Exhibit 99.1
MAX CAPITAL GROUP LTD. REPORTS SECOND-QUARTER FINANCIAL RESULTS
HAMILTON, BERMUDA, July 30, 2007 Max Capital Group Ltd. (NASDAQ: MXGL; BSX: MXGL BH) today reported net income for the three months ended June 30, 2007, of $94.1 million, or $1.45 per diluted share, compared to net income of $19.7 million, or $0.31 per diluted share, for the three months ended June 30, 2006. Net operating income, which represents net income excluding after-tax net realized gains and losses on sales of fixed maturities, for the three months ended June 30, 2007, was $94.4 million, or $1.46 per diluted share, compared with net operating income of $25.0 million, or $0.39 per diluted share, for the three months ended June 30, 2006. For the six months ended June 30, 2007, the Company had net income of $174.1 million, or $2.70 per diluted share, compared to $95.0 million, or $1.49 per diluted share, for the six months ended June 30, 2006. For the six months ended June 30, 2007, the Company had net operating income of $175.5 million, or $2.72 per diluted share, compared to $102.0 million, or $1.60 per diluted share for the six months ended June 30, 2006.
W. Marston Becker, Chairman and Chief Executive Officer of Max Capital Group Ltd., said: “Our results for the second quarter continue the strong underwriting performance and solid investment returns for Max. Gross premiums written for the quarter remain down compared to 2006, but continue in line with our 2007 expectations. We have continued our underwriting focus on a balanced and diversified strategy. During the quarter we commenced underwriting excess and surplus lines in the U.S. through our newly established excess and surplus lines platform, Max Specialty Insurance Company, which underwrites in niche markets. We expect Max Specialty to be an increasingly significant source of profitable growth for Max in the quarters and years ahead.”
Gross premiums written for the three months ended June 30, 2007, were $241.5 million, of which $240.7 million came from property and casualty underwriting and $0.8 million from life and annuity underwriting, compared to $284.0 million, of which $241.2 million came from property and casualty underwriting and $42.8 million from life and annuity underwriting, for the three months ended June 30, 2006. Gross premiums written include $9.9 million for the above-mentioned recently established U.S.-based excess and surplus lines business. The lower level of gross premiums written for the three months ended June 30, 2007, versus the same period in 2006 is consistent with the Company s 2007 budget. Net premiums earned for the three months ended June 30, 2007, were $138.0 million compared to $199.2 million for the same period in 2006. Gross premiums written for the six months ended June 30, 2007, were $455.1 million compared to $539.9 million for the first six months of 2006. Property and casualty reinsurance, property and casualty insurance, excess and surplus lines insurance, and life and annuity reinsurance accounted for 52.7%, 44.8%, 2.2% and 0.3%, respectively, of gross premiums written for the first six months of 2007, versus 55.3%, 36.6%, 0.0% and 8.1%, respectively, for the same period in 2006. Net premiums earned for the first six months of 2007 decreased 22.7% to $277.4 million compared to $358.9 million for the same period in 2006. The decline in net premiums earned in the six months ended June 30, 2007, versus the same period in 2006 principally reflects the lower volume of gross premium written and the increase in the Company s use of reinsurance in order to manage its net exposure retained.
Net investment income for the three months ended June 30, 2007, increased to $46.4 million from $36.5 million for the same period in 2006. The increase is principally attributable to a year-over-year increase in cash and fixed maturities balances and higher yields on fixed-maturity investments. Net investment income for the six months ended June 30, 2007, increased $18.7 million, to $89.2 million, compared to $70.5 million for the same period in 2006. Net gains on alternative investments for the three months ended June 30, 2007, were $68.1 million, for a 5.8% rate of return, versus net losses on alternative investments of $5.6 million, for a negative 0.39% rate of return, for the same period of 2006. For the six months ended June 30, 2007, alternative investments have returned 10.9% compared to 4.0% for the same period in 2006. Invested assets were $4.8 billion as of June 30, 2007, with an allocation of 77.3% to cash and fixed maturities and of 22.7% to alternative investments. On June 30, 2007, the Company redeemed $114.1 million of alternative investments as it moved toward the Company’s previously announced policy allocation target of 20%.
Total revenue for the three months ended June 30, 2007, increased 12.2% to $252.4 million, versus $224.9 million for the same period in 2006. Total revenue for the six months ended June 30, 2007, increased 3.3% to $487.8 million, compared to $472.4 million for the same period in 2006. The increase in revenue in the three- and six-month periods ended June 30, 2007, reflects an increase in investment income and net gains on alternative investments offset by the decrease in net premiums earned compared to 2006.
