ALTERRA CAPITAL HOLDINGS Ltd - FORM 8-K - EX-99.2 - INVESTOR FINANCIAL SUPPLEMENT FOR THE QUARTER ENDED SEPTEMBER 30, 2012

Attached files

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8-K - FORM 8-K - ALTERRA CAPITAL HOLDINGS Ltd	d433426d8k.htm
EX-99.1 - NEWS RELEASE OF ALTERRA CAPITAL HOLDINGS LIMITED, DATED NOVEMBER 6, 2012 - ALTERRA CAPITAL HOLDINGS Ltd	d433426dex991.htm
EX-99.3 - NEWS RELEASE OF ALTERRA CAPITAL HOLDINGS LIMITED, DATED NOVEMBER 6, 2012 - ALTERRA CAPITAL HOLDINGS Ltd	d433426dex993.htm

Exhibit 99.2

LOGO

ALTERRA CAPITAL HOLDINGS LIMITED

Investor Financial Supplement

Third 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, +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		15
Segment Data and Ratios—Year to date		16
Gross Premiums Written by Line of Business—Year to date		23
Investment Portfolio		24
New Point IV Summary		29
Shareholder Return Analysis		30
Earnings Per Share Information		31
Operating Income Reconciliation		32
Book Value per Share		33
Regulation G		34

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 Nine Months Ended						Previous Year Quarter Change			Previous Year to Date Change
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2012			Sept. 30, 2011			Previous Year Quarter Change			Previous Year to Date Change
HIGHLIGHTS
Net income	$	37,652		$	48,386		$	195,616		$	34,334			(22.2	%)		n/m
Net operating income [a]		32,133			50,082			168,816			64,915			(35.8	%)		160.1	%
Operating cashflow		90,861			126,770			257,238			275,475			(28.3	%)		(6.6	%)
Gross premiums written		386,228			386,328			1,614,415			1,578,083			(0.0	%)		2.3	%
Net premiums earned		332,638			347,042			1,021,591			1,075,870			(4.2	%)		(5.0	%)
Total assets		10,734,010			10,472,330			10,734,010			10,472,330			2.5	%		2.5	%
Total shareholders’ equity		2,923,176			2,844,738			2,923,176			2,844,738			2.8	%		2.8	%

PER SHARE
Basic earnings per share
Net income	$	0.39		$	0.46		$	1.98		$	0.32
Net operating income [a]		0.34			0.48			1.71			0.61
Diluted earnings per share
Net income	$	0.38		$	0.46		$	1.93		$	0.32
Net operating income [a]		0.33			0.47			1.67			0.61
Weighted average shares outstanding—basic		95,791,466			104,830,300			98,785,999			105,866,771
Weighted average shares outstanding—diluted		98,610,267			105,665,282			101,252,927			107,092,882
Book value per common share [b]	$	30.45		$	27.27		$	30.45		$	27.27			11.7	%		11.7	%
Diluted book value per share (treasury stock method) [b]		29.57			27.18			29.57			27.18			8.8	%		8.8	%
Diluted tangible book value per share (treasury stock method) [b]		29.01			26.64			29.01			26.64			8.9	%		8.9	%

RATIOS
Annualized return on average shareholders’ equity [c]		5.2	%		6.9	%		9.1	%		1.6	%
Annualized net operating return on average shareholders’ equity [c]		4.5	%		7.1	%		7.9	%		3.1	%
Loss ratio [d]		68.8	%		57.3	%		61.9	%		66.5	%
Acquisition cost ratio [d]		18.6	%		17.7	%		18.0	%		18.3	%
General and administrative expense ratio [d]		12.4	%		12.7	%		13.0	%		13.7	%
Combined ratio [d]		99.9	%		87.7	%		92.9	%		98.4	%

[a]	Non-GAAP financial measure. For definition and calculation see page 32.

[b]	For calculations see page 33.

[c]	Non-GAAP financial measure. For calculations see page 30.

[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)


	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011
	(Unaudited)			(Unaudited)			(Unaudited)						(Unaudited)
ASSETS
Cash and cash equivalents	$	405,809		$	427,704		$	394,514		$	469,477		$	427,898
Fixed maturities, trading at fair value		376,498			211,796			223,592			229,206			227,753
Fixed maturities, available for sale at fair value		5,728,640			5,709,850			5,518,102			5,501,925			5,662,869
Fixed maturities, held to maturity at amortized cost		837,348			833,990			885,214			874,259			926,916
Other investments		376,870			366,404			332,884			286,515			311,633
Restricted cash and cash equivalents		245,747			336,253			450,229			453,367			442,077
Accrued interest income		65,236			65,252			64,295			71,322			71,038
Premiums receivable		872,948			991,927			869,800			715,154			777,980
Losses and benefits recoverable from reinsurers		1,149,684			1,083,840			1,108,036			1,068,119			1,079,035
Deferred acquisition costs		166,128			170,904			176,199			145,850			166,353
Prepaid reinsurance premiums		303,171			326,014			299,163			212,238			214,132
Trades pending settlement		77,802			31,925			111,194			22,887			34,158
Goodwill and intangible assets		55,371			55,431			55,771			56,111			56,652
Other assets		72,758			85,296			86,785			79,417			73,836

Total assets	$	10,734,010		$	10,696,586		$	10,575,778		$	10,185,847		$	10,472,330


