EXHIBIT 99.1
ALTERRA CAPITAL REPORTS FOURTH QUARTER AND YEAR END 2012 RESULTS
Fourth Quarter Net Operating Loss of $0.52 per Diluted Share
2012 Net Operating Income of $1.18 per Diluted Share
2012 Diluted Book Value per Share Growth of 7.5%, including Dividends
HAMILTON, BERMUDA, February 5, 2013—Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported a net loss of $51.8 million, or a loss of $0.54 per diluted share, for the fourth quarter of 2012, compared to net income of $30.9 million, or $0.30 per diluted share, for the same quarter of 2011.
The net operating loss for the fourth quarter of 2012 was $49.7 million, or a loss of $0.52 per diluted share, compared to net operating income of $31.7 million, or $0.30 per diluted share, for the same quarter of 2011.
For the year ended December 31, 2012, Alterra reported net income of $143.8 million, or $1.43 per diluted share, compared to net income of $65.3 million, or $0.61 per diluted share, for the year ended December 31, 2011. Net operating income for the year ended December 31, 2012 was $119.1 million, or $1.18 per diluted share, compared to net operating income of $96.6 million, or $0.91 per diluted share, for the year ended December 31, 2011. Net operating return on average shareholders’ equity for the year ended December 31, 2012 was 4.2%.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “Alterra’s fourth quarter operating results were impacted heavily by Hurricane Sandy. However, for the year, we are pleased to report net income of $143.8 million and growth in diluted book value per share of 7.5%, including dividends. Our 2012 results reflect the diversified underwriting strategy and risk management discipline that has served us well, particularly in years with major industry losses such as Sandy.
“On December 19 we ended the year with the announcement of a merger agreement pursuant to which Alterra will be acquired by Markel Corporation. The transaction is subject to shareholder and regulatory approval and is expected to close in the first half of 2013. We believe the combined company will establish itself as a leading specialty insurance and reinsurance company with greater capacity and a broader range of products and services, and will be better positioned for long-term success, including the creation of superior shareholder value,” Mr. Becker concluded.
Fourth quarter 2012 results for Alterra include:
| | • | | Property and casualty gross premiums written of $356.4 million, representing an increase of $31.6 million or 9.7% compared to the same quarter of 2011; |
| | • | | Net premiums written of $242.6 million, representing an increase of $24.8 million or 11.4%, compared to the same quarter of 2011; |
| | • | | A combined ratio on property and casualty business of 119.0%, compared to 97.4% for the same quarter of 2011; |
| | • | | Significant property catastrophe event net losses of $115.0 million, net of reinstatement premiums, related to Hurricane Sandy, principally within the U.S. insurance segment, compared to net losses of $55.5 million, net of reinstatement premiums, in the same quarter of 2011. A smaller proportion of 2012’s property catastrophe losses fell within the attritional loss ratio, contributing to a higher combined ratio in 2012; |
| | • | | Net favorable development on prior years’ loss reserves of $37.0 million, or 10.8 combined ratio points, compared to $43.0 million, or 12.3 combined ratio points, in the same quarter of 2011; |
| | • | | Net investment income of $52.0 million, compared to $57.1 million in the same quarter of 2011, a decrease of 8.8%; |
| | • | | Income of $6.9 million from New Point Re IV Limited, a sidecar in which Alterra has an indirect 34.8% equity interest, consisting of fees and equity share earnings; and |
| | • | | A deferred tax expense of $21.8 million to record a valuation allowance against net deferred tax assets in the U.S. Uncertainty regarding the future utilization of these deferred tax assets resulted in the valuation allowance. |
Gross premiums written and net premiums written from property and casualty underwriting for the fourth quarter of 2012 are shown in the following table, with the increase/decrease compared to the same quarter of 2011:
| | | | | | | | | | | | | | | | | | | | |
Segment ($ in millions) | | GPW | | | % Inc/(Dec) | | | NPW | | | % Inc/(Dec) | | | Combined Ratio | |
Global Insurance | | $ | 98.0 | | | | 0.3 | % | | $ | 49.3 | | | | 3.7 | % | | | 102.1 | % |
Reinsurance | | | 125.6 | | | | 29.6 | % | | | 114.7 | | | | 21.5 | % | | | 100.2 | % |
U.S. Insurance | | | 94.6 | | | | (7.5 | )% | | | 38.7 | | | | (31.9 | )% | | | 286.8 | % |
Alterra at Lloyd’s | | | 38.2 | | | | 36.9 | % | | | 39.9 | | | | 109.7 | % | | | 96.6 | % |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | 356.4 | | | | 9.7 | % | | $ | 242.6 | | | | 11.4 | % | | | 119.0 | % |
Results for the year ended December 31, 2012 include:
| | • | | Property and casualty gross premiums written of $1,968.6 million, representing an increase of $67.9 million, or 3.6%, compared to the year ended December 31, 2011; |
| | • | | Net premiums written of $1,317.2 million, representing a decrease of $111.8 million, or 7.8%, compared to the year ended December 31, 2011. This decrease reflects increased property reinsurance premiums ceded in order to manage aggregate property exposures across all segments, and a decrease in net premiums written on the contract binding business in the U.S. insurance segment resulting from the sale of the renewal rights for this business in 2011; |
| | • | | A combined ratio on property and casualty business of 99.5%, compared to 98.2% for the year ended December 31, 2011; |
| | • | | Significant property catastrophe event net losses of $130.0 million, net of reinstatement premiums, compared to net losses of $253.4 million, net of reinstatement premiums, in 2011; |
| | • | | Net underwriting losses of $17.5 million on agriculture reinsurance, net of premiums and acquisition costs earned; |
| | • | | Net favorable development on prior years’ loss reserves of $90.8 million, or 6.7 combined ratio points, compared to $153.3 million, or 10.8 combined ratio points, in 2011; |
| | • | | Net investment income of $219.0 million, compared to $234.8 million in 2011, a decrease of 6.8%; |
| | • | | Income of $30.3 million from New Point Re IV Limited consisting of fees and equity share earnings; and |
| | • | | A deferred tax expense of $24.6 million to record a valuation allowance against net deferred tax assets in the U.S. |
Gross premiums written and net premiums written from property and casualty underwriting for the year ended December 31, 2012 are shown in the following table, with the increase/decrease compared to the same period of 2011:
| | | | | | | | | | | | | | | | | | | | |
Segment ($ in millions) | | GPW | | | % Inc/(Dec) | | | NPW | | | % Inc/(Dec) | | | Combined Ratio | |
Global Insurance | | $ | 371.6 | | | | 1.6 | % | | $ | 182.3 | | | | (1.1 | )% | | | 75.7 | % |
Reinsurance | | | 898.5 | | | | (1.0 | )% | | | 727.2 | | | | (11.7 | )% | | | 91.5 | % |
U.S. Insurance | | | 399.1 | | | | 6.5 | % | | | 181.1 | | | | (22.0 | )% | | | 142.0 | % |
Alterra at Lloyd’s | | | 299.5 | | | | 18.3 | % | | | 226.7 | | | | 19.7 | % | | | 109.8 | % |
| | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,968.6 | | | | 3.6 | % | | $ | 1,317.2 | | | | (7.8 | )% | | | 99.5 | % |
Balance Sheet
Total invested assets, including cash and cash equivalents, were $8,032.6 million as of December 31, 2012, an increase of $217.9 million from December 31, 2011. As of December 31, 2012, 95.9% of the fixed maturities portfolio (by carrying value) was investment-grade, an increase from 94.4% as of December 31, 2011. As of December 31, 2012, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.15%, and the weighted average duration was 4.5 years.
Share repurchases under the Board-approved share repurchase authorization for the year ended December 31, 2012 were 6,626,684 common shares at an average price of $23.03 per share for a total of $152.6 million. Alterra did not repurchase any common shares under the share repurchase authorization during the fourth quarter of 2012. As of December 31, 2012, $301.7 million remained under the share repurchase authorization.
Shareholders’ equity was $2,839.7 million as of December 31, 2012, an increase of 1.1% from December 31, 2011. Diluted book value per share as of December 31, 2012 was $28.34. Including dividends declared, diluted book value per share decreased for the fourth quarter of 2012 by 3.6%, and grew by 7.5% for the year ended December 31, 2012. Not included in shareholders’ equity as of December 31, 2012 were $218.0 million of unrecognized gains on held-to-maturity securities, which represented $2.18 in unrecognized diluted book value per share.