Losses and benefits were $106.5 million for the three months ended June 30, 2007, versus $165.3 million for the same period in 2006. The decrease in losses and benefits for the three months ended June 30, 2007, is principally attributable to the decrease in premiums earned. Losses recognized in the second quarter related to catastrophic events, including flooding-related losses in the United Kingdom occurring prior to June 30, 2007, were less than $5.0 million gross of reinsurance recoveries. There were no significant changes in prior-period reserves during the three months ended June 30, 2007.
Acquisition costs for the three months ended June 30, 2007, were $19.7 million compared to $18.8 million for the same period in 2006. Acquisition costs are principally related to the Company s property and casualty business. The increase over 2006 is principally attributable to an increase in adjustable-rate commissions on several reinsurance contracts.
Interest expense for the three months ended June 30, 2007, was $8.3 million versus $4.7 million for the same period in 2006, with the increase principally attributable to interest on the Company’s $100.0 million senior notes issued in April 2007 and its $50.0 million drawdown on the Company’s primary credit facility in April 2007, both of which were used to capitalize the Company s U.S.-based excess and surplus operation, Max Specialty Insurance Company.
General and administrative expenses for the three months ended June 30, 2007, were $26.8 million versus $16.0 million for the same period in 2006. The increase in general and administrative expenses for the three months ended June 30, 2007, principally reflects operating costs related to the Company’s newly launched U.S.-based excess and surplus lines operations, as well as additional personnel-related costs for the group.
Shareholders’ equity was $1,472.8 million at June 30, 2007. Book value per share at June 30, 2007, was $24.49 versus $23.06 at December 31, 2006. Annualized return on average shareholders equity for the six months ended June 30, 2007, was 24.3%.
During the three months ended June 30, 2007, Max Capital Group Ltd. repurchased 715,400 common shares or approximately $20.0 million of shares outstanding under the board-approved share repurchase plan. On July 27, 2007, Max Capital s Board of Directors approved an increase in the share repurchase plan, increasing the dollar value of shares that may be repurchased to $100.0 million from the $30.0 million remaining under the previous share repurchase authorization.
Certain non-GAAP financial measures that are included in this press release are defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.
Max Capital Group Ltd., through its operating subsidiaries, provides specialty insurance and reinsurance products to corporations, public entities, property and casualty insurers and life and health insurers.
This release includes statements about future expectations, plans and prospects of the Company that constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements, including the risk that the SEC’s view of the conclusions reached by the Audit and Risk Management Committee of the Company’s Board of Directors in connection with the internal review of three finite risk retrocessional contracts written in 2001 and 2003, which caused the Company to restate its audited financial statements for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 and unaudited financial statements for the periods ended March 31, 2006, and June 30, 2006, may differ, perhaps materially, and result in material changes to information contained in the Company’s past SEC filings,
including financial statements and financial information. For further information regarding cautionary statements and factors affecting future results, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, and other documents filed by the Company with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.
Contacts | ||
N. James Tees Executive Vice President jim.tees@maxcapgroup.com 1-441-295-8800 | Roy Winnick Kekst and Company roy-winnick@kekst.com 1-212-521-4842 |
MAX CAPITAL GROUP LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
June 30, 2007 | December 31, 2006 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 468,287 | $ | 441,895 | ||||
Fixed maturities, available for sale at fair value | 3,266,386 | 3,028,108 | ||||||
Alternative investments, at fair value | 1,096,687 | 1,065,874 | ||||||
Accrued interest income | 38,065 | 38,922 | ||||||
