Alterra Capital 8-K Alterra Capital Reports First Quarter 2011 Results

Exhibit 99.1

ALTERRA CAPITAL REPORTS FIRST QUARTER 2011 RESULTS

Net Operating Loss of $0.23 per Diluted Share

Diluted Book Value per Share Decline of 2.5%

HAMILTON, BERMUDA, May 3, 2011—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported a net loss of $46.7 million, or $0.44 per diluted share, for the first quarter of 2011, compared to net income of $36.4 million, or $0.63 per diluted share, for the same quarter of 2010. 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 loss for the first quarter of 2011 was $24.7 million, or $0.23 per diluted share, compared to net operating income of $40.7 million, or $0.71 per diluted share, for the same quarter of 2010. Annualized net operating return on average shareholders’ equity for the first quarter of 2011 was negative 3.5%.

Alterra’s results include the results of operations for the former Harbor Point companies from May 12, 2010. Comparative figures for the first quarter of 2010 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 Alterra’s first quarter financial supplement available on Alterra’s website atwww.alterracap.com.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “The first quarter of 2011 was marked by the effects of major property catastrophe events in Japan, New Zealand and Australia. These have been significant industry events; however, our strategy of diversifying and limiting our property catastrophe risk exposures resulted in a manageable level of losses and limited the capital impact to less than 4.5% of our 2011 opening shareholders’ equity – in line with our previously announced estimates. Looking ahead, as a result of the first quarter property catastrophe events, we expect to see improved pricing conditions in the international property reinsurance arena. With our strong capital base and first-rate talent, we believe that we are very well positioned to participate in attractive underwriting opportunities that emerge in this market.”

First quarter 2011 results for Alterra include:

• Property and casualty gross premiums written of $627.4 million, representing an increase of $257.1 million, or 69.4%; net premiums written of $490.1 million, representing an increase of $272.9 million, or 125.7%; and net premiums earned of $379.5 million, representing an increase of $186.0 million, or 96.1%; each as compared to the same quarter of 2010. The increases in these figures primarily reflect the impact of the merger with Harbor Point - whose premiums are not included in the 2010 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 112.5% compared to 90.5% for the same quarter of 2010;

• Property catastrophe event and significant per-risk net losses of $115.5 million ($106.3 million net of reinstatement premiums) compared to $9.6 million in the same quarter of 2010. Incurred losses net of reinsurance and reinstatements for the major events were: Japan earthquake and tsunami - $83.0 million; New Zealand earthquake - $14.0 million; and Australia flood and storms - $9.3 million. Property catastrophe losses principally affected the reinsurance and Alterra at Lloyd’s segments;

• Net favorable development on prior years’ loss reserves of $30.2 million, or 8.0 combined ratio points, compared to $17.1 million, or 8.8 combined ratio points, in the same quarter of 2010;

• Net investment income of $57.8 million compared to $48.4 million in the same quarter of 2010, an increase of 19.4%;

• A loss of principal of $25.0 million on a catastrophe bond investment triggered by the Japan earthquake and tsunami, included within net realized and unrealized losses on investments; and

• Net operating loss of $24.7 million, or $0.23 per diluted share, representing an annualized net operating return on average shareholders’ equity of negative 3.5%.

Gross premiums written from property and casualty underwriting for the first quarter of 2011 were $627.4 million, generated by the segments as follows: insurance - $71.3 million, an increase of $1.9 million, or 2.7%; reinsurance - $375.0 million, an increase of $220.2 million, or 142.2%; U.S. specialty - $70.4 million, a decrease of $3.5 million, or 4.8%; and Alterra at Lloyd’s - $110.7 million, an increase of $38.6 million, or 53.5%; each as compared to the same quarter of 2010. Gross premiums written included $17.1 million from Alterra’s operations in Latin America, which started in the first quarter of 2010.

Combined ratios for the first quarter of 2011 by segment were 82.4% for insurance, 112.9% for reinsurance, 99.0% for U.S. specialty and 160.7% for Alterra at Lloyd’s.

