Exhibit 99.1
ALTERRA CAPITAL REPORTS FOURTH QUARTER AND YEAR END 2011 RESULTS
Net Operating Income of $0.91 per Diluted Share in 2011
Diluted Book Value per Share Growth before Dividends of 5.5%
HAMILTON, BERMUDA, February 8, 2012—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $30.9 million, or $0.30 per diluted share, for the fourth quarter of 2011, compared to net income of $79.7 million, or $0.69 per diluted share, for the same quarter of 2010.
Net operating income for the fourth quarter of 2011 was $31.7 million, or $0.30 per diluted share, compared to net operating income of $76.2 million, or $0.66 per diluted share, for the same quarter of 2010. Annualized net operating return on average shareholders’ equity for the fourth quarter of 2011 was 4.5%.
For the year ended December 31, 2011, Alterra reported net income of $65.3 million, or $0.61 per diluted share, compared to net income of $302.3 million, or $3.17 per diluted share, in 2010. Net operating income for the year ended December 31, 2011 was $96.6 million, or $0.91 per diluted share, compared to net operating income of $251.7 million, or $2.64 per diluted share, in 2010. Net operating return on average shareholders’ equity for the year ended December 31, 2011 was 3.4%.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “We are pleased with Alterra’s relative performance in 2011. We have reported positive operating income and a positive return on equity. Importantly, we have grown our book value per share over the year. Considering the record level of industry property catastrophe losses in 2011, we believe our results highlight the benefits of our diversified underwriting strategy, measured cat risk appetite and sophisticated risk management discipline. We have worked hard these past few years to build a global organization with a geographic and product footprint that can meet the needs of our clients and enable us to capture opportunity. As a result, with the industry apparently on the cusp of change, we believe Alterra is particularly well positioned to take advantage of the expected improvement in prices.”
Fourth quarter 2011 results for Alterra include:
• | Property and casualty gross premiums written of $324.8 million, representing an increase of $11.4 million, or 3.6%; net premiums written of $217.8 million, representing a decrease of $18.2 million, or 7.7%; and net premiums earned of $348.1 million, representing an increase of $7.3 million, or 2.1%; each as compared to the same quarter of 2010; |
• | A combined ratio on property and casualty business of 97.4% compared to 84.8% for the same quarter of 2010; |
• | Property catastrophe event and significant per-risk net losses of $55.5 million, net of reinstatement premiums, compared to $13.0 million in the same quarter of 2010. Losses net of reinsurance and reinstatements include $30.0 million for natural disasters during the fourth quarter of 2011. The remainder of the net losses relate to increased loss estimates on property catastrophe events from the first nine months of the year; |
• | Net favorable development on prior years’ loss reserves of $43.0 million, or 12.3 combined ratio points, compared to $28.0 million, or 8.2 combined ratio points, in the same quarter of 2010; and |
• | Net investment income of $57.1 million compared to $61.1 million in the same quarter of 2010, a decrease of 6.5%. |
Gross premiums written from property and casualty underwriting for the fourth quarter of 2011 were $324.8 million, generated by the segments as follows: insurance - $111.8 million, a decrease of $1.5 million, or 1.3%; reinsurance - $89.2 million, a decrease of $21.5 million, or 19.4%; U.S. specialty - $88.2 million, an increase of $22.6 million, or 34.4%; and Alterra at Lloyd’s - $35.7 million, an increase of $11.7 million, or 49.0%; each as compared to the same quarter of 2010.
Combined ratios for the fourth quarter of 2011 by segment were 55.3% for insurance, 81.6% for reinsurance, 117.4% for U.S. specialty and 193.1% for Alterra at Lloyd’s.
Results for the year ended December 31, 2011 include:
• | Property and casualty gross premiums written of $1,900.7 million, representing an increase of $494.9 million, or 35.2%; net premiums written of $1,429.0 million, representing an increase of $394.0 million, or 38.1%; and net premiums earned of $1,422.0 million, representing an increase of $254.0 million, or 21.8%; each as compared to 2010; |
• | A combined ratio on property and casualty business of 98.2% compared to 85.7% in 2010; |
• | Property catastrophe event and significant per-risk net losses of $253.4 million, net of reinstatement premiums, compared to $54.9 million in 2010. Property catastrophe losses principally affected the reinsurance and Alterra at Lloyd’s segments; |
• | Net favorable development on prior years’ loss reserves of $153.3 million, or 10.8 combined ratio points, compared to $105.5 million, or 9.0 combined ratio points, in 2010; |
• | Net investment income of $234.8 million compared to $222.5 million in 2010, an increase of 5.6%; and |
• | A loss of principal of $25.0 million on a catastrophe bond investment triggered by the Japan earthquake and tsunami, which is included within net realized and unrealized losses on investments. |
Gross premiums written from property and casualty underwriting for the year ended December 31, 2011 were $1,900.7 million, generated by the segments as follows: insurance - $410.3 million, an increase of $10.7 million, or 2.7%; reinsurance - $869.7 million, an increase of $360.7 million, or 70.8%; U.S. specialty - $330.2 million, an increase of $35.7 million, or 12.1%; and Alterra at Lloyd’s - $290.5 million, an increase of $87.9 million, or 43.4%; each as compared to 2010.
Combined ratios for the year ended December 31, 2011 by segment were 68.2% for insurance, 95.8% for reinsurance, 104.8% for U.S. specialty and 135.4% for Alterra at Lloyd’s.
Alterra’s 2010 results of operations reflect the impact of the May 12, 2010 merger with Harbor Point Limited. Accordingly, a comparison of Alterra’s gross premiums written, net premiums written and other results of operations for the current and prior year 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 fourth quarter financial supplement available on Alterra’s website atwww.alterracap.com.
Balance Sheet
Total invested assets, including cash and cash equivalents, were $7,814.7 million as of December 31, 2011, a decrease of $46.6 million from December 31, 2010. As of December 31, 2011, 94.4% of the fixed maturities portfolio (by carrying value) was investment-grade, a decrease from 96.0% as of December 31, 2010. As of December 31, 2011, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.46% and the weighted average duration was 4.1 years.
