Exhibit 99.1
ALTERRA CAPITAL REPORTS FOURTH QUARTER AND YEAR END 2010 RESULTS
Net Operating Income of $2.64 per Diluted Share in 2010
Net Operating ROE of 10.2% in 2010
HAMILTON, BERMUDA, February 8, 2011—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $79.7 million, or $0.69 per diluted share, for the fourth quarter of 2010, compared to net income of $62.6 million, or $1.08 per diluted share, for the same quarter of 2009. Alterra, formerly known as Max Capital Group Ltd. (“Max”), 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 fourth quarter of 2010 was $76.2 million, or $0.66 per diluted share, compared to net operating income of $60.5 million, or $1.04 per diluted share, for the same quarter of 2009. Annualized net operating return on average shareholders’ equity for the fourth quarter of 2010 was 10.2%.
For the year ended December 31, 2010, Alterra reported net income of $302.3 million, or $3.17 per diluted share, compared to net income of $246.2 million, or $4.26 per diluted share, in 2009. Net operating income for the year ended December 31, 2010 was $251.7 million, or $2.64 per diluted share, compared to net operating income of $208.9 million, or $3.62 per diluted share, in 2009. Net operating return on average shareholders’ equity for the year ended December 31, 2010 was 10.2%.
Alterra’s 2010 results include the results of operations for the former Harbor Point companies from May 12, 2010. Comparative figures for 2009 represent the former Max results of operations only. Accordingly, a comparison of Alterra’s gross premiums written and other results of operations for current and prior periods are not meaningful. Selected pro forma combined results of operations for periods prior to the merger for the reinsurance segment are provided in the fourth quarter financial supplement available on Alterra’s website atwww.alterracap.com.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “It has been an exciting and profitable year for Alterra and our shareholders. Our success continues to be tied to our strategy of opportunistically entering complementary market segments with attractive underwriting prospects, while consistently deploying “best in class” underwriting talent to build profitable books of business and better serve our clients.”
Mr. Becker added: “In 2010, the insurance markets continued to be impacted by competitive pricing that became increasingly more aggressive as the year progressed. In this environment, our foremost objective was, and is, to maintain our underwriting discipline, and we believe we have done this well to date. As evidence of this, we expect losses from the recent events in Australia and Egypt to be within our normal ranges.”
“With declining premiums but continuing profitability, excess capital is inevitably generated. We are committed to the flexible and efficient management of capital, and accordingly we are pleased to have returned over $558 million to our shareholders in 2010, in the form of regular dividends, a special dividend, and share repurchases.”
“We are well positioned to navigate the uncertainty of the present industry environment, and to capture meaningful opportunity at the cycle inflection point. In the interim, we intend to continue to focus on growth in book value per share, capital management and a competitive dividend, and to protect our clean and strong balance sheet,” Mr. Becker concluded.
Fourth quarter 2010 results for Alterra include:
• | Property and casualty gross premiums written of $313.5 million, representing an increase of $37.1 million, or 13.4%; net premiums written of $236.0 million, representing an increase of $62.6 million, or 36.1%; and net premiums earned of $340.8 million, representing an increase of $135.3 million, or 65.8%; each as compared to the same quarter of 2009. The percentage increases in these figures primarily reflect incremental growth from recent expansion initiatives, |
including the merger with Harbor Point - whose premiums are not included in the comparative 2009 results of operations - as well as from new operations in Latin America and new product offerings at Alterra at Lloyd’s. These increases were partially offset by decreases in previously existing operations where writings were reduced due to unattractive returns; |
• | A combined ratio on property and casualty business of 84.8% compared to 81.2% in the same quarter of 2009; |
• | Property catastrophe event and significant per-risk net losses of $13.0 million compared to no material property catastrophe losses in the same quarter of 2009; |
• | Net favorable development on prior years’ loss reserves of $28.0 million, or 8.3 combined ratio points, compared to $30.9 million, or 15.0 combined ratio points, in the same quarter of 2009; |
• | Net investment income of $61.1 million compared to $44.7 million in the same quarter of 2009, an increase of 36.7%; |
• | Increased general and administrative expenses principally due to a shift in the allocation of performance based compensation from equity to cash awards; and |
• | Net operating income of $76.2 million, or $0.66 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 fourth quarter of 2010 were $313.5 million, generated by the segments as follows: insurance - $101.1 million, a decrease of $23.9 million, or 19.1%; reinsurance - $110.6 million, an increase of $43.9 million, or 65.8%; U.S. specialty - $77.7 million, an increase of $11.5 million, or 17.4%; and Alterra at Lloyd’s - $24.0 million, an increase of $5.6 million, or 30.7%. Gross premiums written included $4.8 million from our operations in Latin America, which started in the first quarter of 2010.
Combined ratios for the fourth quarter of 2010 by segment were 76.0% for insurance, 82.8% for reinsurance, 100.2% for U.S. specialty and 86.4% for Alterra at Lloyd’s.
Results for the year ended December 31, 2010 include:
• | Property and casualty gross premiums written of $1,405.8 million, representing an increase of $74.6 million, or 5.6%; net premiums written of $1,035.0 million, representing an increase of $183.9 million, or 21.6%; and net premiums earned of $1,168.0 million, representing an increase of $376.9 million, or 47.7%; each as compared to 2009. The percentage increases in these figures primarily reflect incremental growth from recent expansion initiatives, including the merger with Harbor Point - whose premiums are not included in the comparative 2009 results of operations - as well as from new operations in Latin America and new product offerings at Alterra at Lloyd’s. These increases were partially offset by decreases in previously existing operations where writings were reduced due to unattractive returns; |
• | A combined ratio on property and casualty business of 85.7% compared to 88.1% in 2009; |
• | Property catastrophe event and significant per-risk losses of $54.9 million compared to $10.4 million in 2009; |
• | Net favorable development on prior years’ loss reserves of $105.5 million, or 9.0 combined ratio points, compared to $78.3 million, or 9.9 combined ratio points, in 2009; |
• | Net investment income of $222.5 million compared to $169.7 million in 2009, an increase of 31.1%; and |
• | Net operating income of $251.7 million, or $2.64 per diluted share, representing a net operating return on average shareholders’ equity of 10.2%. |
Gross premiums written from property and casualty underwriting for the year ended December 31, 2010 were $1,405.8 million, generated by the segments as follows: insurance - $370.1 million, a decrease of $57.6 million, or 13.5%; reinsurance - $509.1 million, an increase of $20.0 million, or 4.1%; U.S. specialty - $324.0 million, an increase of $38.5 million, or 13.5%; and Alterra at Lloyd’s - $202.6 million, an increase of $73.7 million, or 57.1%. There were no new contracts written within the life and annuity segment during the year ended December 31, 2010.