Balance Sheet

Total invested assets, including cash and cash equivalents, were $7,847.4 million as of March 31, 2011, a decrease of $13.9 million from December 31, 2010. As of March 31, 2011, 96.0% of the fixed maturities portfolio (by carrying value) was investment-grade, unchanged from December 31, 2010. As of March 31, 2011, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.34% and the weighted average duration was 4.1 years.

Net investment income for the first quarter of 2011 increased to $57.8 million from $48.4 million for the same quarter of 2010. 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 6,186,150 common shares during the first quarter of 2011 at an average price of $21.91 per share for a total of $135.5 million. As of March 31, 2011, $192.2 million remained under the Board-approved share repurchase authorization.

Shareholders’ equity was $2,723.2 million as of March 31, 2011, a decrease of 6.7% from December 31, 2010. Diluted book value per share as of March 31, 2011 was $25.34, a decrease of 2.5% from December 31, 2010.

A copy of Alterra’s first quarter financial supplement is available on Alterra’s website atwww.alterracap.com.

Alterra will host a conference call on Wednesday, May 4, 2011 at 10:00 am (EDT) to discuss these results and related matters with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-680-0894 (toll-free U.S.) or 1-617-213-4860 (international) and using access code 35073202. 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 and loss, net operating income and loss 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 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 includes 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.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

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

	March 31, 2011		December 31, 2010
	(unaudited)
ASSETS
Cash and cash equivalents	$	1,001,051	$	905,606
Fixed maturities, trading at fair value		214,807		244,872
Fixed maturities, available for sale at fair value		5,290,684		5,392,643
Fixed maturities, held to maturity at amortized cost (fair value $1,026,302)		983,207		940,104
Other investments, at fair value		357,655		378,128
Accrued interest income		69,497		75,414
Premiums receivable		809,483		588,537
Losses and benefits recoverable from reinsurers		1,053,223		956,115
Deferred acquisition costs		149,197		111,901
Prepaid reinsurance premiums		176,918		149,252
Trades pending settlement		—		32,393
Goodwill and intangible assets		58,585		59,076
Other assets		86,072		83,247
Total assets	$	10,250,379	$	9,917,288
LIABILITIES
Property and casualty losses	$	4,185,230	$	3,906,134
Life and annuity benefits		1,316,287		1,275,580
Deposit liabilities		147,424		147,612
Funds withheld from reinsurers		122,072		121,107
Unearned property and casualty premiums		1,065,160		905,487
Reinsurance balances payable		127,299		102,942
Accounts payable and accrued expenses		103,376		99,680
Trades pending settlement		19,855		—
Senior notes		440,482		440,476
Total liabilities		7,527,185		6,999,018
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; 105,733,610 (2010 - 110,963,160) shares issued and outstanding		105,734		110,963
Additional paid-in capital		1,905,144		2,026,045
Accumulated other comprehensive income		89,233		98,946
Retained earnings		623,083		682,316
Total shareholders’ equity		2,723,194		2,918,270
Total liabilities and shareholders’ equity	$	10,250,379	$	9,917,288
Book value per share	$	25.76	$	26.30
Diluted book value per share	$	25.34	$	25.99
Diluted tangible book value per share [a]	$	24.79	$	25.46
Diluted shares outstanding		107,466,378		112,290,968

[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 March 31,
	2011			2010
REVENUES
Gross premiums written	$	627,848		$	371,139
Reinsurance premiums ceded		(137,357	)		(153,220	)
Net premiums written	$	490,491		$	217,919
Earned premiums	$	489,262		$	304,997
Earned premiums ceded		(109,375	)		(110,757	)
Net premiums earned		379,887			194,240
Net investment income		57,766			48,390
Net realized and unrealized (losses) gains on investments		(18,818	)		6,422
Total other-than-temporary impairment losses		(1,124	)		(698	)
Portion of loss recognized in other comprehensive income (loss), before taxes		95			278
Net impairment losses recognized in earnings		(1,029	)		(420	)
Other income		1,315			344
Total revenues		419,121			248,976
LOSSES AND EXPENSES
Net losses and loss expenses		304,406			124,965
Claims and policy benefits		14,710			17,659
Acquisition costs		70,608			24,244
Interest expense		8,459			4,942
Net foreign exchange gains		(878	)		(2,452	)
Merger and acquisition expenses		—			4,744
General and administrative expenses		71,203			36,528
Total losses and expenses		468,508			210,630
(LOSS) INCOME BEFORE TAXES		(49,387	)		38,346
Income tax (benefit) expense		(2,700	)		1,965
NET (LOSS) INCOME [a]		(46,687	)		36,381
Change in net unrealized gains and losses on fixed maturities, net of tax		(14,586	)		34,131
Foreign currency translation adjustment		4,873			(9,740	)
COMPREHENSIVE (LOSS) INCOME [a]	$	(56,400	)	$	60,772
Basic earnings per share	$	(0.44	)	$	0.64
Diluted earnings per share	$	(0.44	)	$	0.63
Net operating (loss) income per diluted share	$	(0.23	)	$	0.71
Weighted average shares outstanding - basic		107,165,228			56,516,593
Weighted average shares outstanding - diluted		107,165,228			57,383,748