Premiums receivable | 467,045 | 390,889 | ||||||
Losses and benefits recoverable from reinsurers | 604,774 | 538,009 | ||||||
Funds withheld | 14,263 | 15,385 | ||||||
Deferred acquisition costs | 50,951 | 49,064 | ||||||
Prepaid reinsurance premiums | 134,481 | 104,443 | ||||||
Trades pending settlement | 106,861 | 136,563 | ||||||
Other assets | 55,484 | 39,832 | ||||||
Total assets | $ | 6,303,284 | $ | 5,848,984 | ||||
LIABILITIES | ||||||||
Property and casualty losses | $ | 2,442,635 | $ | 2,335,109 | ||||
Life and annuity benefits | 878,434 | 895,560 | ||||||
Deposit liabilities | 222,272 | 204,389 | ||||||
Funds withheld from reinsurers | 252,034 | 254,723 | ||||||
Unearned property and casualty premiums | 490,000 | 436,476 | ||||||
Reinsurance balances payable | 99,576 | 79,506 | ||||||
Accounts payable and accrued expenses | 60,792 | 103,160 | ||||||
Bank loans | 285,000 | 150,000 | ||||||
Senior notes | 99,767 | — | ||||||
Total liabilities | 4,830,510 | 4,458,923 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred shares (par value $ 1.00) 20,000,000 shares authorized; no shares issued or outstanding | — | — | ||||||
Common shares (par value $ 1.00) 200,000,000 shares authorized; 60,127,859 (2006 - 60,276,560) shares issued and outstanding | 60,128 | 60,277 | ||||||
Additional paid-in capital | 907,423 | 950,862 | ||||||
Unearned stock grant compensation | — | (17,570 | ) | |||||
Accumulated other comprehensive loss | (78,565 | ) | (21,688 | ) | ||||
Retained earnings | 583,788 | 418,180 | ||||||
Total shareholders’ equity | 1,472,774 | 1,390,061 | ||||||
Total liabilities and shareholders’ equity | $ | 6,303,284 | $ | 5,848,984 | ||||
Book Value Per Share | $ | 24.49 | $ | 23.06 | ||||
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except shares and per share amounts)
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
REVENUES | ||||||||||||||||
Gross premiums written | $ | 241,502 | $ | 283,967 | $ | 455,100 | $ | 539,891 | ||||||||
Reinsurance premiums ceded | (77,633 | ) | (73,639 | ) | (153,841 | ) | (131,401 | ) | ||||||||
Net premiums written | $ | 163,869 | $ | 210,328 | $ | 301,259 | $ | 408,490 | ||||||||
Earned premiums | $ | 199,697 | $ | 249,283 | $ | 401,189 | $ | 455,409 | ||||||||
Earned premiums ceded | (61,686 | ) | (50,094 | ) | (123,756 | ) | (96,463 | ) | ||||||||
Net premiums earned | 138,011 | 199,189 | 277,433 | 358,946 | ||||||||||||
Net investment income | 46,369 | 36,497 | 89,186 | 70,526 | ||||||||||||
Net gains on alternative investments | 68,087 | (5,636 | ) | 122,199 | 49,223 | |||||||||||
Net realized losses on sale of fixed maturities | (282 | ) | (5,285 | ) | (1,325 | ) | (6,960 | ) | ||||||||
Other income | 169 | 165 | 343 | 664 | ||||||||||||
Total revenues | 252,354 | 224,930 | 487,836 | 472,399 | ||||||||||||
LOSSES AND EXPENSES | ||||||||||||||||
Losses and benefits | 106,501 | 165,324 | 213,516 | 290,923 | ||||||||||||
Acquisition costs | 19,732 | 18,847 | 34,658 | 40,390 | ||||||||||||
Interest expense | 8,328 | 4,673 | 16,435 | 7,969 | ||||||||||||
General and administrative expenses | 26,762 | 16,047 | 51,958 | 37,556 | ||||||||||||
Total losses and expenses | 161,323 | 204,891 | 316,567 | 376,838 | ||||||||||||
NET INCOME BEFORE TAXES | 91,031 | 20,039 | 171,269 | 95,561 | ||||||||||||
Income tax (benefit) expense | (3,109 | ) | 307 | (2,864 | ) | 556 | ||||||||||
NET INCOME | 94,140 | 19,732 | 174,133 | 95,005 | ||||||||||||
Change in net unrealized depreciation of fixed maturities | (53,006 | ) | (31,104 | ) | (57,746 | ) | (81,174 | ) | ||||||||
Foreign currency translation adjustment | 485 | 383 | 869 | 1,482 | ||||||||||||
COMPREHENSIVE INCOME | $ | 41,619 | $ | (10,989 | ) | $ | 117,256 | $ | 15,313 | |||||||
Basic earnings per share | $ | 1.55 | $ | 0.33 | $ | 2.87 | $ | 1.60 | ||||||||
Diluted earnings per share | $ | 1.45 | $ | 0.31 | $ | 2.70 | $ | 1.49 | ||||||||
Diluted net operating earnings per share | $ | 1.46 | $ | 0.39 | $ | 2.72 | $ | 1.60 | ||||||||
Weighted average shares outstanding - basic | 60,710,142 | 59,386,469 | 60,579,936 | 59,336,432 | ||||||||||||
Weighted average shares outstanding - diluted | 64,801,799 | 63,340,090 | 64,488,023 | 63,638,422 | ||||||||||||
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30, | ||||||||
2007 | 2006 | |||||||
Preferred shares | ||||||||
Balance, beginning of period | $ | — | $ | — | ||||
Balance, end of period | — | — | ||||||
Common shares | ||||||||
Balance, beginning of period | 60,277 | 58,829 | ||||||
