Alterra Capital 8K Regulation FD Disclosure | SEC 15 Sep 09

S P

’

Investor Call

Cagney Network

Overview of U.S. Federal Crop Insurance Plans and the potential

impact of changing crop commodity prices on indemnity payments

September 16, 2009

Exhibit 99.1

Agenda

U.S. Multiple Peril Crop Insurance (MPCI) –

Review of “The Basics”

plus Industry results

Overview of Federal Crop Insurance Corporation (FCIC) Insurance Plans

FCIC Insurance Plans –

Worked examples of Indemnity: APH v RA v CRC

FCIC Insurance Plans –

APH v RA v CRC –

Observations on the impact of

changes in crop commodity prices

2009 MPCI Premium split by Insurance Plan –

3 Major Crops v Industry

Max Agriculture Portfolio –

2008 Results, 2009 Expectations

Max Agriculture Portfolio 2009 –

Highlights

Q&A

Cat: loss of yield excess of a large deductible - 50% of production history

Buy-up: loss of yield excess of a smaller deductible - 15% to 50%

U.S. Multi-Peril Crop Insurance (MPCI) –

The Basics

What is multi-peril crop insurance (MPCI)?

MPCI has been administered by the Federal Crop Insurance Corporation (FCIC), an agency of USDA,

since the 1930s and provides the American farmer with a comprehensive insurance-based risk

management tool

Major legislation was enacted in 1980 enlisting, for the first time, private insurance companies to sell,

service and share MPCI risk under what is now known as the Standard Reinsurance Agreement (SRA)

Coverage is provided for loss of yield and/or revenue due to any act of nature

Losses due to drought or excessive rainfall/flood are the biggest concern

Major products:

Revenue: loss of revenue due to loss of yield and/or change in price

Government Subsidies

Subsidizes premium paid by farmers

Reimburses insurer for most of its administrative & operating costs

Provides attractive proportional and non-proportional reinsurance (SRA)

What are the most common causes of MPCI losses?

Multiple Peril Crop Insurance

Drought, 40%

Excess Moisture, 24%

Hail, 8%

Freeze, 5%

Heat, 4%

Disease, 4%

Other, 15%

U.S. Multi-Peril Crop Insurance (MPCI) –

The Basics

Why Crop Insurance?

Controlled

environment

–

Government

(FCIC)

oversees

all

aspects

MPCI

business

policy forms

underwriting

Rates

loss adjustment, etc.

Short tail –

Nearly all claims settled within 90 days following the end of the calendar year

Excellent statistical base

Does not aggregate with other property lines

SRA –

Government reinsurance program provides framework for risk selection

Good industry results

What is the Standard Reinsurance Agreement?

SRA –

A reinsurance contract between the government (FCIC) and the private insurance company

The SRA allows ceding companies to cede or designate each MPCI policy to one of the following

seven funds:

Assigned Risk

Developmental –

Cat

Developmental –

Buy-up

Developmental –

Revenue

Commercial –

Cat

Commercial –

Buy-up

Commercial –

Revenue

Ceding companies utilize historical experience, market knowledge and underwriting models to

determine fund allocation and net risk exposure

U.S. Multi-Peril Crop Insurance (MPCI) –

The Basics

U.S. Multi-Peril Crop insurance industry results have been good:

U.S. Multi-Peril Crop Insurance

Industry Results at 31 August 2009

Most recent significant industry loss years were 1988 (drought)

and 1993 (excess moisture)

Underwriting Gain/Loss Net of SRA is before deduction of Administrative and Operating (A&O)

and other expenses. Industry A&O and other expenses net of government reimbursement

are estimated to be approximately 5% of Retained Premium Net of SRA.

Figures in $ millions

Retained

Underwriting

Gross

Premium

Loss Ratio

Gain/Loss

Year

Premium

Net of SRA

Gross of SRA

Net of SRA

1998

1,876

1,592

89%

18%

1999

2,310

1,837

105%

15%

2000

2,540

1,894

102%

15%

2001

2,961

2,373

100%

15%

2002

2,915

2,294

139%

-2%

2003

3,431

2,606

95%

15%

2004

4,186

3,140

77%

22%

2005

3,949

3,044

60%

32%

2006

4,579

3,684

77%

23%

2007

6,563

5,156

54%

32%

2008 (est)

9,851

8,103

88%

15%

2009 (est)

8,800

7,200

Federal Crop Insurance Corporation –

Insurance Plans

Of the 2.05 million policies sold under the Federal Crop Insurance Program for 2009,

the

APH

(Actual

Production

History),

CRC

(Crop

Revenue

Coverage)

and

(Revenue

Assurance) insurance plans together accounted for 1.93 million or 94%. In terms of

Total Premium written for 2009, the split was 21%, 49% and 21% respectively or a total

of 91%. Fifteen other insurance plans made up the balance of 9%.

