Exhibit 99.1
MAX CAPITAL GROUP LTD. REPORTS THIRD-QUARTER 2009 EARNINGS
Book Value per Diluted Share increased by 12.8% to $26.54
HAMILTON, BERMUDA, November 4, 2009—Max Capital Group Ltd. (NASDAQ: MXGL; BSX: MXGL BH) today reported net income of $95.3 million, or $1.64 per diluted share for the quarter ended September 30, 2009, compared to a net loss of $163.2 million, or $2.89 per diluted share for the quarter ended September 30, 2008.
Net operating income for the quarter ended September 30, 2009 was $53.7 million, or $0.92 per diluted share, compared to a net operating loss of $144.7 million, or $2.57 per diluted share for the quarter ended September 30, 2008. Annualized net operating return on average shareholders’ equity for the quarter ended September 30, 2009 was 14.8%.
W. Marston (Marty) Becker, Chairman and Chief Executive Officer of Max Capital Group Ltd., said: “Our strong third quarter results reflect positive underwriting performance from all segments and a significant increase in book value per share. Max’s underwriting results have benefited from the continued build out of our global platforms in both the U.S. and at Lloyd’s, and a benign Atlantic hurricane season. An improvement in the investment market has lifted the fair value of our investment portfolio, contributing to the substantial book value increase for the quarter.”
Highlights for the Quarter Ended September 30, 2009 include:
| | • | | Gross premiums written increased by $59.6 million (or 28.9%) to $265.9 million, net premiums written increased $72.4 million (or 65.7%) to $182.6 million and net premiums earned increased $66.4 million (or 46.9%) to $208.0 million compared to 2008 |
| | • | | Property & casualty combined ratio improved 8.1 percentage points to 90.9% compared to 2008 |
| | • | | Net favorable development on prior year loss reserves of $15.2 million |
| | • | | Net gains on other investments of $23.3 million compared to a net loss of $158.8 million in 2008 |
| | • | | Net operating income of $53.7 million or $0.92 per diluted share, representing an annualized net operating return on average shareholders’ equity of 14.8% |
| | • | | Book value per diluted share increased by 12.8% during the quarter to $26.54 at September 30, 2009 |
Gross premiums written from property and casualty underwriting for the quarter ended September 30, 2009 were $265.8 million, generated by the segments as follows: Bermuda/Dublin insurance $81.1 million; Bermuda/Dublin reinsurance $94.1 million; U.S. specialty $69.4 million; and Max at Lloyd’s $21.1 million.
Segment combined ratios were 80.2% for Bermuda/Dublin insurance, 94.9% for Bermuda/Dublin reinsurance, 99.7% for U.S. specialty and 84.2% for Max at Lloyd’s for the quarter ended September 30, 2009.
Gross premiums written increased by $0.2 million (or 0.2%) for Bermuda/Dublin insurance, $21.6 million (or 29.8%) for Bermuda/Dublin reinsurance and $16.5 million (or 31.2%) for U.S. specialty compared with the quarter ended September 30, 2008. There were no new contracts written within the life and annuity segment during the quarters ended September 30, 2009 and 2008.
Highlights for the Nine Months Ended September 30, 2009 include:
| | • | | Gross premiums written increased $214.5 million (or 24.3%) to $1,096.7 million, net premiums written increased $137.0 million (or 23.5%) to $719.3 million and net premiums earned increased $115.1 million (or 22.5%) to $627.1 million compared to 2008 |
| | • | | Property & casualty combined ratio rose 1.4 percentage points to 90.5% compared to 2008 |
| | • | | Net favorable development on prior year loss reserves of $47.5 million |
| | • | | Net gains on other investments of $62.7 million compared to a net loss of $145.0 million in 2008 |
| | • | | Net operating income of $148.4 million or $2.57 per diluted share, representing an annualized net operating return on average shareholders’ equity of 14.0% |
| | • | | Book value per diluted share increased by 18.2% to $26.54 at September 30, 2009 |
Gross premiums written from property and casualty underwriting for the nine months ended September 30, 2009 were $1,054.9 million, generated by the segments as follows: Bermuda/Dublin insurance $302.7 million; Bermuda/Dublin reinsurance $422.3 million; U.S. specialty $219.3 million; and Max at Lloyd’s $110.6 million.
Segment combined ratios were 81.6% for Bermuda/Dublin insurance, 93.0% for Bermuda/Dublin reinsurance, 99.5% for U.S. specialty and 89.9% for Max at Lloyd’s for the nine months ended September 30, 2009.
Gross premiums written increased $26.4 million (or 9.6%) for Bermuda/Dublin insurance, $44.8 million (or 11.9%) for Bermuda/Dublin reinsurance and $85.1 million (or 63.4%) for U.S. specialty compared with the nine months ended September 30, 2008. Gross premiums written for the life and annuity segment were $41.7 million for the nine months ended September 30, 2009, a decrease of $52.6 million compared with the nine months ended September 30, 2008.
Special Items
Presented separately from general and administrative expenses is the net benefit associated with the Company’s merger and acquisition activities, which resulted in a gain of $41.4 million and $0.5 million for the three months ended September 30, 2009 and 2008, respectively. On July 9, 2009, the Company received a $50.0 million termination fee in accordance with the terms of the amalgamation agreement with IPC Holdings, Ltd. The net gain of $41.4 million, after deducting $8.6 million of expenses, is included in the Company’s results for the three months ended September 30, 2009.
Investments and Balance Sheet
Cash and fixed maturity investments were $5.0 billion as of September 30, 2009, an increase of $425.5 million from December 31, 2008. Other investments were $389.5 million as of September 30, 2009 representing 7.2% of invested assets, a decrease from 14.1% of invested assets as at December 31, 2008. The Company’s liquidity position at September 30, 2009 is strong, with 70.2% or $3.5 billion of the Company’s $5.0 billion cash and fixed maturities portfolio held in cash, government and government agency-backed securities, or AAA-rated securities. The Company recognized other-than-temporary impairment losses through earnings of $0.1 million for the three months ended September 30, 2009, compared to impairment losses totaling $13.8 million during the same period in 2008. The decline in net investment income from a year ago reflects lower yields on the higher than normal cash and cash equivalents balance held by the Company as it rebalances its asset allocations and positions its portfolios for the changing fixed income markets.
During the quarter ended September 30, 2009, the Company committed to holding certain invested assets to maturity. The resulting ‘held to maturity’ portfolio is recorded at amortized cost, rather than at fair value. The fair value of those securities reclassified as held to maturity was $952.7 million on the date of reclassification, and this became the new cost base. The Company believes this strategy will reduce the volatility to shareholders’ equity caused by the recording of fair value movements within shareholders’ equity. The portfolio’s subsequent unrealized gain in fair value not reflected in the Company’s financial statements was $43.0 million at September 30, 2009, representing an increase to book value of 2.8% at September 30, 2009.