Issue of shares | 1,362 | 596 | ||||||
Repurchase of shares | (1,511 | ) | — | |||||
Balance, end of period | 60,128 | 59,425 | ||||||
Additional paid-in capital | ||||||||
Balance, beginning of period | 950,862 | 921,384 | ||||||
Reclassification of unearned stock grant compensation | (26,357 | ) | — | |||||
Issue of common shares | 19,752 | 13,257 | ||||||
Stock option expense | 1,288 | 434 | ||||||
Repurchase of shares | (38,122 | ) | — | |||||
Balance, end of period | 907,423 | 935,075 | ||||||
Loans receivable from common share sales | ||||||||
Balance, beginning of period | — | (465 | ) | |||||
Loans repaid | — | 165 | ||||||
Balance, end of period | — | (300 | ) | |||||
Unearned stock grant compensation | ||||||||
Balance, beginning of period | (17,570 | ) | (14,574 | ) | ||||
Stock grants awarded | (16,481 | ) | (12,587 | ) | ||||
Amortization | 7,694 | 6,438 | ||||||
Reclassification of unearned stock grant compensation | 26,357 | — | ||||||
Balance, end of period | — | (20,723 | ) | |||||
Accumulated other comprehensive income (loss) | ||||||||
Balance, beginning of period | (21,688 | ) | 4,981 | |||||
Holding losses on fixed maturities arising in period | (59,071 | ) | (88,134 | ) | ||||
Net realized losses included in net income | 1,325 | 6,960 | ||||||
Currency translation adjustments | 869 | 1,482 | ||||||
Balance, end of period | (78,565 | ) | (74,711 | ) | ||||
Retained earnings | ||||||||
Balance, beginning of period | 418,180 | 215,565 | ||||||
Net income | 174,133 | 95,005 | ||||||
Dividends paid | (8,525 | ) | (5,938 | ) | ||||
Balance, end of period | 583,788 | 304,632 | ||||||
Total shareholders’ equity | $ | 1,472,774 | $ | 1,203,398 | ||||
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
Six Months Ended June 30 | ||||||||
2007 | 2006 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 174,133 | $ | 95,005 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Stock based compensation | 8,982 | 6,872 | ||||||
Amortization of premium on fixed maturities | 2,429 | 3,554 | ||||||
Accretion of deposit liabilities | 3,046 | 2,583 | ||||||
Net realized losses on sale of fixed maturities | 1,325 | 6,960 | ||||||
Changes in: | ||||||||
Alternative investments | (30,849 | ) | (91,566 | ) | ||||
Accrued interest income | 857 | 338 | ||||||
Premiums receivable | (76,156 | ) | (22,385 | ) | ||||
Losses and benefits recoverable from reinsurers | (66,765 | ) | (42,442 | ) | ||||
Funds withheld | 1,122 | 1,208 | ||||||
Deferred acquisition costs | (1,887 | ) | (4,355 | ) | ||||
Prepaid reinsurance premiums | (30,038 | ) | (35,694 | ) | ||||
Trades pending settlement | 29,702 | — | ||||||
Other assets | (6,982 | ) | (1,212 | ) | ||||
Property and casualty losses | 107,526 | 177,709 | ||||||
Life and annuity benefits | (17,126 | ) | 48,627 | |||||
Funds withheld from reinsurers | (2,689 | ) | (19,523 | ) | ||||
Unearned property and casualty premiums | 53,524 | 87,641 | ||||||
Reinsurance balances payable | 20,070 | 15,403 | ||||||
Accounts payable and accrued expenses | (42,368 | ) | 21,328 | |||||
Cash from operating activities | 127,856 | 250,051 | ||||||
INVESTING ACTIVITIES | ||||||||
Purchases of fixed maturities | (739,421 | ) | (611,157 | ) | ||||
Sales of fixed maturities | 205,535 | 342,102 | ||||||
Redemptions of fixed maturities | 254,144 | 89,912 | ||||||
Purchase of Max Specialty | (28,400 | ) | — | |||||
Cash used in investing activities | (308,142 | ) | (179,143 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Net proceeds from issuance of common shares | 4,633 | 1,266 | ||||||
Repurchase of common shares | (39,633 | ) | — | |||||
Proceeds from bank loan | 135,000 | — | ||||||
Proceeds from issuance of senior notes | 99,497 | |||||||
Dividends | (8,525 | ) | (5,938 | ) | ||||
Additions to deposit liabilities | 17,970 | 4,990 | ||||||
Payment of deposit liabilities | (3,133 | ) | (33,633 | ) | ||||
Notes and loans repaid | — | 165 | ||||||
Cash provided by (used in) financing activities | 205,809 | (33,150 | ) | |||||
Effect of exchange rate on cash | 869 | 1,482 | ||||||
Net increase in cash and cash equivalents | 26,392 | 39,240 | ||||||
Cash and cash equivalents, beginning of period | 441,895 | 314,031 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 468,287 | $ | 353,271 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $7,224 and $5,767 for the six months ended June 30, 2007 and 2006, respectively. No corporate taxes were paid during the six months ended June 30, 2007 and 2006.
