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

Attached files

file	filename
8-K - FORM 8-K - ALTERRA CAPITAL HOLDINGS Ltd	d392745d8k.htm
EX-99.3 - NEWS RELEASE - ALTERRA CAPITAL HOLDINGS Ltd	d392745dex993.htm
EX-99.1 - NEWS RELEASE - ALTERRA CAPITAL HOLDINGS Ltd	d392745dex991.htm

Exhibit 99.2

LOGO

ALTERRA CAPITAL HOLDINGS LIMITED

Investor Financial Supplement

Second Quarter 2012

(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; (13) the integration of new business ventures Alterra may enter into; and (14) 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		17
Gross Premiums Written by Line of Business - Year to date		25
Investment Portfolio		26
New Point IV Summary		31
Shareholder Return Analysis		32
Earnings Per Share Information		33
Operating Income Reconciliation		34
Book Value per Share		35
Regulation G		36

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, 2012			June 30, 2011			June 30, 2012			June 30, 2011			Previous Year Quarter Change			Previous Year to Date Change
HIGHLIGHTS
Net income (loss)	$	78,940		$	32,635		$	157,964		$	(14,052	)		141.9	%		n/m
Net operating income [a]		68,960			39,558			136,683			14,833			74.3	%		821.5%
Operating cashflow		97,335			101,796			166,377			148,705			(4.4	%)		11.9%
Gross premiums written		566,857			563,907			1,228,187			1,191,755			0.5	%		3.1%
Net premiums earned		350,778			348,941			688,953			728,828			0.5	%		(5.5%	)
Total assets		10,696,586			10,497,364			10,696,586			10,497,364			1.9	%		1.9%
Total shareholders’ equity		2,851,736			2,793,081			2,851,736			2,793,081			2.1	%		2.1%

PER SHARE
Basic earnings per share
Net income (loss)	$	0.79		$	0.31		$	1.58		$	(0.13	)
Net operating income [a]		0.69			0.37			1.36			0.14
Diluted earnings per share
Net income (loss)	$	0.77		$	0.30		$	1.54		$	(0.13	)
Net operating income [a]		0.68			0.37			1.33			0.14

Weighted average shares outstanding - basic		99,563,474			105,604,786			100,283,266			106,385,007
Weighted average shares outstanding - diluted		101,957,882			107,111,909			102,556,070			106,385,007

Book value per common share [b]	$	29.44		$	26.40		$	29.44		$	26.40			11.5	%		11.5	%
Diluted book value per share (treasury stock method) [b]		28.68			25.98			28.68			25.98			10.4	%		10.4	%
Diluted tangible book value per share (treasury stock method) [b]		28.12			25.44			28.12			25.44			10.5	%		10.5	%

RATIOS
Annualized return on average shareholders’ equity [c]		11.1	%		4.7	%		11.1	%		(1.0	%)
Annualized net operating return on average shareholders’ equity [c]		9.7	%		5.7	%		9.6	%		1.1	%

Loss ratio [d]		56.2	%		60.7	%		58.6	%		70.9	%
Acquisition cost ratio [d]		17.7	%		18.5	%		17.7	%		18.6	%
General and administrative expense ratio [d]		12.6	%		14.5	%		13.3	%		14.1	%
Combined ratio [d]		86.6	%		93.7	%		89.5	%		103.5	%

[a]	Non-GAAP financial measure. For definition and calculation see page 34.

[b]	For calculations see page 35.

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

[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, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011
	(Unaudited)			(Unaudited)						(Unaudited)			(Unaudited)
ASSETS
Cash and cash equivalents	$	763,957		$	844,743		$	922,844		$	869,975		$	987,057
Fixed maturities, trading at fair value		211,796			223,592			229,206			227,753			218,481
Fixed maturities, available for sale at fair value		5,709,850			5,518,102			5,501,925			5,662,869			5,403,312
Fixed maturities, held to maturity at amortized cost		833,990			885,214			874,259			926,916			993,691
Other investments, at fair value		366,404			332,884			286,515			311,633			350,193
Accrued interest income		65,252			64,295			71,322			71,038			70,777
Premiums receivable		991,927			869,800			715,154			777,980			870,287
Losses and benefits recoverable from reinsurers		1,083,840			1,108,036			1,068,119			1,079,035			1,058,724
Deferred acquisition costs		170,904			176,199			145,850			166,353			171,517
Prepaid reinsurance premiums		326,014			299,163			212,238			214,132			215,392
Trades pending settlement		31,925			111,194			22,887			34,158			9,168
Goodwill and intangible assets		55,431			55,771			56,111			56,652			58,094
Other assets		85,296			86,785			79,417			73,836			90,671

Total assets	$	10,696,586		$	10,575,778		$	10,185,847		$	10,472,330		$	10,497,364

LIABILITIES
Property and casualty losses	$	4,308,316		$	4,322,847		$	4,216,538		$	4,205,057		$	4,230,290
Life and annuity benefits		1,148,304			1,203,752			1,190,697			1,230,344			1,317,527
Deposit liabilities		158,412			151,058			151,035			147,493			147,428
Funds withheld from reinsurers		93,510			92,793			112,469			124,631			122,705
Unearned property and casualty premiums		1,281,406			1,221,788			1,020,639			1,149,108			1,203,024
Reinsurance balances payable		260,351			201,409			134,354			178,560			137,910
Accounts payable and accrued expenses		116,575			90,359			110,380			110,527			104,917
Trades pending settlement		37,455			—			—			41,383			—
Senior notes		440,521			440,510			440,500			440,489			440,482

Total liabilities		7,844,850			7,724,516			7,376,612			7,627,592			7,704,283

SHAREHOLDERS’ EQUITY
Common shares (par value $1.00) 96,853,334 shares issued and outstanding		96,853			100,707			102,102			104,324			105,795
Additional paid-in capital		1,729,311			1,807,287			1,847,034			1,890,763			1,911,979
Accumulated other comprehensive income		202,229			185,146			166,957			173,025			132,218
Retained earnings		823,343			758,122			693,142			676,626			643,089

Total shareholders’ equity		2,851,736			2,851,262			2,809,235			2,844,738			2,793,081

Total liabilities and shareholders’ equity	$	10,696,586		$	10,575,778		$	10,185,847		$	10,472,330		$	10,497,364

Book value per share	$	29.44		$	28.31		$	27.51		$	27.27		$	26.40

Diluted book value per share (treasury stock method)	$	28.68		$	27.67		$	26.91		$	27.18		$	25.98

Diluted tangible book value per share (treasury stock method) [a]	$	28.12		$	27.13		$	26.37		$	26.64		$	25.44

Debt-to-capital ratio [b]		13.4	%		13.4	%		13.6	%		13.4	%		13.6	%

[a]	Non-GAAP financial measure. For calculations see page 35.

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, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010 [g]
REVENUES
Gross premiums written	$	566,857		$	661,330		$	325,983		$	386,328		$	563,907		$	398,981
Reinsurance premiums ceded		(189,879	)		(224,462	)		(107,203	)		(90,891	)		(136,626	)		(79,715	)

Net premiums written	$	376,978		$	436,868		$	218,780		$	295,437		$	427,281		$	319,266

Earned premiums	$	496,839		$	477,867		$	460,636		$	452,931		$	443,008		$	391,723
Earned premiums ceded		(146,061	)		(139,692	)		(111,532	)		(105,889	)		(94,067	)		(98,463	)

Net premiums earned		350,778			338,175			349,104			347,042			348,941			293,260
Net investment income		54,729			58,678			57,080			60,335			59,665			53,277
Net realized and unrealized gains (losses) on investments		13,481			25,493			(5,775	)		(7,972	)		(5,774	)		(14,786	)
Total other-than-temporary impairment losses		(420	)		(5,467	)		(703	)		(692	)		(187	)		(1,167	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(150	)		98			1			(169	)		(166	)		867

Net impairment losses recognized in earnings		(570	)		(5,369	)		(702	)		(861	)		(353	)		(300	)
Other income		1,928			5,362			2,017			1,473			591			275

Total revenues		420,346			422,339			401,724			400,017			403,070			331,726

LOSSES AND EXPENSES
Net losses and loss expenses		196,764			206,029			231,533			198,521			211,133			159,817
Claims and policy benefits		13,272			13,466			14,564			14,538			15,570			13,943
Acquisition costs		62,171			59,724			64,380			61,434			64,680			48,798
Interest expense		9,635			8,628			13,296			11,303			10,630			7,916
Net foreign exchange losses (gains)		25			(32	)		(753	)		(147	)		3,090			(634	)
Merger and acquisition expenses		—			—			—			—			—			(54,570	)
General and administrative expenses		58,777			60,082			54,657			61,555			69,659			50,649

Total losses and expenses		340,644			347,897			377,677			347,204			374,762			225,919

INCOME BEFORE TAXES		79,702			74,442			24,047			52,813			28,308			105,807
Income tax expense (benefit)		762			(4,582	)		(6,901	)		4,427			(4,327	)		2,360

NET INCOME		78,940			79,024			30,948			48,386			32,635			103,447
Change in net unrealized gains and losses on fixed maturities, net of tax		23,444			16,819			(3,670	)		61,540			42,820			60,525
Foreign currency translation adjustment		(6,361	)		1,370			(2,398	)		(20,733	)		165			(7,629	)

COMPREHENSIVE INCOME	$	96,023		$	97,213		$	24,880		$	89,193		$	75,620		$	156,343

KEY RATIOS/PER SHARE DATA
Loss ratio [a]		56.2	%		61.0	%		66.5	%		57.3	%		60.7	%		54.6	%
Acquisition cost ratio [b]		17.7	%		17.6	%		18.5	%		17.7	%		18.5	%		16.6	%
General and administrative expense ratio [c]		12.6	%		14.0	%		12.4	%		12.7	%		14.5	%		12.0	%

Combined ratio [d]		86.6	%		92.6	%		97.4	%		87.7	%		93.7	%		83.3	%

Net income per share	$	0.79		$	0.78		$	0.30		$	0.46		$	0.31		$	1.14
Net income per diluted share	$	0.77		$	0.77		$	0.30		$	0.46		$	0.30		$	1.13
Net operating income per share - diluted [e]	$	0.68		$	0.66		$	0.30		$	0.47		$	0.37		$	0.64
Annualized ROAE [f]		11.1	%		11.2	%		4.4	%		6.9	%		4.7	%		17.8	%
Annualized net operating ROAE [f]		9.7	%		9.6	%		4.5	%		7.1	%		5.7	%		10.1	%

[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, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business.

