Alterra Capital 8-K Alterra Capital Reports First Quarter 2012 Results

Exhibit 99.1

ALTERRA CAPITAL REPORTS FIRST QUARTER 2012 RESULTS

Net Operating Income of $0.66 per Diluted Share

Diluted Book Value per Share Growth including Dividends of 3.3%

HAMILTON, BERMUDA, May 9, 2012—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $79.0 million, or $0.77 per diluted share, for the first quarter of 2012, compared to a net loss of $46.7 million, or $0.44 per diluted share, for the same quarter of 2011.

Net operating income for the first quarter of 2012 was $67.8 million, or $0.66 per diluted share, compared to a net operating loss of $24.7 million, or $0.23 per diluted share, for the same quarter of 2011. Annualized net operating return on average shareholders’ equity for the first quarter of 2012 was 9.6%.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “We started the year off with a solid quarter and the financial results reflect a good balance between underwriting and investment performance. Our operating return on equity was just under 10%, making this the fourth consecutive quarter in which we have grown book value per share. Alterra’s newer segments and teams in U.S. insurance, Alterra at Lloyd’s and Latin America are still maturing, and with modest levels of earned premium are showing expense ratios that are higher than our ultimate expectations. While our selected loss ratios for these segments and teams will remain conservative until we see more actual loss experience, we are pleased with their progress to date.”

“The market has firmed materially for any risk that has property catastrophe exposure, and has firmed somewhat for certain other lines of business. It is encouraging to us that the remaining rates are no longer going down, and that terms and conditions are generally more balanced. We continue to expect positive rate movement through the balance of 2012, and believe Alterra is well positioned to take advantage of underwriting opportunities as better times return,” Mr. Becker concluded.

First quarter 2012 results for Alterra include:

• Property and casualty gross premiums written of $660.9 million, representing an increase of $33.5 million, or 5.3%, compared to the same quarter of 2011;

• Net premiums written of $436.4 million, representing a decrease of $53.6 million, or 10.9%, compared to the same quarter of 2011. This decrease reflects increased property reinsurance premiums ceded in order to manage aggregate property exposures across all segments, and a decrease in net premiums written on contract binding business in the U.S. insurance segment resulting from the sale of the renewal rights for this business in 2011;

• A combined ratio on property and casualty business of 92.6%, compared to 112.5% for the same quarter of 2011;

• A nominal level of property catastrophe event net losses, compared to net losses of $106.3 million, net of reinstatement premiums, in the same quarter of 2011;

• Net favorable development on prior years’ loss reserves of $10.8 million, or 3.2 combined ratio points, compared to $30.2 million, or 8.0 combined ratio points, in the same quarter of 2011;

• Net investment income of $58.7 million, compared to $57.8 million in the same quarter of 2011, an increase of 1.6%; and

• Income of $9.2 million from New Point Re IV Limited, a sidecar in which Alterra has a 34.8% equity interest, consisting of fees and equity share earnings. Gross premiums written by New Point Re IV Limited were $80.2 million for the first quarter of 2012.

Gross premiums written (“GPW”) and net premiums written (“NPW”) from property and casualty underwriting for the first quarter of 2012 were as shown in the following table, with the increase/decrease compared to the same quarter of 2011:

Segment ($ in millions)	GPW		% Inc/ (Dec)			NPW		% Inc/ (Dec)			Combined Ratio
Global Insurance	$	66.8		4.5	%	$	23.5		(7.3	%)		52.4	%
Reinsurance		318.4		(11.7	%)		258.9		(20.5	%)		93.4	%
U.S. Insurance		104.3		34.1	%		33.8		(14.3	%)		103.1	%
Alterra at Lloyd’s		146.1		35.5	%		107.5		27.0	%		108.2	%
Latin America		25.3		47.9	%		12.7		(15.6	%)		116.2	%
Total	$	660.9		5.3	%	$	436.4		(10.9	%)		92.6	%

Balance Sheet

Total invested assets, including cash and cash equivalents, were $7,804.5 million as of March 31, 2012, a decrease of $10.2 million from December 31, 2011. As of March 31, 2012, 95.9% of the fixed maturities portfolio (by carrying value) was investment-grade, an increase from 94.4% as of December 31, 2011. As of March 31, 2012, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.36%, and the weighted average duration was 4.2 years.