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL DATA - SIX MONTHS TO JUNE 30, 2007 (Unaudited)
Year to Date Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||
(in 000’s US$) | Reinsurance | Insurance | U.S. Excess & Surplus | Total | Reinsurance | |||||||||||||||||||||||
Gross premiums written | $ | 239,926 | $ | 203,938 | $ | 9,872 | $ | 453,736 | $ | 1,364 | $ | — | $ | 455,100 | ||||||||||||||
Reinsurance premiums ceded | (35,166 | ) | (111,528 | ) | (6,874 | ) | (153,568 | ) | (273 | ) | — | (153,841 | ) | |||||||||||||||
Net premiums written | $ | 204,760 | $ | 92,410 | $ | 2,998 | $ | 300,168 | $ | 1,091 | $ | — | $ | 301,259 | ||||||||||||||
Earned premiums | $ | 196,905 | $ | 201,981 | $ | 939 | $ | 399,825 | $ | 1,364 | $ | — | $ | 401,189 | ||||||||||||||
Earned premiums ceded | (21,859 | ) | (100,958 | ) | (666 | ) | (123,483 | ) | (273 | ) | — | (123,756 | ) | |||||||||||||||
Net premiums earned | 175,046 | 101,023 | 273 | 276,342 | 1,091 | — | 277,433 | |||||||||||||||||||||
Net investment income | 21,841 | 7,918 | 1,645 | 31,404 | 14,641 | 43,141 | 89,186 | |||||||||||||||||||||
Net gains on alternative investments | 37,412 | 9,575 | — | 46,987 | 38,784 | 36,428 | 122,199 | |||||||||||||||||||||
Net realized losses on sales of fixed maturities | — | — | — | — | — | (1,325 | ) | (1,325 | ) | |||||||||||||||||||
Other income | — | — | — | — | — | 343 | 343 | |||||||||||||||||||||
Total revenues | 234,299 | 118,516 | 1,918 | 354,733 | 54,516 | 78,587 | 487,836 | |||||||||||||||||||||
Losses and benefits | 115,314 | 76,982 | 152 | 192,448 | 21,068 | — | 213,516 | |||||||||||||||||||||
Acquisition costs | 34,913 | (633 | ) | (20 | ) | 34,260 | 398 | — | 34,658 | |||||||||||||||||||
Interest expense | 4,244 | — | — | 4,244 | 2,168 | 10,023 | 16,435 | |||||||||||||||||||||
General and administrative expenses | 13,941 | 8,915 | 8,179 | 31,035 | 1,429 | 19,494 | 51,958 | |||||||||||||||||||||
Total losses and expenses | 168,412 | 85,264 | 8,311 | 261,987 | 25,063 | 29,517 | 316,567 | |||||||||||||||||||||
Net income before taxes | $ | 65,887 | $ | 33,252 | $ | (6,393 | ) | $ | 92,746 | $ | 29,453 | $ | 49,070 | $ | 171,269 | |||||||||||||
Loss Ratio (a) | 65.9 | % | 76.2 | % | 55.7 | % | 69.6 | % | ||||||||||||||||||||
Combined Ratio (b) | 93.8 | % | 84.4 | % | n/a | 93.3 | % |
SCHEDULE OF SUPPLEMENTAL DATA - THREE MONTHS TO JUNE 30, 2007 (Unaudited)
Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||
(in 000’s US$) | Reinsurance | Insurance | U.S. Excess & Surplus | Total | Reinsurance | |||||||||||||||||||||||
Gross premiums written | $ | 104,912 | �� | $ | 125,904 | $ | 9,872 | $ | 240,688 | $ | 814 | $ | — | $ | 241,502 | |||||||||||||
Reinsurance premiums ceded | (11,617 | ) | (58,979 | ) | (6,874 | ) | (77,470 | ) | (163 | ) | — | (77,633 | ) | |||||||||||||||
Net premiums written | $ | 93,295 | $ | 66,925 | $ | 2,998 | $ | 163,218 | $ | 651 | $ | — | $ | 163,869 | ||||||||||||||
Earned premiums | $ | 98,009 | $ | 99,935 | $ | 939 | $ | 198,883 | $ | 814 | $ | — | $ | 199,697 | ||||||||||||||