Combined ratios for the year ended December 31, 2010 by segment were 73.6% for insurance, 86.8% for reinsurance, 97.9% for U.S. specialty and 83.4% for Alterra at Lloyd’s.
Balance Sheet
Total invested assets, including cash and cash equivalents, were $7.9 billion at December 31, 2010, an increase of $2.6 billion from December 31, 2009. The increase in total invested assets primarily reflects additional invested assets from the Harbor Point investment portfolio. As of December 31, 2010, 96.0% of the fixed maturities portfolio (by carrying value) was investment-grade, a decrease of 0.6 percentage points from December 31, 2009. As of December 31, 2010, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.22% and the weighted average duration was 4.2 years.
Net investment income for the fourth quarter of 2010 increased to $61.1 million from $44.7 million for the same quarter of 2009, and to $222.5 million from $169.7 million for the years ended December 31, 2010 and 2009, respectively. The increase in net investment income reflects the additional investment income from the Harbor Point investment portfolio since the consummation of the merger, and an increased allocation to higher-yielding fixed maturity securities.
Under the Board-approved share repurchase authorization, Alterra repurchased 5,236,085 of its common shares during the fourth quarter of 2010 at an average price of $20.88 per share for a total of $109.3 million. Share repurchases for the year ended December 31, 2010 were 10,288,434 common shares at an average price of $20.19 per share for a total of $207.8 million. As of December 31, 2010, $127.8 million remained under the Board-approved share repurchase authorization.
Shareholders’ equity was $2,918.3 million as of December 31, 2010, an increase of 86.5% from December 31, 2009, reflecting the impact of the merger. Diluted book value per share as of December 31, 2010 was $25.99, an increase of 5.7% from December 31, 2009 after adding back $2.94 per share in dividends paid to shareholders during the year.
A copy of Alterra’s financial supplement for the fourth 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, February 9, 2011 at 10:00 am (ET) to discuss these results with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-713-4215 (toll-free U.S.) or 1-617-213-4867 (international) and using access code 76980192. 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 and property and casualty insurers.
Non-GAAP Financial Measures
In presenting Alterra’s results, management has included and discussed net operating income, net operating income per diluted share, 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 measures 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 reports on Form 10-K and Form 10-Q 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.
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 |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
December 31, 2010 | December 31, 2009 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 905,606 | $ | 702,278 | ||||
Fixed maturities, trading at fair value | 244,872 | 228,696 | ||||||
Fixed maturities, available for sale at fair value | 5,392,643 | 3,007,356 | ||||||
Fixed maturities, held to maturity at amortized cost (fair value $1,015,512) | 940,104 | 1,005,947 | ||||||
Other investments, at fair value | 378,128 | 318,073 | ||||||
Accrued interest income | 75,414 | 57,215 | ||||||
Premiums receivable | 588,537 | 567,301 | ||||||
Losses and benefits recoverable from reinsurers | 956,115 | 1,001,373 | ||||||
Deferred acquisition costs | 111,901 | 65,648 | ||||||
Prepaid reinsurance premiums | 149,252 | 190,613 | ||||||
Trades pending settlement | 32,393 | 76,031 | ||||||
Goodwill and intangible assets | 59,076 | 48,686 | ||||||
Other assets | 83,247 | 70,529 | ||||||
Total assets | $ | 9,917,288 | $ | 7,339,746 | ||||
LIABILITIES | ||||||||
Property and casualty losses | $ | 3,906,134 | $ | 3,178,094 | ||||
Life and annuity benefits | 1,275,580 | 1,372,513 | ||||||
Deposit liabilities | 147,612 | 152,629 | ||||||
Funds withheld from reinsurers | 121,107 | 140,079 | ||||||
Unearned property and casualty premiums | 905,487 | 628,161 | ||||||
Reinsurance balances payable | 102,942 | 146,085 | ||||||
Accounts payable and accrued expenses | 99,680 | 67,088 | ||||||
Senior notes | 440,476 | 90,464 | ||||||
Total liabilities | 6,999,018 | 5,775,113 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Preferred shares (par value $1.00) | — | — | ||||||
Common shares (par value $1.00) | 110,963 | 55,867 | ||||||
Additional paid-in capital | 2,026,045 | 752,309 | ||||||
Accumulated other comprehensive income | 98,946 | 25,431 | ||||||
Retained earnings | 682,316 | 731,026 | ||||||
Total shareholders’ equity | 2,918,270 | 1,564,633 | ||||||
Total liabilities and shareholders’ equity | $ | 9,917,288 | $ | 7,339,746 | ||||
Book value per share | $ | 26.30 | $ | 28.01 | ||||
Diluted book value per share | $ | 25.99 | $ | 27.36 | ||||
Diluted tangible book value per share [a] | $ | 25.46 | $ | 26.51 | ||||