During the three and nine months ended September 30, 2009 the Company has significantly reduced its external borrowings. Total debt has been reduced by $375.0 million from $466.4 million at December 31, 2008 to $91.4 million at September 30, 2009.
Shareholders’ equity was $1,546.7 million at September 30, 2009. Book value per share at September 30, 2009 was $27.13, compared to $24.09 at June 30, 2009, an increase of 12.6%. Diluted book value per share at September 30, 2009 was $26.54 compared to $23.53 at June 30, 2009, an increase of 12.8%.
A copy of the Company’s financial supplement for the third quarter will be available on the Company’s website atwww.maxcapgroup.com shortly after the release of earnings.
The Company will host a conference call on Wednesday, November 4, 2009 at 10:00am (ET) to discuss this release with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-679-8035 (toll-free U.S.) or 1-617-213-4848 (international) and using access code 98165506. Live broadcast of the conference call will also be available through the Company’s website atwww.maxcapgroup.com.
Operating from offices in Bermuda, Ireland, the USA and at Lloyd’s, Max Capital Group Ltd. is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities, property and casualty insurers, and life and health insurers.
In presenting the Company’s results, management has included and discussed net operating income per diluted share, net operating return on average shareholders’ equity, book value per share and diluted book value per share. Such measures are “non-GAAP financial measures” as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of the Company’s business. These measures, however, should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such measures to their respective most directly comparable GAAP financial measures is presented in the attached financial information in accordance with Regulation G.
This release includes statements about future economic performance, finances, expectations, plans and prospects of Max Capital Group Ltd. 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 to the Company’s most recent Annual Report on 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.
MAX CAPITAL GROUP LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | |
| | | September 30,
2009 | | December 31,
2008 | |
| | | (Unaudited) | | | |
ASSETS | | | | | | | |
Cash and cash equivalents | | $ | 1,056,011 | | $ | 949,404 | |
Fixed maturities, trading at fair value | | | 74,337 | | | 61,820 | |
Fixed maturities, available for sale at fair value | | | 2,872,146 | | | 3,592,039 | |
Fixed maturities, held to maturity at amortized cost (fair value $1,069,245) | | | 1,026,244 | | | — | |
Other investments, at fair value | | | 389,515 | | | 753,658 | |
Accrued interest income | | | 52,145 | | | 52,882 | |
Premiums receivable | | | 546,195 | | | 554,845 | |
Losses and benefits recoverable from reinsurers | | | 985,614 | | | 846,622 | |
Deferred acquisition costs | | | 66,451 | | | 51,337 | |
Prepaid reinsurance premiums | | | 206,924 | | | 192,889 | |
Trades pending settlement | | | 38,217 | | | 85,727 | |
Other assets | | | 114,947 | | | 110,772 | |
| | | | | | | |
Total assets | | $ | 7,428,746 | | $ | 7,251,995 | |
| | | | | | | |
LIABILITIES | | | | | | | |
Property and casualty losses | | $ | 3,159,156 | | $ | 2,938,171 | |
Life and annuity benefits | | | 1,415,836 | | | 1,366,976 | |
Deposit liabilities | | | 152,638 | | | 219,260 | |
Funds withheld from reinsurers | | | 142,384 | | | 164,157 | |
Unearned property and casualty premiums | | | 676,342 | | | 574,134 | |
Reinsurance balances payable | | | 151,615 | | | 160,686 | |
Accounts payable and accrued expenses | | | 92,722 | | | 81,916 | |
Bank loans | | | — | | | 375,000 | |
Senior notes | | | 91,379 | | | 91,364 | |
| | | | | | | |
Total liabilities | | | 5,882,072 | | | 5,971,664 | |
| | | | | | | |
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; 57,013,063 (2008 - 55,805,790) shares issued and outstanding | | | 57,013 | | | 55,806 | |
Additional paid-in capital | | | 773,923 | | | 763,391 | |
Accumulated other comprehensive income (loss) | | | 41,602 | | | (45,399 | ) |
Retained earnings | | | 674,136 | | | 506,533 | |
| | | | | | | |
Total shareholders’ equity | | | 1,546,674 | | | 1,280,331 | |
| | | | | | | |
Total liabilities and shareholders’ equity | | $ | 7,428,746 | | $ | 7,251,995 | |
| | | | | | | |
Book Value Per Share | | $ | 27.13 | | $ | 22.94 | |
| | | | | | | |
Diluted Book Value Per Share | | $ | 26.54 | | $ | 22.46 | |
| | | | | | | |
Diluted Shares Outstanding | | | 58,272,865 | | | 57,017,157 | |
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30 | | | Nine Months Ended
September 30 | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
REVENUES | | | | | | | | | | | | | | | | |
Gross premiums written | | $ | 265,886 | | | $ | 206,260 | | | $ | 1,096,668 | | | $ | 882,186 | |
Reinsurance premiums ceded | | | (83,290 | ) | | | (96,061 | ) | | | (377,338 | ) | | | (299,851 | ) |
| | | | | | | | | | | | | | | | |
Net premiums written | | $ | 182,596 | | | $ | 110,199 | | | $ | 719,330 | | | $ | 582,335 | |
| | | | | | | | | | | | | | | | |
Earned premiums | | $ | 329,869 | | | $ | 238,378 | | | $ | 993,871 | | | $ | 760,676 | |
Earned premiums ceded | | | (121,853 | ) | | | (96,789 | ) | | | (366,788 | ) | | | (248,665 | ) |
| | | | | | | | | | | | | | | | |
Net premiums earned | | | 208,016 | | | | 141,589 | | | | 627,083 | | | | 512,011 | |
Net investment income | | | 42,830 | | | | 45,265 | | | | 125,073 | | | | 137,398 | |
Net gains (losses) on other investments | | | 23,275 | | | | (158,756 | ) | | | 62,693 | | | | (144,990 | ) |
Net realized gains (losses) on fixed maturities | | | 1,253 | | | | (3,793 | ) | | | 1,747 | | | | (1,024 | ) |
Total other-than-temporary impairment losses | | | — | | | | (13,757 | ) | | | (5,190 | ) | | | (16,887 | ) |
Portion of loss recognized in other comprehensive income (loss), before taxes | | | (139 | ) | | | — | | | | 3,037 | | | | — | |
| | | | | | | | | | | | | | | | |