A copy of Alterra’s fourth quarter financial supplement is available on Alterra’s website at www.alterracap.com.
Alterra Capital Holdings Limited is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers.
Non-GAAP Financial Measures
In presenting Alterra’s results, management has included and discussed net operating income, net operating income per diluted share, annualized net operating return on average shareholders’ equity, net operating return on average shareholders’ equity and diluted tangible book value per share. These measures are “non-GAAP financial measures” as defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, allow for a more complete understanding of Alterra’s business. These measures, however, should not be viewed as a substitute for measures determined in accordance with U.S. GAAP. The reconciliation of these measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
This release includes statements about future economic performance, finances, expectations, plans and prospects of Alterra and Markel, both individually and on a combined basis, that are forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by such statements. For further information regarding factors affecting future results of Alterra and Markel, please refer to their respective Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Reports on Form 10-Q and other documents filed by Alterra and Markel since March 1, 2012 with the Securities Exchange Commission (“SEC”). These documents are also available free of charge, in the case of Alterra, by directing a request to Alterra through Joe Roberts, Chief Financial Officer, or Susan Spivak Bernstein, Senior Vice President, Investor Relations, at 441-295-8800 and, in the case of Markel, by directing a request to Bruce Kay, Investor Relations, at 804-747-0136. Neither Alterra nor Markel undertakes any obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise.
This release contains certain forward-looking statements within the meaning of the U.S. federal securities laws. Statements that are not historical facts, including statements about Alterra’s and Markel’s beliefs, plans or expectations, are forward-looking statements. These statements are based on Alterra’s or Markel’s current plans, estimates and expectations. Some forward-looking statements may be identified by use of terms such as “believe,” “anticipate,” “intend,” “expect,” “project,” “plan,” “may,” “should,” “could,” “will,” “estimate,” “predict,” “potential,” “continue,” and similar words, terms or statements of a future or forward-looking nature. In light of the inherent risks and uncertainties in all forward-looking statements, the inclusion of such statements in this release should not be considered as a representation by Alterra, Markel or any other person that Alterra’s or Markel’s objectives or plans, both individually and on a combined basis, will be achieved. A non-exclusive list of important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: (a) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding expectations; (b) the adequacy of loss reserves and the need to adjust such reserves as claims develop over time; (c) the failure of any of the loss limitation methods the parties employ; (d) any adverse change in financial ratings of either company or their subsidiaries; (e) the effect of competition on market trends and pricing; (f) cyclical trends, including with respect to demand and pricing in the insurance and reinsurance markets; (g) changes in general economic conditions, including changes in interest rates and/or equity values in the United States of America and elsewhere; and (h) other factors set forth in Alterra’s and Markel’s recent reports on Form 10-K, Form 10-Q and other documents filed with the SEC by Alterra and Markel.
* * * * *
Risks and uncertainties relating to the proposed transaction include the risks that: (1) the parties will not obtain the requisite shareholder or regulatory approvals for the transaction; (2) the anticipated benefits of the transaction will not be realized or the parties may experience difficulties in successfully integrating the two companies; (3) the parties may not be able to retain key personnel; (4) the conditions to the closing of the proposed merger may not be satisfied or waived; (5) the outcome of any legal proceedings to the extent initiated against Alterra or Markel or its respective directors and officers following the announcement of the proposed merger is uncertain; (6) the acquisition may involve unexpected costs; and (7) the businesses may suffer as a result of uncertainty surrounding the acquisition. These risks, as well as other risks of the combined company and its subsidiaries may be different from what the companies expect, or have previously experienced, and each party’s management may respond differently to any of the aforementioned factors. These risks, as well as other risks associated with the merger, are more fully discussed in the joint proxy statement/prospectus of Markel and Alterra that has been filed with the SEC. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made.
ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO FIND IT:
This release relates to a proposed merger between Alterra and Markel. On December 27, 2012, Markel filed with the SEC a registration statement on Form S-4, and on January 18, 2013, Markel and Alterra each filed the definitive joint proxy statement/prospectus. This release is not a substitute for the definitive joint proxy statement/prospectus or any other document that Markel or Alterra filed or may file with the SEC or send to its shareholders in connection with the proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC OR SENT TO SHAREHOLDERS AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. All documents, when filed, will be available free of charge at the SEC’s website (www.sec.gov) or, in the case of Alterra, by directing a request to Joe Roberts, Chief Financial Officer, or Susan Spivak Bernstein, Senior Vice President, Investor Relations, at 441-295-8800 and, in the case of Markel, by directing a request to Bruce Kay, Investor Relations, at 804-747-0136.
PARTICIPANTS IN THE SOLICITATION:
Alterra and Markel and their respective directors and executive officers may be deemed to be participants in any solicitation of proxies from both Alterra’s and Markel’s shareholders in favor of the proposed transaction. Information about Alterra’s directors and executive officers and their ownership in Alterra common stock is available in the proxy statement dated March 26, 2012 for Alterra’s 2012 annual general meeting of shareholders. Information about Markel’s directors and executive officers and their ownership of Markel common stock is available in the proxy statement dated March 16, 2012 for Markel’s 2012 annual meeting of shareholders.
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | |
| | | December 31,
2012 | | | December 31,
2011 | |
| | | (Unaudited) | | | | |
ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 440,298 | | | $ | 469,477 | |
Fixed maturities, trading, at fair value | | | 429,246 | | | | 229,206 | |
Fixed maturities, available for sale, at fair value | | | 5,647,303 | | | | 5,501,925 | |
Fixed maturities, held to maturity, at amortized cost (fair value $1,070,308) | | | 852,266 | | | | 874,259 | |
Equity method investments | | | 92,050 | | | | 13,670 | |
Other investments, at fair value | | | 316,955 | | | | 272,845 | |
Restricted cash and cash equivalents | | | 254,458 | | | | 453,367 | |
Accrued interest income | | | 65,361 | | | | 71,322 | |
Premiums receivable | | | 729,877 | | | | 715,154 | |
Losses and benefits recoverable from reinsurers | | | 1,289,577 | | | | 1,068,119 | |
Deferred acquisition costs | | | 146,328 | | | | 145,850 | |
Prepaid reinsurance premiums | | | 247,740 | | | | 212,238 | |
Trades pending settlement | | | 27,768 | | | | 22,887 | |
Goodwill and intangible assets | | | 54,751 | | | | 56,111 | |
Other assets | | | 64,272 | | | | 79,417 | |
| | | | | | | | |
