Exhibit 99.2
ALTERRA CAPITAL HOLDINGS LIMITED
Investor Financial Supplement
Third Quarter 2012
(Unaudited)
This supplement is for information purposes only. It should be read in conjunction with documents filed by Alterra Capital Holdings Limited with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act 1934.
Alterra Capital Holdings Limited
Investors:
Susan Spivak Bernstein, +1-212-898-6640
or
Media:
Kekst and Company
Peter Hill, +1-212-521-4800
ALTERRA CAPITAL HOLDINGS LIMITED
Cautionary note regarding forward-looking information
This financial supplement 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 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 U.S. Securities and Exchange Commission. Any forward-looking statements made in this financial supplement 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 its 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.
ALTERRA CAPITAL HOLDINGS LIMITED
FINANCIAL SUPPLEMENT TABLE OF CONTENTS
Page | ||||
Financial Highlights | 4 | |||
Consolidated Balance Sheets | 5 | |||
Consolidated Statements of Operations—Quarterly | 6 | |||
Consolidated Statements of Operations—Year to date | 7 | |||
Segment Data and Ratios—Quarterly | 8 | |||
Gross Premiums Written by Line of Business—Quarterly | 15 | |||
Segment Data and Ratios—Year to date | 16 | |||
Gross Premiums Written by Line of Business—Year to date | 23 | |||
Investment Portfolio | 24 | |||
New Point IV Summary | 29 | |||
Shareholder Return Analysis | 30 | |||
Earnings Per Share Information | 31 | |||
Operating Income Reconciliation | 32 | |||
Book Value per Share | 33 | |||
Regulation G | 34 |
ALTERRA CAPITAL HOLDINGS LIMITED
FINANCIAL HIGHLIGHTS
(Expressed in thousands of United States Dollars, except per share and share amounts)
For The Quarters Ended | For The Nine Months Ended | Previous Year Quarter Change | Previous Year to Date Change | |||||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | |||||||||||||||||||||
HIGHLIGHTS | ||||||||||||||||||||||||
Net income | $ | 37,652 | $ | 48,386 | $ | 195,616 | $ | 34,334 | (22.2 | %) | n/m | |||||||||||||
Net operating income [a] | 32,133 | 50,082 | 168,816 | 64,915 | (35.8 | %) | 160.1 | % | ||||||||||||||||
Operating cashflow | 90,861 | 126,770 | 257,238 | 275,475 | (28.3 | %) | (6.6 | %) | ||||||||||||||||
Gross premiums written | 386,228 | 386,328 | 1,614,415 | 1,578,083 | (0.0 | %) | 2.3 | % | ||||||||||||||||
Net premiums earned | 332,638 | 347,042 | 1,021,591 | 1,075,870 | (4.2 | %) | (5.0 | %) | ||||||||||||||||
Total assets | 10,734,010 | 10,472,330 | 10,734,010 | 10,472,330 | 2.5 | % | 2.5 | % | ||||||||||||||||
Total shareholders’ equity | 2,923,176 | 2,844,738 | 2,923,176 | 2,844,738 | 2.8 | % | 2.8 | % | ||||||||||||||||
PER SHARE | ||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Net income | $ | 0.39 | $ | 0.46 | $ | 1.98 | $ | 0.32 | ||||||||||||||||
Net operating income [a] | 0.34 | 0.48 | 1.71 | 0.61 | ||||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||
Net income | $ | 0.38 | $ | 0.46 | $ | 1.93 | $ | 0.32 | ||||||||||||||||
Net operating income [a] | 0.33 | 0.47 | 1.67 | 0.61 | ||||||||||||||||||||
Weighted average shares outstanding—basic | 95,791,466 | 104,830,300 | 98,785,999 | 105,866,771 | ||||||||||||||||||||
Weighted average shares outstanding—diluted | 98,610,267 | 105,665,282 | 101,252,927 | 107,092,882 | ||||||||||||||||||||
Book value per common share [b] | $ | 30.45 | $ | 27.27 | $ | 30.45 | $ | 27.27 | 11.7 | % | 11.7 | % | ||||||||||||
Diluted book value per share (treasury stock method) [b] | 29.57 | 27.18 | 29.57 | 27.18 | 8.8 | % | 8.8 | % | ||||||||||||||||
Diluted tangible book value per share (treasury stock method) [b] | 29.01 | 26.64 | 29.01 | 26.64 | 8.9 | % | 8.9 | % | ||||||||||||||||
RATIOS | ||||||||||||||||||||||||
Annualized return on average shareholders’ equity [c] | 5.2 | % | 6.9 | % | 9.1 | % | 1.6 | % | ||||||||||||||||
Annualized net operating return on average shareholders’ equity [c] | 4.5 | % | 7.1 | % | 7.9 | % | 3.1 | % | ||||||||||||||||
Loss ratio [d] | 68.8 | % | 57.3 | % | 61.9 | % | 66.5 | % | ||||||||||||||||
Acquisition cost ratio [d] | 18.6 | % | 17.7 | % | 18.0 | % | 18.3 | % | ||||||||||||||||
General and administrative expense ratio [d] | 12.4 | % | 12.7 | % | 13.0 | % | 13.7 | % | ||||||||||||||||
Combined ratio [d] | 99.9 | % | 87.7 | % | 92.9 | % | 98.4 | % |
[a] | Non-GAAP financial measure. For definition and calculation see page 32. |
[b] | For calculations see page 33. |
[c] | Non-GAAP financial measure. For calculations see page 30. |
[d] | For property and casualty business only. |
4
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 405,809 | $ | 427,704 | $ | 394,514 | $ | 469,477 | $ | 427,898 | ||||||||||
Fixed maturities, trading at fair value | 376,498 | 211,796 | 223,592 | 229,206 | 227,753 | |||||||||||||||
Fixed maturities, available for sale at fair value | 5,728,640 | 5,709,850 | 5,518,102 | 5,501,925 | 5,662,869 | |||||||||||||||
Fixed maturities, held to maturity at amortized cost | 837,348 | 833,990 | 885,214 | 874,259 | 926,916 | |||||||||||||||
Other investments | 376,870 | 366,404 | 332,884 | 286,515 | 311,633 | |||||||||||||||
Restricted cash and cash equivalents | 245,747 | 336,253 | 450,229 | 453,367 | 442,077 | |||||||||||||||
Accrued interest income | 65,236 | 65,252 | 64,295 | 71,322 | 71,038 | |||||||||||||||
Premiums receivable | 872,948 | 991,927 | 869,800 | 715,154 | 777,980 | |||||||||||||||
Losses and benefits recoverable from reinsurers | 1,149,684 | 1,083,840 | 1,108,036 | 1,068,119 | 1,079,035 | |||||||||||||||
Deferred acquisition costs | 166,128 | 170,904 | 176,199 | 145,850 | 166,353 | |||||||||||||||
Prepaid reinsurance premiums | 303,171 | 326,014 | 299,163 | 212,238 | 214,132 | |||||||||||||||
Trades pending settlement | 77,802 | 31,925 | 111,194 | 22,887 | 34,158 | |||||||||||||||
Goodwill and intangible assets | 55,371 | 55,431 | 55,771 | 56,111 | 56,652 | |||||||||||||||
Other assets | 72,758 | 85,296 | 86,785 | 79,417 | 73,836 | |||||||||||||||
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Total assets | $ | 10,734,010 | $ | 10,696,586 | $ | 10,575,778 | $ | 10,185,847 | $ | 10,472,330 | ||||||||||
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LIABILITIES | ||||||||||||||||||||
Property and casualty losses | $ | 4,460,045 | $ | 4,308,316 | $ | 4,322,847 | $ | 4,216,538 | $ | 4,205,057 | ||||||||||
Life and annuity benefits | 1,148,317 | 1,148,304 | 1,203,752 | 1,190,697 | 1,230,344 | |||||||||||||||
Deposit liabilities | 139,518 | 158,412 | 151,058 | 151,035 | 147,493 | |||||||||||||||
Funds withheld from reinsurers | 93,190 | 93,510 | 92,793 | 112,469 | 124,631 | |||||||||||||||
Unearned property and casualty premiums | 1,192,203 | 1,281,406 | 1,221,788 | 1,020,639 | 1,149,108 | |||||||||||||||
Reinsurance balances payable | 214,202 | 260,351 | 201,409 | 134,354 | 178,560 | |||||||||||||||
Accounts payable and accrued expenses | 93,810 | 116,575 | 90,359 | 110,380 | 110,527 | |||||||||||||||
Trades pending settlement | 29,022 | 37,455 | — | — | 41,383 | |||||||||||||||
Senior notes | 440,527 | 440,521 | 440,510 | 440,500 | 440,489 | |||||||||||||||
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Total liabilities | 7,810,834 | 7,844,850 | 7,724,516 | 7,376,612 | 7,627,592 | |||||||||||||||
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SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Common shares (par value $1.00) 95,985,461 shares issued and outstanding | 95,985 | 96,853 | 100,707 | 102,102 | 104,324 | |||||||||||||||
Additional paid-in capital | 1,715,748 | 1,729,311 | 1,807,287 | 1,847,034 | 1,890,763 | |||||||||||||||
Accumulated other comprehensive income | 265,232 | 202,229 | 185,146 | 166,957 | 173,025 | |||||||||||||||
Retained earnings | 846,211 | 823,343 | 758,122 | 693,142 | 676,626 | |||||||||||||||
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Total shareholders’ equity | 2,923,176 | 2,851,736 | 2,851,262 | 2,809,235 | 2,844,738 | |||||||||||||||
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Total liabilities and shareholders’ equity | $ | 10,734,010 | $ | 10,696,586 | $ | 10,575,778 | $ | 10,185,847 | $ | 10,472,330 | ||||||||||
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Book value per share | $ | 30.45 | $ | 29.44 | $ | 28.31 | $ | 27.51 | $ | 27.27 | ||||||||||
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Diluted book value per share (treasury stock method) | $ | 29.57 | $ | 28.68 | $ | 27.67 | $ | 26.91 | $ | 27.18 | ||||||||||
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Diluted tangible book value per share (treasury stock method) [a] | $ | 29.01 | $ | 28.12 | $ | 27.13 | $ | 26.37 | $ | 26.64 | ||||||||||
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Debt-to-capital ratio [b] | 13.1 | % | 13.4 | % | 13.4 | % | 13.6 | % | 13.4 | % |
[a] | Non-GAAP financial measure. For calculations see page 33. |
[b] | Calculated as debt, being senior notes divided by shareholders’ equity plus debt. |
5
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME—QUARTERLY (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
REVENUES | ||||||||||||||||||||||||
Gross premiums written | $ | 386,228 | $ | 566,857 | $ | 661,330 | $ | 325,983 | $ | 386,328 | $ | 325,213 | ||||||||||||
Reinsurance premiums ceded | (123,477 | ) | (189,879 | ) | (224,462 | ) | (107,203 | ) | (90,891 | ) | (60,611 | ) | ||||||||||||
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Net premiums written | $ | 262,751 | $ | 376,978 | $ | 436,868 | $ | 218,780 | $ | 295,437 | $ | 264,602 | ||||||||||||
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Earned premiums | $ | 483,222 | $ | 496,839 | $ | 477,867 | $ | 460,636 | $ | 452,931 | $ | 436,244 | ||||||||||||
Earned premiums ceded | (150,584 | ) | (146,061 | ) | (139,692 | ) | (111,532 | ) | (105,889 | ) | (93,812 | ) | ||||||||||||
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Net premiums earned | 332,638 | 350,778 | 338,175 | 349,104 | 347,042 | 342,432 | ||||||||||||||||||
Net investment income | 53,518 | 54,729 | 58,678 | 57,080 | 60,335 | 59,711 | ||||||||||||||||||
Net realized and unrealized gains (losses) on investments | 20,436 | 13,481 | 25,493 | (5,775 | ) | (7,972 | ) | 15,411 | ||||||||||||||||
Total other-than-temporary impairment losses | (522 | ) | (420 | ) | (5,467 | ) | (703 | ) | (692 | ) | (90 | ) | ||||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes | (70 | ) | (150 | ) | 98 | 1 | (169 | ) | (61 | ) | ||||||||||||||
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Net impairment losses recognized in earnings | (592 | ) | (570 | ) | (5,369 | ) | (702 | ) | (861 | ) | (151 | ) | ||||||||||||
Other income | 1,586 | 1,928 | 5,362 | 2,017 | 1,473 | 1,327 | ||||||||||||||||||
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Total revenues | 407,586 | 420,346 | 422,339 | 401,724 | 400,017 | 418,730 | ||||||||||||||||||
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LOSSES AND EXPENSES | ||||||||||||||||||||||||
Net losses and loss expenses | 228,529 | 196,764 | 206,029 | 231,533 | 198,521 | 191,012 | ||||||||||||||||||
Claims and policy benefits | 11,838 | 13,272 | 13,466 | 14,564 | 14,538 | 15,060 | ||||||||||||||||||
Acquisition costs | 61,923 | 62,171 | 59,724 | 64,380 | 61,434 | 60,859 | ||||||||||||||||||
Interest expense | 9,026 | 9,635 | 8,628 | 13,296 | 11,303 | 7,551 | ||||||||||||||||||
Net foreign exchange (gains) losses | (82 | ) | 25 | (32 | ) | (753 | ) | (147 | ) | 3,353 | ||||||||||||||
Merger and acquisition expenses | — | — | — | — | — | 550 | ||||||||||||||||||
General and administrative expenses | 57,515 | 58,777 | 60,082 | 54,657 | 61,555 | 56,650 | ||||||||||||||||||
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Total losses and expenses | 368,749 | 340,644 | 347,897 | 377,677 | 347,204 | 335,035 | ||||||||||||||||||
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INCOME BEFORE TAXES | 38,837 | 79,702 | 74,442 | 24,047 | 52,813 | 83,695 | ||||||||||||||||||
Income tax expense (benefit) | 1,185 | 762 | (4,582 | ) | (6,901 | ) | 4,427 | 858 | ||||||||||||||||
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NET INCOME | 37,652 | 78,940 | 79,024 | 30,948 | 48,386 | 82,837 | ||||||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax | 54,301 | 23,444 | 16,819 | (3,670 | ) | 61,540 | 74,383 | |||||||||||||||||
Foreign currency translation adjustment | 8,702 | (6,361 | ) | 1,370 | (2,398 | ) | (20,733 | ) | 13,224 | |||||||||||||||
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COMPREHENSIVE INCOME | $ | 100,655 | $ | 96,023 | $ | 97,213 | $ | 24,880 | $ | 89,193 | $ | 170,444 | ||||||||||||
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KEY RATIOS/PER SHARE DATA | ||||||||||||||||||||||||
Loss ratio [a] | 68.8 | % | 56.2 | % | 61.0 | % | 66.5 | % | 57.3 | % | 56.0 | % | ||||||||||||
Acquisition cost ratio [b] | 18.6 | % | 17.7 | % | 17.6 | % | 18.5 | % | 17.7 | % | 17.8 | % | ||||||||||||
General and administrative expense ratio [c] | 12.4 | % | 12.6 | % | 14.0 | % | 12.4 | % | 12.7 | % | 12.2 | % | ||||||||||||
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Combined ratio [d] | 99.9 | % | 86.6 | % | 92.6 | % | 97.4 | % | 87.7 | % | 86.0 | % | ||||||||||||
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Net income per share | $ | 0.39 | $ | 0.79 | $ | 0.78 | $ | 0.30 | $ | 0.46 | $ | 0.71 | ||||||||||||
Net income per diluted share | $ | 0.38 | $ | 0.77 | $ | 0.77 | $ | 0.30 | $ | 0.46 | $ | 0.70 | ||||||||||||
Net operating income per share—diluted [e] | $ | 0.33 | $ | 0.68 | $ | 0.66 | $ | 0.30 | $ | 0.47 | $ | 0.64 | ||||||||||||
Annualized ROAE [f] | 5.2 | % | 11.1 | % | 11.2 | % | 4.4 | % | 6.9 | % | 11.1 | % | ||||||||||||
Annualized net operating ROAE [f] | 4.5 | % | 9.7 | % | 9.6 | % | 4.5 | % | 7.1 | % | 10.2 | % |
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business. |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business. |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 32 for calculation of net operating income per share—diluted. |
[f] | Non-GAAP financial measure. See page 30 for calculation of annualized return on average shareholders’ equity (ROAE) and annualized net operating ROAE. |
Percentage totals may not add due to rounding.