[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)

	Three Months Ended March 31
	2011			2010
Common shares
Balance, beginning of period	$	110,963		$	55,867
Issuance of common shares, net		1,034			1,630
Repurchase of common shares		(6,263	)		(517	)
Balance, end of period		105,734			56,980
Additional paid-in capital
Balance, beginning of period		2,026,045			752,309
Issuance of common shares, net		(920	)		(1,619	)
Stock based compensation expense		10,902			5,147
Repurchase of common shares		(130,883	)		(11,371	)
Balance, end of period		1,905,144			744,466
Accumulated other comprehensive income
Unrealized holding gains (losses) on investments:
Balance, beginning of period		118,197			36,791
Holding (losses) gains on available for sale securities arising in period [a]		(11,993	)		35,244
Net realized gains on available for sale securities included in net income [a]		(2,498	)		(835	)
Portion of other-than-temporary impairment losses recognised in other comprehensive income [a]		(95	)		(278	)
Balance, end of period		103,611			70,922
Cumulative foreign currency translation adjustment:
Balance, beginning of period		(19,251	)		(11,360	)
Foreign currency translation adjustments		4,873			(9,740	)
Balance, end of period		(14,378	)		(21,100	)
Total accumulated other comprehensive income		89,233			49,822
Retained earnings
Balance, beginning of period		682,316			731,026
Net (loss) income		(46,687	)		36,381
Dividends		(12,546	)		(5,559	)
Balance, end of period		623,083			761,848
Total shareholders’ equity	$	2,723,194		$	1,613,116

[a] Net of tax

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

	Three Months Ended March 31
	2011			2010
OPERATING ACTIVITIES
Net (loss) income	$	(46,687	)	$	36,381
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock based compensation		10,902			5,147
Amortization of premium on fixed maturities		5,266			696
Accretion of deposit liabilities		1,496			1,582
Net realized and unrealized losses (gains) on investments		18,816			(6,422	)
Net impairment losses recognized in earnings		1,029			420
Changes in:
Accrued interest income		6,004			5,164
Premiums receivable		(217,335	)		(53,109	)
Losses and benefits recoverable from reinsurers		(95,272	)		(28,814	)
Deferred acquisition costs		(36,853	)		(7,534	)
Prepaid reinsurance premiums		(27,503	)		(43,777	)
Other assets		(1,964	)		(11,814	)
Property and casualty losses		256,939			72,320
Life and annuity benefits		(11,599	)		(9,700	)
Funds withheld from reinsurers		965			(1,094	)
Unearned property and casualty premiums		154,908			68,789
Reinsurance balances payable		24,283			22,578
Accounts payable and accrued expenses		3,514			(4,013	)
Cash provided by operating activities		46,909			46,800
INVESTING ACTIVITIES
Purchases of available for sale securities		(579,728	)		(422,965	)
Sales of available for sale securities		423,344			132,632
Redemptions/maturities of available for sale securities		275,420			196,732
Purchases of trading securities		(7,783	)		(7,058	)
Sales of trading securities		24,564			—
Redemptions/maturities of trading securities		16,730			6,312
Purchases of held to maturity securities		(2,580	)		(10,243	)
Redemptions/maturities of held to maturity securities		8,546			10,311
Net purchases/sales of other investments		34,334			70,976
Cash provided by (used in) investing activities		192,847			(23,303	)
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		114			11
Repurchase of common shares		(137,146	)		(11,888	)
Dividends paid		(12,546	)		(5,559	)
Additions to deposit liabilities		283			2,006
Payment of deposit liabilities		(1,967	)		(7,378	)
Cash used in financing activities		(151,262	)		(22,808	)
Effect of exchange rate changes on foreign currency cash and cash equivalents		6,951			(12,721	)
Net increase (decrease) in cash and cash equivalents		95,445			(12,032	)
Cash and cash equivalents, beginning of period		905,606			702,278
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,001,051		$	690,246