Total assets | | $ | 10,658,250 | | | $ | 10,185,847 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Property and casualty losses | | $ | 4,690,344 | | | $ | 4,216,538 | |
Life and annuity benefits | | | 1,159,545 | | | | 1,190,697 | |
Deposit liabilities | | | 132,910 | | | | 151,035 | |
Funds withheld from reinsurers | | | 92,733 | | | | 112,469 | |
Unearned property and casualty premiums | | | 1,031,633 | | | | 1,020,639 | |
Reinsurance balances payable | | | 157,199 | | | | 134,354 | |
Accounts payable and accrued expenses | | | 107,742 | | | | 110,380 | |
Trades pending settlement | | | 5,890 | | | | — | |
Senior notes | | | 440,532 | | | | 440,500 | |
| | | | | | | | |
Total liabilities | | | 7,818,528 | | | | 7,376,612 | |
| | | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | | | |
Common shares (par value $1.00 per share); 96,059,645 (2011—102,101,950) shares issued and outstanding | | | 96,060 | | | | 102,102 | |
Additional paid-in capital | | | 1,721,241 | | | | 1,847,034 | |
Accumulated other comprehensive income | | | 244,172 | | | | 166,957 | |
Retained earnings | | | 778,249 | | | | 693,142 | |
| | | | | | | | |
Total shareholders’ equity | | | 2,839,722 | | | | 2,809,235 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 10,658,250 | | | $ | 10,185,847 | |
| | | | | | | | |
Book value per share | | $ | 29.56 | | | $ | 27.51 | |
| | | | | | | | |
Diluted book value per share | | $ | 28.34 | | | $ | 26.91 | |
| | | | | | | | |
Diluted tangible book value per share [a] | | $ | 27.79 | | | $ | 26.37 | |
| | | | | | | | |
Diluted shares outstanding | | | 100,213,325 | | | | 104,406,779 | |
| [a] | Non-GAAP financial measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Year Ended
December 31, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
REVENUES | | | | | | | | | | | | | | | | |
Gross premiums written | | $ | 357,043 | | | $ | 325,983 | | | $ | 1,971,458 | | | $ | 1,904,066 | |
Reinsurance premiums ceded | | | (113,881 | ) | | | (107,203 | ) | | | (651,699 | ) | | | (472,077 | ) |
| | | | | | | | | | | | | | | | |
Net premiums written | | $ | 243,162 | | | $ | 218,780 | | | $ | 1,319,759 | | | $ | 1,431,989 | |
| | | | | | | | | | | | | | | | |
Earned premiums | | $ | 504,757 | | | $ | 460,636 | | | $ | 1,962,685 | | | $ | 1,845,837 | |
Earned premiums ceded | | | (161,125 | ) | | | (111,532 | ) | | | (597,462 | ) | | | (420,863 | ) |
| | | | | | | | | | | | | | | | |
Net premiums earned | | | 343,632 | | | | 349,104 | | | | 1,365,223 | | | | 1,424,974 | |
| | | | |
Net investment income | | | 52,039 | | | | 57,080 | | | | 218,964 | | | | 234,846 | |
Net realized and unrealized gains (losses) on investments | | | 11,476 | | | | (5,775 | ) | | | 70,886 | | | | (38,339 | ) |
| | | | |
Total other-than-temporary impairment losses | | | (3,143 | ) | | | (703 | ) | | | (9,552 | ) | | | (2,706 | ) |
Portion of loss recognized in other comprehensive income (loss), before taxes | | | 2,766 | | | | 1 | | | | 2,644 | | | | (239 | ) |
| | | | | | | | | | | | | | | | |
Net impairment losses recognized in earnings | | | (377 | ) | | | (702 | ) | | | (6,908 | ) | | | (2,945 | ) |
| | | | |
Other income | | | 1,425 | | | | 2,017 | | | | 10,301 | | | | 5,396 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 408,195 | | | | 401,724 | | | | 1,658,466 | | | | 1,623,932 | |
| | | | | | | | | | | | | | | | |
LOSSES AND EXPENSES | | | | | | | | | | | | | | | | |
Net losses and loss expenses | | | 295,123 | | | | 231,533 | | | | 926,445 | | | | 945,593 | |
Claims and policy benefits | | | 17,006 | | | | 14,564 | | | | 55,582 | | | | 59,382 | |
Acquisition costs | | | 66,595 | | | | 64,380 | | | | 250,413 | | | | 261,102 | |
Interest expense | | | 8,355 | | | | 13,296 | | | | 35,644 | | | | 43,688 | |
Net foreign exchange (gains) losses | | | (71 | ) | | | (753 | ) | | | (160 | ) | | | 1,312 | |
Merger and acquisition expenses | | | 3,289 | | | | — | | | | 3,289 | | | | — | |
General and administrative expenses | | | 55,188 | | | | 54,657 | | | | 231,562 | | | | 257,074 | |
| | | | | | | | | | | | | | | | |
Total losses and expenses | | | 445,485 | | | | 377,677 | | | | 1,502,775 | | | | 1,568,151 | |
| | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE TAXES | | | (37,290 | ) | | | 24,047 | | | | 155,691 | | | | 55,781 | |
| | | | |
Income tax expense (benefit) | | | 14,520 | | | | (6,901 | ) | | | 11,885 | | | | (9,501 | ) |
| | | | | | | | | | | | | | | | |
NET INCOME (LOSS) | | | (51,810 | ) | | | 30,948 | | | | 143,806 | | | | 65,282 | |
Holding (losses) gains on available for sale securities arising in period [a] | | | (2,988 | ) | | | (566 | ) | | | 114,263 | | | | 97,044 | |
Net realized gains on available for sale securities included in net income [a] | | | (3,157 | ) | | | (3,103 | ) | | | (25,966 | ) | | | (11,179 | ) |
Portion of other-than-temporary impairment losses recognized in other comprehensive income [a] | | | (2,765 | ) | | | (1 | ) | | | (2,643 | ) | | | 239 | |
| | | | |
Impact of net unrealized investment gains on life & annuity deferred acquisition costs | | | (2,842 | ) | | | — | | | | (2,842 | ) | | | — | |
Foreign currency translation adjustment | | | (9,308 | ) | | | (2,398 | ) | | | (5,597 | ) | | | (18,093 | ) |
| | | | | | | | | | | | | | | | |
Other comprehensive income (loss) | | | (21,060 | ) | | | (6,068 | ) | | | 77,215 | | | | 68,011 | |
| | | | | | | | | | | | | | | | |
COMPREHENSIVE INCOME (LOSS) | | $ | (72,870 | ) | | $ | 24,880 | | | $ | 221,021 | | | $ | 133,293 | |
| | | | | | | | | | | | | | | | |
Net income (loss) per share | | $ | (0.54 | ) | | $ | 0.30 | | | $ | 1.47 | | | $ | 0.62 | |
| | | | | | | | | | | | | | | | |
Net income (loss) per diluted share | | $ | (0.54 | ) | | $ | 0.30 | | | $ | 1.43 | | | $ | 0.61 | |
| | | | | | | | | | | | | | | | |
Net operating (loss) income per diluted share [b] | | $ | (0.52 | ) | | $ | 0.30 | | | $ | 1.18 | | | $ | 0.91 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding—basic | | | 95,691,699 | | | | 103,323,377 | | | | 98,012,424 | | | | 105,249,683 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding—diluted | | | 95,691,699 | | | | 104,672,891 | | | | 100,557,352 | | | | 106,502,893 | |
| | | | | | | | | | | | | | | | |
| [b] | Non-GAAP financial measure as defined by Regulation G. |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Year Ended December 31, | |
| | | 2012 | | | 2011 | |
Common shares | | | | | | | | |
Balance, beginning of year | | $ | 102,102 | | | $ | 110,963 | |
Issuance of common shares, net | | | 842 | | | | 1,529 | |
Repurchase of shares | | | (6,884 | ) | | | (10,390 | ) |
| | | | | | | | |
Balance, end of year | | | 96,060 | | | | 102,102 | |
| | | | | | | | |
Additional paid-in capital | | | | | | | | |
Balance, beginning of year | | | 1,847,034 | | | | 2,026,045 | |
Issuance of common shares, net | | | 3,577 | | | | 2,480 | |
Stock based compensation expense | | | 22,434 | | | | 33,208 | |
Repurchase of shares | | | (151,804 | ) | | | (214,699 | ) |
| | | | | | | | |
Balance, end of year | | | 1,721,241 | | | | 1,847,034 | |
| | | | | | | | |
Accumulated other comprehensive income | | | | | | | | |
Unrealized holdings gains on investments: | | | | | | | | |
Balance, beginning of year | | | 204,301 | | | | 118,197 | |
Holding gains on available for sale fixed maturities arising in period, net of tax | | | 114,263 | | | | 97,044 | |
Net realized gains on available for sale securities included in net income, net of tax | | | (25,966 | ) | | | (11,179 | ) |
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of tax | | | (2,643 | ) | | | 239 | |
Impact of net unrealized investment gains on life & annuity deferred acquisition costs | | | (2,842 | ) | | | — | |
| | | | | | | | |
Balance, end of year | | | 287,113 | | | | 204,301 | |
| | | | | | | | |
Cumulative foreign currency translation adjustment: | | | | | | | | |
Balance, beginning of year | | | (37,344 | ) | | | (19,251 | ) |
Foreign currency translation adjustment | | | (5,597 | ) | | | (18,093 | ) |
| | | | | | | | |
Balance, end of year | | | (42,941 | ) | | | (37,344 | ) |
| | | | | | | | |
Total accumulated other comprehensive income, end of year | | | 244,172 | | | | 166,957 | |