6
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME—YEAR TO DATE AND PRIOR YEARS (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
NINE MONTHS ENDED | YEAR ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 [g] | Dec. 31, 2011 | Dec. 31, 2010 [g] | ||||||||||||||||
REVENUES | ||||||||||||||||||||
Gross premiums written | $ | 1,614,415 | $ | 1,578,083 | $ | 1,095,333 | $ | 1,904,066 | $ | 1,410,731 | ||||||||||
Reinsurance premiums ceded | (537,818 | ) | (364,874 | ) | (293,546 | ) | (472,077 | ) | (371,163 | ) | ||||||||||
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Net premiums written | $ | 1,076,597 | $ | 1,213,209 | $ | 801,787 | $ | 1,431,989 | $ | 1,039,568 | ||||||||||
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Earned premiums | $ | 1,457,928 | $ | 1,385,201 | $ | 1,132,964 | $ | 1,845,837 | $ | 1,578,647 | ||||||||||
Earned premiums ceded | (436,337 | ) | (309,331 | ) | (303,032 | ) | (420,863 | ) | (406,161 | ) | ||||||||||
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Net premiums earned | 1,021,591 | 1,075,870 | 829,932 | 1,424,974 | 1,172,486 | |||||||||||||||
Net investment income | 166,925 | 177,766 | 161,378 | 234,846 | 222,458 | |||||||||||||||
Net realized and unrealized gains (losses) on investments | 59,410 | (32,564 | ) | 7,047 | (38,339 | ) | 16,872 | |||||||||||||
Total other-than-temporary impairment losses | (6,409 | ) | (2,003 | ) | (1,955 | ) | (2,706 | ) | (5,873 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (loss) before taxes | (122 | ) | (240 | ) | 1,084 | (239 | ) | 3,228 | ||||||||||||
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Net impairment losses recognized in earnings | (6,531 | ) | (2,243 | ) | (871 | ) | (2,945 | ) | (2,645 | ) | ||||||||||
Other income | 8,876 | 3,379 | 1,946 | 5,396 | 4,808 | |||||||||||||||
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Total revenues | 1,250,271 | 1,222,208 | 999,432 | 1,623,932 | 1,413,979 | |||||||||||||||
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LOSSES AND EXPENSES | ||||||||||||||||||||
Net losses and loss expenses | 631,322 | 714,060 | 475,794 | 945,593 | 654,841 | |||||||||||||||
Claims and policy benefits | 38,576 | 44,818 | 46,662 | 59,382 | 65,213 | |||||||||||||||
Acquisition costs | 183,818 | 196,722 | 133,901 | 261,102 | 187,464 | |||||||||||||||
Interest expense | 27,289 | 30,392 | 20,409 | 43,688 | 28,275 | |||||||||||||||
Net foreign exchange (gains) losses | (89 | ) | 2,065 | 267 | 1,312 | (115 | ) | |||||||||||||
Merger and acquisition expenses | — | — | (49,276 | ) | — | (48,776 | ) | |||||||||||||
General and administrative expenses | 176,374 | 202,417 | 143,827 | 257,074 | 220,586 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total losses and expenses | 1,057,290 | 1,190,474 | 771,584 | 1,568,151 | 1,107,488 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
INCOME BEFORE TAXES | 192,981 | 31,734 | 227,848 | 55,781 | 306,491 | |||||||||||||||
Income tax (benefit) expense | (2,635 | ) | (2,600 | ) | 5,183 | (9,501 | ) | 4,156 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
NET INCOME | 195,616 | 34,334 | 222,665 | 65,282 | 302,335 | |||||||||||||||
Change in net unrealized gains and losses on fixed maturities, net of tax | 94,564 | 89,774 | 169,039 | 86,104 | 81,406 | |||||||||||||||
Foreign currency translation adjustment | 3,711 | (15,695 | ) | (4,145 | ) | (18,093 | ) | (7,891 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
COMPREHENSIVE INCOME | $ | 293,891 | $ | 108,413 | $ | 387,559 | $ | 133,293 | $ | 375,850 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
KEY RATIOS/PER SHARE DATA | ||||||||||||||||||||
Loss ratio [a] | 61.9 | % | 66.5 | % | 57.5 | % | 66.5 | % | 56.1 | % | ||||||||||
Acquisition cost ratio [b] | 18.0 | % | 18.3 | % | 16.1 | % | 18.3 | % | 16.0 | % | ||||||||||
General and administrative expense ratio [c] | 13.0 | % | 13.7 | % | 12.4 | % | 13.4 | % | 13.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio [d] | 92.9 | % | 98.4 | % | 86.1 | % | 98.2 | % | 85.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net income per share—basic | $ | 1.98 | $ | 0.32 | $ | 2.52 | $ | 0.62 | $ | 3.19 | ||||||||||
Net income per share—diluted | $ | 1.93 | $ | 0.32 | $ | 2.50 | $ | 0.61 | $ | 3.17 | ||||||||||
Net operating income per share—diluted [e] | $ | 1.67 | $ | 0.61 | $ | 1.97 | $ | 0.91 | $ | 2.64 | ||||||||||
Annualized ROAE [f] | 9.1 | % | 1.6 | % | 12.9 | % | 2.3 | % | 12.3 | % | ||||||||||
Annualized Net Operating ROAE [f] | 7.9 | % | 3.1 | % | 10.2 | % | 3.4 | % | 10.2 | % |
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business. |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business. |
[d] | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business. |
[e] | Non-GAAP financial measure. See page 32 for calculation of net operating income per share—diluted. |
[f] | Non-GAAP financial measure. See page 30 for calculation of annualized return on average shareholders’ equity (ROAE) and annualized net operating ROAE. |
[g] | Includes the results for Harbor Point from May 12, 2010. |
Percentage totals may not add due to rounding.
7
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–QUARTER ENDED SEPTEMBER 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance | |||||||||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | Corporate | Consolidated | ||||||||||||||||||||||||||
Gross premiums written | $ | 81,627 | $ | 88,006 | $ | 172,796 | $ | 43,074 | $ | 385,503 | $ | 725 | $ | — | $ | 386,228 | ||||||||||||||||
Reinsurance premiums ceded | (44,157 | ) | (40,083 | ) | (30,318 | ) | (8,835 | ) | (123,393 | ) | (84 | ) | — | (123,477 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums written | $ | 37,470 | $ | 47,923 | $ | 142,478 | $ | 34,239 | $ | 262,110 | $ | 641 | $ | — | $ | 262,751 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Earned premiums | $ | 92,526 | $ | 100,187 | $ | 223,231 | $ | 66,553 | $ | 482,497 | $ | 725 | $ | — | $ | 483,222 | ||||||||||||||||
Earned premiums ceded | (48,392 | ) | (52,222 | ) | (36,446 | ) | (13,440 | ) | (150,500 | ) | (84 | ) | — | (150,584 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums earned | 44,134 | 47,965 | 186,785 | 53,113 | 331,997 | 641 | — | 332,638 | ||||||||||||||||||||||||
Net losses and loss expenses | (31,631 | ) | (46,489 | ) | (98,067 | ) | (52,342 | ) | (228,529 | ) | — | — | (228,529 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (11,838 | ) | — | (11,838 | ) | ||||||||||||||||||||||
Acquisition costs | (124 | ) | (4,404 | ) | (47,159 | ) | (10,104 | ) | (61,791 | ) | (132 | ) | — | (61,923 | ) | |||||||||||||||||
General and administrative expenses | (6,328 | ) | (11,337 | ) | (16,259 | ) | (7,342 | ) | (41,266 | ) | (74 | ) | — | (41,340 | ) | |||||||||||||||||
Other income | — | — | 1,560 | 1 | 1,561 | — | — | 1,561 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Underwriting income (loss) | $ | 6,051 | $ | (14,265 | ) | $ | 26,860 | $ | (16,674 | ) | $ | 1,972 | n/a | — | n/a | |||||||||||||||||
Net investment income | 13,224 | 40,294 | 53,518 | |||||||||||||||||||||||||||||
Net realized and unrealized gains on investments | 20,436 | 20,436 | ||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (592 | ) | (592 | ) | ||||||||||||||||||||||||||||
Corporate other income | 25 | 25 | ||||||||||||||||||||||||||||||
Interest expense | (9,026 | ) | (9,026 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains | 82 | 82 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses | (16,175 | ) | (16,175 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Income before taxes | $ | 1,821 | $ | 35,044 | $ | 38,837 | ||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 71.7 | % | 96.9 | % | 52.5 | % | 98.5 | % | 68.8 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 0.3 | % | 9.2 | % | 25.2 | % | 19.0 | % | 18.6 | % | ||||||||||||||||||||||
General and administrative expense ratio [c] | 14.3 | % | 23.6 | % | 8.7 | % | 13.8 | % | 12.4 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 86.3 | % | 129.7 | % | 86.5 | % | 131.4 | % | 99.9 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business. |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business. |
[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 for the property & casualty business. |
Percentage totals may not add due to rounding.
Effective July 1, 2012, the Company redefined its reporting segments by combining the reinsurance and Latin America segments into a single reinsurance segment. The Latin America segment comprised reinsurance business written for clients in Latin America through the Company’s Rio de Janeiro, Bogotá and Buenos Aires offices. This business will now be combined with and reported as part of the reinsurance segment. Segment disclosures for comparative periods have been re-presented to reflect this change.