Under a Board-approved share repurchase authorization, Alterra repurchased 2,065,877 common shares during the first quarter of 2012 at an average price of $23.56 per share for a total of $48.7 million. As of March 31, 2012, $205.7 million remained under the Board-approved share repurchase authorization.

Shareholders’ equity was $2,851.3 million as of March 31, 2012, an increase of 1.5% from December 31, 2011. Diluted book value per share as of March 31, 2012 was $27.67. Including dividends declared, diluted book value per share growth for the first quarter of 2012 was 3.3%, and was 11.3% for the twelve months ended March 31, 2012. Not included in shareholders’ equity as of March 31, 2012 were $144.3 million of unrecognized gains on held-to-maturity securities, which represented $1.40 in unrecognized diluted book value per share.

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 Thursday, May 10, 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 41021175. 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 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. In particular, statements regarding future rate movements are forward looking statements. 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, 2012		December 31, 2011
	(unaudited)
ASSETS
Cash and cash equivalents	$	844,743	$	922,844
Fixed maturities, trading at fair value		223,592		229,206
Fixed maturities, available for sale at fair value		5,518,102		5,501,925
Fixed maturities, held to maturity at amortized cost (fair value $1,029,502)		885,214		874,259
Other investments, at fair value		332,884		286,515
Accrued interest income		64,295		71,322
Premiums receivable		869,800		715,154
Losses and benefits recoverable from reinsurers		1,108,036		1,068,119
Deferred acquisition costs		176,199		145,850
Prepaid reinsurance premiums		299,163		212,238
Trades pending settlement		111,194		22,887
Goodwill and intangible assets		55,771		56,111
Other assets		86,785		79,417
Total assets	$	10,575,778	$	10,185,847
LIABILITIES
Property and casualty losses	$	4,322,847	$	4,216,538
Life and annuity benefits		1,203,752		1,190,697
Deposit liabilities		151,058		151,035
Funds withheld from reinsurers		92,793		112,469
Unearned property and casualty premiums		1,221,788		1,020,639
Reinsurance balances payable		201,409		134,354
Accounts payable and accrued expenses		90,359		110,380
Senior notes		440,510		440,500
Total liabilities		7,724,516		7,376,612
SHAREHOLDERS’ EQUITY
Common shares (par value $1.00)
100,707,484 (2011 - 102,101,950) shares issued and outstanding		100,707		102,102
Additional paid-in capital		1,807,287		1,847,034
Accumulated other comprehensive income		185,146		166,957
Retained earnings		758,122		693,142
Total shareholders’ equity		2,851,262		2,809,235
Total liabilities and shareholders’ equity	$	10,575,778	$	10,185,847
Book value per share	$	28.31	$	27.51
Diluted book value per share	$	27.67	$	26.91
Diluted tangible book value per share [a]	$	27.13	$	26.37
Diluted shares outstanding		103,036,630		104,406,779

[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 March 31,
	2012			2011
REVENUES
Gross premiums written	$	661,330		$	627,848
Reinsurance premiums ceded		(224,462	)		(137,357	)
Net premiums written	$	436,868		$	490,491
Earned premiums	$	477,867		$	489,262
Earned premiums ceded		(139,692	)		(109,375	)
Net premiums earned		338,175			379,887
Net investment income		58,678			57,766
Net realized and unrealized gains (losses) on investments		25,493			(18,818	)
Total other-than-temporary impairment losses		(5,467	)		(1,124	)
Portion of loss recognized in other comprehensive income (loss), before taxes		98			95
Net impairment losses recognized in earnings		(5,369	)		(1,029	)
Other income		5,362			1,315
Total revenues		422,339			419,121
LOSSES AND EXPENSES
Net losses and loss expenses		206,029			304,406
Claims and policy benefits		13,466			14,710
Acquisition costs		59,724			70,608
Interest expense		8,628			8,459
Net foreign exchange gains		(32	)		(878	)
General and administrative expenses		60,082			71,203
Total losses and expenses		347,897			468,508
INCOME (LOSS) BEFORE TAXES		74,442			(49,387	)
Income tax benefit		(4,582	)		(2,700	)
NET INCOME (LOSS)		79,024			(46,687	)
Holding gains (losses) on available for sale securities arising in period [a]		24,675			(11,993	)
Net realized gains on available for sale securities included in net income [a]		(7,758	)		(2,498	)
Portion of other-than-temporary impairment losses recognized in other comprehensive income [a]		(98	)		(95	)
Foreign currency translation adjustment		1,370			4,873
Other comprehensive income (loss)		18,189			(9,713	)
COMPREHENSIVE INCOME (LOSS)	$	97,213		$	(56,400	)
Net income (loss) per share	$	0.78		$	(0.44	)
Net income (loss) per diluted share	$	0.77		$	(0.44	)
Net operating income (loss) per diluted share [b]	$	0.66		$	(0.23	)
Weighted average shares outstanding - basic		101,002,884			107,165,228
Weighted average shares outstanding - diluted		103,154,081			107,165,228