Under a Board-approved share repurchase authorization, Alterra repurchased 2,362,113 common shares during the fourth quarter of 2011 at an average price of $22.45 per share for a total of $53.0 million. Share repurchases under the Board-approved share repurchase authorization for the year ended December 31, 2011 were 10,305,705 common shares at an average price of $21.67 per share for a total of $223.3 million. As of December 31, 2011, $104.4 million remained under the Board-approved share repurchase authorization.
Shareholders’ equity was $2,809.2 million as of December 31, 2011, a decrease of 3.7% from December 31, 2010. Diluted book value per share as of December 31, 2011 was $26.91. Including dividends declared during 2011, diluted book value per share growth in 2011 was 5.5%.
A copy of Alterra’s fourth quarter financial supplement is available on Alterra’s website atwww.alterracap.com.
Alterra will host a conference call on Thursday, February 9, 2012 at 10:00 am (EDT) to discuss these results and related matters. The conference call can be accessed via telephone by dialing 1-888-679-8040 (toll-free U.S.) or 1-617-213-4851 (international) and using access code 96825658. 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, 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)
December 31, 2011 | December 31, 2010 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 922,844 | $ | 905,606 | ||||
Fixed maturities, trading at fair value | 229,206 | 244,872 | ||||||
Fixed maturities, available for sale at fair value | 5,501,925 | 5,392,643 | ||||||
Fixed maturities, held to maturity at amortized cost (fair value $1,011,493) | 874,259 | 940,104 | ||||||
Other investments, at fair value | 286,515 | 378,128 | ||||||
Accrued interest income | 71,322 | 75,414 | ||||||
Premiums receivable | 715,154 | 588,537 | ||||||
Losses and benefits recoverable from reinsurers | 1,068,119 | 956,115 | ||||||
Deferred acquisition costs | 145,850 | 111,901 | ||||||
Prepaid reinsurance premiums | 212,238 | 149,252 | ||||||
Trades pending settlement | 22,887 | 32,393 | ||||||
Goodwill and intangible assets | 56,111 | 59,076 | ||||||
Other assets | 79,417 | 83,247 | ||||||
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Total assets | $ | 10,185,847 | $ | 9,917,288 | ||||
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LIABILITIES | ||||||||
Property and casualty losses | $ | 4,216,538 | $ | 3,906,134 | ||||
Life and annuity benefits | 1,190,697 | 1,275,580 | ||||||
Deposit liabilities | 151,035 | 147,612 | ||||||
Funds withheld from reinsurers | 112,469 | 121,107 | ||||||
Unearned property and casualty premiums | 1,020,639 | 905,487 | ||||||
Reinsurance balances payable | 134,354 | 102,942 | ||||||
Accounts payable and accrued expenses | 110,380 | 99,680 | ||||||
Senior notes | 440,500 | 440,476 | ||||||
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Total liabilities | 7,376,612 | 6,999,018 | ||||||
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SHAREHOLDERS’ EQUITY | ||||||||
Common shares (par value $1.00) | ||||||||
102,101,950 (2010 - 110,963,160) shares issued and outstanding | 102,102 | 110,963 | ||||||
Additional paid-in capital | 1,847,034 | 2,026,045 | ||||||
Accumulated other comprehensive income | 166,957 | 98,946 | ||||||
Retained earnings | 693,142 | 682,316 | ||||||
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Total shareholders’ equity | 2,809,235 | 2,918,270 | ||||||
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Total liabilities and shareholders equity | $ | 10,185,847 | $ | 9,917,288 | ||||
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Book value per share | $ | 27.51 | $ | 26.30 | ||||
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Diluted book value per share | $ | 26.91 | $ | 25.99 | ||||
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Diluted tangible book value per share [a] | $ | 26.37 | $ | 25.46 | ||||
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Diluted shares outstanding | 104,406,779 | 112,290,968 |
[a] | Non-GAAP financial measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS 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, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES | ||||||||||||||||
Gross premiums written | $ | 325,983 | $ | 315,398 | $ | 1,904,066 | $ | 1,410,731 | ||||||||
Reinsurance premiums ceded | (107,203 | ) | (77,617 | ) | (472,077 | ) | (371,163 | ) | ||||||||
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Net premiums written | $ | 218,780 | $ | 237,781 | $ | 1,431,989 | $ | 1,039,568 | ||||||||
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Earned premiums | $ | 460,636 | $ | 445,683 | $ | 1,845,837 | $ | 1,578,647 | ||||||||
Earned premiums ceded | (111,532 | ) | (103,129 | ) | (420,863 | ) | (406,161 | ) | ||||||||
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Net premiums earned | 349,104 | 342,554 | 1,424,974 | 1,172,486 | ||||||||||||
Net investment income | 57,080 | 61,080 | 234,846 | 222,458 | ||||||||||||
Net realized and unrealized (losses) gains on investments | (5,775 | ) | 9,825 | (38,339 | ) | 16,872 | ||||||||||
Total other-than-temporary impairment losses | (703 | ) | (3,918 | ) | (2,706 | ) | (5,873 | ) | ||||||||
Portion of loss recognized in other comprehensive income (loss), before taxes | 1 | 2,144 | (239 | ) | 3,228 | |||||||||||
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Net impairment losses recognized in earnings | (702 | ) | (1,774 | ) | (2,945 | ) | (2,645 | ) | ||||||||
Other income | 2,017 | 2,862 | 5,396 | 4,808 | ||||||||||||
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Total revenues | 401,724 | 414,547 | 1,623,932 | 1,413,979 | ||||||||||||
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LOSSES AND EXPENSES | ||||||||||||||||
Net losses and loss expenses | 231,533 | 179,047 | 945,593 | 654,841 | ||||||||||||
Claims and policy benefits | 14,564 | 18,551 | 59,382 | 65,213 | ||||||||||||
Acquisition costs | 64,380 | 53,563 | 261,102 | 187,464 | ||||||||||||
Interest expense | 13,296 | 7,866 | 43,688 | 28,275 | ||||||||||||
Net foreign exchange (gains) losses | (753 | ) | (382 | ) | 1,312 | (115 | ) | |||||||||
Merger and acquisition expenses | — | 500 | — | (48,776 | ) | |||||||||||
General and administrative expenses | 54,657 | 76,759 | 257,074 | 220,586 | ||||||||||||
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Total losses and expenses | 377,677 | 335,904 | 1,568,151 | 1,107,488 | ||||||||||||
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INCOME BEFORE TAXES | 24,047 | 78,643 | 55,781 | 306,491 | ||||||||||||
Income tax (benefit) expense | (6,901 | ) | (1,027 | ) | (9,501 | ) | 4,156 | |||||||||
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NET INCOME [a] | 30,948 | 79,670 | 65,282 | 302,335 | ||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax | (3,670 | ) | (87,633 | ) | 86,104 | 81,406 | ||||||||||
Foreign currency translation adjustment | (2,398 | ) | (3,746 | ) | (18,093 | ) | (7,891 | ) | ||||||||