8
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS—QUARTER ENDED SEPTEMBER 30, 2012 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | ||||||||||||||||
UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 71.7 | % | 96.9 | % | 52.5 | % | 98.5 | % | 68.8 | % | ||||||||||
Acquisition cost ratio | 0.3 | % | 9.2 | % | 25.2 | % | 19.0 | % | 18.6 | % | ||||||||||
General and administrative expense ratio | 14.3 | % | 23.6 | % | 8.7 | % | 13.8 | % | 12.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 86.3 | % | 129.7 | % | 86.5 | % | 131.4 | % | 99.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) | ||||||||||||||||||||
Loss ratio [a] | 4.2 | % | — | 10.2 | % | 3.3 | % | 6.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 75.8 | % | 96.9 | % | 62.7 | % | 101.8 | % | 75.7 | % | ||||||||||
Acquisition cost ratio | 0.3 | % | 9.2 | % | 25.2 | % | 19.0 | % | 18.6 | % | ||||||||||
General and administrative expense ratio | 14.3 | % | 23.6 | % | 8.7 | % | 13.8 | % | 12.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 90.4 | % | 129.7 | % | 96.7 | % | 134.7 | % | 106.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED UNDERWRITING RATIOS—QUARTER ENDED SEPTEMBER 30, 2011 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | ||||||||||||||||
UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 47.3 | % | 65.1 | % | 56.6 | % | 61.6 | % | 57.3 | % | ||||||||||
Acquisition cost ratio | (1.7 | %) | 17.5 | % | 22.4 | % | 15.7 | % | 17.7 | % | ||||||||||
General and administrative expense ratio | 14.9 | % | 18.5 | % | 9.2 | % | 20.2 | % | 12.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 60.5 | % | 101.1 | % | 88.1 | % | 97.5 | % | 87.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) | ||||||||||||||||||||
Loss ratio [a] | 41.1 | % | (0.8 | %) | 5.7 | % | 4.9 | % | 9.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 88.4 | % | 64.3 | % | 62.2 | % | 66.5 | % | 66.5 | % | ||||||||||
Acquisition cost ratio | (1.7 | %) | 17.5 | % | 22.4 | % | 15.7 | % | 17.7 | % | ||||||||||
General and administrative expense ratio | 14.9 | % | 18.5 | % | 9.2 | % | 20.2 | % | 12.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 101.7 | % | 100.3 | % | 93.8 | % | 102.4 | % | 96.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts. |
Percentage totals may not add due to rounding.
9
ALTERRA CAPITAL HOLDINGS LIMITED
GLOBAL INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
Gross premiums written | $ | 81,627 | $ | 125,276 | $ | 66,771 | $ | 97,660 | $ | 73,297 | $ | 70,271 | ||||||||||||
Reinsurance premiums ceded | (44,157 | ) | (53,224 | ) | (43,251 | ) | (50,172 | ) | (37,625 | ) | (34,075 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums written | $ | 37,470 | $ | 72,052 | $ | 23,520 | $ | 47,488 | $ | 35,672 | $ | 36,196 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Earned premiums | $ | 92,526 | $ | 92,803 | $ | 94,103 | $ | 91,077 | $ | 93,467 | $ | 96,777 | ||||||||||||
Earned premiums ceded | (48,392 | ) | (45,367 | ) | (47,133 | ) | (42,827 | ) | (48,456 | ) | (41,097 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums earned | 44,134 | 47,436 | 46,970 | 48,250 | 45,011 | 55,680 | ||||||||||||||||||
Net losses and loss expenses | (31,631 | ) | (22,745 | ) | (18,061 | ) | (15,152 | ) | (21,288 | ) | (23,775 | ) | ||||||||||||
Acquisition costs | (124 | ) | (239 | ) | (59 | ) | (1,084 | ) | 748 | (1,265 | ) | |||||||||||||
General and administrative expenses | (6,328 | ) | (6,913 | ) | (6,481 | ) | (6,952 | ) | (6,699 | ) | (6,435 | ) | ||||||||||||
Other income (loss) | — | 1 | 815 | (128 | ) | — | 771 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Underwriting income | $ | 6,051 | $ | 17,540 | $ | 23,184 | $ | 24,934 | $ | 17,772 | $ | 24,976 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss ratio | 71.7 | % | 47.9 | % | 38.5 | % | 31.4 | % | 47.3 | % | 42.7 | % | ||||||||||||
Acquisition cost ratio | 0.3 | % | 0.5 | % | 0.1 | % | 2.2 | % | (1.7 | %) | 2.3 | % | ||||||||||||
General and administrative expense ratio | 14.3 | % | 14.6 | % | 13.8 | % | 14.4 | % | 14.9 | % | 11.6 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Combined ratio | 86.3 | % | 63.0 | % | 52.4 | % | 48.1 | % | 60.5 | % | 56.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
10
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
Gross premiums written | $ | 88,006 | $ | 112,186 | $ | 104,282 | $ | 102,279 | $ | 84,858 | $ | 71,871 | ||||||||||||
Reinsurance premiums ceded | (40,083 | ) | (51,524 | ) | (70,494 | ) | (45,443 | ) | (30,579 | ) | (21,513 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums written | $ | 47,923 | $ | 60,662 | $ | 33,788 | $ | 56,836 | $ | 54,279 | $ | 50,358 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Earned premiums | $ | 100,187 | $ | 100,300 | $ | 96,241 | $ | 90,048 | $ | 83,279 | $ | 79,200 | ||||||||||||
Earned premiums ceded | (52,222 | ) | (44,490 | ) | (40,456 | ) | (34,078 | ) | (28,004 | ) | (27,770 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums earned | 47,965 | 55,810 | 55,785 | 55,970 | 55,275 | 51,430 | ||||||||||||||||||
Net losses and loss expenses | (46,489 | ) | (37,333 | ) | (37,564 | ) | (45,129 | ) | (36,002 | ) | (32,199 | ) | ||||||||||||
Acquisition costs | (4,404 | ) | (6,169 | ) | (7,696 | ) | (8,349 | ) | (9,669 | ) | (6,880 | ) | ||||||||||||
General and administrative expenses | (11,337 | ) | (12,215 | ) | (12,257 | ) | (12,299 | ) | (10,228 | ) | (9,975 | ) | ||||||||||||
Other income (loss) | — | — | 81 | 84 | 58 | 337 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Underwriting (loss) income | $ | (14,265 | ) | $ | 93 | $ | (1,651 | ) | $ | (9,723 | ) | $ | (566 | ) | $ | 2,713 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss ratio | 96.9 | % | 66.9 | % | 67.3 | % | 80.6 | % | 65.1 | % | 62.6 | % | ||||||||||||
Acquisition cost ratio | 9.2 | % | 11.1 | % | 13.8 | % | 14.9 | % | 17.5 | % | 13.4 | % | ||||||||||||
General and administrative expense ratio | 23.6 | % | 21.9 | % | 22.0 | % | 22.0 | % | 18.5 | % | 19.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Combined ratio | 129.7 | % | 99.8 | % | 103.1 | % | 117.5 | % | 101.1 | % | 95.4 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
11
ALTERRA CAPITAL HOLDINGS LIMITED
REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
Gross premiums written | $ | 172,796 | $ | 256,333 | $ | 343,694 | $ | 96,942 | $ | 182,535 | $ | 135,816 | ||||||||||||
Reinsurance premiums ceded | (30,318 | ) | (57,908 | ) | (72,109 | ) | (2,546 | ) | (15,874 | ) | (2,524 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums written | $ | 142,478 | $ | 198,425 | $ | 271,585 | $ | 94,396 | $ | 166,661 | $ | 133,292 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Earned premiums | $ | 223,231 | $ | 233,352 | $ | 214,184 | $ | 225,492 | $ | 224,829 | $ | 216,322 | ||||||||||||
Earned premiums ceded | (36,446 | ) | (32,941 | ) | (32,036 | ) | (19,521 | ) | (18,489 | ) | (15,533 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums earned | 186,785 | 200,411 | 182,148 | 205,971 | 206,340 | 200,789 | ||||||||||||||||||
Net losses and loss expenses | (98,067 | ) | (103,656 | ) | (111,729 | ) | (106,906 | ) | (116,769 | ) | (119,784 | ) | ||||||||||||
Acquisition costs | (47,159 | ) | (48,164 | ) | (42,416 | ) | (46,839 | ) | (46,138 | ) | (45,885 | ) | ||||||||||||
General and administrative expenses | (16,259 | ) | (17,061 | ) | (19,311 | ) | (16,690 | ) | (18,901 | ) | (19,111 | ) | ||||||||||||
Other income (loss) | 1,560 | 1,895 | 4,441 | (100 | ) | 777 | 61 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Underwriting income | $ | 26,860 | $ | 33,425 | $ | 13,133 | $ | 35,436 | $ | 25,309 | $ | 16,070 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Loss ratio | 52.5 | % | 51.7 | % | 61.3 | % | 51.9 | % | 56.6 | % | 59.7 | % | ||||||||||||
Acquisition cost ratio | 25.2 | % | 24.0 | % | 23.3 | % | 22.7 | % | 22.4 | % | 22.9 | % | ||||||||||||
General and administrative expense ratio | 8.7 | % | 8.5 | % | 10.6 | % | 8.1 | % | 9.2 | % | 9.5 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Combined ratio | 86.5 | % | 84.3 | % | 95.2 | % | 82.7 | % | 88.1 | % | 92.0 | % | ||||||||||||
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|
12
ALTERRA CAPITAL HOLDINGS LIMITED
ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
Gross premiums written | $ | 43,074 | $ | 72,008 | $ | 146,143 | $ | 27,933 | $ | 44,816 | $ | 45,922 | ||||||||||||
Reinsurance premiums ceded | (8,835 | ) | (27,068 | ) | (38,590 | ) | (8,888 | ) | (6,723 | ) | (2,397 | ) | ||||||||||||
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|
|
|
|
|
|
|
|
|
| |||||||||||||
Net premiums written | $ | 34,239 | $ | 44,940 | $ | 107,553 | $ | 19,045 | $ | 38,093 | $ | 43,525 | ||||||||||||
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|
|
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| |||||||||||||
Earned premiums | $ | 66,553 | $ | 69,330 | $ | 72,899 | $ | 52,850 | $ | 50,534 | $ | 42,612 | ||||||||||||
Earned premiums ceded | (13,440 | ) | (23,108 | ) | (20,049 | ) | (14,952 | ) | (10,850 | ) | (9,310 | ) | ||||||||||||
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|
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|
| |||||||||||||
Net premiums earned | 53,113 | 46,222 | 52,850 | 37,898 | 39,684 | 33,302 | ||||||||||||||||||
Net losses and loss expenses | (52,342 | ) | (33,030 | ) | (38,675 | ) | (64,346 | ) | (24,462 | ) | (15,254 | ) | ||||||||||||
Acquisition costs | (10,104 | ) | (7,443 | ) | (9,434 | ) | (7,977 | ) | (6,230 | ) | (6,658 | ) | ||||||||||||
General and administrative expenses | (7,342 | ) | (7,856 | ) | (9,095 | ) | (7,271 | ) | (8,007 | ) | (6,275 | ) | ||||||||||||
Other income (loss) | 1 | 7 | — | 851 | (27 | ) | 177 | |||||||||||||||||
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| |||||||||||||
Underwriting (loss) income | $ | (16,674 | ) | $ | (2,100 | ) | $ | (4,354 | ) | $ | (40,845 | ) | $ | 958 | $ | 5,292 | ||||||||
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| |||||||||||||
Loss ratio | 98.5 | % | 71.5 | % | 73.2 | % | 169.8 | % | 61.6 | % | 45.8 | % | ||||||||||||
Acquisition cost ratio | 19.0 | % | 16.1 | % | 17.9 | % | 21.0 | % | 15.7 | % | 20.0 | % | ||||||||||||
General and administrative expense ratio | 13.8 | % | 17.0 | % | 17.2 | % | 19.2 | % | 20.2 | % | 18.8 | % | ||||||||||||
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| |||||||||||||
Combined ratio | 131.4 | % | 104.6 | % | 108.2 | % | 210.0 | % | 97.5 | % | 84.6 | % | ||||||||||||
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13
ALTERRA CAPITAL HOLDINGS LIMITED
LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||
Gross premiums written | $ | 725 | $ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 1,333 | ||||||||||||
Reinsurance premiums ceded | (84 | ) | (155 | ) | (18 | ) | (154 | ) | (90 | ) | (102 | ) | ||||||||||||
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| |||||||||||||
Net premiums written | $ | 641 | $ | 899 | $ | 422 | $ | 1,015 | $ | 732 | $ | 1,231 | ||||||||||||
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| |||||||||||||
Earned premiums | $ | 725 | $ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 1,333 | ||||||||||||
Earned premiums ceded | (84 | ) | (155 | ) | (18 | ) | (154 | ) | (90 | ) | (102 | ) | ||||||||||||
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|
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| |||||||||||||
Net premiums earned | 641 | 899 | 422 | 1,015 | 732 | 1,231 | ||||||||||||||||||