[a] Net of tax

[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)

	Three Months Ended March 31,
	2012			2011
Common shares
Balance, beginning of period	$	102,102		$	110,963
Issuance of common shares, net		677			1,034
Repurchase of common shares		(2,072	)		(6,263	)
Balance, end of period		100,707			105,734
Additional paid-in capital
Balance, beginning of period		1,847,034			2,026,045
Issuance of common shares, net		(472	)		(920	)
Stock based compensation expense		7,486			10,902
Repurchase of common shares		(46,761	)		(130,883	)
Balance, end of period		1,807,287			1,905,144
Accumulated other comprehensive income
Balance, beginning of period		166,957			98,946
Change in net unrealized gains and losses of fixed maturities, net of tax		16,819			(14,586	)
Foreign currency translation adjustments		1,370			4,873
Balance, end of period		185,146			89,233
Retained earnings
Balance, beginning of period		693,142			682,316
Net income (loss)		79,024			(46,687	)
Dividends		(14,044	)		(12,546	)
Balance, end of period		758,122			623,083
Total shareholders’ equity	$	2,851,262		$	2,723,194

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Expressed in thousands of United States Dollars)

	Three Months Ended March 31,
	2012			2011
OPERATING ACTIVITIES
Net income (loss)	$	79,024		$	(46,687	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock based compensation		7,486			10,902
Amortization of premium on fixed maturities		5,616			5,266
Accretion of deposit liabilities		960			1,496
Net realized and unrealized (gains) losses on investments		(25,493	)		18,818
Net impairment losses recognized in earnings		5,369			1,029
Changes in:
Accrued interest income		7,108			6,004
Premiums receivable		(146,066	)		(217,335	)
Losses and benefits recoverable from reinsurers		(32,372	)		(95,272	)
Deferred acquisition costs		(28,975	)		(36,853	)
Prepaid reinsurance premiums		(85,417	)		(27,503	)
Other assets		(7,625	)		(1,966	)
Property and casualty losses		81,529			256,939
Life and annuity benefits		(11,836	)		(11,599	)
Funds withheld from reinsurers		(19,676	)		965
Unearned property and casualty premiums		193,161			154,908
Reinsurance balances payable		66,102			24,283
Accounts payable and accrued expenses		(20,853	)		3,514
Cash provided by operating activities		68,042			46,909
INVESTING ACTIVITIES
Purchases of available for sale securities		(520,816	)		(579,728	)
Sales of available for sale securities		290,644			423,344
Redemptions/maturities of available for sale securities		213,629			275,420
Purchases of trading securities		(24,898	)		(7,783	)
Sales of trading securities		21,001			24,564
Redemptions/maturities of trading securities		14,190			16,730
Purchases of held to maturity securities		—			(2,580	)
Redemptions/maturities of held to maturity securities		8,821			8,546
Net (purchases) sales of other investments		(95,004	)		34,334
Cash (used in) provided by investing activities		(92,433	)		192,847
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		205			114
Repurchase of common shares		(48,833	)		(137,146	)
Dividends paid		(13,734	)		(12,546	)
Additions to deposit liabilities		427			283
Payment of deposit liabilities		(1,363	)		(1,967	)
Cash used in financing activities		(63,298	)		(151,262	)
Effect of exchange rate changes on foreign currency cash and cash equivalents		9,588			6,951
Net (decrease) increase in cash and cash equivalents		(78,101	)		95,445
Cash and cash equivalents, beginning of period		922,844			905,606
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	844,743		$	1,001,051

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interest paid totaled $11,137 and $11,120 for the three months ended March 31, 2012 and 2011, respectively.

