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Alterra Capital Reports Second Quarter 2012 Results

Stocks in this article: ALTE

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 Lloyd’s 72.0 (0.6)% 44.9 (5.4)% 104.6%
Latin America 9.5   91.9%   4.8   9.1%   116.4%
Total $ 565.8 0.5% $ 376.1 (11.8)% 86.6%
 

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 Lloyd’s 218.2 21.0% 152.5 15.3% 106.5%
Latin America 34.8   57.7%   17.5   (10.0)%   116.3%
Total $ 1,226.7 3.0% $ 812.5 (11.3)% 89.5%
 

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 Alterra’s cash and fixed maturities portfolio was 3.26%, and the weighted average duration was 4.1 years.

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