Diluted shares outstanding | 112,290,968 | 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 December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
REVENUES | ||||||||||||||||
Gross premiums written | $ | 315,398 | $ | 278,333 | $ | 1,410,731 | $ | 1,375,001 | ||||||||
Reinsurance premiums ceded | (77,617 | ) | (103,143 | ) | (371,163 | ) | (480,481 | ) | ||||||||
Net premiums written | $ | 237,781 | $ | 175,190 | $ | 1,039,568 | $ | 894,520 | ||||||||
Earned premiums | $ | 445,683 | $ | 325,078 | $ | 1,578,647 | $ | 1,318,949 | ||||||||
Earned premiums ceded | (103,129 | ) | (117,805 | ) | (406,161 | ) | (484,593 | ) | ||||||||
Net premiums earned | 342,554 | 207,273 | 1,172,486 | 834,356 | ||||||||||||
Net investment income | 61,080 | 44,668 | 222,458 | 169,741 | ||||||||||||
Net realized and unrealized gains on investments | 9,825 | 17,325 | 16,872 | 81,765 | ||||||||||||
Total other-than-temporary impairment losses | (3,918 | ) | (125 | ) | (5,873 | ) | (5,315 | ) | ||||||||
Portion of loss recognized in other comprehensive income (loss), before taxes | 2,144 | (800 | ) | 3,228 | 2,237 | |||||||||||
Net impairment losses recognized in earnings | (1,774 | ) | (925 | ) | (2,645 | ) | (3,078 | ) | ||||||||
Net realized gain on retirement of senior notes | — | 111 | — | 111 | ||||||||||||
Other income | 2,862 | (196 | ) | 4,808 | 2,903 | |||||||||||
Total revenues | 414,547 | 268,256 | 1,413,979 | 1,085,798 | ||||||||||||
LOSSES AND EXPENSES | ||||||||||||||||
Net losses and loss expenses | 179,047 | 114,870 | 654,841 | 493,599 | ||||||||||||
Claims and policy benefits | 18,551 | 16,976 | 65,213 | 101,093 | ||||||||||||
Acquisition costs | 53,563 | 23,188 | 187,464 | 96,874 | ||||||||||||
Interest expense | 7,866 | 6,685 | 28,275 | 21,339 | ||||||||||||
Net foreign exchange (gains) losses | (382 | ) | 702 | (115 | ) | (5,772 | ) | |||||||||
Merger and acquisition expenses | 500 | (224 | ) | (48,776 | ) | (31,566 | ) | |||||||||
General and administrative expenses | 76,759 | 38,458 | 220,586 | 153,995 | ||||||||||||
Total losses and expenses | 335,904 | 200,655 | 1,107,488 | 829,562 | ||||||||||||
INCOME BEFORE TAXES | 78,643 | 67,601 | 306,491 | 256,236 | ||||||||||||
Income tax (benefit) expense | (1,027 | ) | 5,009 | 4,156 | 10,021 | |||||||||||
NET INCOME [a] | 79,670 | 62,592 | 302,335 | 246,215 | ||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax | (87,633 | ) | (16,085 | ) | 81,406 | 50,544 | ||||||||||
Foreign currency translation adjustment | (3,746 | ) | (86 | ) | (7,891 | ) | 20,286 | |||||||||
COMPREHENSIVE (LOSS) INCOME [a] | $ | (11,709 | ) | $ | 46,421 | $ | 375,850 | $ | 317,045 | |||||||
Basic earnings per share | $ | 0.70 | $ | 1.10 | $ | 3.19 | $ | 4.32 | ||||||||
Diluted earnings per share | $ | 0.69 | $ | 1.08 | $ | 3.17 | $ | 4.26 | ||||||||
Net operating income per diluted share | $ | 0.66 | $ | 1.04 | $ | 2.64 | $ | 3.62 | ||||||||
Weighted average shares outstanding - basic | 113,968,287 | 57,090,930 | 94,682,279 | 57,006,908 | ||||||||||||
Weighted average shares outstanding - diluted | 114,831,467 | 58,035,775 | 95,459,375 | 57,767,137 | ||||||||||||
[a] | Includes the results of Harbor Point Limited from May 12, 2010. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
Year Ended December 31 | ||||||||
2010 | 2009 | |||||||
Common shares | ||||||||
Balance, beginning of year | $ | 55,867 | $ | 55,806 | ||||
Issuance of common shares, net | 65,384 | 1,604 | ||||||
Repurchase of common shares | (10,288 | ) | (1,543 | ) | ||||
Balance, end of year | 110,963 | 55,867 | ||||||
Additional paid-in capital | ||||||||
Balance, beginning of year | 752,309 | 763,391 | ||||||
Issuance of common shares, net | 1,419,442 | 789 | ||||||
Stock based compensation expense | 51,769 | 20,907 | ||||||
Repurchase of common shares | (197,475 | ) | (32,778 | ) | ||||
Balance, end of year | 2,026,045 | 752,309 | ||||||
Accumulated other comprehensive income (loss) | ||||||||
Balance, beginning of year | 25,431 | (45,399 | ) | |||||
Holding gains on available for sale securities arising in period [a] | 99,603 | 51,563 | ||||||
Net realized (gains) losses on available for sale securities included in net income [a] | (14,969 | ) | 1,218 | |||||
Portion of other-than-temporary impairment losses recognised in other comprehensive income [a] | (3,228 | ) | (2,237 | ) | ||||
Foreign currency translation adjustment | (7,891 | ) | 20,286 | |||||
Balance, end of year | 98,946 | 25,431 | ||||||
Retained earnings | ||||||||
Balance, beginning of year | 731,026 | 506,533 | ||||||
Net income | 302,335 | 246,215 | ||||||
Dividends | (351,045 | ) | (21,722 | ) | ||||
Balance, end of year | 682,316 | 731,026 | ||||||
Total shareholders’ equity | $ | 2,918,270 | $ | 1,564,633 | ||||
[a] | Net of tax |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
Year Ended December 31 | ||||||||
2010 | 2009 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 302,335 | $ | 246,215 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Stock based compensation | 51,769 | 20,907 | ||||||
Amortization of premium on fixed maturities | 19,033 | 3,921 | ||||||
Accretion of deposit liabilities | 6,289 | 2,907 | ||||||