Net impairment losses recognized in earnings | | | (139 | ) | | | (13,757 | ) | | | (2,153 | ) | | | (16,887 | ) |
Other income | | | 819 | | | | (423 | ) | | | 3,099 | | | | 1,001 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 276,054 | | | | 10,125 | | | | 817,542 | | | | 487,509 | |
| | | | | | | | | | | | | | | | |
LOSSES AND EXPENSES | | | | | | | | | | | | | | | | |
Net losses and loss expenses | | | 131,778 | | | | 106,834 | | | | 378,729 | | | | 278,585 | |
Claims and policy benefits | | | 14,378 | | | | 14,000 | | | | 84,117 | | | | 137,175 | |
Acquisition costs | | | 27,997 | | | | 13,896 | | | | 73,686 | | | | 35,743 | |
Interest expense | | | 5,971 | | | | 4,501 | | | | 14,654 | | | | 20,547 | |
Net foreign exchange losses (gains) | | | 406 | | | | 1,971 | | | | (6,474 | ) | | | 1,984 | |
Merger and acquisition expenses | | | (41,350 | ) | | | (500 | ) | | | (31,342 | ) | | | 3,488 | |
General and administrative expenses | | | 40,372 | | | | 31,837 | | | | 115,537 | | | | 90,048 | |
| | | | | | | | | | | | | | | | |
Total losses and expenses | | | 179,552 | | | | 172,539 | | | | 628,907 | | | | 567,570 | |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE TAXES | | | 96,502 | | | | (162,414 | ) | | | 188,635 | | | | (80,061 | ) |
Income tax expense | | | 1,176 | | | | 773 | | | | 5,012 | | | | 1,174 | |
| | | | | | | | | | | | | | | | |
NET INCOME (LOSS) | | | 95,326 | | | | (163,187 | ) | | | 183,623 | | | | (81,235 | ) |
Change in net unrealized gains and losses on fixed maturities, net of tax | | | 95,794 | | | | (40,127 | ) | | | 66,629 | | | | (108,939 | ) |
Foreign currency translation adjustment | | | (4,462 | ) | | | (9,116 | ) | | | 20,372 | | | | (17,469 | ) |
| | | | | | | | | | | | | | | | |
COMPREHENSIVE INCOME (LOSS) | | $ | 186,658 | | | $ | (212,430 | ) | | $ | 270,624 | | | $ | (207,643 | ) |
| | | | | | | | | | | | | | | | |
Net income per share - basic | | $ | 1.67 | | | $ | (2.89 | ) | | $ | 3.22 | | | $ | (1.43 | ) |
| | | | | | | | | | | | | | | | |
Net income per diluted share (1) | | $ | 1.64 | | | $ | (2.89 | ) | | $ | 3.18 | | | $ | (1.43 | ) |
| | | | | | | | | | | | | | | | |
Net operating income per diluted share | | $ | 0.92 | | | $ | (2.57 | ) | | $ | 2.57 | | | $ | (1.03 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - basic | | | 57,233,115 | | | | 56,385,134 | | | | 56,978,901 | | | | 56,660,457 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - diluted (1) | | | 58,210,501 | | | | 56,385,134 | | | | 57,677,996 | | | | 56,660,457 | |
| | | | | | | | | | | | | | | | |
| (1) | In accordance with U.S. generally accepted accounting principles, diluted earnings per share calculations use weighted average common shares outstanding - basic, for periods with a net loss |
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Nine Months Ended
September 30 | |
| | | 2009 | | | 2008 | |
Common shares | | | | | | | | |
Balance, beginning of period | | $ | 55,806 | | | $ | 57,515 | |
Issuance of common shares, net | | | 1,529 | | | | 2,315 | |
Repurchase of shares | | | (322 | ) | | | (3,860 | ) |
| | | | | | | | |
Balance, end of period | | | 57,013 | | | | 55,970 | |
| | | | | | | | |
Additional paid-in capital | | | | | | | | |
Balance, beginning of period | | | 763,391 | | | | 844,455 | |
Issuance of common shares, net | | | 457 | | | | 2,677 | |
Stock based compensation expense | | | 16,124 | | | | 14,726 | |
Repurchase of shares | | | (6,049 | ) | | | (102,380 | ) |
| | | | | | | | |
Balance, end of period | | | 773,923 | | | | 759,478 | |
| | | | | | | | |
Accumulated other comprehensive income (loss) | | | | | | | | |
Balance, beginning of period | | | (45,399 | ) | | | (20,341 | ) |
Holding gains (losses) on available for sale securities arising in period, net of tax | | | 66,650 | | | | (122,677 | ) |
Net realized losses on available for sale securities included in net income, net of tax | | | 3,016 | | | | 13,738 | |
Portion of other-than-temporary impairment losses recognised in other comprehensive income, net of tax | | | (3,037 | ) | | | — | |
Foreign currency translation adjustment | | | 20,372 | | | | (17,469 | ) |
| | | | | | | | |
Balance, end of period | | | 41,602 | | | | (146,749 | ) |
| | | | | | | | |
Retained earnings | | | | | | | | |
Balance, beginning of period | | | 506,533 | | | | 702,265 | |
Net income (loss) | | | 183,623 | | | | (81,235 | ) |
Dividends paid | | | (16,020 | ) | | | (15,247 | ) |
| | | | | | | | |
Balance, end of period | | | 674,136 | | | | 605,783 | |
| | | | | | | | |
Total shareholders’ equity | | $ | 1,546,674 | | | $ | 1,274,482 | |
| | | | | | | | |
MAX CAPITAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Nine Months Ended
September 30 | |
| | | 2009 | | | 2008 | |
OPERATING ACTIVITIES | | | | | | | | |
Net income (loss) | | $ | 183,623 | | | $ | (81,235 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | |
Stock based compensation | | | 16,124 | | | | 14,726 | |
Amortization of premium on fixed maturities | | | 2,503 | | | | 3,771 | |
Accretion of deposit liabilities | | | 2,078 | | | | 3,649 | |
Net (gains) losses on other investments | | | (62,693 | ) | | | 144,990 | |
Net realized (gains) losses on fixed maturities | | | (1,747 | ) | | | 1,024 | |
Net impairment losses recognized in earnings | | | 2,153 | | | | 16,887 | |
Changes in: | | | | | | | | |
Accrued interest income | | | 820 | | | | 1,461 | |
Premiums receivable | | | 12,894 | | | | (72,295 | ) |
Losses and benefits recoverable from reinsurers | | | (130,985 | ) | | | (140,869 | ) |
Deferred acquisition costs | | | (13,645 | ) | | | (7,381 | ) |
Prepaid reinsurance premiums | | | (11,907 | ) | | | (51,004 | ) |
Other assets | | | (2,624 | ) | | | 17,135 | |
Property and casualty losses | | | 183,163 | | | | 247,334 | |
Life and annuity benefits | | | 508 | | | | 55,057 | |
Funds withheld from reinsurers | | | (21,773 | ) | | | (10,306 | ) |
Unearned property and casualty premiums | | | 92,046 | | | | 121,510 | |
Reinsurance balances payable | | | (10,515 | ) | | | 48,358 | |
Accounts payable and accrued expenses | | | 9,828 | | | | 36,821 | |
