Alterra Capital 8-K Alterra Capital Reports Second Quarter 2010 Results

Exhibit 99.1

ALTERRA CAPITAL REPORTS SECOND QUARTER 2010 RESULTS

Net Operating Income of $0.64 per Diluted Share

HAMILTON, BERMUDA, August 3, 2010—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $103.4 million, or $1.13 per diluted share, for the second quarter of 2010, compared to net income of $43.8 million, or $0.76 per diluted share, for the same quarter of 2009. Alterra was formerly known as Max Capital Group Ltd. (“Max”) and was formed on May 12, 2010 by the merger of Max and Harbor Point Limited, a privately held company (“Harbor Point”).

Net operating income for the second quarter of 2010 was $58.8 million, or $0.64 per diluted share, compared to net operating income of $47.8 million, or $0.83 per diluted share, for the same quarter of 2009. Annualized net operating return on average shareholders’ equity for the second quarter of 2010 was 10.1%.

For the six months ended June 30, 2010, Alterra reported net income of $139.8 million, or $1.88 per diluted share, compared to net income of $88.3 million, or $1.54 per diluted share, for the same period of 2009. Net operating income for the six months ended June 30, 2010 was $99.5 million, or $1.33 per diluted share, compared to net operating income of $94.7 million, or $1.65 per diluted share, for the same period of 2009. Annualized net operating return on average shareholders’ equity for the six months ended June 30, 2010 was 10.2%.

The results for Alterra include the results for the former Harbor Point companies from the date of the consummation of the merger on May 12, 2010. Comparative figures for 2009 represent the former Max results only. As a result, a comparison of current and prior periods for the reinsurance segment are not meaningful. Selected pro forma combined results for periods prior to the merger are provided in the second quarter financial supplement available on Alterra’s website.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “This quarter represents the first quarter of results for Alterra, the product of the merger of Max and Harbor Point. We firmly believe the merger has created a stronger, more flexible organization that will provide enhanced value to our clients and shareholders.

“During the quarter, two significant events followed on from the merger. First, Alterra received a financial strength rating of “A (Excellent)” from A.M. Best Co., and second, Alterra made a special dividend distribution to all shareholders of $2.50 per common share. We regard each of these events as a positive indicator of Alterra’s strong capital position and responsible capital management.

“This was a transitional quarter for Alterra, as it does not reflect a full quarter’s results for the former Harbor Point companies. Another quarter will be needed before our income fully reflects the earnings power of our combined operations. However, we have already begun to enjoy the benefits of the merger as evidenced by the increase in the contribution of the reinsurance segment to our business mix.

“Generally soft market conditions continue to present a challenge to insurers and reinsurers, Alterra included. We have managed our premium volumes with the long term in mind, scaling back in areas with softer pricing. The larger, more diversified Alterra has the balance and flexibility to efficiently allocate capital and resources to expand or retract as conditions warrant,” Mr. Becker added.

Second quarter 2010 results for Alterra include:

• Property and casualty gross premiums written of $398.2 million, representing an increase of $42.7 million, or 12.0%; net premiums written of $318.5 million, representing an increase of $92.7 million, or 41.0%; and net premiums earned of $292.5 million, representing an increase of $104.7 million, or 55.8%; each as compared to the same quarter of 2009;

• Property and casualty combined ratio of 83.3% compared to 90.8% in the same quarter of 2009;

• Property catastrophe event and significant per-risk net losses of $20.3 million compared to $5.5 million in net losses of a similar nature in the same quarter of 2009;

• Net favorable development on prior years’ loss reserves of $24.1 million, or 8.3 combined ratio points, compared to $20.0 million, or 10.7 combined ratio points, in the same quarter of 2009;

• Net investment income of $53.3 million compared to $41.8 million in the same quarter of 2009, an increase of 27.6%;

• Net operating income of $58.8 million, or $0.64 per diluted share, representing an annualized net operating return on average shareholders’ equity of 10.1%; and

• A negative goodwill gain of $95.8 million, partly offset by merger and acquisition costs of $41.2 million.

Gross premiums written from property and casualty underwriting for the second quarter of 2010 were $398.2 million, generated by the segments as follows: insurance - $132.3 million; reinsurance - $119.6 million; U.S. specialty - $97.5 million; and Alterra at Lloyd’s - $48.8 million. Included in the reinsurance segment gross premiums written were $40.8 million from the former Harbor Point companies representing their gross premiums written from the date of the consummation of the merger on May 12, 2010.

Segment combined ratios for the second quarter of 2010 were 76.9% for insurance, 83.5% for reinsurance, 97.3% for U.S. specialty and 73.2% for Alterra at Lloyd’s.