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COMPREHENSIVE INCOME (LOSS) [a] | $ | 24,880 | $ | (11,709 | ) | $ | 133,293 | $ | 375,850 | |||||||
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Net income per share | $ | 0.30 | $ | 0.70 | $ | 0.62 | $ | 3.19 | ||||||||
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Net income per diluted share | $ | 0.30 | $ | 0.69 | $ | 0.61 | $ | 3.17 | ||||||||
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Net operating income per diluted share [b] | $ | 0.30 | $ | 0.66 | $ | 0.91 | $ | 2.64 | ||||||||
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Weighted average shares outstanding - basic | 103,323,377 | 113,968,287 | 105,249,683 | 94,682,279 | ||||||||||||
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Weighted average shares outstanding - diluted | 104,672,891 | 114,831,467 | 106,502,893 | 95,459,375 | ||||||||||||
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[a] | Includes the results of Harbor Point Limited from May 12, 2010. |
[b] | Non-GAAP measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
Year Ended December 31, | ||||||||
2011 | 2010 | |||||||
Common shares | ||||||||
Balance, beginning of year | $ | 110,963 | $ | 55,867 | ||||
Issuance of common shares, net | 1,529 | 65,384 | ||||||
Repurchase of common shares | (10,390 | ) | (10,288 | ) | ||||
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Balance, end of year | 102,102 | 110,963 | ||||||
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Additional paid-in capital | ||||||||
Balance, beginning of year | 2,026,045 | 752,309 | ||||||
Issuance of common shares, net | 2,480 | 1,419,442 | ||||||
Stock based compensation expense | 33,208 | 51,769 | ||||||
Repurchase of common shares | (214,699 | ) | (197,475 | ) | ||||
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Balance, end of year | 1,847,034 | 2,026,045 | ||||||
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Accumulated other comprehensive income | ||||||||
Unrealized holding gains (losses) on investments: | ||||||||
Balance, beginning of year | 118,197 | 36,791 | ||||||
Holding gains on available for sale securities arising in period [a] | 97,044 | 99,603 | ||||||
Net realized gains on available for sale securities included in net income [a] | (11,179 | ) | (14,969 | ) | ||||
Portion of other-than-temporary impairment losses recognised in other comprehensive income [a] | 239 | (3,228 | ) | |||||
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Balance, end of year | 204,301 | 118,197 | ||||||
Cumulative foreign currency translation adjustment: | ||||||||
Balance, beginning of year | (19,251 | ) | (11,360 | ) | ||||
Foreign currency translation adjustments | (18,093 | ) | (7,891 | ) | ||||
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Balance, end of year | (37,344 | ) | (19,251 | ) | ||||
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Total accumulated other comprehensive income | 166,957 | 98,946 | ||||||
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Retained earnings | ||||||||
Balance, beginning of year | 682,316 | 731,026 | ||||||
Net income | 65,282 | 302,335 | ||||||
Dividends | (54,456 | ) | (351,045 | ) | ||||
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Balance, end of year | 693,142 | 682,316 | ||||||
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Total shareholders’ equity | $ | 2,809,235 | $ | 2,918,270 | ||||
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[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, | ||||||||
2011 | 2010 | |||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 65,282 | $ | 302,335 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Stock based compensation | 33,208 | 51,769 | ||||||
Amortization of premium on fixed maturities | 23,562 | 19,033 | ||||||
Accretion of deposit liabilities | 9,298 | 6,289 | ||||||
Net realized and unrealized losses (gains) on investments | 38,339 | (16,872 | ) | |||||
Net impairment losses recognized in earnings | 2,945 | 2,645 | ||||||
Negative goodwill gain | — | (95,788 | ) | |||||
Changes in: | ||||||||
Accrued interest income | 4,079 | (2,618 | ) | |||||
Premiums receivable | (128,754 | ) | 342,630 | |||||
Losses and benefits recoverable from reinsurers | (114,759 | ) | 9,751 | |||||
Deferred acquisition costs | (34,591 | ) | (43,716 | ) | ||||
Prepaid reinsurance premiums | (63,564 | ) | 34,695 | |||||
Other assets | (1,476 | ) | (5,495 | ) | ||||
Property and casualty losses | 308,587 | (105,958 | ) | |||||
Life and annuity benefits | (59,010 | ) | (32,906 | ) | ||||
Funds withheld from reinsurers | (8,680 | ) | (18,962 | ) | ||||
Unearned property and casualty premiums | 118,401 | (98,267 | ) | |||||
Reinsurance balances payable | 31,931 | (47,209 | ) | |||||
Accounts payable and accrued expenses | 10,769 | 6,941 | ||||||
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Cash provided by operating activities | 235,567 | 308,297 | ||||||
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INVESTING ACTIVITIES | ||||||||
Purchases of available for sale securities | (2,317,677 | ) | (2,419,091 | ) | ||||
Sales of available for sale securities | 1,311,423 | 1,243,263 | ||||||
Redemptions/maturities of available for sale securities | 965,974 | 953,552 | ||||||
Purchases of trading securities | (76,355 | ) | (103,067 | ) | ||||
Sales of trading securities | 24,563 | 27,207 | ||||||
Redemptions/maturities of trading securities | 68,848 | 54,010 | ||||||
Purchases of held to maturity securities | (2,580 | ) | (27,953 | ) | ||||
Redemptions/maturities of held to maturity securities | 45,713 | 32,354 | ||||||
Net purchases/sales of other investments | 54,017 | 110,849 | ||||||
Acquisition of subsidiary, net of cash acquired | — | 446,819 | ||||||
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Cash provided by investing activities | 73,926 | 317,943 | ||||||
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FINANCING ACTIVITIES | ||||||||
Net proceeds from issuance of common shares | 4,009 | 1,478 | ||||||
Repurchase of common shares | (225,089 | ) | (207,764 | ) | ||||
Net proceeds from issuance of senior notes | — | 349,997 | ||||||
Net repayments of bank loans | — | (200,000 | ) | |||||
Dividends paid | (54,456 | ) | (349,495 | ) | ||||
Additions to deposit liabilities | 1,061 | 3,093 | ||||||
Payment of deposit liabilities | (6,733 | ) | (14,336 | ) | ||||
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Cash used in financing activities | (281,208 | ) | (417,027 | ) | ||||
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Effect of exchange rate changes on foreign currency cash and cash equivalents | (11,047 | ) | (5,885 | ) | ||||
Net increase in cash and cash equivalents | 17,238 | 203,328 | ||||||
Cash and cash equivalents, beginning of year | 905,606 | 702,278 | ||||||
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CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 922,844 | $ | 905,606 | ||||
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $28,583 and $8,657 for the years ended December 31, 2011 and 2010, respectively.
