Alterra Capital Reports Third Quarter 2011 Results
HAMILTON, Bermuda--(BUSINESS WIRE)--Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”) today reported net income of $48.4 million, or $0.46 per diluted share, for the third quarter of 2011, compared to net income of $82.8 million, or $0.70 per diluted share, for the same quarter of 2010.
Net operating income for the third quarter of 2011 was $50.1 million, or $0.47 per diluted share, compared to net operating income of $76.0 million, or $0.64 per diluted share, for the same quarter of 2010. Annualized net operating return on average shareholders’ equity for the third quarter of 2011 was 7.1%.
For the nine months ended September 30, 2011, Alterra reported net income of $34.3 million, or $0.32 per diluted share, compared to net income of $222.7 million, or $2.50 per diluted share, for the same period of 2010. Net operating income for the nine months ended September 30, 2011 was $64.9 million, or $0.61 per diluted share, compared to net operating income of $175.5 million, or $1.97 per diluted share, for the same period of 2010. Annualized net operating return on average shareholders’ equity for the nine months ended September 30, 2011 was 3.1%.
Alterra’s 2010 results include the results of operations for the former Harbor Point Limited (“Harbor Point”) companies from May 12, 2010. Accordingly, a comparison of Alterra’s gross premiums written and other results of operations for the current and prior nine month periods are not meaningful. Selected pro forma combined results of operations for periods prior to the merger for the reinsurance segment are provided in Alterra’s third quarter financial supplement available on Alterra’s website at www.alterracap.com.
W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra, said: “Alterra’s reported results reflect a balanced quarter, with solid operating earnings across our segments and nearly 5% growth in diluted book value per share. Earnings are down compared to the prior year, pressured by higher catastrophe losses and lower investment yields. However, we remain pleased with the consistency of our underwriting results in the face of a very challenging year for property catastrophe business. The relatively limited impact of this year’s property catastrophe events on our results and the absence of negative development of our aggregated loss estimates beyond initially stated ranges continue to reflect favorably on the quality of Alterra’s diversified underwriting, risk management and reserving capabilities. As we near the end of the Atlantic hurricane season and approach the January renewal season, we believe that we have the capital and operational breadth and flexibility to take advantage of what appear to be more favorable market opportunities.”
Third quarter 2011 results for Alterra include:
- Property and casualty gross premiums written of $385.5 million, representing an increase of $61.6 million, or 19.0%; net premiums written of $294.7 million, representing an increase of $31.3 million, or 11.9%; and net premiums earned of $346.3 million, representing an increase of $5.1 million, or 1.5%; each as compared to the same quarter of 2010;
- A combined ratio on property and casualty business of 87.7% compared to 86.0% for the same quarter of 2010;
- Property catastrophe event and significant per-risk net losses of $42.8 million ($42.1 million net of reinstatement premiums) compared to $14.1 million in the same quarter of 2010. Losses net of reinsurance and reinstatements include $21.8 million for natural disasters during the third quarter of 2011, including Hurricane Irene. The remainder of the net losses relate to increased loss estimates on property catastrophe loss events from the first half of the year, which remain within previously announced ranges;
- Net favorable development on prior years’ loss reserves of $31.7 million, or 9.1 combined ratio points, compared to $36.4 million, or 10.7 combined ratio points, in the same quarter of 2010;
- Net investment income of $60.3 million compared to $59.7 million in the same quarter of 2010, an increase of 1.0%; and
- Net operating income of $50.1 million, or $0.47 per diluted share, representing an annualized net operating return on average shareholders’ equity of 7.1%.
Gross premiums written from property and casualty underwriting for the third quarter of 2011 were $385.5 million, generated by the segments as follows: insurance - $86.0 million, an increase of $8.1 million, or 10.3%; reinsurance - $156.8 million, an increase of $32.8 million, or 26.4%; U.S. specialty - $72.2 million, an increase of $8.0 million, or 12.4%; and Alterra at Lloyd’s - $70.6 million, an increase of $12.8 million, or 22.2%; each as compared to the same quarter of 2010.
Combined ratios for the third quarter of 2011 by segment were 64.1% for insurance, 88.2% for reinsurance, 101.4% for U.S. specialty and 95.8% for Alterra at Lloyd’s.
Results for the nine months ended September 30, 2011 include:
- Property and casualty gross premiums written of $1,575.9 million, representing an increase of $483.6 million, or 44.3%; net premiums written of $1,211.2 million, representing an increase of $412.2 million, or 51.6%; and net premiums earned of $1,073.9 million, representing an increase of $246.7 million, or 29.8%; each as compared to the same period of 2010. These increases primarily reflect the impact of the merger with Harbor Point - whose premiums are not included for the period prior to the merger;
- A combined ratio on property and casualty business of 98.4% compared to 86.1% for the same period of 2010;
- Property catastrophe event and significant per-risk net losses of $208.7 million ($197.9 million net of reinstatement premiums) compared to $44.0 million in the same period of 2010. Property catastrophe losses principally affected the reinsurance and Alterra at Lloyd’s segments;
- Net favorable development on prior years’ loss reserves of $110.4 million, or 10.3 combined ratio points, compared to $77.6 million, or 9.4 combined ratio points, in the same period of 2010;
- Net investment income of $177.8 million compared to $161.4 million in the same period of 2010, an increase of 10.2%;
- A loss of principal of $25.0 million on a catastrophe bond investment triggered by the Japan earthquake and tsunami, included within net realized and unrealized losses on investments; and
- Net operating income of $64.9 million, or $0.61 per diluted share, representing an annualized net operating return on average shareholders’ equity of 3.1%.
Gross premiums written from property and casualty underwriting for the nine months ended September 30, 2011 were $1,575.9 million, generated by the segments as follows: insurance - $298.5 million, an increase of $12.1 million, or 4.2%; reinsurance - $780.6 million, an increase of $382.1 million, or 95.9%; U.S. specialty - $242.0 million, an increase of $13.1 million, or 5.7%; and Alterra at Lloyd’s - $254.8 million, an increase of $76.2 million, or 42.6%; each as compared to the same period of 2010.
Combined ratios for the nine months ended September 30, 2011 by segment were 72.7% for insurance, 100.3% for reinsurance, 100.5% for U.S. specialty and 116.5% for Alterra at Lloyd’s.
Balance Sheet
Total invested assets, including cash and cash equivalents, were $7,999.1 million as of September 30, 2011, an increase of $137.8 million from December 31, 2010. As of September 30, 2011, 95.1% of the fixed maturities portfolio (by carrying value) was investment-grade, a decrease from 96.0% as of December 31, 2010. As of September 30, 2011, the weighted average book yield of Alterra’s cash and fixed maturities portfolio was 3.35% and the weighted average duration was 4.2 years.