Actual Production History (APH): The farmer's yield history for the unit to be insured

(known

the

actual

production

history

"APH")

determines

the

farmer's

premium

rate as well as the farmer's yield guarantee. The guarantee is the product of the

farmer's APH and the selected coverage level. Coverage levels range from 50% to 85%

in 5% increments. USDA sets a maximum price for each commodity each year before

planting. Though farmers can elect a price level coverage between 55% and 100% of

this USDA price, most elect 100%. This insurance plan indemnifies the farmer for

harvested and/or appraised production less than the guarantee, so long as the

production loss was due to an insurable cause of loss for that policy, i.e. a named peril

as indicated in each individual crop provision.

Federal Crop Insurance Corporation –

Insurance Plans

(contd.)

Crop Revenue Coverage (CRC)

provides comprehensive protection for crops by establishing

a dollar guarantee based on the applicable futures market exchange early futures price (Base

Price) as indicated in each individual crop provision. The available coverage levels are 50%

to 85% (in 5% increments) of the APH yield which is multiplied by the applicable Base Price

to establish the initial dollar guarantee. Additional dollar protection is provided if the near

harvest futures price (Harvest Price) exceeds the Base Price (i.e. the dollar guarantee is

increased to reflect the higher Harvest Price). The value of production is determined by

multiplying the harvested and/or appraised production by the Harvest Price. The farmer is

indemnified when the value of production is less than the dollar

guarantee.

Revenue Assurance (RA)

provides comprehensive protection for crops by establishing a

dollar guarantee based on the Projected Harvest Price. The Projected Harvest Price is

established by using the applicable futures market exchange early futures price as indicated

in the crop and special provisions. Coverage levels of 65% to 85% (in 5% increments) of the

APH yield are available. The value of production is determined by multiplying the harvested

and/or appraised production by the Fall Harvest Price as indicated in the crop provisions.

The

farmer

indemnified

when

the

value

production

less

than

the

dollar

guarantee.

Crops can be insured under RA as optional units, basic units, enterprise units or whole-farm

units. A Fall Harvest Price Option coverage is also available which provides additional dollar

protection if the Fall Harvest Price increases above the Projected Harvest Price (similar to

CRC but for which an additional premium is paid).

Indemnity Payments –

Example: Corn

Assumptions - Corn

APH

CRC

(a)

Avg. Historical Yield (bushels/acre)

150

(b)

% Covered

70%

(c)

Insured Yield [ = (a) x (b) ]

105

(d)

Base (Early Season) Price

$4.20

(e)

Insured Value [ = (c) x (d) ]

$441.00

(f)

Premium Rate

7.9%

11.1%

11.6%

(g)

Premium [ = (f) x (e) ]

$34.77

$48.81

$51.17

FCIC Insurance Plans –

Loss Calculation Examples

APH

loss

calculation

example:

APH = 150 bu./acre

Coverage level = 70%

No. of acres = 100

Harvested / appraised production = 75 bu. / acre

Price Election = $4.20 per bu.

Loss Payment = [ (150 * 70% * 100) minus (75 * 100)] times $4.20

= $12,600.

FCIC Insurance Plans –

Loss Calculation Examples (contd.)

loss

calculation

example:

APH = 150 bu./acre

Coverage level = 70%

No. of acres = 100

Harvested / appraised production = 75 bu. / acre

Projected Harvest Price = $4.20 per bu.

Fall Harvest Price 1 = $4.20 per bu.

Fall Harvest Price 2 = $3.50 per bu.

Fall Harvest Price 3 = $4.50 per bu.

Fall Harvest Option Price = $5.00 per bu., i.e. $0.50 per bu. additional coverage, subject to Fall Harvest Price

being > Projected Harvest Price, i.e. using Fall Harvest Price 3

plus $0.50 = $5.0 per bu.

Loss

Payment

(using

Fall

Harvest

Price

[150

70%

100

$4.20]

minus

[75

100

$4.20]

12,600;

Loss

Payment

(using

Fall

Harvest

Price

[150

70%

100

$4.20]

minus

[75

100

$3.50]

$17,850;

Loss

Payment

(using

Fall

Harvest

Price

[150

70%

100

$4.20]

minus

[75

100

$4.50]

$10,350;

Loss

Payment

(using

Fall

Harvest

Option

Price)

[150

70%

100

$5.00]

minus

[75

100

$5.00]

$15,000.