[e]	Non-GAAP financial measure. See page 34 for calculation of net operating income per share - diluted.

[f]	Non-GAAP financial measure. See page 32 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.

Percentage totals may not add due to rounding.

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, 2012			June 30, 2011			June 30, 2010 [g]			Dec. 31, 2011			Dec. 31, 2010 [g]
REVENUES
Gross premiums written	$	1,228,187		$	1,191,755		$	770,120		$	1,904,066		$	1,410,731
Reinsurance premiums ceded		(414,341	)		(273,983	)		(232,935	)		(472,077	)		(371,163	)

Net premiums written	$	813,846		$	917,772		$	537,185		$	1,431,989		$	1,039,568

Earned premiums	$	974,706		$	932,270		$	696,720		$	1,845,837		$	1,578,647
Earned premiums ceded		(285,753	)		(203,442	)		(209,220	)		(420,863	)		(406,161	)

Net premiums earned		688,953			728,828			487,500			1,424,974			1,172,486
Net investment income		113,407			117,431			101,667			234,846			222,458
Net realized and unrealized gains (losses) on investments		38,974			(24,592	)		(8,364	)		(38,339	)		16,872
Total other-than-temporary impairment losses		(5,887	)		(1,311	)		(1,865	)		(2,706	)		(5,873	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(52	)		(71	)		1,145			(239	)		3,228

Net impairment losses recognized in earnings		(5,939	)		(1,382	)		(720	)		(2,945	)		(2,645	)
Other income		7,290			1,906			619			5,396			4,808

Total revenues		842,685			822,191			580,702			1,623,932			1,413,979

LOSSES AND EXPENSES
Net losses and loss expenses		402,793			515,539			284,782			945,593			654,841
Claims and policy benefits		26,738			30,280			31,602			59,382			65,213
Acquisition costs		121,895			135,288			73,042			261,102			187,464
Interest expense		18,263			19,089			12,858			43,688			28,275
Net foreign exchange (gains) losses		(7	)		2,212			(3,086	)		1,312			(115	)
Merger and acquisition expenses		—			—			(49,826	)		—			(48,776	)
General and administrative expenses		118,859			140,862			87,177			257,074			220,586

Total losses and expenses		688,541			843,270			436,549			1,568,151			1,107,488

INCOME BEFORE TAXES		154,144			(21,079	)		144,153			55,781			306,491
Income tax (benefit) expense		(3,820	)		(7,027	)		4,325			(9,501	)		4,156

NET INCOME (LOSS)		157,964			(14,052	)		139,828			65,282			302,335
Change in net unrealized gains and losses on fixed maturities, net of tax		40,263			28,234			94,656			86,104			81,406
Foreign currency translation adjustment		(4,991	)		5,038			(17,369	)		(18,093	)		(7,891	)

COMPREHENSIVE INCOME	$	193,236		$	19,220		$	217,115		$	133,293		$	375,850

KEY RATIOS/PER SHARE DATA
Loss ratio [a]		58.6	%		70.9	%		58.6	%		58.6	%		56.1	%
Acquisition cost ratio [b]		17.7	%		18.6	%		15.0	%		17.7	%		16.0	%
General and administrative expense ratio [c]		13.3	%		14.1	%		12.6	%		13.3	%		13.6	%

Combined ratio [d]		89.5	%		103.5	%		86.2	%		89.5	%		85.7	%

Net income (loss) per share - basic	$	1.58		$	(0.13	)	$	1.90		$	0.62		$	3.19
Net income (loss) per share - diluted	$	1.54		$	(0.13	)	$	1.88		$	0.61		$	3.17
Net operating income per share - diluted [e]	$	1.33		$	0.14		$	1.33		$	0.91		$	2.64
Annualized ROAE [f]		11.1	%		(1.0	%)		14.3	%		2.3	%		12.3	%
Annualized Net Operating ROAE [f]		9.6	%		1.1	%		10.2	%		3.4	%		10.2	%

[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, acquistion costs and general and administrative expenses by net premiums earned for the property & casualty business.

[e]	Non-GAAP financial measure. See page 34 for calculation of net operating income per share - diluted.

[f]	Non-GAAP financial measure. See page 32 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.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–THREE MONTHS ENDED JUNE 30, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty																		Life & Annuity Reinsurance			Corporate			Consolidated
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total			Life & Annuity Reinsurance			Corporate			Consolidated
Gross premiums written	$	125,276		$	112,186		$	246,838		$	72,008		$	9,495		$	565,803		$	1,054		$	—		$	566,857
Reinsurance premiums ceded		(53,224	)		(51,524	)		(53,185	)		(27,068	)		(4,723	)		(189,724	)		(155	)		—			(189,879	)

Net premiums written	$	72,052		$	60,662		$	193,653		$	44,940		$	4,772		$	376,079		$	899		$	—		$	376,978

Earned premiums	$	92,803		$	100,300		$	210,413		$	69,330		$	22,939		$	495,785		$	1,054		$	—		$	496,839
Earned premiums ceded		(45,367	)		(44,490	)		(29,097	)		(23,108	)		(3,844	)		(145,906	)		(155	)		—			(146,061	)

Net premiums earned		47,436			55,810			181,316			46,222			19,095			349,879			899			—			350,778
Net losses and loss expenses		(22,745	)		(37,333	)		(89,607	)		(33,030	)		(14,049	)		(196,764	)		—			—			(196,764	)
Claims and policy benefits		—			—			—			—			—			—			(13,272	)		—			(13,272	)
Acquisition costs		(239	)		(6,169	)		(42,708	)		(7,443	)		(5,456	)		(62,015	)		(156	)		—			(62,171	)
General and administrative expenses		(6,913	)		(12,215	)		(14,339	)		(7,856	)		(2,722	)		(44,045	)		(119	)		—			(44,164	)
Other income		1			—			1,895			7			—			1,903			—			—			1,903

Underwriting income (loss)	$	17,540		$	93		$	36,557		$	(2,100	)	$	(3,132	)	$	48,958			n/a			—			n/a
Net investment income																				13,466			41,263			54,729
Net realized and unrealized gains on investments																							13,481			13,481
Net impairment losses recognized in earnings																							(570	)		(570	)
Corporate other income																							25			25
Interest expense																							(9,635	)		(9,635	)
Net foreign exchange losses																							(25	)		(25	)
Corporate general and administrative expenses																							(14,613	)		(14,613	)

Income before taxes																			$	818		$	29,926		$	79,702

Loss ratio [a]		47.9	%		66.9	%		49.4	%		71.5	%		73.6	%		56.2	%
Acquisition cost ratio [b]		0.5	%		11.1	%		23.6	%		16.1	%		28.6	%		17.7	%
General and administrative expense ratio [c]		14.6	%		21.9	%		7.9	%		17.0	%		14.3	%		12.6	%

Combined ratio [d]		63.0	%		99.8	%		80.9	%		104.6	%		116.4	%		86.6	%

[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.

Percentage totals may not add due to rounding.

