Investor Presentation Quarter Ended June 30, 2012 Exhibit 99.1 |
2 Cautionary Note Regarding Forward-Looking Statements This presentation may include forward-looking statements that reflect Alterra’s current views with respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may” and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause actual results to differ materially from those indicated in such statements and you should not place undue reliance on any such statements. These factors include, but are not limited to, the following: (1) the adequacy of loss and benefit reserves and the need to adjust such reserves as claims develop over time; (2) the failure of any of the loss limitation methods employed; (3) the effect of cyclical trends, including with respect to demand and pricing in the insurance and reinsurance markets; (4) changes in general economic conditions, including changes in capital and credit markets; (5) any lowering or loss of financial ratings; (6) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding expectations; (7) actions by competitors, including consolidation; (8) the effects of emerging claims and coverage issues; (9) the loss of business provided to Alterra by its major brokers; (10) the effect on Alterra’s investment portfolio of changing financial market conditions, including inflation, interest rates, liquidity and other factors; (11) tax and regulatory changes and conditions; (12) retention of key personnel; (13) the integration of new business ventures Alterra may enter into; and (14) management’s response to any of the aforementioned factors. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in Alterra’s most recent reports on Form 10-K and Form 10-Q and other documents on file with the Securities and Exchange Commission. Any forward-looking statements made in this presentation are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Alterra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Alterra or it business or operations. Alterra undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. |
3 Alterra’s Franchise Is Well Positioned for Success Global underwriter of specialty insurance and reinsurance Multiple operating platforms - Bermuda, Ireland, United States, Lloyd's and Latin America Strong franchise positions across multiple specialty classes of business Opportunistic and disciplined underwriting strategy Strong culture of risk management Analytical and quantitative underwriting orientation Business mix shift towards shorter-tail lines 5 year average combined ratio (including cats) of 90.8% Liquid balance sheet with conservative reserving track record Shareholders’ equity ~ $2.9 billion at 6/30/12 Low operating and financial leverage S&P and AM Best ratings of “A” Proven track record of active capital management H1 2012 repurchases of $136.9 million and dividends of $27.8 million, or 5.9% of 1/1/12 shareholders’ equity 2011 repurchases of $223.3 million and dividends of $54.5 million, or 9.5% of 1/1/11 shareholders’ equity Increased quarterly dividend in August 2012 to $0.16 per share H1 2012 GPW Short- Tail 60% Long-Tail 40% Insurance 38% Reinsurance 62% |
4 Second Quarter 2012 Results Q2 2012 net operating diluted EPS of $0.68 per share Overall P&C gross premiums written grew 0.5% to $565.8 million Premium growth in US Insurance and shorter-tail lines offset by declines in longer- tail reinsurance lines P&C net premiums written decreased 11.8% to $376.1 million Driven by increased reinsurance purchases to manage aggregate exposures Net investment income of $54.7 million compared to $59.7 million in Q2 2011 Combined ratio of 86.6% compared to 93.7% in Q2 2011 Diluted book value per share of $28.68 at 6/30/12 up from $26.91 at 12/31/11. Additional $1.58 per diluted share of unrecorded unrealized gains in the held to