FCIC Insurance Plans –

Loss Calculation Examples (contd.)

CRC

loss

calculation

example:

APH = 150 bu./acre

Coverage level = 70%

No. of acres = 100

Harvested / appraised production = 75 bu. / acre

Base Price = $4.20 per bu.

Harvest Price 1 = $4.20 per bu.

Harvest Price 2 = $3.50 per bu.

Harvest Price 3 = $4.50 per bu.

Loss

Payment

(using

Harvest

Price

[150

70%

100

$4.20]

minus

[75

100

$4.20]

$12,600;

Loss

Payment

(using

Harvest

Price

[150

70%

100

$4.20]

minus

[75

100

$3.50]

$17,850.

Loss

Payment

(using

Harvest

Price

[150

70%

100

$4.50]

minus

[75

100

$4.50]

$13,500.

Indemnity Payments –

Worked Examples

Assumptions - Corn

CRC

APH

(a)

Avg. Historical Yield (bushels/acre)

150

(b)

% Covered

70%

(c)

Insured Yield [ = (a) x (b) ]

105

(d)

Base (Early Season) Price

$4.20

(e)

Insured Value [ = (c) x (d) ]

$441.00

(f)

Premium Rate

11.6%

11.1%

7.9%

(g)

Premium [ = (f) x (e) ]

$51.17

$48.81

$34.77

Revenue Assurance - Dollars of Indemnity

Actual Yield

105

120

135

150

% Average Historical Yield Lost

Actual (Harvest) Price

% Chg

90%

80%

70%

60%

50%

40%

30%

20%

10%

$2.52

-40%

$403

$365

$328

$290

$252

$214

$176

$139

$101

$63

$2.94

-30%

$397

$353

$309

$265

$221

$176

$132

$88

$44

$3.36

-20%

$391

$340

$290

$239

$189

$139

$88

$38

$3.78

-10%

$384

$328

$271

$214

$158

$101

$44

$4.20

$378

$315

$252

$189

$126

$63

$4.62

10%

$372

$302

$233

$164

$94

$25

$5.04

20%

$365

$290

$214

$139

$63

$5.46

30%

$359

$277

$195

$113

$31

$5.88

40%

$353

$265

$176

$88

Crop Revenue Coverage - Dollars of Indemnity

Actual Yield

105

120

135

150

% Average Historical Yield Lost

Actual (Harvest) Price

% Chg

90%

80%

70%

60%

50%

40%

30%

20%

10%

$2.52

-40%

$403

$365

$328

$290

$252

$214

$176

$139

$101

$63

$2.94

-30%

$397

$353

$309

$265

$221

$176

$132

$88

$44

$3.36

-20%

$391

$340

$290

$239

$189

$139

$88

$38

$3.78

-10%

$384

$328

$271

$214

$158

$101

$44

$4.20

$378

$315

$252

$189

$126

$63

$4.62

10%

$416

$347

$277

$208

$139

$69

$5.04

20%

$454

$378

$302

$227

$151

$76

$5.46

30%

$491

$410

$328

$246

$164

$82

$5.88

40%

$529

$441

$353

$265

$176

$88

Actual Production History - Dollars of Indemnity

Actual Yield

105

120

135

150

% Average Historical Yield Lost

Actual (Harvest) Price

% Chg

90%

80%

70%

60%

50%

40%

30%

20%

10%

$2.52

-40%

$378

$315

$252

$189

$126

$63

$2.94

-30%

$378

$315

$252

$189

$126

$63

$3.36

-20%

$378

$315

$252

$189

$126

$63

$3.78

-10%

$378

$315

$252

$189

$126

$63

$4.20

$378

$315

$252

$189

$126

$63

$4.62

10%

$378

$315

$252

$189

$126

$63

$5.04

20%

$378

$315

$252

$189

$126

$63

$5.46

30%

$378

$315

$252

$189

$126

$63

$5.88

40%

$378

$315

$252

$189

$126

$63

Observations on the impact of changes in crop commodity

prices

Changes in crop commodity prices will impact loss payments in different ways:

Actual

Production

History

policy

–

changes

crop

commodity

prices

will

have

impact

on the

indemnity payment, which is determined strictly by yield shortfalls.

Revenue

Assurance

policy

(without

Harvest

Price

Option)*

–

increasing

crop

commodity prices

will help mitigate the loss that would otherwise have been payable in the event of a yield

shortfall. Decreasing crop commodity prices will however tend to

increase loss payments (as

seen in 2008).