Income taxes paid totaled $2,049 and $3,889 for the years ended December 31, 2011 and 2010, respectively.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Quarter Segment Information:
Property & Casualty | Life & Annuity | |||||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | Corporate | Consolidated | |||||||||||||||||||||||||
Gross premiums written | $ | 111,758 | $ | 89,151 | $ | 88,181 | $ | 35,724 | $ | 324,814 | $ | 1,169 | $ | — | $ | 325,983 | ||||||||||||||||
Reinsurance premiums ceded | (57,703 | ) | (1,718 | ) | (37,912 | ) | (9,716 | ) | (107,049 | ) | (154 | ) | — | (107,203 | ) | |||||||||||||||||
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Net premiums written | $ | 54,055 | $ | 87,433 | $ | 50,269 | $ | 26,008 | $ | 217,765 | $ | 1,015 | $ | — | $ | 218,780 | ||||||||||||||||
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Earned premiums | $ | 100,908 | $ | 217,141 | $ | 80,217 | $ | 61,201 | $ | 459,467 | $ | 1,169 | $ | — | $ | 460,636 | ||||||||||||||||
Earned premiums ceded | (47,084 | ) | (19,038 | ) | (29,821 | ) | (15,435 | ) | (111,378 | ) | (154 | ) | — | (111,532 | ) | |||||||||||||||||
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Net premiums earned | 53,824 | 198,103 | 50,396 | 45,766 | 348,089 | 1,015 | — | 349,104 | ||||||||||||||||||||||||
Net losses and loss expenses | (18,446 | ) | (101,721 | ) | (41,835 | ) | (69,531 | ) | (231,533 | ) | — | — | (231,533 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (14,564 | ) | — | (14,564 | ) | ||||||||||||||||||||||
Acquisition costs | (1,161 | ) | (44,450 | ) | (8,272 | ) | (10,366 | ) | (64,249 | ) | (131 | ) | — | (64,380 | ) | |||||||||||||||||
General and administrative expenses | (10,178 | ) | (15,462 | ) | (9,073 | ) | (8,499 | ) | (43,212 | ) | (67 | ) | — | (43,279 | ) | |||||||||||||||||
Other income (loss) | (44 | ) | (100 | ) | — | 851 | 707 | 413 | — | 1,120 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Underwriting income (loss) | $ | 23,995 | $ | 36,370 | $ | (8,784 | ) | $ | (41,779 | ) | $ | 9,802 | n/a | — | n/a | |||||||||||||||||
Net investment income | 11,515 | 45,565 | 57,080 | |||||||||||||||||||||||||||||
Net realized and unrealized losses on investments | (5,509 | ) | (266 | ) | (5,775 | ) | ||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (702 | ) | (702 | ) | ||||||||||||||||||||||||||||
Corporate other income | 897 | 897 | ||||||||||||||||||||||||||||||
Interest expense | (13,296 | ) | (13,296 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains | 753 | 753 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses | (11,378 | ) | (11,378 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
(Loss) income before taxes | $ | (7,328 | ) | $ | 21,573 | $ | 24,047 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 34.3 | % | 51.3 | % | 83.0 | % | 151.9 | % | 66.5 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 2.2 | % | 22.4 | % | 16.4 | % | 22.7 | % | 18.5 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] | 18.9 | % | 7.8 | % | 18.0 | % | 18.6 | % | 12.4 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 55.3 | % | 81.6 | % | 117.4 | % | 193.1 | % | 97.4 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–YEAR ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Period Segment Information:
Property & Casualty | Life & Annuity | |||||||||||||||||||||||||||||||
Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd’s | Total | Reinsurance | Corporate | Consolidated | |||||||||||||||||||||||||
Gross premiums written | $ | 410,281 | $ | 869,709 | $ | 330,176 | $ | 290,544 | $ | 1,900,710 | $ | 3,356 | $ | — | $ | 1,904,066 | ||||||||||||||||
Reinsurance premiums ceded | (200,146 | ) | (83,156 | ) | (123,874 | ) | (64,536 | ) | (471,712 | ) | (365 | ) | — | (472,077 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums written | $ | 210,135 | $ | 786,553 | $ | 206,302 | $ | 226,008 | $ | 1,428,998 | $ | 2,991 | $ | — | $ | 1,431,989 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Earned premiums | $ | 398,503 | $ | 894,017 | $ | 302,625 | $ | 247,336 | $ | 1,842,481 | $ | 3,356 | $ | — | $ | 1,845,837 | ||||||||||||||||
Earned premiums ceded | (187,730 | ) | (70,027 | ) | (101,336 | ) | (61,405 | ) | (420,498 | ) | (365 | ) | — | (420,863 | ) | |||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums earned | 210,773 | 823,990 | 201,289 | 185,931 | 1,421,983 | 2,991 | — | 1,424,974 | ||||||||||||||||||||||||
Net losses and loss expenses | (105,751 | ) | (527,955 | ) | (139,560 | ) | (172,327 | ) | (945,593 | ) | — | — | (945,593 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (59,382 | ) | — | (59,382 | ) | ||||||||||||||||||||||
Acquisition costs | (375 | ) | (182,257 | ) | (35,512 | ) | (42,401 | ) | (260,545 | ) | (557 | ) | — | (261,102 | ) | |||||||||||||||||
General and administrative expenses | (37,723 | ) | (79,330 | ) | (35,825 | ) | (36,993 | ) | (189,871 | ) | (648 | ) | — | (190,519 | ) | |||||||||||||||||
Other income (loss) | 965 | 1,225 | — | 1,204 | 3,394 | 382 | — | 3,776 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Underwriting income (loss) | $ | 67,889 | $ | 35,673 | $ | (9,608 | ) | $ | (64,586 | ) | $ | 29,368 | n/a | — | n/a | |||||||||||||||||
Net investment income | 48,534 | 186,312 | 234,846 | |||||||||||||||||||||||||||||