maturity investment portfolio . Q2 2012 impacted by $7.4 million of equity earnings and fee income from New Point Re IV. P&C GPW (0.5% increase) Growth in Book Value 93.7% 86.6% Combined Ratio $563.0 $565.8 Diluted Book Value per Share (7.6% increase 1 ) $26.91 $28.68 Expansion into new lines and regions 2 Unrealized gains on the held to maturity fixed maturity investments are not included in equity as the investments are carried on the balance sheet at amortized cost. Jun 30, 2011 Jun 30, 2012 Dec 31, 2011 Jun 30, 2012 2 1 Including adding back $0.28 per share of dividends. |
5 GPW $’millions H1 2012 H1 2011 Period over Period Growth % Bermuda/ Dublin 221.9 182.2 US Reinsurance 39.1 42.4 GPW on contracts bound by Alterra in the period 1 261.0 224.6 20.8% Alterra’s share of New Point Re IV premiums 2 29.3 - Total property reinsurance gross premiums 290.3 224.6 29.3% Total property reinsurance net premiums 4 189.2 152.3 24.2% Growth in Reinsurance Segment Property Premiums 1 Excluding premium adjustments and reinstatement premiums. 2 34.8% share of New Point Re IV gross premiums written. These premiums are not included in Alterra’s reported gross premiums written as the investment in New Point Re IV is accounted for under the equity method. 3 H1 2011 includes $13.4 million of New Point Re III gross premiums written. These premiums are included in Alterra’s reported gross premiums written as Alterra owns 100% of New Point Re III. 4 Includes Alterra’s 34.8% share of New Point Re IV net premiums written. 20.8% growth in Alterra’s reinsurance segment property premiums reflects improved market conditions Participation in New Point Re IV increased year over year growth to 29.3% 3 |
6 New Point IV and V Sidecar vehicles formed to create additional capacity for the property catastrophe collateralized marketplace “Just in time” capital as it is called down and utilized when needed New Point IV - $200 million of capital fully deployed in 2012 Alterra has a 34.8% equity interest GPW was $84.3 million for the six months ended June 30, 2012 Income of $16.6 million recognized for the six months ended June 30, 2012 New Point V - $210 million of available capacity New Point vehicles allow us to leverage our underwriting skills to earn fees while providing additional capacity to brokers and clients |
7 2011 global industry cat losses were over $105 billion Market stressed by historic low returns on invested assets Cash flow levels deteriorating Industry reserve redundancies diminishing Property cat rate increases have slowed Casualty lines continue to show modest improvement Pricing poised to positively move further with the next catalyst Market Transitioning. . . Alterra is positioned to be a beneficiary of improving market conditions |
8 Pricing Is Improving for the First Time Since 1999. . . More Rate Improvement Is Needed To Meaningfully Increase Exposure ------------------------------------------------------------------------------------------ Source: RBC Capital Markets and CIAB Commercial Property and Casualty Market Index Survey Large Accounts: Rates Remain Below 1999 Medium Accounts: Rates ~3% Above 1999 Small Accounts: Rates ~13% Above 1999 |
9 2004 Insurance Property 2003 Insurance Excess Liability Professional Liability 2005 Reinsurance Property / Property Cat Harbor Point formed 2006 Insurance Aviation 2008 Lloyd's Insurance Financial Institutions Prof. Indemnity Lloyd's Reinsurance Accident / Health Property 2007 U.S. E&S Insurance Property Inland Marine U.S. Casualty Reinsurance Multi Peril Crop Experienced & highly quantitative underwriting teams Lead underwriters average over 20 years in the business High percentage of employees hold professional designations 2009 Lloyd's Casualty (non U.S.) A&H Insurance U.S. Specialty Professional Liability Latin America Reinsurance 2002 Traditional Re Workers' Comp Medical Malpractice GL / PL Aviation Identifying & Recruiting "Franchise Players" Has Been Instrumental in Our Success 2010 Alterra formed by the merger of Max Capital and Harbor Point 2011 Lloyd’s Property Direct & Facultative U.S. Specialty Excess Casualty |
