HCC INSURANCE HOLDINGS INC/DE/ - FORM 8-K - EX-99.6 - November 9, 2009

Attached files

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8-K - FORM 8-K - HCC INSURANCE HOLDINGS INC/DE/h68221e8vk.htm
EX-99.4 - EX-99.4 - HCC INSURANCE HOLDINGS INC/DE/h68221exv99w4.htm
EX-99.3 - EX-99.3 - HCC INSURANCE HOLDINGS INC/DE/h68221exv99w3.htm
EX-99.1 - EX-99.1 - HCC INSURANCE HOLDINGS INC/DE/h68221exv99w1.htm
EX-99.5 - EX-99.5 - HCC INSURANCE HOLDINGS INC/DE/h68221exv99w5.htm
EX-99.2 - EX-99.2 - HCC INSURANCE HOLDINGS INC/DE/h68221exv99w2.htm
EX-23.1 - EX-23.1 - HCC INSURANCE HOLDINGS INC/DE/h68221exv23w1.htm
Exhibit 99.6
HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
STATEMENT OF RATIOS
(in thousands)
                                         
    Years Ended December 31,  
    2008     2007     2006     2005     2004  
Gross premium to surplus ratio:
                                        
Gross written premium
   $ 2,510,612     $ 2,460,498     $ 2,243,843     $ 2,049,116     $ 1,992,361  
Policyholders’ surplus
     1,852,684       1,744,889       1,342,054       1,110,268       844,851  
Premium to surplus ratio(1)
     135.5 %     141.0 %     167.2 %     184.6 %     235.8 %
(Gross premium to surplus ratio = gross written premium divided by policyholders’ surplus)
 
Net premium to surplus ratio:
                                    
Net written premium
   $ 2,064,091     $ 1,985,641     $ 1,812,896     $ 1,495,931     $ 1,121,343  
Policyholders’ surplus
     1,852,684       1,744,889       1,342,054       1,110,268       844,851  
Premium to surplus ratio(1)
     111.4 %     113.8 %     135.1 %     134.7 %     132.7 %
(Net premium to surplus ratio = net written premium divided by policyholders’ surplus) Loss ratio:
 
Loss ratio:
                                        
Incurred loss and loss adjustment expense
   $ 1,216,746     $ 1,194,925     $ 1,020,221     $ 925,130     $ 651,675  
Net earned premium
   $ 2,000,289       1,971,951       1,700,373       1,378,100       1,013,573  
Loss ratio(1)
     60.8 %     60.6 %     60.0 %     67.1 %     64.3 %
(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium)
 
Expense ratio:
                                        
Underwriting expense
   $ 501,948     $ 473,597     $ 435,371     $ 381,680     $ 299,789  
Net written premium
   $ 2,064,091       1,985,641       1,812,896       1,495,931       1,121,343  
Expense ratio(1)
     24.3 %     23.9 %     24.0 %     25.5 %     26.7 %
(Expense ratio = underwriting expense divided by net written premium)
 
Combined ratio(1)
     85.1 %     84.5 %     84.0 %     92.6 %     91.0 %
(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, in thousands)
                                         
    Years Ended December 31,  
    2008     2007     2006     2005     2004  
Loss ratio:
                                        
Incurred loss and loss adjustment expense
   $ 1,211,873     $ 1,183,947     $ 1,011,856     $ 919,697     $ 645,230  
Net earned premium
     2,007,774       1,985,086       1,709,189       1,369,988       1,010,692  
Loss ratio(2)
     60.4 %     59.6 %     59.2 %     67.1 %     63.8 %
(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium)
 
Expense ratio:
                                        
Underwriting expense
   $ 501,537     $ 472,168     $ 427,456     $ 357,727     $ 269,390  
Net earned premium
     2,007,774       1,985,086       1,709,189       1,369,988       1,010,692  
Expense ratio(2)
     25.0 %     23.8 %     25.0 %     26.1 %     26.7 %
(Expense ratio = underwriting expense divided by net earned premium)
 
Combined ratio(2)
     85.4 %     83.4 %     84.2 %     93.2 %     90.5 %
(Combined ratio = loss ratio plus expense ratio)
                                        
 
Ratio of earnings to fixed charges (as adjusted)(3):
                                        
Interest factor of rent expense(4)
   $ 4,581     $ 4,067     $ 3,944     $ 3,373     $ 3,319  
Interest expense
     20,362       16,270       18,128       14,126       11,965  
Capitalized interest
     104       —       —       —       —  
 
                              
Total fixed charges
   $ 25,047     $ 20,337     $ 22,072     $ 17,499     $ 15,284  
 
                              
Earnings from continuing operations before income tax expense
   $ 432,238     $ 579,904     $ 503,102     $ 266,167     $ 237,044  
Fixed charges
     25,047       20,337       22,072       17,499       15,284  
 
                              
Earnings per calculation
   $ 457,285     $ 600,241     $ 525,174     $ 283,666     $ 252,328  
 
                              
Ratio of earnings to fixed charges(5)
     18.26     29.51       23.79       16.21       16.51  
 
                              
 
(2)   Calculated for our insurance companies using financial data reported in accordance with generally accepted accounting principles.
 
(3)   As discussed in Note 1 to the consolidated financial statements, we adopted FSP APB 14-1 and FSP EITF 03-6-1 on January 1, 2009. All amounts in the calculation of the ratio of earnings to fixed charges have been adjusted for the retrospective application of these new accounting standards.
 
(4)   Estimated to be 33% of total rent expense.
 
(5)   Earnings per calculation divided by total fixed charges.

 

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