Gross premiums written for the second quarter of 2010 decreased by $1.6 million, or (1.2)%, for insurance and increased by $24.4 million, or 25.6%, for reinsurance compared with the same quarter of 2009. Gross premiums written increased by $16.5 million, or 20.3%, for U.S. specialty, and by $3.4 million, or 7.6%, for Alterra at Lloyd’s. There were no new contracts written within the life and annuity segment during the second quarter of 2010. Due to the lack of profitable business opportunities and low investment yields in the current investment environment, Alterra has not identified any life and annuity transactions that have met its return hurdles. Consequently, Alterra has determined not to write any new life and annuity reinsurance in the foreseeable future.

Results for the six months ended June 30, 2010 include:

• Property and casualty gross premiums written of $768.5 million, representing a decrease of $20.7 million, or (2.6)%; net premiums written of $535.7 million, representing an increase of $40.4 million, or 8.2%; and net premiums earned of $486.0 million, representing an increase of $108.4 million, or 28.7%; each as compared to the same period of 2009;

• Property and casualty combined ratio of 86.2% compared to 90.3% in the same period of 2009;

• Property catastrophe event and significant per-risk losses of $29.9 million compared to $8.9 million in the same period of 2009;

• Net favorable development on prior years’ loss reserves of $41.2 million, or 8.5 combined ratio points, compared to $32.3 million, or 8.6 combined ratio points, in the same period of 2009;

• Net investment income of $101.7 million compared to $82.2 million in the same period of 2009, an increase of 23.6%; and

• Net operating income of $99.5 million, or $1.33 per diluted share, representing an annualized net operating return on average shareholders’ equity of 10.2%.

Gross premiums written from property and casualty underwriting for the six months ended June 30, 2010 were $768.5 million, generated by the segments as follows: insurance - $198.7 million; reinsurance - $274.4 million; U.S. specialty - $174.4 million; and Alterra at Lloyd’s - $120.9 million.

Segment combined ratios for the six months ended June 30, 2010 were 81.2% for insurance, 86.6% for reinsurance, 97.9% for U.S. specialty and 77.6% for Alterra at Lloyd’s.

Gross premiums written for the six months ended June 30, 2010 decreased by $22.9 million, or (10.3)%, for insurance and by $53.7 million, or (16.4)%, for reinsurance compared with the same period of 2009. Gross premiums written increased by $24.5 million, or 16.4%, for U.S. specialty and by $31.4 million, or 35.0%, for Alterra at Lloyd’s. There were no new contracts written within the life and annuity segment during the six months ended June 30, 2010.

Balance Sheet

Alterra’s balance sheet at June 30, 2010 comprises the combined assets and liabilities of Max and Harbor Point. Total invested assets, including cash and cash equivalents, were $7.7 billion at June 30, 2010, an increase of $2.5 billion from December 31, 2009. The credit quality of Alterra’s fixed maturities investment portfolio remains high. At June 30, 2010, 96.6% of the fixed maturities portfolio (by carrying value) was investment-grade, compared to 96.6% at December 31, 2009. Alterra recognized other-than-temporary impairment losses through earnings of $0.3 million for the second quarter of 2010, compared to $2.0 million of impairment losses during the same quarter of 2009. As of June 30, 2010, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.33% and the weighted average duration was 4.0 years.

Net investment income for the second quarter of 2010 increased to $53.3 million from $41.8 million for the same quarter of 2009, and to $101.7 million from $82.2 million for the six months ended June 30, 2010 and 2009, respectively. The increase in net investment income reflects the additional investment income from the Harbor Point investment portfolio from the consummation of the merger on May 12, 2010, and an increased allocation to higher-yielding fixed maturity securities.

On June 16, 2010, Alterra paid a special dividend of $2.50 per share to shareholders of record as of June 2, 2010. Under the Board-approved share repurchase authorization, Alterra commenced repurchases under a 10b-5 share repurchase program on June 28, 2010, purchasing 109,000 shares during the second quarter of 2010 at an average price of $18.87 per share. Separately, Alterra repurchased 1,482,674 of its common shares on June 30, 2010 at a price of $19.00 per share for a total purchase price of $28.2 million. At June 30, 2010, $91.1 million remained under the Board-approved share repurchase authorization.

Shareholders’ equity was $2,927.0 million at June 30, 2010, an increase of 87.1% from December 31, 2009. Book value per diluted share at June 30, 2010 was $24.55 compared to $27.36 at December 31, 2009, a decrease of 10.3%, principally due to the payment of a $2.50 per share special dividend paid shortly after the consummation of the merger and the impact of acquisition accounting adjustments.

A copy of Alterra’s financial supplement for the second quarter will be available on Alterra’s website atwww.alterracap.com shortly after the release of earnings.

Alterra will host a conference call on Wednesday, August 4, 2010 at 10:00am (EDT) to discuss its second quarter results with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-713-4214 (toll-free U.S.) or 1-617-213-4866 (international) and using access code 34061384. A live broadcast of the conference call will also be available through Alterra’s website atwww.alterracap.com.

Alterra Capital Holdings Limited 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. Alterra was formed on May 12, 2010 by the merger of Max Capital Group Ltd. and Harbor Point Limited.