Net realized and unrealized losses on investments | (10,408 | ) | (27,931 | ) | (38,339 | ) | ||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (2,945 | ) | (2,945 | ) | ||||||||||||||||||||||||||||
Corporate other income | 1,620 | 1,620 | ||||||||||||||||||||||||||||||
Interest expense | (43,688 | ) | (43,688 | ) | ||||||||||||||||||||||||||||
Net foreign exchange losses | (1,312 | ) | (1,312 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses | (66,555 | ) | (66,555 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
(Loss) income before taxes | $ | (19,088 | ) | $ | 45,501 | $ | 55,781 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 50.2 | % | 64.1 | % | 69.3 | % | 92.7 | % | 66.5 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 0.2 | % | 22.1 | % | 17.6 | % | 22.8 | % | 18.3 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] | 17.9 | % | 9.6 | % | 17.8 | % | 19.9 | % | 13.4 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 68.2 | % | 95.8 | % | 104.8 | % | 135.4 | % | 98.2 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[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 acquisition 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. |
Percentage totals may not add due to rounding.
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 | |||||||||||||||||||||||||||||||
Insurance [e] | Reinsurance | U.S. Specialty [e] | Alterra at Lloyd’s | Total | Reinsurance | Corporate | Consolidated | |||||||||||||||||||||||||
Gross premiums written | $ | 113,236 | $ | 110,620 | $ | 65,625 | $ | 23,980 | $ | 313,461 | $ | 1,937 | $ | — | $ | 315,398 | ||||||||||||||||
Reinsurance premiums ceded | (56,728 | ) | (2,908 | ) | (15,956 | ) | (1,859 | ) | (77,451 | ) | (166 | ) | — | (77,617 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums written | $ | 56,508 | $ | 107,712 | $ | 49,669 | $ | 22,121 | $ | 236,010 | $ | 1,771 | $ | — | $ | 237,781 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Earned premiums | $ | 106,169 | $ | 215,261 | $ | 74,683 | $ | 47,633 | $ | 443,746 | $ | 1,937 | $ | — | $ | 445,683 | ||||||||||||||||
Earned premiums ceded | (43,847 | ) | (21,082 | ) | (26,140 | ) | (11,894 | ) | (102,963 | ) | (166 | ) | — | (103,129 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums earned | 62,322 | 194,179 | 48,543 | 35,739 | 340,783 | 1,771 | — | 342,554 | ||||||||||||||||||||||||
Net losses and loss expenses | (35,687 | ) | (97,639 | ) | (31,878 | ) | (13,843 | ) | (179,047 | ) | — | — | (179,047 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (18,551 | ) | — | (18,551 | ) | ||||||||||||||||||||||
Acquisition costs | (1,765 | ) | (38,406 | ) | (8,618 | ) | (4,853 | ) | (53,642 | ) | 79 | — | (53,563 | ) | ||||||||||||||||||
General and administrative expenses | (11,812 | ) | (24,714 | ) | (7,552 | ) | (12,186 | ) | (56,264 | ) | (1,088 | ) | — | (57,352 | ) | |||||||||||||||||
Other income (loss) | 68 | (216 | ) | — | 2,006 | 1,858 | 357 | — | 2,215 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Underwriting income | $ | 13,126 | $ | 33,204 | $ | 495 | $ | 6,863 | $ | 53,688 | n/a | — | n/a | |||||||||||||||||||
Net investment income | 12,084 | 48,996 | 61,080 | |||||||||||||||||||||||||||||
Net realized and unrealized gains on investments | 3,981 | 5,844 | 9,825 | |||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (1,774 | ) | (1,774 | ) | ||||||||||||||||||||||||||||
Corporate other income | 647 | 647 | ||||||||||||||||||||||||||||||
Interest expense | (7,866 | ) | (7,866 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains | 382 | 382 | ||||||||||||||||||||||||||||||
Merger and acquisition expenses | (500 | ) | (500 | ) | ||||||||||||||||||||||||||||
Corporate general and administrative expenses | (19,407 | ) | (19,407 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
(Loss) income before taxes | $ | (1,367 | ) | $ | 26,322 | $ | 78,643 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 57.3 | % | 50.3 | % | 65.7 | % | 38.7 | % | 52.5 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 2.8 | % | 19.8 | % | 17.8 | % | 13.6 | % | 15.7 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] | 19.0 | % | 12.7 | % | 15.6 | % | 34.1 | % | 16.5 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 79.0 | % | 82.8 | % | 99.0 | % | 86.4 | % | 84.8 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–YEAR ENDED DECEMBER 31, 2010 (Unaudited)
(Expressed in thousands of United States Dollars)
Period Segment Information:
Property & Casualty | Life & Annuity | |||||||||||||||||||||||||||||||
Insurance [e] | Reinsurance | U.S. Specialty [e] | Alterra at Lloyd’s | Total | Reinsurance | Corporate | Consolidated | |||||||||||||||||||||||||
Gross premiums written | $ | 399,612 | $ | 509,053 | $ | 294,498 | $ | 202,633 | $ | 1,405,796 | $ | 4,935 | $ | — | $ | 1,410,731 | ||||||||||||||||
Reinsurance premiums ceded | (180,691 | ) | (64,131 | ) | (88,493 | ) | (37,448 | ) | (370,763 | ) | (400 | ) | — | (371,163 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums written | $ | 218,921 | $ | 444,922 | $ | 206,005 | $ | 165,185 | $ | 1,035,033 | $ | 4,535 | $ | — | $ | 1,039,568 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Earned premiums | $ | 415,396 | $ | 699,243 | $ | 288,270 | $ | 170,803 | $ | 1,573,712 | $ | 4,935 | $ | — | $ | 1,578,647 | ||||||||||||||||