| | | | | | | | |
Cash provided by operating activities | | | 249,851 | | | | 349,633 | |
| | | | | | | | |
INVESTING ACTIVITIES | | | | | | | | |
Purchases of available for sale securities | | | (783,451 | ) | | | (630,760 | ) |
Sales of available for sale securities | | | 175,465 | | | | 261,290 | |
Redemptions of available for sale securities | | | 479,310 | | | | 441,634 | |
Purchases of trading securities | | | (40,691 | ) | | | — | |
Sales of trading securities | | | 28,887 | | | | — | |
Redemptions of trading securities | | | 5,094 | | | | — | |
Purchases of held to maturity securities | | | (33,647 | ) | | | — | |
Net sales of other investments | | | 462,501 | | | | 28,251 | |
Acquisition of subsidiary, net of cash acquired | | | — | | | | (29,941 | ) |
| | | | | | | | |
Cash provided by investing activities | | | 293,468 | | | | 70,474 | |
| | | | | | | | |
FINANCING ACTIVITIES | | | | | | | | |
Net proceeds from issuance of common shares | | | 1,986 | | | | 4,992 | |
Repurchase of common shares | | | (6,371 | ) | | | (106,240 | ) |
Net repayments of bank loans | | | (375,000 | ) | | | (35,000 | ) |
Dividends paid | | | (16,020 | ) | | | (15,247 | ) |
Additions to deposit liabilities | | | 12,422 | | | | 15,762 | |
Payment of deposit liabilities | | | (80,748 | ) | | | (21,011 | ) |
| | | | | | | | |
Cash used in financing activities | | | (463,731 | ) | | | (156,744 | ) |
| | | | | | | | |
Effect of exchange rate on cash | | | 27,019 | | | | (8,090 | ) |
Net increase in cash and cash equivalents | | | 106,607 | | | | 255,273 | |
Cash and cash equivalents, beginning of period | | | 949,404 | | | | 397,656 | |
| | | | | | | | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 1,056,011 | | | $ | 652,929 | |
| | | | | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $4,943 and $14,892 for the nine months ended September 30, 2009 and 2008, respectively.
Corporate taxes paid totaled $310 and $185 for the nine months ended September 30, 2009 and 2008, respectively.
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2009 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year to Date Segment Information: | | Property & Casualty | | | Life &
Annuity | | | Corporate | | | Consolidated | |
| | | Bermuda/Dublin | | | U.S.
Specialty | | | Max at
Lloyd’s | | | Total | | | Reinsurance | | | | | | | |
| | | Insurance | | | Reinsurance | | | | | | | |
Gross premiums written | | $ | 302,727 | | | $ | 422,296 | | | $ | 219,268 | | | $ | 110,629 | | | $ | 1,054,920 | | | $ | 41,748 | | | $ | — | | | $ | 1,096,668 | |
Reinsurance premiums ceded | | | (146,076 | ) | | | (80,574 | ) | | | (118,579 | ) | | | (31,963 | ) | | | (377,192 | ) | | | (146 | ) | | | — | | | | (377,338 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 156,651 | | | $ | 341,722 | | | $ | 100,689 | | | $ | 78,666 | | | $ | 677,728 | | | $ | 41,602 | | | $ | — | | | $ | 719,330 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 307,709 | | | $ | 364,994 | | | $ | 185,609 | | | $ | 93,811 | | | $ | 952,123 | | | $ | 41,748 | | | $ | — | | | $ | 993,871 | |
Earned premiums ceded | | | (157,710 | ) | | | (74,711 | ) | | | (111,682 | ) | | | (22,539 | ) | | | (366,642 | ) | | | (146 | ) | | | — | | | | (366,788 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 149,999 | | | | 290,283 | | | | 73,927 | | | | 71,272 | | | | 585,481 | | | | 41,602 | | | | — | | | | 627,083 | |
Net investment income | | | 16,861 | | | | 29,607 | | | | 4,549 | | | | 3,216 | | | | 54,233 | | | | 37,626 | | | | 33,214 | | | | 125,073 | |
Net gains on other investments | | | 3,537 | | | | 8,467 | | | | — | | | | — | | | | 12,004 | | | | 29,146 | | | | 21,543 | | | | 62,693 | |
Net realized gains (losses) on fixed maturities | | | — | | | | — | | | | 148 | | | | 2,587 | | | | 2,735 | | | | — | | | | (988 | ) | | | 1,747 | |
Net impairment losses recognized in earnings | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,153 | ) | | | (2,153 | ) |
Other income | | | 1,238 | | | | 12 | | | | 272 | | | | 475 | | | | 1,997 | | | | — | | | | 1,102 | | | | 3,099 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 171,635 | | | | 328,369 | | | | 78,896 | | | | 77,550 | | | | 656,450 | | | | 108,374 | | | | 52,718 | | | | 817,542 | |
Net losses and loss expenses | | | 106,029 | | | | 192,756 | | | | 46,500 | | | | 33,444 | | | | 378,729 | | | | — | | | | — | | | | 378,729 | |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | 84,117 | | | | — | | | | 84,117 | |
Acquisition costs | | | (1,503 | ) | | | 53,496 | | | | 5,873 | | | | 14,797 | | | | 72,663 | | | | 1,023 | | | | — | | | | 73,686 | |
Interest expense | | | — | | | | 2,400 | | | | — | | | | — | | | | 2,400 | | | | 2,803 | | | | 9,451 | | | | 14,654 | |
Net foreign exchange gains | | | — | | | | — | | | | — | | | | (5,124 | ) | | | (5,124 | ) | | | — | | | | (1,350 | ) | | | (6,474 | ) |
Merger and acquisition expenses | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (31,342 | ) | | | (31,342 | ) |
General and administrative expenses | | | 17,825 | | | | 23,604 | | | | 21,195 | | | | 15,856 | | | | 78,480 | | | | 2,180 | | | | 34,877 | | | | 115,537 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 122,351 | | | | 272,256 | | | | 73,568 | | | | 58,973 | | | | 527,148 | | | | 90,123 | | | | 11,636 | | | | 628,907 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income before taxes | | $ | 49,284 | | | $ | 56,113 | | | $ | 5,328 | | | $ | 18,577 | | | $ | 129,302 | | | $ | 18,251 | | | $ | 41,082 | | | $ | 188,635 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 70.7 | % | | | 66.4 | % | | | 62.9 | % | | | 46.9 | % | | | 64.7 | % | | | | | | | | | | | | |
Combined Ratio (b) | | | 81.6 | % | | | 93.0 | % | | | 99.5 | % | | | 89.9 | % | | | 90.5 | % | | | | | | | | | | | | |
|
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED SEPTEMBER 30, 2009 (Unaudited) (Expressed in thousands of United States Dollars) | |
|
| | | | |
Quarter Segment Information: | | Property & Casualty | | | Life &
Annuity | | | Corporate | | | Consolidated | |
| | | Bermuda/Dublin | | | U.S.