Earned premiums ceded | (11,383 | ) | (49,474 | ) | (666 | ) | (61,523 | ) | (163 | ) | — | (61,686 | ) | |||||||||||||||
Net premiums earned | 86,626 | 50,461 | 273 | 137,360 | 651 | — | 138,011 | |||||||||||||||||||||
Net investment income | 11,106 | 3,974 | 1,618 | 16,698 | 7,285 | 22,386 | 46,369 | |||||||||||||||||||||
Net gains on alternative investments | 20,990 | 5,200 | — | 26,190 | 21,288 | 20,609 | 68,087 | |||||||||||||||||||||
Net realized gains on sales of fixed maturities | — | — | — | — | — | (282 | ) | (282 | ) | |||||||||||||||||||
Other income | — | — | — | — | — | 169 | 169 | |||||||||||||||||||||
Total revenues | 118,722 | 59,635 | 1,891 | 180,248 | 29,224 | 42,882 | 252,354 | |||||||||||||||||||||
Losses and benefits | 55,550 | 40,148 | 152 | 95,850 | 10,651 | — | 106,501 | |||||||||||||||||||||
Acquisition costs | 19,657 | (42 | ) | (20 | ) | 19,595 | 137 | — | 19,732 | |||||||||||||||||||
Interest expense | 1,213 | — | — | 1,213 | 504 | 6,611 | 8,328 | |||||||||||||||||||||
General and administrative expenses | 6,671 | 4,531 | 4,672 | 15,874 | 718 | 10,170 | 26,762 | |||||||||||||||||||||
Total losses and expenses | 83,091 | 44,637 | 4,804 | 132,532 | 12,010 | 16,781 | 161,323 | |||||||||||||||||||||
Net income before taxes | $ | 35,631 | $ | 14,998 | $ | (2,913 | ) | $ | 47,716 | $ | 17,214 | $ | 26,101 | $ | 91,031 | |||||||||||||
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL DATA - SIX MONTHS TO JUNE 30, 2006 (Unaudited)
Year to Date Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | |||||||||||||||||||||||
(in 000’s US$) | Reinsurance | Insurance | U.S. Excess & Surplus | Total | Reinsurance | ||||||||||||||||||||||
Gross premiums written | $ | 298,773 | $ | 197,547 | $ | — | $ | 496,320 | $ | 43,571 | $ | — | $ | 539,891 | |||||||||||||
Reinsurance premiums ceded | (27,523 | ) | (103,617 | ) | — | (131,140 | ) | (261 | ) | — | (131,401 | ) | |||||||||||||||
Net premiums written | $ | 271,250 | $ | 93,930 | $ | — | $ | 365,180 | $ | 43,310 | $ | — | $ | 408,490 | |||||||||||||
Earned premiums | $ | 232,671 | $ | 179,167 | $ | — | $ | 411,838 | $ | 43,571 | $ | — | $ | 455,409 | |||||||||||||
Earned premiums ceded | (15,307 | ) | (80,895 | ) | — | (96,202 | ) | (261 | ) | — | (96,463 | ) | |||||||||||||||
Net premiums earned | 217,364 | 98,272 | — | 315,636 | 43,310 | — | 358,946 | ||||||||||||||||||||
Net investment income | 17,952 | 7,145 | — | 25,097 | 14,756 | 30,673 | 70,526 | ||||||||||||||||||||
Net gains on alternative investments | 11,389 | 3,452 | — | 14,841 | 13,685 | 20,697 | 49,223 | ||||||||||||||||||||
Net realized losses on sales of fixed maturities | — | — | — | — | — | (6,960 | ) | (6,960 | ) | ||||||||||||||||||
Other income | — | — | — | — | — | 664 | 664 | ||||||||||||||||||||
Total revenues | 246,705 | 108,869 | — | 355,574 | 71,751 | 45,074 | 472,399 | ||||||||||||||||||||
Losses and benefits | 153,223 | 74,832 | — | 228,055 | 62,868 | — | 290,923 | ||||||||||||||||||||
Acquisition costs | 39,403 | 443 | — | 39,846 | 544 | — | 40,390 | ||||||||||||||||||||