Earned premiums ceded | (180,684 | ) | (71,627 | ) | (117,657 | ) | (35,793 | ) | (405,761 | ) | (400 | ) | — | (406,161 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums earned | 234,712 | 627,616 | 170,613 | 135,010 | 1,167,951 | 4,535 | — | 1,172,486 | ||||||||||||||||||||||||
Net losses and loss expenses | (140,108 | ) | (347,816 | ) | (107,052 | ) | (59,865 | ) | (654,841 | ) | — | — | (654,841 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (65,213 | ) | — | (65,213 | ) | ||||||||||||||||||||||
Acquisition costs | (3,651 | ) | (131,114 | ) | (28,174 | ) | (24,164 | ) | (187,103 | ) | (361 | ) | — | (187,464 | ) | |||||||||||||||||
General and administrative expenses | (34,508 | ) | (66,073 | ) | (30,122 | ) | (28,531 | ) | (159,234 | ) | (2,964 | ) | — | (162,198 | ) | |||||||||||||||||
Other income (loss) | 1,267 | — | — | 2,534 | 3,801 | 286 | — | 4,087 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Underwriting income | $ | 57,712 | $ | 82,613 | $ | 5,265 | $ | 24,984 | $ | 170,574 | n/a | — | n/a | |||||||||||||||||||
Net investment income | 49,785 | 172,673 | 222,458 | |||||||||||||||||||||||||||||
Net realized and unrealized gains on investments | 11,358 | 5,514 | 16,872 | |||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (2,645 | ) | (2,645 | ) | ||||||||||||||||||||||||||||
Corporate other income | 721 | 721 | ||||||||||||||||||||||||||||||
Interest expense | (28,275 | ) | (28,275 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains | 115 | 115 | ||||||||||||||||||||||||||||||
Merger and acquisition expenses | 48,776 | 48,776 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses | (58,388 | ) | (58,388 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
(Loss) income before taxes | $ | (2,574 | ) | $ | 138,491 | $ | 306,491 | |||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 59.7 | % | 55.4 | % | 62.7 | % | 44.3 | % | 56.1 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 1.6 | % | 20.9 | % | 16.5 | % | 17.9 | % | 16.0 | % | ||||||||||||||||||||||
General and adminstrative expense ratio [c] | 14.7 | % | 10.5 | % | 17.7 | % | 21.1 | % | 13.6 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 76.0 | % | 86.8 | % | 96.9 | % | 83.4 | % | 85.7 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[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 acquisition 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 periods 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–YEAR ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Gross Premiums Written by Type of Risk:
Year Ended December 31, 2011 | Movement on Prior Year Period | Year Ended December 31, 2010 | ||||||||||||||||||||||
Gross Premiums Written | Percentage of Total Gross Premiums Written | Gross Premiums Written | Percentage of Total Gross Premiums Written | |||||||||||||||||||||
Property & Casualty: | ||||||||||||||||||||||||
Insurance [a]: | ||||||||||||||||||||||||
Aviation | S | $ | 32,376 | 1.7 | % | (18.8 | %) | $ | 39,888 | 2.8 | % | |||||||||||||
Excess Liability | L | 116,606 | 6.1 | % | 2.7 | % | 113,573 | 8.1 | % | |||||||||||||||
Professional Liability | L | 184,377 | 9.7 | % | 0.7 | % | 183,051 | 13.0 | % | |||||||||||||||
Property | S | 76,922 | 4.0 | % | 21.9 | % | 63,100 | 4.5 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
410,281 | 21.5 | % | 2.7 | % | 399,612 | 28.3 | % | |||||||||||||||||
Reinsurance [b]: | ||||||||||||||||||||||||
Agriculture | S | 30,682 | 1.6 | % | 5.0 | % | 29,222 | 2.1 | % | |||||||||||||||
Auto | S | 99,807 | 5.2 | % | n/m | 32,902 | 2.3 | % | ||||||||||||||||
Aviation | S | 15,991 | 0.8 | % | (48.9 | %) | 31,292 | 2.2 | % | |||||||||||||||
Credit/ Surety | S | 34,916 | 1.8 | % | n/m | 2,196 | 0.2 | % | ||||||||||||||||
General Casualty | L | 73,814 | 3.9 | % | 52.6 | % | 48,357 | 3.4 | % | |||||||||||||||
Marine & Energy | S | 24,012 | 1.3 | % | 46.6 | % | 16,381 | 1.2 | % | |||||||||||||||
Medical Malpractice | L | 37,345 | 2.0 | % | (27.3 | %) | 51,391 | 3.6 | % | |||||||||||||||
Other | S | 3,137 | 0.2 | % | 12.7 | % | 2,784 | 0.2 | % | |||||||||||||||
Professional Liability | L | 159,542 | 8.4 | % | 44.5 | % | 110,427 | 7.8 | % | |||||||||||||||
Property | S | 319,684 | 16.8 | % | 115.8 | % | 148,146 | 10.5 | % | |||||||||||||||
Whole Account | S/L | 35,800 | 1.9 | % | n/m | 5,129 | 0.4 | % | ||||||||||||||||
Workers’ Compensation | L | 34,979 | 1.8 | % | 13.5 | % | 30,826 | 2.2 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
869,709 | 45.7 | % | 70.8 | % | 509,053 | 36.1 | % | |||||||||||||||||
U.S. Specialty [a]: | ||||||||||||||||||||||||
General Liability | L | 86,630 | 4.5 | % | 6.8 | % | 81,137 | 5.8 | % | |||||||||||||||
Marine | S | 88,493 | 4.6 | % | 31.2 | % | 67,454 | 4.8 | % | |||||||||||||||
Professional Liability | L | 17,673 | 0.9 | % | 167.7 | % | 6,602 | 0.5 | % | |||||||||||||||
Property | S | 137,380 | 7.2 | % | (1.4 | %) | 139,305 | 9.9 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||
330,176 | 17.3 | % | 12.1 | % | 294,498 | 20.9 | % | |||||||||||||||||
Alterra at Lloyd’s: | ||||||||||||||||||||||||
Accident & Health | S | 37,093 | 1.9 | % | 20.0 | % | 30,921 | 2.2 | % | |||||||||||||||
Aviation | S | 13,269 | 0.7 | % | (17.8 | %) | 16,138 | 1.1 | % | |||||||||||||||