| | | | | | | | |
Retained earnings | | | | | | | | |
Balance, beginning of year | | | 693,142 | | | | 682,316 | |
Net income | | | 143,806 | | | | 65,282 | |
Dividends | | | (58,699 | ) | | | (54,456 | ) |
| | | | | | | | |
Balance, end of year | | | 778,249 | | | | 693,142 | |
| | | | | | | | |
Total shareholders’ equity | | $ | 2,839,722 | | | $ | 2,809,235 | |
| | | | | | | | |
ALTERRA CAPITAL HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASHFLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Year Ended December 31, | |
| | | 2012 | | | 2011 | |
OPERATING ACTIVITIES | | | | | | | | |
Net income | | $ | 143,806 | | | $ | 65,282 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Stock based compensation | | | 22,434 | | | | 33,208 | |
Amortization of premium on fixed maturities | | | 33,403 | | | | 23,562 | |
Accretion of deposit liabilities | | | 1,816 | | | | 9,298 | |
Net realized and unrealized (gains) losses on investments | | | (70,886 | ) | | | 38,339 | |
Net impairment losses recognized in earnings | | | 6,908 | | | | 2,945 | |
Changes in: | | | | | | | | |
Accrued interest income | | | 5,996 | | | | 4,079 | |
Premiums receivable | | | (10,822 | ) | | | (128,754 | ) |
Losses and benefits recoverable from reinsurers | | | (219,516 | ) | | | (114,759 | ) |
Deferred acquisition costs | | | 3,348 | | | | (34,591 | ) |
Prepaid reinsurance premiums | | | (34,768 | ) | | | (63,564 | ) |
Other assets | | | 17,280 | | | | (1,476 | ) |
Property and casualty losses | | | 459,066 | | | | 308,587 | |
Life and annuity benefits | | | (51,231 | ) | | | (59,010 | ) |
Funds withheld from reinsurers | | | (19,736 | ) | | | (8,680 | ) |
Unearned property and casualty premiums | | | 6,397 | | | | 118,401 | |
Reinsurance balances payable | | | 22,711 | | | | 31,931 | |
Accounts payable and accrued expenses | | | (3,093 | ) | | | 10,769 | |
| | | | | | | | |
Cash provided by operating activities | | | 313,113 | | | | 235,567 | |
| | | | | | | | |
INVESTING ACTIVITIES | | | | | | | | |
Purchases of available for sale securities | | | (2,236,243 | ) | | | (2,317,677 | ) |
Sales of available for sale securities | | | 923,875 | | | | 1,311,423 | |
Redemptions/maturities of available for sale securities | | | 1,250,105 | | | | 965,974 | |
Purchases of trading securities | | | (532,454 | ) | | | (76,355 | ) |
Sales of trading securities | | | 305,184 | | | | 24,563 | |
Redemptions/maturities of trading securities | | | 37,283 | | | | 68,848 | |
Purchases of held to maturity securities | | | — | | | | (2,580 | ) |
Redemptions/maturities of held to maturity securities | | | 32,040 | | | | 45,713 | |
Net (purchases) sales of other investments | | | (28,175 | ) | | | 60,783 | |
Net purchases of equity method investments | | | (66,145 | ) | | | (6,766 | ) |
Dividends from equity method investments | | | 8,694 | | | | — | |
Change in restricted cash and cash equivalents | | | 198,909 | | | | (103,458 | ) |
| | | | | | | | |
Cash used in investing activities | | | (106,927 | ) | | | (29,532 | ) |
| | | | | | | | |
FINANCING ACTIVITIES | | | | | | | | |
Net proceeds from issuance of common shares | | | 4,419 | | | | 4,009 | |
Repurchase of common shares | | | (158,688 | ) | | | (225,089 | ) |
Dividends paid | | | (58,322 | ) | | | (54,456 | ) |
Additions to deposit liabilities | | | 8,940 | | | | 1,061 | |
Payments of deposit liabilities | | | (28,881 | ) | | | (6,733 | ) |
| | | | | | | | |
Cash used in financing activities | | | (232,532 | ) | | | (281,208 | ) |
| | | | | | | | |
Effect of exchange rate changes on foreign currency cash and cash equivalents | | | (2,833 | ) | | | (11,047 | ) |
Net decrease in cash and cash equivalents | | | (29,179 | ) | | | (86,220 | ) |
Cash and cash equivalents, beginning of year | | | 469,477 | | | | 555,697 | |
| | | | | | | | |
CASH AND CASH EQUIVALENTS, END OF YEAR | | $ | 440,298 | | | $ | 469,477 | |
| | | | | | | | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid totaled $28,400 and $28,582 for the years ended December 31, 2012 and 2011, respectively.
Income taxes paid totaled $7,954 and $2,049 for the years ended December 31, 2012 and 2011, respectively.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA—THREE MONTHS ENDED DECEMBER 31, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Property & Casualty | | | | | | | | | | |
| | | Global
Insurance | | | U.S.
Insurance | | | Reinsurance | | | Alterra at
Lloyd’s | | | Total | | | Life & Annuity
Reinsurance | | | Corporate | | | Consolidated | |
Gross premiums written | | $ | 97,964 | | | $ | 94,587 | | | $ | 125,630 | | | $ | 38,233 | | | $ | 356,414 | | | $ | 629 | | | $ | — | | | $ | 357,043 | |
Reinsurance premiums ceded | | | (48,698 | ) | | | (55,863 | ) | | | (10,950 | ) | | | 1,704 | | | | (113,807 | ) | | | (74 | ) | | | — | | | | (113,881 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 49,266 | | | $ | 38,724 | | | $ | 114,680 | | | $ | 39,937 | | | $ | 242,607 | | | $ | 555 | | | $ | — | | | $ | 243,162 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 94,486 | | | $ | 98,142 | | | $ | 240,252 | | | $ | 71,248 | | | $ | 504,128 | | | $ | 629 | | | $ | — | | | $ | 504,757 | |
Earned premiums ceded | | | (47,524 | ) | | | (62,839 | ) | | | (41,447 | ) | | | (9,241 | ) | | | (161,051 | ) | | | (74 | ) | | | — | | | | (161,125 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 46,962 | | | | 35,303 | | | | 198,805 | | | | 62,007 | | | | 343,077 | | | | 555 | | | | — | | | | 343,632 | |
| | | | | | | | |
Net losses and loss expenses | | | (39,503 | ) | | | (85,476 | ) | | | (130,869 | ) | | | (39,275 | ) | | | (295,123 | ) | | | — | | | | — | | | | (295,123 | ) |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (17,006 | ) | | | — | | | | (17,006 | ) |
Acquisition costs | | | (552 | ) | | | (4,915 | ) | | | (49,339 | ) | | | (11,880 | ) | | | (66,686 | ) | | | 91 | | | | — | | | | (66,595 | ) |
General and administrative expenses | | | (7,871 | ) | | | (10,849 | ) | | | (19,002 | ) | | | (8,722 | ) | | | (46,444 | ) | | | (76 | ) | | | — | | | | (46,520 | ) |
Other income | | | — | | | | — | | | | 1,400 | | | | — | | | | 1,400 | | | | — | | | | — | | | | 1,400 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Underwriting income (loss) | | $ | (964 | ) | | $ | (65,937 | ) | | $ | 995 | | | $ | 2,130 | | | $ | (63,776 | ) | | | n/a | | | | — | | | | n/a | |
Net investment income | | | | | | | | | | | | | | | | | | | | | | | 13,727 | | | | 38,312 | | | | 52,039 | |
Net realized and unrealized gains on investments | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,476 | | | | 11,476 | |
Net impairment losses recognized in earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | (377 | ) | | | (377 | ) |
Corporate other income | | | | | | | | | | | | | | | | | | | | | | | | | | | 25 | | | | 25 | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,355 | ) | | | (8,355 | ) |
Net foreign exchange gains | | | | | | | | | | | | | | | | | | | | | | | | | | | 71 | | | | 71 | |
Merger and acquisition expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,289 | ) | | | (3,289 | ) |
Corporate general and administrative expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,668 | ) | | | (8,668 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | $ | (2,709 | ) | | $ | 29,195 | | | $ | (37,290 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (a) | | | 84.1 | % | | | 242.1 | % | | | 65.8 | % | | | 63.3 | % | | | 86.0 | % | | | | | | | | | | | | |
Acquisition cost ratio (b) | | | 1.2 | % | | | 13.9 | % | | | 24.8 | % | | | 19.2 | % | | | 19.4 | % | | | | | | | | | | | | |
General and administrative expense ratio (c) | | | 16.8 | % | | | 30.7 | % | | | 9.6 | % | | | 14.1 | % | | | 13.5 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Combined ratio (d) | | | 102.1 | % | | | 286.8 | % | | | 100.2 | % | | | 96.6 | % | | | 119.0 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA—YEAR ENDED DECEMBER 31, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Property & Casualty | | | | | | | | | | |
| | | Global
Insurance | | | U.S.