Under the Board-approved share repurchase authorization, Alterra repurchased 1,446,442 common shares during the third quarter of 2011 at an average price of $19.41 per share for a total of $28.1 million. Share repurchases under the Board-approved share repurchase authorization for the nine months ended September 30, 2011 were 7,943,592 common shares at an average price of $21.44 per share for a total of $170.3 million. As of September 30, 2011, $157.5 million remained under the Board-approved share repurchase authorization.
Shareholders’ equity was $2,844.7 million as of September 30, 2011, an increase of 1.8% from June 30, 2011. Diluted book value per share as of September 30, 2011 was $27.18, an increase of 4.6% from June 30, 2011.
A copy of Alterra’s third quarter financial supplement is available on Alterra’s website at www.alterracap.com.
Alterra will host a conference call on Wednesday, November 2, 2011 at 10:00 am (EDT) to discuss these results and related matters with interested investors and shareholders. The conference call can be accessed via telephone by dialing 1-888-680-0878 (toll-free U.S.) or 1-617-213-4855 (international) and using access code 81760320. A live broadcast of the conference call will also be available through 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 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 those 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.
Cautionary Note Regarding Forward-Looking Statements
This release includes forward-looking statements that reflect Alterra’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements. For further information regarding cautionary statements and factors affecting Alterra’s future results, please refer to the most recent reports on Form 10-K and Form 10-Q and other documents filed by Alterra with the SEC. Alterra undertakes no obligation to update or revise publicly any forward-looking statement whether as a result of new information, future developments or otherwise.
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ALTERRA CAPITAL HOLDINGS LIMITED |
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| CONSOLIDATED BALANCE SHEETS | |||||
| (Expressed in thousands of United States Dollars, except per share and share amounts) | |||||
| September 30, 2011 | December 31, 2010 | ||||
| (unaudited) | |||||
| ASSETS | |||||
| Cash and cash equivalents | $ | 869,975 | $ | 905,606 | |
| Fixed maturities, trading at fair value | 227,753 | 244,872 | |||
| Fixed maturities, available for sale at fair value | 5,662,869 | 5,392,643 | |||
| Fixed maturities, held to maturity at amortized cost (fair value $1,073,174) | 926,916 | 940,104 | |||
| Other investments, at fair value | 311,633 | 378,128 | |||
| Accrued interest income | 71,038 | 75,414 | |||
| Premiums receivable | 777,980 | 588,537 | |||
| Losses and benefits recoverable from reinsurers | 1,079,035 | 956,115 | |||
| Deferred acquisition costs | 166,353 | 111,901 | |||
| Prepaid reinsurance premiums | 214,132 | 149,252 | |||
| Trades pending settlement | 34,158 | 32,393 | |||
| Goodwill and intangible assets | 56,652 | 59,076 | |||
| Other assets | 73,836 | 83,247 | |||
| Total assets | $ | 10,472,330 | $ | 9,917,288 | |
| LIABILITIES | |||||
| Property and casualty losses | $ | 4,205,057 | $ | 3,906,134 | |
| Life and annuity benefits | 1,230,344 | 1,275,580 | |||
| Deposit liabilities | 147,493 | 147,612 | |||
| Funds withheld from reinsurers | 124,631 | 121,107 | |||
| Unearned property and casualty premiums | 1,149,108 | 905,487 | |||
| Reinsurance balances payable | 178,560 | 102,942 | |||
| Accounts payable and accrued expenses | 110,527 | 99,680 | |||
| Trades pending settlement | 41,383 | - | |||
| Senior notes | 440,489 | 440,476 | |||
| Total liabilities | 7,627,592 | 6,999,018 | |||
| SHAREHOLDERS' EQUITY | |||||
| Common shares (par value $1.00) | |||||
| 104,323,873 (2010 - 110,963,160) shares issued and outstanding | 104,324 | 110,963 | |||
| Additional paid-in capital | 1,890,763 | 2,026,045 | |||
| Accumulated other comprehensive income | 173,025 | 98,946 | |||
| Retained earnings | 676,626 | 682,316 | |||
| Total shareholders' equity | 2,844,738 | 2,918,270 | |||
| Total liabilities and shareholders' equity | $ | 10,472,330 | $ | 9,917,288 | |
| Book value per share | $ | 27.27 | $ | 26.30 | |
| Diluted book value per share | $ | 27.18 | $ | 25.99 | |
| Diluted tangible book value per share [a] | $ | 26.64 | $ | 25.46 | |
| Diluted shares outstanding | 104,665,209 | 112,290,968 | |||
| [a] Non-GAAP financial measure as defined by Regulation G. | |||||
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ALTERRA CAPITAL HOLDINGS LIMITED |
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| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) | |||||||||||||||||
| (Expressed in thousands of United States Dollars, except per share and share amounts) | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| REVENUES | |||||||||||||||||
| Gross premiums written | $ | 386,328 | $ | 325,213 | $ | 1,578,083 | $ | 1,095,333 | |||||||||
| Reinsurance premiums ceded | (90,891 | ) | (60,611 | ) | (364,874 | ) | (293,546 | ) | |||||||||
| Net premiums written | $ | 295,437 | $ | 264,602 | $ | 1,213,209 | $ | 801,787 | |||||||||
| Earned premiums | $ | 452,931 | $ | 436,244 | $ | 1,385,201 | $ | 1,132,964 | |||||||||
| Earned premiums ceded | (105,889 | ) | (93,812 | ) | (309,331 | ) | (303,032 | ) | |||||||||
| Net premiums earned | 347,042 | 342,432 | 1,075,870 | 829,932 | |||||||||||||