Net investment income | 13,224 | 13,466 | 14,776 | 11,515 | 12,131 | 12,182 | ||||||||||||||||||
Net realized and unrealized (losses) gains on investments | — | — | — | (5,509 | ) | (6,407 | ) | 3,321 | ||||||||||||||||
Other income (loss) | — | — | — | 413 | (8 | ) | (43 | ) | ||||||||||||||||
Claims and policy benefits | (11,838 | ) | (13,272 | ) | (13,466 | ) | (14,564 | ) | (14,538 | ) | (15,060 | ) | ||||||||||||
Acquisition costs | (132 | ) | (156 | ) | (119 | ) | (131 | ) | (145 | ) | (171 | ) | ||||||||||||
General and administrative expenses | (74 | ) | (119 | ) | (34 | ) | (67 | ) | (145 | ) | (577 | ) | ||||||||||||
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| |||||||||||||
Income (loss) before taxes | $ | 1,821 | $ | 818 | $ | 1,579 | $ | (7,328 | ) | $ | (8,380 | ) | $ | 883 | ||||||||||
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14
ALTERRA CAPITAL HOLDINGS LIMITED
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE QUARTERS ENDED | ||||||||||||||||||||||||||||
Sept. 30, 2012 | June 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Sept. 30, 2011 | Sept. 30, 2010 | |||||||||||||||||||||||
Property & Casualty: | ||||||||||||||||||||||||||||
Global Insurance: | ||||||||||||||||||||||||||||
Aviation | S | $ | 5,996 | $ | 3,954 | $ | 1,302 | $ | 20,410 | $ | 6,736 | $ | 8,247 | |||||||||||||||
Excess Liability | L | 23,746 | 31,435 | 25,186 | 21,281 | 20,365 | 14,384 | |||||||||||||||||||||
Professional Liability | L | 36,558 | 59,407 | 24,466 | 40,360 | 30,590 | 36,673 | |||||||||||||||||||||
Property | S | 15,327 | 30,480 | 15,817 | 15,609 | 15,606 | 10,967 | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
81,627 | 125,276 | 66,771 | 97,660 | 73,297 | 70,271 | |||||||||||||||||||||||
U.S. Insurance: | ||||||||||||||||||||||||||||
General/ Excess Liability | L | 18,240 | 23,683 | 34,667 | 31,618 | 24,925 | 25,566 | |||||||||||||||||||||
Marine | S | 25,333 | 28,634 | 25,201 | 23,806 | 22,189 | 15,637 | |||||||||||||||||||||
Professional Liability | L | 17,185 | 13,133 | 11,208 | 15,720 | 13,318 | 3,613 | |||||||||||||||||||||
Property | S | 27,248 | 46,736 | 33,206 | 31,135 | 24,426 | 27,055 | |||||||||||||||||||||
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|
|
|
|
|
|
|
|
| |||||||||||||||||
88,006 | 112,186 | 104,282 | 102,279 | 84,858 | 71,871 | |||||||||||||||||||||||
Reinsurance: | ||||||||||||||||||||||||||||
Agriculture | S | 576 | 5,298 | 17,505 | 186 | 998 | (2,665 | ) | ||||||||||||||||||||
Auto | S | 2,491 | 39,590 | 512 | 20,548 | 7,716 | 9,702 | |||||||||||||||||||||
Aviation | S | 16,456 | 5,820 | 5,525 | 337 | 14,670 | 15,313 | |||||||||||||||||||||
Credit/ Surety | S | 19,018 | 3,266 | 35,850 | 6,764 | 8,484 | 6,938 | |||||||||||||||||||||
General Casualty | L | 11,182 | 23,625 | 14,956 | 13,130 | 22,870 | 20,113 | |||||||||||||||||||||
Marine & Energy | S | 3,259 | 6,610 | 13,395 | 3,407 | 4,131 | 8,826 | |||||||||||||||||||||
Medical Malpractice | L | 5,565 | 8,105 | 11,276 | 1,673 | 6,867 | (3,131 | ) | ||||||||||||||||||||
Other | S | (882 | ) | 549 | 4,437 | (181 | ) | 1,112 | 1,128 | |||||||||||||||||||
Professional Liability | L | 34,585 | 37,246 | 59,458 | 20,270 | 39,877 | 37,926 | |||||||||||||||||||||
Property | S | 68,266 | 117,629 | 161,124 | 21,645 | 70,274 | 42,458 | |||||||||||||||||||||
Whole Account | S/L | 2,879 | 191 | 1,408 | 2,408 | (1,946 | ) | (1,353 | ) | |||||||||||||||||||
Workers’ Compensation | L | 9,401 | 8,404 | 18,248 | 6,755 | 7,482 | 561 | |||||||||||||||||||||
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|
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|
|
|
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|
|
| |||||||||||||||||
172,796 | 256,333 | 343,694 | 96,942 | 182,535 | 135,816 | |||||||||||||||||||||||
Alterra at Lloyd’s: | ||||||||||||||||||||||||||||
Accident & Health | S | 9,574 | 8,250 | 17,432 | 5,646 | 9,523 | 5,919 | |||||||||||||||||||||
Agriculture | S | (2,627 | ) | 613 | 20,370 | — | — | — | ||||||||||||||||||||
Aviation | S | 2,914 | 3,220 | 2,486 | 5,562 | 4,130 | 3,946 | |||||||||||||||||||||
Financial Institutions | L | 6,566 | 5,400 | 6,904 | 8,137 | 3,591 | 8,130 | |||||||||||||||||||||
International Casualty | L | 6,093 | 8,423 | 49,268 | 1,947 | 7,903 | 3,702 | |||||||||||||||||||||
Marine | S | 2,014 | 2,282 | 2,726 | 1,493 | — | — | |||||||||||||||||||||
Professional Liability | L | 4,980 | 6,108 | 5,428 | 1,868 | 440 | 4,330 | |||||||||||||||||||||
Property | S | 13,560 | 37,712 | 41,529 | 3,280 | 19,229 | 19,895 | |||||||||||||||||||||
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|
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|
|
| |||||||||||||||||
43,074 | 72,008 | 146,143 | 27,933 | 44,816 | 45,922 | |||||||||||||||||||||||
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|
|
|
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|
| |||||||||||||||||
Aggregate Property & Casualty | $ | 385,503 | $ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 323,880 | ||||||||||||||||
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| |||||||||||||||||
Life & Annuity: | ||||||||||||||||||||||||||||
Annuity | $ | — | $ | (353 | ) | $ | 353 | $ | 770 | $ | 449 | $ | — | |||||||||||||||
Life | 725 | 1,407 | 87 | 399 | 373 | 1,333 | ||||||||||||||||||||||
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|
|
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| |||||||||||||||||
Aggregate Life & Annuity | $ | 725 | $ | 1,054 | $ | 440 | $ | 1,169 | $ | 822 | $ | 1,333 | ||||||||||||||||
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|
|
|
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|
| |||||||||||||||||
Aggregate Property & Casualty and Life & Annuity | $ | 386,228 | $ | 566,857 | $ | 661,330 | $ | 325,983 | $ | 386,328 | $ | 325,213 | ||||||||||||||||
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|
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|
| |||||||||||||||||
S = Short tail lines | $ | 209,963 | $ | 340,739 | $ | 399,121 | $ | 160,851 | $ | 208,251 | $ | 172,689 | ||||||||||||||||
L = Long tail lines | 175,540 | 225,064 | 261,769 | 163,963 | 177,255 | 151,191 | ||||||||||||||||||||||
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|
|
|
|
|
|
|
| |||||||||||||||||
Aggregate Property & Casualty | $ | 385,503 | $ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 323,880 | ||||||||||||||||
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|
| |||||||||||||||||
Property [a] | $ | 124,401 | $ | 232,557 | $ | 251,676 | $ | 71,669 | $ | 129,535 | $ | 100,375 | ||||||||||||||||
Casualty [b] | 174,101 | 224,969 | 261,065 | 162,759 | 178,228 | 151,867 | ||||||||||||||||||||||
Specialty [c] | 87,001 | 108,277 | 148,149 | 90,386 | 77,743 | 71,638 | ||||||||||||||||||||||
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|
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| |||||||||||||||||
Aggregate Property & Casualty | $ | 385,503 | $ | 565,803 | $ | 660,890 | $ | 324,814 | $ | 385,506 | $ | 323,880 | ||||||||||||||||
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|
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|
|
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|
|
[a] | Property includes property lines of business. |
[b] | Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers’ compensation lines of business. |
[c] | Specialty includes accident & health, agriculture, auto, aviation, credit/surety, energy, marine, other, and whole account lines of business. |
15
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
Property & Casualty | Life & Annuity Reinsurance | |||||||||||||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | Corporate | Consolidated | ||||||||||||||||||||||||||
Gross premiums written | $ | 273,674 | $ | 304,474 | $ | 772,823 | $ | 261,225 | $ | 1,612,196 | $ | 2,219 | $ | — | $ | 1,614,415 | ||||||||||||||||
Reinsurance premiums ceded | (140,632 | ) | (162,101 | ) | (160,335 | ) | (74,493 | ) | (537,561 | ) | (257 | ) | — | (537,818 | ) | |||||||||||||||||
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|
|
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|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Net premiums written | $ | 133,042 | $ | 142,373 | $ | 612,488 | $ | 186,732 | $ | 1,074,635 | $ | 1,962 | $ | — | $ | 1,076,597 | ||||||||||||||||
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|
|
|
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|
| |||||||||||||||||
Earned premiums | $ | 279,432 | $ | 296,728 | $ | 670,767 | $ | 208,782 | $ | 1,455,709 | $ | 2,219 | $ | — | $ | 1,457,928 | ||||||||||||||||
Earned premiums ceded | (140,892 | ) | (137,168 | ) | (101,423 | ) | (56,597 | ) | (436,080 | ) | (257 | ) | — | (436,337 | ) | |||||||||||||||||
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|
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|
| |||||||||||||||||
Net premiums earned | 138,540 | 159,560 | 569,344 | 152,185 | 1,019,629 | 1,962 | — | 1,021,591 | ||||||||||||||||||||||||
Net losses and loss expenses | (72,437 | ) | (121,386 | ) | (313,452 | ) | (124,047 | ) | (631,322 | ) | — | — | (631,322 | ) | ||||||||||||||||||
Claims and policy benefits | — | — | — | — | — | (38,576 | ) | — | (38,576 | ) | ||||||||||||||||||||||
Acquisition costs | (422 | ) | (18,269 | ) | (137,739 | ) | (26,981 | ) | (183,411 | ) | (407 | ) | — | (183,818 | ) | |||||||||||||||||
General and administrative expenses | (19,722 | ) | (35,809 | ) | (52,631 | ) | (24,293 | ) | (132,455 | ) | (227 | ) | — | (132,682 | ) | |||||||||||||||||
Other income | 816 | 81 | 7,896 | 8 | 8,801 | — | — | 8,801 | ||||||||||||||||||||||||
|
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|
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|
|
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|
|
|
|
|
|
| |||||||||||||||||
Underwriting income (loss) | 46,775 | (15,823 | ) | 73,418 | (23,128 | ) | 81,242 | n/a | — | n/a | ||||||||||||||||||||||
Net investment income | 41,466 | 125,459 | 166,925 | |||||||||||||||||||||||||||||
Net realized and unrealized gains on investments | 59,410 | 59,410 | ||||||||||||||||||||||||||||||
Net impairment losses recognized in earnings | (6,531 | ) | (6,531 | ) | ||||||||||||||||||||||||||||
Corporate other income | 75 | 75 | ||||||||||||||||||||||||||||||
Interest expense | (27,289 | ) | (27,289 | ) | ||||||||||||||||||||||||||||
Net foreign exchange gains | 89 | 89 | ||||||||||||||||||||||||||||||
Corporate general and administrative expenses | (43,692 | ) | (43,692 | ) | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||
Income before taxes | $ | 4,218 | $ | 107,521 | $ | 192,981 | ||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||
Loss ratio [a] | 52.3 | % | 76.1 | % | 55.1 | % | 81.5 | % | 61.9 | % | ||||||||||||||||||||||
Acquisition cost ratio [b] | 0.3 | % | 11.4 | % | 24.2 | % | 17.7 | % | 18.0 | % | ||||||||||||||||||||||
General and administrative expense ratio [c] | 14.2 | % | 22.4 | % | 9.2 | % | 16.0 | % | 13.0 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Combined ratio [d] | 66.8 | % | 110.0 | % | 88.5 | % | 115.2 | % | 92.9 | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business. |
[b] | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business. |
[c] | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business. |
[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 for the property & casualty business. |
Percentage totals may not add due to rounding.