LIABILITIES
Property and casualty losses	$	4,460,045		$	4,308,316		$	4,322,847		$	4,216,538		$	4,205,057
Life and annuity benefits		1,148,317			1,148,304			1,203,752			1,190,697			1,230,344
Deposit liabilities		139,518			158,412			151,058			151,035			147,493
Funds withheld from reinsurers		93,190			93,510			92,793			112,469			124,631
Unearned property and casualty premiums		1,192,203			1,281,406			1,221,788			1,020,639			1,149,108
Reinsurance balances payable		214,202			260,351			201,409			134,354			178,560
Accounts payable and accrued expenses		93,810			116,575			90,359			110,380			110,527
Trades pending settlement		29,022			37,455			—			—			41,383
Senior notes		440,527			440,521			440,510			440,500			440,489

Total liabilities		7,810,834			7,844,850			7,724,516			7,376,612			7,627,592


SHAREHOLDERS’ EQUITY
Common shares (par value $1.00) 95,985,461 shares issued and outstanding		95,985			96,853			100,707			102,102			104,324
Additional paid-in capital		1,715,748			1,729,311			1,807,287			1,847,034			1,890,763
Accumulated other comprehensive income		265,232			202,229			185,146			166,957			173,025
Retained earnings		846,211			823,343			758,122			693,142			676,626

Total shareholders’ equity		2,923,176			2,851,736			2,851,262			2,809,235			2,844,738

Total liabilities and shareholders’ equity	$	10,734,010		$	10,696,586		$	10,575,778		$	10,185,847		$	10,472,330

Book value per share	$	30.45		$	29.44		$	28.31		$	27.51		$	27.27

Diluted book value per share (treasury stock method)	$	29.57		$	28.68		$	27.67		$	26.91		$	27.18

Diluted tangible book value per share (treasury stock method) [a]	$	29.01		$	28.12		$	27.13		$	26.37		$	26.64

Debt-to-capital ratio [b]		13.1	%		13.4	%		13.4	%		13.6	%		13.4	%

[a]	Non-GAAP financial measure. For calculations see page 33.

[b]	Calculated as debt, being 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
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
REVENUES
Gross premiums written	$	386,228		$	566,857		$	661,330		$	325,983		$	386,328		$	325,213
Reinsurance premiums ceded		(123,477	)		(189,879	)		(224,462	)		(107,203	)		(90,891	)		(60,611	)

Net premiums written	$	262,751		$	376,978		$	436,868		$	218,780		$	295,437		$	264,602

Earned premiums	$	483,222		$	496,839		$	477,867		$	460,636		$	452,931		$	436,244
Earned premiums ceded		(150,584	)		(146,061	)		(139,692	)		(111,532	)		(105,889	)		(93,812	)

Net premiums earned		332,638			350,778			338,175			349,104			347,042			342,432
Net investment income		53,518			54,729			58,678			57,080			60,335			59,711
Net realized and unrealized gains (losses) on investments		20,436			13,481			25,493			(5,775	)		(7,972	)		15,411
Total other-than-temporary impairment losses		(522	)		(420	)		(5,467	)		(703	)		(692	)		(90	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(70	)		(150	)		98			1			(169	)		(61	)

Net impairment losses recognized in earnings		(592	)		(570	)		(5,369	)		(702	)		(861	)		(151	)
Other income		1,586			1,928			5,362			2,017			1,473			1,327

Total revenues		407,586			420,346			422,339			401,724			400,017			418,730

LOSSES AND EXPENSES
Net losses and loss expenses		228,529			196,764			206,029			231,533			198,521			191,012
Claims and policy benefits		11,838			13,272			13,466			14,564			14,538			15,060
Acquisition costs		61,923			62,171			59,724			64,380			61,434			60,859
Interest expense		9,026			9,635			8,628			13,296			11,303			7,551
Net foreign exchange (gains) losses		(82	)		25			(32	)		(753	)		(147	)		3,353
Merger and acquisition expenses		—			—			—			—			—			550
General and administrative expenses		57,515			58,777			60,082			54,657			61,555			56,650

Total losses and expenses		368,749			340,644			347,897			377,677			347,204			335,035

INCOME BEFORE TAXES		38,837			79,702			74,442			24,047			52,813			83,695
Income tax expense (benefit)		1,185			762			(4,582	)		(6,901	)		4,427			858

NET INCOME		37,652			78,940			79,024			30,948			48,386			82,837
Change in net unrealized gains and losses on fixed maturities, net of tax		54,301			23,444			16,819			(3,670	)		61,540			74,383
Foreign currency translation adjustment		8,702			(6,361	)		1,370			(2,398	)		(20,733	)		13,224

COMPREHENSIVE INCOME	$	100,655		$	96,023		$	97,213		$	24,880		$	89,193		$	170,444

KEY RATIOS/PER SHARE DATA
Loss ratio [a]		68.8	%		56.2	%		61.0	%		66.5	%		57.3	%		56.0	%
Acquisition cost ratio [b]		18.6	%		17.7	%		17.6	%		18.5	%		17.7	%		17.8	%
General and administrative expense ratio [c]		12.4	%		12.6	%		14.0	%		12.4	%		12.7	%		12.2	%

Combined ratio [d]		99.9	%		86.6	%		92.6	%		97.4	%		87.7	%		86.0	%

Net income per share	$	0.39		$	0.79		$	0.78		$	0.30		$	0.46		$	0.71
Net income per diluted share	$	0.38		$	0.77		$	0.77		$	0.30		$	0.46		$	0.70
Net operating income per share—diluted [e]	$	0.33		$	0.68		$	0.66		$	0.30		$	0.47		$	0.64
Annualized ROAE [f]		5.2	%		11.1	%		11.2	%		4.4	%		6.9	%		11.1	%
Annualized net operating ROAE [f]		4.5	%		9.7	%		9.6	%		4.5	%		7.1	%		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 32 for calculation of net operating income per share—diluted.