Insurance | | | Reinsurance | | | Alterra at
Lloyd’s | | | Total | | | Life & Annuity
Reinsurance | | | Corporate | | | Consolidated | |
Gross premiums written | | $ | 371,638 | | | $ | 399,061 | | | $ | 898,453 | | | $ | 299,458 | | | $ | 1,968,610 | | | $ | 2,848 | | | $ | — | | | $ | 1,971,458 | |
Reinsurance premiums ceded | | | (189,330 | ) | | | (217,964 | ) | | | (171,285 | ) | | | (72,789 | ) | | | (651,368 | ) | | | (331 | ) | | | — | | | | (651,699 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 182,308 | | | $ | 181,097 | | | $ | 727,168 | | | $ | 226,669 | | | $ | 1,317,242 | | | $ | 2,517 | | | $ | — | | | $ | 1,319,759 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 373,918 | | | $ | 394,870 | | | $ | 911,019 | | | $ | 280,030 | | | $ | 1,959,837 | | | $ | 2,848 | | | $ | — | | | $ | 1,962,685 | |
Earned premiums ceded | | | (188,416 | ) | | | (200,007 | ) | | | (142,870 | ) | | | (65,838 | ) | | | (597,131 | ) | | | (331 | ) | | | — | | | | (597,462 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 185,502 | | | | 194,863 | | | | 768,149 | | | | 214,192 | | | | 1,362,706 | | | | 2,517 | | | | — | | | | 1,365,223 | |
| | | | | | | | |
Net losses and loss expenses | | | (111,940 | ) | | | (206,862 | ) | | | (444,321 | ) | | | (163,322 | ) | | | (926,445 | ) | | | — | | | | — | | | | (926,445 | ) |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (55,582 | ) | | | — | | | | (55,582 | ) |
Acquisition costs | | | (974 | ) | | | (23,184 | ) | | | (187,078 | ) | | | (38,861 | ) | | | (250,097 | ) | | | (316 | ) | | | — | | | | (250,413 | ) |
General and administrative expenses | | | (27,593 | ) | | | (46,658 | ) | | | (71,633 | ) | | | (33,015 | ) | | | (178,899 | ) | | | (303 | ) | | | — | | | | (179,202 | ) |
Other income | | | 816 | | | | 81 | | | | 9,296 | | | | 8 | | | | 10,201 | | | | — | | | | — | | | | 10,201 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Underwriting income (loss) | | $ | 45,811 | | | $ | (81,760 | ) | | $ | 74,413 | | | $ | (20,998 | ) | | $ | 17,466 | | | | n/a | | | | — | | | | n/a | |
Net investment income | | | | | | | | | | | | | | | | | | | | | | | 55,193 | | | | 163,771 | | | | 218,964 | |
Net realized and unrealized gains on investments | | | | | | | | | | | | | | | | | | | | | | | | | | | 70,886 | | | | 70,886 | |
Net impairment losses recognized in earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | (6,908 | ) | | | (6,908 | ) |
Corporate other income | | | | | | | | | | | | | | | | | | | | | | | | | | | 100 | | | | 100 | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | (35,644 | ) | | | (35,644 | ) |
Net foreign exchange gains | | | | | | | | | | | | | | | | | | | | | | | | | | | 160 | | | | 160 | |
Merger and acquisition expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,289 | ) | | | (3,289 | ) |
Corporate general and administrative expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (52,360 | ) | | | (52,360 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income before taxes | | | | | | | | | | | | | | | | | | | | | | $ | 1,509 | | | $ | 136,716 | | | $ | 155,691 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (a) | | | 60.3 | % | | | 106.2 | % | | | 57.8 | % | | | 76.3 | % | | | 68.0 | % | | | | | | | | | | | | |
Acquisition cost ratio (b) | | | 0.5 | % | | | 11.9 | % | | | 24.4 | % | | | 18.1 | % | | | 18.4 | % | | | | | | | | | | | | |
General and administrative expense ratio (c) | | | 14.9 | % | | | 23.9 | % | | | 9.3 | % | | | 15.4 | % | | | 13.1 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Combined ratio (d) | | | 75.7 | % | | | 142.0 | % | | | 91.5 | % | | | 109.8 | % | | | 99.5 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. |
| (b) | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned. |
| (c) | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned. |
| (d) | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
n/a Not applicable
Percentage totals may not add due to rounding.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA—THREE MONTHS ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Property & Casualty | | | | | | | | | | |
| | | Global
Insurance | | | U.S.
Insurance | | | Reinsurance | | | Alterra at
Lloyd’s | | | Total | | | Life & Annuity
Reinsurance | | | Corporate | | | Consolidated | |
Gross premiums written | | $ | 97,660 | | | $ | 102,279 | | | $ | 96,942 | | | $ | 27,933 | | | $ | 324,814 | | | $ | 1,169 | | | $ | — | | | $ | 325,983 | |
Reinsurance premiums ceded | | | (50,172 | ) | | | (45,443 | ) | | | (2,546 | ) | | | (8,888 | ) | | | (107,049 | ) | | | (154 | ) | | | — | | | | (107,203 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 47,488 | | | $ | 56,836 | | | $ | 94,396 | | | $ | 19,045 | | | $ | 217,765 | | | $ | 1,015 | | | $ | — | | | $ | 218,780 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 91,077 | | | $ | 90,048 | | | $ | 225,492 | | | $ | 52,850 | | | $ | 459,467 | | | $ | 1,169 | | | $ | — | | | $ | 460,636 | |
Earned premiums ceded | | | (42,827 | ) | | | (34,078 | ) | | | (19,521 | ) | | | (14,952 | ) | | | (111,378 | ) | | | (154 | ) | | | — | | | | (111,532 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 48,250 | | | | 55,970 | | | | 205,971 | | | | 37,898 | | | | 348,089 | | | | 1,015 | | | | — | | | | 349,104 | |
| | | | | | | | |
Net losses and loss expenses | | | (15,152 | ) | | | (45,129 | ) | | | (106,906 | ) | | | (64,346 | ) | | | (231,533 | ) | | | — | | | | — | | | | (231,533 | ) |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14,564 | ) | | | — | | | | (14,564 | ) |
Acquisition costs | | | (1,084 | ) | | | (8,349 | ) | | | (46,839 | ) | | | (7,977 | ) | | | (64,249 | ) | | | (131 | ) | | | — | | | | (64,380 | ) |
General and administrative expenses | | | (6,952 | ) | | | (12,299 | ) | | | (16,690 | ) | | | (7,271 | ) | | | (43,212 | ) | | | (67 | ) | | | — | | | | (43,279 | ) |
Other income | | | (128 | ) | | | 84 | | | | (100 | ) | | | 851 | | | | 707 | | | | 413 | | | | — | | | | 1,120 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Underwriting income (loss) | | $ | 24,934 | | | $ | (9,723 | ) | | $ | 35,436 | | | $ | (40,845 | ) | | $ | 9,802 | | | | n/a | | | | — | | | | n/a | |
Net investment income | | | | | | | | | | | | | | | | | | | | | | | 11,515 | | | | 45,565 | | | | 57,080 | |
Net realized and unrealized losses on investments | | | | | | | | | | | | | | | | | | | | | | | (5,509 | ) | | | (266 | ) | | | (5,775 | ) |
Net impairment losses recognized in earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | (702 | ) | | | (702 | ) |
Corporate other income | | | | | | | | | | | | | | | | | | | | | | | | | | | 897 | | | | 897 | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | (13,296 | ) | | | (13,296 | ) |
Net foreign exchange gains | | | | | | | | | | | | | | | | | | | | | | | | | | | 753 | | | | 753 | |
Corporate general and administrative expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (11,378 | ) | | | (11,378 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | $ | (7,328 | ) | | $ | 21,573 | | | $ | 24,047 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (a) | | | 31.4 | % | | | 80.6 | % | | | 51.9 | % | | | 169.8 | % | | | 66.5 | % | | | | | | | | | | | | |
Acquisition cost ratio (b) | | | 2.2 | % | | | 14.9 | % | | | 22.7 | % | | | 21.0 | % | | | 18.5 | % | | | | | | | | | | | | |
General and administrative expense ratio (c) | | | 14.4 | % | | | 22.0 | % | | | 8.1 | % | | | 19.2 | % | | | 12.4 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Combined ratio (d) | | | 48.1 | % | | | 117.5 | % | | | 82.7 | % | | | 210.0 | % | | | 97.4 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA—YEAR ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Property & Casualty | | | | | | | | | | |
| | | Global
Insurance | | | U.S.