16
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED UNDERWRITING RATIOS—NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | ||||||||||||||||
UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 52.3 | % | 76.1 | % | 55.1 | % | 81.5 | % | 61.9 | % | ||||||||||
Acquisition cost ratio | 0.3 | % | 11.4 | % | 24.2 | % | 17.7 | % | 18.0 | % | ||||||||||
General and administrative expense ratio | 14.2 | % | 22.4 | % | 9.2 | % | 16.0 | % | 13.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 66.8 | % | 110.0 | % | 88.5 | % | 115.2 | % | 92.9 | % | ||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) | ||||||||||||||||||||
Loss ratio [a] | 21.8 | % | (0.6 | %) | 4.8 | % | (1.8 | %) | 5.3 | % | ||||||||||
|
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|
|
|
|
|
|
| |||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 74.1 | % | 75.4 | % | 59.9 | % | 79.7 | % | 67.2 | % | ||||||||||
Acquisition cost ratio | 0.3 | % | 11.4 | % | 24.2 | % | 17.7 | % | 18.0 | % | ||||||||||
General and administrative expense ratio | 14.2 | % | 22.4 | % | 9.2 | % | 16.0 | % | 13.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 88.7 | % | 109.3 | % | 93.3 | % | 113.4 | % | 98.2 | % | ||||||||||
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|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts. |
CONSOLIDATED UNDERWRITING RATIOS—NINE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited)
Property & Casualty | ||||||||||||||||||||
Global Insurance | U.S. Insurance | Reinsurance | Alterra at Lloyd’s | Total | ||||||||||||||||
UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 54.5 | % | 64.8 | % | 68.0 | % | 74.7 | % | 66.5 | % | ||||||||||
Acquisition cost ratio | (1.1 | %) | 16.8 | % | 22.0 | % | 22.9 | % | 18.3 | % | ||||||||||
General and administrative expense ratio | 15.3 | % | 19.6 | % | 10.7 | % | 19.1 | % | 13.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 68.6 | % | 101.2 | % | 100.7 | % | 116.7 | % | 98.4 | % | ||||||||||
|
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|
|
|
| |||||||||||
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE) | ||||||||||||||||||||
Loss ratio [a] | 28.9 | % | (0.3 | %) | 9.1 | % | 9.4 | % | 10.3 | % | ||||||||||
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|
|
| |||||||||||
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS | ||||||||||||||||||||
Loss ratio | 83.4 | % | 64.5 | % | 77.1 | % | 84.1 | % | 76.8 | % | ||||||||||
Acquisition cost ratio | (1.1 | %) | 16.8 | % | 22.0 | % | 22.9 | % | 18.3 | % | ||||||||||
General and administrative expense ratio | 15.3 | % | 19.6 | % | 10.7 | % | 19.1 | % | 13.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 97.5 | % | 100.9 | % | 109.8 | % | 126.1 | % | 108.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
[a] | Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts. |
Percentage totals may not add due to rounding. |
17
ALTERRA CAPITAL HOLDINGS LIMITED
GLOBAL INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written | $ | 273,674 | $ | 268,101 | $ | 269,004 | $ | 365,761 | $ | 370,120 | ||||||||||
Reinsurance premiums ceded | (140,632 | ) | (131,282 | ) | (118,908 | ) | (181,454 | ) | (170,608 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums written | $ | 133,042 | $ | 136,819 | $ | 150,096 | $ | 184,307 | $ | 199,512 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earned premiums | $ | 279,432 | $ | 273,010 | $ | 293,692 | $ | 364,087 | $ | 391,716 | ||||||||||
Earned premiums ceded | (140,892 | ) | (132,521 | ) | (132,019 | ) | (175,348 | ) | (173,123 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums earned | 138,540 | 140,489 | 161,673 | 188,739 | 218,593 | |||||||||||||||
Net losses and loss expenses | (72,437 | ) | (76,601 | ) | (96,981 | ) | (91,753 | ) | (128,823 | ) | ||||||||||
Acquisition costs | (422 | ) | 1,601 | (1,753 | ) | 517 | (3,381 | ) | ||||||||||||
General and administrative expenses | (19,722 | ) | (21,425 | ) | (18,833 | ) | (28,377 | ) | (28,615 | ) | ||||||||||
Other income | 816 | 814 | 760 | 686 | 760 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Underwriting income | $ | 46,775 | $ | 44,878 | $ | 44,866 | $ | 69,812 | $ | 58,534 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loss ratio | 52.3 | % | 54.5 | % | 60.0 | % | 48.6 | % | 58.9 | % | ||||||||||
Acquisition cost ratio | 0.3 | % | (1.1 | %) | 1.1 | % | (0.3 | %) | 1.5 | % | ||||||||||
General and administrative expense ratio | 14.2 | % | 15.3 | % | 11.6 | % | 15.0 | % | 13.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 66.8 | % | 68.6 | % | 72.7 | % | 63.4 | % | 73.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
18
ALTERRA CAPITAL HOLDINGS LIMITED
U.S. INSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written | $ | 304,474 | $ | 272,417 | $ | 246,245 | $ | 374,696 | $ | 323,990 | ||||||||||
Reinsurance premiums ceded | (162,101 | ) | (97,123 | ) | (77,592 | ) | (142,566 | ) | (98,576 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums written | $ | 142,373 | $ | 175,294 | $ | 168,653 | $ | 232,130 | $ | 225,414 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earned premiums | $ | 296,728 | $ | 246,993 | $ | 229,122 | $ | 337,041 | $ | 311,950 | ||||||||||
Earned premiums ceded | (137,168 | ) | (79,640 | ) | (96,335 | ) | (113,718 | ) | (125,218 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums earned | 159,560 | 167,353 | 132,787 | 223,323 | 186,732 | |||||||||||||||
Net losses and loss expenses | (121,386 | ) | (108,429 | ) | (82,614 | ) | (153,558 | ) | (118,337 | ) | ||||||||||
Acquisition costs | (18,269 | ) | (28,055 | ) | (19,689 | ) | (36,404 | ) | (28,444 | ) | ||||||||||
General and administrative expenses | (35,809 | ) | (32,872 | ) | (26,433 | ) | (45,171 | ) | (36,015 | ) | ||||||||||
Other income | 81 | 195 | 439 | 279 | 507 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Underwriting (loss) income | $ | (15,823 | ) | $ | (1,808 | ) | $ | 4,490 | $ | (11,531 | ) | $ | 4,443 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loss ratio | 76.1 | % | 64.8 | % | 62.2 | % | 68.8 | % | 63.4 | % | ||||||||||
Acquisition cost ratio | 11.4 | % | 16.8 | % | 14.8 | % | 16.3 | % | 15.2 | % | ||||||||||
General and administrative expense ratio | 22.4 | % | 19.6 | % | 19.9 | % | 20.2 | % | 19.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 110.0 | % | 101.2 | % | 96.9 | % | 105.3 | % | 97.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
19
ALTERRA CAPITAL HOLDINGS LIMITED
REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written | $ | 772,823 | $ | 810,244 | $ | 417,739 | $ | 907,186 | $ | 531,912 | ||||||||||
Reinsurance premiums ceded | (160,335 | ) | (81,438 | ) | (61,223 | ) | (83,984 | ) | (64,131 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums written | $ | 612,488 | $ | 728,806 | $ | 356,516 | $ | 823,202 | $ | 467,781 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earned premiums | $ | 670,767 | $ | 691,196 | $ | 486,885 | $ | 916,688 | $ | 705,398 | ||||||||||
Earned premiums ceded | (101,423 | ) | (50,989 | ) | (50,545 | ) | (70,510 | ) | (71,627 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums earned | 569,344 | 640,207 | 436,340 | 846,178 | 633,771 | |||||||||||||||
Net losses and loss expenses | (313,452 | ) | (435,053 | ) | (252,365 | ) | (541,959 | ) | (352,491 | ) | ||||||||||
Acquisition costs | (137,739 | ) | (141,014 | ) | (93,535 | ) | (187,853 | ) | (132,831 | ) | ||||||||||
General and administrative expenses | (52,631 | ) | (68,329 | ) | (43,999 | ) | (85,019 | ) | (70,639 | ) | ||||||||||
Other income | 7,896 | 1,325 | 216 | 1,225 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Underwriting income (loss) | $ | 73,418 | $ | (2,864 | ) | $ | 46,657 | $ | 32,572 | $ | 77,810 | |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loss ratio | 55.1 | % | 68.0 | % | 57.8 | % | 64.0 | % | 55.6 | % | ||||||||||
Acquisition cost ratio | 24.2 | % | 22.0 | % | 21.4 | % | 22.2 | % | 21.0 | % | ||||||||||
General and administrative expense ratio | 9.2 | % | 10.7 | % | 10.1 | % | 10.0 | % | 11.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 88.5 | % | 100.7 | % | 89.4 | % | 96.3 | % | 87.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
20
ALTERRA CAPITAL HOLDINGS LIMITED
ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written | $ | 261,225 | $ | 225,134 | $ | 159,347 | $ | 253,067 | $ | 179,774 | ||||||||||
Reinsurance premiums ceded | (74,493 | ) | (54,820 | ) | (35,589 | ) | (63,708 | ) | (37,448 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums written | $ | 186,732 | $ | 170,314 | $ | 123,758 | $ | 189,359 | $ | 142,326 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earned premiums | $ | 208,782 | $ | 171,815 | $ | 120,267 | $ | 224,665 | $ | 164,648 | ||||||||||
Earned premiums ceded | (56,597 | ) | (45,970 | ) | (23,899 | ) | (60,922 | ) | (35,793 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums earned | 152,185 | 125,845 | 96,368 | 163,743 | 128,855 | |||||||||||||||
Net losses and loss expenses | (124,047 | ) | (93,977 | ) | (43,834 | ) | (158,323 | ) | (55,190 | ) | ||||||||||
Acquisition costs | (26,981 | ) | (28,828 | ) | (18,484 | ) | (36,805 | ) | (22,447 | ) | ||||||||||
General and administrative expenses | (24,293 | ) | (24,033 | ) | (13,705 | ) | (31,304 | ) | (23,965 | ) | ||||||||||
Other income | 8 | 353 | 528 | 1,204 | 2,534 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Underwriting (loss) income | $ | (23,128 | ) | $ | (20,640 | ) | $ | 20,873 | $ | (61,485 | ) | $ | 29,787 | |||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Loss ratio | 81.5 | % | 74.7 | % | 45.5 | % | 96.7 | % | 42.8 | % | ||||||||||
Acquisition cost ratio | 17.7 | % | 22.9 | % | 19.2 | % | 22.5 | % | 17.4 | % | ||||||||||
General and administrative expense ratio | 16.0 | % | 19.1 | % | 14.2 | % | 19.1 | % | 18.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Combined ratio | 115.2 | % | 116.7 | % | 78.9 | % | 138.3 | % | 78.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
21
ALTERRA CAPITAL HOLDINGS LIMITED
LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||
Gross premiums written | $ | 2,219 | $ | 2,187 | $ | 2,998 | $ | 3,356 | $ | 4,935 | ||||||||||
Reinsurance premiums ceded | (257 | ) | (211 | ) | (234 | ) | (365 | ) | (400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums written | $ | 1,962 | $ | 1,976 | $ | 2,764 | $ | 2,991 | $ | 4,535 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Earned premiums | $ | 2,219 | $ | 2,187 | $ | 2,998 | $ | 3,356 | $ | 4,935 | ||||||||||
Earned premiums ceded | (257 | ) | (211 | ) | (234 | ) | (365 | ) | (400 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net premiums earned | 1,962 | 1,976 | 2,764 | 2,991 | 4,535 | |||||||||||||||
Net investment income | 41,466 | 37,019 | 37,701 | 48,534 | 49,785 | |||||||||||||||
Net realized and unrealized (losses) gains on investments | — | (4,899 | ) | 7,377 | (10,408 | ) | 11,358 | |||||||||||||
Other income (loss) | — | (31 | ) | (71 | ) | 382 | 286 | |||||||||||||
Claims and policy benefits | (38,576 | ) | (44,818 | ) | (46,662 | ) | (59,382 | ) | (65,213 | ) | ||||||||||
Acquisition costs | (407 | ) | (426 | ) | (440 | ) | (557 | ) | (361 | ) | ||||||||||