Interest expense | 1,307 | — | — | 1,307 | 850 | 5,812 | 7,969 | ||||||||||||||||||||
General and administrative expenses | 10,972 | 6,873 | — | 17,845 | 1,317 | 18,394 | 37,556 | ||||||||||||||||||||
Total losses and expenses | 204,905 | 82,148 | — | 287,053 | 65,579 | 24,206 | 376,838 | ||||||||||||||||||||
Net income before taxes | $ | 41,800 | $ | 26,721 | $ | — | $ | 68,521 | $ | 6,172 | $ | 20,868 | $ | 95,561 | |||||||||||||
Loss Ratio (a) | 70.5 | % | 76.1 | % | 72.3 | % | |||||||||||||||||||||
Combined Ratio (b) | 93.7 | % | 83.6 | % | 90.5 | % |
SCHEDULE OF SUPPLEMENTAL DATA - THREE MONTHS TO JUNE 30, 2006 (Unaudited)
Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | |||||||||||||||||||||||
(in 000’s US$) | Reinsurance | Insurance | U.S. Excess& Surplus | Total | Reinsurance | ||||||||||||||||||||||
Gross premiums written | $ | 113,790 | $ | 127,381 | $ | — | $ | 241,171 | $ | 42,796 | $ | — | $ | 283,967 | |||||||||||||
Reinsurance premiums ceded | (11,464 | ) | (62,069 | ) | — | (73,533 | ) | (106 | ) | — | (73,639 | ) | |||||||||||||||
Net premiums written | $ | 102,326 | $ | 65,312 | $ | — | $ | 167,638 | $ | 42,690 | $ | — | $ | 210,328 | |||||||||||||
Earned premiums | $ | 115,637 | $ | 90,850 | $ | — | $ | 206,487 | $ | 42,796 | $ | — | $ | 249,283 | |||||||||||||
Earned premiums ceded | (7,391 | ) | (42,597 | ) | — | (49,988 | ) | (106 | ) | — | (50,094 | ) | |||||||||||||||
Net premiums earned | 108,246 | 48,253 | — | 156,499 | 42,690 | — | 199,189 | ||||||||||||||||||||
Net investment income | 9,500 | 3,780 | — | 13,280 | 7,259 | 15,958 | 36,497 | ||||||||||||||||||||
Net gains on alternative investments | (1,670 | ) | (470 | ) | — | (2,140 | ) | (1,972 | ) | (1,524 | ) | (5,636 | ) | ||||||||||||||
Net realized gains on sales of fixed maturities | — | — | — | — | — | (5,285 | ) | (5,285 | ) | ||||||||||||||||||
Other income | — | — | — | — | — | 165 | 165 | ||||||||||||||||||||
Total revenues | 116,076 | 51,563 | — | 167,639 | 47,977 | 9,314 | 224,930 | ||||||||||||||||||||
Losses and benefits | 75,777 | 37,723 | — | 113,500 | 51,824 | — | 165,324 | ||||||||||||||||||||
Acquisition costs | 18,573 | (10 | ) | — | 18,563 | 284 | — | 18,847 | |||||||||||||||||||
Interest expense | 1,848 | — | — | 1,848 | (226 | ) | 3,051 | 4,673 | |||||||||||||||||||
General and administrative expenses | 5,211 | 3,183 | — | 8,394 | 674 | 6,979 | 16,047 | ||||||||||||||||||||
Total losses and expenses | 101,409 | 40,896 | — | 142,305 | 52,556 | 10,030 | 204,891 | ||||||||||||||||||||
Net income before taxes | $ | 14,667 | $ | 10,667 | $ | — | $ | 25,334 | $ | (4,579 | ) | $ | (716 | ) | $ | 20,039 | |||||||||||
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL DATA - SIX MONTHS TO JUNE 30, 2007 (Unaudited)
Gross Premiums Written by Type of Risk: | Six months to June 30, 2007 | Six months to June 30, 2006 | ||||||||||
Gross Premiums Written* | Percentage of Total Premiums Written | Gross Premiums Written* | Percentage of Total Premiums Written | |||||||||