Income taxes paid totaled $4,197 and $79 for the three months ended March 31, 2012 and 2011, respectively.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL SEGMENT DATA–THREE MONTHS ENDED MARCH 31, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)

Quarter Segment Information:	Property & Casualty																		Life  & Annuity Reinsurance			Corporate			Consolidated
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
Gross premiums written	$	66,771		$	104,282		$	318,354		$	146,143		$	25,340		$	660,890		$	440		$	—		$	661,330
Reinsurance premiums ceded		(43,251	)		(70,494	)		(59,493	)		(38,590	)		(12,616	)		(224,444	)		(18	)		—			(224,462	)
Net premiums written	$	23,520		$	33,788		$	258,861		$	107,553		$	12,724		$	436,446		$	422		$	—		$	436,868
Earned premiums	$	94,103		$	96,241		$	194,661		$	72,899		$	19,523		$	477,427		$	440		$	—		$	477,867
Earned premiums ceded		(47,133	)		(40,456	)		(26,753	)		(20,049	)		(5,283	)		(139,674	)		(18	)		—			(139,692	)
Net premiums earned		46,970			55,785			167,908			52,850			14,240			337,753			422			—			338,175
Net losses and loss expenses		(18,061	)		(37,564	)		(101,195	)		(38,675	)		(10,534	)		(206,029	)		—			—			(206,029	)
Claims and policy benefits		—			—			—			—			—			—			(13,466	)		—			(13,466	)
Acquisition costs		(59	)		(7,696	)		(38,661	)		(9,434	)		(3,755	)		(59,605	)		(119	)		—			(59,724	)
General and administrative expenses		(6,481	)		(12,257	)		(17,052	)		(9,095	)		(2,259	)		(47,144	)		(34	)		—			(47,178	)
Other income (loss)		815			81			4,441			—			—			5,337			—			—			5,337
Underwriting income (loss)	$	23,184		$	(1,651	)	$	15,441		$	(4,354	)	$	(2,308	)	$	30,312			n/a			—			n/a
Net investment income																				14,776			43,902			58,678
Net realized and unrealized gains on investments																				—			25,493			25,493
Net impairment losses recognized in earnings																							(5,369	)		(5,369	)
Corporate other income																							25			25
Interest expense																							(8,628	)		(8,628	)
Net foreign exchange gains																							32			32
Corporate general and administrative expenses																							(12,904	)		(12,904	)
Income before taxes																			$	1,579		$	42,551		$	74,442
Loss ratio [a]		38.5	%		67.3	%		60.3	%		73.2	%		74.0	%		61.0	%
Acquisition cost ratio [b]		0.1	%		13.8	%		23.0	%		17.9	%		26.4	%		17.6	%
General and administrative expense ratio [c]		13.8	%		22.0	%		10.2	%		17.2	%		15.9	%		14.0	%
Combined ratio [d]		52.4	%		103.1	%		93.4	%		108.2	%		116.2	%		92.6	%

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

(Expressed in thousands of United States Dollars)