Crop

Revenue

Coverage

policy

–

the

impact

changing

crop

commodity

prices

mixed

and

will depend on what happens to yields. 3 possibilities:

yields

flat

increasing

indemnity

payment

crop

commodity

prices

increase.

yields

down

50%

relative

insured

yield**

larger

price

increases

lead

increased indemnity payments, but these payments are LESS than they would be if prices

decreased by an equivalent amount.

yields

down

50%

100%

relative

insured

yield

larger

price

increases

lead

increased indemnity payments and these payments are MORE than they would be if prices

decreased by an equivalent amount.

* RA with Harvest Price Option is similar to CRC.

** Insured Yield is equal to Average Historical Yield times Coverage Level (%).

Indemnity Payments -

Graphs

$100

$200

$300

$400

$500

$600

Dollars of Indemnity

% of Average Historical Yield Lost

Price Change

Actual Production History

Indemnity Payments -

Graphs

$100

$200

$300

$400

$500

$600

Dollars of Indemnity

% of Average Historical Yield Lost

Price Change

Revenue Assurance

Indemnity Payments -

Graphs

$100

$200

$300

$400

$500

$600

Dollars of Indemnity

% of Average Historical Yield Lost

Price Change

Crop Revenue Coverage

2009 MPCI Premium Split by Coverage Type

3 Major Crops versus Industry (at 31 August 2009)

CROP

Total $

APH

CRC

Other

Total

Corn

3,298,246,938

61%

23%

100%

Soybean

1,909,493,425

11%

50%

30%

100%

Wheat

1,831,245,999

15%

59%

25%

100%

Total 3 Crops

7,038,986,362

10%

58%

25%

100%

Total 116 Crops (Industry)

8,715,649,036

21%

49%

21%

100%

Toal

3 Crops as % of Industry

81%

40%

95%

97%

61%

81%

Max

Agriculture

Portfolio

2008

Results

2009

Expectations

2008 Crop

Year

–

Results:

Ultimate

Combined

Ratio

projection

2009 unchanged from that of Q1 2009 and Q4 2008 “best estimate”, at 100%

gross/101% net of reinsurance.

2009 Crop

Year

–

Premium

Projections:

GWP

growth

minus

11%

expected for the U.S. MPCI Industry as a whole in view minus 20%+ crop

commodity price falls against U.S. MPCI Industry average original rate

increase of 0% to 5% plus some organic growth; However, Max Agriculture

GWP expected

grow

overall

2009

2008,

two

thirds

which

(6%)

represented by growth in our U.S. MPCI Quota Share treaty writings in view

increased number of Quota Share Clients.

2009 Crop

Year

–

Expected

Results:

Max

continues

believe

that

its

Agriculture account

well

positioned

for

profitable

growth

and

superior

returns and

for

2009

currently

expecting

record

Combined

Ratio

within the range 92% to 96%.

Max

Agriculture

Portfolio

2009

Highlights

Portfolio Composition

Quota Share

99%

Excess of Loss

Rate on Line Profile - by Premium

1.75% - 2.50%

11%

2.51% - 5.00%

22%

5.01% - 10.00%

29%

10.01% - 15.00%

33%

20.01% +

2009 Budget GWP $75M v Actual Q209 $87.4M

c.92% of Max Agriculture’s GWP is U.S. MPCI Quota Share

where premium rates are legislatively mandated and where all

coverages

and loss adjusting procedures are also set by the U.S.

Government.

Max’s broker market share of this U.S. MPCI Quota Share

business has increased by an est. 25% from 4.0% to 5.0% for

2009.

The remainder of our Quota Share book (7% of GWP) is made up

of U.S. Crop Hail and U.S. Named Peril Crop Insurance business.

Max Agriculture’s 2009 book shows improved geographical and

client spread over 2008.

Conservative

ROL

profile

book

–

avoid/minimize

layers.

Max MPCI Quota Share Portfolio - State Distribution

North Dakota

15%

Minnesota

10%

Iowa

Indiana

Illinois

Nebraska

South Dakota

California

Ohio

Texas

Other

20%

INFORMATION CONCERNING

FORWARD LOOKING STATEMENTS

This presentation includes statements about future economic performance, finances,

expectations,

plans

and

prospects

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.

For further information regarding cautionary statements and factors affecting

future

results,

please

refer

the

Company’s

most

recent

Annual

Report

Form 10-K

Quarterly Reports on Form 10-Q filed subsequent to the Annual Report

and other documents filed by the Company with the SEC. The Company 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 Inactive 8-KRegulation FD Disclosure