Insurance | | | Reinsurance | | | Alterra at
Lloyd’s | | | Total | | | Life & Annuity
Reinsurance | | | Corporate | | | Consolidated | |
Gross premiums written | | $ | 365,761 | | | $ | 374,696 | | | $ | 907,186 | | | $ | 253,067 | | | $ | 1,900,710 | | | $ | 3,356 | | | $ | — | | | $ | 1,904,066 | |
Reinsurance premiums ceded | | | (181,454 | ) | | | (142,566 | ) | | | (83,984 | ) | | | (63,708 | ) | | | (471,712 | ) | | | (365 | ) | | | — | | | | (472,077 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 184,307 | | | $ | 232,130 | | | $ | 823,202 | | | $ | 189,359 | | | $ | 1,428,998 | | | $ | 2,991 | | | $ | — | | | $ | 1,431,989 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 364,087 | | | $ | 337,041 | | | $ | 916,688 | | | $ | 224,665 | | | $ | 1,842,481 | | | $ | 3,356 | | | $ | — | | | $ | 1,845,837 | |
Earned premiums ceded | | | (175,348 | ) | | | (113,718 | ) | | | (70,510 | ) | | | (60,922 | ) | | | (420,498 | ) | | | (365 | ) | | | — | | | | (420,863 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 188,739 | | | | 223,323 | | | | 846,178 | | | | 163,743 | | | | 1,421,983 | | | | 2,991 | | | | — | | | | 1,424,974 | |
| | | | | | | | |
Net losses and loss expenses | | | (91,753 | ) | | | (153,558 | ) | | | (541,959 | ) | | | (158,323 | ) | | | (945,593 | ) | | | — | | | | — | | | | (945,593 | ) |
Claims and policy benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | (59,382 | ) | | | — | | | | (59,382 | ) |
Acquisition costs | | | 517 | | | | (36,404 | ) | | | (187,853 | ) | | | (36,805 | ) | | | (260,545 | ) | | | (557 | ) | | | — | | | | (261,102 | ) |
General and administrative expenses | | | (28,377 | ) | | | (45,171 | ) | | | (85,019 | ) | | | (31,304 | ) | | | (189,871 | ) | | | (648 | ) | | | — | | | | (190,519 | ) |
Other income | | | 686 | | | | 279 | | | | 1,225 | | | | 1,204 | | | | 3,394 | | | | 382 | | | | — | | | | 3,776 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Underwriting income (loss) | | $ | 69,812 | | | $ | (11,531 | ) | | $ | 32,572 | | | $ | (61,485 | ) | | $ | 29,368 | | | | n/a | | | | — | | | | n/a | |
Net investment income | | | | | | | | | | | | | | | | | | | | | | | 48,534 | | | | 186,312 | | | | 234,846 | |
Net realized and unrealized losses on investments | | | | | | | | | | | | | | | | | | | | | | | (10,408 | ) | | | (27,931 | ) | | | (38,339 | ) |
Net impairment losses recognized in earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,945 | ) | | | (2,945 | ) |
Corporate other income | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,620 | | | | 1,620 | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | (43,688 | ) | | | (43,688 | ) |
Net foreign exchange losses | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,312 | ) | | | (1,312 | ) |
Corporate general and administrative expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | (66,555 | ) | | | (66,555 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before taxes | | | | | | | | | | | | | | | | | | | | | | $ | (19,088 | ) | | $ | 45,501 | | | $ | 55,781 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (a) | | | 48.6 | % | | | 68.8 | % | | | 64.0 | % | | | 96.7 | % | | | 66.5 | % | | | | | | | | | | | | |
Acquisition cost ratio (b) | | | (0.3 | )% | | | 16.3 | % | | | 22.2 | % | | | 22.5 | % | | | 18.3 | % | | | | | | | | | | | | |
General and administrative expense ratio (c) | | | 15.0 | % | | | 20.2 | % | | | 10.0 | % | | | 19.1 | % | | | 13.4 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Combined ratio (d) | | | 63.4 | % | | | 105.3 | % | | | 96.3 | % | | | 138.3 | % | | | 98.2 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. |
| (b) | The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned. |
| (c) | The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned. |
| (d) | The combined ratio is calculated by dividing the sum of net losses and loss expenses, acquisition costs and general and administrative expenses by net premiums earned. |
n/a Not applicable
Percentage totals may not add due to rounding.
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL PREMIUM DATA—YEAR ENDED DECEMBER 31, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year Ended December 31, 2012 | | | | | | Year Ended December 31, 2011 | |
| | | | | Gross Premiums
Written | | | Percentage of Total
Gross Premiums
Written | | | Movement on Prior
Year Period | | | Gross Premiums
Written [a] | | | Percentage of Total
Gross Premiums
Written [a] | |
Property & Casualty: | | | | | | | | | | | | | | |
Global Insurance: | | | | | | | | | | | | | | |
Aviation | | S | | $ | 27,514 | | | | 1.4 | % | | | (15.0 | )% | | $ | 32,376 | | | | 1.7 | % |
Excess Liability | | L | | | 102,754 | | | | 5.2 | % | | | 4.2 | % | | | 98,582 | | | | 5.2 | % |
Professional Liability | | L | | | 166,457 | | | | 8.4 | % | | | 5.4 | % | | | 157,881 | | | | 8.3 | % |
Property | | S | | | 74,913 | | | | 3.8 | % | | | (2.6 | )% | | | 76,922 | | | | 4.0 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 371,638 | | | | 18.9 | % | | | 1.6 | % | | | 365,761 | | | | 19.2 | % |
U.S. Insurance: | | | | | | | | | | | | | | |
General/Excess Liability | | L | | | 100,265 | | | | 5.1 | % | | | (4.2 | )% | | | 104,654 | | | | 5.5 | % |
Marine | | S | | | 100,887 | | | | 5.1 | % | | | 14.0 | % | | | 88,493 | | | | 4.6 | % |
Professional Liability | | L | | | 61,238 | | | | 3.1 | % | | | 38.6 | % | | | 44,169 | | | | 2.3 | % |
Property | | S | | | 136,671 | | | | 6.9 | % | | | (0.5 | )% | | | 137,380 | | | | 7.2 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 399,061 | | | | 20.2 | % | | | 6.5 | % | | | 374,696 | | | | 19.7 | % |
Reinsurance: | | | | | | | | | | | | | | |
Agriculture | | S | | | 23,074 | | | | 1.2 | % | | | (24.8 | )% | | | 30,682 | | | | 1.6 | % |
Auto | | S | | | 53,443 | | | | 2.7 | % | | | (45.7 | )% | | | 98,360 | | | | 5.2 | % |
Aviation | | S | | | 28,332 | | | | 1.4 | % | | | 77.2 | % | | | 15,991 | | | | 0.8 | % |
Credit/Surety | | S | | | 64,978 | | | | 3.3 | % | | | 57.7 | % | | | 41,210 | | | | 2.2 | % |
General Casualty | | L | | | 83,212 | | | | 4.2 | % | | | 11.5 | % | | | 74,652 | | | | 3.9 | % |
Marine & Energy | | S | | | 25,851 | | | | 1.3 | % | | | 7.7 | % | | | 24,012 | | | | 1.3 | % |
Medical Malpractice | | L | | | 22,708 | | | | 1.2 | % | | | (39.2 | )% | | | 37,345 | | | | 2.0 | % |
Other | | S | | | 4,081 | | | | 0.2 | % | | | 32.9 | % | | | 3,071 | | | | 0.2 | % |