Financial Institutions | L | 27,205 | 1.4 | % | 39.9 | % | 19,448 | 1.4 | % | |||||||||||||||
International Casualty | L | 52,425 | 2.8 | % | 100.3 | % | 26,174 | 1.9 | % | |||||||||||||||
Marine | S | 1,493 | 0.1 | % | n/m | — | 0.0 | % | ||||||||||||||||
Professional Liability | L | 20,696 | 1.1 | % | 5.6 | % | 19,591 | 1.4 | % | |||||||||||||||
Property | S | 132,068 | 6.9 | % | 54.4 | % | 85,553 | 6.1 | % | |||||||||||||||
Surety | S | 6,295 | 0.3 | % | 30.9 | % | 4,808 | 0.3 | % | |||||||||||||||
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290,544 | 15.3 | % | 43.4 | % | 202,633 | 14.4 | % | |||||||||||||||||
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Aggregate Property & Casualty | $ | 1,900,710 | 99.8 | % | 35.2 | % | $ | 1,405,796 | 99.7 | % | ||||||||||||||
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Life & Annuity: | ||||||||||||||||||||||||
Annuity | $ | 1,826 | 0.1 | % | 60.9 | % | $ | 1,135 | 0.1 | % | ||||||||||||||
Life | 1,530 | 0.1 | % | (59.7 | %) | 3,800 | 0.3 | % | ||||||||||||||||
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Aggregate Life & Annuity | $ | 3,356 | 0.2 | % | (32.0 | %) | $ | 4,935 | 0.3 | % | ||||||||||||||
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Aggregate Property & Casualty and Life & Annuity | $ | 1,904,066 | 100.0 | % | 35.0 | % | $ | 1,410,731 | 100.0 | % | ||||||||||||||
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S = Short tail lines | $ | 1,071,518 | 56.4 | % | $ | 712,655 | 50.7 | % | ||||||||||||||||
L = Long tail lines | 829,192 | 43.6 | % | 693,141 | 49.3 | % | ||||||||||||||||||
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Aggregate Property & Casualty | $ | 1,900,710 | $ | 1,405,796 | ||||||||||||||||||||
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[a] | Insurance and U.S. Specialty segment amounts for the comparative 2010 periods have been reclassified to conform with the current period’s presentation. |
[b] | Includes the results of Harbor Point Limited from May 12, 2010. |
Percentage totals may not add due to rounding.
n/m Not meaningful.
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, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income before tax | $ | 24,047 | $ | 78,643 | $ | 55,781 | $ | 306,491 | ||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, before tax [a] | 1,059 | (2,627 | ) | 29,486 | 65 | |||||||||||
Foreign exchange (gains) losses, before tax | (753 | ) | (382 | ) | 1,312 | (115 | ) | |||||||||
Merger and acquisition expenses, before tax | — | 500 | — | (48,776 | ) | |||||||||||
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Net operating income before tax | $ | 24,353 | $ | 76,134 | $ | 86,579 | $ | 257,665 | ||||||||
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Net income | $ | 30,948 | $ | 79,670 | $ | 65,282 | $ | 302,335 | ||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] | 1,271 | (3,537 | ) | 30,391 | (865 | ) | ||||||||||
Foreign exchange (gains) losses, net of tax | (534 | ) | (417 | ) | 927 | 363 | ||||||||||
Merger and acquisition expenses, net of tax | — | 500 | — | (50,121 | ) | |||||||||||
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Net operating income | $ | 31,685 | $ | 76,216 | $ | 96,600 | $ | 251,712 | ||||||||
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Net income per diluted share | $ | 0.30 | $ | 0.69 | $ | 0.61 | $ | 3.17 | ||||||||
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] | 0.01 | (0.03 | ) | 0.29 | (0.01 | ) | ||||||||||
Foreign exchange (gains) losses, net of tax | (0.01 | ) | — | 0.01 | 0.01 | |||||||||||
Merger and acquisition expenses, net of tax | — | — | — | (0.53 | ) | |||||||||||
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Net operating income per diluted share | $ | 0.30 | $ | 0.66 | $ | 0.91 | $ | 2.64 | ||||||||
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Weighted average shares outstanding - basic | 103,323,377 | 113,968,287 | 105,249,683 | 94,682,279 | ||||||||||||
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Weighted average shares outstanding - diluted | 104,672,891 | 114,831,467 | 106,502,893 | 95,459,375 | ||||||||||||
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[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 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 December 31, | Year Ended December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income | $ | 30,948 | $ | 79,670 | $ | 65,282 | $ | 302,335 | ||||||||
Annualized net income | 123,792 | 318,680 | 65,282 | 302,335 | ||||||||||||
Net operating income | $ | 31,685 | $ | 76,216 | $ | 96,600 | $ | 251,712 | ||||||||
Annualized net operating income | 126,740 | 304,864 | 96,600 | 251,712 | ||||||||||||
Average shareholders’ equity [b] | $ | 2,826,987 | $ | 2,977,404 | $ | 2,806,191 | $ | 2,467,429 | ||||||||
Annualized return on average shareholders’ equity | 4.4 | % | 10.7 | % | 2.3 | % | 12.3 | % | ||||||||
Annualized net operating return on average shareholders’ equity | 4.5 | % | 10.2 | % | 3.4 | % | 10.2 | % |
[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, 2011 | December 31, 2010 | |||||||
Shareholders’ equity | $ | 2,809,235 | $ | 2,918,270 | ||||
Goodwill and intangible assets | 56,111 | 59,076 | ||||||
