ALTERRA CAPITAL HOLDINGS Ltd - FORM 8-K - EX-99.2 - INVESTOR FINANCIAL SUPPLEMENT

Attached files

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EX-99.1 - NEWS RELEASE OF ALTERRA CAPITAL HOLDINGS LTD., ANNOUNCING FINANCIAL RESULTS - ALTERRA CAPITAL HOLDINGS Ltd	dex991.htm
EX-99.3 - NEWS RELEASE OF ALTERRA CAPITAL HOLDINGS LTD., ANNOUNCING A DIVIDEND DECLARATION - ALTERRA CAPITAL HOLDINGS Ltd	dex993.htm
8-K - FORM 8-K - ALTERRA CAPITAL HOLDINGS Ltd	d8k.htm

Exhibit 99.2

LOGO

ALTERRA CAPITAL HOLDINGS LIMITED

Investor Financial Supplement

Second Quarter 2011

(Unaudited)

This supplement is for information purposes only. It should be read in conjunction with documents filed by Alterra Capital

Holdings Limited with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act 1934.

Alterra Capital Holdings Limited

Investors:

Susan Spivak Bernstein, +1-212-898-6640

Media:

Kekst and Company

Peter Hill or Melissa Sheer, +1-212-521-4800

ALTERRA CAPITAL HOLDINGS LIMITED

Cautionary note regarding forward-looking information

This financial supplement may include forward-looking statements that reflect Alterra’s current views with respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may” and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are important factors that could cause actual results to differ materially from those indicated in such statements and you should not place undue reliance on any such statements.

These factors include, but are not limited to, the following: (1) the adequacy of loss reserves and the need to adjust such reserves as claims develop over time; (2) the failure of any of the loss limitation methods employed; (3) the effect of cyclical trends, including with respect to demand and pricing in the insurance and reinsurance markets; (4) changes in general economic conditions, including changes in capital and credit markets; (5) any lowering or loss of financial ratings; (6) the occurrence of natural or man-made catastrophic events with a frequency or severity exceeding expectations; (7) actions by competitors, including consolidation; (8) the effects of emerging claims and coverage issues; (9) the loss of business provided to Alterra by its major brokers; (10) the effect on Alterra’s investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors; (11) tax and regulatory changes and conditions; (12) retention of key personnel; and (13) the integration of new business ventures Alterra may enter into; as well as management’s response to any of the aforementioned factors.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in Alterra’s most recent reports on Form 10-K and Form 10-Q and other documents on file with the U.S. Securities and Exchange Commission. Any forward-looking statements made in this financial supplement are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Alterra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Alterra or its business or operations. Alterra undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

ALTERRA CAPITAL HOLDINGS LIMITED

FINANCIAL SUPPLEMENT TABLE OF CONTENTS


	Page
Financial Highlights		4
Consolidated Balance Sheets		5
Consolidated Statements of Operations - Quarterly		6
Consolidated Statements of Operations - Year to date		7
Segment Data and Ratios - Quarterly		8
Gross Premiums Written by Line of Business - Quarterly		16
Segment Data and Ratios - Year to date		18
Gross Premiums Written by Line of Business - Year to date		25
Investment Portfolio		26
Shareholder Return Analysis		29
Earnings Per Share Information		30
Operating Income Reconciliation		31
Book Value per Share		32
Regulation G		33
Reclassified Historical Segment Information		34
Pro forma Consolidated Statements of Income		38

ALTERRA CAPITAL HOLDINGS LIMITED

FINANCIAL HIGHLIGHTS

(Expressed in thousands of United States Dollars, except per share and share amounts)


	For The Quarters Ended						For The Six Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			Previous Year Quarter Change			Previous Year to Date Change
HIGHLIGHTS
Net income (loss)	$	32,635		$	103,447		$	(14,052	)	$	139,828			(68.5	%)		(110.0	%)
Net operating income [a]		39,558			58,774			14,833			99,455			(32.7	%)		(85.1	%)
Operating cashflow		101,796			126,981			148,705			173,781			(19.8	%)		(14.4	%)
Gross premiums written		563,907			398,981			1,191,755			770,120			41.3	%		54.7	%
Net premiums earned		348,941			293,260			728,828			487,500			19.0	%		49.5	%
Total assets		10,497,364			9,974,936			10,497,364			9,974,936			5.2	%		5.2	%
Total shareholders’ equity		2,793,081			2,926,967			2,793,081			2,926,967			(4.6	%)		(4.6	%)

PER SHARE
Basic earnings per share
Net income (loss)	$	0.31		$	1.14		$	(0.13	)	$	1.90
Net operating income [a]		0.37			0.65			0.14			1.35
Diluted earnings per share
Net income (loss)	$	0.30		$	1.13		$	(0.13	)	$	1.88
Net operating income [a]		0.37			0.64			0.14			1.33

Weighted average shares outstanding - basic		105,604,786			91,042,301			106,385,007			73,779,447
Weighted average shares outstanding - diluted		107,111,909			91,661,430			106,385,007			74,524,919
Book value per common share [b]	$	26.40		$	24.67		$	26.40		$	24.67			7.0	%		7.0	%
Diluted book value per share (treasury stock method) [b]		25.98			24.55			25.98			24.55			5.8	%		5.8	%
Diluted tangible book value per share (treasury stock method) [b]		25.44			24.04			25.44			24.04			5.8	%		5.8	%

RATIOS

Annualized return on average shareholders’ equity [c]		4.7	%		17.8	%		(1.0	%)		14.3	%
Annualized net operating return on average shareholders’ equity [c]		5.7	%		10.1	%		1.1	%		10.2	%

Loss ratio [d]		60.7	%		54.6	%		70.9	%		58.6	%
Acquisition cost ratio [d]		18.5	%		16.6	%		18.6	%		15.0	%
General and administrative expense ratio [d]		14.5	%		12.0	%		14.1	%		12.6	%
Combined ratio [d]		93.7	%		83.3	%		103.5	%		86.2	%

[a]	Net operating income represents net income excluding, as applicable, after-tax net realized and unrealized gains and losses on non-hedge fund investments, after-tax net foreign exchange gains or losses, and after-tax merger and acquisition expenses.

[b]	For detailed calculations see page 32.

[c]	For detailed calculations see page 29.

[d]	For property and casualty business only.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States Dollars, except per share and share amounts)


	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
	(Unaudited)			(Unaudited)						(Unaudited)			(Unaudited)
ASSETS
Cash and cash equivalents	$	987,057		$	1,001,051		$	905,606		$	925,752		$	741,684
Fixed maturities, trading, at fair value		218,481			214,807			244,872			243,158			230,251
Fixed maturities, available for sale, at fair value		5,403,312			5,290,684			5,392,643			5,425,955			5,451,969
Fixed maturities, held to maturity, at amortized cost		993,691			983,207			940,104			954,623			871,651
Other investments, at fair value		350,193			357,655			378,128			411,275			436,757
Accrued interest income		70,777			69,497			75,414			73,622			67,561
Premiums receivable		870,287			809,483			588,537			664,603			780,025
Losses and benefits recoverable from reinsurers		1,058,724			1,053,223			956,115			976,819			962,442
Deferred acquisition costs		171,517			149,197			111,901			106,728			89,881
Prepaid reinsurance premiums		215,392			176,918			149,252			173,140			207,102
Trades pending settlement		9,168			—			32,393			24,364			—
Goodwill and intangible assets		58,094			58,585			59,076			60,670			60,670
Other assets		90,671			86,072			83,247			78,225			74,943


Total assets	$	10,497,364		$	10,250,379		$	9,917,288		$	10,118,934		$	9,974,936


LIABILITIES
Property and casualty losses	$	4,230,290		$	4,185,230		$	3,906,134		$	3,847,366		$	3,772,622
Life and annuity benefits		1,317,527			1,316,287			1,275,580			1,299,190			1,209,031
Deposit liabilities		147,428			147,424			147,612			147,212			147,727
Funds withheld from reinsurers		122,705			122,072			121,107			119,859			120,324
Unearned property and casualty premiums		1,203,024			1,065,160			905,487			1,015,831			1,090,323
Reinsurance balances payable		137,910			127,299			102,942			122,184			295,979
Accounts payable and accrued expenses		104,917			103,376			99,680			90,282			81,846
Trades pending settlement		—			19,855			—			—			39,641
Bank loans		—			—			—			—			200,000
Senior notes		440,482			440,482			440,476			440,473			90,476


Total liabilities		7,704,283			7,527,185			6,999,018			7,082,397			7,047,969


SHAREHOLDERS’ EQUITY
Common shares (par value $1.00) 105,794,521 shares issued and outstanding		105,795			105,734			110,963			115,899			118,643
Additional paid-in capital		1,911,979			1,905,144			2,026,045			2,113,732			2,157,700
Accumulated other comprehensive income		132,218			89,233			98,946			190,325			102,718
Retained earnings		643,089			623,083			682,316			616,581			547,906


Total shareholders’ equity		2,793,081			2,723,194			2,918,270			3,036,537			2,926,967


Total liabilities and shareholders’ equity	$	10,497,364		$	10,250,379		$	9,917,288		$	10,118,934		$	9,974,936


Book value per share	$	26.40		$	25.76		$	26.30		$	26.20		$	24.67


Diluted book value per share (treasury stock method)	$	25.98		$	25.34		$	25.99		$	25.88		$	24.55


Diluted tangible book value per share (treasury stock method) [a]	$	25.44		$	24.79		$	25.46		$	25.37		$	24.04


Debt-to-capital ratio [b]		13.6	%		13.9	%		13.1	%		12.7	%		9.0	%

[a]	Non-GAAP financial measure. For detailed calculations see page 32.