Quarter Segment Information:	Property & Casualty																		Life & Annuity Reinsurance			Corporate			Consolidated
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
Gross premiums written	$	63,895		$	77,765		$	360,727		$	107,890		$	17,136		$	627,413		$	435		$	—		$	627,848
Reinsurance premiums ceded		(38,524	)		(38,317	)		(35,252	)		(23,179	)		(2,065	)		(137,337	)		(20	)		—			(137,357	)
Net premiums written	$	25,371		$	39,448		$	325,475		$	84,711		$	15,071		$	490,076		$	415		$	—		$	490,491
Earned premiums	$	90,651		$	81,470		$	244,340		$	63,164		$	9,202		$	488,827		$	435		$	—		$	489,262
Earned premiums ceded		(40,779	)		(27,801	)		(19,901	)		(20,580	)		(294	)		(109,355	)		(20	)		—			(109,375	)
Net premiums earned		49,872			53,669			224,439			42,584			8,908			379,472			415			—			379,887
Net losses and loss expenses		(31,624	)		(34,415	)		(183,908	)		(48,443	)		(6,016	)		(304,406	)		—			—			(304,406	)
Claims and policy benefits		—			—			—			—						—			(14,710	)		—			(14,710	)
Acquisition costs		(264	)		(7,986	)		(47,760	)		(12,652	)		(1,787	)		(70,449	)		(159	)		—			(70,608	)
General and administrative expenses		(7,952	)		(11,270	)		(22,272	)		(8,253	)		(2,456	)		(52,203	)		(177	)		—			(52,380	)
Other income (loss)		729			83			—			215			—			1,027			—			—			1,027
Underwriting income (loss)	$	10,761		$	81		$	(29,501	)	$	(26,549	)	$	(1,351	)	$	(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 losses																							878			878
Corporate general and administrative expenses																							(18,823	)		(18,823	)
Income (loss) before taxes																			$	519		$	(3,347	)	$	(49,387	)
Loss ratio [a]		63.4	%		64.1	%		81.9	%		113.8	%		67.5	%		80.2	%
Acquisition cost ratio [b]		0.5	%		14.9	%		21.3	%		29.7	%		20.1	%		18.6	%
General and administrative expense ratio [c]		15.9	%		21.0	%		9.9	%		19.4	%		27.6	%		13.8	%
Combined ratio [d]		79.9	%		100.0	%		113.1	%		162.8	%		115.2	%		112.5	%

[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 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.

n/a Not applicable.

Percentage totals may not add due to rounding.

Segment Re-presentation

Effective January 1, 2012, the Company redefined its operating and reporting segments. Reinsurance business written within Latin America, which was previously reported within the reinsurance or Alterra at Lloyd’s segments, has been reclassified to a new Latin America segment. In addition, business written by the Company’s recently incorporated Brazilian reinsurance company, Alterra Resseguradora do Brasil Limitada (“Alterra Brazil”), is included in the Latin America segment. Insurance business written by Alterra Insurance USA Inc., which was previously reported within the global insurance segment (formerly the insurance segment), has been reclassified to the U.S. insurance segment (formerly the U.S. specialty segment).

Re-presented comparative financial information was filed on a Form 8-K on April 20, 2012.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL PREMIUM DATA–THREE MONTHS ENDED MARCH 31, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)

