HCC Insurance Holdings' CEO Discusses Q1 2012 Results - Earnings Call Transcript

HCC Insurance Holdings, Inc. (HCC)

Q1 2012 Earnings Conference Call

May 02, 2012, 09:00 a.m. ET

Executives

John Molbeck, Jr. - CEO

Chris Williams - President

Brad Irick - EVP and CFO

Mike Schell - EVP and Chief Property and Casualty Insurance Officer

Bill Burke, Jr. - EVP and COO

Analysts

Michael Nannizzi - Goldman Sachs

Doug Mewhirter - RBC Capital Markets

Ryan Byrnes - Macquarie

Presentation

Operator

Welcome to the First Quarter 2012 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session.

I’d now like to turn the conference over to Mr. John Molbeck, Chief Executive Officer. Sir, you may begin your conference.

John Molbeck, Jr.

Thank you, operator. And good morning everyone and welcome to HCC’s 2012 first quarter conference call. Joining me today is Chris Williams, our President; Brad Irick, our Chief Financial Officer; Mike Schell, our Chief Property and Casualty Insurance Officer; and Bill Burke, Jr., our Chief Operating Officer is joining us for the first time today.

Brad will follow my initial remarks with financial highlights and Chris will comment about the quarter. But first a few highlights, for the quarter we had annualized operating return on equity of 11.1%, an increase in gross written premium of 5% to $682.7 million.

Net earnings of $82.6 million, net earnings per diluted share of $0.79. A GAAP combined ratio of 85.2% which included 1.3 percentage points of catastrophe. During the quarter we repurchased 2.2 million shares of our common stock at an average cost of $30.64, and increased book value per share by 2.5%. Importantly, our expense ratio was 25.1% for the quarter, a measure which continues to differentiate HCC.

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