Net realized and unrealized gains on investments | (16,872 | ) | (81,765 | ) | ||||
Net impairment losses recognized in earnings | 2,645 | 3,078 | ||||||
Net realized gain on retirement of senior notes | — | (111 | ) | |||||
Negative goodwill gain | (95,788 | ) | — | |||||
Changes in: | ||||||||
Accrued interest income | (2,618 | ) | (4,206 | ) | ||||
Premiums receivable | 342,630 | (7,551 | ) | |||||
Losses and benefits recoverable from reinsurers | 9,751 | (145,863 | ) | |||||
Deferred acquisition costs | (43,716 | ) | (12,913 | ) | ||||
Prepaid reinsurance premiums | 34,695 | 3,932 | ||||||
Other assets | (5,495 | ) | (2,050 | ) | ||||
Property and casualty losses | (105,958 | ) | 199,201 | |||||
Life and annuity benefits | (32,906 | ) | (21,070 | ) | ||||
Funds withheld from reinsurers | (18,962 | ) | (24,079 | ) | ||||
Unearned property and casualty premiums | (98,267 | ) | 44,490 | |||||
Reinsurance balances payable | (47,209 | ) | (15,579 | ) | ||||
Accounts payable and accrued expenses | 6,941 | (16,312 | ) | |||||
Cash provided by operating activities | 308,297 | 193,152 | ||||||
INVESTING ACTIVITIES | ||||||||
Purchases of available for sale securities | (2,419,091 | ) | (1,212,911 | ) | ||||
Sales of available for sale securities | 1,243,263 | 281,495 | ||||||
Redemptions/maturities of available for sale securities | 953,552 | 625,434 | ||||||
Purchases of trading securities | (103,067 | ) | (195,151 | ) | ||||
Sales of trading securities | 27,207 | 29,578 | ||||||
Redemptions/maturities of trading securities | 54,010 | 8,347 | ||||||
Purchases of held to maturity securities | (27,953 | ) | (33,647 | ) | ||||
Redemptions/maturities of held to maturity securities | 32,354 | — | ||||||
Net purchases/sales of other investments | 110,849 | 534,244 | ||||||
Acquisition of subsidiary, net of cash acquired | 446,819 | (8,198 | ) | |||||
Cash provided by investing activities | 317,943 | 29,191 | ||||||
FINANCING ACTIVITIES | ||||||||
Net proceeds from issuance of common shares | 1,478 | 2,393 | ||||||
Repurchase of common shares | (207,764 | ) | (34,321 | ) | ||||
Net proceeds from issuance of senior notes | 349,997 | — | ||||||
Net repayments of bank loans | (200,000 | ) | (375,000 | ) | ||||
Net repayments of senior notes | — | (811 | ) | |||||
Dividends paid | (349,495 | ) | (21,722 | ) | ||||
Additions to deposit liabilities | 3,093 | 14,630 | ||||||
Payment of deposit liabilities | (14,336 | ) | (84,168 | ) | ||||
Cash used in financing activities | (417,027 | ) | (498,999 | ) | ||||
Effect of exchange rate changes on foreign currency cash and cash equivalents | (5,885 | ) | 29,530 | |||||
Net increase (decrease) in cash and cash equivalents | 203,328 | (247,126 | ) | |||||
Cash and cash equivalents, beginning of year | 702,278 | 949,404 | ||||||
CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 905,606 | $ | 702,278 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $8,657 and $6,896 for the years ended December 31, 2010 and 2009, respectively.
Income taxes paid totaled $3,889 and $609 for the years ended December 31, 2010 and 2009, respectively.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED DECEMBER 31, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written | $ | 101,116 | $ | 110,620 | $ | 77,745 | $ | 23,980 | $ | 313,461 | $ | 1,937 | $ | — | $ | 315,398 | ||||||||||||||||
Reinsurance premiums ceded | (51,700 | ) | (2,908 | ) | (20,984 | ) | (1,859 | ) | (77,451 | ) | (166 | ) | — | (77,617 | ) | |||||||||||||||||
Net premiums written | $ | 49,416 | $ | 107,712 | $ | 56,761 | $ | 22,121 | $ | 236,010 | $ | 1,771 | $ | — | $ | 237,781 | ||||||||||||||||
Earned premiums | $ | 98,024 | $ | 215,261 | $ | 82,828 | $ | 47,633 | $ | 443,746 | $ | 1,937 | $ | — | $ | 445,683 | ||||||||||||||||
Earned premiums ceded | (41,104 | ) | (21,082 | ) | (28,883 | ) | (11,894 | ) | (102,963 | ) | (166 | ) | — | (103,129 | ) | |||||||||||||||||
Net premiums earned | 56,920 | 194,179 | 53,945 | 35,739 | 340,783 | 1,771 | — | 342,554 | ||||||||||||||||||||||||
Net investment income | 6,495 | 17,965 | 1,282 | 4,246 | 29,988 | 12,084 | 19,008 | 61,080 | ||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 227 | 276 | — | (3,893 | ) | (3,390 | ) | 3,981 | 9,234 | 9,825 | ||||||||||||||||||||||
Net impairment losses recognized in earnings | — | — | — | — | — | — | (1,774 | ) | (1,774 | ) | ||||||||||||||||||||||
Other income | — | (216 | ) | 68 | 2,006 | 1,858 | 357 | 647 | 2,862 | |||||||||||||||||||||||
Total revenues | 63,642 | 212,204 | 55,295 | 38,098 | 369,239 | 18,193 | 27,115 | 414,547 | ||||||||||||||||||||||||
Net losses and loss expenses | 31,842 | 97,639 | 35,723 | 13,843 | 179,047 | — | — | 179,047 | ||||||||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | 18,551 | — | 18,551 | ||||||||||||||||||||||||
Acquisition costs | 1,628 | 38,406 | 8,755 | 4,853 | 53,642 | (79 | ) | — | 53,563 | |||||||||||||||||||||||
Interest expense | 416 | 781 | — | — | 1,197 | (501 | ) | 7,170 | 7,866 | |||||||||||||||||||||||
Net foreign exchange (gains) losses | — | (271 | ) | — | 65 | (206 | ) | — | (176 | ) | (382 | ) | ||||||||||||||||||||
