Alterra Capital Reports Second Quarter 2012 Results

Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $78.9 million, or $0.77 per diluted share, for the second quarter of 2012, compared to net income of $32.6 million, or $0.30 per diluted share, for the same quarter of 2011.

Net operating income for the second quarter of 2012 was $69.0 million, or $0.68 per diluted share, compared to net operating income of $39.6 million, or $0.37 per diluted share, for the same quarter of 2011. Annualized net operating return on average shareholders’ equity for the second quarter of 2012 was 9.7%.

For the six months ended June 30, 2012, Alterra reported net income of $158.0 million, or $1.54 per diluted share, compared to net loss of $14.1 million, or $0.13 per diluted share, for the same period of 2011. Net operating income for the six months ended June 30, 2012 was $136.7 million, or $1.33 per diluted share, compared to net operating income of $14.8 million, or $0.14 per diluted share, for the same period of 2011. Annualized net operating return on average shareholders’ equity for the six months ended June 30, 2012 was 9.6%.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “We are pleased to report another solid quarter for Alterra. Despite a challenging market environment, we achieved an annualized net operating return on equity close to 10% for the quarter, while continuing to maintain a conservative philosophy on our newer product lines and teams. While we would prefer to see rates increasing at a faster pace, we are pleased that overall firming continues. Over the last twelve months, we have supplemented our 7.7% operating return on equity with significant share repurchases at a discount to diluted book value, contributing to a 12.5% increase in diluted book value per share, including dividends, since June 30, 2011. We expect to continue to use share repurchases as an important capital management tool for maximizing shareholder value until rate increases enable us to more effectively deploy any excess capital in our underwriting operations."

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