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid totaled $11,120 and $nil for the three months ended March 31, 2011 and 2010, respectively.

Income taxes paid totaled $79 and $nil for the three months ended March 31, 2011 and 2010, respectively.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED MARCH 31, 2011 (Unaudited)

(Expressed in thousands of United States Dollars)

	Property & Casualty															Life & Annuity			Corporate			Consolidated
	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance
Quarter Segment Information:
Gross premiums written	$	71,272		$	375,020		$	70,388		$	110,733		$	627,413		$	435		$	—		$	627,848
Reinsurance premiums ceded		(43,246	)		(37,317	)		(33,595	)		(23,179	)		(137,337	)		(20	)		—			(137,357	)
Net premiums written	$	28,026		$	337,703		$	36,793		$	87,554		$	490,076		$	415		$	—		$	490,491
Earned premiums	$	98,944		$	249,901		$	73,177		$	66,805		$	488,827		$	435		$	—		$	489,262
Earned premiums ceded		(44,730	)		(20,195	)		(23,850	)		(20,580	)		(109,355	)		(20	)		—			(109,375	)
Net premiums earned		54,214			229,706			49,327			46,225			379,472			415			—			379,887
Net losses and loss expenses		(34,664	)		(186,885	)		(31,375	)		(51,482	)		(304,406	)		—			—			(304,406	)
Claims and policy benefits		—			—			—			—			—			(14,710	)		—			(14,710	)
Acquisition costs		(184	)		(49,143	)		(8,066	)		(13,056	)		(70,449	)		(159	)		—			(70,608	)
General and administrative expenses		(9,825	)		(23,258	)		(9,397	)		(9,723	)		(52,203	)		(177	)		—			(52,380	)
Other income		812			—			—			215			1,027			—			—			1,027
Underwriting income (loss)	$	10,353		$	(29,580	)	$	489		$	(27,821	)	$	(46,559	)		n/a			—			n/a
Net investment income																	12,343			45,423			57,766
Net realized and unrealized gains (losses) on investments																	2,807			(21,625	)		(18,818	)
Net impairment losses recognized in earnings																				(1,029	)		(1,029	)
Corporate other income																				288			288
Interest expense																				(8,459	)		(8,459	)
Net foreign exchange gains																				878			878
Corporate general and administrative expenses																				(18,823	)		(18,823	)
Income (loss) before taxes																$	519		$	(3,347	)	$	(49,387	)
Loss ratio [a]		63.9	%		81.4	%		63.6	%		111.4	%		80.2	%
Acquisition cost ratio [b]		0.3	%		21.4	%		16.4	%		28.2	%		18.6	%
General and administrative expense ratio [c]		18.1	%		10.1	%		19.1	%		21.0	%		13.8	%
Combined ratio [d]		82.4	%		112.9	%		99.0	%		160.7	%		112.5	%

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED MARCH 31, 2010 (Unaudited)

(Expressed in thousands of United States Dollars)