General and administrative expenses | (227 | ) | (581 | ) | (1,876 | ) | (648 | ) | (2,964 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income (loss) before taxes | $ | 4,218 | $ | (11,760 | ) | $ | (1,207 | ) | $ | (19,088 | ) | $ | (2,574 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
22
ALTERRA CAPITAL HOLDINGS LIMITED
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)
(Expressed in thousands of United States Dollars)
FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | |||||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2010 | Dec. 31, 2011 | Dec. 31, 2010 | ||||||||||||||||||
Property & Casualty: | ||||||||||||||||||||||
Global Insurance: | ||||||||||||||||||||||
Aviation | S | $ | 11,252 | $ | 11,966 | $ | 17,211 | $ | 32,376 | $ | 39,888 | |||||||||||
Excess Liability | L | 80,367 | 77,301 | 71,230 | 98,582 | 89,933 | ||||||||||||||||
Professional Liability | L | 120,431 | 117,521 | 129,462 | 157,881 | 177,199 | ||||||||||||||||
Property | S | 61,624 | 61,313 | 51,101 | 76,922 | 63,100 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
273,674 | 268,101 | 269,004 | 365,761 | 370,120 | ||||||||||||||||||
U.S. Insurance: | ||||||||||||||||||||||
General Liability | L | 76,590 | 73,036 | 76,205 | 104,655 | 104,777 | ||||||||||||||||
Marine | S | 79,168 | 64,687 | 49,696 | 88,493 | 67,454 | ||||||||||||||||
Professional Liability | L | 41,526 | 28,449 | 9,526 | 44,168 | 12,454 | ||||||||||||||||
Property | S | 107,190 | 106,245 | 110,818 | 137,380 | 139,305 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
304,474 | 272,417 | 246,245 | 374,696 | 323,990 | ||||||||||||||||||
Reinsurance [a]: | ||||||||||||||||||||||
Agriculture | S | 23,379 | 30,496 | 30,628 | 30,682 | 29,222 | ||||||||||||||||
Auto | S | 42,593 | 77,812 | 9,707 | 98,360 | 32,285 | ||||||||||||||||
Aviation | S | 27,801 | 15,654 | 28,696 | 15,991 | 31,292 | ||||||||||||||||
Credit/ Surety | S | 58,134 | 34,446 | 5,447 | 41,210 | 7,004 | ||||||||||||||||
General Casualty | L | 49,763 | 61,522 | 32,316 | 74,652 | 50,394 | ||||||||||||||||
Marine & Energy | S | 23,264 | 20,605 | 17,930 | 24,012 | 16,381 | ||||||||||||||||
Medical Malpractice | L | 24,946 | 35,672 | 31,837 | 37,345 | 51,391 | ||||||||||||||||
Other | S | 4,104 | 3,252 | 2,209 | 3,071 | 2,729 | ||||||||||||||||
Professional Liability | L | 131,289 | 139,023 | 81,850 | 159,293 | 110,388 | ||||||||||||||||
Property | S | 347,019 | 330,146 | 156,995 | 351,791 | 166,129 | ||||||||||||||||
Whole Account | S/L | 4,478 | 33,392 | 3,582 | 35,800 | 3,871 | ||||||||||||||||
Workers’ Compensation | L | 36,053 | 28,224 | 16,542 | 34,979 | 30,826 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
772,823 | 810,244 | 417,739 | 907,186 | 531,912 | ||||||||||||||||||
Alterra at Lloyd’s: | ||||||||||||||||||||||
Accident & Health | S | 35,256 | 31,447 | 25,351 | 37,093 | 30,921 | ||||||||||||||||
Agriculture | S | 18,355 | — | — | — | — | ||||||||||||||||
Aviation | S | 8,620 | 7,707 | 10,914 | 13,269 | 16,138 | ||||||||||||||||
Financial Institutions | L | 18,870 | 19,068 | 19,064 | 27,205 | 18,763 | ||||||||||||||||
International Casualty | L | 63,784 | 49,955 | 23,559 | 51,902 | 26,174 | ||||||||||||||||
Marine | S | 7,022 | — | — | 1,493 | — | ||||||||||||||||
Professional Liability | L | 17,539 | 18,828 | 15,387 | 20,696 | 19,591 | ||||||||||||||||
Property | S | 91,779 | 98,129 | 65,072 | 101,409 | 68,187 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
261,225 | 225,134 | 159,347 | 253,067 | 179,774 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Aggregate Property & Casualty | $ | 1,612,196 | $ | 1,575,896 | $ | 1,092,335 | $ | 1,900,710 | $ | 1,405,796 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Life & Annuity: | ||||||||||||||||||||||
Annuity | $ | — | $ | 1,056 | $ | 6 | $ | 1,826 | $ | 1,135 | ||||||||||||
Life | 2,219 | 1,131 | 2,992 | 1,530 | 3,800 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Aggregate Life & Annuity | $ | 2,219 | $ | 2,187 | $ | 2,998 | $ | 3,356 | $ | 4,935 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Aggregate Property & Casualty and Life & Annuity | $ | 1,614,415 | $ | 1,578,083 | $ | 1,095,333 | $ | 1,904,066 | $ | 1,410,731 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
S = Short tail lines | $ | 948,799 | $ | 910,601 | $ | 583,566 | $ | 1,071,452 | $ | 711,971 | ||||||||||||
L = Long tail lines | 663,397 | 665,295 | 508,769 | 829,258 | 693,825 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Aggregate Property & Casualty | $ | 1,612,196 | $ | 1,575,896 | $ | 1,092,335 | $ | 1,900,710 | $ | 1,405,796 | ||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||
Property [b] | $ | 607,612 | 37.7 | % | $ | 667,502 | 38.5 | % | ||||||||||||||
Casualty [c] | 661,158 | 41.0 | % | 811,358 | 37.8 | % | ||||||||||||||||
Specialty [d] | 343,426 | 21.3 | % | 421,850 | 23.7 | % | ||||||||||||||||
|
|
|
| |||||||||||||||||||
Aggregate Property & Casualty | $ | 1,612,196 | $ | 1,900,710 | ||||||||||||||||||
|
|
|
|
[a] | Includes the results for Harbor Point from May 12, 2010. |
[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/surety, energy, marine, other, and whole account lines of business. |
Percentage totals may not add due to rounding.
23
ALTERRA CAPITAL HOLDINGS LIMITED
INVESTMENT PORTFOLIO (Unaudited)
(Expressed in thousands of United States Dollars)
Carrying Value | Fair Value | |||||||||||||||||||||||||||||||
Type of Investment | As of Sept. 30, 2012 | Investment Distribution | As of Dec. 31, 2011 | Investment Distribution | As of Sept. 30, 2012 | Investment Distribution | As of Dec. 31, 2011 | Investment Distribution | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 651,556 | 8.2 | % | $ | 922,844 | 11.8 | % | $ | 651,556 | 8.0 | % | $ | 922,844 | 11.6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
U.S. government and agencies | 811,788 | 10.2 | % | 751,806 | 9.6 | % | 811,788 | 9.9 | % | 751,806 | 9.5 | % | ||||||||||||||||||||
Non-U.S. governments | 240,463 | 3.0 | % | 164,621 | 2.1 | % | 240,463 | 2.9 | % | 164,621 | 2.1 | % | ||||||||||||||||||||
Corporate securities | 2,673,789 | 33.5 | % | 2,646,358 | 33.9 | % | 2,673,788 | 32.7 | % | 2,646,358 | 33.3 | % | ||||||||||||||||||||
Municipal securities | 270,501 | 3.4 | % | 263,007 | 3.4 | % | 270,501 | 3.3 | % | 263,007 | 3.3 | % | ||||||||||||||||||||
Asset-backed securities | 354,739 | 4.5 | % | 247,965 | 3.2 | % | 354,740 | 4.3 | % | 247,965 | 3.1 | % | ||||||||||||||||||||
Residential mortgage-backed securities | 1,310,149 | 16.4 | % | 1,296,277 | 16.6 | % | 1,310,149 | 16.0 | % | 1,296,277 | 16.3 | % | ||||||||||||||||||||
Commercial mortgage-backed securities | 443,709 | 5.6 | % | 361,097 | 4.6 | % | 443,709 | 5.4 | % | 361,097 | 4.5 | % | ||||||||||||||||||||
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Fixed maturities carried at fair value | $ | 6,105,138 | 76.6 | % | $ | 5,731,131 | 73.3 | % | $ | 6,105,138 | 74.8 | % | $ | 5,731,131 | 72.1 | % | ||||||||||||||||
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Other investments | $ | 376,870 | 4.7 | % | $ | 286,515 | 3.7 | % | $ | 376,870 | 4.6 | % | $ | 286,515 | 3.6 | % | ||||||||||||||||
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Total investments carried at fair value | $ | 7,133,564 | 89.5 | % | $ | 6,940,490 | 88.8 | % | $ | 7,133,564 | 87.4 | % | $ | 6,940,490 | 87.3 | % | ||||||||||||||||
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U.S. government and agencies | $ | 27,627 | 0.3 | % | $ | 29,201 | 0.4 | % | $ | 31,700 | 0.4 | % | $ | 32,906 | 0.4 | % | ||||||||||||||||
Non-U.S. governments | 516,673 | 6.5 | % | 524,449 | 6.7 | % | 651,431 | 8.0 | % | 623,080 | 7.8 | % | ||||||||||||||||||||
Corporate securities | 292,392 | 3.7 | % | 319,609 | 4.1 | % | 348,310 | 4.3 | % | 354,504 | 4.5 | % | ||||||||||||||||||||
Asset-backed securities | 656 | 0.0 | % | 1,000 | 0.0 | % | 658 | 0.0 | % | 1,003 | 0.0 | % | ||||||||||||||||||||
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Fixed maturities carried at amortized cost | $ | 837,348 | 10.5 | % | $ | 874,259 | 11.2 | % | $ | 1,032,099 | 12.6 | % | $ | 1,011,493 | 12.7 | % | ||||||||||||||||
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Total invested assets | $ | 7,970,912 | 100.0 | % | $ | 7,814,749 | 100.0 | % | $ | 8,165,663 | 100.0 | % | $ | 7,951,983 | 100.0 | % | ||||||||||||||||
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As of September 30, 2012, the weighted average book yield of the cash and fixed maturities portfolio was 3.21%, and the weighted average duration was 4.4 years.
Carrying Value | Fair Value | |||||||||||||||||||||||||||||||
Credit Ratings | As of Sept. 30, 2012 | Ratings Distribution | As of Dec. 31, 2011 | Ratings Distribution | As of Sept. 30, 2012 | Ratings Distribution | As of Dec. 31, 2011 | Ratings Distribution | ||||||||||||||||||||||||
U.S. government and agencies [a] | $ | 2,084,315 | 30.0 | % | $ | 1,869,405 | 28.3 | % | $ | 2,084,315 | 29.2 | % | $ | 1,869,405 | 27.7 | % | ||||||||||||||||
AAA | 1,203,508 | 17.3 | % | 948,861 | 14.4 | % | 1,203,508 | 16.9 | % | 948,861 | 14.1 | % | ||||||||||||||||||||
AA | 757,361 | 10.9 | % | 883,783 | 13.4 | % | 757,361 | 10.6 | % | 883,783 | 13.1 | % | ||||||||||||||||||||
A | 1,480,920 | 21.3 | % | 1,378,361 | 20.9 | % | 1,480,920 | 20.7 | % | 1,378,361 | 20.4 | % | ||||||||||||||||||||
BBB | 321,374 | 4.6 | % | 281,983 | 4.3 | % | 321,374 | 4.5 | % | 281,983 | 4.2 | % | ||||||||||||||||||||
BB | 67,285 | 1.0 | % | 84,803 | 1.3 | % | 67,285 | 0.9 | % | 84,803 | 1.3 | % | ||||||||||||||||||||
B | 140,223 | 2.0 | % | 131,159 | 2.0 | % | 140,223 | 2.0 | % | 131,159 | 1.9 | % | ||||||||||||||||||||
CCC or lower | 33,576 | 0.5 | % | 53,157 | 0.8 | % | 33,576 | 0.5 | % | 53,157 | 0.8 | % | ||||||||||||||||||||
Not rated | 16,576 | 0.2 | % | 99,619 | 1.5 | % | 16,576 | 0.2 | % | 99,619 | 1.5 | % | ||||||||||||||||||||
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Fixed maturities carried at fair value | $ | 6,105,138 | 87.9 | % | $ | 5,731,131 | 86.8 | % | $ | 6,105,138 | 85.5 | % | $ | 5,731,131 | 85.0 | % | ||||||||||||||||
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U.S. government and agencies | $ | 27,627 | 0.4 | % | $ | 29,201 | 0.4 | % | $ | 31,700 | 0.4 | % | $ | 32,906 | 0.5 | % | ||||||||||||||||
AAA | 583,187 | 8.4 | % | 619,832 | 9.4 | % | 734,678 | 10.3 | % | 733,632 | 10.9 | % | ||||||||||||||||||||
AA | 92,473 | 1.3 | % | 82,511 | 1.2 | % | 105,763 | 1.5 | % | 88,631 | 1.3 | % | ||||||||||||||||||||
A | 101,119 | 1.5 | % | 117,600 | 1.8 | % | 120,707 | 1.7 | % | 129,791 | 1.9 | % | ||||||||||||||||||||
BBB | 30,567 | 0.4 | % | 24,117 | 0.4 | % | 36,974 | 0.5 | % | 25,705 | 0.4 | % | ||||||||||||||||||||
BB | 2,375 | 0.0 | % | 998 | 0.0 | % | 2,278 | 0.0 | % | 828 | 0.0 | % | ||||||||||||||||||||
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Fixed maturities carried at amortized cost | $ | 837,348 | 12.1 | % | $ | 874,259 | 13.2 | % | $ | 1,032,100 | 14.5 | % | $ | 1,011,493 | 15.0 | % | ||||||||||||||||
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Total fixed maturities | $ | 6,942,486 | 100.0 | % | $ | 6,605,390 | 100.0 | % | $ | 7,137,238 | 100.0 | % | $ | 6,742,624 | 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 $1,272,527 (December 31, 2011: $1,117,599). |
Percentage totals may not add due to rounding.