Non-GAAP Financial Measures

In presenting Alterra’s results, management has included and discussed net operating income, net operating income per diluted share, annualized net operating return on average shareholders’ equity and diluted tangible book value per share. These 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 Alterra’s business. These measures, however, should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The reconciliation of these measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.

Cautionary Note Regarding Forward-Looking Statements

This release may include forward-looking statements that reflect Alterra’s current views with respect to future events and financial performance. These 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 Alterra’s future results, please refer to the 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 Alterra with the SEC. Alterra 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 HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except per share and share amounts)

	June 30, 2010		December 31, 2009
	(unaudited)
ASSETS
Cash and cash equivalents	$	741,684	$	702,278
Fixed maturities, trading at fair value		230,251		228,696
Fixed maturities, available for sale at fair value		5,451,969		3,007,356
Fixed maturities, held to maturity at amortized cost (fair value $967,303)		871,651		1,005,947
Other investments, at fair value		436,757		318,073
Accrued interest income		67,561		57,215
Premiums receivable		780,025		567,301
Losses and benefits recoverable from reinsurers		962,442		1,001,373
Deferred acquisition costs		89,881		65,648
Prepaid reinsurance premiums		207,102		190,613
Trades pending settlement		—		76,031
Goodwill and intangible assets		60,670		48,686
Other assets		74,943		70,529
Total assets	$	9,974,936	$	7,339,746
LIABILITIES
Property and casualty losses	$	3,772,622	$	3,178,094
Life and annuity benefits		1,209,031		1,372,513
Deposit liabilities		147,727		152,629
Funds withheld from reinsurers		120,324		140,079
Unearned property and casualty premiums		1,090,323		628,161
Reinsurance balances payable		295,979		146,085
Accounts payable and accrued expenses		81,846		67,088
Trades pending settlement		39,641		—
Bank loans		200,000		—
Senior notes		90,476		90,464
Total liabilities		7,047,969		5,775,113
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; 118,643,363 (2009 - 55,867,125) shares issued and outstanding		118,643		55,867
Additional paid-in capital		2,157,700		752,309
Accumulated other comprehensive income		102,718		25,431
Retained earnings		547,906		731,026
Total shareholders’ equity		2,926,967		1,564,633
Total liabilities and shareholders’ equity	$	9,974,936	$	7,339,746
Book value per share	$	24.67	$	28.01
Diluted book value per share	$	24.55	$	27.36
Diluted tangible book value per share [a]	$	24.04	$	26.51
Diluted shares outstanding		119,240,654		57,178,458

[a] Non-Gaap measure as defined by Regulation G.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
REVENUES
Gross premiums written	$	398,981		$	396,509		$	770,120		$	830,782
Reinsurance premiums ceded		(79,715	)		(129,669	)		(232,935	)		(294,048	)
Net premiums written	$	319,266		$	266,840		$	537,185		$	536,734
Earned premiums	$	391,723		$	354,620		$	696,720		$	664,002
Earned premiums ceded		(98,463	)		(125,835	)		(209,220	)		(244,935	)
Net premiums earned		293,260			228,785			487,500			419,067
Net investment income		53,277			41,755			101,667			82,243
Net realized and unrealized (losses) gains on investments		(14,786	)		21,472			(8,364	)		39,913
Total other-than-temporary impairment losses		(1,167	)		(5,190	)		(1,865	)		(5,190	)
Portion of loss recognized in other comprehensive income (loss), before taxes		867			3,176			1,145			3,176
Net impairment losses recognized in earnings		(300	)		(2,014	)		(720	)		(2,014	)
Other income		275			974			619			2,280
Total revenues		331,726			290,972			580,702			541,489
LOSSES AND EXPENSES
Net losses and loss expenses		159,817			122,228			284,782			246,951
Claims and policy benefits		13,943			55,407			31,602			69,739
Acquisition costs		48,798			25,059			73,042			45,689
Interest expense		7,916			4,744			12,858			8,683
Net foreign exchange gains		(634	)		(3,404	)		(3,086	)		(6,880	)
Merger and acquisition expenses		(54,570	)		4,785			(49,826	)		10,008
General and administrative expenses		50,649			36,105			87,177			75,165
Total losses and expenses		225,919			244,924			436,549			449,355
INCOME BEFORE TAXES		105,807			46,048			144,153			92,134
Income tax expense		2,360			2,290			4,325			3,837
NET INCOME [a]		103,447			43,758			139,828			88,297
Change in net unrealized gains and losses on fixed maturities, net of tax		60,525			36,933			94,656			(29,165	)
Foreign currency translation adjustment		(7,629	)		20,925			(17,369	)		24,834
COMPREHENSIVE INCOME [a]	$	156,343		$	101,616		$	217,115		$	83,966
Basic earnings per share	$	1.14		$	0.77		$	1.90		$	1.55
Diluted earnings per share	$	1.13		$	0.76		$	1.88		$	1.54
Net operating income per diluted share	$	0.64		$	0.83		$	1.33		$	1.65
Weighted average shares outstanding - basic		91,042,301			57,066,298			73,779,447			56,851,795
Weighted average shares outstanding - diluted		91,661,430			57,638,446			74,524,919			57,411,744