	Property & Casualty															Life & Annuity			Corporate			Consolidated
	Insurance [e]			Reinsurance			U.S. Specialty [e]			Alterra at Lloyd’s			Total			Reinsurance
Quarter Segment Information:
Gross premiums written	$	69,406		$	154,851		$	73,902		$	72,117		$	370,276		$	863		$	—		$	371,139
Reinsurance premiums ceded		(39,651	)		(45,351	)		(48,152	)		(19,959	)		(153,113	)		(107	)		—			(153,220	)
Net premiums written	$	29,755		$	109,500		$	25,750		$	52,158		$	217,163		$	756		$	—		$	217,919
Earned premiums	$	101,746		$	95,743		$	69,185		$	37,460		$	304,134		$	863		$	—		$	304,997
Earned premiums ceded		(48,830	)		(15,958	)		(38,393	)		(7,469	)		(110,650	)		(107	)		—			(110,757	)
Net premiums earned		52,916			79,785			30,792			29,991			193,484			756			—			194,240
Net losses and loss expenses		(39,446	)		(50,065	)		(19,196	)		(16,258	)		(124,965	)		—			—			(124,965	)
Claims and policy benefits		—			—			—			—			—			(17,659	)		—			(17,659	)
Acquisition costs		317			(14,966	)		(3,682	)		(5,767	)		(24,098	)		(146	)		—			(24,244	)
General and administrative expenses		(6,847	)		(8,959	)		(7,522	)		(2,713	)		(26,041	)		(657	)		—			(26,698	)
Other income		(6	)		—			—			178			172			(28	)		—			144
Underwriting income	$	6,934		$	5,795		$	392		$	5,431		$	18,552			n/a			—			n/a
Net investment income																	13,099			35,291			48,390
Net realized and unrealized gains on investments																	5,916			506			6,422
Net impairment losses recognized in earnings																				(420	)		(420	)
Corporate other income																				200			200
Interest expense																				(4,942	)		(4,942	)
Net foreign exchange gains																				2,452			2,452
Merger and acquisition expenses																				(4,744	)		(4,744	)
Corporate general and administrative expenses																				(9,830	)		(9,830	)
Income before taxes																$	1,281		$	18,513		$	38,346
Loss ratio [a]		74.5	%		62.7	%		62.3	%		54.2	%		64.6	%
Acquisition cost ratio [b]		(0.6	%)		18.8	%		12.0	%		19.2	%		12.5	%
General and administrative expense ratio [c]		12.9	%		11.2	%		24.4	%		9.0	%		13.5	%
Combined ratio [d]		86.9	%		92.7	%		98.7	%		82.5	%		90.5	%

[a] The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned.

[b] The acquisition cost ratio is calculated by dividing acquisitions costs by net premiums earned.

[c] The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned.

[d] 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.

[e] Insurance and U.S. specialty segment amounts for the comparative 2010 period have been reclassified to conform with the current period’s presentation.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL PREMIUM DATA–THREE MONTHS ENDED MARCH 31, 2011 (Unaudited)

(Expressed in thousands of United States Dollars)