[b]	Calculated as debt, being bank loans and senior notes, divided by shareholders’ equity plus debt.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - QUARTERLY (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010 [g]			June 30, 2009
REVENUES
Gross premiums written	$	563,907		$	627,848		$	315,398		$	325,213		$	398,981		$	396,509
Reinsurance premiums ceded		(136,626	)		(137,357	)		(77,617	)		(60,611	)		(79,715	)		(129,669	)

Net premiums written	$	427,281		$	490,491		$	237,781		$	264,602		$	319,266		$	266,840


Earned premiums	$	443,008		$	489,262		$	445,683		$	436,244		$	391,723		$	354,620
Earned premiums ceded		(94,067	)		(109,375	)		(103,129	)		(93,812	)		(98,463	)		(125,835	)

Net premiums earned		348,941			379,887			342,554			342,432			293,260			228,785

Net investment income		59,665			57,766			61,080			59,711			53,277			41,755
Net realized and unrealized (losses) gains on investments		(5,774	)		(18,818	)		9,825			15,411			(14,786	)		21,472

Total other-than-temporary impairment losses		(187	)		(1,124	)		(3,918	)		(90	)		(1,167	)		(5,190	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(166	)		95			2,144			(61	)		867			3,176

Net impairment losses recognized in earnings		(353	)		(1,029	)		(1,774	)		(151	)		(300	)		(2,014	)

Other income		591			1,315			2,862			1,327			275			974


Total revenues		403,070			419,121			414,547			418,730			331,726			290,972


LOSSES AND EXPENSES
Net losses and loss expenses		211,133			304,406			179,047			191,012			159,817			122,228
Claims and policy benefits		15,570			14,710			18,551			15,060			13,943			55,407
Acquisition costs		64,680			70,608			53,563			60,859			48,798			25,059
Interest expense		10,630			8,459			7,866			7,551			7,916			4,744
Net foreign exchange losses (gains)		3,090			(878	)		(382	)		3,353			(634	)		(3,404	)
Merger and acquisition expenses		—			—			500			550			(54,570	)		4,785
General and administrative expenses		69,659			71,203			76,759			56,650			50,649			36,105


Total losses and expenses		374,762			468,508			335,904			335,035			225,919			244,924


INCOME (LOSS) BEFORE TAXES		28,308			(49,387	)		78,643			83,695			105,807			46,048

Income tax (benefit) expense		(4,327	)		(2,700	)		(1,027	)		858			2,360			2,290


NET INCOME (LOSS)		32,635			(46,687	)		79,670			82,837			103,447			43,758

Change in net unrealized gains and losses on fixed maturities, net of tax		42,820			(14,586	)		(87,633	)		74,383			60,525			36,933
Foreign currency translation adjustment		165			4,873			(3,746	)		13,224			(7,629	)		20,925


COMPREHENSIVE INCOME (LOSS)	$	75,620		$	(56,400	)	$	(11,709	)	$	170,444		$	156,343		$	101,616


KEY RATIOS/PER SHARE DATA

Loss ratio [a]		60.7	%		80.2	%		52.5	%		56.0	%		54.6	%		65.1	%
Acquisition cost ratio [b]		18.5	%		18.6	%		15.7	%		17.8	%		16.6	%		13.0	%
General and administrative expense ratio [c]		14.5	%		13.8	%		16.6	%		12.2	%		12.0	%		12.7	%

Combined ratio [d]		93.7	%		112.5	%		84.8	%		86.0	%		83.3	%		90.8	%


Net income (loss) per share	$	0.31		$	(0.44	)	$	0.70		$	0.71		$	1.14		$	0.77
Net income (loss) per diluted share	$	0.30		$	(0.44	)	$	0.69		$	0.70		$	1.13		$	0.76
Net operating income (loss) per share - diluted [e]	$	0.37		$	(0.23	)	$	0.66		$	0.64		$	0.64		$	0.83
Annualized ROAE [f]		4.7	%		(6.6	%)		10.7	%		11.1	%		17.8	%		13.3	%
Annualized net operating ROAE [f]		5.7	%		(3.5	%)		10.2	%		10.2	%		10.1	%		14.6	%

[a]	The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b]	The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c]	The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

[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 for the property & casualty business.

[e]	Non-GAAP financial measure. See page 31 for calculation of net operating income per share - diluted.

[f]	Non-GAAP financial measure. See page 29 for calculation of annualized return on average shareholders’ equity (ROAE) and annualized net operating ROAE

[g]	Includes the results for Harbor Point Limited (“Harbor Point”) from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - YEAR TO DATE AND PRIOR YEARS (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	SIX MONTHS ENDED									YEAR ENDED
	June 30, 2011			June 30, 2010 [g]			June 30, 2009			Dec. 31, 2010			Dec. 31, 2009
REVENUES
Gross premiums written	$	1,191,755		$	770,120		$	830,782		$	1,410,731		$	1,375,001
Reinsurance premiums ceded		(273,983	)		(232,935	)		(294,048	)		(371,163	)		(480,481	)

Net premiums written	$	917,772		$	537,185		$	536,734		$	1,039,568		$	894,520


Earned premiums	$	932,270		$	696,720		$	664,002		$	1,578,647		$	1,318,949
Earned premiums ceded		(203,442	)		(209,220	)		(244,935	)		(406,161	)		(484,593	)

Net premiums earned		728,828			487,500			419,067			1,172,486			834,356

Net investment income		117,431			101,667			82,243			222,458			169,741
Net realized and unrealized (losses) gains on investments		(24,592	)		(8,364	)		39,913			16,872			81,765

Total other-than-temporary impairment losses		(1,311	)		(1,865	)		(5,190	)		(5,873	)		(5,315	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(71	)		1,145			3,176			3,228			2,237

Net impairment losses recognized in earnings		(1,382	)		(720	)		(2,014	)		(2,645	)		(3,078	)

Net realized gain on retirement of senior notes		—			—			—			—			111
Other income		1,906			619			2,280			4,808			2,903


Total revenues		822,191			580,702			541,489			1,413,979			1,085,798


LOSSES AND EXPENSES
Net losses and loss expenses		515,539			284,782			246,951			654,841			493,599
Claims and policy benefits		30,280			31,602			69,739			65,213			101,093
Acquisition costs		135,288			73,042			45,689			187,464			96,874
Interest expense		19,089			12,858			8,683			28,275			21,339
Net foreign exchange losses (gains)		2,212			(3,086	)		(6,880	)		(115	)		(5,772	)
Merger and acquisition expenses		—			(49,826	)		10,008			(48,776	)		(31,566	)
General and administrative expenses		140,862			87,177			75,165			220,586			153,995

Total losses and expenses		843,270			436,549			449,355			1,107,488			829,562


(LOSS) INCOME BEFORE TAXES		(21,079	)		144,153			92,134			306,491			256,236

Income tax (benefit) expense		(7,027	)		4,325			3,837			4,156			10,021


NET (LOSS) INCOME		(14,052	)		139,828			88,297			302,335			246,215

Change in net unrealized gains and losses on fixed maturities, net of tax		28,234			94,656			(29,165	)		81,406			50,544
Foreign currency translation adjustment		5,038			(17,369	)		24,834			(7,891	)		20,286


COMPREHENSIVE INCOME	$	19,220		$	217,115		$	83,966		$	375,850		$	317,045


KEY RATIOS/PER SHARE DATA

Loss ratio [a]		70.9	%		58.6	%		65.4	%		56.1	%		62.4	%
Acquisition cost ratio [b]		18.6	%		15.0	%		11.9	%		16.0	%		12.1	%
General and administrative expense ratio [c]		14.1	%		12.6	%		13.0	%		13.6	%		13.6	%

Combined ratio [d]		103.5	%		86.2	%		90.3	%		85.7	%		88.1	%


Net income (loss) per share - basic	$	(0.13	)	$	1.90		$	1.55		$	3.19		$	4.32
Net income (loss) per share - diluted	$	(0.13	)	$	1.88		$	1.54		$	3.17		$	4.26
Net operating income per share - diluted [e]	$	0.14		$	1.33		$	1.65		$	2.64		$	3.62
Annualized ROAE [f]		(1.0	%)		14.3	%		13.7	%		12.3	%		17.6	%
Annualized Net Operating ROAE [f]		1.1	%		10.2	%		14.7	%		10.2	%		14.9	%

[a]	The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b]	The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c]	The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

[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 for the property & casualty business.

[e]	Non-GAAP financial measure. See page 31 for calculation of net operating income per share - diluted.

[f]	See page 29 for calculation of annualized return on average shareholders’ equity (ROAE) and annualized net operating ROAE

[g]	Includes the results for Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty															Life & Annuity			Corporate			Consolidated
	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance

Gross premiums written	$	141,255		$	248,754		$	99,448		$	73,520		$	562,977		$	930		$	—		$	563,907
Reinsurance premiums ceded		(56,002	)		(28,247	)		(27,358	)		(24,918	)		(136,525	)		(101	)		—			(136,626	)

Net premiums written	$	85,253		$	220,507		$	72,090		$	48,602		$	426,452		$	829		$	—		$	427,281


Earned premiums	$	97,296		$	209,212		$	73,840		$	61,730		$	442,078		$	930		$	—		$	443,008
Earned premiums ceded		(44,338	)		(12,305	)		(22,783	)		(14,540	)		(93,966	)		(101	)		—			(94,067	)

Net premiums earned		52,958			196,907			51,057			47,190			348,112			829			—			348,941
Net losses and loss expenses		(28,992	)		(125,592	)		(32,709	)		(23,840	)		(211,133	)		—			—			(211,133	)
Claims and policy benefits		—			—			—			—			—			(15,570	)		—			(15,570	)
Acquisition costs		361			(44,366	)		(9,644	)		(10,909	)		(64,558	)		(122	)		—			(64,680	)
General and administrative expenses		(8,859	)		(22,937	)		(9,289	)		(9,536	)		(50,621	)		(259	)		—			(50,880	)
Other income		139			548			—			165			852			(23	)		—			829


Underwriting income (loss)		15,607			4,560			(585	)		3,070			22,652			n/a			—			n/a

Net investment income																	12,545			47,120			59,665
Net realized and unrealized losses on investments																	(1,299	)		(4,475	)		(5,774	)
Net impairment losses recognized in earnings																				(353	)		(353	)
Corporate other income																				(238	)		(238	)
Interest expense																				(10,630	)		(10,630	)
Net foreign exchange losses																				(3,090	)		(3,090	)
Corporate general and administrative expenses																				(18,779	)		(18,779	)


Income (loss) before taxes																$	(3,899	)	$	9,555		$	28,308


Loss ratio [a]		54.7	%		63.8	%		64.1	%		50.5	%		60.7	%
Acquisition cost ratio [b]		(0.7	%)		22.5	%		18.9	%		23.1	%		18.5	%
General and administrative expense ratio [c]		16.7	%		11.6	%		18.2	%		20.2	%		14.5	%

Combined ratio [d]		70.8	%		98.0	%		101.1	%		93.8	%		93.7	%

[a]	The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b]	The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c]	The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

[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 for the property & casualty business.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)


	Property & Casualty
	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total

UNDERWRITING RATIOS

Loss ratio		54.7	%		63.8	%		64.1	%		50.5	%		60.7	%
Acquisition cost ratio		(0.7	%)		22.5	%		18.9	%		23.1	%		18.5	%
General and administrative expense ratio		16.7	%		11.6	%		18.2	%		20.2	%		14.5	%

Combined ratio		70.8	%		98.0	%		101.1	%		93.8	%		93.7	%


EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)

Loss ratio [a]		27.8	%		12.1	%		0.0	%		21.0	%		14.0	%


NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS

Loss ratio		82.5	%		75.9	%		64.1	%		71.5	%		74.6	%
Acquisition cost ratio		(0.7	%)		22.5	%		18.9	%		23.1	%		18.5	%
General and administrative expense ratio		16.7	%		11.6	%		18.2	%		20.2	%		14.5	%

Combined ratio		98.6	%		110.1	%		101.1	%		114.8	%		107.7	%

[a]	Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts.

CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2010 (Unaudited)


	Property & Casualty
	Insurance [b]			Reinsurance			U.S. Specialty [b]			Alterra at Lloyd’s			Total

UNDERWRITING RATIOS

Loss ratio		64.2	%		53.0	%		60.6	%		37.4	%		54.6	%
Acquisition cost ratio		1.4	%		21.0	%		20.7	%		18.3	%		16.6	%
General and administrative expense ratio		13.6	%		9.5	%		14.4	%		17.6	%		12.0	%

Combined ratio		79.2	%		83.5	%		95.8	%		73.2	%		83.3	%


EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)

Loss ratio [a]		15.8	%		7.4	%		0.0	%		9.3	%		8.2	%


NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS

Loss ratio		80.0	%		60.4	%		60.6	%		46.6	%		62.9	%
Acquisition cost ratio		1.4	%		21.0	%		20.7	%		18.3	%		16.6	%
General and administrative expense ratio		13.6	%		9.5	%		14.4	%		17.6	%		12.0	%

Combined ratio		95.0	%		90.9	%		95.8	%		82.5	%		91.5	%

[a]	Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts.

[b]	Insurance and U.S. Specialty segment amounts for the comparative 2010 period have been reclassified to conform with the current period’s presentation.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010 [a]			Sept. 30, 2010 [a]			June 30, 2010 [a]			June 30, 2009 [a]

Gross premiums written	$	141,255		$	71,272		$	113,236		$	77,944		$	139,026		$	139,226
Reinsurance premiums ceded		(56,002	)		(43,246	)		(56,728	)		(36,875	)		(47,437	)		(47,972	)

Net premiums written	$	85,253		$	28,026		$	56,508		$	41,069		$	91,589		$	91,254


Earned premiums	$	97,296		$	98,944		$	106,169		$	102,640		$	104,841		$	105,576
Earned premiums ceded		(44,338	)		(44,730	)		(43,847	)		(42,796	)		(45,211	)		(51,129	)

Net premiums earned		52,958			54,214			62,322			59,844			59,630			54,447

Net losses and loss expenses		(28,992	)		(34,664	)		(35,687	)		(26,679	)		(38,296	)		(39,901	)
Acquisition costs		361			(184	)		(1,765	)		(1,382	)		(821	)		230
General and administrative expenses		(8,859	)		(9,825	)		(11,812	)		(7,717	)		(8,132	)		(6,693	)
Other income		139			812			68			1,108			97			219

Underwriting income	$	15,607		$	10,353		$	13,126		$	25,174		$	12,478		$	8,302


Loss ratio		54.7	%		63.9	%		57.3	%		44.6	%		64.2	%		73.3	%
Acquisition cost ratio		(0.7	%)		0.3	%		2.8	%		2.3	%		1.4	%		(0.4	%)
General and administrative expense ratio		16.7	%		18.1	%		19.0	%		12.9	%		13.6	%		12.3	%

Combined ratio		70.8	%		82.4	%		79.0	%		59.8	%		79.2	%		85.2	%

[a]	Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

See page 34 for additional information.

ALTERRA CAPITAL HOLDINGS LIMITED

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010 [a]			June 30, 2009
Gross premiums written	$	248,754		$	375,020		$	110,620		$	124,004		$	119,578		$	95,196
Reinsurance premiums ceded		(28,247	)		(37,317	)		(2,908	)		(2,524	)		(13,348	)		(18,085	)

Net premiums written	$	220,507		$	337,703		$	107,712		$	121,480		$	106,230		$	77,111


Earned premiums	$	209,212		$	249,901		$	215,261		$	213,510		$	174,729		$	112,550
Earned premiums ceded		(12,305	)		(20,195	)		(21,082	)		(15,533	)		(19,054	)		(22,825	)

Net premiums earned		196,907			229,706			194,179			197,977			155,675			89,725

Net losses and loss expenses		(125,592	)		(186,885	)		(97,639	)		(117,671	)		(82,441	)		(57,813	)
Acquisition costs		(44,366	)		(49,143	)		(38,406	)		(45,069	)		(32,673	)		(15,734	)
General and administrative expenses		(22,937	)		(23,258	)		(24,714	)		(17,580	)		(14,820	)		(7,223	)
Other income		548			—			(216	)		61			155			12

Underwriting income (loss)	$	4,560		$	(29,580	)	$	33,204		$	17,718		$	25,896		$	8,967


Loss ratio		63.8	%		81.4	%		50.3	%		59.4	%		53.0	%		64.4	%
Acquisition cost ratio		22.5	%		21.4	%		19.8	%		22.8	%		21.0	%		17.5	%
General and administrative expense ratio		11.6	%		10.1	%		12.7	%		8.9	%		9.5	%		8.1	%

Combined ratio		98.0	%		112.9	%		82.8	%		91.1	%		83.5	%		90.0	%

[a]	Includes the results for Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

PRO FORMA ALTERRA REINSURANCE SEGMENT SELECTED FINANCIAL INFORMATION [a] (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009

Gross premiums written	$	110,620		$	124,004		$	197,146		$	460,618		$	125,447		$	210,882		$	262,938		$	461,141

Net premiums earned		194,179			197,977			226,291			215,050			230,516			238,953			221,120			220,103

Net losses and loss expenses		97,639			117,671			136,158			129,727			108,941			113,625			118,613			115,706

Acquisition costs		38,406			45,069			47,179			42,689			46,708			50,167			42,586			43,280

General and administrative expenses		24,714			17,580			16,527			16,824			23,680			19,726			18,520			19,201

Loss ratio		50.3	%		59.4	%		60.2	%		60.3	%		47.3	%		47.6	%		53.6	%		52.6	%
Acquisition cost ratio		19.8	%		22.8	%		20.8	%		19.9	%		20.3	%		21.0	%		19.3	%		19.7	%
General and administrative expense ratio		12.7	%		8.9	%		7.3	%		7.8	%		10.3	%		8.3	%		8.4	%		8.7	%

Combined ratio		82.8	%		91.1	%		88.3	%		88.0	%		77.8	%		76.8	%		81.3	%		81.0	%

[a]

This information is based on historical Alterra reinsurance segment financial information adjusted to include Harbor Point historical financial information as though the amalgamation with Harbor Point had occurred on January 1, 2009. The financial information also includes adjustments to eliminate any intercompany transactions and to reflect the amortization of certain acquisition accounting fair value adjustments.

The pro forma information is provided for informational purposes only. The pro forma information does not necessarily represent results that would have occurred if the amalgamation had occurred on January 1, 2009, nor is it necessarily indicative of future results.

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. SPECIALTY SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010 [a]			Sept. 30, 2010 [a]			June 30, 2010 [a]			June 30, 2009 [a]
Gross premiums written	$	99,448		$	70,388		$	65,625		$	64,198		$	90,773		$	75,701
Reinsurance premiums ceded		(27,358	)		(33,595	)		(15,956	)		(18,713	)		(5,672	)		(52,938	)

Net premiums written	$	72,090		$	36,793		$	49,669		$	45,485		$	85,101		$	22,763


Earned premiums	$	73,840		$	73,177		$	74,683		$	73,337		$	71,065		$	59,053
Earned premiums ceded		(22,783	)		(23,850	)		(26,140	)		(26,071	)		(27,053	)		(41,271	)

Net premiums earned		51,057			49,327			48,543			47,266			44,012			17,782

Net losses and loss expenses		(32,709	)		(31,375	)		(31,878	)		(29,295	)		(26,683	)		(11,057	)
Acquisition costs		(9,644	)		(8,066	)		(8,618	)		(6,763	)		(9,111	)		(2,483	)
General and administrative expenses		(9,289	)		(9,397	)		(7,552	)		(8,693	)		(6,355	)		(4,357	)
Other income		—			—			—			—			—			153

Underwriting (loss) income	$	(585	)	$	489		$	495		$	2,515		$	1,863		$	38


Loss ratio		64.1	%		63.6	%		65.7	%		62.0	%		60.6	%		62.2	%
Acquisition cost ratio		18.9	%		16.4	%		17.8	%		14.3	%		20.7	%		14.0	%
General and administrative expense ratio		18.2	%		19.1	%		15.6	%		18.4	%		14.4	%		24.5	%

Combined ratio		101.1	%		99.0	%		99.0	%		94.7	%		95.8	%		100.6	%

[a]	Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

See page 34 for additional information.

ALTERRA CAPITAL HOLDINGS LIMITED

ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			June 30, 2009
Gross premiums written	$	73,520		$	110,733		$	23,980		$	57,734		$	48,802		$	45,363
Reinsurance premiums ceded		(24,918	)		(23,179	)		(1,859	)		(2,397	)		(13,233	)		(10,647	)

Net premiums written	$	48,602		$	87,554		$	22,121		$	55,337		$	35,569		$	34,716


Earned premiums	$	61,730		$	66,805		$	47,633		$	45,424		$	40,286		$	36,418
Earned premiums ceded		(14,540	)		(20,580	)		(11,894	)		(9,310	)		(7,120	)		(10,583	)

Net premiums earned		47,190			46,225			35,739			36,114			33,166			25,835

Net losses and loss expenses		(23,840	)		(51,482	)		(13,843	)		(17,367	)		(12,397	)		(13,457	)
Acquisition costs		(10,909	)		(13,056	)		(4,853	)		(7,474	)		(6,070	)		(6,395	)
General and administrative expenses		(9,536	)		(9,723	)		(12,186	)		(7,806	)		(5,826	)		(5,712	)
Other income		165			215			2,006			177			173			436

Underwriting income (loss)	$	3,070		$	(27,821	)	$	6,863		$	3,644		$	9,046		$	707


Loss ratio		50.5	%		111.4	%		38.7	%		48.1	%		37.4	%		52.1	%
Acquisition cost ratio		23.1	%		28.2	%		13.6	%		20.7	%		18.3	%		24.8	%
General and administrative expense ratio		20.2	%		21.0	%		34.1	%		21.6	%		17.6	%		22.1	%

Combined ratio		93.8	%		160.7	%		86.4	%		90.4	%		73.2	%		99.0	%

ALTERRA CAPITAL HOLDINGS LIMITED

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			June 30, 2009
Gross premiums written	$	930		$	435		$	1,937		$	1,333		$	802		$	41,023
Reinsurance premiums ceded		(101	)		(20	)		(166	)		(102	)		(25	)		(27	)

Net premiums written	$	829		$	415		$	1,771		$	1,231		$	777		$	40,996


Earned premiums	$	930		$	435		$	1,937		$	1,333		$	802		$	41,023
Earned premiums ceded		(101	)		(20	)		(166	)		(102	)		(25	)		(27	)

Net premiums earned		829			415			1,771			1,231			777			40,996

Net investment income		12,545			12,343			12,084			12,182			12,420			12,917
Net realized and unrealized (losses) gains on investments		(1,299	)		2,807			3,981			3,321			(1,860	)		9,346
Other income		(23	)		—			357			(43	)		—			—
Claims and policy benefits		(15,570	)		(14,710	)		(18,551	)		(15,060	)		(13,943	)		(55,407	)
Acquisition costs		(122	)		(159	)		79			(171	)		(123	)		(677	)
General and administrative expenses		(259	)		(177	)		(1,088	)		(577	)		(642	)		(657	)


(Loss) income before taxes	$	(3,899	)	$	519		$	(1,367	)	$	883		$	(3,371	)	$	6,518

ALTERRA CAPITAL HOLDINGS LIMITED

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)