[a] Includes the results of Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(Expressed in thousands of United States Dollars)

	Six Months Ended June 30
	2010			2009
Common shares
Balance, beginning of period	$	55,867		$	55,806
Issuance of common shares, net		64,983			904
Repurchase of shares		(2,207	)		(111	)
Balance, end of period		118,643			56,599
Additional paid-in capital
Balance, beginning of period		752,309			763,391
Issuance of common shares, net		1,417,316			(95	)
Stock based compensation expense		30,241			10,727
Repurchase of shares		(42,166	)		(1,976	)
Balance, end of period		2,157,700			772,047
Accumulated other comprehensive income (loss)
Balance, beginning of period		25,431			(45,399	)
Holding gains (losses) on available for sale securities arising in period [a]		99,001			(28,715	)
Net realized (gains) losses on available for sale securities included in net income [a]		(3,200	)		2,726
Portion of other-than-temporary impairment losses recognised in other comprehensive income [a]		(1,145	)		(3,176	)
Foreign currency translation adjustment		(17,369	)		24,834
Balance, end of period		102,718			(49,730	)
Retained earnings
Balance, beginning of period		731,026			506,533
Net income		139,828			88,297
Dividends		(322,948	)		(10,277	)
Balance, end of period		547,906			584,553
Total shareholders’ equity	$	2,926,967		$	1,363,469

[a] Net of tax

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

	Six Months Ended June 30
	2010			2009
OPERATING ACTIVITIES
Net income	$	139,828		$	88,297
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation		30,241			10,727
Amortization of premium on fixed maturities		4,798			2,048
Accretion of deposit liabilities		2,754			1,440
Net realized and unrealized losses (gains) on investments		8,364			(39,913	)
Net impairment losses recognized in earnings		720			2,014
Negative goodwill gain		(95,788	)		—
Changes in:
Accrued interest income		5,133			5,450
Premiums receivable		150,598			(106,798	)
Losses and benefits recoverable from reinsurers		(4,706	)		(74,749	)
Deferred acquisition costs		(22,681	)		(17,036	)
Prepaid reinsurance premiums		(25,170	)		(50,996	)
Other assets		6,412			4,437
Property and casualty losses		(212,784	)		75,859
Life and annuity benefits		(19,532	)		16,276
Funds withheld from reinsurers		(19,754	)		(23,331	)
Unearned property and casualty premiums		94,146			159,763
Reinsurance balances payable		146,084			27,405
Accounts payable and accrued expenses		(14,882	)		(28,598	)
Cash provided by operating activities		173,781			52,295
INVESTING ACTIVITIES
Purchases of available for sale securities		(1,030,431	)		(487,944	)
Sales of available for sale securities		264,405			139,161
Redemptions/maturities of available for sale securities		527,854			331,362
Purchases of trading securities		(27,913	)		(25,393	)
Sales of trading securities		1,153			28,539
Redemptions/maturities of trading securities		12,975			2,896
Purchases of held to maturity securities		(14,682	)		—
Redemptions/maturities of held to maturity securities		16,570			—
Net purchases/sales of other investments		59,897			334,051
Acquisition of subsidiary, net of cash acquired		446,819			—
Cash provided by investing activities		256,647			322,672
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		1,075			809
Repurchase of common shares		(44,373	)		(2,087	)
Net repayments of bank loans		—			(270,000	)
Dividends paid		(321,396	)		(10,277	)
Additions to deposit liabilities		2,997			12,073
Payment of deposit liabilities		(9,873	)		(78,991	)
Cash used in financing activities		(371,570	)		(348,473	)
Effect of exchange rate changes on foreign currency cash and cash equivalents		(19,452	)		32,280
Net increase in cash and cash equivalents		39,406			58,774
Cash and cash equivalents, beginning of period		702,278			949,404
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	741,684		$	1,008,178
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid totaled $9,918 and $8,895 for the six months ended June 30, 2010 and 2009, respectively.

Corporate taxes paid totaled $729 and $nil for the six months ended June 30, 2010 and 2009, respectively.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED JUNE 30, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