		Three Months Ended March 31, 2011						Movement on Prior Year Period			Three Months Ended March 31, 2010
		Gross Premiums Written			Percentage of Total Gross Premiums Written						Gross Premiums Written		Percentage of Total Gross Premiums Written
Gross Premiums Written by Type of Risk:
Property & Casualty:
Insurance:
Aviation	S	$	1,416			0.2	%		(39.7	%)	$	2,349		0.6	%
Excess Liability	L		27,387			4.4	%		2.8	%		26,633		7.2	%
Professional Liability	L		26,796			4.3	%		(2.8	%)		27,573		7.4	%
Property	S		15,673			2.5	%		22.0	%		12,851		3.5	%
			71,272			11.4	%		2.7	%		69,406		18.7	%
Reinsurance [a]:
Agriculture	S		20,785			3.3	%		(42.0	%)		35,806		9.6	%
Auto	S		15,160			2.4	%		n/a			—		—
Aviation	S		904			0.1	%		(81.3	%)		4,822		1.3	%
Credit/ Surety	S		24,426			3.9	%		n/a			—		—
General Casualty	L		16,247			2.6	%		24.5	%		13,051		3.5	%
Marine & Energy	S		17,093			2.7	%		316.9	%		4,100		1.1	%
Medical Malpractice	L		17,582			2.8	%		(35.3	%)		27,155		7.3	%
Other	S		1,759			0.3	%		77.9	%		989		0.3	%
Professional Liability	L		59,684			9.5	%		400.7	%		11,919		3.2	%
Property	S		149,874			23.9	%		226.3	%		45,933		12.4	%
Whole Account	S/L		35,070			5.6	%		n/a			2,573		0.7	%
Workers’ Compensation	L		16,436			2.6	%		93.3	%		8,503		2.3	%
			375,020			59.7	%		142.2	%		154,851		41.7	%
U.S. Specialty:
General Liability	L		17,883			2.8	%		(10.7	%)		20,029		5.4	%
Marine	S		17,109			2.7	%		6.5	%		16,063		4.3	%
Professional Liability	L		4,355			0.7	%		93.9	%		2,246		0.6	%
Property	S		31,041			4.9	%		(12.7	%)		35,564		9.6	%
			70,388			11.2	%		(4.8	%)		73,902		19.9	%
Alterra at Lloyd’s:
Accident & Health	S		13,544			2.2	%		1.0	%		13,410		3.6	%
Aviation	S		1,767			0.3	%		(59.9	%)		4,403		1.2	%
Financial Institutions	L		9,036			1.4	%		48.4	%		6,088		1.6	%
International Casualty	L		33,860			5.4	%		147.4	%		13,684		3.7	%
Professional Liability	L		7,922			1.3	%		14.9	%		6,896		1.9	%
Property	S		44,623			7.1	%		61.5	%		27,636		7.4	%
Surety	S		(19	)		0.0	%		n/a			—		—
			110,733			17.6	%		53.5	%		72,117		19.4	%
Aggregate Property & Casualty		$	627,413			99.9	%		69.4	%	$	370,276		99.8	%
Life & Annuity:
Annuity		$	336			0.1	%		n/a		$	—		—
Life			99			0.0	%		(88.5	%)		863		0.2	%
Aggregate Life & Annuity		$	435			0.1	%		(49.6	%)	$	863		0.2	%
Aggregate Property & Casualty and Life & Annuity		$	627,848			100.0	%		69.2	%	$	371,139		100.0	%
S = Short tail lines		$	372,690			59.4	%				$	205,213		55.4	%
L = Long tail lines			254,723			40.6	%					165,063		44.6	%
Aggregate Property & Casualty		$	627,413								$	370,276

[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 (Loss) Income and Net Operating (Loss) Income per Diluted Share

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

	Three Months Ended March 31,
	2011			2010
Net (loss) income before tax	$	(49,387	)	$	38,346
Net realized and unrealized losses on non-hedge fund investments, before tax [a]		23,109			1,368
Foreign exchange gains, before tax		(878	)		(2,452	)
Merger and acquisition expenses, before tax		—			4,744
Net operating (loss) income before tax	$	(27,156	)	$	42,006
Net (loss) income	$	(46,687	)	$	36,381
Net realized and unrealized losses on non-hedge fund investments, net of tax [a]		22,602			1,236
Foreign exchange gains, net of tax		(640	)		(1,680	)
Merger and acquisition expenses, net of tax		—			4,744
Net operating (loss) income	$	(24,725	)	$	40,681
Net (loss) income per diluted share	$	(0.44	)	$	0.63
Net realized and unrealized losses on non-hedge fund investments, net of tax [a]		0.21			0.02
Foreign exchange gains, net of tax		(0.01	)		(0.03	)
Merger and acquisition expenses, net of tax		—			0.09
Net operating (loss) income per diluted share	$	(0.23	)	$	0.71
Weighted average shares outstanding - basic		107,165,228			56,516,593
Weighted average shares outstanding - diluted		107,165,228			57,383,748

[a] Net realized and unrealized (gains) losses on non-hedge fund investments includes realized and unrealized (gains) losses on trading securities, realized (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.

Per share totals may not add due to rounding.

Annualized Net Operating Return on Average Shareholders’ Equity

(Expressed in thousands of United States Dollars)

	Three Months Ended March 31,
	2011			2010
Net (loss) income	$	(46,687	)	$	36,381
Annualized net (loss) income		(186,748	)		145,524
Net operating (loss) income	$	(24,725	)	$	40,681
Annualized net operating (loss) income		(98,900	)		162,724
Average shareholders’ equity [b]	$	2,820,732		$	1,588,875
Annualized return on average shareholders’ equity		(6.6	%)		9.2	%
Annualized net operating return on average shareholders’ equity		(3.5	%)		10.2	%

[b] Average shareholders’ equity is computed as the average of the quarterly average shareholders’ equity balances.