(Expressed in thousands of United States Dollars)


		FOR THE QUARTERS ENDED
		June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			June 30, 2009

Gross Premiums Written by Type of Risk:
Property & Casualty:
Insurance [a]:
Aviation	S	$	3,814		$	1,416		$	22,677		$	8,247		$	6,615		$	10,634
Excess Liability	L		41,390			27,387			27,361			21,579			38,001			38,667
Professional Liability	L		66,017			26,796			51,199			37,151			67,127			63,258
Property	S		30,034			15,673			11,999			10,967			27,283			26,667

			141,255			71,272			113,236			77,944			139,026			139,226

Reinsurance [b]:
Agriculture	S	$	8,713		$	20,785		$	(1,406	)	$	(2,665	)	$	(2,513	)		(233	)
Auto	S		55,105			15,160			22,585			10,251			66			—
Aviation	S		80			904			2,596			15,313			8,561			10,699
Credit/ Surety	S		1,556			24,426			1,118			2,569			(1,491	)		—
General Casualty	L		22,045			16,247			17,658			18,505			(857	)		(2,016	)
Marine & Energy	S		(619	)		17,093			(1,549	)		8,826			5,004			(343	)
Medical Malpractice	L		11,223			17,582			19,554			(3,131	)		7,813			17,437
Other	S		447			1,759			520			1,183			92			402
Professional Liability	L		39,462			59,684			28,538			37,965			32,005			15,219
Property	S		106,168			149,874			6,296			34,859			61,058			33,692
Whole Account	S/L		268			35,070			426			(232	)		2,362			1,588
Workers’ Compensation	L		4,306			16,436			14,284			561			7,478			18,751

			248,754			375,020			110,620			124,004			119,578			95,196

U.S. Specialty [a]:
General Liability	L	$	18,387		$	17,883		$	19,914		$	18,371		$	22,822			17,501
Marine	S		25,389			17,109			17,758			15,637			17,996			14,968
Professional Liability	L		4,894			4,355			(534	)		3,135			1,756			—
Property	S		50,778			31,041			28,487			27,055			48,199			43,232

			99,448			70,388			65,625			64,198			90,773			75,701

Alterra at Lloyd’s:
Accident & Health	S	$	8,380		$	13,544		$	5,570		$	5,919		$	6,022			5,255
Aviation	S		1,810			1,767			5,224			3,946			2,565			—
Financial Institutions	L		6,441			9,036			384			8,130			4,846			7,679
International Casualty	L		8,486			33,860			2,213			4,095			6,182			—
Professional Liability	L		10,466			7,922			4,204			4,330			4,161			6,530
Property	S		37,937			44,623			5,946			26,945			25,026			25,899
Surety	S		—			(19	)		439			4,369			—			—

			73,520			110,733			23,980			57,734			48,802			45,363


Aggregate Property & Casualty		$	562,977		$	627,413		$	313,461		$	323,880		$	398,179		$	355,486


Life & Annuity:
Annuity		$	271		$	336		$	1,129		$	—		$	6		$	—
Life			659			99			808			1,333			796			41,023


Aggregate Life & Annuity			930			435			1,937			1,333			802			41,023

Aggregate Property & Casualty and Life & Annuity		$	563,907		$	627,848		$	315,398		$	325,213		$	398,981		$	396,509

[a]	Insurance and U.S. specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

[b]	Includes the results for Harbor Point from May 12, 2010.


S = Short tail lines	$	329,726	$	372,690	$	128,473	$	173,305	$	205,664	$	171,666
L = Long tail lines		233,251		254,723		184,988		150,575		192,515		183,820

Aggregate Property & Casualty	$	562,977	$	627,413	$	313,461	$	323,880	$	398,179	$	355,486

ALTERRA CAPITAL HOLDINGS LIMITED

PRO FORMA ALTERRA REINSURANCE SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS [a] (Unaudited)

(Expressed in thousands of United States Dollars)


		FOR THE QUARTERS ENDED
		Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010		Dec. 31, 2009		Sept. 30, 2009			June 30, 2009			Mar. 31, 2009

Gross Premiums Written by Type of Risk:
Agriculture	S	$	(1,406	)	$	(2,665	)	$	(4,643	)	$	55,944	$	2,153	$	(96	)	$	(262	)	$	91,196
Auto	S		22,585			10,251			14,359			18,063		19,531		12,828			11,288			15,148
Aviation	S		2,596			15,313			8,586			6,191		9,395		18,154			10,760			4,509
Credit/ Surety	S		1,118			2,569			1,530			23,555		9,058		369			2,440			8,828
General Casualty	L		17,658			18,505			6,724			42,398		15,607		31,167			10,225			36,892
Marine & Energy	S		(1,549	)		8,826			5,220			21,128		4,033		8,565			(3,731	)		37,799
Medical Malpractice	L		19,554			(3,131	)		6,424			33,804		11,093		7,077			21,783			36,417
Other	S		520			1,183			294			5,664		168		(57	)		485			3,011
Professional Liability	L		28,538			37,965			51,615			55,812		37,407		60,373			53,705			50,629
Property	S		6,296			34,859			96,745			138,958		2,260		34,240			118,581			142,118
Whole Account	S/L		426			(232	)		3,095			47,135		6,578		4,569			18,503			5,369
Workers’ Compensation	L		14,284			561			7,197			11,966		8,164		33,693			19,161			29,225

Aggregate Pro Forma Reinsurance Segment		$	110,620		$	124,004		$	197,146		$	460,618	$	125,447	$	210,882		$	262,938		$	461,141

[a]

This information is based on historical Alterra reinsurance segment gross premiums written adjusted to include Harbor Point historical gross premiums written as though the amalgamation with Harbor Point had occurred on January 1, 2009. The financial information also includes adjustments to eliminate any intercompany transactions.

The pro forma information is provided for informational purposes only. The pro forma information does not necessarily represent results that would have occurred if the amalgamation with Harbor Point had occurred on January 1, 2009, nor is it necessarily indicative of future results.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–SIX MONTHS ENDED JUNE 30, 2011 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty															Life & Annuity			Corporate			Consolidated
	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total			Reinsurance

Gross premiums written	$	212,527		$	623,774		$	169,836		$	184,253		$	1,190,390		$	1,365		$	—		$	1,191,755
Reinsurance premiums ceded		(99,248	)		(65,564	)		(60,953	)		(48,097	)		(273,862	)		(121	)		—			(273,983	)

Net premiums written	$	113,279		$	558,210		$	108,883		$	136,156		$	916,528		$	1,244		$	—		$	917,772


Earned premiums	$	196,240		$	459,113		$	147,017		$	128,535		$	930,905		$	1,365		$	—		$	932,270
Earned premiums ceded		(89,068	)		(32,500	)		(46,633	)		(35,120	)		(203,321	)		(121	)		—			(203,442	)

Net premiums earned		107,172			426,613			100,384			93,415			727,584			1,244			—			728,828

Net losses and loss expenses		(63,656	)		(312,477	)		(64,084	)		(75,322	)		(515,539	)		—						(515,539	)
Claims and policy benefits		—			—			—			—			—			(30,280	)					(30,280	)
Acquisition costs		177			(93,509	)		(17,710	)		(23,965	)		(135,007	)		(281	)					(135,288	)
General and administrative expenses		(18,684	)		(46,195	)		(18,686	)		(19,259	)		(102,824	)		(436	)					(103,260	)
Other income		951			548			—			380			1,879			(23	)					1,856


Underwriting income (loss)		25,960			(25,020	)		(96	)		(24,751	)		(23,907	)		n/a			—			n/a

Net investment income																	24,888			92,543			117,431
Net realized and unrealized gains (losses) on investments																	1,508			(26,100	)		(24,592	)
Net impairment losses recognized in earnings																				(1,382	)		(1,382	)
Corporate other income																				50			50
Interest expense																				(19,089	)		(19,089	)
Net foreign exchange losses																				(2,212	)		(2,212	)
Corporate general and administrative expenses																				(37,602	)		(37,602	)


Income (loss) before taxes																$	(3,380	)	$	6,208		$	(21,079	)


Loss ratio [a]		59.4	%		73.2	%		63.8	%		80.6	%		70.9	%
Acquisition cost ratio [b]		(0.2	%)		21.9	%		17.6	%		25.7	%		18.6	%
General and administrative expense ratio [c]		17.4	%		10.8	%		18.6	%		20.6	%		14.1	%

Combined ratio		76.7	%		106.0	%		100.1	%		126.9	%		103.5	%

[a]	The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned for the property & casualty business

[b]	The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned for the property & casualty business

[c]	The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned for the property & casualty business

[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 for the property & casualty business.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED UNDERWRITING RATIOS - SIX MONTHS ENDED JUNE 30, 2011 (Unaudited)


	Property & Casualty
	Insurance			Reinsurance			U.S. Specialty			Alterra at Lloyd’s			Total

UNDERWRITING RATIOS

Loss ratio		59.4	%		73.2	%		63.8	%		80.6	%		70.9	%
Acquisition cost ratio		(0.2	%)		21.9	%		17.6	%		25.7	%		18.6	%
General and administrative expense ratio		17.4	%		10.8	%		18.6	%		20.6	%		14.1	%

Combined ratio		76.7	%		106.0	%		100.1	%		126.9	%		103.5	%


EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)

Loss ratio [a]		20.5	%		10.9	%		0.0	%		10.6	%		10.9	%


NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS

Loss ratio		80.0	%		84.2	%		63.8	%		91.2	%		81.7	%
Acquisition cost ratio		(0.2	%)		21.9	%		17.6	%		25.7	%		18.6	%
General and administrative expense ratio		17.4	%		10.8	%		18.6	%		20.6	%		14.1	%

Combined ratio		97.2	%		116.9	%		100.1	%		137.5	%		114.4	%

[a]	Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts.

CONSOLIDATED UNDERWRITING RATIOS - SIX MONTHS ENDED JUNE 30, 2010 (Unaudited)


	Property & Casualty
	Insurance [b]			Reinsurance [c]			U.S. Specialty [b]			Alterra at Lloyd’s			Total

UNDERWRITING RATIOS

Loss ratio		69.1	%		56.3	%		61.3	%		45.4	%		58.6	%
Acquisition cost ratio		0.4	%		20.2	%		17.1	%		18.7	%		15.0	%
General and administrative expense ratio		13.3	%		10.1	%		18.6	%		13.5	%		12.6	%

Combined ratio		82.8	%		86.6	%		97.0	%		77.6	%		86.2	%


EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)

Loss ratio [a]		13.3	%		8.9	%		1.0	%		7.5	%		8.4	%


NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS

Loss ratio		82.3	%		65.1	%		62.3	%		52.8	%		67.1	%
Acquisition cost ratio		0.4	%		20.2	%		17.1	%		18.7	%		15.0	%
General and administrative expense ratio		13.3	%		10.1	%		18.6	%		13.5	%		12.6	%

Combined ratio		96.1	%		95.5	%		98.0	%		85.1	%		94.6	%

[a]	Prior accident year reserve development excludes changes in reserves resulting from changes in premium estimates on prior years’ contracts.

