Exhibit 12
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
STATEMENT OF RATIOS
Years ended December 31, | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Gross premium to surplus ratio: | ||||||||||||||||||||
Gross written premium | $ | 2,049,116 | $ | 1,992,361 | $ | 1,746,413 | $ | 1,163,397 | $ | 1,014,833 | ||||||||||
Policyholders’ surplus | 1,110,268 | 844,851 | 591,889 | 523,807 | 401,393 | |||||||||||||||
Premium to surplus ratio (1) | 184.6 | % | 235.8 | % | 295.1 | % | 222.1 | % | 252.8 | % | ||||||||||
(Gross premium to surplus ratio = gross written premium divided by policyholders’ surplus) | ||||||||||||||||||||
Net premium to surplus ratio: | ||||||||||||||||||||
Net written premium | $ | 1,495,931 | $ | 1,121,343 | $ | 867,795 | $ | 545,475 | $ | 371,409 | ||||||||||
Policyholders’ surplus | 1,110,268 | 844,851 | 591,889 | 523,807 | 401,393 | |||||||||||||||
Premium to surplus ratio (1) | 134.7 | % | 132.7 | % | 146.6 | % | 104.1 | % | 92.5 | % | ||||||||||
(Net premium to surplus ratio = net written premium divided by policyholders’ surplus) | ||||||||||||||||||||
Loss ratio: | ||||||||||||||||||||
Incurred loss and loss adjustment expense | $ | 925,130 | $ | 651,675 | $ | 494,024 | $ | 313,744 | $ | 266,537 | ||||||||||
Net earned premium | 1,378,100 | 1,013,573 | 739,376 | 506,371 | 341,779 | |||||||||||||||
Loss ratio (1) | 67.1 | % | 64.3 | % | 66.8 | % | 62.0 | % | 78.0 | % | ||||||||||
(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium) | ||||||||||||||||||||
Expense ratio: | ||||||||||||||||||||
Underwriting expense | $ | 381,680 | $ | 299,789 | $ | 199,927 | $ | 130,578 | $ | 88,461 | ||||||||||
Net written premium | 1,495,931 | 1,121,343 | 867,795 | 545,475 | 371,409 | |||||||||||||||
Expense ratio (1) | 25.5 | % | 26.7 | % | 23.0 | % | 23.9 | % | 23.8 | % | ||||||||||
(Expense ratio = underwriting expense divided by net written premium) | ||||||||||||||||||||
Combined ratio (1) | 92.6 | % | 91.0 | % | 89.8 | % | 85.9 | % | 101.8 | % | ||||||||||
(Combined ratio = loss ratio plus expense ratio) |
(1) | Calculated for our insurance companies using financial data reported in accordance with statutory accounting principles. |
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
STATEMENT OF RATIOS
(continued)
(continued)
Years ended December 31, | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
(As restated) | (As restated) | (As restated) | (As restated) | (As restated) | ||||||||||||||||
Loss ratio: | ||||||||||||||||||||
Incurred loss and loss adjustment expense | $ | 919,697 | $ | 645,230 | $ | 488,000 | $ | 307,143 | $ | 267,390 | ||||||||||
Net earned premium | 1,369,988 | 1,010,692 | 738,272 | 505,521 | 342,787 | |||||||||||||||
Loss ratio (2) | 67.1 | % | 63.8 | % | 66.1 | % | 60.8 | % | 78.0 | % | ||||||||||
(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium) | ||||||||||||||||||||
Expense ratio: | ||||||||||||||||||||
Underwriting expense | $ | 357,727 | $ | 269,390 | $ | 181,637 | $ | 128,938 | $ | 87,052 | ||||||||||
Net earned premium | 1,369,988 | 1,010,692 | 738,272 | 505,521 | 342,787 | |||||||||||||||
Expense ratio (2) | 26.1 | % | 26.7 | % | 24.6 | % | 25.5 | % | 25.4 | % | ||||||||||
(Expense ratio = underwriting expense divided by net earned premium) | ||||||||||||||||||||
Combined ratio (2) | 93.2 | % | 90.5 | % | 90.7 | % | 86.3 | % | 103.4 | % | ||||||||||
(Combined ratio = loss ratio plus expense ratio) |
(2) | Calculated for our insurance companies using financial data reported in accordance with generally accepted accounting principles. |