Diluted Tangible Book Value Per Share

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

	March 31, 2011		December 31, 2010
Shareholders’ equity	$	2,723,194	$	2,918,270
Goodwill and intangible assets		58,585		59,076
Tangible book value	$	2,664,609	$	2,859,194
Diluted shares outstanding		107,466,378		112,290,968
Diluted tangible book value per share	$	24.79	$	25.46

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA–MARCH 31, 2011 (Unaudited)

(Expressed in thousands of United States Dollars)

Type of Investment	As of March 31, 2011		Investment Distribution			As of December 31, 2010		Investment Distribution
Cash and cash equivalents	$	1,001,051		12.8	%	$	905,606		11.5	%
U.S. government and agencies		829,036		10.6	%		995,546		12.7	%
Non-U.S. governments		176,497		2.2	%		79,111		1.0	%
Corporate securities		2,654,351		33.8	%		2,735,366		34.8	%
Municipal securities		196,027		2.5	%		238,014		3.0	%
Asset-backed securities		114,729		1.5	%		86,937		1.1	%
Residential mortgage-backed securities		1,178,989		15.0	%		1,168,390		14.9	%
Commercial mortgage-backed securities		355,862		4.5	%		334,151		4.3	%
Fixed maturities at fair value	$	5,505,491		70.2	%	$	5,637,515		71.7	%
U.S. government and agencies	$	29,690		0.4	%	$	29,687		0.4	%
Non-U.S. governments		570,559		7.3	%		538,274		6.8	%
Corporate securities		381,958		4.9	%		371,143		4.7	%
Asset-backed securities		1,000		0.0	%		1,000		0.0	%
Fixed maturities at amortized cost	$	983,207		12.5	%	$	940,104		12.0	%
Other investments	$	357,655		4.6	%	$	378,128		4.8	%
Total invested assets	$	7,847,404		100.0	%	$	7,861,353		100.0	%
Credit Rating	As of March 31, 2011		Ratings Distribution			As of December 31, 2010		Ratings Distribution
U.S. government and agencies [a]	$	1,914,424		29.5	%	$	2,060,116		31.3	%
AAA		1,111,873		17.1	%		1,076,680		16.4	%
AA		652,294		10.1	%		657,867		10.0	%
A		1,323,594		20.4	%		1,353,945		20.6	%
BBB		248,544		3.8	%		226,849		3.4	%
BB		31,979		0.5	%		32,021		0.5	%
B		120,738		1.9	%		138,703		2.1	%
CCC or lower		49,785		0.8	%		45,469		0.7	%
Not rated		52,260		0.8	%		45,865		0.7	%
Fixed maturities at fair value	$	5,505,491		84.8	%	$	5,637,515		85.7	%
U.S. government and agencies	$	29,690		0.5	%	$	29,687		0.5	%
AAA		682,948		10.5	%		641,437		9.8	%
AA		117,084		1.8	%		113,140		1.7	%
A		139,118		2.1	%		141,683		2.2	%
BBB		14,367		0.2	%		12,744		0.2	%
Not rated		—		—			1,413		0.0	%
Fixed maturities at amortized cost	$	983,207		15.2	%	$	940,104		14.3	%
Total fixed maturities	$	6,488,698		100.0	%	$	6,577,619		100.0	%

[a] Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,085,388 (December 31, 2010: $1,064,570)

Percentage totals may not add due to rounding.

	Three Months Ended March 31,
	2011			2010
Net investment income	$	57,766		$	48,390
Realized and unrealized (losses) gains on trading fixed maturities		(1,827	)		(182	)
Net realized gains on available for sale fixed maturities		3,369			838
Change in fair value of hedge funds		3,167			7,288
Change in fair value of non-hedge fund other investments		(23,527	)		(1,522	)
Net realized and unrealized (losses) gains on investments	$	(18,818	)	$	6,422
Net impairment losses recognized in earnings	$	(1,029	)	$	(420	)

Contacts

Susan Spivak Bernstein, 1-212-898-6640

Senior Vice President

susan.spivak@alterra-bm.com

or

Kekst and Company

Roanne Kulakoff or Peter Hill, 1-212-521-4800

roanne-kulakoff@kekst.com /peter-hill@kekst.com