Effective January 1, 2012, the Company redefined its operating and reporting segments. Reinsurance business written within Latin America, which was previously reported within the reinsurance or Alterra at Lloyd’s segments, has been reclassified to a new Latin America segment. In addition, business written by the Company’s recently incorporated Brazilian reinsurance company, Alterra Resseguradora do Brasil S.A. (“Alterra Brazil”), is included in the Latin America segment. Insurance business written by Alterra Insurance USA Inc., which was previously reported within the global insurance segment (formerly the insurance segment), has been reclassified to the U.S. insurance segment (formerly the U.S. specialty segment). Re-presented comparative financial information was filed on Form 8-K on April 20, 2012.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2012 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
UNDERWRITING RATIOS
Loss ratio		47.9	%		66.9	%		49.4	%		71.5	%		73.6	%		56.2	%
Acquisition cost ratio		0.5	%		11.1	%		23.6	%		16.1	%		28.6	%		17.7	%
General and administrative expense ratio		14.6	%		21.9	%		7.9	%		17.0	%		14.3	%		12.6	%

Combined ratio		63.0	%		99.8	%		80.9	%		104.6	%		116.4	%		86.6	%

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

Loss ratio [a]		21.3	%		—			7.3	%		—			(15.8	%)		5.8	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
UNDERWRITING RATIOS

Loss ratio		69.3	%		66.9	%		56.8	%		71.5	%		57.8	%		62.1	%
Acquisition cost ratio		0.5	%		11.1	%		23.6	%		16.1	%		28.6	%		17.7	%
General and administrative expense ratio		14.6	%		21.9	%		7.9	%		17.0	%		14.3	%		12.6	%

Combined ratio		84.4	%		99.8	%		88.2	%		104.6	%		100.6	%		92.4	%


CONSOLIDATED UNDERWRITING RATIOS - THREE MONTHS ENDED JUNE 30, 2011 (Unaudited)
	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
UNDERWRITING RATIOS
Loss ratio		51.9	%		65.1	%		64.0	%		48.4	%		65.2	%		60.7	%
Acquisition cost ratio		(2.4	%)		17.8	%		22.4	%		22.8	%		26.9	%		18.5	%
General and administrative expense ratio		14.9	%		19.5	%		11.3	%		17.8	%		34.4	%		14.5	%

Combined ratio		64.3	%		102.4	%		97.7	%		89.0	%		126.6	%		93.7	%

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

Loss ratio [a]		32.3	%		—			12.5	%		22.7	%		—			13.9	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
UNDERWRITING RATIOS

Loss ratio		84.2	%		65.1	%		76.4	%		71.1	%		65.2	%		74.6	%
Acquisition cost ratio		(2.4	%)		17.8	%		22.4	%		22.8	%		26.9	%		18.5	%
General and administrative expense ratio		14.9	%		19.5	%		11.3	%		17.8	%		34.4	%		14.5	%

Combined ratio		96.6	%		102.4	%		110.1	%		111.7	%		126.6	%		107.7	%

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

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

GLOBAL INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	125,276		$	66,771		$	97,660		$	73,297		$	130,909		$	132,312
Reinsurance premiums ceded		(53,224	)		(43,251	)		(50,172	)		(37,625	)		(55,133	)		(46,257	)

Net premiums written	$	72,052		$	23,520		$	47,488		$	35,672		$	75,776		$	86,055

Earned premiums	$	92,803		$	94,103		$	91,077		$	93,467		$	88,892		$	99,874
Earned premiums ceded		(45,367	)		(47,133	)		(42,827	)		(48,456	)		(43,286	)		(43,676	)

Net premiums earned		47,436			46,970			48,250			45,011			45,606			56,198

Net losses and loss expenses		(22,745	)		(18,061	)		(15,152	)		(21,288	)		(23,689	)		(35,927	)
Acquisition costs		(239	)		(59	)		(1,084	)		748			1,117			(797	)
General and administrative expenses		(6,913	)		(6,481	)		(6,952	)		(6,699	)		(6,774	)		(6,501	)
Other income (loss)		1			815			(128	)		—			85			—

Underwriting income	$	17,540		$	23,184		$	24,934		$	17,772		$	16,345		$	12,973

Loss ratio		47.9	%		38.5	%		31.4	%		47.3	%		51.9	%		63.9	%
Acquisition cost ratio		0.5	%		0.1	%		2.2	%		(1.7	%)		(2.4	%)		1.4	%
General and administrative expense ratio		14.6	%		13.8	%		14.4	%		14.9	%		14.9	%		11.6	%

Combined ratio		63.0	%		52.4	%		48.1	%		60.5	%		64.3	%		76.9	%

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	112,186		$	104,282		$	102,279		$	84,858		$	109,794		$	97,487
Reinsurance premiums ceded		(51,524	)		(70,494	)		(45,443	)		(30,579	)		(28,227	)		(6,852	)

Net premiums written	$	60,662		$	33,788		$	56,836		$	54,279		$	81,567		$	90,635

Earned premiums	$	100,300		$	96,241		$	90,048		$	83,279		$	82,244		$	76,032
Earned premiums ceded		(44,490	)		(40,456	)		(34,078	)		(28,004	)		(23,835	)		(28,588	)

Net premiums earned		55,810			55,785			55,970			55,275			58,409			47,444

Net losses and loss expenses		(37,333	)		(37,564	)		(45,129	)		(36,002	)		(38,012	)		(29,052	)
Acquisition costs		(6,169	)		(7,696	)		(8,349	)		(9,669	)		(10,400	)		(9,135	)
General and administrative expenses		(12,215	)		(12,257	)		(12,299	)		(10,228	)		(11,374	)		(7,986	)
Other income (loss)		—			81			84			58			54			97

Underwriting income (loss)	$	93		$	(1,651	)	$	(9,723	)	$	(566	)	$	(1,323	)	$	1,368

Loss ratio		66.9	%		67.3	%		80.6	%		65.1	%		65.1	%		61.2	%
Acquisition cost ratio		11.1	%		13.8	%		14.9	%		17.5	%		17.8	%		19.3	%
General and administrative expense ratio		21.9	%		22.0	%		22.0	%		18.5	%		19.5	%		16.8	%

Combined ratio		99.8	%		103.1	%		117.5	%		101.1	%		102.4	%		97.3	%

ALTERRA CAPITAL HOLDINGS LIMITED

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	246,838		$	318,354		$	88,397		$	121,329		$	244,899		$	117,614
Reinsurance premiums ceded		(53,185	)		(59,493	)		(1,670	)		(11,055	)		(27,675	)		(13,348	)

Net premiums written	$	193,653		$	258,861		$	86,727		$	110,274		$	217,224		$	104,266

Earned premiums	$	210,413		$	194,661		$	207,129		$	206,698		$	203,470		$	174,442
Earned premiums ceded		(29,097	)		(26,753	)		(17,718	)		(17,146	)		(11,815	)		(19,054	)

Net premiums earned		181,316			167,908			189,411			189,552			191,655			155,388

Net losses and loss expenses		(89,607	)		(101,195	)		(97,328	)		(108,135	)		(122,576	)		(82,278	)
Acquisition costs		(42,708	)		(38,661	)		(42,026	)		(41,781	)		(42,947	)		(32,604	)
General and administrative expenses		(14,339	)		(17,052	)		(14,585	)		(16,470	)		(21,647	)		(13,975	)
Other income (loss)		1,895			4,441			(100	)		777			548			155

Underwriting income	$	36,557		$	15,441		$	35,372		$	23,943		$	5,033		$	26,686

Loss ratio		49.4	%		60.3	%		51.4	%		57.0	%		64.0	%		53.0	%
Acquisition cost ratio		23.6	%		23.0	%		22.2	%		22.0	%		22.4	%		21.0	%
General and administrative expense ratio		7.9	%		10.2	%		7.7	%		8.7	%		11.3	%		9.0	%

Combined ratio		80.9	%		93.4	%		81.3	%		87.8	%		97.7	%		82.9	%

ALTERRA CAPITAL HOLDINGS LIMITED

ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	72,008		$	146,143		$	27,933		$	44,816		$	72,428		$	41,308
Reinsurance premiums ceded		(27,068	)		(38,590	)		(8,888	)		(6,723	)		(24,918	)		(13,233	)

Net premiums written	$	44,940		$	107,553		$	19,045		$	38,093		$	47,510		$	28,075

Earned premiums	$	69,330		$	72,899		$	52,850		$	50,534		$	58,117		$	40,195
Earned premiums ceded		(23,108	)		(20,049	)		(14,952	)		(10,850	)		(14,540	)		(7,120	)

Net premiums earned		46,222			52,850			37,898			39,684			43,577			33,075

Net losses and loss expenses		(33,030	)		(38,675	)		(64,346	)		(24,462	)		(21,072	)		(12,322	)
Acquisition costs		(7,443	)		(9,434	)		(7,977	)		(6,230	)		(9,946	)		(6,059	)
General and administrative expenses		(7,856	)		(9,095	)		(7,271	)		(8,007	)		(7,773	)		(4,717	)
Other income (loss)		7			—			851			(27	)		165			173

Underwriting (loss) income	$	(2,100	)	$	(4,354	)	$	(40,845	)	$	958		$	4,951		$	10,150

Loss ratio		71.5	%		73.2	%		169.8	%		61.6	%		48.4	%		37.3	%
Acquisition cost ratio		16.1	%		17.9	%		21.0	%		15.7	%		22.8	%		18.3	%
General and administrative expense ratio		17.0	%		17.2	%		19.2	%		20.2	%		17.8	%		14.3	%

Combined ratio		104.6	%		108.2	%		210.0	%		97.5	%		89.0	%		69.8	%

ALTERRA CAPITAL HOLDINGS LIMITED

LATIN AMERICA SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	9,495		$	25,340		$	8,545		$	61,206		$	4,947		$	9,458
Reinsurance premiums ceded		(4,723	)		(12,616	)		(876	)		(4,819	)		(572	)		—

Net premiums written	$	4,772		$	12,724		$	7,669		$	56,387		$	4,375		$	9,458

Earned premiums	$	22,939		$	19,523		$	18,363		$	18,131		$	9,355		$	378
Earned premiums ceded		(3,844	)		(5,283	)		(1,803	)		(1,343	)		(490	)		—

Net premiums earned		19,095			14,240			16,560			16,788			8,865			378

Net losses and loss expenses		(14,049	)		(10,534	)		(9,578	)		(8,634	)		(5,784	)		(238	)
Acquisition costs		(5,456	)		(3,755	)		(4,813	)		(4,357	)		(2,382	)		(80	)
General and administrative expenses		(2,722	)		(2,259	)		(2,105	)		(2,431	)		(3,053	)		(1,954	)