Specialty | | | Max at
Lloyd’s | | | Total | | | Reinsurance | | | | | | | |
| | | Insurance | | | Reinsurance | | | | | | | |
Gross premiums written | | $ | 81,134 | | | $ | 94,118 | | | $ | 69,419 | | | $ | 21,087 | | | $ | 265,758 | | | $ | 128 | | | $ | — | | | $ | 265,886 | |
Reinsurance premiums ceded | | | (41,884 | ) | | | (11,106 | ) | | | (26,259 | ) | | | (4,015 | ) | | | (83,264 | ) | | | (26 | ) | | | — | | | | (83,290 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 39,250 | | | $ | 83,012 | | | $ | 43,160 | | | $ | 17,072 | | | $ | 182,494 | | | $ | 102 | | | $ | — | | | $ | 182,596 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 103,961 | | | $ | 128,458 | | | $ | 68,175 | | | $ | 29,147 | | | $ | 329,741 | | | $ | 128 | | | $ | — | | | $ | 329,869 | |
Earned premiums ceded | | | (54,814 | ) | | | (25,367 | ) | | | (37,074 | ) | | | (4,572 | ) | | | (121,827 | ) | | | (26 | ) | | | — | | | | (121,853 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 49,147 | | | | 103,091 | | | | 31,101 | | | | 24,575 | | | | 207,914 | | | | 102 | | | | — | | | | 208,016 | |
Net investment income | | | 5,898 | | | | 10,404 | | | | 1,461 | | | | 1,749 | | | | 19,512 | | | | 13,143 | | | | 10,175 | | | | 42,830 | |
Net gains on other investments | | | 1,298 | | | | 3,040 | | | | — | | | | — | | | | 4,338 | | | | 11,932 | | | | 7,005 | | | | 23,275 | |
Net realized gains (losses) on fixed maturities | | | — | | | | — | | | | — | | | | 1,400 | | | | 1,400 | | | | — | | | | (147 | ) | | | 1,253 | |
Net impairment losses recognized in earnings | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (139 | ) | | | (139 | ) |
Other income | | | 91 | | | | — | | | | 52 | | | | (33 | ) | | | 110 | | | | — | | | | 709 | | | | 819 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 56,434 | | | | 116,535 | | | | 32,614 | | | | 27,691 | | | | 233,274 | | | | 25,177 | | | | 17,603 | | | | 276,054 | |
Net losses and loss expenses | | | 31,756 | | | | 68,728 | | | | 21,266 | | | | 10,028 | | | | 131,778 | | | | — | | | | — | | | | 131,778 | |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | 14,378 | | | | — | | | | 14,378 | |
Acquisition costs | | | 369 | | | | 20,299 | | | | 1,926 | | | | 5,250 | | | | 27,844 | | | | 153 | | | | — | | | | 27,997 | |
Interest expense | | | — | | | | 1,706 | | | | — | | | | — | | | | 1,706 | | | | 2,349 | | | | 1,916 | | | | 5,971 | |
Net foreign exchange losses | | | — | | | | — | | | | — | | | | 42 | | | | 42 | | | | — | | | | 364 | | | | 406 | |
Merger and acquisition expenses | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (41,350 | ) | | | (41,350 | ) |
General and administrative expenses | | | 7,281 | | | | 8,857 | | | | 7,804 | | | | 5,423 | | | | 29,365 | | | | 829 | | | | 10,178 | | | | 40,372 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 39,406 | | | | 99,590 | | | | 30,996 | | | | 20,743 | | | | 190,735 | | | | 17,709 | | | | (28,892 | ) | | | 179,552 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income before taxes | | $ | 17,028 | | | $ | 16,945 | | | $ | 1,618 | | | $ | 6,948 | | | $ | 42,539 | | | $ | 7,468 | | | $ | 46,495 | | | $ | 96,502 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 64.6 | % | | | 66.7 | % | | | 68.4 | % | | | 40.8 | % | | | 63.4 | % | | | | | | | | | | | | |
Combined Ratio (b) | | | 80.2 | % | | | 94.9 | % | | | 99.7 | % | | | 84.2 | % | | | 90.9 | % | | | | | | | | | | | | |
| (a) | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. |
| (b) | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2008 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year to Date Segment Information: | | Property & Casualty | | | Life &
Annuity | | | Corporate | | | Consolidated | |
| | | Bermuda/Dublin | | | U.S.
Specialty | | | Max at
Lloyd’s (c) | | Total | | | Reinsurance | | | | | | | |
| | | Insurance | | | Reinsurance | | | | | | | |
Gross premiums written | | $ | 276,288 | | | $ | 377,485 | | | $ | 134,162 | | | $ | — | | $ | 787,935 | | | $ | 94,251 | | | $ | — | | | $ | 882,186 | |
Reinsurance premiums ceded | | | (133,099 | ) | | | (85,133 | ) | | | (81,334 | ) | | | — | | | (299,566 | ) | | | (285 | ) | | | — | | | | (299,851 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 143,189 | | | $ | 292,352 | | | $ | 52,828 | | | $ | — | | $ | 488,369 | | | $ | 93,966 | | | $ | — | | | $ | 582,335 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 278,092 | | | $ | 310,663 | | | $ | 77,670 | | | $ | — | | $ | 666,425 | | | $ | 94,251 | | | $ | — | | | $ | 760,676 | |
Earned premiums ceded | | | (140,991 | ) | | | (57,817 | ) | | | (49,571 | ) | | | — | | | (248,379 | ) | | | (286 | ) | | | — | | | | (248,665 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 137,101 | | | | 252,846 | | | | 28,099 | | | | — | | | 418,046 | | | | 93,965 | | | | — | | | | 512,011 | |
Net investment income | | | 13,313 | | | | 27,797 | | | | 5,563 | | | | — | | | 46,673 | | | | 29,932 | | | | 60,793 | | | | 137,398 | |
Net losses on other investments | | | (13,576 | ) | | | (29,638 | ) | | | — | | | | — | | | (43,214 | ) | | | (58,751 | ) | | | (43,025 | ) | | | (144,990 | ) |
Net realized losses on fixed maturities | | | — | | | | — | | | | (523 | ) | | | — | | | (523 | ) | | | — | | | | (501 | ) | | | (1,024 | ) |
Net impairment losses recognized in earnings | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | (16,887 | ) | | | (16,887 | ) |
Other income | | | 1,112 | | | | — | | | | 140 | | | | — | | | 1,252 | | | | — | | | | (251 | ) | | | 1,001 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 137,950 | | | | 251,005 | | | | 33,279 | | | | — | | | 422,234 | | | | 65,146 | | | | 129 | | | | 487,509 | |
Net losses and loss expenses | | | 108,819 | | | | 150,326 | | | | 19,440 | | | | — | | | 278,585 | | | | — | | | | — | | | | 278,585 | |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | — | | | | 137,175 | | | | — | | | | 137,175 | |
Acquisition costs | | | (1,945 | ) | | | 35,174 | | | | 2,058 | | | | — | | | 35,287 | | | | 456 | | | | — | | | | 35,743 | |
Interest expense | | | — | | | | 2,382 | | | | — | | | | — | | | 2,382 | | | | 2,096 | | | | 16,069 | | | | 20,547 | |
Net foreign exchange losses | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | 1,984 | | | | 1,984 | |
Merger and acquisition expenses | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | 3,488 | | | | 3,488 | |
General and administrative expenses | | | 16,052 | | | | 21,981 | | | | 20,599 | | | | — | | | 58,632 | | | | 2,273 | | | | 29,143 | | | | 90,048 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 122,926 | | | | 209,863 | | | | 42,097 | | | | — | | | 374,886 | | | | 142,000 | | | | 50,684 | | | | 567,570 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before taxes | | $ | 15,024 | | | $ | 41,142 | | | $ | (8,818 | ) | | $ | — | | $ | 47,348 | | | $ | (76,854 | ) | | $ | (50,555 | ) | | $ | (80,061 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 79.4 | % | | | 59.5 | % | | | 69.2 | % | | | | | | 66.6 | % | | | | | | | | | | | | |
Combined Ratio (b) | | | 89.7 | % | | | 82.1 | % | | | 149.8 | % | | | | | | 89.1 | % | | | | | | | | | | | | |
|
| SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED SEPTEMBER 30, 2008 (Unaudited) | |
| (Expressed in thousands of United States Dollars) | |
| | | | |
Quarter Segment Information: | | Property & Casualty | | | Life &
Annuity | | | Corporate | | | Consolidated | |
| | | Bermuda/Dublin | | | U.S.