Professional Liability | | L | | | 164,719 | | | | 8.4 | % | | | 3.4 | % | | | 159,293 | | | | 8.4 | % |
Property | | S | | | 382,566 | | | | 19.4 | % | | | 8.7 | % | | | 351,791 | | | | 18.5 | % |
Whole Account | | S/L | | | 6,302 | | | | 0.3 | % | | | (82.4 | )% | | | 35,800 | | | | 1.9 | % |
Workers’ Compensation | | L | | | 39,187 | | | | 2.0 | % | | | 12.0 | % | | | 34,979 | | | | 1.8 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 898,453 | | | | 45.6 | % | | | (1.0 | )% | | | 907,186 | | | | 47.6 | % |
Alterra at Lloyd’s: | | | | | | | | | | | | | | |
Accident & Health | | S | | | 43,045 | | | | 2.2 | % | | | 16.0 | % | | | 37,093 | | | | 1.9 | % |
Agriculture | | S | | | 18,321 | | | | 0.9 | % | | | n/m | | | | — | | | | — | |
Aviation | | S | | | 16,287 | | | | 0.8 | % | | | 22.7 | % | | | 13,269 | | | | 0.7 | % |
Financial Institutions | | L | | | 26,238 | | | | 1.3 | % | | | (3.6 | )% | | | 27,205 | | | | 1.4 | % |
International Casualty | | L | | | 65,919 | | | | 3.3 | % | | | 27.0 | % | | | 51,902 | | | | 2.7 | % |
Marine | | S | | | 9,262 | | | | 0.5 | % | | | n/m | | | | 1,493 | | | | 0.1 | % |
Professional Liability | | L | | | 20,053 | | | | 1.0 | % | | | (3.1 | )% | | | 20,696 | | | | 1.1 | % |
Property | | S | | | 100,333 | | | | 5.1 | % | | | (1.1 | )% | | | 101,409 | | | | 5.3 | % |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 299,458 | | | | 15.2 | % | | | 18.3 | % | | | 253,067 | | | | 13.3 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Aggregate Property & Casualty | | | | $ | 1,968,610 | | | | 99.9 | % | | | 3.6 | % | | $ | 1,900,710 | | | | 99.8 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Life & Annuity: | | | | | | | | | | | | | | |
Life | | | | $ | 2,848 | | | | 0.1 | % | | | 86.1 | % | | $ | 1,530 | | | | 0.1 | % |
Annuity | | | | | — | | | | — | | | | (100.0 | )% | | | 1,826 | | | | 0.1 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Aggregate Life & Annuity | | | | $ | 2,848 | | | | 0.1 | % | | | (15.1 | )% | | $ | 3,356 | | | | 0.2 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Aggregate Property & Casualty and Life & Annuity | | | | $ | 1,971,458 | | | | 100.0 | % | | | 3.5 | % | | $ | 1,904,066 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | | | | | | | |
S = Short tail lines | | | | $ | 1,112,708 | | | | 56.5 | % | | | | | | $ | 1,071,452 | | | | 56.4 | % |
L = Long tail lines | | | | | 855,902 | | | | 43.5 | % | | | | | | | 829,258 | | | | 43.6 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Aggregate Property & Casualty | | | | $ | 1,968,610 | | | | | | | | | | | $ | 1,900,710 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Property [b] | | | | $ | 694,483 | | | | 35.3 | % | | | | | | $ | 667,502 | | | | 35.1 | % |
Casualty [c] | | | | | 852,750 | | | | 43.3 | % | | | | | | | 811,358 | | | | 42.7 | % |
Specialty [d] | | | | | 421,377 | | | | 21.4 | % | | | | | | | 421,850 | | | | 22.2 | % |
| | | | | | | | | | | | | | | | | | | | | | |
Aggregate Property & Casualty | | | | $ | 1,968,610 | | | | | | | | | | | $ | 1,900,710 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| [a] | Comparative period has been re-presented to conform with the current period’s presentation. |
| [b] | Property includes property lines of business. |
| [c] | Casualty includes excess liability, financial institutions, general liability, international casualty, medical malpractice, professional liability and workers’ compensation lines of business. |
| [d] | Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business. |
Percentage totals may not add due to rounding.
n/m Not meaningful.
ALTERRA CAPITAL HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (UNAUDITED)
Net Operating Income and Net Operating Income per Diluted Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Net income (loss) before tax | | $ | (37,290 | ) | | $ | 24,047 | | | $ | 155,691 | | | $ | 55,781 | |
Net realized and unrealized (gains) losses on investments not included in operating income, before tax [a] | | | (888 | ) | | | 1,059 | | | | (28,964 | ) | | | 29,486 | |
Foreign exchange (gains) losses, before tax | | | (71 | ) | | | (753 | ) | | | (160 | ) | | | 1,312 | |
Merger and acquisition expenses, before tax | | | 3,239 | | | | — | | | | 3,239 | | | | — | |
| | | | | | | | | | | | | | | | |
Net operating income (loss) before tax | | $ | (35,010 | ) | | $ | 24,353 | | | $ | 129,806 | | | $ | 86,579 | |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | (51,810 | ) | | $ | 30,948 | | | $ | 143,806 | | | $ | 65,282 | |
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] | | | (1,094 | ) | | | 1,271 | | | | (27,826 | ) | | | 30,391 | |
Foreign exchange (gains) losses, net of tax | | | (48 | ) | | | (534 | ) | | | (116 | ) | | | 927 | |
Merger and acquisition expenses, net tax | | | 3,239 | | | | — | | | | 3,239 | | | | — | |
| | | | | | | | | | | | | | | | |
Net operating income (loss) | | $ | (49,713 | ) | | $ | 31,685 | | | $ | 119,103 | | | $ | 96,600 | |
| | | | | | | | | | | | | | | | |
Net income (loss) per diluted share | | $ | (0.54 | ) | | $ | 0.30 | | | $ | 1.43 | | | $ | 0.61 | |
Net realized and unrealized (gains) losses on investments not included in operating income, net of tax [a] | | | (0.01 | ) | | | 0.01 | | | | (0.28 | ) | | | 0.29 | |
Foreign exchange losses, net of tax | | | — | | | | (0.01 | ) | | | — | | | | 0.01 | |
Merger and acquisition expenses, net of tax | | | 0.03 | | | | — | | | | 0.03 | | | | — | |
| | | | | | | | | | | | | | | | |
Net operating income (loss) per diluted share | | $ | (0.52 | ) | | $ | 0.30 | | | $ | 1.18 | | | $ | 0.91 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding—basic | | | 95,691,699 | | | | 103,323,377 | | | | 98,012,424 | | | | 105,249,683 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding—diluted | | | 95,691,699 | | | | 104,672,891 | | | | 100,557,352 | | | | 106,502,893 | |
| | | | | | | | | | | | | | | | |
| [a] | Net realized and unrealized (gains) losses on investments not included in operating income includes realized and unrealized (gains) losses on trading securities, realized (gains) losses on available for sale securities, net impairment losses recognized in earnings, earnings from equity method investments in run-off and changes in fair value of derivatives, catastrophe bonds and structured deposits. |
Per share totals may not add due to rounding.