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Tangible book value | $ | 2,753,124 | $ | 2,859,194 | ||||
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Diluted shares outstanding | 104,406,779 | 112,290,968 | ||||||
Diluted tangible book value per share | $ | 26.37 | $ | 25.46 |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA– DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
Type of Investment | As of December 31, 2011 | Investment Distribution | As of December 31, 2010 | Investment Distribution | ||||||||||||
Cash and cash equivalents | $ | 922,844 | 11.8 | % | $ | 905,606 | 11.5 | % | ||||||||
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U.S. government and agencies | 751,806 | 9.6 | % | 995,546 | 12.7 | % | ||||||||||
Non-U.S. governments | 164,621 | 2.1 | % | 79,111 | 1.0 | % | ||||||||||
Corporate securities | 2,646,358 | 33.9 | % | 2,735,366 | 34.8 | % | ||||||||||
Municipal securities | 263,007 | 3.4 | % | 238,014 | 3.0 | % | ||||||||||
Asset-backed securities | 247,965 | 3.2 | % | 86,937 | 1.1 | % | ||||||||||
Residential mortgage-backed securities | 1,296,277 | 16.6 | % | 1,168,390 | 14.9 | % | ||||||||||
Commercial mortgage-backed securities | 361,097 | 4.6 | % | 334,151 | 4.3 | % | ||||||||||
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Fixed maturities at fair value | $ | 5,731,131 | 73.3 | % | $ | 5,637,515 | 71.7 | % | ||||||||
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U.S. government and agencies | $ | 29,201 | 0.4 | % | $ | 29,687 | 0.4 | % | ||||||||
Non-U.S. governments | 524,449 | 6.7 | % | 538,274 | 6.8 | % | ||||||||||
Corporate securities | 319,609 | 4.1 | % | 371,143 | 4.7 | % | ||||||||||
Asset-backed securities | 1,000 | 0.0 | % | 1,000 | 0.0 | % | ||||||||||
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Fixed maturities at amortized cost | $ | 874,259 | 11.2 | % | $ | 940,104 | 12.0 | % | ||||||||
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Other investments | $ | 286,515 | 3.7 | % | $ | 378,128 | 4.8 | % | ||||||||
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Total invested assets | $ | 7,814,749 | 100.0 | % | $ | 7,861,353 | 100.0 | % | ||||||||
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Credit Rating | As of December 31, 2011 | Ratings Distribution | As of December 31, 2010 | Ratings Distribution | ||||||||||||
U.S. government and agencies [a] | $ | 1,869,405 | 28.3 | % | $ | 2,060,116 | 31.3 | % | ||||||||
AAA | 948,861 | 14.4 | % | 1,076,680 | 16.4 | % | ||||||||||
AA | 883,783 | 13.4 | % | 657,867 | 10.0 | % | ||||||||||
A | 1,378,361 | 20.9 | % | 1,353,945 | 20.6 | % | ||||||||||
BBB | 281,983 | 4.3 | % | 226,849 | 3.4 | % | ||||||||||
BB | 84,803 | 1.3 | % | 32,021 | 0.5 | % | ||||||||||
B | 131,159 | 2.0 | % | 138,703 | 2.1 | % | ||||||||||
CCC or lower | 53,157 | 0.8 | % | 45,469 | 0.7 | % | ||||||||||
Not rated | 99,619 | 1.5 | % | 45,865 | 0.7 | % | ||||||||||
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Fixed maturities at fair value | $ | 5,731,131 | 86.8 | % | $ | 5,637,515 | 85.7 | % | ||||||||
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U.S. government and agencies | $ | 29,201 | 0.4 | % | $ | 29,687 | 0.5 | % | ||||||||
AAA | 619,832 | 9.4 | % | 641,437 | 9.8 | % | ||||||||||
AA | 82,511 | 1.2 | % | 113,140 | 1.7 | % | ||||||||||
A | 117,600 | 1.8 | % | 141,683 | 2.2 | % | ||||||||||
BBB | 24,117 | 0.4 | % | 12,744 | 0.2 | % | ||||||||||
BB | 998 | 0.0 | % | — | — | |||||||||||
Not rated | — | — | 1,413 | 0.0 | % | |||||||||||
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Fixed maturities at amortized cost | $ | 874,259 | 13.2 | % | $ | 940,104 | 14.3 | % | ||||||||
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Total fixed maturities | $ | 6,605,390 | 100.0 | % | $ | 6,577,619 | 100.0 | % | ||||||||
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[a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,117,599 (December 31, 2010: $1,064,570). |
Percentage totals may not add due to rounding.
000000000 | 000000000 | 000000000 | 000000000 | |||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net investment income | $ | 57,080 | $ | 61,080 | $ | 234,846 | $ | 222,458 | ||||||||
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Realized and unrealized gains (losses) on trading fixed maturities | 763 | (3,893 | ) | 2,031 | (4,476 | ) | ||||||||||
Net realized gains on available for sale fixed maturities | 1,990 | 5,816 | 11,509 | 15,474 | ||||||||||||
(Decrease) increase in fair value of hedge funds | (5,415 | ) | 5,465 | (11,795 | ) | 14,333 | ||||||||||
(Decrease) increase in fair value of non-hedge fund other investments | (3,113 | ) | 2,437 | (40,084 | ) | (8,459 | ) | |||||||||
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Net realized and unrealized (losses) gains on investments | $ | (5,775 | ) | $ | 9,825 | $ | (38,339 | ) | $ | 16,872 | ||||||
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Net impairment losses recognized in earnings | $ | (702 | ) | $ | (1,774 | ) | $ | (2,945 | ) | $ | (2,645 | ) | ||||
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Contacts
Susan Spivak Bernstein, 1-212-898-6640
Senior Vice President
susan.spivak@alterra-bm.com
or
Kekst and Company
Peter Hill or Melissa Sheer, 1-212-521-4800
peter-hill@kekst.com /melissa-sheer@kekst.com