[f]	Non-GAAP financial measure. See page 30 for calculation of annualized return on average shareholders’ equity (ROAE) and annualized net operating ROAE.

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)


	NINE MONTHS ENDED									YEAR ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010 [g]			Dec. 31, 2011			Dec. 31, 2010 [g]
REVENUES
Gross premiums written	$	1,614,415		$	1,578,083		$	1,095,333		$	1,904,066		$	1,410,731
Reinsurance premiums ceded		(537,818	)		(364,874	)		(293,546	)		(472,077	)		(371,163	)

Net premiums written	$	1,076,597		$	1,213,209		$	801,787		$	1,431,989		$	1,039,568

Earned premiums	$	1,457,928		$	1,385,201		$	1,132,964		$	1,845,837		$	1,578,647
Earned premiums ceded		(436,337	)		(309,331	)		(303,032	)		(420,863	)		(406,161	)

Net premiums earned		1,021,591			1,075,870			829,932			1,424,974			1,172,486
Net investment income		166,925			177,766			161,378			234,846			222,458
Net realized and unrealized gains (losses) on investments		59,410			(32,564	)		7,047			(38,339	)		16,872
Total other-than-temporary impairment losses		(6,409	)		(2,003	)		(1,955	)		(2,706	)		(5,873	)
Portion of loss recognized in other comprehensive income (loss) before taxes		(122	)		(240	)		1,084			(239	)		3,228

Net impairment losses recognized in earnings		(6,531	)		(2,243	)		(871	)		(2,945	)		(2,645	)
Other income		8,876			3,379			1,946			5,396			4,808

Total revenues		1,250,271			1,222,208			999,432			1,623,932			1,413,979

LOSSES AND EXPENSES
Net losses and loss expenses		631,322			714,060			475,794			945,593			654,841
Claims and policy benefits		38,576			44,818			46,662			59,382			65,213
Acquisition costs		183,818			196,722			133,901			261,102			187,464
Interest expense		27,289			30,392			20,409			43,688			28,275
Net foreign exchange (gains) losses		(89	)		2,065			267			1,312			(115	)
Merger and acquisition expenses		—			—			(49,276	)		—			(48,776	)
General and administrative expenses		176,374			202,417			143,827			257,074			220,586

Total losses and expenses		1,057,290			1,190,474			771,584			1,568,151			1,107,488

INCOME BEFORE TAXES		192,981			31,734			227,848			55,781			306,491
Income tax (benefit) expense		(2,635	)		(2,600	)		5,183			(9,501	)		4,156

NET INCOME		195,616			34,334			222,665			65,282			302,335
Change in net unrealized gains and losses on fixed maturities, net of tax		94,564			89,774			169,039			86,104			81,406
Foreign currency translation adjustment		3,711			(15,695	)		(4,145	)		(18,093	)		(7,891	)

COMPREHENSIVE INCOME	$	293,891		$	108,413		$	387,559		$	133,293		$	375,850

KEY RATIOS/PER SHARE DATA
Loss ratio [a]		61.9	%		66.5	%		57.5	%		66.5	%		56.1	%
Acquisition cost ratio [b]		18.0	%		18.3	%		16.1	%		18.3	%		16.0	%
General and administrative expense ratio [c]		13.0	%		13.7	%		12.4	%		13.4	%		13.6	%

Combined ratio [d]		92.9	%		98.4	%		86.1	%		98.2	%		85.7	%

Net income per share—basic	$	1.98		$	0.32		$	2.52		$	0.62		$	3.19
Net income per share—diluted	$	1.93		$	0.32		$	2.50		$	0.61		$	3.17
Net operating income per share—diluted [e]	$	1.67		$	0.61		$	1.97		$	0.91		$	2.64
Annualized ROAE [f]		9.1	%		1.6	%		12.9	%		2.3	%		12.3	%
Annualized Net Operating ROAE [f]		7.9	%		3.1	%		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 32 for calculation of net operating income per share—diluted.

[f]	Non-GAAP financial measure. See page 30 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–QUARTER ENDED SEPTEMBER 30, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty															Life & Annuity Reinsurance
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total			Life & Annuity Reinsurance			Corporate			Consolidated
Gross premiums written	$	81,627		$	88,006		$	172,796		$	43,074		$	385,503		$	725		$	—		$	386,228
Reinsurance premiums ceded		(44,157	)		(40,083	)		(30,318	)		(8,835	)		(123,393	)		(84	)		—			(123,477	)

Net premiums written	$	37,470		$	47,923		$	142,478		$	34,239		$	262,110		$	641		$	—		$	262,751

Earned premiums	$	92,526		$	100,187		$	223,231		$	66,553		$	482,497		$	725		$	—		$	483,222
Earned premiums ceded		(48,392	)		(52,222	)		(36,446	)		(13,440	)		(150,500	)		(84	)		—			(150,584	)