[b]	Insurance and U.S. Specialty segment amounts for the comparative 2010 period have been reclassified to conform with the current period’s presentation.

[c]	Includes the results for Harbor Point from May 12, 2010.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010 [a]			June 30, 2009 [a]			Dec. 31, 2010 [a]			Dec. 31, 2009 [a]

Gross premiums written	$	212,527		$	208,432		$	230,232		$	399,612		$	447,340
Reinsurance premiums ceded		(99,248	)		(87,088	)		(104,192	)		(180,691	)		(218,633	)

Net premiums written	$	113,279		$	121,344		$	126,040		$	218,921		$	228,707


Earned premiums	$	196,240		$	206,587		$	211,216		$	415,396		$	434,147
Earned premiums ceded		(89,068	)		(94,041	)		(104,307	)		(180,684	)		(216,687	)

Net premiums earned		107,172			112,546			106,909			234,712			217,460

Net losses and loss expenses		(63,656	)		(77,742	)		(78,059	)		(140,108	)		(140,403	)
Acquisition costs		177			(504	)		1,597			(3,651	)		1,206
General and administrative expenses		(18,684	)		(14,979	)		(12,767	)		(34,508	)		(27,927	)
Other Income		951			91			1,435			1,267			1,620

Underwriting income	$	25,960		$	19,412		$	19,115		$	57,712		$	51,956


Loss ratio		59.4	%		69.1	%		73.0	%		59.7	%		64.6	%
Acquisition cost ratio		(0.2	%)		0.4	%		(1.5	%)		1.6	%		(0.6	%)
General and administration expense ratio		17.4	%		13.3	%		11.8	%		14.6	%		12.7	%

Combined ratio		76.7	%		82.8	%		83.5	%		76.0	%		76.9	%

[a]	Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

See page 34 for additional information.

ALTERRA CAPITAL HOLDINGS LIMITED

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010 [a]			June 30, 2009			Dec. 31, 2010 [a]			Dec. 31, 2009

Gross premiums written	$	623,774		$	274,429		$	328,178		$	509,053		$	489,028
Reinsurance premiums ceded		(65,564	)		(58,699	)		(69,468	)		(64,131	)		(80,005	)

Net premiums written	$	558,210		$	215,730		$	258,710		$	444,922		$	409,023


Earned premiums	$	459,113		$	270,472		$	236,536		$	699,243		$	476,434
Earned premiums ceded		(32,500	)		(35,012	)		(49,344	)		(71,627	)		(88,578	)

Net premiums earned		426,613			235,460			187,192			627,616			387,856

Net losses and loss expenses		(312,477	)		(132,506	)		(124,028	)		(347,816	)		(254,474	)
Acquisition costs		(93,509	)		(47,639	)		(33,197	)		(131,114	)		(71,074	)
General and administrative expenses		(46,195	)		(23,779	)		(14,747	)		(66,073	)		(31,778	)
Other income		548			155			12			—			12

Underwriting (loss) income	$	(25,020	)	$	31,691		$	15,232		$	82,613		$	30,542


Loss ratio		73.2	%		56.3	%		66.3	%		55.4	%		65.6	%
Acquisition cost ratio		21.9	%		20.2	%		17.7	%		20.9	%		18.3	%
General and administration expense ratio		10.8	%		10.1	%		7.9	%		10.5	%		8.2	%

Combined ratio		106.0	%		86.6	%		91.9	%		86.8	%		92.1	%

[a]	Includes the results for Harbor Point from May 12, 2010.

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. SPECIALTY SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010 [a]			June 30, 2009 [a]			Dec. 31, 2010 [a]			Dec. 31, 2009 [a]
Gross premiums written	$	169,836		$	164,675		$	141,210		$	294,498		$	265,905
Reinsurance premiums ceded		(60,953	)		(53,824	)		(92,320	)		(88,493	)		(148,546	)

Net premiums written	$	108,883		$	110,851		$	48,890		$	206,005		$	117,359


Earned premiums	$	147,017		$	140,250		$	109,966		$	288,270		$	239,613
Earned premiums ceded		(46,633	)		(65,446	)		(73,197	)		(117,657	)		(149,008	)

Net premiums earned		100,384			74,804			36,769			170,613			90,605

Net losses and loss expenses		(64,084	)		(45,879	)		(21,448	)		(107,052	)		(54,764	)
Acquisition costs		(17,710	)		(12,793	)		(3,672	)		(28,174	)		(7,474	)
General and administrative expenses		(18,686	)		(13,877	)		(11,168	)		(30,122	)		(27,925	)
Other income		—			—			(68	)		—			(68	)

Underwriting (loss) income	$	(96	)	$	2,255		$	413		$	5,265		$	374


Loss ratio		63.8	%		61.3	%		58.3	%		62.7	%		60.4	%
Acquisition cost ratio		17.6	%		17.1	%		10.0	%		16.5	%		8.2	%
General and administration expense ratio		18.6	%		18.6	%		30.4	%		17.7	%		30.8	%

Combined ratio		100.1	%		97.0	%		98.7	%		96.9	%		99.5	%

[a]	Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

See page 34 for additional information.

ALTERRA CAPITAL HOLDINGS LIMITED

ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010			June 30, 2009			Dec. 31, 2010			Dec. 31, 2009
Gross premiums written	$	184,253		$	120,919		$	89,542		$	202,633		$	128,973
Reinsurance premiums ceded		(48,097	)		(33,192	)		(27,948	)		(37,448	)		(32,884	)

Net premiums written	$	136,156		$	87,727		$	61,594		$	165,185		$	96,089


Earned premiums	$	128,535		$	77,746		$	64,664		$	170,803		$	125,000
Earned premiums ceded		(35,120	)		(14,589	)		(17,967	)		(35,793	)		(29,907	)

Net premiums earned		93,415			63,157			46,697			135,010			95,093

Net losses and loss expenses		(75,322	)		(28,655	)		(23,416	)		(59,865	)		(43,958	)
Acquisition costs		(23,965	)		(11,837	)		(9,547	)		(24,164	)		(18,136	)
General and administrative expenses		(19,259	)		(8,539	)		(10,433	)		(28,531	)		(19,972	)
Other income		380			351			508			2,534			658

Underwriting (loss) income	$	(24,751	)	$	14,477		$	3,809		$	24,984		$	13,685


Loss ratio		80.6	%		45.4	%		50.1	%		44.3	%		46.2	%
Acquisition cost ratio		25.7	%		18.7	%		20.4	%		17.9	%		19.1	%
General and administration expense ratio		20.6	%		13.5	%		22.3	%		21.1	%		21.0	%

Combined ratio		126.9	%		77.6	%		92.9	%		83.4	%		86.3	%

ALTERRA CAPITAL HOLDINGS LIMITED

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010			June 30, 2009			Dec. 31, 2010			Dec. 31, 2009
Gross premiums written	$	1,365		$	1,665		$	41,620		$	4,935		$	43,755
Reinsurance premiums ceded		(121	)		(132	)		(120	)		(400	)		(413	)

Net premiums written	$	1,244		$	1,533		$	41,500		$	4,535		$	43,342


Earned premiums	$	1,365		$	1,665		$	41,620		$	4,935		$	43,755
Earned premiums ceded		(121	)		(132	)		(120	)		(400	)		(413	)

Net premiums earned		1,244			1,533			41,500			4,535			43,342

Net investment income		24,888			25,519			24,483			49,785			50,993
Net realized and unrealized gains on investments		1,508			4,056			17,214			11,358			37,338
Other income		(23	)		(28	)		—			286			(120	)
Claims and policy benefits		(30,280	)		(31,602	)		(69,739	)		(65,213	)		(101,093	)
Acquisition costs		(281	)		(269	)		(870	)		(361	)		(1,396	)
General and administrative expenses		(436	)		(1,299	)		(1,351	)		(2,964	)		(2,786	)


Income (loss) before taxes	$	(3,380	)	$	(2,090	)	$	11,237		$	(2,574	)	$	26,278

ALTERRA CAPITAL HOLDINGS LIMITED

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)

(Expressed in thousands of United States Dollars)


		FOR THE SIX MONTHS ENDED								FOR THE YEARS ENDED
		June 30, 2011			June 30, 2010			June 30, 2009		Dec. 31, 2010		Dec. 31, 2009

Gross Premiums Written by Type of Risk:
Property & Casualty:
Insurance [a]:
Aviation	S	$	5,230		$	8,964		$	16,819	$	39,888	$	69,834
Excess Liability	L		68,777			64,633			76,639		113,573		133,340
Professional Liability	L		92,813			94,701			95,699		183,051		179,904
Property	S		45,707			40,134			41,075		63,100		64,262

			212,527			208,432			230,232		399,612		447,340

Reinsurance [b]:
Agriculture	S		29,498			33,293			87,433		29,222		89,550
Auto	S		70,265			66			—		32,902		—
Aviation	S		984			13,383			14,858		31,292		34,715
Credit/ Surety	S		25,982			(1,491	)		—		2,196		—
General Casualty	L		38,292			12,194			16,125		48,357		29,185
Marine & Energy	S		16,474			9,104			8,735		16,381		18,321
Medical Malpractice	L		28,805			34,968			53,830		51,391		67,483
Other	S		2,206			1,081			2,268		2,784		2,297
Professional Liability	L		99,146			43,924			24,930		110,427		71,531
Property	S		256,042			106,991			75,873		148,146		87,039
Whole Account	S/L		35,338			4,935			5,963		5,129		11,456
Workers’ Compensation	L		20,742			15,981			38,163		30,826		77,451

			623,774			274,429			328,178		509,053		489,028

U.S. Specialty [a]:
General Liability	L		36,270			42,852			33,120		81,137		68,209
Marine	S		42,498			34,059			29,749		67,454		61,360
Professional Liability	L		9,249			4,001			—		6,602		576
Property	S		81,819			83,763			78,341		139,305		135,760

			169,836			164,675			141,210		294,498		265,905

Alterra at Lloyd’s:
Accident & Health	S		21,924			19,432			17,665		30,921		22,602
Aviation	S		3,577			6,968			—		16,138		2,611
Financial Institutions	L		15,477			10,934			11,503		19,448		23,822
International Casualty	L		42,346			19,866			—		26,174		—
Professional Liability	L		18,388			11,057			9,315		19,591		19,889
Property	S		82,560			52,662			51,059		85,553		60,049
Surety	S		(19	)		—			—		4,808		—

			184,253			120,919			89,542		202,633		128,973


Aggregate Property & Casualty		$	1,190,390		$	768,455		$	789,162	$	1,405,796	$	1,331,246


Life & Annuity:
Annuity		$	607		$	6		$	—	$	1,135	$	—
Life			758			1,659			41,620		3,800		43,755


Aggregate Life & Annuity			1,365			1,665			41,620		4,935		43,755

Aggregate Property & Casualty and Life & Annuity		$	1,191,755		$	770,120		$	830,782	$	1,410,731	$	1,375,001

[a]	Insurance and U.S. Specialty segment amounts for comparative periods have been reclassified to conform with the current period’s presentation.