| Net investment income | 60,335 | 59,711 | 177,766 | 161,378 | |||||||||||||
| Net realized and unrealized (losses) gains on investments | (7,972 | ) | 15,411 | (32,564 | ) | 7,047 | |||||||||||
| Total other-than-temporary impairment losses | (692 | ) | (90 | ) | (2,003 | ) | (1,955 | ) | |||||||||
| Portion of loss recognized in other comprehensive income (loss), before taxes | (169 | ) | (61 | ) | (240 | ) | 1,084 | ||||||||||
| Net impairment losses recognized in earnings | (861 | ) | (151 | ) | (2,243 | ) | (871 | ) | |||||||||
| Other income | 1,473 | 1,327 | 3,379 | 1,946 | |||||||||||||
| Total revenues | 400,017 | 418,730 | 1,222,208 | 999,432 | |||||||||||||
| LOSSES AND EXPENSES | |||||||||||||||||
| Net losses and loss expenses | 198,521 | 191,012 | 714,060 | 475,794 | |||||||||||||
| Claims and policy benefits | 14,538 | 15,060 | 44,818 | 46,662 | |||||||||||||
| Acquisition costs | 61,434 | 60,859 | 196,722 | 133,901 | |||||||||||||
| Interest expense | 11,303 | 7,551 | 30,392 | 20,409 | |||||||||||||
| Net foreign exchange (gains) losses | (147 | ) | 3,353 | 2,065 | 267 | ||||||||||||
| Merger and acquisition expenses | - | 550 | - | (49,276 | ) | ||||||||||||
| General and administrative expenses | 61,555 | 56,650 | 202,417 | 143,827 | |||||||||||||
| Total losses and expenses | 347,204 | 335,035 | 1,190,474 | 771,584 | |||||||||||||
| INCOME BEFORE TAXES | 52,813 | 83,695 | 31,734 | 227,848 | |||||||||||||
| Income tax expense (benefit) | 4,427 | 858 | (2,600 | ) | 5,183 | ||||||||||||
| NET INCOME [a] | 48,386 | 82,837 | 34,334 | 222,665 | |||||||||||||
| Change in net unrealized gains and losses on fixed maturities, net of tax | 61,540 | 74,383 | 89,774 | 169,039 | |||||||||||||
| Foreign currency translation adjustment | (20,733 | ) | 13,224 | (15,695 | ) | (4,145 | ) | ||||||||||
| COMPREHENSIVE INCOME [a] | $ | 89,193 | $ | 170,444 | $ | 108,413 | $ | 387,559 | |||||||||
| Net income per share | $ | 0.46 | $ | 0.71 | $ | 0.32 | $ | 2.52 | |||||||||
| Net income per diluted share | $ | 0.46 | $ | 0.70 | $ | 0.32 | $ | 2.50 | |||||||||
| Net operating income per diluted share [b] | $ | 0.47 | $ | 0.64 | $ | 0.61 | $ | 1.97 | |||||||||
| Weighted average shares outstanding - basic | 104,830,300 | 117,200,505 | 105,866,771 | 88,253,609 | |||||||||||||
| Weighted average shares outstanding - diluted | 105,665,282 | 117,957,942 | 107,092,882 | 89,001,515 | |||||||||||||
| [a] Includes the results of Harbor Point Limited from May 12, 2010. | |||||||||||||||||
| [b] Non-GAAP measure as defined by Regulation G. | |||||||||||||||||
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ALTERRA CAPITAL HOLDINGS LIMITED |
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| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) | |||||||||
| (Expressed in thousands of United States Dollars) | |||||||||
| Nine Months Ended September 30, | |||||||||
| 2011 | 2010 | ||||||||
| Common shares | |||||||||
| Balance, beginning of period | $ | 110,963 | $ | 55,867 | |||||
| Issuance of common shares, net | 1,384 | 65,084 | |||||||
| Repurchase of common shares | (8,023 | ) | (5,052 | ) | |||||
| Balance, end of period | 104,324 | 115,899 | |||||||
| Additional paid-in capital | |||||||||
| Balance, beginning of period | 2,026,045 | 752,309 | |||||||
| Issuance of common shares, net | 632 | 1,418,214 | |||||||
| Stock based compensation expense | 28,014 | 36,600 | |||||||
| Repurchase of common shares | (163,928 | ) | (93,391 | ) | |||||
| Balance, end of period | 1,890,763 | 2,113,732 | |||||||
| Accumulated other comprehensive income | |||||||||
| Unrealized holding gains (losses) on investments: | |||||||||
| Balance, beginning of period | 118,197 | 36,791 | |||||||
| Holding gains on available for sale securities arising in period [a] | 97,610 | 179,482 | |||||||
| Net realized gains on available for sale securities included in net income [a] | (8,076 | ) | (9,359 | ) | |||||
| Portion of other-than-temporary impairment losses recognised in other comprehensive income [a] | 240 | (1,084 | ) | ||||||
| Balance, end of period | 207,971 | 205,830 | |||||||
| Cumulative foreign currency translation adjustment: | |||||||||
| Balance, beginning of period | (19,251 | ) | (11,360 | ) | |||||
| Foreign currency translation adjustments | (15,695 | ) | (4,145 | ) | |||||
| Balance, end of period | (34,946 | ) | (15,505 | ) | |||||
| Total accumulated other comprehensive income | 173,025 | 190,325 | |||||||
| Retained earnings | |||||||||
| Balance, beginning of period | 682,316 | 731,026 | |||||||
| Net income | 34,334 | 222,665 | |||||||
| Dividends | (40,024 | ) | (337,110 | ) | |||||
| Balance, end of period | 676,626 | 616,581 | |||||||
| Total shareholders' equity | $ | 2,844,738 | $ | 3,036,537 | |||||
| [a] Net of tax | |||||||||
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ALTERRA CAPITAL HOLDINGS LIMITED |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| (Expressed in thousands of United States Dollars) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | 34,334 | $ | 222,665 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Stock based compensation | 28,014 | 36,600 | ||||||
| Amortization of premium on fixed maturities | 15,383 | 10,973 | ||||||
| Accretion of deposit liabilities | 4,245 | 3,940 | ||||||
| Net realized and unrealized losses (gains) on investments | 32,564 | (7,047 | ) | |||||
| Net impairment losses recognized in earnings | 2,243 | 871 | ||||||
| Negative goodwill gain | - | (95,788 | ) | |||||
| Changes in: | ||||||||
| Accrued interest income | 4,370 | (822 | ) | |||||