Merger and acquisition expenses | — | — | — | — | — | — | 500 | 500 | ||||||||||||||||||||||||
General and administrative expenses | 9,782 | 24,714 | 9,582 | 12,186 | 56,264 | 1,088 | 19,407 | 76,759 | ||||||||||||||||||||||||
Total losses and expenses | 43,668 | 161,269 | 54,060 | 30,947 | 289,944 | 19,059 | 26,901 | 335,904 | ||||||||||||||||||||||||
Income (loss) before taxes | $ | 19,974 | $ | 50,935 | $ | 1,235 | $ | 7,151 | $ | 79,295 | $ | (866 | ) | $ | 214 | $ | 78,643 | |||||||||||||||
Loss Ratio [a] | 55.9 | % | 50.3 | % | 66.2 | % | 38.7 | % | 52.5 | % | ||||||||||||||||||||||
Combined Ratio [b] | 76.0 | % | 82.8 | % | 100.2 | % | 86.4 | % | 84.8 | % |
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–YEAR ENDED DECEMBER 31, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Year to Date Segment Information [c]: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written | $ | 370,120 | $ | 509,053 | $ | 323,990 | $ | 202,633 | $ | 1,405,796 | $ | 4,935 | $ | — | $ | 1,410,731 | ||||||||||||||||
Reinsurance premiums ceded | (170,608 | ) | (64,131 | ) | (98,576 | ) | (37,448 | ) | (370,763 | ) | (400 | ) | — | (371,163 | ) | |||||||||||||||||
Net premiums written | $ | 199,512 | $ | 444,922 | $ | 225,414 | $ | 165,185 | $ | 1,035,033 | $ | 4,535 | $ | — | $ | 1,039,568 | ||||||||||||||||
Earned premiums | $ | 391,716 | $ | 699,243 | $ | 311,950 | $ | 170,803 | $ | 1,573,712 | $ | 4,935 | $ | — | $ | 1,578,647 | ||||||||||||||||
Earned premiums ceded | (173,123 | ) | (71,627 | ) | (125,218 | ) | (35,793 | ) | (405,761 | ) | (400 | ) | — | (406,161 | ) | |||||||||||||||||
Net premiums earned | 218,593 | 627,616 | 186,732 | 135,010 | 1,167,951 | 4,535 | — | 1,172,486 | ||||||||||||||||||||||||
Net investment income | 25,134 | 60,072 | 5,233 | 11,554 | 101,993 | 49,785 | 70,680 | 222,458 | ||||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 618 | 694 | 29 | (4,476 | ) | (3,135 | ) | 11,358 | 8,649 | 16,872 | ||||||||||||||||||||||
Net impairment losses recognized in earnings | — | — | — | — | — | — | (2,645 | ) | (2,645 | ) | ||||||||||||||||||||||
Other income | 760 | — | 507 | 2,534 | 3,801 | 286 | 721 | 4,808 | ||||||||||||||||||||||||
Total revenues | 245,105 | 688,382 | 192,501 | 144,622 | 1,270,610 | 65,964 | 77,405 | 1,413,979 | ||||||||||||||||||||||||
Net losses and loss expenses | 128,823 | 347,816 | 118,337 | 59,865 | 654,841 | — | — | 654,841 | ||||||||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | 65,213 | — | 65,213 | ||||||||||||||||||||||||
Acquisition costs | 3,381 | 131,114 | 28,444 | 24,164 | 187,103 | 361 | — | 187,464 | ||||||||||||||||||||||||
Interest expense | 970 | 6,988 | — | — | 7,958 | 5,849 | 14,468 | 28,275 | ||||||||||||||||||||||||
Net foreign exchange losses (gains) | — | 1,696 | — | (1,737 | ) | (41 | ) | — | (74 | ) | (115 | ) | ||||||||||||||||||||
Merger and acquisition expenses | — | — | — | — | — | — | (48,776 | ) | (48,776 | ) | ||||||||||||||||||||||
General and administrative expenses | 28,615 | 66,073 | 36,015 | 28,531 | 159,234 | 2,964 | 58,388 | 220,586 | ||||||||||||||||||||||||
Total losses and expenses | 161,789 | 553,687 | 182,796 | 110,823 | 1,009,095 | 74,387 | 24,006 | 1,107,488 | ||||||||||||||||||||||||
Income (loss) before taxes | $ | 83,316 | $ | 134,695 | $ | 9,705 | $ | 33,799 | $ | 261,515 | $ | (8,423 | ) | $ | 53,399 | $ | 306,491 | |||||||||||||||
Loss Ratio [a] | 58.9 | % | 55.4 | % | 63.4 | % | 44.3 | % | 56.1 | % | ||||||||||||||||||||||
Combined Ratio [b] | 73.6 | % | 86.8 | % | 97.9 | % | 83.4 | % | 85.7 | % |
[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 Limited from May 12, 2010. |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED DECEMBER 31, 2009 (Unaudited)
(Expressed in thousands of United States Dollars)
Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written | $ | 125,040 | $ | 66,732 | $ | 66,210 | $ | 18,344 | $ | 276,326 | $ | 2,007 | $ | — | $ | 278,333 | ||||||||||||||||
Reinsurance premiums ceded | (66,007 | ) | 569 | (36,517 | ) | (921 | ) | (102,876 | ) | (267 | ) | — | (103,143 | ) | ||||||||||||||||||
Net premiums written | $ | 59,033 | $ | 67,301 | $ | 29,693 | $ | 17,423 | $ | 173,450 | $ | 1,740 | $ | — | $ | 175,190 | ||||||||||||||||
Earned premiums | $ | 109,381 | $ | 111,440 | $ | 71,061 | $ | 31,189 | $ | 323,071 | $ | 2,007 | $ | — | $ | 325,078 | ||||||||||||||||
Earned premiums ceded | (53,417 | ) | (13,867 | ) | (42,886 | ) | (7,368 | ) | (117,538 | ) | (267 | ) | — | (117,805 | ) | |||||||||||||||||
Net premiums earned | 55,964 | 97,573 | 28,175 | 23,821 | 205,533 | 1,740 | — | 207,273 | ||||||||||||||||||||||||
Net investment income | 6,014 | 10,613 | 1,438 | 1,172 | 19,237 | 13,367 | 12,064 | 44,668 | ||||||||||||||||||||||||
Net realized and unrealized gains on investments | 893 | 2,073 | 84 | 3 | 3,053 | 8,192 | 6,080 | 17,325 | ||||||||||||||||||||||||
Net impairment losses recognized in earnings | — | — | — | — | — | — | (925 | ) | (925 | ) | ||||||||||||||||||||||
Net realized gain on retirement of senior notes | — | — | — | — | — | — | 111 | 111 | ||||||||||||||||||||||||