Quarter Ended Sept. 30, 2012 | Quarter Ended June 30, 2012 | Quarter Ended Mar. 31, 2012 | Quarter Ended Dec. 31, 2011 | Quarter Ended Sept. 30, 2011 | Quarter Ended Sept. 30, 2010 | |||||||||||||||||||
Net investment income | $ | 53,518 | $ | 54,729 | $ | 58,678 | $ | 57,080 | $ | 60,335 | $ | 59,711 | ||||||||||||
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Realized and unrealized gains on trading fixed maturities | $ | 3,621 | $ | 587 | $ | 1,066 | $ | 763 | $ | 1,663 | $ | 883 | ||||||||||||
Net realized gains on available for sale fixed maturities | 3,087 | 11,990 | 7,759 | 1,990 | 6,096 | 6,395 | ||||||||||||||||||
Increase (decrease) in fair value of hedge funds | 8,245 | (2,894 | ) | 3,679 | (5,415 | ) | (7,669 | ) | 4,820 | |||||||||||||||
Increase (decrease) in fair value of structured deposit | 1,003 | (655 | ) | 365 | (313 | ) | (2,007 | ) | 786 | |||||||||||||||
Income from equity method investments | 5,167 | 5,583 | 4,927 | 1,024 | 579 | 1,660 | ||||||||||||||||||
(Decrease) increase in fair value of derivatives | (687 | ) | (1,130 | ) | 7,697 | (3,824 | ) | (6,634 | ) | 867 | ||||||||||||||
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Net realized and unrealized gains (losses) on investments | $ | 20,436 | $ | 13,481 | $ | 25,493 | $ | (5,775 | ) | $ | (7,972 | ) | $ | 15,411 | ||||||||||
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Net impairment losses recognized in earnings | $ | (592 | ) | $ | (570 | ) | $ | (5,369 | ) | $ | (702 | ) | $ | (861 | ) | $ | (151 | ) | ||||||
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24
ALTERRA CAPITAL HOLDINGS LIMITED
INVESTMENT PORTFOLIO (Unaudited)
(Expressed in thousands of United States Dollars)
Periodic Rate of Return | ||||||||||||||||||||
As of Sept. 30, 2012 | Last 3 Months | Year to Date | Last 12 months | Last 60 months* | ||||||||||||||||
Cash and fixed maturities | $ | 7,594,042 | 1.94 | % | 4.69 | % | 5.66 | % | 5.65 | % | ||||||||||
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Distressed securities | $ | 24,861 | 3.00 | % | 6.76 | % | 5.19 | % | 2.77 | % | ||||||||||
Diversified arbitrage | 12,284 | 3.75 | % | 10.05 | % | 8.94 | % | (4.22 | %) | |||||||||||
Emerging markets | 3,533 | (0.69 | %) | (28.34 | %) | (28.60 | %) | (5.84 | %) | |||||||||||
Event-driven arbitrage | 7,710 | 3.17 | % | (12.47 | %) | (27.55 | %) | (9.52 | %) | |||||||||||
Fixed income arbitrage | — | 0.00 | % | 0.00 | % | 0.00 | % | 9.56 | % | |||||||||||
Fund of funds | 16,791 | 2.69 | % | 5.97 | % | 6.36 | % | 2.16 | % | |||||||||||
Global macro | 49,517 | 2.35 | % | 5.53 | % | 3.80 | % | 4.99 | % | |||||||||||
Long / short credit | 534 | (1.88 | %) | (4.49 | %) | (10.49 | %) | (1.03 | %) | |||||||||||
Long / short equity | 148,578 | 3.99 | % | 6.85 | % | 7.93 | % | 2.91 | % | |||||||||||
Opportunistic | 1,660 | 0.00 | % | (2.00 | %) | (2.29 | %) | (24.48 | %) | |||||||||||
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Hedge funds ** | 265,468 | 2.56 | % | 2.98 | % | 1.14 | % | (0.49 | %) | |||||||||||
Derivatives | (649 | ) | ||||||||||||||||||
Structured deposits | 25,254 | |||||||||||||||||||
Equity investments | 86,797 | |||||||||||||||||||
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Total other investments | $ | 376,870 | ||||||||||||||||||
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Total invested assets | $ | 7,970,912 | ||||||||||||||||||
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Hedge Fund Investment Return Data: | ||||||||||||||||||||
HFRI Fund of Funds Composite Index [a] | 2.37 | % | 3.38 | % | 2.89 | % | (1.64 | %) |
Hedge Fund Performance History—60 months ended September 30, 2012
Monthly performance | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||||
January | 1.53 | % | 0.13 | % | 0.79 | % | 2.13 | % | (1.37 | %) | ||||||||||||||
February | 0.02 | % | 0.57 | % | 0.17 | % | 0.65 | % | 1.83 | % | ||||||||||||||
March | (0.21 | %) | 0.29 | % | 1.02 | % | (0.76 | %) | (2.58 | %) | ||||||||||||||
April | (0.02 | %) | 0.73 | % | 0.88 | % | (0.84 | %) | (0.13 | %) | ||||||||||||||
May | (0.41 | %) | (0.28 | %) | (0.73 | %) | 2.45 | % | 2.51 | % | ||||||||||||||
June | (0.48 | %) | (0.89 | %) | (0.83 | %) | 1.53 | % | 0.93 | % | ||||||||||||||
July | 0.81 | % | 0.15 | % | 0.36 | % | 1.40 | % | (4.12 | %) | ||||||||||||||
August | 1.20 | % | (1.37 | %) | (0.28 | %) | 0.78 | % | (2.14 | %) | ||||||||||||||
September | 0.53 | % | (1.13 | %) | 1.28 | % | 1.71 | % | (7.31 | %) | ||||||||||||||
October | 0.07 | % | 0.84 | % | 1.53 | % | (4.85 | %) | 4.15 | % | ||||||||||||||
November | (0.19 | %) | 0.40 | % | 0.35 | % | (1.75 | %) | 0.10 | % | ||||||||||||||
December | (1.67 | %) | 0.31 | % | 0.77 | % | (1.92 | %) | (0.13 | %) | ||||||||||||||
Quarterly performance | ||||||||||||||||||||||||
Q1 | 1.33 | % | 0.98 | % | 1.99 | % | 2.00 | % | (2.15 | %) | ||||||||||||||
Q2 | (0.91 | %) | (0.45 | %) | (0.69 | %) | 3.14 | % | 3.33 | % | ||||||||||||||
Q3 | 2.56 | % | (2.33 | %) | 1.35 | % | 3.94 | % | (13.03 | %) | ||||||||||||||
Q4 | (1.79 | %) | 1.56 | % | 2.66 | % | (8.31 | %) | 4.11 | % | ||||||||||||||
Period return | 2.98 | % | (3.57 | %) | 4.25 | % | 12.27 | % | (19.38 | %) | 4.11 | % |
Past performance should not be considered to be a reliable indicator of future performance.
[a] | As reported by HFRI as of October 19, 2012 |
* | Annualized |
** | Net of all fees |
25
ALTERRA CAPITAL HOLDINGS LIMITED
LARGEST 25 CORPORATE HOLDINGS [a] (Unaudited)
(Expressed in thousands of United States Dollars)
As of September 30, 2012 | ||||||||
Amortized Cost | Fair Value | |||||||
Issuer | ||||||||
General Electric Co. | $ | 86,017 | $ | 92,285 | ||||
JP Morgan Chase & Co | 82,580 | 85,800 | ||||||
European Investment Bank | 64,100 | 75,071 | ||||||
Citigroup Inc | 58,289 | 62,322 | ||||||
KFW | 50,909 | 59,274 | ||||||
Bank of America Corp | 47,334 | 51,153 | ||||||
Wells Fargo & Co | 41,556 | 45,598 | ||||||
Goldman Sachs Group Inc | 38,069 | 40,055 | ||||||
Novartis AG | 33,610 | 35,626 | ||||||
Morgan Stanley | 33,864 | 35,569 | ||||||
Pepsico Inc | 33,316 | 35,441 | ||||||
Credit Suisse Group AG | 32,645 | 34,680 | ||||||
UBS AG | 29,780 | 33,502 | ||||||
HSBC Holdings PLC | 31,430 | 32,721 | ||||||
Metlife Inc | 28,912 | 31,908 | ||||||
Verizon Communications Inc | 29,582 | 31,691 | ||||||
BP plc | 29,978 | 31,590 | ||||||
Ally Financial Inc | 31,517 | 31,563 | ||||||
National Australia Bank Ltd | 29,958 | 30,521 | ||||||
Wal-Mart Stores Inc | 27,879 | 30,468 | ||||||
Canadian Imperial Bank of Commerce | 29,477 | 29,931 | ||||||
AT&T Inc | 27,372 | 29,740 | ||||||
International Business Machines Corp | 26,295 | 28,967 | ||||||
Barclays plc | 26,338 | 27,607 | ||||||
Coca-Cola Co | 24,374 | 26,814 | ||||||
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$ | 975,181 | $ | 1,049,897 | |||||
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[a] | Corporate holdings includes supranationals and government-guaranteed corporate securities. |
26
ALTERRA CAPITAL HOLDINGS LIMITED
EUROPEAN GOVERNMENT AND EUROPEAN BANKING INSTITUTION HOLDINGS (Unaudited)
(Expressed in thousands of United States Dollars)
As of September 30, 2012 | ||||||||
Fair Value | % of Total | |||||||
Largest European Government Holdings | ||||||||
France | $ | 285,840 | 35.6 | % | ||||
Germany | 266,144 | 33.1 | % | |||||
Netherlands | 154,432 | 19.2 | % | |||||
United Kingdom | 56,689 | 7.1 | % | |||||
Belgium | 21,945 | 2.7 | % | |||||
Norway | 7,267 | 0.9 | % | |||||
Denmark | 4,290 | 0.5 | % | |||||
All Other European Governments | 6,522 | 0.8 | % | |||||
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Total European Government Holdings | $ | 803,129 | 100.0 | % | ||||
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As of September 30, 2012 | ||||||||
Fair Value | % of Total | |||||||
Largest European Banking Institution Holdings | ||||||||
European Investment Bank | $ | 75,071 | 15.9 | % | ||||
KFW | 59,274 | 12.6 | % | |||||
Credit Suisse Group AG | 34,680 | 7.4 | % | |||||
UBS AG | 33,502 | 7.1 | % | |||||
HSBC Holdings plc | 32,721 | 6.9 | % | |||||
Barclays plc | 27,607 | 5.9 | % | |||||
Lloyds Banking Group plc | 26,413 | 5.6 | % | |||||
Cooperatieve Centrale Raiffeisen-Boerenlee | 19,225 | 4.1 | % | |||||
BNP Paribas SA | 18,962 | 4.0 | % | |||||
All Other | 143,688 | 30.5 | % | |||||
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Total European Banking Institutions | $ | 471,143 | 100.0 | % | ||||
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Percentage totals may not add due to rounding.
27
ALTERRA CAPITAL HOLDINGS LIMITED
EUROPEAN CORPORATE FIXED MATURITIES INVESTMENT EXPOSURES (Unaudited)
(Expressed in thousands of United States Dollars)
As of September 30, 2012 | ||||||||||||||||
Banking Institutions | Other Financial Institutions | Other Corporates | Total | |||||||||||||
Country | ||||||||||||||||
United Kingdom | $ | 98,044 | $ | 30,304 | $ | 99,543 | $ | 227,891 | ||||||||
Netherlands | 48,522 | 2,552 | 58,796 | 109,870 | ||||||||||||
France | 44,111 | 841 | 55,923 | 100,875 | ||||||||||||
Germany | 86,571 | — | 12,538 | 99,109 | ||||||||||||
Supranational | 79,806 | — | — | 79,806 | ||||||||||||
Switzerland | 65,491 | — | 2,099 | 67,590 | ||||||||||||
Norway | 18,941 | — | 23,502 | 42,443 | ||||||||||||
Sweden | 25,469 | — | — | 25,469 | ||||||||||||
Luxembourg | — | — | 12,084 | 12,084 | ||||||||||||
Ireland | 1,181 | — | 2,274 | 3,455 | ||||||||||||
Denmark | 3,007 | — | — | 3,007 | ||||||||||||
Jersey | — | — | 1,670 | 1,670 | ||||||||||||
Spain | — | — | 515 | 515 | ||||||||||||
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Fair value | $ | 471,143 | $ | 33,697 | $ | 268,944 | $ | 773,784 | ||||||||
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Balance sheet carrying value [a] | $ | 434,854 | $ | 41,860 | $ | 258,379 | $ | 735,093 | ||||||||
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Credit rating | ||||||||||||||||
AAA | $ | 256,712 | $ | 27,231 | $ | — | $ | 283,943 | ||||||||
AA | 65,701 | 1,548 | 58,320 | 125,569 | ||||||||||||
A | 127,976 | 3,419 | 179,278 | 310,673 | ||||||||||||
BBB | 14,065 | — | 21,640 | 35,705 | ||||||||||||
BB | 4,736 | 1,499 | 3,437 | 9,672 | ||||||||||||
B | 1,953 | — | 6,269 | 8,222 | ||||||||||||
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Fair value | $ | 471,143 | $ | 33,697 | $ | 268,944 | $ | 773,784 | ||||||||
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Balance sheet carrying value [a] | $ | 434,854 | $ | 41,860 | $ | 258,379 | $ | 735,093 | ||||||||
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[a] | The trading and available for sale portfolios are carried at fair value and the held to maturity portfolio is carried at amortized cost. |
28
ALTERRA CAPITAL HOLDINGS LIMITED
NEW POINT IV SUMMARY (Unaudited)
(Expressed in thousands of United States Dollars)
New Point IV Limited (“New Point IV”) is a side car vehicle established in 2011 to provide capacity to write property catastrophe collateralized retrocessional coverage. New Point IV is sponsored by Alterra in partnership with Stone Point Capital LLC and other investors. Alterra provides underwriting services to New Point Re IV Limited (“New Point Re IV), a wholly-owned subsidiary of New Point IV.