	Property & Casualty															Life & Annuity
Quarter Segment Information [c]:	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance			Corporate			Consolidated
Gross premiums written	$	132,312		$	119,578		$	97,487		$	48,802		$	398,179		$	802		$	—		$	398,981
Reinsurance premiums ceded		(46,257	)		(13,348	)		(6,852	)		(13,233	)		(79,690	)		(25	)		—			(79,715	)
Net premiums written	$	86,055		$	106,230		$	90,635		$	35,569		$	318,489		$	777		$	—		$	319,266
Earned premiums	$	99,874		$	174,729		$	76,032		$	40,286		$	390,921		$	802		$	—		$	391,723
Earned premiums ceded		(43,676	)		(19,054	)		(28,588	)		(7,120	)		(98,438	)		(25	)		—			(98,463	)
Net premiums earned		56,198			155,675			47,444			33,166			292,483			777			—			293,260
Net investment income		6,261			13,708			1,315			3,035			24,319			12,420			16,538			53,277
Net realized and unrealized losses on investments		(103	)		(97	)		(1	)		(1,284	)		(1,485	)		(1,860	)		(11,441	)		(14,786	)
Net impairment losses recognized in earnings		—			—			—			—			—			—			(300	)		(300	)
Other income		—			155			97			173			425			—			(150	)		275
Total revenues		62,356			169,441			48,855			35,090			315,742			11,337			4,647			331,726
Net losses and loss expenses		35,927			82,441			29,052			12,397			159,817			—			—			159,817
Claims and policy benefits		—			—			—			—			—			13,943			—			13,943
Acquisition costs		797			32,673			9,135			6,070			48,675			123			—			48,798
Interest expense		240			3,357			—			—			3,597			2,676			1,643			7,916
Net foreign exchange losses (gains)		—			489			—			(1,182	)		(693	)		—			59			(634	)
Merger and acquisition expenses		—			—			—			—			—			—			(54,570	)		(54,570	)
General and administrative expenses		6,501			14,820			7,986			5,826			35,133			642			14,874			50,649
Total losses and expenses		43,465			133,780			46,173			23,111			246,529			17,384			(37,994	)		225,919
Income (loss) before taxes	$	18,891		$	35,661		$	2,682		$	11,979		$	69,213		$	(6,047	)	$	42,641		$	105,807
Loss Ratio [a]		63.9	%		53.0	%		61.2	%		37.4	%		54.6	%
Combined Ratio [b]		76.9	%		83.5	%		97.3	%		73.2	%		83.3	%
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–SIX MONTHS ENDED JUNE 30, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
	Property & Casualty															Life & Annuity
Year to Date Segment Information [c]:	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance			Corporate			Consolidated
Gross premiums written	$	198,733		$	274,429		$	174,374		$	120,919		$	768,455		$	1,665		$	—		$	770,120
Reinsurance premiums ceded		(84,833	)		(58,699	)		(56,079	)		(33,192	)		(232,803	)		(132	)		—			(232,935	)
Net premiums written	$	113,900		$	215,730		$	118,295		$	87,727		$	535,652		$	1,533		$	—		$	537,185
Earned premiums	$	196,915		$	270,472		$	149,922		$	77,746		$	695,055		$	1,665		$	—		$	696,720
Earned premiums ceded		(90,922	)		(35,012	)		(68,565	)		(14,589	)		(209,088	)		(132	)		—			(209,220	)
Net premiums earned		105,993			235,460			81,357			63,157			485,967			1,533			—			487,500
Net investment income		12,430			24,612			2,656			5,052			44,750			25,519			31,398			101,667
Net realized and unrealized gains (losses) on investments		203			221			(1	)		(1,466	)		(1,043	)		4,056			(11,377	)		(8,364	)
Net impairment losses recognized in earnings		—			—			—			—			—			—			(720	)		(720	)
Other income		(11	)		155			102			351			597			(28	)		50			619
Total revenues		118,615			260,448			84,114			67,094			530,271			31,080			19,351			580,702
Net losses and loss expenses		73,206			132,506			50,415			28,655			284,782			—			—			284,782
Claims and policy benefits		—			—			—			—			—			31,602			—			31,602
Acquisition costs		488			47,639			12,809			11,837			72,773			269			—			73,042
Interest expense		474			5,058			—			—			5,532			4,039			3,287			12,858
Net foreign exchange losses (gains)		—			489			—			(3,891	)		(3,402	)		—			316			(3,086	)
Merger and acquisition expenses		—			—			—			—			—			—			(49,826	)		(49,826	)
General and administrative expenses		12,398			23,779			16,458			8,539			61,174			1,299			24,704			87,177
Total losses and expenses		86,566			209,471			79,682			45,140			420,859			37,209			(21,519	)		436,549
Income (loss) before taxes	$	32,049		$	50,977		$	4,432		$	21,954		$	109,412		$	(6,129	)	$	40,870		$	144,153
Loss Ratio [a]		69.1	%		56.3	%		62.0	%		45.4	%		58.6	%
Combined Ratio [b]		81.2	%		86.6	%		97.9	%		77.6	%		86.2	%

[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] Includes the results of Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED JUNE 30, 2009 (Unaudited)

(Expressed in thousands of United States Dollars)