[b]	Includes the results for Harbor Point from May 12, 2010.


S = Short tail lines	$	702,416	$	410,877	$	426,857	$	712,655	$	654,128
L = Long tail lines		487,974		357,578		362,305		693,141		677,118

Aggregate Property & Casualty	$	1,190,390	$	768,455	$	789,162	$	1,405,796	$	1,331,246

ALTERRA CAPITAL HOLDINGS LIMITED

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)


	Carrying Value										Fair Value
Type of Investment	As of June 30, 2011		Investment Distribution			As of Dec. 31, 2010		Investment Distribution			As of June 30, 2011		Investment Distribution			As of Dec. 31, 2010		Investment Distribution
Cash and cash equivalents	$	987,057		12.4	%	$	905,606		11.5	%	$	987,057		12.3	%	$	905,606		11.4	%


U.S. government and agencies		744,465		9.4	%		995,546		12.7	%		744,465		9.3	%		995,546		12.5	%
Non-U.S. governments		168,290		2.1	%		79,111		1.0	%		168,290		2.1	%		79,111		1.0	%
Corporate securities		2,743,228		34.5	%		2,735,366		34.8	%		2,743,228		34.3	%		2,735,366		34.5	%
Municipal securities		218,370		2.7	%		238,014		3.0	%		218,370		2.7	%		238,014		3.0	%
Asset-backed securities		203,598		2.6	%		86,937		1.1	%		203,598		2.5	%		86,937		1.1	%
Residential mortgage-backed securities		1,159,922		14.6	%		1,168,390		14.9	%		1,159,922		14.5	%		1,168,390		14.7	%
Commercial mortgage-backed securities		383,920		4.8	%		334,151		4.3	%		383,920		4.8	%		334,151		4.2	%


Fixed maturities carried at fair value	$	5,621,793		70.7	%	$	5,637,515		71.7	%	$	5,621,793		70.2	%	$	5,637,515		71.0	%


Other investments carried at fair value	$	350,193		4.4	%	$	378,128		4.8	%	$	350,193		4.4	%	$	378,128		4.8	%


Total investments carried at fair value	$	6,959,043		87.5	%	$	6,921,249		88.0	%	$	6,959,043		86.9	%	$	6,921,249		87.2	%


U.S. government and agencies	$	29,694		0.4	%	$	29,687		0.4	%	$	30,416		0.4	%	$	30,200		0.4	%
Non-U.S. governments		584,039		7.3	%		538,274		6.8	%		616,403		7.7	%		587,053		7.4	%
Corporate securities		378,958		4.8	%		371,143		4.7	%		401,959		5.0	%		397,261		5.0	%
Asset-backed securities		1,000		0.0	%		1,000		0.0	%		1,004		0.0	%		998		0.0	%


Fixed maturities carried at amortized cost	$	993,691		12.5	%	$	940,104		12.0	%	$	1,049,782		13.1	%	$	1,015,512		12.8	%


Total invested assets	$	7,952,734		100.0	%	$	7,861,353		100.0	%	$	8,008,825		100.0	%	$	7,936,761		100.0	%

As of June 30, 2011, the weighted average book yield of the cash and fixed maturities portfolio was 3.33%, and the weighted average duration was 4.1 years.


Credit Ratings	As of June 30, 2011		Ratings Distribution			As of Dec. 31, 2010		Ratings Distribution			As of June 30, 2011		Ratings Distribution			As of Dec. 31, 2010		Ratings Distribution
U.S. government and agencies [a]	$	1,866,591		28.2	%	$	2,060,116		31.3	%	$	1,866,591		28.0	%	$	2,060,116		31.0	%
AAA		1,199,207		18.1	%		1,076,680		16.4	%		1,199,207		18.0	%		1,076,680		16.2	%
AA		656,570		9.9	%		657,867		10.0	%		656,570		9.8	%		657,867		9.9	%
A		1,406,390		21.3	%		1,353,945		20.6	%		1,406,390		21.1	%		1,353,945		20.4	%
BBB		266,150		4.0	%		226,849		3.4	%		266,150		4.0	%		226,849		3.4	%
BB		24,165		0.4	%		32,021		0.5	%		24,165		0.4	%		32,021		0.5	%
B		106,444		1.6	%		138,703		2.1	%		106,444		1.6	%		138,703		2.1	%
CCC or lower		46,565		0.7	%		45,469		0.7	%		46,565		0.7	%		45,469		0.7	%
Not rated		49,711		0.8	%		45,865		0.7	%		49,711		0.7	%		45,865		0.7	%


Fixed maturities carried at fair value	$	5,621,793		85.0	%	$	5,637,515		85.7	%	$	5,621,793		84.3	%	$	5,637,515		84.7	%


U.S. government and agencies		29,694		0.4	%		29,687		0.5	%		30,416		0.5	%		30,200		0.5	%
AAA		696,439		10.5	%		641,437		9.8	%		737,096		11.0	%		699,598		10.5	%
AA		117,851		1.8	%		113,140		1.7	%		121,423		1.8	%		118,276		1.8	%
A		135,249		2.0	%		141,683		2.2	%		143,984		2.2	%		151,127		2.3	%
BBB		14,458		0.2	%		12,744		0.2	%		16,863		0.3	%		14,764		0.2	%
Not rated		—		—			1,413		0.0	%		—		—			1,547		0.0	%


Fixed maturities carried at amortized cost	$	993,691		15.0	%	$	940,104		14.3	%	$	1,049,782		15.7	%	$	1,015,512		15.3	%


Total fixed maturities	$	6,615,484		100.0	%	$	6,577,619		100.0	%	$	6,671,575		100.0	%	$	6,653,027		100.0	%

[a]	Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,122,126 (December 31, 2010: $1,064,570)

Percentage totals may not add due to rounding.


	Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended			Quarter Ended
	June 30, 2011			Mar. 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			June 30, 2009
Net investment income	$	59,665		$	57,766		$	61,080		$	59,711		$	53,277		$	41,755

Realized and unrealized gains (losses) on trading fixed maturities		1,432			(1,827	)		(3,893	)		883			(1,284	)		720
Net realized gains (losses) on available for sale fixed maturities		54			3,369			5,816			6,395			2,425			(654	)
(Decrease) increase in fair value of hedge funds		(1,878	)		3,167			5,465			4,820			(3,323	)		21,514
(Decrease) increase in fair value of non-hedge fund other investments		(5,382	)		(23,527	)		2,437			3,313			(12,604	)		(108	)

Net realized and unrealized (losses) gains on investments	$	(5,774	)	$	(18,818	)	$	9,825		$	15,411		$	(14,786	)	$	21,472


Net impairment losses recognized in earnings	$	(353	)	$	(1,029	)	$	(1,774	)	$	(151	)	$	(300	)	$	(2,014	)

ALTERRA CAPITAL HOLDINGS LIMITED

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)


	As of June 30, 2011		Periodic Rate of Return
	As of June 30, 2011		Last 3 Months			Year to Date			Last 12 months			Last 60 months*
Cash and fixed maturities	$	7,602,541		2.04	%		3.10	%		4.29	%		5.67	%


Distressed securities	$	34,496		1.93	%		2.36	%		6.16	%		5.85	%
Diversified arbitrage		22,532		(5.41	%)		(2.07	%)		6.52	%		(3.85	%)
Emerging markets		4,961		(0.59	%)		0.93	%		5.15	%		4.40	%
Event-driven arbitrage		26,696		0.83	%		(3.62	%)		(6.56	%)		2.78	%
Fixed income arbitrage		—		0.00	%		0.00	%		0.00	%		12.97	%
Fund of funds		44,154		0.71	%		3.05	%		8.75	%		1.48	%
Global macro		49,213		(1.60	%)		(0.67	%)		2.67	%		5.72	%
Long / short credit		9,821		(3.90	%)		(2.15	%)		0.91	%		4.21	%
Long / short equity		124,214		(0.11	%)		2.84	%		7.00	%		6.50	%
Opportunistic		1,699		(2.05	%)		(36.60	%)		(37.63	%)		(20.52	%)


Hedge funds **		317,786		(0.45	%)		0.53	%		3.48	%		2.55	%

Derivatives		456
Structured deposits		26,859
Equity investments		5,092


Total other investments	$	350,193


Total invested assets	$	7,952,734


Hedge Fund Investment Return Data:

HFRI Fund of Funds Composite Index [a]				(1.18	%)		(0.31	%)		6.67	%		1.53	%

Hedge Fund Performance History – 60 months ended June 30, 2011


Monthly performance	2011			2010			2009			2008			2007			2006
January		0.13	%		0.79	%		2.13	%		(1.37	%)		1.28	%
February		0.57	%		0.17	%		0.65	%		1.83	%		1.50	%
March		0.29	%		1.02	%		(0.76	%)		(2.58	%)		1.90	%
April		0.73	%		0.88	%		(0.84	%)		(0.13	%)		2.30	%
May		(0.28	%)		(0.73	%)		2.45	%		2.51	%		2.59	%
June		(0.89	%)		(0.83	%)		1.53	%		0.93	%		0.85	%
July					0.36	%		1.40	%		(4.12	%)		0.99	%		(0.71	%)
August					(0.28	%)		0.78	%		(2.14	%)		(1.62	%)		0.02	%
September					1.28	%		1.71	%		(7.31	%)		1.85	%		(2.04	%)
October					0.84	%		1.53	%		(4.85	%)		4.15	%		1.37	%
November					0.40	%		0.35	%		(1.75	%)		0.10	%		1.81	%
December					0.31	%		0.77	%		(1.92	%)		(0.13	%)		1.96	%

Quarterly performance
Q1		0.98	%		1.99	%		2.00	%		(2.15	%)		4.75	%
Q2		(0.45	%)		(0.69	%)		3.14	%		3.33	%		5.83	%
Q3					1.35	%		3.94	%		(13.03	%)		1.18	%		(2.72	%)
Q4					1.56	%		2.66	%		(8.31	%)		4.11	%		5.22	%

Period return		0.53	%		4.25	%		12.27	%		(19.38	%)		16.78	%		2.36	%

Past performance should not be considered to be a reliable indicator of future performance.

