Exhibit 12
HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
Three months ended March 31, | ||||||||
2013 | 2012 | |||||||
Net loss ratio | ||||||||
Loss and loss adjustment expense, net | $ | 332,697 | $ | 328,928 | ||||
Net earned premium | 561,186 | 547,141 | ||||||
Net loss ratio (1) | 59.3 | % | 60.1 | % | ||||
(Net loss ratio = incurred loss and loss adjustment expense divided by net earned premium) | ||||||||
Expense ratio (2) | ||||||||
Segment underwriting expense (3) | $ | 138,167 | $ | 137,680 | ||||
Segment revenue (4) | 564,729 | 541,592 | ||||||
Expense ratio | 24.5 | % | 25.4 | % | ||||
(Expense ratio = segment underwriting expense divided by segment revenue) | ||||||||
Combined ratio (2) | 83.8 | % | 85.5 | % | ||||
(Combined ratio = net loss ratio plus expense ratio) | ||||||||
Accident year net loss ratio | ||||||||
Loss and loss adjustment expense, net | $ | 332,697 | $ | 328,928 | ||||
Add: Favorable (adverse) development | - | - | ||||||
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Accident year net loss and loss adjustment expense | $ | 332,697 | $ | 328,928 | ||||
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Net earned premium | $ | 561,186 | $ | 547,141 | ||||
Add: (Increase) decrease related to prior year reinstatement premium | - | - | ||||||
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Accident year net earned premium | $ | 561,186 | $ | 547,141 | ||||
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Accident year net loss ratio | 59.3 | % | 60.1 | % | ||||
(Accident year net loss ratio = accident year net loss and loss adjustment expense divided by accident year net earned premium) |
(1) | Calculated for our insurance companies using financial data reported in accordance with generally accepted accounting principles. |
(2) | The 2012 expense ratio and combined ratio have been adjusted to reflect change in Exited Lines in 2012. See Note 10, “Segments” to the Consolidated Financial Statements. |
(3) | Sum of Other Expense for each of our insurance segments. |
(4) | Sum of Segment Revenue for each of our insurance segments. |
HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
Three months ended March 31, | ||||||||
2013 | 2012 | |||||||
Net paid loss ratio | ||||||||
Losses paid, net of reinsurance | $ | 299,529 | $ | 344,522 | ||||
Net earned premium | 561,186 | 547,141 | ||||||
Net paid loss ratio | 53.4 | % | 63.0 | % | ||||
(Net paid loss ratio = losses paid, net of reinsurance, divided by net earned premium) | ||||||||
Ratio of earnings to fixed charges | ||||||||
Interest factor of rent expense (5) | $ | 1,250 | $ | 1,312 | ||||
Interest expense | 6,471 | 6,909 | ||||||
Capitalized interest | - | 13 | ||||||
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Total fixed charges | $ | 7,721 | $ | 8,234 | ||||
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Earnings before income tax expense | $ | 151,396 | $ | 116,960 | ||||
Interest factor of rent expense (5) | 1,250 | 1,312 | ||||||
Interest expense | 6,471 | 6,909 | ||||||
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Earnings per calculation | $ | 159,117 | $ | 125,181 | ||||
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Ratio of earnings to fixed charges (6) | 20.61 | 15.20 | ||||||
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(5) | Estimated to be 33% of total rent expense. |
(6) | Earnings per calculation divided by total fixed charges. |