10 Local Knowledge Global Reach |
11 ____________________ Note: Pro forma gross premium written (“GPW”) represents the combined GPW of Max Capital and Harbor Point net of intercompany eliminations of GPW. Global Insurance (15.7% of H1 2012 P&C GPW) Reinsurance (46.1% of H1 2012 P&C GPW) Professional Liability Property Excess Liability Aviation General Casualty Property Aviation Workers Comp. Professional Liability Other Med. Mal. Marine & Energy Agriculture H1 2012 GPW: $192.0 million = pro forma $1,060.4 $815.4 Alterra Has a Strong Market Position in Specialty Classes … Credit/ Surety H1 2012 GPW: $565.2 million $870.4 Auto $382.9 $389.4 $447.3 $370.1 $365.8 $192.0 $0.0 $100.0 2007 2008 2009 2010 2011 H1 2012 $200.0 $300.0 $400.0 $500.0 $423.6 $345.2 $419.5 $487.1 $0.0 $200.0 $400.0 $600.0 $1,000.0 2007 2008 2009 2010 2011 H1 2012 $998.3 $900.4 $565.2 $800.0 $1,200.0 4% 2% 7% 3% 3% 1% 17% 45% 7% 5% 6% 3% 30% 43% 24% |
12 …With an Attractive Position in the U.S. Market and Lloyd’s Professional Liability Property Marine Excess/ General Liability Property Agriculture Aviation Financial Institutions Accident & Health Int’l Casualty Marine Professional Liability U.S. Insurance (17.6% of H1 2012 P&C GPW) Alterra at Lloyd’s (17.8% of H1 2012 P&C GPW) H1 2012 GPW: $216.5 million H1 2012 GPW: $218.2 million 21% 25% 12% 42% 12% 10% 3% 6% 26% 2% 5% 36% $194.3 $265.9 $324.0 $374.7 $216.5 $0.0 $100.0 $200.0 $300.0 $400.0 2008 2009 2010 2011 H1 2012 $8.8 $129.0 $179.8 $253.1 $218.2 $0.0 $100.0 $200.0 $300.0 2008 2009 2010 2011 H1 2012 |
13 …and Latin America Latin America (2.8% of H1 2012 P&C GPW) 5% 6% 73% 16% Property Surety Marine General Liability H1 2012 GPW: $34.8 million $44.8 $91.8 $34.8 $0.0 $100.0 2010 2011 H1 2012 |
14 North America Europe Other Reinsurance Insurance (1) 2011 GPW = $1,904.1 million ____________________ (1) Includes Reinsurance segment, Life & Annuity reinsurance and reinsurance written through Lloyd’s platform. Diversified and Balanced Business Mix Global Platform 2011 Line of Business 2011 Auto 5% Aviation 3% Marine & Energy 6% Agriculture 2% Accident & Health 2% Other Short -Tail 2% Property 35% Whole Account 2% General Casualty 17% Financial Institutions 2% Workers' Comp 2% Medical Malpractice 2% Professional Liability 20% 74% 16% 10% 57% 43% |
15 ____________________ Source: Company filings, SNL Financial. Diversified reinsurers include RE, AXS, ACGL, TRH, PRE, AWH, ENH, AHL, PTP, AGII and ALTE. Property focused reinsurers include RNR, VR, MRH and FSR. Diversified Reinsurers Property Focused Reinsurers Diversified Platforms Generate More Consistent Margins Alterra has performed well within its diversified peer group with less volatility than property focused reinsurers Alterra has had one of the lowest combined ratios of its peer group Median 115% 84% 83% 94% 84% 93% 115% 89% 95% Alterra 106% 86% 88% 92% 88% 86% 98% 90% 92% 96% 77% 75% 84% 76% 85% 96% 82% 84% 124% 96% 99% 101% 97% 103% 143% 103% 108% 0% 25% 50% 75% 100% 125% 150% 175% 200% 225% 2005 2006 2007 2008 2009 2010 2011 H1 2012 Average Median 170% 56% 62% 90% 66% 84% 125% 71% 90% 140% 48% 59% 79% 21% 45% 99% 38% 66% 201% 60% 73% 92% 75% 100% 154% 96% 106% 0% 25% 50% 75% 100% 125% 150% 175% 200% 225% 2005 2006 2007 2008 2009 2010 2011 H1 2012 Average |
16 3 Year Return on Equity Alterra’s ROEs Have Been More Consistent Than Most Peers ____________________ Source: JMP Research, SNL Financial. Three years ended December 31, 2011. Alterra ROE reflects Pro-Forma data for Max and Harbor Point prior to the merger in May 2010. ACGL AHL AXS AWH MRH PRE PTP RNR VR ALTE ENH 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 4% 6% 8% 10% 12% 14% 16% Std. Dev. |