Other income | — | — | 42 | 183 | 225 | (120 | ) | (301 | ) | (196 | ) | |||||||||||||||||||||
Total revenues | 62,871 | 110,259 | 29,739 | 25,179 | 228,048 | 23,179 | 17,029 | 268,256 | ||||||||||||||||||||||||
Net losses and loss expenses | 26,326 | 61,718 | 16,312 | 10,514 | 114,870 | — | — | 114,870 | ||||||||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | 16,976 | — | 16,976 | ||||||||||||||||||||||||
Acquisition costs | 270 | 17,578 | 1,628 | 3,339 | 22,815 | 373 | — | 23,188 | ||||||||||||||||||||||||
Interest expense | 781 | 4,191 | — | — | 4,972 | 525 | 1,188 | 6,685 | ||||||||||||||||||||||||
Net foreign exchange losses | — | — | — | 69 | 69 | — | 633 | 702 | ||||||||||||||||||||||||
Merger and acquisition expenses | — | — | — | — | — | — | (224 | ) | (224 | ) | ||||||||||||||||||||||
General and administrative expenses | 6,798 | 8,174 | 10,034 | 4,116 | 29,122 | 606 | 8,730 | 38,458 | ||||||||||||||||||||||||
Total losses and expenses | 34,175 | 91,661 | 27,974 | 18,038 | 171,848 | 18,480 | 10,327 | 200,655 | ||||||||||||||||||||||||
Income before taxes | $ | 28,696 | $ | 18,598 | $ | 1,765 | $ | 7,141 | $ | 56,200 | $ | 4,699 | $ | 6,702 | $ | 67,601 | ||||||||||||||||
Loss Ratio [a] | 47.0 | % | 63.3 | % | 57.9 | % | 44.1 | % | 55.9 | % | ||||||||||||||||||||||
Combined Ratio [b] | 59.7 | % | 89.6 | % | 99.3 | % | 75.4 | % | 81.2 | % |
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–YEAR ENDED DECEMBER 31, 2009 (Unaudited)
(Expressed in thousands of United States Dollars)
Year to Date Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | |||||||||||||||||||||||||||
Gross premiums written | $ | 427,767 | $ | 489,028 | $ | 285,478 | $ | 128,973 | $ | 1,331,246 | $ | 43,755 | $ | — | $ | 1,375,001 | ||||||||||||||||
Reinsurance premiums ceded | (212,083 | ) | (80,005 | ) | (155,096 | ) | (32,884 | ) | (480,068 | ) | (413 | ) | — | (480,481 | ) | |||||||||||||||||
Net premiums written | $ | 215,684 | $ | 409,023 | $ | 130,382 | $ | 96,089 | $ | 851,178 | $ | 43,342 | $ | — | $ | 894,520 | ||||||||||||||||
Earned premiums | $ | 417,090 | $ | 476,434 | $ | 256,670 | $ | 125,000 | $ | 1,275,194 | $ | 43,755 | $ | — | $ | 1,318,949 | ||||||||||||||||
Earned premiums ceded | (211,127 | ) | (88,578 | ) | (154,568 | ) | (29,907 | ) | (484,180 | ) | (413 | ) | — | (484,593 | ) | |||||||||||||||||
Net premiums earned | 205,963 | 387,856 | 102,102 | 95,093 | 791,014 | 43,342 | — | 834,356 | ||||||||||||||||||||||||
Net investment income | 22,875 | 40,220 | 5,987 | 4,388 | 73,470 | 50,993 | 45,278 | 169,741 | ||||||||||||||||||||||||
Net realized and unrealized gains on investments | 4,430 | 10,540 | 232 | 2,590 | 17,792 | 37,338 | 26,635 | 81,765 | ||||||||||||||||||||||||
Net impairment losses recognized in earnings | — | — | — | — | — | — | (3,078 | ) | (3,078 | ) | ||||||||||||||||||||||
Net realized gain on retirement of senior notes | — | — | — | — | — | — | 111 | 111 | ||||||||||||||||||||||||
Other income | 1,238 | 12 | 314 | 658 | 2,222 | (120 | ) | 801 | 2,903 | |||||||||||||||||||||||
Total revenues | 234,506 | 438,628 | 108,635 | 102,729 | 884,498 | 131,553 | 69,747 | 1,085,798 | ||||||||||||||||||||||||
Net losses and loss expenses | 132,355 | 254,474 | 62,812 | 43,958 | 493,599 | — | — | 493,599 | ||||||||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | 101,093 | — | 101,093 | ||||||||||||||||||||||||
Acquisition costs | (1,233 | ) | 71,074 | 7,501 | 18,136 | 95,478 | 1,396 | — | 96,874 | |||||||||||||||||||||||
Interest expense | 781 | 6,591 | — | — | 7,372 | 3,328 | 10,639 | 21,339 | ||||||||||||||||||||||||
Net foreign exchange gains | — | — | — | (5,055 | ) | (5,055 | ) | — | (717 | ) | (5,772 | ) | ||||||||||||||||||||
Merger and acquisition expenses | — | — | — | — | — | — | (31,566 | ) | (31,566 | ) | ||||||||||||||||||||||
General and administrative expenses | 24,623 | 31,778 | 31,229 | 19,972 | 107,602 | 2,786 | 43,607 | 153,995 | ||||||||||||||||||||||||
Total losses and expenses | 156,526 | 363,917 | 101,542 | 77,011 | 698,996 | 108,603 | 21,963 | 829,562 | ||||||||||||||||||||||||
Income before taxes | $ | 77,980 | $ | 74,711 | $ | 7,093 | $ | 25,718 | $ | 185,502 | $ | 22,950 | $ | 47,784 | $ | 256,236 | ||||||||||||||||
Loss Ratio [a] | 64.3 | % | 65.6 | % | 61.5 | % | 46.2 | % | 62.4 | % | ||||||||||||||||||||||
Combined Ratio [b] | 75.6 | % | 92.1 | % | 99.5 | % | 86.3 | % | 88.1 | % |
[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–YEAR ENDED DECEMBER 31, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Gross Premiums Written by Type of Risk: | Year Ended December 31, 2010 | Year Ended December 31, 2009 | ||||||||||||||||||||
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: | ||||||||||||||||||||||
Insurance: | ||||||||||||||||||||||
Aviation | S | $ | 39,888 | 2.8 | % | (42.9 | %) | $ | 69,834 | 5.1 | % | |||||||||||
Excess Liability | L | 89,933 | 6.4 | % | (20.9 | %) | 113,767 | 8.3 | % | |||||||||||||
Professional Liability | L | 177,199 | 12.6 | % | (1.5 | %) | 179,904 | 13.1 | % | |||||||||||||
Property | S | 63,100 | 4.5 | % | (1.8 | %) | 64,262 | 4.7 | % | |||||||||||||