| Premiums receivable | (188,751 | ) | 266,878 | |||||
| Losses and benefits recoverable from reinsurers | (123,268 | ) | (9,975 | ) | ||||
| Deferred acquisition costs | (54,495 | ) | (38,485 | ) | ||||
| Prepaid reinsurance premiums | (65,156 | ) | 10,865 | |||||
| Other assets | 5,652 | 3,407 | ||||||
| Property and casualty losses | 293,119 | (166,930 | ) | |||||
| Life and annuity benefits | (47,023 | ) | (24,819 | ) | ||||
| Funds withheld from reinsurers | 3,524 | (20,220 | ) | |||||
| Unearned property and casualty premiums | 244,206 | 12,092 | ||||||
| Reinsurance balances payable | 75,643 | (28,025 | ) | |||||
| Accounts payable and accrued expenses | 10,871 | (7,167 | ) | |||||
| Cash provided by operating activities | 275,475 | 169,013 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of available for sale securities | (1,929,474 | ) | (1,752,420 | ) | ||||
| Sales of available for sale securities | 1,126,984 | 892,465 | ||||||
| Redemptions/maturities of available for sale securities | 660,245 | 702,506 | ||||||
| Purchases of trading securities | (50,971 | ) | (55,812 | ) | ||||
| Sales of trading securities | 24,563 | 14,097 | ||||||
| Redemptions/maturities of trading securities | 44,231 | 19,361 | ||||||
| Purchases of held to maturity securities | (2,580 | ) | (16,961 | ) | ||||
| Redemptions/maturities of held to maturity securities | 18,251 | 23,599 | ||||||
| Net purchases/sales of other investments | 27,353 | 78,985 | ||||||
| Acquisition of subsidiary, net of cash acquired | - | 446,819 | ||||||
| Cash (used in) provided by investing activities | (81,398 | ) | 352,639 | |||||
| FINANCING ACTIVITIES | ||||||||
| Net proceeds from issuance of common shares | 2,016 | 1,478 | ||||||
| Repurchase of common shares | (171,951 | ) | (98,443 | ) | ||||
| Net proceeds from issuance of senior notes | - | 349,997 | ||||||
| Net repayments of bank loans | - | (200,000 | ) | |||||
| Dividends paid | (39,894 | ) | (335,560 | ) | ||||
| Additions to deposit liabilities | 334 | 3,453 | ||||||
| Payment of deposit liabilities | (5,056 | ) | (12,747 | ) | ||||
| Cash used in financing activities | (214,551 | ) | (291,822 | ) | ||||
| Effect of exchange rate changes on foreign currency cash and cash equivalents | (15,157 | ) | (6,356 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (35,631 | ) | 223,474 | |||||
| Cash and cash equivalents, beginning of period | 905,606 | 702,278 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 869,975 | $ | 925,752 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid totaled $25,320 and $5,394 for the nine months ended September 30, 2011 and 2010, respectively. | ||||||||
| Income taxes paid totaled $172 and $4,068 for the nine months ended September 30, 2011 and 2010, respectively. | ||||||||
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ALTERRA CAPITAL HOLDINGS LIMITED |
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| SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited) | |||||||||||||||||||||||||||
| (Expressed in thousands of United States Dollars) | |||||||||||||||||||||||||||
| Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | |||||||||||||||||||||||
| Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd's | Total | Reinsurance | ||||||||||||||||||||||
| Gross premiums written | $ | 85,996 | $ | 156,784 | $ | 72,159 | $ | 70,567 | $ | 385,506 | $ | 822 | $ | - | $ | 386,328 | |||||||||||
| Reinsurance premiums ceded | (43,195 | ) | (15,874 | ) | (25,009 | ) | (6,723 | ) | (90,801 | ) | (90 | ) | - | (90,891 | ) | ||||||||||||
| Net premiums written | $ | 42,801 | $ | 140,910 | $ | 47,150 | $ | 63,844 | $ | 294,705 | $ | 732 | $ | - | $ | 295,437 | |||||||||||
| Earned premiums | $ | 101,355 | $ | 217,763 | $ | 75,391 | $ | 57,600 | $ | 452,109 | $ | 822 | $ | - | $ | 452,931 | |||||||||||
| Earned premiums ceded | (51,578 | ) | (18,489 | ) | (24,882 | ) | (10,850 | ) | (105,799 | ) | (90 | ) | - | (105,889 | ) | ||||||||||||
| Net premiums earned | 49,777 | 199,274 | 50,509 | 46,750 | 346,310 | 732 | - | 347,042 | |||||||||||||||||||
| Net losses and loss expenses | (23,649 | ) | (113,757 | ) | (33,641 | ) | (27,474 | ) | (198,521 | ) | - | - | (198,521 | ) | |||||||||||||
| Claims and policy benefits | - | - | - | - | - | (14,538 | ) | - | (14,538 | ) | |||||||||||||||||
| Acquisition costs | 609 | (44,298 | ) | (9,530 | ) | (8,070 | ) | (61,289 | ) | (145 | ) | - | (61,434 | ) | |||||||||||||
| General and administrative expenses | (8,861 | ) | (17,673 | ) | (8,066 | ) | (9,235 | ) | (43,835 | ) | (145 | ) | - | (43,980 | ) | ||||||||||||
| Other income (loss) | 58 | 777 | - | (27 | ) | 808 | (8 | ) | - | 800 | |||||||||||||||||
| Underwriting income (loss) | $ | 17,934 | $ | 24,323 | $ | (728 | ) | $ | 1,944 | $ | 43,473 | n/a | - | n/a | |||||||||||||
| Net investment income | 12,131 | 48,204 | 60,335 | ||||||||||||||||||||||||
| Net realized and unrealized losses on investments | (6,407 | ) | (1,565 | ) | (7,972 | ) | |||||||||||||||||||||
| Net impairment losses recognized in earnings | (861 | ) | (861 | ) | |||||||||||||||||||||||
| Corporate other income | 673 | 673 | |||||||||||||||||||||||||
| Interest expense | (11,303 | ) | (11,303 | ) | |||||||||||||||||||||||
| Net foreign exchange gains | 147 | 147 | |||||||||||||||||||||||||
| Corporate general and administrative expenses | (17,575 | ) | (17,575 | ) | |||||||||||||||||||||||
| (Loss) income before taxes | $ | (8,380 | ) | $ | 17,720 | $ | 52,813 | ||||||||||||||||||||
