decrease in cash		(9,155	)		(25,645	)		(27,396	)		(11,348	)
Cash at beginning of period		48,290			73,935			66,531			59,638
Cash at end of period	$	39,135		$	48,290		$	39,135		$	48,290

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HCC Insurance Holdings, Inc. and Subsidiaries
Insurance Company Premium
December 31, 2007

(Unaudited, in thousands)

	4th Qtr		4th Qtr		Change
	2007		2006		%
GROSS WRITTEN
Diversified financial products	$	262,335	$	265,278		(1	)%
Group life, accident & health		196,459		206,424		(5	)
Aviation		41,064		50,136		(18	)
London market account		23,721		31,904		(26	)
Other specialty lines		69,798		52,691		32
Discontinued lines		38		1,002	nm
	$	593,415	$	607,435		(2	)%
NET WRITTEN
Diversified financial products	$	206,816	$	220,134		(6	)%
Group life, accident & health		189,460		201,916		(6	)
Aviation		31,847		37,448		(15	)
London market account		10,289		16,470		(38	)
Other specialty lines		46,705		37,425		25
Discontinued lines		27		45	nm
	$	485,144	$	513,438		(6	)%
NET EARNED PREMIUM
Diversified financial products	$	196,431	$	190,798		3	%
Group life, accident & health		186,667		205,813		(9	)
Aviation		37,630		40,225		(6	)
London market account		31,846		31,907		—
Other specialty lines		47,576		35,412		34
Discontinued lines		28		93	nm
	$	500,178	$	504,248		(1	)%

nm — Not meaningful comparison

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HCC Insurance Holdings, Inc. and Subsidiaries
Insurance Company Premium
December 31, 2007

(Unaudited, in thousands)

	Year to Date			Year to Date		Change
	2007			2006		%
GROSS WRITTEN
Diversified financial products	$	963,355		$	956,057		1	%
Group life, accident & health		798,684			621,639		28
Aviation		195,809			216,208		(9	)
London market account		213,716			234,868		(9	)
Other specialty lines		280,040			205,651		36
Discontinued lines		(425	)		1,225	nm
	$	2,451,179		$	2,235,648		10	%
NET WRITTEN
Diversified financial products	$	771,648		$	794,232		(3	)%
Group life, accident & health		759,207			590,811		29
Aviation		145,761			166,258		(12	)
London market account		118,241			127,748		(7	)
Other specialty lines		191,151			133,481		43
Discontinued lines		(399	)		22	nm
	$	1,985,609		$	1,812,552		10	%
NET EARNED PREMIUM
Diversified financial products	$	777,414		$	728,861		7	%
Group life, accident & health		758,516			591,070		28
Aviation		153,121			152,886		—
London market account		124,609			112,362		11
Other specialty lines		171,824			123,981		39
Discontinued lines		(398	)		29	nm
	$	1,985,086		$	1,709,189		16	%

nm — Not meaningful comparison

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HCC Insurance Holdings, Inc. and Subsidiaries
Investments — Selected Disclosures
December 31, 2007

(Unaudited, in thousands)

					Ratings
	Amortized Cost		Market Value		AAA		AA		A		BBB & below		Other		Average
Fixed Income Securities	$	3,641,667	$	3,666,705	$	2,971,589	$	420,842	$	243,774	$	30,500	$		AAA
Residential Mortgage Backed Securities & Collateralized Mortgage Obligations
Agency	$	609,785	$	617,190		617,190		—		—		—		—	AAA
Non-Agency
Subprime		5,905		5,365		4,007		—		—		1,358		—	AAA
Alt A		12,490		12,427		11,940		34		453		—		—	AAA
Prime		96,092		93,635		93,635		—		—		—		—	AAA
Total Residential MBS/CMO	$	724,272	$	728,617
Commercial Mortgaged Backed Securities	$	211,574	$	211,128		211,128		—		—		—		—	AAA
Municipal Bond Portfolio	$	1,802,417	$	1,822,281		1,448,783		352,895		20,603		—		—	AAA
Insurance Enhanced	$	1,159,285	$	1,170,854		1,170,854		—		—		—		—	AAA
Insured — Underlying Ratings	$	1,159,285	$	1,170,854		184,510		643,038		290,907		1,531		50,868	AA
Non-Insured	$	643,132	$	651,427		258,318		370,093		23,016		—		—	AA+
Short-Term
Bank Sweep Accounts — US	$	96,140	$	96,140
Bank Sweep Accounts — Non-US		129,278		129,278
Taxable Money Market Funds		399,654		399,654
Short-term Non US Gov Bonds		158,578		158,578
Total Short-Term	$	783,650	$	783,650

Note:

There are no CDO/CLOs in the portfolio.
There are no Auction Rate Securities in the portfolio.
Other Ratings are bonds with at least one enhanced rating; each issuer has an equivalent investment grade rating.
Received paydown of $1.6 million on subprime and Alt A securities in fourth quarter 2007.

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HCC Insurance Holdings, Inc. and Subsidiaries
Subprime Liability Exposure
December 31, 2007

• HCC wrote approximately $1.4 billion of Directors and Officers and Errors and Omissions premium in 2006 and 2007 combined.

• The majority of the D&O business is written excess and usually with high attachment points.

• The majority of the Errors and Omissions insurance was for limits of $1 million or less.

• Except for run-off policies, HCC has not written multi-year policies.

• The insurance provided is claims made with defense costs within the limits.

• Approximately 30 percent of the Company’s in-force D&O book is Financial Institutions including insurance companies and brokers.

• Many of the larger financial institutions purchased Side A only coverage.

• HCC’s average D&O limit is less than $10 million gross and $8 million net.

• As of December 31, the Company had 18 non-Side A only D&O or E&O claims and seven Side A only claims.

• Of the claims reported, only one was primary with a policy limit of $5 million gross.

• The average policy limit for non-Side A only claims is $11 million gross and $7.5 million net with an average excess point of $60 million.

• The average Side A only limit is $13 million gross and $11 million net with an average attachment point of more than $200 million.

• Based upon its current knowledge, the Company continues to believe subprime will be contained within its loss picks.

12

HCC Insurance Holdings, Inc. and Subsidiaries
Consolidated Insurance Companies
Net Loss Ratios
December 31, 2007

(Unaudited, in thousands)

	Full Year 2007								Full Year 2006
	Net Earned			Incurred		Loss			Net Earned		Incurred		Loss
Line of Business	Premium			Losses		Ratio			Premium		Losses		Ratio
Diversified financial products	$	777,414		$	315,409		40.6	%	$	728,861	$	351,010		48.2	%
Group life, accident & health		758,516			579,780		76.4			591,070		432,343		73.1
Aviation		153,121			89,683		58.6			152,886		82,328		53.8
London market account		124,609			68,798		55.2			112,362		48,316		43.0
Other specialty lines		171,824			115,804		67.4			123,981		69,374		56.0
Discontinued lines		(398	)		14,473	nm				29		28,485	nm
Total	$	1,985,086		$	1,183,947		59.6	%	$	1,709,189	$	1,011,856		59.2	%

nm — Not meaningful comparison

13