Property and Casualty Reinsurance: | ||||||||||||
Accident & Health | $ | — | 0.0 | % | $ | 6,333 | 1.2 | % | ||||
Aviation | 19,798 | 4.4 | % | 17,258 | 3.2 | % | ||||||
Excess Liability | 6,173 | 1.4 | % | 31,811 | 5.9 | % | ||||||
Medical Malpractice | 37,531 | 8.2 | % | 35,189 | 6.5 | % | ||||||
Other | 624 | 0.1 | % | 359 | 0.1 | % | ||||||
Professional Liability | 31,173 | 6.8 | % | 55,205 | 10.2 | % | ||||||
Property | 79,142 | 17.4 | % | 61,355 | 11.3 | % | ||||||
Marine & Energy | 24,927 | 5.5 | % | 20,273 | 3.7 | % | ||||||
Whole Account | 8,541 | 1.9 | % | 36,489 | 6.8 | % | ||||||
Workers’ Compensation | 32,017 | 7.0 | % | 34,501 | 6.4 | % | ||||||
239,926 | 52.7 | % | 298,773 | 55.3 | % | |||||||
Property and Casualty Insurance: | ||||||||||||
Aviation | 13,429 | 3.0 | % | 3,753 | 0.7 | % | ||||||
Excess Liability | 76,670 | 16.8 | % | 87,284 | 16.2 | % | ||||||
Professional Liability | 80,603 | 17.7 | % | 71,602 | 13.2 | % | ||||||
Property | 33,236 | 7.3 | % | 34,908 | 6.5 | % | ||||||
203,938 | 44.8 | % | 197,547 | 36.6 | % | |||||||
Excess & Surplus Insurance: | ||||||||||||
Property | 9,872 | 2.2 | % | — | 0.0 | % | ||||||
9,872 | 2.2 | % | — | 0.0 | % | |||||||
Aggregate Property and Casualty | $ | 453,736 | 99.7 | % | $ | 496,320 | 91.9 | % | ||||
Life & Annuity: | ||||||||||||
Annuity | $ | — | 0.0 | % | $ | 41,924 | 7.8 | % | ||||
Health | — | 0.0 | % | — | 0.0 | % | ||||||
Life | 1,364 | 0.3 | % | 1,647 | 0.3 | % | ||||||
Aggregate Life & Annuity | 1,364 | 0.3 | % | 43,571 | 8.1 | % | ||||||
Aggregate P&C and Life & Annuity | $ | 455,100 | 100.0 | % | $ | 539,891 | 100.0 | % | ||||
Periodic Rate of Return | |||||||||||||||
Selected Investment Return Data: | Fair Value* | Investment %’s | Last 3 Months | Year to Date | Last 60 months** | ||||||||||
Cash and Fixed Maturities | $ | 3,734,673 | 77.3 | % | -0.25 | % | 0.93 | % | 4.30 | % | |||||
Commodity Trading Advisers | $ | — | 0.0 | % | 7.31 | % | 6.63 | % | 6.91 | % | |||||
Distressed Securities | 188,284 | 3.9 | % | 4.33 | % | 9.60 | % | 21.18 | % | ||||||
Diversified Arbitrage | 162,757 | 3.4 | % | 2.19 | % | 6.85 | % | 7.33 | % | ||||||
Emerging Markets | 93,759 | 1.9 | % | 8.06 | % | 13.08 | % | 17.54 | % | ||||||
Event-Driven Arbitrage | 208,689 | 4.3 | % | 10.80 | % | 21.38 | % | 15.69 | % | ||||||
Fixed Income Arbitrage | 27,518 | 0.6 | % | 3.22 | % | 7.32 | % | 7.59 | % | ||||||
Global Macro | 65,531 | 1.4 | % | 5.59 | % | 8.48 | % | 10.00 | % | ||||||
Long / Short Credit | 86,561 | 1.8 | % | 3.22 | % | 7.28 | % | 12.76 | % | ||||||
Long / Short Equity | 226,895 | 4.6 | % | 7.34 | % | 12.88 | % | 9.31 | % | ||||||
Opportunistic | 33,824 | 0.7 | % | 8.28 | % | 15.08 | % | 19.47 | % | ||||||
MDS | 1,093,818 | 22.6 | % | 5.83 | % | 10.85 | % | 10.67 | % | ||||||
Reinsurance Private Equity | 2,869 | 0.1 | % | 8.54 | % | 15.11 | % | -0.70 | % | ||||||
Alternative Investments | $ | 1,096,687 | 22.7 | % | 5.84 | % | 10.86 | % | 10.04 | % | |||||
Total Investments | $ | 4,831,360 | 100.0 | % | 2.18 | % | 5.71 | % | 6.56 | % | |||||