| Loss ratio [a] | 47.5 | % | 57.1 | % | 66.6 | % | 58.8 | % | 57.3 | % | |||||||||||||||||
| Acquisition cost ratio [b] | (1.2 | %) | 22.2 | % | 18.9 | % | 17.3 | % | 17.7 | % | |||||||||||||||||
|
General and administrative expense ratio [c] |
17.8 | % | 8.9 | % | 16.0 | % | 19.8 | % | 12.7 | % | |||||||||||||||||
| Combined ratio [d] | 64.1 | % | 88.2 | % | 101.4 | % | 95.8 | % | 87.7 | % | |||||||||||||||||
| SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited) | |||||||||||||||||||||||||||
| (Expressed in thousands of United States Dollars) | |||||||||||||||||||||||||||
| Period Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | |||||||||||||||||||||||
| Insurance | Reinsurance | U.S. Specialty | Alterra at Lloyd's | Total | Reinsurance | ||||||||||||||||||||||
| Gross premiums written | $ | 298,523 | $ | 780,558 | $ | 241,995 | $ | 254,820 | $ | 1,575,896 | $ | 2,187 | $ | - | $ | 1,578,083 | |||||||||||
| Reinsurance premiums ceded | (142,443 | ) | (81,438 | ) | (85,962 | ) | (54,820 | ) | (364,663 | ) | (211 | ) | - | (364,874 | ) | ||||||||||||
| Net premiums written | $ | 156,080 | $ | 699,120 | $ | 156,033 | $ | 200,000 | $ | 1,211,233 | $ | 1,976 | $ | - | $ | 1,213,209 | |||||||||||
| Earned premiums | $ | 297,595 | $ | 676,876 | $ | 222,408 | $ | 186,135 | $ | 1,383,014 | $ | 2,187 | $ | - | $ | 1,385,201 | |||||||||||
| Earned premiums ceded | (140,646 | ) | (50,989 | ) | (71,515 | ) | (45,970 | ) | (309,120 | ) | (211 | ) | - | (309,331 | ) | ||||||||||||
| Net premiums earned | 156,949 | 625,887 | 150,893 | 140,165 | 1,073,894 | 1,976 | - | 1,075,870 | |||||||||||||||||||
| Net losses and loss expenses | (87,305 | ) | (426,234 | ) | (97,725 | ) | (102,796 | ) | (714,060 | ) | - | - | (714,060 | ) | |||||||||||||
| Claims and policy benefits | - | - | - | - | - | (44,818 | ) | - | (44,818 | ) | |||||||||||||||||
| Acquisition costs | 786 | (137,807 | ) | (27,240 | ) | (32,035 | ) | (196,296 | ) | (426 | ) | - | (196,722 | ) | |||||||||||||
| General and administrative expenses | (27,545 | ) | (63,868 | ) | (26,752 | ) | (28,494 | ) | (146,659 | ) | (581 | ) | - | (147,240 | ) | ||||||||||||
| Other income (loss) | 1,009 | 1,325 | - | 353 | 2,687 | (31 | ) | - | 2,656 | ||||||||||||||||||
| Underwriting income (loss) | $ | 43,894 | $ | (697 | ) | $ | (824 | ) | $ | (22,807 | ) | $ | 19,566 | n/a | - | n/a | |||||||||||
| Net investment income | 37,019 | 140,747 | 177,766 | ||||||||||||||||||||||||
| Net realized and unrealized losses on investments | (4,899 | ) | (27,665 | ) | (32,564 | ) | |||||||||||||||||||||
| Net impairment losses recognized in earnings | (2,243 | ) | (2,243 | ) | |||||||||||||||||||||||
| Corporate other income | 723 | 723 | |||||||||||||||||||||||||
| Interest expense | (30,392 | ) | (30,392 | ) | |||||||||||||||||||||||
| Net foreign exchange losses | (2,065 | ) | (2,065 | ) | |||||||||||||||||||||||
| Corporate general and administrative expenses | (55,177 | ) | (55,177 | ) | |||||||||||||||||||||||
| (Loss) income before taxes | $ | (11,760 | ) | $ | 23,928 | $ | 31,734 | ||||||||||||||||||||
| Loss ratio [a] | 55.6 | % | 68.1 | % | 64.8 | % | 73.3 | % | 66.5 | % | |||||||||||||||||
| Acquisition cost ratio [b] | (0.5 | %) | 22.0 | % | 18.1 | % | 22.9 | % | 18.3 | % | |||||||||||||||||
| General and adminstrative expense ratio [c] | 17.6 | % | 10.2 | % | 17.7 | % | 20.3 | % | 13.7 | % | |||||||||||||||||
| Combined ratio [d] | 72.7 | % | 100.3 | % | 100.5 | % | 116.5 | % | 98.4 | % | |||||||||||||||||
| [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. | |||||||||||||||||||||||||||
| Percentage totals may not add due to rounding. | |||||||||||||||||||||||||||
|
ALTERRA CAPITAL HOLDINGS LIMITED |
||||||||||||||||||||||||||
| SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED SEPTEMBER 30, 2010 (Unaudited) | ||||||||||||||||||||||||||
| (Expressed in thousands of United States Dollars) | ||||||||||||||||||||||||||
| Quarter Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||
| Insurance [e] | Reinsurance | U.S. Specialty [e] | Alterra at Lloyd's | Total | Reinsurance | |||||||||||||||||||||
| Gross premiums written | $ | 77,944 | $ | 124,004 | $ | 64,198 | $ | 57,734 | $ | 323,880 | $ | 1,333 | $ | - | $ | 325,213 | ||||||||||
| Reinsurance premiums ceded | (36,875 | ) | (2,524 | ) | (18,713 | ) | (2,397 | ) | (60,509 | ) | (102 | ) | - | (60,611 | ) | |||||||||||
| Net premiums written | $ | 41,069 | $ | 121,480 | $ | 45,485 | $ | 55,337 | $ | 263,371 | $ | 1,231 | $ | - | $ | 264,602 | ||||||||||
| Earned premiums | $ | 102,640 | $ | 213,510 | $ | 73,337 | $ | 45,424 | $ | 434,911 | $ | 1,333 | $ | - | $ | 436,244 | ||||||||||
| Earned premiums ceded | (42,796 | ) | (15,533 | ) | (26,071 | ) | (9,310 | ) | (93,710 | ) | (102 | ) | - | (93,812 | ) | |||||||||||
| Net premiums earned | 59,844 | 197,977 | 47,266 | 36,114 | 341,201 | 1,231 | - | 342,432 | ||||||||||||||||||
| Net losses and loss expenses | (26,679 | ) | (117,671 | ) | (29,295 | ) | (17,367 | ) | (191,012 | ) | - | - | (191,012 | ) | ||||||||||||
| Claims and policy benefits | - | - | - | - | - | (15,060 | ) | - | (15,060 | ) | ||||||||||||||||
| Acquisition costs | (1,382 | ) | (45,069 | ) | (6,763 | ) | (7,474 | ) | (60,688 | ) | (171 | ) | - | (60,859 | ) | |||||||||||
| General and administrative expenses | (7,717 | ) | (17,580 | ) | (8,693 | ) | (7,806 | ) | (41,796 | ) | (577 | ) | - | (42,373 | ) | |||||||||||
| Other income (loss) | 1,108 | 61 | - | 177 | 1,346 | (43 | ) | - | 1,303 | |||||||||||||||||
| Underwriting income | $ | 25,174 | $ | 17,718 | $ | 2,515 | $ | 3,644 | $ | 49,051 | n/a | - | n/a | |||||||||||||