Underwriting (loss) income	$	(3,132	)	$	(2,308	)	$	64		$	1,366		$	(2,354	)	$	(1,894	)

Loss ratio		73.6	%		74.0	%		57.8	%		51.4	%		65.2	%		62.9	%
Acquisition cost ratio		28.6	%		26.4	%		29.1	%		26.0	%		26.9	%		21.2	%
General and administrative expense ratio		14.3	%		15.9	%		12.7	%		14.5	%		34.4	%		n/m

Combined ratio		116.4	%		116.2	%		99.6	%		91.9	%		126.6	%		n/m

ALTERRA CAPITAL HOLDINGS LIMITED

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Gross premiums written	$	1,054		$	440		$	1,169		$	822		$	930		$	802
Reinsurance premiums ceded		(155	)		(18	)		(154	)		(90	)		(101	)		(25	)

Net premiums written	$	899		$	422		$	1,015		$	732		$	829		$	777

Earned premiums	$	1,054		$	440		$	1,169		$	822		$	930		$	802
Earned premiums ceded		(155	)		(18	)		(154	)		(90	)		(101	)		(25	)

Net premiums earned		899			422			1,015			732			829			777

Net investment income		13,466			14,776			11,515			12,131			12,545			12,420
Net realized and unrealized (losses) gains on investments		—			—			(5,509	)		(6,407	)		(1,299	)		(1,860	)
Other income (loss)		—			—			413			(8	)		(23	)		—
Claims and policy benefits		(13,272	)		(13,466	)		(14,564	)		(14,538	)		(15,570	)		(13,943	)
Acquisition costs		(156	)		(119	)		(131	)		(145	)		(122	)		(123	)
General and administrative expenses		(119	)		(34	)		(67	)		(145	)		(259	)		(642	)

Income (loss) before taxes	$	818		$	1,579		$	(7,328	)	$	(8,380	)	$	(3,899	)	$	(3,371	)

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, 2012			Mar. 31, 2012		Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			June 30, 2010
Property & Casualty:
Global Insurance:
Aviation	S	$	3,954		$	1,302	$	20,410		$	6,736		$	3,814		$	6,615
Excess Liability	L		31,435			25,186		21,281			20,365			34,659			33,198
Professional Liability	L		59,407			24,466		40,360			30,590			62,402			65,216
Property	S		30,480			15,817		15,609			15,606			30,034			27,283

			125,276			66,771		97,660			73,297			130,909			132,312

U.S. Insurance:
General/ Excess Liability	L		23,683			34,667		31,618			24,925			25,118			27,625
Marine	S		28,634			25,201		23,806			22,189			25,389			17,996
Professional Liability	L		13,133			11,208		15,720			13,318			8,509			3,667
Property	S		46,736			33,206		31,135			24,426			50,778			48,199

			112,186			104,282		102,279			84,858			109,794			97,487

Reinsurance [a]:
Agriculture	S		5,298			17,505		186			998			8,713			(2,513	)
Auto	S		39,590			512		20,548			7,716			55,072			5
Aviation	S		5,811			5,460		337			14,440			80			8,561
Credit/ Surety	S		2,219			31,409		1,801			98			571			(1,891	)
General Casualty	L		24,168			12,521		12,951			20,923			22,045			(857	)
Marine & Energy	S		6,262			11,707		2,918			1,647			(678	)		4,894
Medical Malpractice	L		8,105			11,276		1,673			6,867			11,223			7,813
Other	S		549			4,437		(181	)		1,112			447			92
Professional Liability	L		37,246			59,458		20,270			39,877			39,462			32,005
Property	S		108,995			144,413		18,731			22,115			103,390			59,665
Whole Account	S/L		191			1,408		2,408			(1,946	)		268			2,362
Workers’ Compensation	L		8,404			18,248		6,755			7,482			4,306			7,478

			246,838			318,354		88,397			121,329			244,899			117,614

Alterra at Lloyd’s:
Accident & Health	S		8,250			17,432		5,646			9,523			8,380			6,022
Agriculture	S		613			20,370		—			—			—			—
Aviation	S		3,220			2,486		5,562			4,130			1,810			2,565
Financial Institutions	L		5,400			6,904		8,137			3,591			6,441			4,846
International Casualty	L		8,423			49,268		1,947			7,903			8,263			6,173
Marine	S		2,282			2,726		1,493			—			—			—
Professional Liability	L		6,108			5,428		1,868			440			10,466			4,161
Property	S		37,712			41,529		3,280			19,229			37,068			17,541

			72,008			146,143		27,933			44,816			72,428			41,308

Latin America:
Aviation	S		9			65		—			230			—			—
General Liability	L		(543	)		2,435		179			1,947			223			9
Marine	S		348			1,688		489			2,484			59			110
Property	S		8,634			16,711		2,914			48,159			3,681			8,939
Surety	S		1,047			4,441		4,963			8,386			984			400

			9,495			25,340		8,545			61,206			4,947			9,458

Aggregate Property & Casualty		$	565,803		$	660,890	$	324,814		$	385,506		$	562,977		$	398,179

Life & Annuity:
Annuity		$	(353	)	$	353	$	770		$	449		$	271		$	6
Life			1,407			87		399			373			659			796

Aggregate Life & Annuity		$	1,054		$	440	$	1,169		$	822		$	930		$	802

Aggregate Property & Casualty and Life & Annuity		$	566,857		$	661,330	$	325,983		$	386,328		$	563,907		$	398,981

S = Short tail lines		$	340,739		$	399,121	$	160,851		$	208,251		$	329,726		$	205,664
L = Long tail lines			225,064			261,769		163,963			177,255			233,251			192,515

Aggregate Property & Casualty		$	565,803		$	660,890	$	324,814		$	385,506		$	562,977		$	398,179

Property [b]		$	232,557		$	251,676	$	71,669		$	129,535		$	224,951		$	161,627
Casualty [c]			224,969			261,065		162,759			178,228			233,117			191,334
Specialty [d]			108,277			148,149		90,386			77,743			104,909			45,218

Aggregate Property & Casualty		$	565,803		$	660,890	$	324,814		$	385,506		$	562,977		$	398,179

[a]	Includes the results of HarborPoint from May 12, 2010.

[b]	Property includes property lines of business.

[c]	Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers’ compensation lines of business.

[d]	Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business.

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–SIX MONTHS ENDED JUNE 30, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty																		Life & Annuity Reinsurance			Corporate			Consolidated
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total			Life & Annuity Reinsurance			Corporate			Consolidated
Gross premiums written	$	192,047		$	216,468		$	565,192		$	218,151		$	34,835		$	1,226,693		$	1,494		$	—		$	1,228,187
Reinsurance premiums ceded		(96,475	)		(122,018	)		(112,678	)		(65,658	)		(17,339	)		(414,168	)		(173	)		—			(414,341	)

Net premiums written	$	95,572		$	94,450		$	452,514		$	152,493		$	17,496		$	812,525		$	1,321		$	—		$	813,846

Earned premiums	$	186,906		$	196,541		$	405,074		$	142,229		$	42,462		$	973,212		$	1,494		$	—		$	974,706
Earned premiums ceded		(92,500	)		(84,946	)		(55,850	)		(43,157	)		(9,127	)		(285,580	)		(173	)		—			(285,753	)

Net premiums earned		94,406			111,595			349,224			99,072			33,335			687,632			1,321			—			688,953
Net losses and loss expenses		(40,806	)		(74,897	)		(190,802	)		(71,705	)		(24,583	)		(402,793	)		—			—			(402,793	)
Claims and policy benefits		—			—			—			—			—			—			(26,738	)		—			(26,738	)
Acquisition costs		(298	)		(13,865	)		(81,369	)		(16,877	)		(9,211	)		(121,620	)		(275	)		—			(121,895	)
General and administrative expenses		(13,394	)		(24,472	)		(31,391	)		(16,951	)		(4,981	)		(91,189	)		(153	)		—			(91,342	)
Other income		816			81			6,336			7			—			7,240			—			—			7,240

Underwriting income (loss)		40,724			(1,558	)		51,998			(6,454	)		(5,440	)		79,270			n/a			—			n/a
Net investment income																				28,242			85,165			113,407
Net realized and unrealized gains on investments																							38,974			38,974
Net impairment losses recognized in earnings																							(5,939	)		(5,939	)
Corporate other income																							50			50
Interest expense																							(18,263	)		(18,263	)
Net foreign exchange gains																							7			7
Corporate general and administrative expenses																							(27,517	)		(27,517	)

Income before taxes																			$	2,397		$	72,477		$	154,144

Loss ratio [a]		43.2	%		67.1	%		54.6	%		72.4	%		73.7	%		58.6	%
Acquisition cost ratio [b]		0.3	%		12.4	%		23.3	%		17.0	%		27.6	%		17.7	%
General and administrative expense ratio [c]		14.2	%		21.9	%		9.0	%		17.1	%		14.9	%		13.3	%

Combined ratio [d]		57.7	%		101.5	%		86.9	%		106.5	%		116.3	%		89.5	%

[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, 2012 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
UNDERWRITING RATIOS
Loss ratio		43.2	%		67.1	%		54.6	%		72.4	%		73.7	%		58.6	%
Acquisition cost ratio		0.3	%		12.4	%		23.3	%		17.0	%		27.6	%		17.7	%
General and administrative expense ratio		14.2	%		21.9	%		9.0	%		17.1	%		14.9	%		13.3	%