Alterra owns 34.8% of the common shares of New Point IV and accounts for it as an equity method investment.
FOR THE QUARTERS ENDED | FOR THE NINE MONTHS ENDED | |||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | |||||||||||||
Gross Premiums Written by New Point IV [a] | $ | — | $ | 8,843 | $ | 75,430 | $ | 8,843 | ||||||||
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The following is included in Alterra’s unaudited interim consolidated financial statements for the respective periods: | ||||||||||||||||
Balance Sheet | ||||||||||||||||
Other investments [b] | $ | 83,128 | $ | 9,044 | $ | 83,128 | $ | 9,044 | ||||||||
Statement of Operations and Comprehensive Income | ||||||||||||||||
Other income [c] | $ | 1,500 | $ | 537 | $ | 7,622 | $ | 537 | ||||||||
Income from equity method investment [d] | $ | 5,250 | $ | 409 | $ | 15,772 | $ | 409 |
[a] | New Point IV is not consolidated by Alterra. Consequently, these gross premiums written are not included in Alterra’s gross premiums written. |
[b] | Represents Alterra’s 34.8% investment in New Point IV under the equity method of accounting. |
[c] | Represents the underwriting fees and profit commissions earned by Alterra in connection with New Point Re IV. This is included in the reinsurance segment and is included in net operating income. |
[d] | Represents Alterra’s 34.8% share of the net income of New Point IV. This is included within net realized and unrealized gains on investments in Alterra’s statement of operations and comprehensive income and is included in net operating income. |
29
ALTERRA CAPITAL HOLDINGS LIMITED
SHAREHOLDER RETURN ANALYSIS (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Income and Return on Equity: | ||||||||||||||||||||||||
Net income | $ | 37,652 | $ | 48,386 | $ | 195,616 | $ | 34,334 | $ | 65,282 | $ | 302,335 | ||||||||||||
Net operating income | $ | 32,133 | $ | 50,082 | $ | 168,816 | $ | 64,915 | $ | 96,600 | $ | 251,712 | ||||||||||||
Average shareholders’ equity | $ | 2,887,456 | $ | 2,818,910 | $ | 2,856,401 | $ | 2,799,260 | $ | 2,806,191 | $ | 2,467,429 | ||||||||||||
Annualized return on average shareholders’ equity [a] | 5.2 | % | 6.9 | % | 9.1 | % | 1.6 | % | 2.3 | % | 12.3 | % | ||||||||||||
Annualized net operating return on average shareholders’ equity [a] | 4.5 | % | 7.1 | % | 7.9 | % | 3.1 | % | 3.4 | % | 10.2 | % | ||||||||||||
Book value and dividends per share: | ||||||||||||||||||||||||
Diluted book value per share | $ | 29.57 | $ | 27.18 | $ | 29.57 | $ | 27.18 | $ | 26.91 | $ | 25.99 | ||||||||||||
Dividends paid per share | $ | 0.16 | $ | 0.14 | $ | 0.44 | $ | 0.38 | $ | 0.52 | $ | 2.94 | ||||||||||||
Change in diluted book value per share | 3.1 | % | 4.6 | % | 9.9 | % | 4.6 | % | 3.5 | % | (5.0 | %) | ||||||||||||
Dividend payout ratio [b] | 0.5 | % | 0.5 | % | 1.5 | % | 1.4 | % | 1.9 | % | 22.4 | % | ||||||||||||
Total return to shareholders [c] | 3.6 | % | 5.1 | % | 11.4 | % | 5.9 | % | 5.4 | % | 17.4 | % |
[a] | Annualized return on average shareholders’ equity is defined as annualized net income divided by the average of the quarterly average shareholders’ equity balances. |
Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the quarterly average shareholders’ equity balances.
[b] | Dividend payout ratio is calculated as dividends paid divided by beginning shareholders’ equity. |
[c] | Total return to shareholders is calculated as the change in diluted book value per share plus the dividend payout ratio. |
Percentage totals may not add due to rounding.
30
ALTERRA CAPITAL HOLDINGS LIMITED
EARNINGS PER SHARE INFORMATION (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Net income available to common shareholders | $ | 37,652 | $ | 48,386 | $ | 195,616 | $ | 34,334 | $ | 65,282 | $ | 302,335 | ||||||||||||
Denominator: | ||||||||||||||||||||||||
Weighted average shares—basic | ||||||||||||||||||||||||
Outstanding [a] | 95,461,087 | 104,589,483 | 98,479,628 | 105,644,318 | 105,022,397 | 94,426,055 | ||||||||||||||||||
Unvested restricted share units | 330,379 | 240,817 | 306,371 | 222,453 | 227,286 | 256,224 | ||||||||||||||||||
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95,791,466 | 104,830,300 | 98,785,999 | 105,866,771 | 105,249,683 | 94,682,279 | |||||||||||||||||||
Share equivalents: | ||||||||||||||||||||||||
Warrants | 2,057,064 | 521,292 | 1,921,734 | 948,670 | 1,023,278 | 537,399 | ||||||||||||||||||
Options | 137,445 | 95,228 | 127,415 | 131,600 | 124,022 | 183,258 | ||||||||||||||||||
Employee stock purchase plan | 3,759 | 1,909 | 3,875 | 1,472 | 1,386 | 2,301 | ||||||||||||||||||
Non participating restricted shares | 620,533 | 216,553 | 413,904 | 144,369 | 104,524 | 54,138 | ||||||||||||||||||
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Weighted average shares—diluted [b] | 98,610,267 | 105,665,282 | 101,252,927 | 107,092,882 | 106,502,893 | 95,459,375 | ||||||||||||||||||
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Net income per share | $ | 0.39 | $ | 0.46 | $ | 1.98 | $ | 0.32 | $ | 0.62 | $ | 3.19 | ||||||||||||
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Net income per diluted share | $ | 0.38 | $ | 0.46 | $ | 1.93 | $ | 0.32 | $ | 0.61 | $ | 3.17 | ||||||||||||
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[a] | Includes weighted average unvested participating restricted shares. |
[b] | Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the average market price during the period of calculation. |
31
ALTERRA CAPITAL HOLDINGS LIMITED
OPERATING INCOME RECONCILIATION (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
FOR THE QUARTERS ENDED | FOR THE NINE MONTHS ENDED | FOR THE YEARS ENDED | ||||||||||||||||||||||
Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | |||||||||||||||||||
Before tax | ||||||||||||||||||||||||
Net income | $ | 38,837 | $ | 52,813 | $ | 192,981 | $ | 31,734 | $ | 55,781 | $ | 306,491 | ||||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, before tax [a] | (6,348 | ) | 1,164 | (28,076 | ) | 28,427 | 29,486 | 65 | ||||||||||||||||
Foreign exchange (gains) losses, before tax | (82 | ) | (147 | ) | (89 | ) | 2,065 | 1,312 | (115 | ) | ||||||||||||||
Merger and acquisition expenses, before tax | — | — | — | — | — | (48,776 | ) | |||||||||||||||||
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Net operating income | $ | 32,407 | $ | 53,830 | $ | 164,816 | $ | 62,226 | $ | 86,579 | $ | 257,665 | ||||||||||||
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Net of tax | ||||||||||||||||||||||||
Net income | $ | 37,652 | $ | 48,386 | $ | 195,616 | $ | 34,334 | $ | 65,282 | $ | 302,335 | ||||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] | (5,465 | ) | 1,807 | (26,732 | ) | 29,120 | 30,391 | (865 | ) | |||||||||||||||
Foreign exchange (gains) losses, before tax | (54 | ) | (111 | ) | (68 | ) | 1,461 | 927 | 363 | |||||||||||||||
Merger and acquisition expenses, net of tax | — | — | — | — | — | (50,121 | ) | |||||||||||||||||
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Net operating income | $ | 32,133 | $ | 50,082 | $ | 168,816 | $ | 64,915 | $ | 96,600 | $ | 251,712 | ||||||||||||
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Weighted average shares outstanding: | ||||||||||||||||||||||||
Basic | 95,791,466 | 104,830,300 | 98,785,999 | 105,866,771 | 105,249,683 | 94,682,279 | ||||||||||||||||||
Diluted | 98,610,267 | 105,665,282 | 101,252,927 | 107,092,882 | 106,502,893 | 95,459,375 | ||||||||||||||||||
Basic per share data | ||||||||||||||||||||||||
Net income per share | $ | 0.39 | $ | 0.46 | $ | 1.98 | $ | 0.32 | $ | 0.62 | $ | 3.19 | ||||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] | (0.06 | ) | 0.02 | (0.27 | ) | 0.28 | 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 share | $ | 0.34 | $ | 0.48 | $ | 1.71 | $ | 0.61 | $ | 0.92 | $ | 2.66 | ||||||||||||
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Diluted per share data | ||||||||||||||||||||||||
Net income per diluted share | $ | 0.38 | $ | 0.46 | $ | 1.93 | $ | 0.32 | $ | 0.61 | $ | 3.17 | ||||||||||||
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a] | (0.06 | ) | 0.02 | (0.26 | ) | 0.27 | 0.29 | (0.01 | ) | |||||||||||||||
Foreign exchange (gains) losses, net of tax | — | — | — | 0.01 | 0.02 | 0.01 | ||||||||||||||||||
Merger and acquisition expenses, net of tax | — | — | — | — | — | (0.53 | ) | |||||||||||||||||
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Net operating income per diluted share | $ | 0.33 | $ | 0.47 | $ | 1.67 | $ | 0.61 | $ | 0.91 | $ | 2.64 | ||||||||||||
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[a] | Net realized and unrealized (gains) losses on investments excluded from 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.
32
ALTERRA CAPITAL HOLDINGS LIMITED
BOOK VALUE PER SHARE (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
As of Sept. 30, 2012 | As of Dec. 31, 2011 | |||||||
Price per share at period end | $ | 23.94 | $ | 23.63 | ||||
Shareholders’ equity | $ | 2,923,176 | $ | 2,809,235 | ||||
Goodwill and intangible assets | $ | 55,371 | $ | 56,111 | ||||
Tangible book value | $ | 2,867,805 | $ | 2,753,124 | ||||
Basic common shares outstanding [a] | 95,985,461 | 102,101,950 | ||||||
Add: unvested restricted stock units | 360,611 | 241,108 | ||||||
Add: dilutive impact of warrants outstanding | 2,236,063 | 1,938,297 | ||||||
Add: dilutive impact of options outstanding | 137,927 | 125,424 | ||||||
Add: unvested performance based restricted shares | 127,847 | — | ||||||
Add: employee stock purchase plan | 3,052 | — | ||||||
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Diluted shares outstanding [b] | 98,850,961 | 104,406,779 | ||||||
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Basic book value per share | $ | 30.45 | $ | 27.51 | ||||
Diluted book value per share | $ | 29.57 | $ | 26.91 | ||||
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Basic tangible book value per share | $ | 29.88 | $ | 26.96 | ||||
Diluted tangible book value per share | $ | 29.01 | $ | 26.37 | ||||
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[a] | Includes unvested restricted shares. |
[b] | Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the period-end market price. |
[c] | Not included in shareholders’ equity as of September 30, 2012 were $194.8 million of unrecognized net gains on held-to-maturity securities, which if included, would increase diluted book value per share by $1.97 as of September 30, 2012. |
33
ALTERRA CAPITAL HOLDINGS LIMITED
REGULATION G
In presenting the Company’s results, management has included and discussed net operating income, net operating income per share, net operating income per diluted share, annualized net operating return on average shareholders’ equity, tangible book value per share 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 the Company’s business. These measures, however, should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The reconciliation of such measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.
Net operating income is defined as net income excluding after-tax net realized and unrealized gains or losses on investments excluded from operating income (this includes net realized and unrealized gains or losses on trading securities, net realized gains or losses on available for sale securities, net impairment losses recognized in earnings, changes in fair value of derivatives, catastrophe bonds, structured deposits and earnings from equity method investments in run-off), after-tax net foreign exchange gains or losses and after-tax merger and acquisition expenses. Net operating income per share and per diluted share is defined as the net operating income divided by the weighted average common shares or weighted average diluted common shares, respectively. We believe that this non-GAAP measure provides a better indication of management performance and the underlying fundamentals of our operations as realized and unrealized gains and losses on investments excluded from operating income and foreign exchange gains and losses may fluctuate from period to period and are typically outside the control of management. Merger and acquisition expenses are not indicative of expenses fundamental to the business and may fluctuate from period to period.
Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the quarterly average shareholders’ equity balances. Tangible book value is defined as shareholders’ equity excluding goodwill and intangible assets. Tangible book value per share and diluted tangible book value per share is defined as the tangible book value divided by the common shares outstanding or diluted common shares outstanding, respectively. These non-GAAP measures allow management to assess how the Company has performed in terms of wealth generated for its shareholders.
34