| Net investment income | 12,182 | 47,529 | 59,711 | |||||||||||||||||||||||
| Net realized and unrealized gains on investments | 3,321 | 12,090 | 15,411 | |||||||||||||||||||||||
| Net impairment losses recognized in earnings | (151 | ) | (151 | ) | ||||||||||||||||||||||
| Corporate other income | 24 | 24 | ||||||||||||||||||||||||
| Interest expense | (7,551 | ) | (7,551 | ) | ||||||||||||||||||||||
| Net foreign exchange losses | (3,353 | ) | (3,353 | ) | ||||||||||||||||||||||
| Merger and acquisition expenses | (550 | ) | (550 | ) | ||||||||||||||||||||||
| Corporate general and administrative expenses | (14,277 | ) | (14,277 | ) | ||||||||||||||||||||||
| Income before taxes | $ | 883 | $ | 33,761 | $ | 83,695 | ||||||||||||||||||||
| Loss ratio [a] | 44.6 | % | 59.4 | % | 62.0 | % | 48.1 | % | 56.0 | % | ||||||||||||||||
| Acquisition cost ratio [b] | 2.3 | % | 22.8 | % | 14.3 | % | 20.7 | % | 17.8 | % | ||||||||||||||||
| General and adminstrative expense ratio [c] | 12.9 | % | 8.9 | % | 18.4 | % | 21.6 | % | 12.2 | % | ||||||||||||||||
| Combined ratio [d] | 59.8 | % | 91.1 | % | 94.7 | % | 90.4 | % | 86.0 | % | ||||||||||||||||
| SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2010 (Unaudited) | ||||||||||||||||||||||||||
| (Expressed in thousands of United States Dollars) | ||||||||||||||||||||||||||
| Period Segment Information: | Property & Casualty | Life & Annuity | Corporate | Consolidated | ||||||||||||||||||||||
| Insurance [e] | Reinsurance | U.S. Specialty [e] | Alterra at Lloyd's | Total | Reinsurance | |||||||||||||||||||||
| Gross premiums written | $ | 286,376 | $ | 398,433 | $ | 228,873 | $ | 178,653 | $ | 1,092,335 | $ | 2,998 | $ | - | $ | 1,095,333 | ||||||||||
| Reinsurance premiums ceded | (123,963 | ) | (61,223 | ) | (72,537 | ) | (35,589 | ) | (293,312 | ) | (234 | ) | - | (293,546 | ) | |||||||||||
| Net premiums written | $ | 162,413 | $ | 337,210 | $ | 156,336 | $ | 143,064 | $ | 799,023 | $ | 2,764 | $ | - | $ | 801,787 | ||||||||||
| Earned premiums | $ | 309,227 | $ | 483,982 | $ | 213,587 | $ | 123,170 | $ | 1,129,966 | $ | 2,998 | $ | - | $ | 1,132,964 | ||||||||||
| Earned premiums ceded | (136,837 | ) | (50,545 | ) | (91,517 | ) | (23,899 | ) | (302,798 | ) | (234 | ) | - | (303,032 | ) | |||||||||||
| Net premiums earned | 172,390 | 433,437 | 122,070 | 99,271 | 827,168 | 2,764 | - | 829,932 | ||||||||||||||||||
| Net losses and loss expenses | (104,421 | ) | (250,177 | ) | (75,174 | ) | (46,022 | ) | (475,794 | ) | - | - | (475,794 | ) | ||||||||||||
| Claims and policy benefits | - | - | - | - | - | (46,662 | ) | - | (46,662 | ) | ||||||||||||||||
| Acquisition costs | (1,886 | ) | (92,708 | ) | (19,556 | ) | (19,311 | ) | (133,461 | ) | (440 | ) | - | (133,901 | ) | |||||||||||
| General and administrative expenses | (22,696 | ) | (41,359 | ) | (22,570 | ) | (16,345 | ) | (102,970 | ) | (1,876 | ) | - | (104,846 | ) | |||||||||||
| Other income (loss) | 1,199 | 216 | - | 528 | 1,943 | (71 | ) | - | 1,872 | |||||||||||||||||
| Underwriting income | $ | 44,586 | $ | 49,409 | $ | 4,770 | $ | 18,121 | $ | 116,886 | n/a | - | n/a | |||||||||||||
| Net investment income | 37,701 | 123,677 | 161,378 | |||||||||||||||||||||||
| Net realized and unrealized gains (losses) on investments | 7,377 | (330 | ) | 7,047 | ||||||||||||||||||||||
| Net impairment losses recognized in earnings | (871 | ) | (871 | ) | ||||||||||||||||||||||
| Corporate other income | 74 | 74 | ||||||||||||||||||||||||
| Interest expense | (20,409 | ) | (20,409 | ) | ||||||||||||||||||||||
| Net foreign exchange losses | (267 | ) | (267 | ) | ||||||||||||||||||||||
| Merger and acquisition expenses | 49,276 | 49,276 | ||||||||||||||||||||||||
| Corporate general and administrative expenses | (38,981 | ) | (38,981 | ) | ||||||||||||||||||||||
| (Loss) income before taxes | $ | (1,207 | ) | $ | 112,169 | $ | 227,848 | |||||||||||||||||||
| Loss ratio [a] | 60.6 | % | 57.7 | % | 61.6 | % | 46.4 | % | 57.5 | % | ||||||||||||||||
| Acquisition cost ratio [b] | 1.1 | % | 21.4 | % | 16.0 | % | 19.5 | % | 16.1 | % | ||||||||||||||||
| General and adminstrative expense ratio [c] | 13.2 | % | 9.5 | % | 18.5 | % | 16.5 | % | 12.4 | % | ||||||||||||||||
| Combined ratio [d] | 74.8 | % | 88.7 | % | 96.1 | % | 82.3 | % | 86.1 | % | ||||||||||||||||
| [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. | ||||||||||||||||||||||||||
| [e]Insurance and U.S. specialty segment amounts for the comparative 2010 periods have been reclassified to conform with the current period's presentation. | ||||||||||||||||||||||||||
| Percentage totals may not add due to rounding. | ||||||||||||||||||||||||||
|
ALTERRA CAPITAL HOLDINGS LIMITED |
|||||||||||||||||||
| SCHEDULE OF SUPPLEMENTAL PREMIUM DATA–NINE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited) | |||||||||||||||||||
| (Expressed in thousands of United States Dollars) | |||||||||||||||||||
| Gross Premiums Written by Type of Risk: |
Nine Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||
| Gross Premiums Written |
Percentage of Total Gross Premiums Written |
Movement on Prior Year Period |
Gross Premiums Written | Percentage of Total Gross Premiums Written | |||||||||||||||
| Property & Casualty: | |||||||||||||||||||
| Insurance [a]: | |||||||||||||||||||
| Aviation | S | $ | 11,966 | 0.8 | % | (30.5 | %) | $ | 17,211 | 1.6 | % | ||||||||
| Excess Liability | L | 92,942 | 5.9 | % | 7.8 | % | 86,212 | 7.9 | % | ||||||||||
