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Alterra Capital Reports Third Quarter 2012 Results

Stocks in this article: ALTE

Third quarter 2012 results for Alterra include:

  • Property and casualty gross premiums written of $385.5 million, which is unchanged compared to the same quarter of 2011;
  • Net premiums written of $262.1 million, representing a decrease of $32.6 million, or 11.1%, 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, partially offset by growth in gross premiums written in the global insurance and U.S. insurance segments;
  • A combined ratio on property and casualty business of 99.9%, compared to 87.7% for the same quarter of 2011;
  • Significant property catastrophe event net losses of $15.0 million, net of reinstatement premiums, principally within the U.S. insurance segment, compared to net losses of $42.1 million, net of reinstatement premiums, in the same quarter of 2011. A smaller proportion of 2012's property losses fell within the attritional loss ratio, contributing to a higher combined ratio in 2012;
  • Net underwriting losses of $22.5 million on agriculture reinsurance, net of premiums and acquisition costs earned;
  • Net favorable development on prior years’ loss reserves of $22.7 million, or 6.8 combined ratio points, compared to $31.7 million, or 9.2 combined ratio points, in the same quarter of 2011;
  • Net investment income of $53.5 million, compared to $60.3 million in the same quarter of 2011, a decrease of 11.3%; and
  • Income of $6.8 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 and net premiums written from property and casualty underwriting for the third 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 $ 81.6 11.4 % $ 37.5 5.0 % 86.3 %
Reinsurance 172.8 (5.3 )% 142.5 (14.5 )% 86.5 %
U.S. Insurance 88.0 3.7 % 47.9 (11.7 )% 129.7 %
Alterra at Lloyd’s   43.1   (3.9 )%       34.2   (10.1 )%     131.4 %
Total $ 385.5 % $ 262.1 (11.1 )% 99.9 %

Results for the nine months ended September 30, 2012 include:

  • Property and casualty gross premiums written of $1,612.2 million, representing an increase of $36.3 million, or 2.3%, compared to the same period of 2011;
  • Net premiums written of $1,074.6 million, representing a decrease of $136.6 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 92.9%, compared to 98.4% for the same period of 2011;
  • Significant property catastrophe event net losses of $15.0 million, net of reinstatement premiums, compared to net losses of $197.9 million, net of reinstatement premiums, in the same period of 2011;
  • Net underwriting losses of $22.5 million on agriculture reinsurance, net of premiums and acquisition costs earned;
  • Net favorable development on prior years’ loss reserves of $53.8 million, or 5.3 combined ratio points, compared to $110.4 million, or 10.3 combined ratio points, in the same period of 2011;
  • Net investment income of $166.9 million, compared to $177.8 million in the same period of 2011, a decrease of 6.1%; and
  • Income of $23.4 million from New Point Re IV Limited consisting of fees and equity share earnings.

Gross premiums written and net premiums written from property and casualty underwriting for the nine months ended September 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 $ 273.7 2.1 % $ 133.0 (2.8 )% 66.8 %
Reinsurance 772.8 (4.6 )% 612.5 (16.0 )% 88.5 %
U.S. Insurance 304.5 11.8 % 142.4 (18.8 )% 110.0 %
Alterra at Lloyd’s   261.2   16.0 %     186.7   9.6 %   115.2 %
Total $ 1,612.2 2.3 % $ 1,074.6 (11.3 )% 92.9 %

With the total impact and ramifications of Hurricane Sandy unclear, it is too early for Alterra to make a reliable estimate of losses for this event. However, the social and economic loss has already shown itself to be meaningful. In accordance with Alterra's normal practice, a loss estimate will be released once more information is available.

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