	Property & Casualty															Life & Annuity
Quarter Segment Information:	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance			Corporate			Consolidated
Gross premiums written	$	133,911		$	95,196		$	81,016		$	45,363		$	355,486		$	41,023		$	—		$	396,509
Reinsurance premiums ceded		(49,251	)		(18,085	)		(51,659	)		(10,647	)		(129,642	)		(27	)		—			(129,669	)
Net premiums written	$	84,660		$	77,111		$	29,357		$	34,716		$	225,844		$	40,996		$	—		$	266,840
Earned premiums	$	101,551		$	112,550		$	63,078		$	36,418		$	313,597		$	41,023		$	—		$	354,620
Earned premiums ceded		(50,743	)		(22,825	)		(41,657	)		(10,583	)		(125,808	)		(27	)		—			(125,835	)
Net premiums earned		50,808			89,725			21,421			25,835			187,789			40,996			—			228,785
Net investment income		5,722			9,975			1,495			645			17,837			12,917			11,001			41,755
Net realized and unrealized gains on investments		1,003			2,385			—			720			4,108			9,346			8,018			21,472
Net impairment losses recognized in earnings		—			—			—			—			—			—			(2,014	)		(2,014	)
Other income		—			12			372			436			820			—			154			974
Total revenues		57,533			102,097			23,288			27,636			210,554			63,259			17,159			290,972
Net losses and loss expenses		37,809			57,813			13,149			13,457			122,228			—			—			122,228
Claims and policy benefits		—			—			—			—			—			55,407			—			55,407
Acquisition costs		(470	)		15,734			2,723			6,395			24,382			677			—			25,059
Interest expense		—			1,191			—			—			1,191			837			2,716			4,744
Net foreign exchange gains		—			—			—			(1,656	)		(1,656	)		—			(1,748	)		(3,404	)
Merger and acquisition expenses		—			—			—			—			—			—			4,785			4,785
General and administrative expenses		5,415			7,223			5,635			5,712			23,985			657			11,463			36,105
Total losses and expenses		42,754			81,961			21,507			23,908			170,130			57,578			17,216			244,924
Income (loss) before taxes	$	14,779		$	20,136		$	1,781		$	3,728		$	40,424		$	5,681		$	(57	)	$	46,048
Loss Ratio [a]		74.4	%		64.4	%		61.4	%		52.1	%		65.1	%
Combined Ratio [b]		84.1	%		90.0	%		100.4	%		99.0	%		90.8	%
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–SIX MONTHS ENDED JUNE 30, 2009 (Unaudited)
(Expressed in thousands of United States Dollars)
	Property & Casualty															Life & Annuity
Year to Date Segment Information:	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance			Corporate			Consolidated
Gross premiums written	$	221,593		$	328,178		$	149,849		$	89,542		$	789,162		$	41,620		$	—		$	830,782
Reinsurance premiums ceded		(104,192	)		(69,468	)		(92,320	)		(27,948	)		(293,928	)		(120	)		—			(294,048	)
Net premiums written	$	117,401		$	258,710		$	57,529		$	61,594		$	495,234		$	41,500		$	—		$	536,734
Earned premiums	$	203,748		$	236,536		$	117,434		$	64,664		$	622,382		$	41,620		$	—		$	664,002
Earned premiums ceded		(102,896	)		(49,344	)		(74,608	)		(17,967	)		(244,815	)		(120	)		—			(244,935	)
Net premiums earned		100,852			187,192			42,826			46,697			377,567			41,500			—			419,067
Net investment income		10,963			19,203			3,088			1,467			34,721			24,483			23,039			82,243
Net realized and unrealized gains on investments		2,239			5,427			148			1,187			9,001			17,214			13,698			39,913
Net impairment losses recognized in earnings		—			—			—			—			—			—			(2,014	)		(2,014	)
Other income		1,147			12			220			508			1,887			—			393			2,280
Total revenues		115,201			211,834			46,282			49,859			423,176			83,197			35,116			541,489
Net losses and loss expenses		74,273			124,028			25,234			23,416			246,951			—			—			246,951
Claims and policy benefits		—			—			—			—			—			69,739			—			69,739
Acquisition costs		(1,872	)		33,197			3,947			9,547			44,819			870			—			45,689
Interest expense		—			694			—			—			694			454			7,535			8,683
Net foreign exchange gains		—			—			—			(5,166	)		(5,166	)		—			(1,714	)		(6,880	)
Merger and acquisition expenses		—			—			—			—			—			—			10,008			10,008
General and administrative expenses		10,544			14,747			13,391			10,433			49,115			1,351			24,699			75,165
Total losses and expenses		82,945			172,666			42,572			38,230			336,413			72,414			40,528			449,355
Income (loss) before taxes	$	32,256		$	39,168		$	3,710		$	11,629		$	86,763		$	10,783		$	(5,412	)	$	92,134
Loss Ratio [a]		73.6	%		66.3	%		58.9	%		50.1	%		65.4	%
Combined Ratio [b]		82.2	%		91.9	%		99.4	%		92.9	%		90.3	%

[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.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL PREMIUM DATA–SIX MONTHS ENDED JUNE 30, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