[a]	As reported by HFRI as of August 1, 2011

*	Annualized

**	Net of all fees

ALTERRA CAPITAL HOLDINGS LIMITED

LARGEST 25 CORPORATE HOLDINGS (Unaudited)

(Expressed in thousands of United States Dollars)


	As of June 30, 2011
Issuer	Amortized Cost		Fair Value
Bank of America Corp		67,068		68,365
General Electric		61,225		62,186
JP Morgan Chase & Co		51,863		53,648
Citigroup Inc		50,704		50,831
Wells Fargo & Co		47,575		48,762
Morgan Stanley		44,468		45,990
Lloyds Banking Group plc		39,680		40,976
Credit Suisse Group		37,238		37,769
Pepsico Inc		35,899		37,337
BP plc		36,137		37,027
Novartis AG		33,051		34,476
AT&T Inc		33,056		34,192
Verizon Communications Inc		32,615		34,137
UBS AG		30,807		33,328
Goldman Sachs Group Inc		32,011		32,683
Pfizer Inc		26,964		28,281
Berkshire Hathaway Inc		27,336		27,887
Conoco Philips		25,553		27,028
Hypo Real Estate Holding AG		26,087		26,239
Metlife Inc		25,301		26,164
Barclays plc		25,776		25,299
Wal-Mart Stores Inc		24,024		24,497
HSBC Holdings plc		23,961		24,470
Medtronic Inc.		22,518		23,176
Duke Energy Corp.		21,602		22,711

	$	882,518	$	907,459

ALTERRA CAPITAL HOLDINGS LIMITED

SHAREHOLDER RETURN ANALYSIS (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	FOR THE QUARTERS ENDED						FOR THE SIX MONTHS ENDED						FOR THE YEARS ENDED
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010			Dec. 31, 2010			Dec. 31, 2009
Income and Return on Equity:
Net income (loss)	$	32,635		$	103,447		$	(14,052	)	$	139,828		$	302,335		$	246,215

Net operating income	$	39,558		$	58,774		$	14,833		$	99,455		$	251,712		$	208,907

Average shareholders’ equity	$	2,758,138		$	2,321,687		$	2,789,435		$	1,955,281		$	2,467,429		$	1,398,872

Annualized return on average shareholders’ equity [a]		4.7	%		17.8	%		(1.0	%)		14.3	%		12.3	%		17.6	%

Annualized net operating return on average shareholders’ equity [a]		5.7	%		10.1	%		1.1	%		10.2	%		10.2	%		14.9	%


Book value and dividends per share:

Diluted book value per share	$	25.98		$	24.55		$	25.98		$	24.55		$	25.99		$	27.36

Dividends paid per share	$	0.12		$	2.60		$	0.24		$	2.70		$	2.94		$	0.38


Change in diluted book value per share		2.5	%		(11.9	%)		(0.0	%)		(10.3	%)		(5.0	%)		21.8	%


Dividend payout ratio [b]		0.5	%		19.7	%		0.9	%		20.6	%		22.4	%		1.7	%


Total return to shareholders [c]		3.0	%		7.8	%		0.8	%		10.3	%		17.4	%		23.5	%

[a]	Annualized return on average shareholders’ equity is defined as annualized net income divided by the average of the quarterly average shareholders’ equity balances.

Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the quarterly average shareholders’ equity balances.

[b]	Dividend payout ratio is calculated as dividends paid divided by beginning shareholders’ equity.

[c]	Total return to shareholders is calculated as the change in diluted book value per share plus the dividend payout ratio.

ALTERRA CAPITAL HOLDINGS LIMITED

EARNINGS PER SHARE INFORMATION (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	FOR THE QUARTERS ENDED				FOR THE SIX MONTHS ENDED					FOR THE YEARS ENDED
	June 30, 2011		June 30, 2010		June 30, 2011			June 30, 2010		Dec. 31, 2010		Dec. 31, 2009
Net income (loss) available to common shareholders	$	32,635	$	103,447	$	(14,052	)	$	139,828	$	302,335	$	246,215

Denominator:
Weighted average shares - basic
Outstanding [a]		105,365,111		90,745,497		106,171,735			73,429,084		94,426,055		56,615,080
Unvested restricted share units		239,675		296,804		213,272			350,363		256,224		391,828

		105,604,786		91,042,301		106,385,007			73,779,447		94,682,279		57,006,908

Share equivalents:
Warrants		1,247,975		420,613		—			526,539		537,399		608,161
Options		148,366		193,827		—			214,258		183,258		150,669
Employee stock purchase plan		2,506		4,689		—			4,675		2,301		1,399
Non participating restricted shares		108,276		—		—			—		54,138		—


Weighted average shares - diluted [b]		107,111,909		91,661,430		106,385,007			74,524,919		95,459,375		57,767,137


Net income (loss) per share	$	0.31	$	1.14	$	(0.13	)	$	1.90	$	3.19	$	4.32


Net income (loss) per diluted share	$	0.30	$	1.13	$	(0.13	)	$	1.88	$	3.17	$	4.26

[a]	Includes weighted average unvested participating restricted shares

[b]	Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the average market price during the period of calculation.

ALTERRA CAPITAL HOLDINGS LIMITED

OPERATING INCOME RECONCILIATION (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	FOR THE QUARTERS ENDED					FOR THE SIX MONTHS ENDED						FOR THE YEARS ENDED
	June 30, 2011		June 30, 2010			June 30, 2011			June 30, 2010			Dec. 31, 2010			Dec. 31, 2009

Before tax
Net income (loss)	$	28,308	$	105,807		$	(21,079	)	$	144,153		$	306,491		$	256,236
Net realized and unrealized losses (gains) on non-hedge fund investments, before tax [a]		4,249		11,763			27,263			13,131			65			(2,173	)
Foreign exchange losses (gains), before tax		3,090		(634	)		2,212			(3,086	)		(115	)		(5,772	)
Merger and acquisition expenses, before tax		—		(54,570	)		—			(49,826	)		(48,776	)		(31,566	)

Net operating income (loss)		35,647		62,366			8,396			104,372			257,665			216,725


Net of tax
Net income (loss)	$	32,635	$	103,447		$	(14,052	)	$	139,828		$	302,335		$	246,215
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a]		4,711		11,540			27,313			12,776			(865	)		(1,411	)
Foreign exchange losses (gains), net of tax		2,212		(298	)		1,572			(1,978	)		363			(4,331	)
Merger and acquisition expenses, net of tax		—		(55,915	)		—			(51,171	)		(50,121	)		(31,566	)

Net operating income		39,558		58,774			14,833			99,455			251,712			208,907


Weighted average shares outstanding:
Basic		105,604,786		91,042,301			106,385,007			73,779,447			94,682,279			57,006,908
Diluted		107,111,909		91,661,430			106,385,007			74,524,919			95,459,375			57,767,137

Basic per share data
Earnings (losses) per share	$	0.31	$	1.14		$	(0.13	)	$	1.90		$	3.19		$	4.32
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a]		0.04		0.12			0.26			0.17			(0.01	)		(0.02	)
Foreign exchange losses (gains), net of tax		0.02		—			0.01			(0.03	)		0.01			(0.08	)
Merger and acquisition expenses, net of tax		—		(0.61	)		—			(0.69	)		(0.53	)		(0.56	)

Net operating income (loss) per share	$	0.37	$	0.65		$	0.14		$	1.35		$	2.66		$	3.66


Diluted per share data
Diluted earnings (loss) per share	$	0.30	$	1.13		$	(0.13	)	$	1.88		$	3.17		$	4.26
Net realized and unrealized losses (gains) on non-hedge fund investments, net of tax [a]		0.04		0.12			0.26			0.17			(0.01	)		(0.02	)
Foreign exchange losses (gains), net of tax		0.02		—			0.01			(0.03	)		0.01			(0.07	)
Merger and acquisition expenses, net of tax		—		(0.61	)		—			(0.69	)		(0.53	)		(0.55	)

Net operating income per diluted share	$	0.37	$	0.64		$	0.14		$	1.33		$	2.64		$	3.62

[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.

ALTERRA CAPITAL HOLDINGS LIMITED

BOOK VALUE PER SHARE (Unaudited)

(Expressed in thousands of United States Dollars, except per share and share amounts)


	As of June 30, 2011		As of Mar.31, 2011		As of Dec. 31, 2010

Price per share at period end	$	22.30	$	22.26	$	21.64

Shareholders’ equity	$	2,793,081	$	2,723,194	$	2,918,270

Goodwill and intangible assets	$	58,094	$	58,585	$	59,076

Tangible book value	$	2,734,987	$	2,664,609	$	2,859,194

Basic common shares outstanding [a]		105,794,521		105,733,610		110,963,160

Add: unvested restricted stock units		247,179		247,179		167,971

Add: dilutive impact of warrants outstanding		1,334,909		1,346,672		1,036,442

Add: dilutive impact of options outstanding		123,881		134,901		123,395

Add: dilutive impact of employee stock purchase plan		—		4,016		—


Diluted shares outstanding [b]		107,500,490		107,466,378		112,290,968

Basic book value per share	$	26.40	$	25.76	$	26.30
Diluted book value per share	$	25.98	$	25.34	$	25.99

Basic tangible book value per share	$	25.85	$	25.20	$	25.77
Diluted tangible book value per share	$	25.44	$	24.79	$	25.46

[a]	Includes unvested restricted shares

[b]	Computed using the treasury method. The treasury method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the period-end market price.

ALTERRA CAPITAL HOLDINGS LIMITED

REGULATION G

In presenting the Company’s results, management has included and discussed net operating income, net operating income per share, net operating income per diluted share, annualized net operating return on average shareholders’ equity, tangible book value per share 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 the Company’s business. These measures, however, should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The reconciliation of such measures to their respective most directly comparable U.S. GAAP financial measures is presented in the attached financial information in accordance with Regulation G.

Net operating income is defined as net income excluding after-tax net realized and unrealized gains or losses on non- hedge fund investments (this includes net realized and unrealized gains or losses on trading securities, net realized gains or losses on available for sale securities, net impairment losses recognized in earnings, changes in fair value of investment derivatives, catastrophe bonds, structured deposits and earnings from equity method investments), after-tax net foreign exchange gains or losses and after-tax merger and acquisition expenses. Net operating income per share and per diluted share is defined as the net operating income divided by the weighted average common shares or weighted average diluted common shares, respectively. We believe that this non-GAAP measure provides a better indication of management performance as realized and unrealized gains and losses on fixed maturities may fluctuate from period to period and foreign exchange gains and losses are typically outside the control of management. Merger and acquisition expenses are not indicative of expenses fundamental to the business and may fluctuate from period to period.

Annualized net operating return on average shareholders’ equity is defined as annualized net operating income divided by the average of the beginning and ending shareholders’ equity. Tangible book value is defined as shareholders’ equity excluding goodwill and intangible assets. Tangible book value per share and diluted tangible book value per share is defined as the tangible book value divided by the common shares outstanding or diluted common shares outstanding, respectively. These non-GAAP measures allow management to assess how the Company has performed in terms of wealth generated for its shareholders.