Reinsurance | | | Max at
Lloyd’s (c) | | Total | | | Reinsurance | | | | | | | |
| | | Insurance | | | Reinsurance | | | | | | | |
Gross premiums written | | $ | 80,908 | | | $ | 72,458 | | | $ | 52,894 | | | $ | — | | $ | 206,260 | | | $ | — | | | $ | — | | | $ | 206,260 | |
Reinsurance premiums ceded | | | (38,316 | ) | | | (27,210 | ) | | | (30,535 | ) | | | — | | | (96,061 | ) | | | — | | | | — | | | | (96,061 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 42,592 | | | $ | 45,248 | | | $ | 22,359 | | | $ | — | | $ | 110,199 | | | $ | — | | | $ | — | | | $ | 110,199 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 93,264 | | | $ | 110,132 | | | $ | 34,982 | | | $ | — | | $ | 238,378 | | | $ | — | | | $ | — | | | $ | 238,378 | |
Earned premiums ceded | | | (47,013 | ) | | | (28,054 | ) | | | (21,722 | ) | | | — | | | (96,789 | ) | | | — | | | | — | | | | (96,789 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 46,251 | | | | 82,078 | | | | 13,260 | | | | — | | | 141,589 | | | | — | | | | — | | | | 141,589 | |
Net investment income | | | 4,933 | | | | 8,360 | | | | 1,753 | | | | — | | | 15,046 | | | | 9,347 | | | | 20,872 | | | | 45,265 | |
Net losses on other investments | | | (14,937 | ) | | | (32,637 | ) | | | — | | | | — | | | (47,574 | ) | | | (65,286 | ) | | | (45,896 | ) | | | (158,756 | ) |
Net realized losses on fixed maturities | | | — | | | | — | | | | (523 | ) | | | — | | | (523 | ) | | | — | | | | (3,270 | ) | | | (3,793 | ) |
Net impairment losses recognized in earnings | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | (13,757 | ) | | | (13,757 | ) |
Other income | | | — | | | | — | | | | 140 | | | | — | | | 140 | | | | — | | | | (563 | ) | | | (423 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 36,247 | | | | 57,801 | | | | 14,630 | | | | — | | | 108,678 | | | | (55,939 | ) | | | (42,614 | ) | | | 10,125 | |
Net losses and loss expenses | | | 39,014 | | | | 58,990 | | | | 8,830 | | | | — | | | 106,834 | | | | — | | | | — | | | | 106,834 | |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | — | | | | 14,000 | | | | — | | | | 14,000 | |
Acquisition costs | | | (743 | ) | | | 12,668 | | | | 1,773 | | | | — | | | 13,698 | | | | 198 | | | | — | | | | 13,896 | |
Interest expense | | | — | | | | (63 | ) | | | — | | | | — | | | (63 | ) | | | (148 | ) | | | 4,712 | | | | 4,501 | |
Net foreign exchange losses | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | 1,971 | | | | 1,971 | |
Merger and acquisition expenses | | | — | | | | — | | | | — | | | | — | | | — | | | | — | | | | (500 | ) | | | (500 | ) |
General and administrative expenses | | | 5,200 | | | | 6,186 | | | | 8,323 | | | | — | | | 19,709 | | | | 782 | | | | 11,346 | | | | 31,837 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 43,471 | | | | 77,781 | | | | 18,926 | | | | — | | | 140,178 | | | | 14,832 | | | | 17,529 | | | | 172,539 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss before taxes | | $ | (7,224 | ) | | $ | (19,980 | ) | | $ | (4,296 | ) | | $ | — | | $ | (31,500 | ) | | $ | (70,771 | ) | | $ | (60,143 | ) | | $ | (162,414 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 84.4 | % | | | 71.9 | % | | | 66.6 | % | | | | | | 75.5 | % | | | | | | | | | | | | |
Combined Ratio (b) | | | 94.0 | % | | | 94.8 | % | | | 142.7 | % | | | | | | 99.0 | % | | | | | | | | | | | | |
| (a) | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. |
| (b) | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
| (c) | The results of operations for the Max at Lloyd’s segment are consolidated only from the November 6, 2008 date of acquisition. |
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL PREMIUM DATA–NINE MONTHS ENDED SEPTEMBER 30, 2009 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | |
Gross Premiums Written by Type of Risk: | | Nine Months Ended
September 30, 2009 | | | | | | Nine Months Ended
September 30, 2008 | |
| | | Gross
Premiums
Written | | Percentage of
Total Gross
Premiums
Written | | | Movement
on Prior
Year
Period | | | Gross
Premiums
Written | | Percentage of
Total Gross
Premiums
Written | |
Property & Casualty: | | | | | | | | | | | | | | | |
Bermuda/Dublin Insurance: | | | | | | | | | | | | | | | |
Aviation | | $ | 30,314 | | 2.8 | % | | 38.6 | % | | $ | 21,870 | | 2.5 | % |
Excess Liability | | | 87,084 | | 7.9 | % | | (9.8 | %) | | | 96,557 | | 10.9 | % |
Professional Liability | | | 134,845 | | 12.3 | % | | 15.7 | % | | | 116,565 | | 13.2 | % |
Property | | | 50,484 | | 4.6 | % | | 22.2 | % | | | 41,296 | | 4.7 | % |
| | | | | | | | | | | | | | | |
| | | 302,727 | | 27.6 | % | | 9.6 | % | | | 276,288 | | 31.3 | % |
Bermuda/Dublin Reinsurance: | | | | | | | | | | | | | | | |
Agriculture | | | 87,338 | | 8.0 | % | | 8.9 | % | | | 80,220 | | 9.1 | % |
Aviation | | | 25,335 | | 2.3 | % | | (8.7 | %) | | | 27,746 | | 3.1 | % |
General Casualty | | | 23,404 | | 2.1 | % | | 184.1 | % | | | 8,239 | | 1.0 | % |
Marine & Energy | | | 14,722 | | 1.3 | % | | 86.5 | % | | | 7,892 | | 0.9 | % |
Medical Malpractice | | | 56,397 | | 5.1 | % | | (12.6 | %) | | | 64,555 | | 7.3 | % |
Other | | | 2,268 | | 0.2 | % | | (20.4 | %) | | | 2,849 | | 0.3 | % |