| Professional Liability | L | 132,302 | 8.4 | % | 0.3 | % | 131,852 | 12.0 | % | ||||||||||
| Property | S | 61,313 | 3.9 | % | 20.0 | % | 51,101 | 4.7 | % | ||||||||||
| 298,523 | 18.9 | % | 4.2 | % | 286,376 | 26.1 | % | ||||||||||||
| Reinsurance [b]: | |||||||||||||||||||
| Agriculture | S | 30,496 | 1.9 | % | (0.4 | %) | 30,628 | 2.8 | % | ||||||||||
| Auto | S | 79,259 | 5.0 | % | n/m | 10,317 | 0.9 | % | |||||||||||
| Aviation | S | 15,654 | 1.0 | % | (45.4 | %) | 28,696 | 2.6 | % | ||||||||||
| Credit/ Surety | S | 33,098 | 2.1 | % | n/m | 1,078 | 0.1 | % | |||||||||||
| General Casualty | L | 60,862 | 3.9 | % | 98.3 | % | 30,699 | 2.8 | % | ||||||||||
| Marine & Energy | S | 20,605 | 1.3 | % | 14.9 | % | 17,930 | 1.6 | % | ||||||||||
| Medical Malpractice | L | 35,672 | 2.3 | % | 12.0 | % | 31,837 | 2.9 | % | ||||||||||
| Other | S | 3,318 | 0.2 | % | 46.6 | % | 2,264 | 0.2 | % | ||||||||||
| Professional Liability | L | 139,221 | 8.8 | % | 70.0 | % | 81,889 | 7.5 | % | ||||||||||
| Property | S | 300,757 | 19.1 | % | 112.0 | % | 141,850 | 13.0 | % | ||||||||||
| Whole Account | S/L | 33,392 | 2.1 | % | n/m | 4,703 | 0.4 | % | |||||||||||
| Workers' Compensation | L | 28,224 | 1.8 | % | 70.6 | % | 16,542 | 1.5 | % | ||||||||||
| 780,558 | 49.5 | % | 95.9 | % | 398,433 | 36.4 | % | ||||||||||||
| U.S. Specialty [a]: | |||||||||||||||||||
| General Liability | L | 57,395 | 3.6 | % | (6.3 | %) | 61,223 | 5.6 | % | ||||||||||
| Marine | S | 64,687 | 4.1 | % | 30.2 | % | 49,696 | 4.5 | % | ||||||||||
| Professional Liability | L | 13,668 | 0.9 | % | 91.5 | % | 7,136 | 0.7 | % | ||||||||||
| Property | S | 106,245 | 6.7 | % | (4.1 | %) | 110,818 | 10.1 | % | ||||||||||
| 241,995 | 15.3 | % | 5.7 | % | 228,873 | 20.9 | % | ||||||||||||
| Alterra at Lloyd's: | |||||||||||||||||||
| Accident & Health | S | 31,447 | 2.0 | % | 24.0 | % | 25,351 | 2.3 | % | ||||||||||
| Aviation | S | 7,707 | 0.5 | % | (29.4 | %) | 10,914 | 1.0 | % | ||||||||||
| Financial Institutions | L | 19,068 | 1.2 | % | 0.0 | % | 19,064 | 1.7 | % | ||||||||||
| International Casualty | L | 50,351 | 3.2 | % | 110.1 | % | 23,961 | 2.2 | % | ||||||||||
| Professional Liability | L | 18,828 | 1.2 | % | 22.4 | % | 15,387 | 1.4 | % | ||||||||||
| Property | S | 126,070 | 8.0 | % | 58.4 | % | 79,607 | 7.3 | % | ||||||||||
| Surety | S | 1,349 | 0.1 | % | (69.1 | %) | 4,369 | 0.4 | % | ||||||||||
| 254,820 | 16.1 | % | 42.6 | % | 178,653 | 16.3 | % | ||||||||||||
| Aggregate Property & Casualty | $ | 1,575,896 | 99.9 | % | 44.3 | % | $ | 1,092,335 | 99.7 | % | |||||||||
| Life & Annuity: | |||||||||||||||||||
| Annuity | $ | 1,056 | 0.1 | % | n/m | $ | 6 | 0.0 | % | ||||||||||
| Life | 1,131 | 0.1 | % | (62.2 | %) | 2,992 | 0.3 | % | |||||||||||
| Aggregate Life & Annuity | $ | 2,187 | 0.1 | % | (27.1 | %) | $ | 2,998 | 0.3 | % | |||||||||
| Aggregate Property & Casualty and Life & Annuity | $ | 1,578,083 | 100.0 | % | 44.1 | % | $ | 1,095,333 | 100.0 | % | |||||||||
| S = Short tail lines | $ | 910,667 | 57.8 | % | $ | 584,182 | 53.5 | % | |||||||||||
| L = Long tail lines | 665,229 | 42.2 | % | 508,153 | 46.5 | % | |||||||||||||
| Aggregate Property & Casualty | $ | 1,575,896 | $ | 1,092,335 | |||||||||||||||
| [a]Insurance and U.S. specialty segment amounts for the comparative 2010 periods have been reclassified to conform with the current period's presentation. | |||||||||||||||||||
| [b]Includes the results of Harbor Point Limited from May 12, 2010. | |||||||||||||||||||
| 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Net income before tax | $ | 52,813 | $ | 83,695 | $ | 31,734 | $ | 227,848 | |||||||||
| Net realized and unrealized losses (gains) on non-hedge fund investments, before tax [a] | 1,164 | (10,440 | ) | 28,427 | 2,692 | ||||||||||||
| Foreign exchange (gains) losses, before tax | (147 | ) | 3,353 | 2,065 | 267 | ||||||||||||
| Merger and acquisition expenses, before tax | - | 550 | - | (49,276 | ) | ||||||||||||
| Net operating income before tax | $ | 53,830 | $ | 77,158 | $ | 62,226 | $ | 181,531 | |||||||||
| Net income | $ | 48,386 | $ | 82,837 | $ | 34,334 | $ | 222,665 | |||||||||
| Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] | 1,807 | (10,104 | ) | 29,120 | 2,672 | ||||||||||||
| Foreign exchange (gains) losses, net of tax | (111 | ) | 2,758 | 1,461 | 780 | ||||||||||||
| Merger and acquisition expenses, net of tax | - | 550 | - | (50,621 | ) | ||||||||||||
| Net operating income | $ | 50,082 | $ | 76,041 | $ | 64,915 | $ | 175,496 | |||||||||
| Net income per diluted share | $ | 0.46 | $ | 0.70 | $ | 0.32 | $ | 2.50 | |||||||||
| Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a] | 0.02 | (0.08 | ) | 0.27 | 0.03 | ||||||||||||
| Foreign exchange losses, net of tax | - | 0.02 | 0.01 | 0.01 | |||||||||||||
| Merger and acquisition expenses, net of tax | - | - | - | (0.57 | ) | ||||||||||||
| Net operating income per diluted share | $ | 0.47 | $ | 0.64 | $ | 0.61 | $ | 1.97 | |||||||||
| Weighted average shares outstanding - basic | 104,830,300 | 117,200,505 | 105,866,771 | 88,253,609 | |||||||||||||
| Weighted average shares outstanding - diluted | 105,665,282 | 117,957,942 | 107,092,882 | 89,001,515 | |||||||||||||
|
[a]Net realized and unrealized (gains) losses on non-hedge fund investments 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 and changes in fair value of investment 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Net income | $ | 48,386 | $ | 82,837 | $ | 34,334 | $ | 222,665 | |||||||||
| Annualized net income | 193,544 | 331,348 | 45,779 | 296,887 | |||||||||||||