Net premiums earned		44,134			47,965			186,785			53,113			331,997			641			—			332,638

Net losses and loss expenses		(31,631	)		(46,489	)		(98,067	)		(52,342	)		(228,529	)		—			—			(228,529	)
Claims and policy benefits		—			—			—			—			—			(11,838	)		—			(11,838	)
Acquisition costs		(124	)		(4,404	)		(47,159	)		(10,104	)		(61,791	)		(132	)		—			(61,923	)
General and administrative expenses		(6,328	)		(11,337	)		(16,259	)		(7,342	)		(41,266	)		(74	)		—			(41,340	)
Other income		—			—			1,560			1			1,561			—			—			1,561

Underwriting income (loss)	$	6,051		$	(14,265	)	$	26,860		$	(16,674	)	$	1,972			n/a			—			n/a

Net investment income																	13,224			40,294			53,518
Net realized and unrealized gains on investments																				20,436			20,436
Net impairment losses recognized in earnings																				(592	)		(592	)
Corporate other income																				25			25
Interest expense																				(9,026	)		(9,026	)
Net foreign exchange gains																				82			82
Corporate general and administrative expenses																				(16,175	)		(16,175	)

Income before taxes																$	1,821		$	35,044		$	38,837

Loss ratio [a]		71.7	%		96.9	%		52.5	%		98.5	%		68.8	%
Acquisition cost ratio [b]		0.3	%		9.2	%		25.2	%		19.0	%		18.6	%
General and administrative expense ratio [c]		14.3	%		23.6	%		8.7	%		13.8	%		12.4	%

Combined ratio [d]		86.3	%		129.7	%		86.5	%		131.4	%		99.9	%

[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.

Percentage totals may not add due to rounding.

Effective July 1, 2012, the Company redefined its reporting segments by combining the reinsurance and Latin America segments into a single reinsurance segment. The Latin America segment comprised reinsurance business written for clients in Latin America through the Company’s Rio de Janeiro, Bogotá and Buenos Aires offices. This business will now be combined with and reported as part of the reinsurance segment. Segment disclosures for comparative periods have been re-presented to reflect this change.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED UNDERWRITING RATIOS—QUARTER ENDED SEPTEMBER 30, 2012 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total
UNDERWRITING RATIOS
Loss ratio		71.7	%		96.9	%		52.5	%		98.5	%		68.8	%
Acquisition cost ratio		0.3	%		9.2	%		25.2	%		19.0	%		18.6	%
General and administrative expense ratio		14.3	%		23.6	%		8.7	%		13.8	%		12.4	%

Combined ratio		86.3	%		129.7	%		86.5	%		131.4	%		99.9	%

EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
Loss ratio [a]		4.2	%		—			10.2	%		3.3	%		6.8	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS
Loss ratio		75.8	%		96.9	%		62.7	%		101.8	%		75.7	%
Acquisition cost ratio		0.3	%		9.2	%		25.2	%		19.0	%		18.6	%
General and administrative expense ratio		14.3	%		23.6	%		8.7	%		13.8	%		12.4	%

Combined ratio		90.4	%		129.7	%		96.7	%		134.7	%		106.7	%

CONSOLIDATED UNDERWRITING RATIOS—QUARTER ENDED SEPTEMBER 30, 2011 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total
UNDERWRITING RATIOS
Loss ratio		47.3	%		65.1	%		56.6	%		61.6	%		57.3	%
Acquisition cost ratio		(1.7	%)		17.5	%		22.4	%		15.7	%		17.7	%
General and administrative expense ratio		14.9	%		18.5	%		9.2	%		20.2	%		12.7	%

Combined ratio		60.5	%		101.1	%		88.1	%		97.5	%		87.7	%

EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
Loss ratio [a]		41.1	%		(0.8	%)		5.7	%		4.9	%		9.2	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS
Loss ratio		88.4	%		64.3	%		62.2	%		66.5	%		66.5	%
Acquisition cost ratio		(1.7	%)		17.5	%		22.4	%		15.7	%		17.7	%
General and administrative expense ratio		14.9	%		18.5	%		9.2	%		20.2	%		12.7	%

Combined ratio		101.7	%		100.3	%		93.8	%		102.4	%		96.8	%

[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
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Gross premiums written	$	81,627		$	125,276		$	66,771		$	97,660		$	73,297		$	70,271
Reinsurance premiums ceded		(44,157	)		(53,224	)		(43,251	)		(50,172	)		(37,625	)		(34,075	)

Net premiums written	$	37,470		$	72,052		$	23,520		$	47,488		$	35,672		$	36,196

Earned premiums	$	92,526		$	92,803		$	94,103		$	91,077		$	93,467		$	96,777
Earned premiums ceded		(48,392	)		(45,367	)		(47,133	)		(42,827	)		(48,456	)		(41,097	)

Net premiums earned		44,134			47,436			46,970			48,250			45,011			55,680

Net losses and loss expenses		(31,631	)		(22,745	)		(18,061	)		(15,152	)		(21,288	)		(23,775	)
Acquisition costs		(124	)		(239	)		(59	)		(1,084	)		748			(1,265	)
General and administrative expenses		(6,328	)		(6,913	)		(6,481	)		(6,952	)		(6,699	)		(6,435	)
Other income (loss)		—			1			815			(128	)		—			771