17 Active Capital Management ____________________ Source: SNL Financial and FactSet Note: Capital returned to shareholders includes dividends and share repurchases. For the three years ended December 31, 2011 Average Annual Capital Returned to Shareholders as a % of Opening Shareholders’ Equity 20.6% 18.4% 16.3% 15.1% 13.6% 12.7% 12.0% 11.7% 9.9% 9.3% 8.9% 7.5% 6.3% 6.3% 5.8% 4.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% ACGL AWH AHL ALTE PTP ENH VR MRH PRE RNR AXS AGII FSR XL RE ACE |
18 Our strategy is to diversify our book of business so that property cat is one of many components of our business Results demonstrate our successful risk management Our reserving process has been tested by large, recent loss events including: 2011 Australia floods, New Zealand earthquake, Japan earthquake and tsunami, U.S. spring storms, Hurricane Irene, Thai floods 2010 Chile earthquake, New Zealand earthquake 2008 Hurricanes Ike/Gustav Superior Risk Management Alterra’s losses from catastrophe events as a % of equity are below our peer group average |
19 Peer PML’s as a Percentage of Shareholder’s Equity ____________________ Source: Dowling & Partners Research Note: ALTE includes proportionate share of New Point Re IV. RNR and PRE do not disclose their PMLs for either 1-in-100 year events or 1-in-250 year events. All data is based on RMS 11 except RE which is based on AIR. 0% 5% 10% 15% 20% 25% 30% 35% VR ENH MRH ALTE AWH AHL FSR ACGL AXS Y RE PTP As of July 1, 2012 1 in 100 1 in 250 |
20 2011 – “The Year of the Cat” Alterra’s Ratio Of Losses to Equity Are Below Peer Group __________________ Source: Company reports and SNL Financial 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 FSR PRE PTP MRH RE TRH AHL VR ENH RNR AGII ACGL AWH ALTE Losses Percentage of January 1, 2011 Capital and Surplus |
21 2010 – Chile Earthquake / Windstorm Xynthia/ September New Zealand Earthquake ____________________ (2) Q2 net losses reflect only losses from the Chile earthquake. Initial losses include the Chile earthquake and Windstorm Xynthia. (3) Initial loss estimate reflects 50% to 90% of Reuters consensus net operating earnings prior to the earthquake, based on disclosure that net income would remain positive for the quarter. (4) Initial estimates based on Chile and Xynthia, ultimate losses include the Chile, Haiti, and Baja earthquakes, Xynthia and the Australia hailstorms. Based on international catastrophe losses being two-thirds of total catastrophe losses as disclosed in the earnings conference call. (5) Initial estimate is as of the first quarter conference call. Both initial and revised estimates reflect only the Chile earthquake. (6) Pro forma; includes losses from Harbor Point and Max Capital prior to the merger. Expressed as a percentage of combined 12/31/09 equity prior to the special dividend. 0% 2% 4% 6% 8% 10% 0 50 100 150 200 250 300 350 400 450 FSR PTP (1) VR (2) RNR (3) MRH RE PRE AHL AXS (2) TRH (2) AWH (2)(4) ENH AGII (1)(5) ACGL(1) ALTE (6) Ultimate Net Losses Reported Percentage of January 1, 2010 Capital and Surplus Alterra’s 2010 Losses Are Below Peer Group Source: Company filings and press releases; losses are generally disclosed net of tax and net of reinstatement premiums. (1) Q2 net losses reflect Q1 estimates plus reported development, if any. |
22 2008 – Hurricanes Ike / Gustav ____________________ Source: Company filings, as of 12/31/08. Losses are generally disclosed net of reinstatement premiums. (1) Equity includes preferred shares, which subsequently converted to common shares. (2) Results reflect Ike only. (3) Equity includes preferred shares, which subsequently converted to common shares. (4) TRH does not disclose specific losses but did lose "$169.7 million principally relating to Hurricane Ike." 0% 2% 4% 6% 8% 10% 12% 14% 0 50 100 150 200 250 300 350 400 450 VR FSR RNR MRH IPCR(1) PTP(1) ACGL AXS PRE(2) HP(3) AHL ENH ORH TRH(4) AWH RE MXGL Ultimate Net Losses Reported Percentage of June 30, 2008 Capital and Surplus |