Combined ratio		57.7	%		101.5	%		86.9	%		106.5	%		116.3	%		89.5	%

EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
Loss ratio [a]		30.1	%		(0.9	%)		3.5	%		(4.5	%)		(12.4	%)		4.5	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS
Loss ratio		73.3	%		66.2	%		58.2	%		68.0	%		61.3	%		63.1	%
Acquisition cost ratio		0.3	%		12.4	%		23.3	%		17.0	%		27.6	%		17.7	%
General and administrative expense ratio		14.2	%		21.9	%		9.0	%		17.1	%		14.9	%		13.3	%

Combined ratio		87.8	%		100.6	%		90.5	%		102.0	%		103.9	%		94.1	%

[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, 2011 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Latin America			Total
UNDERWRITING RATIOS
Loss ratio		57.9	%		64.6	%		73.7	%		80.7	%		66.4	%		70.9	%
Acquisition cost ratio		(0.9	%)		16.4	%		21.8	%		26.2	%		23.5	%		18.6	%
General and administrative expense ratio		15.4	%		20.2	%		10.6	%		18.6	%		31.0	%		14.1	%

Combined ratio		72.5	%		101.2	%		106.0	%		125.5	%		120.8	%		103.5	%

EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
Loss ratio [a]		23.1	%		—			11.2	%		11.5	%		—			10.8	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS
Loss ratio		81.0	%		64.6	%		84.9	%		92.2	%		66.4	%		81.7	%
Acquisition cost ratio		(0.9	%)		16.4	%		21.8	%		26.2	%		23.5	%		18.6	%
General and administrative expense ratio		15.4	%		20.2	%		10.6	%		18.6	%		31.0	%		14.1	%

Combined ratio		95.6	%		101.2	%		117.2	%		137.0	%		120.8	%		114.3	%

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

Percentage

totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

GLOBAL INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	192,047		$	194,804		$	198,733		$	365,761		$	370,120
Reinsurance premiums ceded		(96,475	)		(93,657	)		(84,833	)		(181,454	)		(170,608	)

Net premiums written	$	95,572		$	101,147		$	113,900		$	184,307		$	199,512

Earned premiums	$	186,906		$	179,543		$	196,915		$	364,087		$	391,716
Earned premiums ceded		(92,500	)		(84,065	)		(90,922	)		(175,348	)		(173,123	)

Net premiums earned		94,406			95,478			105,993			188,739			218,593
Net losses and loss expenses		(40,806	)		(55,313	)		(73,206	)		(91,753	)		(128,823	)
Acquisition costs		(298	)		853			(488	)		517			(3,381	)
General and administrative expenses		(13,394	)		(14,726	)		(12,398	)		(28,377	)		(28,615	)
Other income (loss)		816			814			(11	)		686			760

Underwriting income	$	40,724		$	27,106		$	19,890		$	69,812		$	58,534

Loss ratio		43.2	%		57.9	%		69.1	%		48.6	%		58.9	%
Acquisition cost ratio		0.3	%		(0.9	%)		0.5	%		(0.3	%)		1.5	%
General and administrative expense ratio		14.2	%		15.4	%		11.7	%		15.0	%		13.1	%

Combined ratio		57.7	%		72.5	%		81.2	%		63.4	%		73.6	%

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	216,468		$	187,559		$	174,374		$	374,696		$	323,990
Reinsurance premiums ceded		(122,018	)		(66,544	)		(56,079	)		(142,566	)		(98,576	)

Net premiums written	$	94,450		$	121,015		$	118,295		$	232,130		$	225,414

Earned premiums	$	196,541		$	163,714		$	149,922		$	337,041		$	311,950
Earned premiums ceded		(84,946	)		(51,636	)		(68,565	)		(113,718	)		(125,218	)

Net premiums earned		111,595			112,078			81,357			223,323			186,732
Net losses and loss expenses		(74,897	)		(72,427	)		(50,415	)		(153,558	)		(118,337	)
Acquisition costs		(13,865	)		(18,386	)		(12,809	)		(36,404	)		(28,444	)
General and administrative expenses		(24,472	)		(22,644	)		(16,458	)		(45,171	)		(36,015	)
Other income		81			137			102			279			507

Underwriting (loss) income	$	(1,558	)	$	(1,242	)	$	1,777		$	(11,531	)	$	4,443

Loss ratio		67.1	%		64.6	%		62.0	%		68.8	%		63.4	%
Acquisition cost ratio		12.4	%		16.4	%		15.7	%		16.3	%		15.2	%
General and administrative expense ratio		21.9	%		20.2	%		20.2	%		20.2	%		19.3	%

Combined ratio		101.5	%		101.2	%		97.9	%		105.3	%		97.9	%

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, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	565,192		$	605,626		$	272,443		$	815,352		$	487,100
Reinsurance premiums ceded		(112,678	)		(62,927	)		(58,699	)		(75,652	)		(63,991	)

Net premiums written	$	452,514		$	542,699		$	213,744		$	739,700		$	423,109

Earned premiums	$	405,074		$	447,810		$	270,179		$	861,637		$	692,303
Earned premiums ceded		(55,850	)		(31,716	)		(35,012	)		(66,580	)		(71,596	)

Net premiums earned		349,224			416,094			235,167			795,057			620,707

Net losses and loss expenses		(190,802	)		(306,484	)		(132,339	)		(511,947	)		(344,063	)
Acquisition costs		(81,369	)		(90,707	)		(47,569	)		(174,514	)		(129,242	)
General and administrative expenses		(31,391	)		(43,919	)		(21,807	)		(74,974	)		(62,730	)
Other income		6,336			548			155			1,225			—

Underwriting income (loss)	$	51,998		$	(24,468	)	$	33,607		$	34,847		$	84,672

Loss ratio		54.6	%		73.7	%		56.3	%		64.4	%		55.4	%
Acquisition cost ratio		23.3	%		21.8	%		20.2	%		21.9	%		20.8	%
General and administrative expense ratio		9.0	%		10.6	%		9.3	%		9.4	%		10.1	%

Combined ratio		86.9	%		106.0	%		85.8	%		95.8	%		86.4	%

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, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	218,151		$	180,318		$	113,425		$	253,067		$	179,774
Reinsurance premiums ceded		(65,658	)		(48,097	)		(33,192	)		(63,708	)		(37,448	)

Net premiums written	$	152,493		$	132,221		$	80,233		$	189,359		$	142,326

Earned premiums	$	142,229		$	121,281		$	77,655		$	224,665		$	164,648
Earned premiums ceded		(43,157	)		(35,120	)		(14,589	)		(60,922	)		(35,793	)

Net premiums earned		99,072			86,161			63,066			163,743			128,855

Net losses and loss expenses		(71,705	)		(69,515	)		(28,580	)		(158,323	)		(55,190	)
Acquisition costs		(16,877	)		(22,598	)		(11,826	)		(36,805	)		(22,447	)
General and administrative expenses		(16,951	)		(16,026	)		(7,430	)		(31,304	)		(23,965	)
Other income		7			380			351			1,204			2,534

Underwriting (loss) income	$	(6,454	)	$	(21,598	)	$	15,581		$	(61,485	)	$	29,787

Loss ratio		72.4	%		80.7	%		45.3	%		96.7	%		42.8	%
Acquisition cost ratio		17.0	%		26.2	%		18.8	%		22.5	%		17.4	%
General and administrative expense ratio		17.1	%		18.6	%		11.8	%		19.1	%		18.6	%

Combined ratio		106.5	%		125.5	%		75.9	%		138.3	%		78.8	%

ALTERRA CAPITAL HOLDINGS LIMITED

LATIN AMERICA SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	June 30, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	34,835		$	22,083		$	9,480		$	91,834		$	44,812
Reinsurance premiums ceded		(17,339	)		(2,637	)		—			(8,332	)		(140	)

Net premiums written	$	17,496		$	19,446		$	9,480		$	83,502		$	44,672

Earned premiums	$	42,462		$	18,557		$	384		$	55,051		$	13,095
Earned premiums ceded		(9,127	)		(784	)		—			(3,930	)		(31	)

Net premiums earned		33,335			17,773			384			51,121			13,064

Net losses and loss expenses		(24,583	)		(11,800	)		(242	)		(30,012	)		(8,428	)
Acquisition costs		(9,211	)		(4,169	)		(81	)		(13,339	)		(3,589	)
General and administrative expenses		(4,981	)		(5,509	)		(3,081	)		(10,045	)		(7,909	)

Underwriting loss	$	(5,440	)	$	(3,705	)	$	(3,020	)	$	(2,275	)	$	(6,862	)

Loss ratio		73.7	%		66.4	%		63.0	%		58.7	%		64.5	%
Acquisition cost ratio		27.6	%		23.5	%		21.1	%		26.1	%		27.5	%
General and administrative expense ratio		14.9	%		31.0	%		n/m			19.6	%		60.5	%

Combined ratio		116.3	%		120.8	%		n/m			104.5	%		152.5	%

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, 2012			June 30, 2011			June 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	1,494		$	1,365		$	1,665		$	3,356		$	4,935
Reinsurance premiums ceded		(173	)		(121	)		(132	)		(365	)		(400	)

Net premiums written	$	1,321		$	1,244		$	1,533		$	2,991		$	4,535

Earned premiums	$	1,494		$	1,365		$	1,665		$	3,356		$	4,935
Earned premiums ceded		(173	)		(121	)		(132	)		(365	)		(400	)