Underwriting income	$	6,051		$	17,540		$	23,184		$	24,934		$	17,772		$	24,976

Loss ratio		71.7	%		47.9	%		38.5	%		31.4	%		47.3	%		42.7	%
Acquisition cost ratio		0.3	%		0.5	%		0.1	%		2.2	%		(1.7	%)		2.3	%
General and administrative expense ratio		14.3	%		14.6	%		13.8	%		14.4	%		14.9	%		11.6	%

Combined ratio		86.3	%		63.0	%		52.4	%		48.1	%		60.5	%		56.5	%

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Gross premiums written	$	88,006		$	112,186		$	104,282		$	102,279		$	84,858		$	71,871
Reinsurance premiums ceded		(40,083	)		(51,524	)		(70,494	)		(45,443	)		(30,579	)		(21,513	)

Net premiums written	$	47,923		$	60,662		$	33,788		$	56,836		$	54,279		$	50,358

Earned premiums	$	100,187		$	100,300		$	96,241		$	90,048		$	83,279		$	79,200
Earned premiums ceded		(52,222	)		(44,490	)		(40,456	)		(34,078	)		(28,004	)		(27,770	)

Net premiums earned		47,965			55,810			55,785			55,970			55,275			51,430

Net losses and loss expenses		(46,489	)		(37,333	)		(37,564	)		(45,129	)		(36,002	)		(32,199	)
Acquisition costs		(4,404	)		(6,169	)		(7,696	)		(8,349	)		(9,669	)		(6,880	)
General and administrative expenses		(11,337	)		(12,215	)		(12,257	)		(12,299	)		(10,228	)		(9,975	)
Other income (loss)		—			—			81			84			58			337

Underwriting (loss) income	$	(14,265	)	$	93		$	(1,651	)	$	(9,723	)	$	(566	)	$	2,713

Loss ratio		96.9	%		66.9	%		67.3	%		80.6	%		65.1	%		62.6	%
Acquisition cost ratio		9.2	%		11.1	%		13.8	%		14.9	%		17.5	%		13.4	%
General and administrative expense ratio		23.6	%		21.9	%		22.0	%		22.0	%		18.5	%		19.4	%

Combined ratio		129.7	%		99.8	%		103.1	%		117.5	%		101.1	%		95.4	%

ALTERRA CAPITAL HOLDINGS LIMITED

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Gross premiums written	$	172,796		$	256,333		$	343,694		$	96,942		$	182,535		$	135,816
Reinsurance premiums ceded		(30,318	)		(57,908	)		(72,109	)		(2,546	)		(15,874	)		(2,524	)

Net premiums written	$	142,478		$	198,425		$	271,585		$	94,396		$	166,661		$	133,292

Earned premiums	$	223,231		$	233,352		$	214,184		$	225,492		$	224,829		$	216,322
Earned premiums ceded		(36,446	)		(32,941	)		(32,036	)		(19,521	)		(18,489	)		(15,533	)

Net premiums earned		186,785			200,411			182,148			205,971			206,340			200,789

Net losses and loss expenses		(98,067	)		(103,656	)		(111,729	)		(106,906	)		(116,769	)		(119,784	)
Acquisition costs		(47,159	)		(48,164	)		(42,416	)		(46,839	)		(46,138	)		(45,885	)
General and administrative expenses		(16,259	)		(17,061	)		(19,311	)		(16,690	)		(18,901	)		(19,111	)
Other income (loss)		1,560			1,895			4,441			(100	)		777			61

Underwriting income	$	26,860		$	33,425		$	13,133		$	35,436		$	25,309		$	16,070

Loss ratio		52.5	%		51.7	%		61.3	%		51.9	%		56.6	%		59.7	%
Acquisition cost ratio		25.2	%		24.0	%		23.3	%		22.7	%		22.4	%		22.9	%
General and administrative expense ratio		8.7	%		8.5	%		10.6	%		8.1	%		9.2	%		9.5	%

Combined ratio		86.5	%		84.3	%		95.2	%		82.7	%		88.1	%		92.0	%

ALTERRA CAPITAL HOLDINGS LIMITED

ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Gross premiums written	$	43,074		$	72,008		$	146,143		$	27,933		$	44,816		$	45,922
Reinsurance premiums ceded		(8,835	)		(27,068	)		(38,590	)		(8,888	)		(6,723	)		(2,397	)

Net premiums written	$	34,239		$	44,940		$	107,553		$	19,045		$	38,093		$	43,525

Earned premiums	$	66,553		$	69,330		$	72,899		$	52,850		$	50,534		$	42,612
Earned premiums ceded		(13,440	)		(23,108	)		(20,049	)		(14,952	)		(10,850	)		(9,310	)

Net premiums earned		53,113			46,222			52,850			37,898			39,684			33,302
Net losses and loss expenses		(52,342	)		(33,030	)		(38,675	)		(64,346	)		(24,462	)		(15,254	)
Acquisition costs		(10,104	)		(7,443	)		(9,434	)		(7,977	)		(6,230	)		(6,658	)
General and administrative expenses		(7,342	)		(7,856	)		(9,095	)		(7,271	)		(8,007	)		(6,275	)
Other income (loss)		1			7			—			851			(27	)		177

Underwriting (loss) income	$	(16,674	)	$	(2,100	)	$	(4,354	)	$	(40,845	)	$	958		$	5,292