		Six Months Ended June 30, 2010					Movement on Prior Year Period		Six Months Ended June 30, 2009
Gross Premiums Written by Type of Risk:		Gross Premiums Written			Percentage of Total Gross Premiums Written				Gross Premiums Written		Percentage of Total Gross Premiums Written
Property & Casualty:
Insurance:
Aviation	S	$	8,964		1.2	%	(46.7	%)	$	16,819	2.0	%
Excess Liability	L		56,846		7.4	%	(16.4	%)		68,000	8.2	%
Professional Liability	L		92,789		12.0	%	(3.0	%)		95,699	11.5	%
Property	S		40,134		5.2	%	(2.3	%)		41,075	5.0	%
			198,733		25.8	%	(10.3	%)		221,593	26.7	%
Reinsurance [a]:
Agriculture	S		33,293		4.3	%	(61.9	%)		87,433	10.5	%
Auto	S		66		0.0	%	n/a			—	—
Aviation	S		13,383		1.7	%	(9.9	%)		14,858	1.8	%
Credit/ Surety	L		(1,491	)	(0.2	%)	n/a			—	—
General Casualty	L		12,194		1.6	%	(24.4	%)		16,125	1.9	%
Marine & Energy	S		9,104		1.2	%	4.2	%		8,735	1.1	%
Medical Malpractice	L		34,968		4.6	%	(35.0	%)		53,830	6.5	%
Other	S		1,081		0.1	%	(52.3	%)		2,268	0.3	%
Professional Liability	L		43,924		5.7	%	76.2	%		24,930	3.0	%
Property	S		106,991		13.9	%	41.0	%		75,873	9.1	%
Whole Account	S/L		4,935		0.6	%	(17.2	%)		5,963	0.7	%
Workers’ Compensation	L		15,981		2.1	%	(58.1	%)		38,163	4.6	%
			274,429		35.6	%	(16.4	%)		328,178	39.5	%
U.S. Specialty:
General Liability	L		50,639		6.6	%	21.3	%		41,759	5.0	%
Marine	S		34,059		4.4	%	14.5	%		29,749	3.6	%
Professional Liability	L		5,913		0.7	%	n/a			—	—
Property	S		83,763		10.9	%	6.9	%		78,341	9.4	%
			174,374		22.6	%	16.4	%		149,849	18.0	%
Alterra at Lloyd’s:
Accident & Health	S		19,432		2.5	%	10.0	%		17,665	2.2	%
Aviation	S		6,968		0.9	%	n/a			—	—
Financial Institutions	L		10,934		1.4	%	(4.9	%)		11,503	1.4	%
International Casualty	L		19,866		2.6	%	n/a			—	—
Professional Liability	L		11,057		1.5	%	18.7	%		9,315	1.1	%
Property	S		52,662		6.8	%	3.1	%		51,059	6.1	%
			120,919		15.7	%	35.0	%		89,542	10.8	%
Aggregate Property & Casualty		$	768,455		99.7	%	(2.6	%)	$	789,162	95.0	%
Life & Annuity:
Annuity		$	6		0.0	%	n/a		$	—	—
Life			1,659		0.3	%	(96.0	%)		41,620	5.0	%
Aggregate Life & Annuity		$	1,665		0.3	%	(96.0	%)	$	41,620	5.0	%
Aggregate P&C and Life & Annuity		$	770,120		100.0	%	(7.3	%)	$	830,782	100.0	%
S = Short tail lines		$	412,368		53.7	%			$	423,875	53.7	%
L = Long tail lines			356,087		46.3	%				365,287	46.3	%
Aggregate Property & Casualty		$	768,455						$	789,162

[a] Includes the results of Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (Unaudited)

Net Operating Income and Net Operating Income per Diluted Share

(Expressed in thousands of United States Dollars, except per share and share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Net income	$	103,447		$	43,758		$	139,828		$	88,297
Net realized and unrealized losses on non-hedge fund investments, net of tax [a]		11,540			2,162			12,776			1,877
Foreign exchange gains, net of tax		(298	)		(2,932	)		(1,978	)		(5,476	)
Merger and acquisition expenses, net of tax		(55,915	)		4,785			(51,171	)		10,008
Net operating income	$	58,774		$	47,773		$	99,455		$	94,706
Net income per diluted share	$	1.13		$	0.76		$	1.88		$	1.54
Net realized and unrealized losses on non-hedge fund investments, net of tax [a]		0.12			0.04			0.17			0.03
Foreign exchange gains, net of tax		—			(0.05	)		(0.03	)		(0.09	)
Merger and acquisition expenses, net of tax		(0.61	)		0.08			(0.69	)		0.17
Net operating income per diluted share	$	0.64		$	0.83		$	1.33		$	1.65
Weighted average shares outstanding - basic		91,042,301			57,066,298			73,779,447			56,851,795
Weighted average shares outstanding - diluted		91,661,430			57,638,446			74,524,919			57,411,744

[a] Net realized and unrealized losses (gains) on non-hedge fund investments includes realized and unrealized (gains) losses on trading securities, realised (gains) losses on available for sale securities, net impairment losses recognized in earnings, earnings from equity method investments and changes in fair value of investment derivatives, catastrophe bonds and structured deposits.