23 PML goal of no more than 25% of starting capital in 1 in 250 year event Adjust position as market pricing makes risk/reward attractive Use RMS with “all switches on” and gross-up factors on standard model Incorporate AIR, market share, industry and client historical loss data Capture detailed location data and put a premium on data quality Historically, our losses for events have been close to expected ranges PML and aggregate usage is incorporated into our pricing models Key In-force PMLs as of July 1, 2012 U.S. wind 1 in 100 year event - $498 million net loss (17.7% of 1/1/12 shareholders’ equity) California earthquake 1 in 250 year event - $360 million net loss (12.8% of 1/1/12 shareholders’ equity) Europe wind 1 in 100 year event - $145 million net loss (5.2% of 1/1/12 shareholders’ equity) Cat Aggregate & PML Management |
24 Disciplined Underwriting Management Expands our market clout and footprint Reduces underwriting risk Increases fee income Earlier profit recognition Assists in the risk management process Can dial down as market pricing improves Benefits of Ceding Premium Include: Reduces Volatility and Improves the Near term ROE |
Reserve for Losses and Loss Expenses 25 As of June 30, 2012 and December 31, 2011 Global Insurance Reinsurance U.S. Insurance Alterra at Lloyd’s Latin America IBNR Case 0 500 1,000 1,500 2,000 2,500 $1,297 $1,286 $467 $451 $56 $34 $2,094 $2,088 66% 67% 67% 64% 63% 63% 70% 65% $ 394 $357 34% 33% 33% 36% 37% 37% 30% 35% Q2 2012 Q4 2011 Q2 2012 Q4 2011 Q2 2012 Q4 2011 Q2 2012 Q4 2011 Q2 2012 Q4 2011 |
26 Favorable Reserve Development $5.9 $45.1 $90.8 $77.2 $105.5 $153.3 Development as a % of Net Reserves prior to development 0.3% 2.5% 4.1% 3.4% 3.4% 4.6% Reserve Development History ($ in millions) ____________________ $1,840 $1,796 $2,128 $2,213 $2,985 $3,182 500 1,000 1,500 2,000 2,500 3,000 3,500 2006 2007 2008 2009 2010 2011 - Net Loss Reserves Note: Reserve development and net reserves prior to May 12, 2010 are for Max Capital only. Reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts. |
27 High Quality, Liquid Investment Portfolio Alterra maintains a high quality, liquid portfolio 95.4% of portfolio in fixed income/cash, which consists of highly rated securities Assets are generally matched to liabilities Cycle management extends to investments Cash balance $764.0 million or 9.7% of portfolio Average fixed income duration of approximately 4.1 years, including cash 60.7% of the cash and fixed maturities portfolio is held in cash, government / agency-backed securities and “AAA” securities 71.8% of fixed income portfolio rated “AA” or better Hedge fund investments are marked-to-market Minimal exposure to selected asset classes CMBS of $399.0 million (5.9% of portfolio) – average rating of AA+/Aa1 ABS of $350.6 million (5.2% of portfolio) RMBS of $1,322.8 million (19.6% of portfolio) – 93.9% agency- backed No CDO’s, CLO’s, SIV’s or other highly structured securities Less than $13 million of OTTI losses over the last eight quarters Carrying Value $7.9 billion As of June 30, 2012 Cash Other Investments 4% Fixed Income 10% 86% |
European government holdings Total European government holdings represent $750.4 million, or 9.5%, of the $7.9 billion investment portfolio. No direct exposure in Greece, Portugal, Italy, Ireland or Spain. European banking institutions Total European banking institution holdings represent $437.6 million, or 5.5%, of the $7.9 billion investment portfolio. Two largest holdings, which total $126.7 million, are with government-backed banking institutions. European Exposure As of June 30, 2012 France 36% Germany 34% Netherlands 19% Belgium 3% United Kingdom 6% Denmark 1% Other Norway 1% 1% European Investment Bank 16% KFW 14% Credit Suisse 8% Lloyds 6% UBS 6% BNP Paribas 4% HSBC 4% Barclays 7% Other 35% 28 |