Loss ratio		98.5	%		71.5	%		73.2	%		169.8	%		61.6	%		45.8	%
Acquisition cost ratio		19.0	%		16.1	%		17.9	%		21.0	%		15.7	%		20.0	%
General and administrative expense ratio		13.8	%		17.0	%		17.2	%		19.2	%		20.2	%		18.8	%

Combined ratio		131.4	%		104.6	%		108.2	%		210.0	%		97.5	%		84.6	%

ALTERRA CAPITAL HOLDINGS LIMITED

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE QUARTERS ENDED
	Sept. 30, 2012			June 30, 2012			Mar. 31, 2012			Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Gross premiums written	$	725		$	1,054		$	440		$	1,169		$	822		$	1,333
Reinsurance premiums ceded		(84	)		(155	)		(18	)		(154	)		(90	)		(102	)

Net premiums written	$	641		$	899		$	422		$	1,015		$	732		$	1,231

Earned premiums	$	725		$	1,054		$	440		$	1,169		$	822		$	1,333
Earned premiums ceded		(84	)		(155	)		(18	)		(154	)		(90	)		(102	)

Net premiums earned		641			899			422			1,015			732			1,231
Net investment income		13,224			13,466			14,776			11,515			12,131			12,182
Net realized and unrealized (losses) gains on investments		—			—			—			(5,509	)		(6,407	)		3,321
Other income (loss)		—			—			—			413			(8	)		(43	)
Claims and policy benefits		(11,838	)		(13,272	)		(13,466	)		(14,564	)		(14,538	)		(15,060	)
Acquisition costs		(132	)		(156	)		(119	)		(131	)		(145	)		(171	)
General and administrative expenses		(74	)		(119	)		(34	)		(67	)		(145	)		(577	)

Income (loss) before taxes	$	1,821		$	818		$	1,579		$	(7,328	)	$	(8,380	)	$	883

ALTERRA CAPITAL HOLDINGS LIMITED

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS (Unaudited)

(Expressed in thousands of United States Dollars)


		FOR THE QUARTERS ENDED
		Sept. 30, 2012			June 30, 2012			Mar. 31, 2012		Dec. 31, 2011			Sept. 30, 2011			Sept. 30, 2010
Property & Casualty:
Global Insurance:
Aviation	S	$	5,996		$	3,954		$	1,302	$	20,410		$	6,736		$	8,247
Excess Liability	L		23,746			31,435			25,186		21,281			20,365			14,384
Professional Liability	L		36,558			59,407			24,466		40,360			30,590			36,673
Property	S		15,327			30,480			15,817		15,609			15,606			10,967

			81,627			125,276			66,771		97,660			73,297			70,271
U.S. Insurance:
General/ Excess Liability	L		18,240			23,683			34,667		31,618			24,925			25,566
Marine	S		25,333			28,634			25,201		23,806			22,189			15,637
Professional Liability	L		17,185			13,133			11,208		15,720			13,318			3,613
Property	S		27,248			46,736			33,206		31,135			24,426			27,055

			88,006			112,186			104,282		102,279			84,858			71,871
Reinsurance:
Agriculture	S		576			5,298			17,505		186			998			(2,665	)
Auto	S		2,491			39,590			512		20,548			7,716			9,702
Aviation	S		16,456			5,820			5,525		337			14,670			15,313
Credit/ Surety	S		19,018			3,266			35,850		6,764			8,484			6,938
General Casualty	L		11,182			23,625			14,956		13,130			22,870			20,113
Marine & Energy	S		3,259			6,610			13,395		3,407			4,131			8,826
Medical Malpractice	L		5,565			8,105			11,276		1,673			6,867			(3,131	)
Other	S		(882	)		549			4,437		(181	)		1,112			1,128
Professional Liability	L		34,585			37,246			59,458		20,270			39,877			37,926
Property	S		68,266			117,629			161,124		21,645			70,274			42,458
Whole Account	S/L		2,879			191			1,408		2,408			(1,946	)		(1,353	)
Workers’ Compensation	L		9,401			8,404			18,248		6,755			7,482			561

			172,796			256,333			343,694		96,942			182,535			135,816
Alterra at Lloyd’s:
Accident & Health	S		9,574			8,250			17,432		5,646			9,523			5,919
Agriculture	S		(2,627	)		613			20,370		—			—			—
Aviation	S		2,914			3,220			2,486		5,562			4,130			3,946
Financial Institutions	L		6,566			5,400			6,904		8,137			3,591			8,130
International Casualty	L		6,093			8,423			49,268		1,947			7,903			3,702
Marine	S		2,014			2,282			2,726		1,493			—			—
Professional Liability	L		4,980			6,108			5,428		1,868			440			4,330
Property	S		13,560			37,712			41,529		3,280			19,229			19,895

			43,074			72,008			146,143		27,933			44,816			45,922

Aggregate Property & Casualty		$	385,503		$	565,803		$	660,890	$	324,814		$	385,506		$	323,880

Life & Annuity:
Annuity		$	—		$	(353	)	$	353	$	770		$	449		$	—
Life			725			1,407			87		399			373			1,333

Aggregate Life & Annuity		$	725		$	1,054		$	440	$	1,169		$	822		$	1,333

Aggregate Property & Casualty and Life & Annuity		$	386,228		$	566,857		$	661,330	$	325,983		$	386,328		$	325,213

S = Short tail lines		$	209,963		$	340,739		$	399,121	$	160,851		$	208,251		$	172,689
L = Long tail lines			175,540			225,064			261,769		163,963			177,255			151,191

Aggregate Property & Casualty		$	385,503		$	565,803		$	660,890	$	324,814		$	385,506		$	323,880

Property [a]		$	124,401		$	232,557		$	251,676	$	71,669		$	129,535		$	100,375
Casualty [b]			174,101			224,969			261,065		162,759			178,228			151,867
Specialty [c]			87,001			108,277			148,149		90,386			77,743			71,638

Aggregate Property & Casualty		$	385,503		$	565,803		$	660,890	$	324,814		$	385,506		$	323,880

[a]	Property includes property lines of business.