Gross Premiums Written by Type of Risk:		Three Months Ended March 31, 2012								Three Months Ended March 31, 2011 [a]
		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:
Global Insurance:
Aviation	S	$	1,302		0.2	%		(8.1	%)	$	1,416		0.2	%
Excess Liability	L		25,186		3.8	%		13.1	%		22,277		3.5	%
Professional Liability	L		24,466		3.7	%		(0.3	%)		24,529		3.9	%
Property	S		15,817		2.4	%		0.9	%		15,673		2.5	%
			66,771		10.1	%		4.5	%		63,895		10.2	%
U.S. Insurance:
General/Excess Liability	L		34,667		5.2	%		50.8	%		22,993		3.7	%
Marine	S		25,201		3.8	%		47.3	%		17,109		2.7	%
Professional Liability	L		11,208		1.7	%		69.3	%		6,622		1.1	%
Property	S		33,206		5.0	%		7.0	%		31,041		4.9	%
			104,282		15.8	%		34.1	%		77,765		12.4	%
Reinsurance:
Agriculture	S		17,505		2.6	%		(15.8	%)		20,785		3.3	%
Auto	S		512		0.1	%		(96.6	%)		15,024		2.4	%
Aviation	S		5,460		0.8	%		504.0	%		904		0.1	%
Credit/ Surety	S		31,409		4.7	%		38.3	%		22,707		3.6	%
General Casualty	L		12,521		1.9	%		(18.8	%)		15,427		2.5	%
Marine & Energy	S		11,707		1.8	%		(29.3	%)		16,549		2.6	%
Medical Malpractice	L		11,276		1.7	%		(35.9	%)		17,582		2.8	%
Other	S		4,437		0.7	%		162.1	%		1,693		0.3	%
Professional Liability	L		59,458		9.0	%		(0.4	%)		59,684		9.5	%
Property	S		144,413		21.8	%		4.0	%		138,866		22.1	%
Whole Account	S/L		1,408		0.2	%		(96.0	%)		35,070		5.6	%
Workers’ Compensation	L		18,248		2.8	%		11.0	%		16,436		2.6	%
			318,354		48.1	%		(11.7	%)		360,727		57.5	%
Alterra at Lloyd’s:
Accident & Health	S		17,432		2.6	%		28.7	%		13,544		2.2	%
Agriculture	S		20,370		3.1	%		n/m			—		0.0	%
Aviation	S		2,486		0.4	%		40.7	%		1,767		0.3	%
Financial Institutions	L		6,904		1.0	%		(23.6	%)		9,036		1.4	%
International Casualty	L		49,268		7.4	%		45.8	%		33,789		5.4	%
Marine	S		2,726		0.4	%		n/m			—		0.0	%
Professional Liability	L		5,428		0.8	%		(31.5	%)		7,922		1.3	%
Property	S		41,529		6.3	%		(0.7	%)		41,832		6.7	%
			146,143		22.1	%		35.5	%		107,890		17.2	%
Latin America:
Aviation	S		65		0.0	%		n/m			—		0.0	%
General Casualty	L		2,435		0.4	%		154.4	%		957		0.2	%
Marine	S		1,688		0.3	%		210.3	%		544		0.1	%
Property	S		16,711		2.5	%		19.9	%		13,935		2.2	%
Surety	S		4,441		0.7	%		161.2	%		1,700		0.3	%
			25,340		3.8	%		47.9	%		17,136		2.7	%
Aggregate Property & Casualty		$	660,890		99.9	%		5.3	%	$	627,413		99.9	%
Life & Annuity:
Annuity		$	353		0.1	%		5.1	%	$	336		0.1	%
Life			87		0.0	%		(12.1	%)		99		0.0	%
Aggregate Life & Annuity		$	440		0.1	%		1.1	%	$	435		0.1	%
Aggregate Property & Casualty and Life & Annuity		$	661,330		100.0	%		5.3	%	$	627,848		100.0	%
S = Short tail lines		$	399,121		60.4	%				$	372,624		59.4	%
L = Long tail lines			261,769		39.6	%					254,789		40.6	%
Aggregate Property & Casualty		$	660,890							$	627,413
Property [b]		$	251,676		38.1	%				$	241,347		38.5	%
Casualty [c]			261,065		39.5	%					237,254		37.8	%
Specialty [d]			148,149		22.4	%					148,812		23.7	%
		$	660,890							$	627,413

[a] Comparative periods have been re-presented to conform with the current period’s presentation.

[b] Property includes property lines of business.

[c] Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers’ compensation lines of business.

[d] Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business.

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 March 31,
	2012			2011
Net income (loss) before tax	$	74,442		$	(49,387	)
Net realized and unrealized (gains) losses on investments not included in operating income, before tax [a]		(11,551	)		23,109
Foreign exchange (gains) losses, before tax		(32	)		(878	)
Net operating income (loss) before tax	$	62,859		$	(27,156	)
Net income (loss)	$	79,024		$	(46,687	)
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a]		(11,247	)		22,602
Foreign exchange (gains) losses, net of tax		(21	)		(640	)
Net operating income (loss)	$	67,756		$	(24,725	)
Net income (loss) per diluted share	$	0.77		$	(0.44	)
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a]		(0.11	)		0.21
Foreign exchange (gains) losses, net of tax		(0.00	)		(0.01	)
Net operating income (loss) per diluted share	$	0.66		$	(0.23	)
Weighted average shares outstanding - basic		101,002,884			107,165,228
Weighted average shares outstanding - diluted		103,154,081			107,165,228

[a] Net realized and unrealized (gains) losses on investments not included in operating income 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 in run-off 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 March 31,
	2012			2011
Net income (loss)	$	79,024		$	(46,687	)
Annualized net income (loss)		316,096			(186,748	)
Net operating income (loss)	$	67,756		$	(24,725	)
Annualized net operating income (loss)		271,024			(98,900	)
Average shareholders’ equity [b]	$	2,830,249		$	2,820,732
Annualized return on average shareholders’ equity		11.2	%		(6.6	%)
Annualized net operating return on average shareholders’ equity		9.6	%		(3.5	%)