ALTERRA CAPITAL HOLDINGS LIMITED

Reclassified Segment Information

Selected Financial Information

ALTERRA CAPITAL HOLDINGS LIMITED

RECLASSIFICATION OF INSURANCE AND U.S. SPECIALTY SEGMENTS

(Expressed in thousands of United States Dollars)

INSURANCE SEGMENT


	Year ended						Year ended			Year ended						Year ended
	Dec. 31, 2010						Dec. 31, 2010			Dec. 31, 2009						Dec. 31, 2009
	(Reclassified)			Reclassified amounts			(As previously reported)			(Reclassified)			Reclassified amounts			(As previously reported)
Gross premiums written	$	399,612		$	29,492		$	370,120		$	447,340		$	19,573		$	427,767
Reinsurance premiums ceded		(180,691	)		(10,083	)		(170,608	)		(218,633	)		(6,550	)		(212,083	)

Net premiums written	$	218,921		$	19,409		$	199,512		$	228,707		$	13,023		$	215,684


Earned premiums	$	415,396		$	23,680		$	391,716		$	434,147		$	17,057		$	417,090
Earned premiums ceded		(180,684	)		(7,561	)		(173,123	)		(216,687	)		(5,560	)		(211,127	)

Net premiums earned		234,712			16,119			218,593			217,460			11,497			205,963

Net losses and loss expenses		(140,108	)		(11,285	)		(128,823	)		(140,403	)		(8,048	)		(132,355	)
Acquisition costs		(3,651	)		(270	)		(3,381	)		1,206			(27	)		1,233
General and administrative expenses		(34,508	)		(5,893	)		(28,615	)		(27,927	)		(3,304	)		(24,623	)
Other income		1,267			507			760			1,620			382			1,238

Underwriting income (loss)	$	57,712		$	(822	)	$	58,534		$	51,956		$	500		$	51,456


Loss ratio		59.7	%					58.9	%		64.6	%					64.3	%
Acquisition cost ratio		1.6	%					1.6	%		(0.6	%)					(0.6	%)
General and administrative expense ratio		14.7	%					13.1	%		12.9	%					11.9	%

Combined ratio		76.0	%					73.6	%		76.9	%					75.6	%


U.S. SPECIALTY SEGMENT
	Year ended						Year ended			Year ended						Year ended
	Dec. 31, 2010						Dec. 31, 2010			Dec. 31, 2009						Dec. 31, 2009
	(Reclassified)			Reclassified amounts			(As previously reported)			(Reclassified)			Reclassified amounts			(As previously reported)
Gross premiums written	$	294,498		$	(29,492)		$	323,990		$	265,905		$	(19,573)		$	285,478
Reinsurance premiums ceded		(88,493	)		10,083			(98,576	)		(148,546	)		6,550			(155,096	)

Net premiums written	$	206,005		$	(19,409)		$	225,414		$	117,359		$	(13,023)		$	130,382

Earned premiums	$	288,270		$	(23,680)		$	311,950		$	239,613		$	(17,057)		$	256,670
Earned premiums ceded		(117,657	)		7,561			(125,218	)		(149,008	)		5,560			(154,568	)

Net premiums earned		170,613			(16,119	)		186,732			90,605			(11,497)			102,102
Net losses and loss expenses		(107,052	)		11,285			(118,337	)		(54,764	)		8,048			(62,812	)
Acquisition costs		(28,174	)		270			(28,444	)		(7,474	)		27			(7,501	)
General and administrative expenses		(30,122	)		5,893			(36,015	)		(27,925	)		3,304			(31,229	)
Other income		—			(507	)		507			(68	)		(382	)		314

Underwriting income (loss)	$	5,265		$	822		$	4,443		$	374		$	(500)		$	874

Loss ratio		62.7	%					63.4	%		60.4	%					61.5	%
Acquisition cost ratio		16.5	%					15.2	%		8.2	%					7.3	%
General and administrative expense ratio		17.7	%					19.3	%		30.9	%					30.7	%

Combined ratio		96.9	%					97.9	%		99.5	%					99.5	%

Effective January 1, 2011, Alterra redefined its Insurance and U.S. Specialty segments based on changes to the internal reporting structure. Insurance business underwritten by Alterra Insurance USA Inc., which was previously reported within the U.S. Specialty segment, has been reclassified to the Insurance segment. Alterra Insurance USA Inc. is a managing general underwriter for Alterra Excess & Surplus Insurance Company and Alterra America Insurance Company, as well as various third party insurance companies, and is Alterra’s principal insurance underwriting platform for retail distribution in the United States. Segment disclosures for comparative periods have been restated to reflect this reclassification.

ALTERRA CAPITAL HOLDINGS LIMITED

INSURANCE SEGMENT Results - as Reclassified (Unaudited)

(Expressed in thousands of United States Dollars)




	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009

Gross premiums written	$	113,236		$	77,944		$	139,026		$	69,406		$	126,678		$	90,430		$	139,226		$	91,006
Reinsurance premiums ceded		(56,728	)		(36,875	)		(47,437	)		(39,651	)		(71,053	)		(43,388	)		(47,972	)		(56,220	)

Net premiums written	$	56,508		$	41,069		$	91,589		$	29,755		$	55,625		$	47,042		$	91,254		$	34,786


Earned premiums	$	106,169		$	102,640		$	104,841		$	101,746		$	114,155		$	108,776		$	105,576		$	105,640
Earned premiums ceded		(43,847	)		(42,796	)		(45,211	)		(48,830	)		(56,043	)		(56,337	)		(51,129	)		(53,178	)

Net premiums earned		62,322			59,844			59,630			52,916			58,112			52,439			54,447			52,462
Net losses and loss expenses		(35,687	)		(26,679	)		(38,296	)		(39,446	)		(27,829	)		(34,515	)		(39,901	)		(38,158	)
Acquisition costs		(1,765	)		(1,382	)		(821	)		317			(60	)		(331	)		230			1,367
General and administrative expenses		(11,812	)		(7,717	)		(8,132	)		(6,847	)		(7,046	)		(8,114	)		(6,693	)		(6,074	)
Other income		68			1,108			97			(6	)		42			143			219			1,216

Underwriting income	$	13,126		$	25,174		$	12,478		$	6,934		$	23,219		$	9,622		$	8,302		$	10,813


Loss ratio		57.3	%		44.6	%		64.2	%		74.5	%		47.9	%		65.8	%		73.3	%		72.7	%
Acquisition cost ratio		2.8	%		2.3	%		1.4	%		(0.6	%)		0.1	%		0.6	%		(0.4	%)		(2.6	%)
General and administrative expense ratio		18.9	%		12.9	%		13.6	%		13.0	%		12.1	%		15.5	%		12.3	%		11.6	%

Combined ratio		79.0	%		59.8	%		79.2	%		86.9	%		60.1	%		81.9	%		85.2	%		81.7	%

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. SPECIALTY SEGMENT Results - as Reclassified (Unaudited)

(Expressed in thousands of United States Dollars)



	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009

Gross premiums written	$	65,625		$	64,198		$	90,773		$	73,902		$	64,572		$	60,123		$	75,701		$	65,509
Reinsurance premiums ceded		(15,956	)		(18,713	)		(5,672	)		(48,152	)		(31,471	)		(24,755	)		(52,938	)		(39,382	)

Net premiums written	$	49,669		$	45,485		$	85,101		$	25,750		$	33,101		$	35,368		$	22,763		$	26,127


Earned premiums	$	74,683		$	73,337		$	71,065		$	69,185		$	66,287		$	63,360		$	59,053		$	50,913
Earned premiums ceded		(26,140	)		(26,071	)		(27,053	)		(38,393	)		(40,260	)		(35,551	)		(41,271	)		(31,926	)

Net premiums earned		48,543			47,266			44,012			30,792			26,027			27,809			17,782			18,987

Net losses and loss expenses		(31,878	)		(29,295	)		(26,683	)		(19,196	)		(14,809	)		(18,507	)		(11,057	)		(10,391	)
Acquisition costs		(8,618	)		(6,763	)		(9,111	)		(3,682	)		(1,838	)		(1,964	)		(2,483	)		(1,189	)
General and administrative expenses		(7,552	)		(8,693	)		(6,355	)		(7,522	)		(9,786	)		(6,971	)		(4,357	)		(6,811	)
Other income		—			—			—			—			—			—			153			(221	)

Underwriting income (loss)	$	495		$	2,515		$	1,863		$	392		$	(406	)	$	367		$	38		$	375


Loss ratio		65.7	%		62.0	%		60.6	%		62.3	%		56.9	%		66.6	%		62.2	%		54.7	%
Acquisition cost ratio		17.8	%		14.3	%		20.7	%		12.0	%		7.1	%		7.1	%		14.0	%		6.3	%
General and administrative expense ratio		15.5	%		18.4	%		14.5	%		24.4	%		37.6	%		25.0	%		24.4	%		35.9	%

Combined ratio		99.0	%		94.7	%		95.8	%		98.7	%		101.6	%		98.7	%		100.6	%		96.9	%

ALTERRA CAPITAL HOLDINGS LIMITED

Pro Forma Combined - Alterra Capital Holdings Limited and Harbor Point Limited

Selected Financial Information

The following presentation is for informational purposes only

ALTERRA CAPITAL HOLDINGS LIMITED

PRO FORMA COMBINED STATEMENTS OF INCOME [a] (unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2010			Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			June 30, 2009			Mar. 31, 2009
REVENUES
Gross premiums written	$	476,550		$	676,905		$	337,048		$	382,650		$	564,251		$	662,432
Reinsurance premiums ceded		(81,333	)		(159,515	)		(81,627	)		(73,703	)		(126,503	)		(168,155	)

Net premiums written	$	395,217		$	517,390		$	255,421		$	308,947		$	437,748		$	494,277


Net premiums earned	$	368,061		$	338,332		$	347,833		$	351,245		$	366,130		$	317,598

Net investment income		61,562			64,583			60,668			60,068			59,636			58,943
Net realized and unrealized (losses) gains on investments		(13,734	)		13,280			18,004			29,622			22,462			20,722
Net impairment losses recognized in earnings		(300	)		(420	)		(925	)		(139	)		(2,014	)		—
Net realized gain on retirement of senior notes		—			—			111			—			—			—
Other income		339			480			189			964			1,193			1,799


Total revenues		415,928			416,255			425,880			441,760			447,407			399,062


LOSSES AND EXPENSES
Net losses and loss expenses		213,517			210,543			166,573			181,064			186,301			178,130
Claims and policy benefits		13,943			17,659			16,976			14,378			55,407			14,332
Acquisition costs		64,315			53,998			54,042			59,613			53,317			47,611
Interest expense		8,061			5,226			6,978			6,292			5,146			4,351
Net foreign exchange (gains) losses		(1,622	)		(869	)		789			(116	)		(5,571	)		(1,911	)
Merger and acquisition expenses		—			—			—			(41,350	)		4,785			5,223
General and administrative expenses		60,137			51,611			66,157			57,048			53,979			57,508

Total losses and expenses		358,351			338,168			311,515			276,929			353,364			305,244


INCOME BEFORE TAXES		57,577			78,087			114,365			164,831			94,043			93,818

Income tax expense		4,294			1,311			5,686			2,910			3,206			1,990


NET INCOME		53,283			76,776			108,679			161,921			90,837			91,828

[a]

The information presented above is on a combined pro forma basis (after the elimination of intercompany transactions and the amortization of certain acquisition accounting fair value adjustments). The pro forma financial information is provided for informational purposes only to present a summary of the combined results of operations assuming the amalgamation with Harbor Point had occurred at the beginning of each calendar year presented. The pro forma data does not necessarily represent results that would have occurred if the amalgamation had taken place at the beginning of each calendar year presented, nor is it necessarily indicative of the future results.

ALTERRA CAPITAL HOLDINGS Ltd - FORM 8-K - EX-99.2 - INVESTOR FINANCIAL SUPPLEMENT - August 2, 2011

Attached files