Professional Liability | | | 45,922 | | 4.2 | % | | 56.7 | % | | | 29,306 | | 3.3 | % |
Property | | | 89,414 | | 8.2 | % | | (8.6 | %) | | | 97,774 | | 11.1 | % |
Whole Account | | | 8,509 | | 0.8 | % | | (18.8 | %) | | | 10,481 | | 1.2 | % |
Workers’ Compensation | | | 68,987 | | 6.3 | % | | 42.5 | % | | | 48,423 | | 5.5 | % |
| | | | | | | | | | | | | | | |
| | | 422,296 | | 38.5 | % | | 11.9 | % | | | 377,485 | | 42.8 | % |
U.S. Specialty: | | | | | | | | | | | | | | | |
General Casualty | | | 69,026 | | 6.3 | % | | 61.1 | % | | | 42,849 | | 4.9 | % |
Marine | | | 45,917 | | 4.2 | % | | 78.5 | % | | | 25,723 | | 2.9 | % |
Property | | | 104,325 | | 9.5 | % | | 59.1 | % | | | 65,590 | | 7.4 | % |
| | | | | | | | | | | | | | | |
| | | 219,268 | | 20.0 | % | | 63.4 | % | | | 134,162 | | 15.2 | % |
Max at Lloyd’s (a): | | | | | | | | | | | | | | | |
Accident & Health | | | 21,357 | | 2.0 | % | | n/a | | | | — | | — | |
Financial Institutions | | | 18,376 | | 1.7 | % | | n/a | | | | — | | — | |
Professional Liability | | | 14,599 | | 1.3 | % | | n/a | | | | — | | — | |
Property | | | 56,297 | | 5.1 | % | | n/a | | | | — | | — | |
| | | | | | | | | | | | | | | |
| | | 110,629 | | 10.1 | % | | n/a | | | | — | | — | |
| | | | | | | | | | | | | | | |
Aggregate Property & Casualty | | $ | 1,054,920 | | 96.2 | % | | 33.9 | % | | $ | 787,935 | | 89.3 | % |
| | | | | | | | | | | | | | | |
Life & Annuity: | | | | | | | | | | | | | | | |
Annuity | | $ | — | | — | | | n/a | | | $ | 92,821 | | 10.5 | % |
Life | | | 41,748 | | 3.8 | % | | n/a | | | | 1,430 | | 0.2 | % |
| | | | | | | | | | | | | | | |
Aggregate Life & Annuity | | $ | 41,748 | | 3.8 | % | | (55.7 | %) | | $ | 94,251 | | 10.7 | % |
| | | | | | | | | | | | | | | |
Aggregate P&C and Life & Annuity | | $ | 1,096,668 | | 100.0 | % | | 24.3 | % | | $ | 882,186 | | 100.0 | % |
| | | | | | | | | | | | | | | |
| (a) | The results of operations for the Max at Lloyd’s segment are consolidated only from November 6, 2008, the date Max at Lloyd’s was acquired |
MAX CAPITAL GROUP LTD.
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (Unaudited)
Net Operating Income per Diluted Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30 | | | Nine Months Ended
September 30 | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Net income (loss) | | $ | 95,326 | | | $ | (163,187 | ) | | $ | 183,623 | | | $ | (81,235 | ) |
Net realized (gains) losses on fixed maturities, net of tax | | | (711 | ) | | | 17,065 | | | | 1,166 | | | | 17,532 | |
Foreign exchange losses (gains), net of tax | | | 395 | | | | 1,971 | | | | (5,043 | ) | | | 1,984 | |
Merger and acquisition expenses, net of tax | | | (41,350 | ) | | | (500 | ) | | | (31,342 | ) | | | 3,488 | |
| | | | | | | | | | | | | | | | |
Net operating income (loss) | | $ | 53,660 | | | $ | (144,651 | ) | | $ | 148,404 | | | $ | (58,231 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) per diluted share | | $ | 1.64 | | | $ | (2.89 | ) | | $ | 3.18 | | | $ | (1.43 | ) |
Net realized (gains) losses on fixed maturities, net of tax | | | (0.01 | ) | | | 0.30 | | | | 0.02 | | | | 0.31 | |
Foreign exchange losses (gains), net of tax | | | 0.01 | | | | 0.03 | | | | (0.09 | ) | | | 0.03 | |
Merger and acquisition expenses, net of tax | | | (0.72 | ) | | | (0.01 | ) | | | (0.54 | ) | | | 0.06 | |
| | | | | | | | | | | | | | | | |
Net operating income (loss) per diluted share | | $ | 0.92 | | | $ | (2.57 | ) | | $ | 2.57 | | | $ | (1.03 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - basic | | | 57,233,115 | | | | 56,385,134 | | | | 56,978,901 | | | | 56,660,457 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - diluted (1) | | | 58,210,501 | | | | 56,385,134 | | | | 57,677,996 | | | | 56,660,457 | |
| | | | | | | | | | | | | | | | |
| (1) | In accordance with U.S. generally accepted accounting principles, diluted earnings per share calculations use weighted average common shares outstanding - basic, for periods with a net loss |
Annualized Return and Annualized Net Operating Return on Average Shareholders’ Equity
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30 | | | Nine Months Ended
September 30 | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Net income (loss) | | $ | 95,326 | | | $ | (163,187 | ) | | $ | 183,623 | | | $ | (81,235 | ) |
Annualized net income (loss) | | | 381,304 | | | | (652,748 | ) | | | 244,831 | | | | (108,313 | ) |
Net operating income (loss) | | $ | 53,660 | | | $ | (144,651 | ) | | $ | 148,404 | | | $ | (58,231 | ) |
Annualized net operating income (loss) | | | 214,640 | | | | (578,604 | ) | | | 197,872 | | | | (77,641 | ) |
Beginning shareholders’ equity | | $ | 1,363,469 | | | $ | 1,489,556 | | | $ | 1,280,331 | | | $ | 1,583,894 | |
Ending shareholders’ equity | | | 1,546,674 | | | | 1,274,482 | | | | 1,546,674 | | | | 1,274,482 | |
Average shareholders’ equity | | | 1,455,072 | | | | 1,382,019 | | | | 1,413,503 | | | | 1,429,188 | |
Annualized return on average shareholders’ equity | | | 26.2 | % | | | (47.2 | %) | | | 17.3 | % | | | (7.6 | %) |
Annualized net operating return on average shareholders’ equity | | | 14.8 | % | | | (41.9 | %) | | | 14.0 | % | | | (5.4 | %) |
MAX CAPITAL GROUP LTD.