[b] Average shareholders’ equity is computed as 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, 2012		December 31, 2011
Shareholders’ equity	$	2,851,262	$	2,809,235
Goodwill and intangible assets		55,771		56,111
Tangible book value	$	2,795,491	$	2,753,124
Diluted shares outstanding		103,036,630		104,406,779
Diluted tangible book value per share	$	27.13	$	26.37

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA– MARCH 31, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)

Type of Investment	As of March 31, 2012		Investment Distribution			As of December 31, 2011		Investment Distribution
Cash and cash equivalents	$	844,743		10.8	%	$	922,844		11.8	%
U.S. government and agencies		773,635		9.9	%		751,806		9.6	%
Non-U.S. governments		172,921		2.2	%		164,621		2.1	%
Corporate securities		2,586,702		33.1	%		2,646,358		33.9	%
Municipal securities		268,658		3.4	%		263,007		3.4	%
Asset-backed securities		263,481		3.4	%		247,965		3.2	%
Residential mortgage-backed securities		1,311,184		16.8	%		1,296,277		16.6	%
Commercial mortgage-backed securities		365,113		4.7	%		361,097		4.6	%
Fixed maturities at fair value	$	5,741,694		73.6	%	$	5,731,131		73.3	%
U.S. government and agencies	$	29,206		0.4	%	$	29,201		0.4	%
Non-U.S. governments		537,824		6.9	%		524,449		6.7	%
Corporate securities		317,184		4.1	%		319,609		4.1	%
Asset-backed securities		1,000		0.0	%		1,000		0.0	%
Fixed maturities at amortized cost	$	885,214		11.3	%	$	874,259		11.2	%
Other investments	$	332,884		4.3	%	$	286,515		3.7	%
Total invested assets	$	7,804,535		100.0	%	$	7,814,749		100.0	%

Credit Rating	As of March 31, 2012		Ratings Distribution			As of December 31, 2011		Ratings Distribution
U.S. government and agencies [a]	$	1,986,689		30.0	%	$	1,869,405		28.3	%
AAA		1,007,269		15.2	%		948,861		14.4	%
AA		828,916		12.5	%		883,783		13.4	%
A		1,363,572		20.6	%		1,378,361		20.9	%
BBB		284,843		4.3	%		281,983		4.3	%
BB		64,343		1.0	%		84,803		1.3	%
B		121,783		1.8	%		131,159		2.0	%
CCC or lower		43,005		0.6	%		53,157		0.8	%
Not rated		41,274		0.6	%		99,619		1.5	%
Fixed maturities at fair value	$	5,741,694		86.6	%	$	5,731,131		86.8	%
U.S. government and agencies	$	29,206		0.4	%	$	29,201		0.4	%
AAA		612,593		9.2	%		619,832		9.4	%
AA		99,451		1.5	%		82,511		1.2	%
A		121,952		1.8	%		117,600		1.8	%
BBB		21,014		0.3	%		24,117		0.4	%
BB		998		0.0	%		998		0.0	%
Fixed maturities at amortized cost	$	885,214		13.4	%	$	874,259		13.2	%
Total fixed maturities	$	6,626,908		100.0	%	$	6,605,390		100.0	%

[a] Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,213,054 (December 31, 2011: $1,117,599).

Percentage totals may not add due to rounding.

	Three Months Ended March 31,
	2012			2011
Net investment income	$	58,678		$	57,766
Realized and unrealized gains (losses) on trading fixed maturities		1,066			(1,827	)
Net realized gains on available for sale fixed maturities		7,759			3,369
Increase in fair value of hedge funds		3,679			3,167
Decrease in fair value of catastrophe bonds		—			(25,390	)
Increase in fair value of structured deposit		365			1,334
Income (loss) from equity method investments		4,927			(145	)
Increase in fair value of derivatives		7,697			674
Net realized and unrealized gains (losses) on investments	$	25,493		$	(18,818	)
Net impairment losses recognized in earnings	$	(5,369	)	$	(1,029	)

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