29 ____________________ Note: Price / diluted book value multiple as of August 27, 2012. Well Positioned to Build Shareholder Value Franchise positions in attractive specialty markets Established operating platforms provide global access to business Diversified business portfolio across casualty and property lines Opportunistic approach – nimble and responsive to market trends High-quality, liquid investment portfolio Invested asset leverage intended to drive more consistent returns Balance sheet strength with low leverage / financial flexibility Attractive entry point – price / diluted book value of 0.81x |
30 Appendices |
31 June 30, December 31, 2012 2011 Cash & Fixed Maturities 7,520 $ 7,528 $ Other Investments 366 287 Premium Receivables 992 715 Losses Recoverable 1,084 1,068 Other Assets 735 588 Total Assets 10,697 $ 10,186 $ Property & Casualty Losses 4,308 $ 4,217 $ Life & Annuity Benefits 1,148 1,191 Deposit Liabilities 158 151 Funds Withheld 94 112 Unearned Premium 1,281 1,021 Senior Notes 441 441 Other Liabilities 415 244 Total Liabilites 7,845 $ 7,377 $ Shareholders' Equity 2,852 2,809 10,697 $ 10,186 $ Strong Balance Sheet ($ in millions) |
32 YTD Results Comparison ($ in millions) Six months ended June 30, June 30, 2012 2011 Gross Premiums Written 1,228 $ 1,192 $ Net Premiums Earned 689 729 Net Investment Income 113 117 Net Realized and Unrealized Gains (Losses) on Investments 39 (25) Other Than Temporary Impairment Charges (6) (1) Other Income 7 2 Total Revenues 842 822 Total Losses, Expenses & Taxes 684 836 Net Income (Loss) 158 $ (14) $ Net Operating Income 137 $ 15 $ Property & Casualty Underwriting Loss Ratio 58.6% 70.9% Expense Ratio 31.0% 32.7% Combined Ratio 89.5% 103.5% |
33 Six months ended June 30, 2012 ($ in millions) Totals in table may not add due to rounding. (1) Property and Casualty only. Diversified Operating Platform Property & Casualty Global Insurance U.S. Insurance Reinsurance Alterra at Lloyd's Latin America Total Life & Annuity Reinsurance Corporate Consolidated Gross premiums written $192.0 $216.5 $565.2 $218.2 $34.8 $1,226.7 $1.5 - $ 1,228.2 $ Reinsurance premiums ceded (96.5) (122.0) (112.7) (65.7) (17.3) (414.2) (0.2) - (414.4) Net premiums written $95.6 $94.5 $452.5 $152.5 $17.5 $812.5 $1.3 - $ 813.8 $ Earned premiums $186.9 $196.5 $405.1 $142.2 $42.5 $973.2 $1.5 - $ 974.7 $ Earned premiums ceded (92.5) (84.9) (55.9) (43.2) (9.1) (285.6) (0.2) - (285.8) Net premiums earned 94.4 111.6 349.2 99.1 33.3 687.6 1.3 - 689.0 Net losses and loss expenses (40.8) (74.9) (190.8) (71.7) (24.6) (402.8) - - (402.8) Claims and policy benefits - - - - - - (26.7) - (26.7) Acquisition costs (0.3) (13.9) (81.4) (16.9) (9.2) (121.6) (0.3) - (121.9) General and administrative expenses (13.4) (24.5) (31.4) (17.0) (5.0) (91.2) (0.2) - (91.4) Other income 0.8 0.1 6.3 - - 7.2 - - 7.2 Underwriting income (loss) 40.7 (1.6) 52.0 (6.5) (5.4) 79.3 n/a - n/a Net investment income 28.2 85.2 113.4 39.0 39.0 (5.9) (5.9) Corporate other income 0.1 0.1 Interest expense (18.3) (18.3) Net foreign exchange gains - - Corporate general and administrative expenses (27.5) (27.5) Income before taxes $2.4 $72.5 $154.1 Loss ratio 43.2% 67.1% 54.6% 72.4% 73.7% 58.6% Acquisition cost ratio 0.3% 12.4% 23.3% 17.0% 27.6% 17.7% 14.2% 21.9% 9.0% 17.1% 14.9% 13.3% Combined ratio (1) 57.7% 101.5% 86.9% 106.5% 116.3% 89.5% Net realized and unrealized gains on investments Net impairment losses recognized in earnings General and administrative expense ratio |