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA–NINE MONTHS ENDED SEPTEMBER 30, 2009 (Unaudited)
Selected Investment Return Data:
| | | | | | | | | | | | |
| | | | | Investment | | Credit | | | | Ratings |
Expressed in thousands of United States Dollars | | As at
September 30,
2009 | | Distribution | | Rating | | As at
September 30,
2009 | | Distribution |
Cash and Cash Equivalents | | $ | 1,056,011 | | 19.5% | | U.S. Government and Agencies (1) | | $ | 1,047,968 | | 26.4% |
| | | | | | | AAA | | | 677,434 | | 17.1% |
U.S. Government and Agencies | | | 437,967 | | 8.1% | | AA | | | 305,040 | | 7.7% |
Non-U.S. Government | | | 100,363 | | 1.9% | | A | | | 650,756 | | 16.4% |
Corporate Securities | | | 1,210,951 | | 22.3% | | BBB | | | 143,337 | | 3.6% |
Municipal Securities | | | 68,630 | | 1.3% | | BB | | | 32,607 | | 0.8% |
Asset-Backed Securities | | | 151,299 | | 2.8% | | B or lower | | | 89,341 | | 2.2% |
Residential Mortgage-Backed Securities | | | 689,497 | | 12.7% | | Fixed Maturities at fair value | | $ | 2,946,483 | | 74.2% |
Commercial Mortgage-Backed Securities | | | 287,776 | | 5.3% | | | | | | | |
| | | | | | | U.S. Government and Agencies | | $ | 14,041 | | 0.3% |
Fixed Maturities at fair value | | $ | 2,946,483 | | 54.4% | | AAA | | | 733,276 | | 18.5% |
| | | | | | | AA | | | 106,383 | | 2.7% |
| | | | | | | A | | | 158,387 | | 4.0% |
U.S. Government and Agencies | | $ | 14,041 | | 0.2% | | BBB | | | 12,685 | | 0.3% |
Non-U.S. Government | | | 585,906 | | 10.8% | | BB | | | — | | 0.0% |
Corporate Securities | | | 426,297 | | 7.9% | | B or lower | | | 1,472 | | 0.0% |
| | | | | | | | | | | | |
| | | | | | | Fixed Maturities at amortised cost | | $ | 1,026,244 | | 25.8% |
| | | | | | | | | | | | |
Fixed Maturities at amortised cost | | $ | 1,026,244 | | 18.9% | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | Total Fixed Maturities | | $ | 3,972,727 | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Periodic Rate of Return | | | |
| | | | | | | | | Last
3 Months | | | Year
to Date | | | Last
12 months | | | Last
60 months* | | | |
Cash and Fixed Maturities | | $ | 5,028,738 | | 92.8% | | | | 4.31% | | | 5.46% | | | 9.63% | | | 4.62% | | | |
| | | | | | | | | | | | | | | | | | | | | |
Convertible Arbitrage | | $ | — | | 0.0% | | | | 0.00% | | | 16.99% | | | 19.28% | | | (0.41% | ) | | |
Distressed Securities | | | 75,003 | | 1.4% | | | | 8.90% | | | 13.74% | | | 2.09% | | | 8.53% | | | |
Diversified Arbitrage | | | 35,289 | | 0.7% | | | | 4.42% | | | 7.85% | | | (12.54% | ) | | (2.39% | ) | | |
Emerging Markets | | | 29,174 | | 0.5% | | | | 10.09% | | | 32.09% | | | 3.64% | | | 8.33% | | | |
Event-Driven Arbitrage | | | 56,110 | | 1.0% | | | | 4.30% | | | 16.46% | | | (4.57% | ) | | 7.02% | | | |
Fixed Income Arbitrage | | | 17,029 | | 0.3% | | | | 3.62% | | | 16.30% | | | 22.64% | | | 12.70% | | | |
Global Macro | | | 43,634 | | 0.8% | | | | 1.86% | | | 8.50% | | | 8.46% | | | 6.50% | | | |
Long / Short Credit | | | 11,083 | | 0.2% | | | | 6.47% | | | 17.40% | | | 7.03% | | | 6.65% | | | |
Long / Short Equity | | | 116,893 | | 2.2% | | | | 4.67% | | | 10.52% | | | 9.02% | | | 5.48% | | | |
Opportunistic | | | 2,772 | | 0.1% | | | | (5.31% | ) | | (32.64% | ) | | (49.74% | ) | | (3.58% | ) | | |
Hedge Funds ** | | | 386,987 | | 7.2% | | | | 3.94% | | | 9.36% | | | 0.27% | | | 4.08% | | | |
Reinsurance Private Equity | | | 2,528 | | 0.0% | | | | 3.05% | | | 10.88% | | | 9.16% | | | 14.15% | | | |
| | | | | | | | | | | | | | | | | | | | | |
Other Investments | | $ | 389,515 | | 7.2% | | | | 3.94% | | | 9.38% | | | 0.32% | | | 3.76% | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total Investments | | $ | 5,418,253 | | 100.0% | | | | 4.26% | | | 6.04% | | | 7.66% | | | 4.79% | | | |
| | | | | | | | | | | | | | | | | | | | | |
Past performance should not be considered to be a reliable indicator of future performance.
| (1) | Included within U.S. Government and Agencies are Agency-issued Residential Mortgage-Backed Securities with a fair value of $610,001 |
| | |
Contacts Susan Spivak Bernstein Senior Vice President susan.spivak@maxcapservices.com 1-212-898-6640 | | Roanne Kulakoff Kekst and Company roanne-kulakoff@kekst.com 1-212-521-4837 |
