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Alterra Capital Reports Second Quarter 2012 Results

Stocks in this article: ALTE

Non-GAAP Financial Measures

In presenting Alterra’s 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 Alterra’s 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 Alterra’s 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 Alterra’s 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
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
Total assets $ 10,696,586   $ 10,185,847
 
LIABILITIES
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
Total liabilities 7,844,850   7,376,612
 
SHAREHOLDERS’ EQUITY
Common shares (par value $1.00 per share);
96,853,334 (2011—102,101,950) shares issued and outstanding 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
Total shareholders’ equity 2,851,736   2,809,235
 
Total liabilities and shareholders’ equity $ 10,696,586   $ 10,185,847
 
Book value per share $ 29.44   $ 27.51
 
Diluted book value per share $ 28.68   $ 26.91
 
Diluted tangible book value per share [a] $ 28.12   $ 26.37
 
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

  Six Months Ended

June 30,

June 30,
2012   2011 2012   2011
REVENUES
Gross premiums written $ 566,857 $ 563,907 $ 1,228,187 $ 1,191,755
Reinsurance premiums ceded (189,879 ) (136,626 ) (414,341 ) (273,983 )
Net premiums written $ 376,978   $ 427,281   $ 813,846   $ 917,772  
 
Earned premiums $ 496,839 $ 443,008 $ 974,706 $ 932,270
Earned premiums ceded (146,061 ) (94,067 ) (285,753 ) (203,442 )
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 )
Net impairment losses recognized in earnings (570 ) (353 ) (5,939 ) (1,382 )
 
Other income 1,928 591 7,290 1,906
       
Total revenues 420,346   403,070   842,685   822,191  
 
LOSSES AND EXPENSES
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
       
Total losses and expenses 340,644   374,762   688,541   843,270  
 
INCOME (LOSS) BEFORE TAXES 79,702 28,308 154,144 (21,079 )
 
Income tax expense (benefit) 762   (4,327 ) (3,820 ) (7,027 )
 
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  
Other comprehensive income (loss) 17,083 42,985 35,272 33,272
       
COMPREHENSIVE INCOME $ 96,023   $ 75,620   $ 193,236   $ 19,220  
 
Net income (loss) per share $ 0.79   $ 0.31   $ 1.58   $ (0.13 )
Net income (loss) per diluted share $ 0.77   $ 0.30   $ 1.54   $ (0.13 )
Net operating income per diluted share [b] $ 0.68   $ 0.37   $ 1.33   $ 0.14  
 
Weighted average common shares outstanding—basic 99,563,474   105,604,786   100,283,266   106,385,007  
Weighted average common shares outstanding—diluted 101,957,882   107,111,909   102,556,070   106,385,007  
 
[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
Balance, beginning of period $ 102,102 $ 110,963
Issuance of common shares, net 694 1,406
Repurchase of shares (5,943 ) (6,574 )
Balance, end of period 96,853   105,795  
 
Additional paid-in capital
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 )
Balance, end of period 1,729,311   1,911,979  
 
Accumulated other comprehensive income
Unrealized holdings gains on investments:
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  
Balance, end of period 244,564   146,431  
Cumulative foreign currency translation adjustment:
Balance, beginning of period (37,344 ) (19,251 )
Foreign currency translation adjustment (4,991 ) 5,038  
Balance, end of period (42,335 ) (14,213 )
Total accumulated other comprehensive income, end of period 202,229   132,218  
 
Retained earnings
Balance, beginning of period 693,142 682,316
Net income (loss) 157,964 (14,052 )
Dividends (27,763 ) (25,175 )
Balance, end of period 823,343   643,089  
 
Total shareholders’ equity $ 2,851,736   $ 2,793,081  
 
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
Net income (loss) $ 157,964 $ (14,052 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
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:
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  
Cash provided by operating activities 165,377     148,705  
 
INVESTING ACTIVITIES
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  
Cash (used in) provided by investing activities (155,212 ) 94,442  
 
FINANCING ACTIVITIES
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 )
Cash used in financing activities (165,637 ) (170,056 )
 
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  
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 763,957   $ 987,057  
 
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 Lloyd’s   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 %
 
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 Lloyd’s   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.
(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 Lloyd’s segments, has been reclassified to a new Latin America segment. In addition, business written by the Company's 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   Life & Annuity Reinsurance   Corporate   Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Latin America   Total      
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 )
Net premiums written $ 75,776   $ 81,567   $ 217,224   $ 47,510   $ 4,375   $ 426,452   $ 829   $   $ 427,281  
 
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 )
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  
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 )
(Loss) income before taxes $ (3,899 ) $ 9,555   $ 28,308  
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 %
Combined ratio (d) 64.3 % 102.4 % 97.7 % 89.0 % 126.6 % 93.7 %
 
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - SIX MONTHS ENDED JUNE 30, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty Life & Annuity Reinsurance Corporate Consolidated
Global Insurance   U.S. Insurance   Reinsurance   Alterra at Lloyd’s   Latin America   Total      
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 )
Net premiums written $ 101,147   $ 121,015   $ 542,699   $ 132,221   $ 19,446   $ 916,528   $ 1,244   $   $ 917,772  
 
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 )
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 %
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
 

Percentage of Total

 

 

Percentage of Total

Gross Premiums

Gross Premiums

Movement on

Gross Premiums

Gross Premiums

Written

Written

Prior Year Period

Written [a]

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 Lloyd's:
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 period's 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.

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