Net premiums earned		1,321			1,244			1,533			2,991			4,535

Net investment income		28,242			24,888			25,519			48,534			49,785
Net realized and unrealized gains (losses) on investments		—			1,508			4,056			(10,408	)		11,358
Other income (loss)		—			(23	)		(28	)		382			286
Claims and policy benefits		(26,738	)		(30,280	)		(31,602	)		(59,382	)		(65,213	)
Acquisition costs		(275	)		(281	)		(269	)		(557	)		(361	)
General and administrative expenses		(153	)		(436	)		(1,299	)		(648	)		(2,964	)

Income (loss) before taxes	$	2,397		$	(3,380	)	$	(2,090	)	$	(19,088	)	$	(2,574	)

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, 2012		June 30, 2011			June 30, 2010			Dec. 31, 2011		Dec. 31, 2010
Property & Casualty:
Global Insurance [a]:
Aviation	S	$	5,256	$	5,230		$	8,964		$	32,376	$	39,888
Excess Liability	L		56,621		56,936			56,846			98,582		89,933
Professional Liability	L		83,873		86,931			92,789			157,881		177,199
Property	S		46,297		45,707			40,134			76,922		63,100

			192,047		194,804			198,733			365,761		370,120

U.S. Insurance [a]:
General Liability	L		58,350		48,111			50,639			104,655		104,777
Marine	S		53,835		42,498			34,059			88,493		67,454
Professional Liability	L		24,341		15,131			5,913			44,168		12,454
Property	S		79,942		81,819			83,763			137,380		139,305

			216,468		187,559			174,374			374,696		323,990

Reinsurance [b]:
Agriculture	S		22,803		29,498			33,293			30,682		29,222
Auto	S		40,102		70,096			5			98,360		32,285
Aviation	S		11,271		984			13,383			15,761		31,211
Credit/ Surety	S		33,628		23,278			(1,891	)		25,177		(1,025	)
General Casualty	L		36,689		37,472			12,194			71,346		47,987
Marine & Energy	S		17,969		15,871			8,994			20,436		14,546
Medical Malpractice	L		19,381		28,805			34,968			37,345		51,391
Other	S		4,986		2,140			1,081			3,071		2,729
Professional Liability	L		96,704		99,146			43,924			159,293		110,388
Property	S		253,408		242,256			105,576			283,102		133,669
Whole Account	S/L		1,599		35,338			4,935			35,800		3,871
Workers’ Compensation	L		26,652		20,742			15,981			34,979		30,826

			565,192		605,626			272,443			815,352		487,100

Alterra at Lloyd’s:
Accident & Health	S		25,682		21,924			19,432			37,093		30,921
Agriculture	S		20,983		—			—			—		—
Aviation	S		5,706		3,577			6,968			13,269		16,138
Financial Institutions	L		12,304		15,477			10,934			27,205		18,763
International Casualty	L		57,691		42,052			19,857			51,902		26,174
Marine	S		5,008		—			—			1,493		—
Professional Liability	L		11,536		18,388			11,057			20,696		19,591
Property	S		79,241		78,900			45,177			101,409		68,187

			218,151		180,318			113,425			253,067		179,774

Latin America:
Aviation	S		74		—			—			230		81
General Liability	L		1,892		1,180			9			3,306		2,407
Marine	S		2,036		603			110			3,576		1,835
Property	S		25,345		17,616			8,961			68,688		32,460
Surety	S		5,488		2,684			400			16,034		8,029

			34,835		22,083			9,480			91,834		44,812

Aggregate Property & Casualty		$	1,226,693	$	1,190,390		$	768,455		$	1,900,710	$	1,405,796


Life & Annuity:
Annuity		$	—	$	607		$	6		$	1,826	$	1,135
Life			1,494		758			1,659			1,530		3,800

Aggregate Life & Annuity		$	1,494	$	1,365		$	1,665		$	3,356	$	4,935

Aggregate Property & Casualty and Life & Annuity		$	1,228,187	$	1,191,755		$	770,120		$	1,904,066	$	1,410,731


S = Short tail lines		$	739,860	$	702,350		$	410,877		$	1,071,452	$	711,971
L = Long tail lines			486,833		488,040			357,578			829,258		693,825

Aggregate Property & Casualty		$	1,226,693	$	1,190,390		$	768,455		$	1,900,710	$	1,405,796


Property [c]		$	484,233		39.5	%				$	667,501		38.5	%
Casualty [d]			486,034		39.6	%					811,358		37.8	%
Specialty [e]			256,426		20.9	%					421,851		23.7	%

Aggregate Property & Casualty		$	1,226,693							$	1,900,710

[a]	Comparative periods have been re-presented to conform with the current period’s presentation.

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

[c]	Property includes property lines of business.

[d]	Casualty includes excess liability, financial institutions, general liability, general casualty, international casualty, medical malpractice, professional liability and workers’ compensation lines of business.

[e]	Specialty includes accident & health, agriculture, auto, aviation, credit, energy, marine, other, surety and whole account lines of business.

Percentage totals may not add due to rounding.

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, 2012		Investment Distribution			As of Dec. 31, 2011		Investment Distribution			As of June 30, 2012		Investment Distribution			As of Dec. 31, 2011		Investment Distribution
Cash and cash equivalents	$	763,957		9.7	%	$	922,844		11.8	%	$	763,957		9.5	%	$	922,844		11.6	%


U.S. government and agencies		779,270		9.9	%		751,806		9.6	%		779,270		9.7	%		751,806		9.5	%
Non-U.S. governments		217,341		2.8	%		164,621		2.1	%		217,341		2.7	%		164,621		2.1	%
Corporate securities		2,571,697		32.6	%		2,646,358		33.9	%		2,571,697		32.0	%		2,646,358		33.3	%
Municipal securities		281,884		3.6	%		263,007		3.4	%		281,884		3.5	%		263,007		3.3	%
Asset-backed securities		349,715		4.4	%		247,965		3.2	%		349,715		4.3	%		247,965		3.1	%
Residential mortgage-backed securities		1,322,785		16.8	%		1,296,277		16.6	%		1,322,785		16.4	%		1,296,277		16.3	%
Commercial mortgage-backed securities		398,954		5.1	%		361,097		4.6	%		398,954		5.0	%		361,097		4.5	%

Fixed maturities carried at fair value	$	5,921,646		75.1	%	$	5,731,131		73.3	%	$	5,921,646		73.6	%	$	5,731,131		72.1	%

Other investments carried at fair value	$	366,404		4.6	%	$	286,515		3.7	%	$	366,404		4.6	%	$	286,515		3.6	%

Total investments carried at fair value	$	7,052,007		89.4	%	$	6,940,490		88.8	%	$	7,052,007		87.7	%	$	6,940,490		87.3	%


U.S. government and agencies	$	27,616		0.4	%	$	29,201		0.4	%	$	31,697		0.4	%	$	32,906		0.4	%
Non-U.S. governments		509,819		6.5	%		524,449		6.7	%		618,022		7.7	%		623,080		7.8	%
Corporate securities		295,639		3.7	%		319,609		4.1	%		340,900		4.2	%		354,504		4.5	%
Asset-backed securities		916		0.0	%		1,000		0.0	%		919		0.0	%		1,003		0.0	%

Fixed maturities carried at amortized cost	$	833,990		10.6	%	$	874,259		11.2	%	$	991,538		12.3	%	$	1,011,493		12.7	%

Total invested assets	$	7,885,997		100.0	%	$	7,814,749		100.0	%	$	8,043,545		100.0	%	$	7,951,983		100.0	%

As of June 30, 2012, the weighted average book yield of the cash and fixed maturities portfolio was 3.26%, and the weighted average duration was 4.1 years.


	Carrying Value										Fair Value
Credit Ratings	As of June 30, 2012		Ratings Distribution			As of Dec. 31, 2011		Ratings Distribution			As of June 30, 2012		Ratings Distribution			As of Dec. 31, 2011		Ratings Distribution
U.S. government and agencies [a]	$	2,020,993		29.9	%	$	1,869,405		28.3	%	$	2,020,993		29.2	%	$	1,869,405		27.7	%
AAA		1,179,378		17.5	%		948,861		14.4	%		1,179,378		17.1	%		948,861		14.1	%
AA		741,038		11.0	%		883,783		13.4	%		741,038		10.7	%		883,783		13.1	%
A		1,388,280		20.5	%		1,378,361		20.9	%		1,388,280		20.1	%		1,378,361		20.4	%
BBB		349,968		5.2	%		281,983		4.3	%		349,968		5.1	%		281,983		4.2	%
BB		57,532		0.9	%		84,803		1.3	%		57,532		0.8	%		84,803		1.3	%
B		139,370		2.1	%		131,159		2.0	%		139,370		2.0	%		131,159		1.9	%
CCC or lower		35,026		0.5	%		53,157		0.8	%		35,026		0.5	%		53,157		0.8	%
Not rated		10,061		0.1	%		99,619		1.5	%		10,061		0.1	%		99,619		1.5	%

Fixed maturities carried at fair value	$	5,921,646		87.7	%	$	5,731,131		86.8	%	$	5,921,646		85.7	%	$	5,731,131		85.0	%


U.S. government and agencies	$	27,616		0.4	%	$	29,201		0.4	%	$	31,697		0.5	%	$	32,906		0.5	%
AAA		575,679		8.5	%		619,832		9.4	%		697,991		10.1	%		733,632		10.9	%
AA		92,778		1.4	%		82,511		1.2	%		102,914		1.5	%		88,631		1.3	%
A		108,610		1.6	%		117,600		1.8	%		126,183		1.8	%		129,791		1.9	%
BBB		26,962		0.4	%		24,117		0.4	%		30,634		0.4	%		25,705		0.4	%
BB		2,345		0.0	%		998		0.0	%		2,119		0.0	%		828		0.0	%

Fixed maturities carried at amortized cost	$	833,990		12.3	%	$	874,259		13.2	%	$	991,538		14.3	%	$	1,011,493		15.0	%

Total fixed maturities	$	6,755,636		100.0	%	$	6,605,390		100.0	%	$	6,913,184		100.0	%	$	6,742,624		100.0	%

[a]	Included within U.S. government and agencies are agency-issued residential mortgage-backed securities with a fair value of $1,241,723 (December 31, 2011: $1,117,599).