Annualized Net Operating Return on Average Shareholders’ Equity

(Expressed in thousands of United States Dollars)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Net income	$	103,447		$	43,758		$	139,828		$	88,297
Annualized net income		413,788			175,032			279,656			176,594
Net operating income	$	58,774		$	47,773		$	99,455		$	94,706
Annualized net operating income		235,096			191,092			198,910			189,412
Average shareholders’ equity [b]	$	2,322,587		$	1,313,166		$	1,955,731		$	1,292,381
Annualized return on average shareholders’ equity		17.8	%		13.3	%		14.3	%		13.7	%
Annualized net operating return on average shareholders’ equity		10.1	%		14.6	%		10.2	%		14.7	%

[b] Average shareholders’ equity is computed as the average of the quarterly shareholders’ equity balances. The averages for the quarter and six months ended June 30, 2010 have been weighted to include Harbor Point from May 12, 2010.

Diluted Tangible Book Value Per Share

(Expressed in thousands of United States Dollars, except per share and share amounts)

	June 30, 2010			December 31, 2009
Shareholders’ equity	$	2,926,967		$	1,564,633
Goodwill and intangible assets		(60,670	)		(48,686	)
Tangible book value	$	2,866,297		$	1,515,947
Diluted shares outstanding		119,240,654			57,178,458
Diluted tangible book value per share	$	24.04		$	26.51

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA–JUNE 30, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

Type of Investment	As at June 30, 2010		Investment Distribution		As at December 31, 2009		Investment Distribution
Cash and cash equivalents	$	741,684	9.6	%	$	702,278	13.4	%
U.S. government and agencies		1,130,700	14.6	%		525,427	10.0	%
Non-U.S. governments		74,108	1.0	%		82,027	1.5	%
Corporate securities		2,697,593	34.9	%		1,375,999	26.2	%
Municipal securities		208,628	2.7	%		83,658	1.6	%
Asset-backed securities		98,265	1.3	%		102,006	1.9	%
Residential mortgage-backed securities		1,115,574	14.4	%		763,974	14.5	%
Commercial mortgage-backed securities		357,352	4.6	%		302,961	5.8	%
Fixed maturities at fair value	$	5,682,220	73.5	%	$	3,236,052	61.5	%
U.S. government and agencies	$	22,688	0.3	%	$	14,050	0.3	%
Non-U.S. governments		492,728	6.4	%		573,250	10.9	%
Corporate securities		356,235	4.6	%		418,647	7.9	%
Fixed maturities at amortized cost	$	871,651	11.3	%	$	1,005,947	19.1	%
Other investments	$	436,757	5.6	%	$	318,073	6.0	%
Total invested assets	$	7,732,312	100.0	%	$	5,262,350	100.0	%
Credit Rating	As at June 30, 2010		Ratings Distribution		As at December 31, 2009		Ratings Distribution
U.S. government and agencies [a]	$	2,148,230	32.8	%	$	1,214,895	28.6	%
AAA		1,162,805	17.7	%		720,364	17.0	%
AA		607,171	9.3	%		325,997	7.7	%
A		1,334,267	20.3	%		731,723	17.3	%
BBB		207,243	3.2	%		100,841	2.4	%
BB		29,931	0.5	%		34,781	0.8	%
B or lower		192,573	2.9	%		107,451	2.5	%
Fixed maturities at fair value	$	5,682,220	86.7	%	$	3,236,052	76.3	%
U.S. government and agencies	$	22,688	0.3	%	$	14,050	0.3	%
AAA		586,033	8.9	%		717,954	16.9	%
AA		110,509	1.7	%		101,675	2.4	%
A		138,655	2.1	%		158,141	3.7	%
BBB		12,498	0.2	%		12,672	0.3	%
BB		—	—			—	—
B or lower		1,268	0.0	%		1,455	0.1	%
Fixed maturities at amortized cost	$	871,651	13.3	%	$	1,005,947	23.7	%
Total fixed maturities	$	6,553,871	100.0	%	$	4,241,999	100.0	%

[a] Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,017,530 (December 31, 2009; $689,468)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Net investment income	$	53,277		$	41,755		$	101,667		$	82,243
Realized and unrealized (losses) gains on trading fixed maturities		(1,284	)		720			(1,466	)		1,187
Net realized gains (losses) on available for sale fixed maturities		2,425			(654	)		3,263			(693	)
Change in fair value of hedge funds		(3,323	)		21,514			4,048			38,978
Change in fair value of non-hedge fund other investments		(12,604	)		(108	)		(14,209	)		441
Net realized and unrealized gains on investments	$	(14,786	)	$	21,472		$	(8,364	)	$	39,913
Net impairment losses recognized in earnings	$	(300	)	$	(2,014	)	$	(720	)	$	(2,014	)

Contacts
Susan Spivak Bernstein Senior Vice President susan.spivak@alterra-bm.com 1-212-898-6640	Roanne Kulakoff or Peter Hill Kekst and Company roanne-kulakoff@kekst.com peter-hill@kekst.com 1-212-521-4800