Annualized Net Operating Return on Average Shareholders’ Equity
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Net income (loss) | | $ | (51,810 | ) | | $ | 30,948 | | | $ | 143,806 | | | $ | 65,282 | |
Annualized net income (loss) | | | (207,240 | ) | | | 123,792 | | | | 143,806 | | | | 65,282 | |
| | | | |
Net operating income (loss) | | $ | (49,713 | ) | | $ | 31,685 | | | $ | 119,103 | | | $ | 96,600 | |
Annualized net operating income (loss) | | | (198,852 | ) | | | 126,740 | | | | 119,103 | | | | 96,600 | |
| | | | |
Average shareholders’ equity [b] | | $ | 2,881,449 | | | $ | 2,826,987 | | | $ | 2,862,663 | | | $ | 2,806,191 | |
| | | | |
Annualized return on average shareholders’ equity | | | (7.2 | )% | | | 4.4 | % | | | 5.0 | % | | | 2.3 | % |
Annualized net operating return on average shareholders’ equity | | | (6.9 | )% | | | 4.5 | % | | | 4.2 | % | | | 3.4 | % |
| [b] | Average shareholders equity is computed as the average of the quarterly average shareholders’ equity balances. |
Diluted Tangible Book Value Per Share
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | |
| | | December 31, 2012 | | | December 31, 2011 | |
Shareholders’ equity | | $ | 2,839,722 | | | $ | 2,809,235 | |
Goodwill and intangible assets | | | 54,751 | | | | 56,111 | |
| | | | | | | | |
Tangible book value | | $ | 2,784,971 | | | $ | 2,753,124 | |
| | | | | | | | |
Diluted shares outstanding | | | 100,213,325 | | | | 104,406,779 | |
| | |
Diluted tangible book value per share | | $ | 27.79 | | | $ | 26.37 | |
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA—DECEMBER 31, 2012 (UNAUDITED)
(Expressed in thousands of United States Dollars)
| | | | | | | | | | | | | | | | |
Type of Investment | | As of December 31,
2012 | | | Investment
Distribution | | | As of December 31,
2011 | | | Investment
Distribution | |
Cash and cash equivalents (restricted and unrestricted) | | $ | 694,756 | | | | 8.6 | % | | $ | 922,844 | | | | 11.8 | % |
| | | | | | | | | | | | | | | | |
U.S. government and agencies | | $ | 885,370 | | | | 11.0 | % | | $ | 751,806 | | | | 9.6 | % |
Non-U.S. governments | | | 246,712 | | | | 3.1 | % | | | 164,621 | | | | 2.1 | % |
Corporate securities | | | 2,610,605 | | | | 32.5 | % | | | 2,646,358 | | | | 33.9 | % |
Municipal securities | | | 273,336 | | | | 3.4 | % | | | 263,007 | | | | 3.4 | % |
Asset-backed securities | | | 371,597 | | | | 4.6 | % | | | 247,965 | | | | 3.2 | % |
Residential mortgage-backed securities | | | 1,234,670 | | | | 15.4 | % | | | 1,296,277 | | | | 16.6 | % |
Commercial mortgage-backed securities | | | 454,259 | | | | 5.7 | % | | | 361,097 | | | | 4.6 | % |
| | | | | | | | | | | | | | | | |
Fixed maturities at fair value | | $ | 6,076,549 | | | | 75.6 | % | | $ | 5,731,131 | | | | 73.3 | % |
| | | | | | | | | | | | | | | | |
U.S. government and agencies | | $ | 27,639 | | | | 0.3 | % | | $ | 29,201 | | | | 0.4 | % |
Non-U.S. governments | | | 527,843 | | | | 6.6 | % | | | 524,449 | | | | 6.7 | % |
Corporate securities | | | 296,360 | | | | 3.7 | % | | | 319,609 | | | | 4.1 | % |
Asset-backed securities | | | 424 | | | | — | | | | 1,000 | | | | — | |
| | | | | | | | | | | | | | | | |
Fixed maturities at amortized cost | | $ | 852,266 | | | | 10.6 | % | | $ | 874,259 | | | | 11.2 | % |
| | | | | | | | | | | | | | | | |
Equity method investments | | $ | 92,050 | | | | 1.1 | % | | $ | 13,670 | | | | 0.2 | % |
| | | | | | | | | | | | | | | | |
Other investments | | $ | 316,955 | | | | 3.9 | % | | $ | 272,845 | | | | 3.5 | % |
| | | | | | | | | | | | | | | | |
Total invested assets | | $ | 8,032,576 | | | | 100.0 | % | | $ | 7,814,749 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Credit Rating | | As of December 31,
2012 | | | Ratings
Distribution | | | As of December 31,
2011 | | | Ratings
Distribution | |
U.S. government and agencies [a] | | $ | 2,092,893 | | | | 30.2 | % | | $ | 1,869,405 | | | | 28.3 | % |
AAA | | | 1,170,299 | | | | 16.9 | % | | | 948,861 | | | | 14.4 | % |
AA | | | 693,411 | | | | 10.0 | % | | | 883,783 | | | | 13.4 | % |
A | | | 1,520,959 | | | | 22.0 | % | | | 1,378,361 | | | | 20.9 | % |
BBB | | | 320,215 | | | | 4.6 | % | | | 281,983 | | | | 4.3 | % |
BB | | | 67,041 | | | | 1.0 | % | | | 84,803 | | | | 1.3 | % |
B | | | 158,934 | | | | 2.3 | % | | | 131,159 | | | | 2.0 | % |
CCC or lower | | | 38,420 | | | | 0.6 | % | | | 53,157 | | | | 0.8 | % |
Not rated | | | 14,377 | | | | 0.2 | % | | | 99,619 | | | | 1.5 | % |
| | | | | | | | | | | | | | | | |
Fixed maturities at fair value | | $ | 6,076,549 | | | | 87.7 | % | | $ | 5,731,131 | | | | 86.8 | % |
| | | | | | | | | | | | | | | | |
U.S. government and agencies | | $ | 27,639 | | | | 0.4 | % | | $ | 29,201 | | | | 0.4 | % |
AAA | | | 406,659 | | | | 5.9 | % | | | 619,832 | | | | 9.4 | % |
AA | | | 284,282 | | | | 4.1 | % | | | 82,511 | | | | 1.2 | % |
A | | | 99,235 | | | | 1.4 | % | | | 117,600 | | | | 1.8 | % |
BBB | | | 32,031 | | | | 0.5 | % | | | 24,117 | | | | 0.4 | % |
BB | | | 2,420 | | | | — | | | | 998 | | | | — | |
| | | | | | | | | | | | | | | | |
Fixed maturities at amortized cost | | $ | 852,266 | | | | 12.3 | % | | $ | 874,259 | | | | 13.2 | % |
| | | | | | | | | | | | | | | | |
Total fixed maturities | | $ | 6,928,815 | | | | 100.0 | % | | $ | 6,605,390 | | | | 100.0 | % |
| | | | | | | | | | | | | | | | |
| [a] | Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,207,523 (December 31, 2011: $1,117,599). |
Percentage totals may not add due to rounding.
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | | Year Ended December 31, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
Net investment income | | $ | 52,039 | | | $ | 57,080 | | | $ | 218,964 | | | $ | 234,846 | |
| | | | | | | | | | | | | | | | |
Realized and unrealized (losses) gains on trading fixed maturities | | | (1,322 | ) | | | 763 | | | | 3,952 | | | | 2,031 | |
Net realized gains on available for sale fixed maturities | | | 3,312 | | | | 1,990 | | | | 26,148 | | | | 11,509 | |
Increase (decrease) in fair value of hedge funds | | | 4,871 | | | | (5,415 | ) | | | 13,901 | | | | (11,795 | ) |
Decrease in fair value of catastrophe bonds | | | — | | | | — | | | | — | | | | (25,641 | ) |
Decrease in fair value of structured deposit | | | (1,004 | ) | | | (312 | ) | | | (291 | ) | | | (2,269 | ) |
Income from equity method investments | | | 5,253 | | | | 1,023 | | | | 20,930 | | | | 1,445 | |
Increase (decrease) in fair value of derivatives | | | 366 | | | | (3,824 | ) | | | 6,246 | | | | (13,619 | ) |
| | | | | | | | | | | | | | | | |
Net realized and unrealized gains (losses) on investments | | $ | 11,476 | | | $ | (5,775 | ) | | $ | 70,886 | | | $ | (38,339 | ) |
| | | | | | | | | | | | | | | | |
Net impairment losses recognized in earnings | | $ | (377 | ) | | $ | (702 | ) | | $ | (6,908 | ) | | $ | (2,945 | ) |
| | | | | | | | | | | | | | | | |
Contacts
Investors:
Susan Spivak Bernstein, 1-212-898-6640
Senior Vice President
susan.spivak@alterra-bm.com
Press:
Kekst and Company
Peter Hill, 1-212-521-4800
peter-hill@kekst.com