Percentage totals may not add due to rounding.


	Quarter Ended June 30, 2012			Quarter Ended Mar. 31, 2012			Quarter Ended Dec. 31, 2011			Quarter Ended Sept. 30, 2011			Quarter Ended June 30, 2011			Quarter Ended June 30, 2010
Net investment income	$	54,729		$	58,678		$	57,080		$	60,335		$	59,665		$	53,277


Realized and unrealized gains (losses) on trading fixed maturities	$	587		$	1,066		$	763		$	1,663		$	1,432		$	(1,284	)
Net realized gains (losses) on available for sale fixed maturities		11,990			7,759			1,990			6,096			54			2,425
(Decrease) increase in fair value of hedge funds		(2,894	)		3,679			(5,415	)		(7,669	)		(1,878	)		(3,323	)
(Decrease) increase in fair value of catastrophe bonds		—			—			—			—			(251	)		335
(Decrease) increase in fair value of structured deposit		(655	)		365			(313	)		(2,007	)		(1,284	)		—
Income (loss) from equity method investments		5,583			4,927			1,024			579			(13	)		(572	)
(Decrease) increase in fair value of derivatives		(1,130	)		7,697			(3,824	)		(6,634	)		(3,834	)		(12,367	)

Net realized and unrealized gains (losses) on investments	$	13,481		$	25,493		$	(5,775	)	$	(7,972	)	$	(5,774	)	$	(14,786	)

Net impairment losses recognized in earnings	$	(570	)	$	(5,369	)	$	(702	)	$	(861	)	$	(353	)	$	(300	)

ALTERRA CAPITAL HOLDINGS LIMITED

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)


				Periodic Rate of Return
	As of June 30, 2012			Last 3 Months			Year to Date			Last 12 months			Last 60 months*
	As of June 30, 2012
Cash and fixed maturities	$	7,519,593			1.53	%		2.70	%		5.33	%		5.70	%


Distressed securities	$	24,659			(1.11	%)		3.65	%		(1.21	%)		2.22	%
Diversified arbitrage		14,004			70.00	%		6.07	%		3.45	%		(2.70	%)
Emerging markets		3,557			(3.60	%)		(27.84	%)		(28.29	%)		(5.44	%)
Event-driven arbitrage		7,952			(0.59	%)		(15.16	%)		(32.85	%)		(9.42	%)
Fixed income arbitrage		—			0.00	%		0.00	%		0.00	%		11.07	%
Fund of funds		28,616			(0.61	%)		3.20	%		0.71	%		1.62	%
Global macro		36,669			1.43	%		3.11	%		4.82	%		4.17	%
Long / short credit		848			(2.23	%)		(2.66	%)		(12.51	%)		(1.62	%)
Long / short equity		134,194			(1.84	%)		2.76	%		(0.36	%)		4.89	%
Opportunistic		1,660			0.00	%		(2.00	%)		(2.29	%)		(24.21	%)

Hedge funds **		252,159			(0.91	%)		0.41	%		(3.69	%)		(0.76	%)
Derivatives		(328	)
Structured deposits		24,250
Equity investments		90,323

Total other investments	$	366,404

Total invested assets	$	7,885,997

Hedge Fund Investment Return Data:

HFRI Fund of Funds Composite Index [a]					(2.21	%)		1.09	%		(4.40	%)		(2.02	%)

Hedge Fund Performance History – 60 months ended June 30, 2012


Monthly performance	2012			2011			2010			2009			2008			2007
January		1.53	%		0.13	%		0.79	%		2.13	%		(1.37	%)
February		0.02	%		0.57	%		0.17	%		0.65	%		1.83	%
March		(0.21	%)		0.29	%		1.02	%		(0.76	%)		(2.58	%)
April		(0.02	%)		0.73	%		0.88	%		(0.84	%)		(0.13	%)
May		(0.41	%)		(0.28	%)		(0.73	%)		2.45	%		2.51	%
June		(0.48	%)		(0.89	%)		(0.83	%)		1.53	%		0.93	%
July					0.15	%		0.36	%		1.40	%		(4.12	%)		0.99	%
August					(1.37	%)		(0.28	%)		0.78	%		(2.14	%)		(1.62	%)
September					(1.13	%)		1.28	%		1.71	%		(7.31	%)		1.85	%
October					0.07	%		0.84	%		1.53	%		(4.85	%)		4.15	%
November					(0.19	%)		0.40	%		0.35	%		(1.75	%)		0.10	%
December					(1.67	%)		0.31	%		0.77	%		(1.92	%)		(0.13	%)

Quarterly performance
Q1		1.33	%		0.98	%		1.99	%		2.00	%		(2.15	%)
Q2		(0.91	%)		(0.45	%)		(0.69	%)		3.14	%		3.33	%
Q3					(2.33	%)		1.35	%		3.94	%		(13.03	%)		1.18	%
Q4					(1.79	%)		1.56	%		2.66	%		(8.31	%)		4.11	%
Period return		0.41	%		(3.57	%)		4.25	%		12.27	%		(19.38	%)		5.34	%

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

[a]	As reported by HFRI as of July 26, 2012

*	Annualized

**	Net of all fees

ALTERRA CAPITAL HOLDINGS LIMITED

LARGEST 25 CORPORATE HOLDINGS [a] (Unaudited)

(Expressed in thousands of United States Dollars)


	As of June 30, 2012
Issuer	Amortized Cost		Fair Value
General Electric Co.	$	85,701	$	90,087
JP Morgan Chase & Co		79,024		81,677
European Investment Bank		60,624		67,735
Citigroup Inc		63,890		66,554
KFW		51,860		58,980
Bank of America Corp		51,739		53,370
Wells Fargo & Co		40,388		43,588
Credit Suisse Group AG		35,259		36,410
Morgan Stanley		36,138		36,276
Pepsico Inc		33,436		35,365
Novartis AG		32,913		34,812
Metlife Inc		30,621		33,042
Ally Financial Inc		31,545		31,673
Goldman Sachs Group Inc		30,877		31,671
Canadian Imperial Bank of Commerce		30,299		30,617
Wal-Mart Stores Inc		28,106		29,951
BP plc		28,191		29,526
Barclays plc		28,618		29,076
International Business Machines Corp		26,364		28,481
UBS AG		25,415		28,097
Verizon Communications Inc		26,135		28,085
Conoco Philips		25,218		27,903
Lloyds Banking Group plc		26,496		27,689
AT&T Inc		24,869		26,833
Coca-Cola Co		24,405		26,705

	$	958,131	$	1,014,203

[a]	Corporate holdings includes supranationals and government-guaranteed corporate securities.

ALTERRA CAPITAL HOLDINGS LIMITED

EUROPEAN GOVERNMENT AND EUROPEAN BANKING INSTITUTION HOLDINGS (Unaudited)

(Expressed in thousands of United States Dollars)


	As of June 30, 2012
Largest European Government Holdings	Fair Value		% of Total
France	$	266,621		35.5	%
Germany		256,424		34.2	%
Netherlands		146,068		19.5	%
United Kingdom		44,971		6.0	%
Belgium		20,579		2.7	%
Norway		7,075		0.9	%
Denmark		4,253		0.6	%
All Other European Governments		4,401		0.6	%

Total European Government Holdings	$	750,392		100.0	%


	As of June 30, 2012
Largest European Banking Institution Holdings	Fair Value		% of Total
European Investment Bank	$	67,735		15.5	%
KFW		58,980		13.5	%
Credit Suisse Group AG		36,410		8.3	%
Barclays plc		29,076		6.6	%
UBS AG		28,097		6.4	%
Lloyds Banking Group plc		27,689		6.3	%
BNP Paribas SA		18,304		4.2	%
HSBC Holdings plc		17,895		4.1	%
Cooperatieve Centrale Raiffeisen-Boerenlee		16,289		3.7	%
All Other		137,079		31.4	%

Total European Banking Institutions	$	437,554		100.0	%

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

EUROPEAN CORPORATE FIXED MATURITIES INVESTMENT EXPOSURES (Unaudited)

(Expressed in thousands of United States Dollars)


	As of June 30, 2012
	Banking Institutions		Other Financial Institutions		Other Corporates		Total
Country
United Kingdom	$	96,898	$	29,384	$	98,154	$	224,436
Netherlands		42,027		9,045		50,978		102,050
Germany		84,557		—		11,359		95,916
France		37,999		—		50,401		88,400
Supranational		72,269		—		—		72,269
Switzerland		61,979		—		2,038		64,017
Sweden		19,309		3,994		—		23,303
Norway		16,392		—		20,253		36,645
Ireland		1,104		9,369		4,984		15,457
Luxembourg		—		—		11,950		11,950
Denmark		5,020		—		—		5,020
New Zealand		—		—		4,363		4,363
Spain		—		—		509		509

Fair value	$	437,554	$	51,792	$	254,989	$	744,335

Balance sheet carrying value [a]	$	409,304	$	48,024	$	241,714	$	699,042

Credit rating
AAA	$	250,192	$	29,420	$	402	$	280,014
AA		46,168		8,885		48,214		103,267
A		123,667		12,993		175,584		312,244
BBB		11,432		—		17,536		28,968
BB		4,429		494		7,747		12,670
B		1,666		—		5,506		7,172

Fair value	$	437,554	$	51,792	$	254,989	$	744,335

Balance sheet carrying value [a]	$	409,304	$	48,024	$	241,714	$	699,042

[a]	The trading and available for sale portfolios are carried at fair value and the held to maturity portfolio is carried at amortized cost.