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

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

ALTERRA CAPITAL HOLDINGS LIMITED

SCHEDULE OF SUPPLEMENTAL UNDERWRITING DATA–NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)


	Property & Casualty															Life & Annuity Reinsurance
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total			Life & Annuity Reinsurance			Corporate			Consolidated
Gross premiums written	$	273,674		$	304,474		$	772,823		$	261,225		$	1,612,196		$	2,219		$	—		$	1,614,415
Reinsurance premiums ceded		(140,632	)		(162,101	)		(160,335	)		(74,493	)		(537,561	)		(257	)		—			(537,818	)

Net premiums written	$	133,042		$	142,373		$	612,488		$	186,732		$	1,074,635		$	1,962		$	—		$	1,076,597

Earned premiums	$	279,432		$	296,728		$	670,767		$	208,782		$	1,455,709		$	2,219		$	—		$	1,457,928
Earned premiums ceded		(140,892	)		(137,168	)		(101,423	)		(56,597	)		(436,080	)		(257	)		—			(436,337	)

Net premiums earned		138,540			159,560			569,344			152,185			1,019,629			1,962			—			1,021,591
Net losses and loss expenses		(72,437	)		(121,386	)		(313,452	)		(124,047	)		(631,322	)		—			—			(631,322	)
Claims and policy benefits		—			—			—			—			—			(38,576	)		—			(38,576	)
Acquisition costs		(422	)		(18,269	)		(137,739	)		(26,981	)		(183,411	)		(407	)		—			(183,818	)
General and administrative expenses		(19,722	)		(35,809	)		(52,631	)		(24,293	)		(132,455	)		(227	)		—			(132,682	)
Other income		816			81			7,896			8			8,801			—			—			8,801

Underwriting income (loss)		46,775			(15,823	)		73,418			(23,128	)		81,242			n/a			—			n/a
Net investment income																	41,466			125,459			166,925
Net realized and unrealized gains on investments																				59,410			59,410
Net impairment losses recognized in earnings																				(6,531	)		(6,531	)
Corporate other income																				75			75
Interest expense																				(27,289	)		(27,289	)
Net foreign exchange gains																				89			89
Corporate general and administrative expenses																				(43,692	)		(43,692	)

Income before taxes																$	4,218		$	107,521		$	192,981

Loss ratio [a]		52.3	%		76.1	%		55.1	%		81.5	%		61.9	%
Acquisition cost ratio [b]		0.3	%		11.4	%		24.2	%		17.7	%		18.0	%
General and administrative expense ratio [c]		14.2	%		22.4	%		9.2	%		16.0	%		13.0	%

Combined ratio [d]		66.8	%		110.0	%		88.5	%		115.2	%		92.9	%

[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.

Percentage totals may not add due to rounding.

ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED UNDERWRITING RATIOS—NINE MONTHS ENDED SEPTEMBER 30, 2012 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total
UNDERWRITING RATIOS
Loss ratio		52.3	%		76.1	%		55.1	%		81.5	%		61.9	%
Acquisition cost ratio		0.3	%		11.4	%		24.2	%		17.7	%		18.0	%
General and administrative expense ratio		14.2	%		22.4	%		9.2	%		16.0	%		13.0	%

Combined ratio		66.8	%		110.0	%		88.5	%		115.2	%		92.9	%

EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
Loss ratio [a]		21.8	%		(0.6	%)		4.8	%		(1.8	%)		5.3	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS
Loss ratio		74.1	%		75.4	%		59.9	%		79.7	%		67.2	%
Acquisition cost ratio		0.3	%		11.4	%		24.2	%		17.7	%		18.0	%
General and administrative expense ratio		14.2	%		22.4	%		9.2	%		16.0	%		13.0	%

Combined ratio		88.7	%		109.3	%		93.3	%		113.4	%		98.2	%

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

CONSOLIDATED UNDERWRITING RATIOS—NINE MONTHS ENDED SEPTEMBER 30, 2011 (Unaudited)


	Property & Casualty
	Global Insurance			U.S. Insurance			Reinsurance			Alterra at Lloyd’s			Total
UNDERWRITING RATIOS

Loss ratio		54.5	%		64.8	%		68.0	%		74.7	%		66.5	%
Acquisition cost ratio		(1.1	%)		16.8	%		22.0	%		22.9	%		18.3	%
General and administrative expense ratio		15.3	%		19.6	%		10.7	%		19.1	%		13.7	%

Combined ratio		68.6	%		101.2	%		100.7	%		116.7	%		98.4	%

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

Loss ratio [a]		28.9	%		(0.3	%)		9.1	%		9.4	%		10.3	%

NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT UNDERWRITING RATIOS

Loss ratio		83.4	%		64.5	%		77.1	%		84.1	%		76.8	%
Acquisition cost ratio		(1.1	%)		16.8	%		22.0	%		22.9	%		18.3	%
General and administrative expense ratio		15.3	%		19.6	%		10.7	%		19.1	%		13.7	%