370,120 | 26.2 | % | (13.5 | %) | 427,767 | 31.1 | % | |||||||||||||||
Reinsurance [a]: | ||||||||||||||||||||||
Agriculture | S | 29,222 | 2.1 | % | (67.4 | %) | 89,550 | 6.5 | % | |||||||||||||
Auto | S | 32,902 | 2.3 | % | n/a | — | — | |||||||||||||||
Aviation | S | 31,292 | 2.2 | % | (9.9 | %) | 34,715 | 2.5 | % | |||||||||||||
Credit/ Surety | S | 2,196 | 0.2 | % | n/a | — | — | |||||||||||||||
General Casualty | L | 48,357 | 3.4 | % | 65.7 | % | 29,185 | 2.1 | % | |||||||||||||
Marine & Energy | S | 16,381 | 1.2 | % | (10.6 | %) | 18,321 | 1.3 | % | |||||||||||||
Medical Malpractice | L | 51,391 | 3.6 | % | (23.8 | %) | 67,483 | 4.9 | % | |||||||||||||
Other | S | 2,784 | 0.2 | % | 21.2 | % | 2,297 | 0.2 | % | |||||||||||||
Professional Liability | L | 110,427 | 7.8 | % | 54.4 | % | 71,531 | 5.2 | % | |||||||||||||
Property | S | 148,146 | 10.5 | % | 70.2 | % | 87,039 | 6.3 | % | |||||||||||||
Whole Account | S/L | 5,129 | 0.4 | % | (55.2 | %) | 11,456 | 0.8 | % | |||||||||||||
Workers’ Compensation | L | 30,826 | 2.2 | % | (60.2 | %) | 77,451 | 5.6 | % | |||||||||||||
509,053 | 36.1 | % | 4.1 | % | 489,028 | 35.6 | % | |||||||||||||||
U.S. Specialty: | ||||||||||||||||||||||
General Liability | L | 104,777 | 7.4 | % | 19.4 | % | 87,782 | 6.4 | % | |||||||||||||
Marine | S | 67,454 | 4.8 | % | 9.9 | % | 61,360 | 4.5 | % | |||||||||||||
Professional Liability | L | 12,454 | 0.9 | % | n/a | 576 | 0.0 | % | ||||||||||||||
Property | S | 139,305 | 9.9 | % | 2.6 | % | 135,760 | 9.9 | % | |||||||||||||
323,990 | 23.0 | % | 13.5 | % | 285,478 | 20.8 | % | |||||||||||||||
Alterra at Lloyd’s: | ||||||||||||||||||||||
Accident & Health | S | 30,921 | 2.2 | % | 36.8 | % | 22,602 | 1.6 | % | |||||||||||||
Aviation | S | 16,138 | 1.1 | % | n/a | 2,611 | 0.2 | % | ||||||||||||||
Financial Institutions | L | 19,448 | 1.4 | % | (18.4 | %) | 23,822 | 1.7 | % | |||||||||||||
International Casualty | L | 26,174 | 1.9 | % | n/a | — | — | |||||||||||||||
Professional Liability | L | 19,591 | 1.4 | % | (1.5 | %) | 19,889 | 1.4 | % | |||||||||||||
Property | S | 85,553 | 6.1 | % | 42.5 | % | 60,049 | 4.4 | % | |||||||||||||
Surety | S | 4,808 | 0.3 | % | n/a | — | — | |||||||||||||||
202,633 | 14.4 | % | 57.1 | % | 128,973 | 9.4 | % | |||||||||||||||
Aggregate Property & Casualty | $ | 1,405,796 | 99.7 | % | 5.6 | % | $ | 1,331,246 | 96.8 | % | ||||||||||||
Life & Annuity: | ||||||||||||||||||||||
Annuity | $ | 1,135 | 0.1 | % | n/a | $ | — | — | ||||||||||||||
Life | 3,800 | 0.3 | % | (91.3 | %) | 43,755 | 3.2 | % | ||||||||||||||
Aggregate Life & Annuity | $ | 4,935 | 0.3 | % | (88.7 | %) | $ | 43,755 | 3.2 | % | ||||||||||||
Aggregate Property & Casualty and Life & Annuity | $ | 1,410,731 | 100.0 | % | 2.6 | % | $ | 1,375,001 | 100.0 | % | ||||||||||||
S = Short tail lines | $ | 712,655 | 50.7 | % | $ | 654,128 | 49.1 | % | ||||||||||||||
L = Long tail lines | 693,141 | 49.3 | % | 677,118 | 50.9 | % | ||||||||||||||||
Aggregate Property & Casualty | $ | 1,405,796 | $ | 1,331,246 | ||||||||||||||||||
[a] | Includes the results of Harbor Point Limited from May 12, 2010. |
Percentage totals may not add due to rounding.
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 December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income before tax | $ | 78,643 | $ | 67,601 | $ | 306,491 | $ | 256,236 | ||||||||
Net realized and unrealized (gains) losses on non-hedge fund investments, before tax [a] | (2,627 | ) | (2,064 | ) | 65 | (2,173 | ) | |||||||||
Foreign exchange (gains) losses, before tax | (382 | ) | 702 | (115 | ) | (5,772 | ) | |||||||||
Merger and acquisition expenses, before tax | 500 | (224 | ) | (48,776 | ) | (31,566 | ) | |||||||||
Net operating income before tax | $ | 76,134 | $ | 66,015 | $ | 257,665 | $ | 216,725 | ||||||||
Net income | $ | 79,670 | $ | 62,592 | $ | 302,335 | $ | 246,215 | ||||||||
Net realized and unrealized (gains) losses on non-hedge fund investments, net of tax [a] | (3,537 | ) | (2,576 | ) | (865 | ) | (1,411 | ) | ||||||||
Foreign exchange (gains) losses, net of tax | (417 | ) | 682 | 363 | (4,331 | ) | ||||||||||
Merger and acquisition expenses, net of tax | 500 | (224 | ) | (50,121 | ) | (31,566 | ) | |||||||||
Net operating income | $ | 76,216 | $ | 60,474 | $ | 251,712 | $ | 208,907 | ||||||||
Net income per diluted share | $ | 0.69 | $ | 1.08 | $ | 3.17 | $ | 4.26 | ||||||||
Net realized and unrealized (gains) losses on non-hedge fund investments, net of tax [a] | (0.03 | ) | (0.05 | ) | (0.01 | ) | (0.02 | ) | ||||||||
Foreign exchange (gains) losses, net of tax | — | 0.01 | 0.01 | (0.07 | ) | |||||||||||
Merger and acquisition expenses, net of tax | — | — | (0.53 | ) | (0.55 | ) | ||||||||||
Net operating income per diluted share | $ | 0.66 | $ | 1.04 | $ | 2.64 | $ | 3.62 | ||||||||
Weighted average shares outstanding - basic | 113,968,287 | 57,090,930 | 94,682,279 | 57,006,908 | ||||||||||||
Weighted average shares outstanding - diluted | 114,831,467 | 58,035,775 | 95,459,375 | 57,767,137 | ||||||||||||