ALTERRA CAPITAL HOLDINGS LIMITED

NEW POINT IV SUMMARY (Unaudited)

(Expressed in thousands of United States Dollars)

New Point IV Limited (“New Point IV”) is a side car vehicle established in 2011 to provide capacity to write property catastrophe collateralized retrocessional coverage. New Point IV is sponsored by Alterra in partnership with Stone Point Capital LLC and other investors. Alterra provides underwriting services to New Point Re IV Limited (“New Point Re IV), a wholly-owned subsidiary of New Point IV.

Alterra owns 34.8% of the common shares of New Point IV and accounts for it as an equity method investment.


	FOR THE QUARTERS ENDED				FOR THE SIX MONTHS ENDED
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011

Gross Premiums Written by New Point IV [a]	$	4,095	$	—	$	84,273	$	—

The following is included in Alterra’s unaudited interim consolidated financial statements for the respective periods:

Balance Sheet
Other investments [b]	$	86,571	$	—	$	86,571	$	—

Statement of Operations and Comprehensive Income
Other income [c]	$	1,773	$	—	$	6,121	$	—

Income from equity method investment [d]	$	5,628	$	—	$	10,522	$	—

[a]	New Point IV is not consolidated by Alterra. Consequently, these gross premiums written are not included in Alterra’s gross premiums written.

[b]	Represents Alterra’s 34.8% investment in New Point IV under the equity method of accounting.

[c]	Represents the underwriting fees and profit commissions earned by Alterra in connection with New Point Re IV. This is included in the reinsurance segment and is included in net operating income.

[d]	Represents Alterra’s 34.8% share of the net income of New Point IV. This is included within net realized and unrealized gains on investments in Alterra’s statement of operations and comprehensive income and is included in net operating income.

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, 2012			June 30, 2011			June 30, 2012			June 30, 2011			Dec. 31, 2011			Dec. 31, 2010
Income and Return on Equity:
Net income (loss)	$	78,940		$	32,635		$	157,964		$	(14,052	)	$	65,282		$	302,335
Net operating income	$	68,960		$	39,558		$	136,683		$	14,833		$	96,600		$	251,712
Average shareholders’ equity	$	2,851,499		$	2,758,138		$	2,840,874		$	2,789,435		$	2,806,191		$	2,467,429
Annualized return on average shareholders’ equity [a]		11.1	%		4.7	%		11.1	%		(1.0	%)		2.3	%		12.3	%
Annualized net operating return on average shareholders’ equity [a]		9.7	%		5.7	%		9.6	%		1.1	%		3.4	%		10.2	%

Book value and dividends per share:

Diluted book value per share	$	28.68		$	25.98		$	28.68		$	25.98		$	26.91		$	25.99

Dividends paid per share	$	0.14		$	0.12		$	0.28		$	0.24		$	0.52		$	2.94
Change in diluted book value per share		3.7	%		2.5	%		6.6	%		0.0	%		3.5	%		(5.0	%)

Dividend payout ratio [b]		0.5	%		0.5	%		1.0	%		0.9	%		1.9	%		22.4	%
Total return to shareholders [c]		4.1	%		3.0	%		7.5	%		0.8	%		5.4	%		17.4	%

[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.

Percentage totals may not add due to rounding.

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, 2012		June 30, 2011		June 30, 2012		June 30, 2011			Dec. 31, 2011		Dec. 31, 2010
Net income (loss) available to common shareholders	$	78,940	$	32,635	$	157,964	$	(14,052	)	$	65,282	$	302,335
Denominator:
Weighted average shares - basic
Outstanding [a]		99,242,983		105,365,111		99,988,898		106,171,735			105,022,397		94,426,055
Unvested restricted share units		320,491		239,675		294,368		213,272			227,286		256,224

		99,563,474		105,604,786		100,283,266		106,385,007			105,249,683		94,682,279
Share equivalents:
Warrants		1,776,887		1,247,975		1,854,069		—			1,023,278		537,399
Options		92,399		148,366		104,212		—			124,022		183,258
Employee stock purchase plan		1,460		2,506		3,933		—			1,386		2,301
Non participating restricted shares		523,662		108,276		310,590		—			104,524		54,138

Weighted average shares - diluted [b]		101,957,882		107,111,909		102,556,070		106,385,007			106,502,893		95,459,375

Net income (loss) per share	$	0.79	$	0.31	$	1.58	$	(0.13	)	$	0.62	$	3.19

Net income (loss) per diluted share	$	0.77	$	0.30	$	1.54	$	(0.13	)	$	0.61	$	3.17

[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, 2012			June 30, 2011		June 30, 2012			June 30, 2011			Dec. 31, 2011		Dec. 31, 2010
Before tax
Net income (loss)	$	79,702		$	28,308	$	154,144		$	(21,079	)	$	55,781	$	306,491
Net realized and unrealized (gains) losses on investments excluded from operating income, before tax [a]		(10,177	)		4,249		(21,728	)		27,263			29,486		65
Foreign exchange losses (gains), before tax		25			3,090		(7	)		2,212			1,312		(115	)
Merger and acquisition expenses, before tax		—			—		—			—			—		(48,776	)

Net operating income	$	69,550		$	35,647	$	132,409		$	8,396		$	86,579	$	257,665


Net of tax
Net income (loss)	$	78,940		$	32,635	$	157,964		$	(14,052	)	$	65,282	$	302,335
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(9,987	)		4,711		(21,267	)		27,313			30,391		(865	)
Foreign exchange losses (gains), before tax		7			2,212		(14	)		1,572			927		363
Merger and acquisition expenses, net of tax		—			—		—			—			—		(50,121	)

Net operating income	$	68,960		$	39,558	$	136,683		$	14,833		$	96,600	$	251,712


Weighted average shares outstanding:
Basic		99,563,474			105,604,786		100,283,266			106,385,007			105,249,683		94,682,279
Diluted		101,957,882			107,111,909		102,556,070			106,385,007			106,502,893		95,459,375

Basic per share data
Income (loss) per share	$	0.79		$	0.31	$	1.58		$	(0.13	)	$	0.62	$	3.19
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(0.10	)		0.04		(0.21	)		0.26			0.29		(0.01	)
Foreign exchange losses (gains), net of tax		—			0.02		—			0.01			0.01		0.01
Merger and acquisition expenses, net of tax		—			—		—			—			—		(0.53	)

Net operating income per share	$	0.69		$	0.37	$	1.36		$	0.14		$	0.92	$	2.67


Diluted per share data
Income (loss) per diluted share	$	0.77		$	0.30	$	1.54		$	(0.13	)	$	0.61	$	3.17
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(0.10	)		0.04		(0.21	)		0.26			0.29		(0.01	)
Foreign exchange losses (gains), net of tax		—			0.02		—			0.02			0.02		0.01
Merger and acquisition expenses, net of tax		—			—		—			—			—		(0.53	)

Net operating income per diluted share	$	0.68		$	0.37	$	1.33		$	0.14		$	0.91	$	2.64

[a]

Net realized and unrealized (gains) losses on investments excluded from operating income 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 in run off and changes in fair value of 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, 2012		As of Dec. 31, 2011
Price per share at period end	$	23.35	$	23.63
Shareholders’ equity	$	2,851,736	$	2,809,235
Goodwill and intangible assets	$	55,431	$	56,111
Tangible book value	$	2,796,305	$	2,753,124
Basic common shares outstanding [a]		96,853,334		102,101,950
Add: unvested restricted stock units		373,399		241,108
Add: dilutive impact of warrants outstanding		1,959,863		1,938,297
Add: dilutive impact of options outstanding		96,188		125,424
Add: unvested performance based restricted shares		146,397		—

Diluted shares outstanding [b]		99,429,181		104,406,779
Basic book value per share	$	29.44	$	27.51
Diluted book value per share	$	28.68	$	26.91

Basic tangible book value per share	$	28.87	$	26.96
Diluted tangible book value per share	$	28.12	$	26.37

[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 investments excluded from operating income (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 derivatives, catastrophe bonds, structured deposits and earnings from equity method investments in run-off), 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 and the underlying fundamentals of our operations as realized and unrealized gains and losses on non-hedge fund investments and foreign exchange gains and losses may fluctuate from period to period and 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 quarterly average shareholders’ equity balances. 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 Ltd - FORM 8-K - EX-99.2 - INVESTOR FINANCIAL SUPPLEMENT - August 7, 2012

Attached files