| Net operating income | $ | 50,082 | $ | 76,041 | $ | 64,915 | $ | 175,496 | |||||||||
| Annualized net operating income | 200,328 | 304,164 | 86,553 | 233,995 | |||||||||||||
| Average shareholders' equity [b] | $ | 2,818,910 | $ | 2,981,752 | $ | 2,799,260 | $ | 2,297,438 | |||||||||
| Annualized return on average shareholders' equity | 6.9 | % | 11.1 | % | 1.6 | % | 12.9 | % | |||||||||
| Annualized net operating return on average shareholders' equity | 7.1 | % | 10.2 | % | 3.1 | % | 10.2 | % | |||||||||
|
[b]Average shareholders' equity is computed as the average of the quarterly average shareholders' equity balances. The average for the nine months ended September 30, 2010 has been weighted to include Harbor Point Limited from May 12, 2010. |
|||||||||||||||||
| Diluted Tangible Book Value Per Share | |||||||||||||||||
| (Expressed in thousands of United States Dollars, except per share and share amounts) | |||||||||||||||||
| September 30, 2011 | December 31, 2010 | ||||||||||||||||
| Shareholders' equity | $ | 2,844,738 | $ | 2,918,270 | |||||||||||||
| Goodwill and intangible assets | 56,652 | 59,076 | |||||||||||||||
| Tangible book value | $ | 2,788,086 | $ | 2,859,194 | |||||||||||||
| Diluted shares outstanding | 104,665,209 | 112,290,968 | |||||||||||||||
| Diluted tangible book value per share | $ | 26.64 | $ | 25.46 | |||||||||||||
|
ALTERRA CAPITAL HOLDINGS LIMITED |
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| SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA– SEPTEMBER 30, 2011 (Unaudited) | ||||||||||||||||
| (Expressed in thousands of United States Dollars) | ||||||||||||||||
| Type of Investment | As of September 30, 2011 | Investment Distribution | As of December 31, 2010 |
Investment |
||||||||||||
| Cash and cash equivalents | $ | 869,975 | 10.9 | % | $ | 905,606 | 11.5 | % | ||||||||
| U.S. government and agencies | 856,923 | 10.7 | % | 995,546 | 12.7 | % | ||||||||||
| Non-U.S. governments | 185,283 | 2.3 | % | 79,111 | 1.0 | % | ||||||||||
| Corporate securities | 2,781,212 | 34.8 | % | 2,735,366 | 34.8 | % | ||||||||||
| Municipal securities | 245,427 | 3.1 | % | 238,014 | 3.0 | % | ||||||||||
| Asset-backed securities | 240,584 | 3.0 | % | 86,937 | 1.1 | % | ||||||||||
| Residential mortgage-backed securities | 1,222,528 | 15.3 | % | 1,168,390 | 14.9 | % | ||||||||||
| Commercial mortgage-backed securities | 358,665 | 4.5 | % | 334,151 | 4.3 | % | ||||||||||
| Fixed maturities at fair value | $ | 5,890,622 | 73.6 | % | $ | 5,637,515 | 71.7 | % | ||||||||
| U.S. government and agencies | $ | 29,697 | 0.4 | % | $ | 29,687 | 0.4 | % | ||||||||
| Non-U.S. governments | 539,409 | 6.7 | % | 538,274 | 6.8 | % | ||||||||||
| Corporate securities | 356,810 | 4.5 | % | 371,143 | 4.7 | % | ||||||||||
| Asset-backed securities | 1,000 | 0.0 | % | 1,000 | 0.0 | % | ||||||||||
| Fixed maturities at amortized cost | $ | 926,916 | 11.6 | % | $ | 940,104 | 12.0 | % | ||||||||
| Other investments | $ | 311,633 | 3.9 | % | $ | 378,128 | 4.8 | % | ||||||||
| Total invested assets | $ | 7,999,146 | 100.0 | % | $ | 7,861,353 | 100.0 | % | ||||||||
| Credit Rating | As of September 30, 2011 | Ratings Distribution | As of December 31, 2010 | Ratings Distribution | ||||||||||||
| U.S. government and agencies [a] | $ | 1,971,023 | 28.9 | % | $ | 2,060,116 | 31.3 | % | ||||||||
| AAA | 1,045,128 | 15.3 | % | 1,076,680 | 16.4 | % | ||||||||||
| AA | 891,470 | 13.1 | % | 657,867 | 10.0 | % | ||||||||||
| A | 1,393,419 | 20.4 | % | 1,353,945 | 20.6 | % | ||||||||||
| BBB | 253,442 | 3.7 | % | 226,849 | 3.4 | % | ||||||||||
| BB | 78,711 | 1.2 | % | 32,021 | 0.5 | % | ||||||||||
| B | 129,293 | 1.9 | % | 138,703 | 2.1 | % | ||||||||||
| CCC or lower | 51,226 | 0.8 | % | 45,469 | 0.7 | % | ||||||||||
| Not rated | 76,910 | 1.1 | % | 45,865 | 0.7 | % | ||||||||||
| Fixed maturities at fair value | $ | 5,890,622 | 86.4 | % | $ | 5,637,515 | 85.7 | % | ||||||||
| U.S. government and agencies | $ | 29,697 | 0.4 | % | $ | 29,687 | 0.5 | % | ||||||||
| AAA | 641,925 | 9.4 | % | 641,437 | 9.8 | % | ||||||||||
| AA | 110,497 | 1.6 | % | 113,140 | 1.7 | % | ||||||||||
| A | 124,734 | 1.8 | % | 141,683 | 2.2 | % | ||||||||||
| BBB | 20,063 | 0.3 | % | 12,744 | 0.2 | % | ||||||||||
| Not rated | - | - | 1,413 | 0.0 | % | |||||||||||
| Fixed maturities at amortized cost | $ | 926,916 | 13.6 | % | $ | 940,104 | 14.3 | % | ||||||||
| Total fixed maturities | $ | 6,817,538 | 100.0 | % | $ | 6,577,619 | 100.0 | % | ||||||||
| [a] Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,114,100 (December 31, 2010: $1,064,570) | ||||||||||||||||
|
Percentage totals may not add due to rounding. |
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| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net investment income | $ | 60,335 | $ | 59,711 | $ | 177,766 | $ | 161,378 | ||||||||
| Realized and unrealized gains (losses) on trading fixed maturities | 1,663 | 883 | 1,268 | (583 | ) | |||||||||||
| Net realized gains on available for sale fixed maturities | 6,096 | 6,395 | 9,519 | 9,658 | ||||||||||||
| (Decrease) increase in fair value of hedge funds | (7,669 | ) | 4,820 | (6,380 | ) | 8,868 | ||||||||||
| (Decrease) increase in fair value of non-hedge fund other investments | (8,062 | ) | 3,313 | (36,971 | ) | (10,896 | ) | |||||||||
| Net realized and unrealized (losses) gains on investments | $ | (7,972 | ) | $ | 15,411 | $ | (32,564 | ) | $ | 7,047 | ||||||
| Net impairment losses recognized in earnings | $ | (861 | ) | $ | (151 | ) | $ | (2,243 | ) | $ | (871 | ) | ||||