[a] | Net realized and unrealized (gains) losses 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 December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income | $ | 79,670 | $ | 62,592 | $ | 302,335 | $ | 246,215 | ||||||||
Annualized net income | 318,680 | 250,368 | 302,335 | 246,215 | ||||||||||||
Net operating income | $ | 76,216 | $ | 60,474 | $ | 251,712 | $ | 208,907 | ||||||||
Annualized net operating income | 304,864 | 241,896 | 251,712 | 208,907 | ||||||||||||
Average shareholders’ equity [b] | $ | 2,977,404 | $ | 1,555,654 | $ | 2,467,429 | $ | 1,398,872 | ||||||||
Annualized return on average shareholders’ equity | 10.7 | % | 16.1 | % | 12.3 | % | 17.6 | % | ||||||||
Annualized net operating return on average shareholders’ equity | 10.2 | % | 15.5 | % | 10.2 | % | 14.9 | % |
[b] | Average shareholders’ equity is computed as the average of the quarterly average shareholders’ equity balances. The average for the year ended December 31, 2010 has been weighted to include Harbor Point Limited from May 12, 2010. |
Diluted Tangible Book Value Per Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
December 31, 2010 | December 31, 2009 | |||||||
Shareholders’ equity | $ | 2,918,270 | $ | 1,564,633 | ||||
Goodwill and intangible assets | (59,076 | ) | (48,686 | ) | ||||
Tangible book value | $ | 2,859,194 | $ | 1,515,947 | ||||
Diluted shares outstanding | 112,290,968 | 57,178,458 | ||||||
Diluted tangible book value per share | $ | 25.46 | $ | 26.51 |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA–DECEMBER 31, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Type of Investment | As of December 31, 2010 | Investment Distribution | As of December 31, 2009 | Investment Distribution | ||||||||||||
Cash and cash equivalents | $ | 905,606 | 11.5 | % | $ | 702,278 | 13.3 | % | ||||||||
U.S. government and agencies | 995,546 | 12.7 | % | 525,427 | 10.0 | % | ||||||||||
Non-U.S. governments | 79,111 | 1.0 | % | 82,027 | 1.6 | % | ||||||||||
Corporate securities | 2,735,366 | 34.8 | % | 1,375,999 | 26.1 | % | ||||||||||
Municipal securities | 238,014 | 3.0 | % | 83,658 | 1.6 | % | ||||||||||
Asset-backed securities | 86,937 | 1.1 | % | 102,006 | 1.9 | % | ||||||||||
Residential mortgage-backed securities | 1,168,390 | 14.9 | % | 763,974 | 14.5 | % | ||||||||||
Commercial mortgage-backed securities | 334,151 | 4.3 | % | 302,961 | 5.8 | % | ||||||||||
Fixed maturities at fair value | $ | 5,637,515 | 71.7 | % | $ | 3,236,052 | 61.5 | % | ||||||||
U.S. government and agencies | $ | 29,687 | 0.4 | % | $ | 14,050 | 0.3 | % | ||||||||
Non-U.S. governments | 538,274 | 6.8 | % | 573,250 | 10.9 | % | ||||||||||
Corporate securities | 371,143 | 4.7 | % | 418,647 | 8.0 | % | ||||||||||
Asset-backed securities | 1,000 | 0.0 | % | — | 0.0 | % | ||||||||||
Fixed maturities at amortized cost | $ | 940,104 | 12.0 | % | $ | 1,005,947 | 19.1 | % | ||||||||
Other investments | $ | 378,128 | 4.8 | % | $ | 318,073 | 6.0 | % | ||||||||
Total invested assets | $ | 7,861,353 | 100.0 | % | $ | 5,262,350 | 100.0 | % | ||||||||
Credit Rating | As of December 31, 2010 | Ratings Distribution | As of December 31, 2009 | Ratings Distribution | ||||||||||||
U.S. government and agencies [a] | $ | 2,060,116 | 31.3 | % | $ | 1,214,895 | 28.6 | % | ||||||||
AAA | 1,076,680 | 16.4 | % | 720,364 | 17.0 | % | ||||||||||
AA | 657,867 | 10.0 | % | 325,997 | 7.7 | % | ||||||||||
A | 1,353,945 | 20.6 | % | 731,723 | 17.2 | % | ||||||||||
BBB | 226,849 | 3.4 | % | 100,841 | 2.4 | % | ||||||||||
BB | 32,021 | 0.5 | % | 34,781 | 0.8 | % | ||||||||||
B or lower | 230,037 | 3.5 | % | 107,451 | 2.5 | % | ||||||||||
Fixed maturities at fair value | $ | 5,637,515 | 85.7 | % | $ | 3,236,052 | 76.3 | % | ||||||||
U.S. government and agencies | $ | 29,687 | 0.5 | % | $ | 14,050 | 0.3 | % | ||||||||
AAA | 641,437 | 9.8 | % | 717,954 | 16.9 | % | ||||||||||
AA | 113,140 | 1.7 | % | 101,675 | 2.4 | % | ||||||||||
A | 141,683 | 2.2 | % | 158,141 | 3.7 | % | ||||||||||
BBB | 12,744 | 0.2 | % | 12,672 | 0.3 | % | ||||||||||
BB | — | — | — | — | ||||||||||||
B or lower | 1,413 | 0.0 | % | 1,455 | 0.0 | % | ||||||||||
Fixed maturities at amortized cost | $ | 940,104 | 14.3 | % | $ | 1,005,947 | 23.7 | % | ||||||||
Total fixed maturities | $ | 6,577,619 | 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 $1,064,570 (December 31, 2009: $689,468) |
Percentage | totals may not add due to rounding. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net investment income | $ | 61,080 | $ | 44,668 | $ | 222,458 | $ | 169,741 | ||||||||
Realized and unrealized (losses) gains on trading fixed maturities | (3,893 | ) | 3 | (4,476 | ) | 2,590 | ||||||||||
Net realized gains on available for sale fixed maturities | 5,816 | 3,234 | 15,474 | 1,885 | ||||||||||||
Change in fair value of hedge funds | 5,465 | 13,555 | 14,333 | 75,755 | ||||||||||||
Change in fair value of non-hedge fund other investments | 2,437 | 533 | (8,459 | ) | 1,535 | |||||||||||
Net realized and unrealized gains on investments | $ | 9,825 | $ | 17,325 | $ | 16,872 | $ | 81,765 | ||||||||
Net impairment losses recognized in earnings | $ | (1,774 | ) | $ | (925 | ) | $ | (2,645 | ) | $ | (3,078 | ) | ||||