Combined ratio		97.5	%		100.9	%		109.8	%		126.1	%		108.7	%

[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 NINE MONTHS ENDED									FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010			Dec. 31, 2011			Dec. 31, 2010

Gross premiums written	$	273,674		$	268,101		$	269,004		$	365,761		$	370,120
Reinsurance premiums ceded		(140,632	)		(131,282	)		(118,908	)		(181,454	)		(170,608	)

Net premiums written	$	133,042		$	136,819		$	150,096		$	184,307		$	199,512

Earned premiums	$	279,432		$	273,010		$	293,692		$	364,087		$	391,716
Earned premiums ceded		(140,892	)		(132,521	)		(132,019	)		(175,348	)		(173,123	)

Net premiums earned		138,540			140,489			161,673			188,739			218,593
Net losses and loss expenses		(72,437	)		(76,601	)		(96,981	)		(91,753	)		(128,823	)
Acquisition costs		(422	)		1,601			(1,753	)		517			(3,381	)
General and administrative expenses		(19,722	)		(21,425	)		(18,833	)		(28,377	)		(28,615	)
Other income		816			814			760			686			760

Underwriting income	$	46,775		$	44,878		$	44,866		$	69,812		$	58,534

Loss ratio		52.3	%		54.5	%		60.0	%		48.6	%		58.9	%
Acquisition cost ratio		0.3	%		(1.1	%)		1.1	%		(0.3	%)		1.5	%
General and administrative expense ratio		14.2	%		15.3	%		11.6	%		15.0	%		13.1	%

Combined ratio		66.8	%		68.6	%		72.7	%		63.4	%		73.6	%

ALTERRA CAPITAL HOLDINGS LIMITED

U.S. INSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	304,474		$	272,417		$	246,245		$	374,696		$	323,990
Reinsurance premiums ceded		(162,101	)		(97,123	)		(77,592	)		(142,566	)		(98,576	)

Net premiums written	$	142,373		$	175,294		$	168,653		$	232,130		$	225,414

Earned premiums	$	296,728		$	246,993		$	229,122		$	337,041		$	311,950
Earned premiums ceded		(137,168	)		(79,640	)		(96,335	)		(113,718	)		(125,218	)

Net premiums earned		159,560			167,353			132,787			223,323			186,732
Net losses and loss expenses		(121,386	)		(108,429	)		(82,614	)		(153,558	)		(118,337	)
Acquisition costs		(18,269	)		(28,055	)		(19,689	)		(36,404	)		(28,444	)
General and administrative expenses		(35,809	)		(32,872	)		(26,433	)		(45,171	)		(36,015	)
Other income		81			195			439			279			507

Underwriting (loss) income	$	(15,823	)	$	(1,808	)	$	4,490		$	(11,531	)	$	4,443

Loss ratio		76.1	%		64.8	%		62.2	%		68.8	%		63.4	%
Acquisition cost ratio		11.4	%		16.8	%		14.8	%		16.3	%		15.2	%
General and administrative expense ratio		22.4	%		19.6	%		19.9	%		20.2	%		19.3	%

Combined ratio		110.0	%		101.2	%		96.9	%		105.3	%		97.9	%

ALTERRA CAPITAL HOLDINGS LIMITED

REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010			Dec. 31, 2011			Dec. 31, 2010

Gross premiums written	$	772,823		$	810,244		$	417,739		$	907,186		$	531,912
Reinsurance premiums ceded		(160,335	)		(81,438	)		(61,223	)		(83,984	)		(64,131	)

Net premiums written	$	612,488		$	728,806		$	356,516		$	823,202		$	467,781


Earned premiums	$	670,767		$	691,196		$	486,885		$	916,688		$	705,398
Earned premiums ceded		(101,423	)		(50,989	)		(50,545	)		(70,510	)		(71,627	)

Net premiums earned		569,344			640,207			436,340			846,178			633,771

Net losses and loss expenses		(313,452	)		(435,053	)		(252,365	)		(541,959	)		(352,491	)
Acquisition costs		(137,739	)		(141,014	)		(93,535	)		(187,853	)		(132,831	)
General and administrative expenses		(52,631	)		(68,329	)		(43,999	)		(85,019	)		(70,639	)
Other income		7,896			1,325			216			1,225			—

Underwriting income (loss)	$	73,418		$	(2,864	)	$	46,657		$	32,572		$	77,810

Loss ratio		55.1	%		68.0	%		57.8	%		64.0	%		55.6	%
Acquisition cost ratio		24.2	%		22.0	%		21.4	%		22.2	%		21.0	%
General and administrative expense ratio		9.2	%		10.7	%		10.1	%		10.0	%		11.1	%

Combined ratio		88.5	%		100.7	%		89.4	%		96.3	%		87.7	%

ALTERRA CAPITAL HOLDINGS LIMITED

ALTERRA AT LLOYD’S SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	261,225		$	225,134		$	159,347		$	253,067		$	179,774
Reinsurance premiums ceded		(74,493	)		(54,820	)		(35,589	)		(63,708	)		(37,448	)

Net premiums written	$	186,732		$	170,314		$	123,758		$	189,359		$	142,326

Earned premiums	$	208,782		$	171,815		$	120,267		$	224,665		$	164,648
Earned premiums ceded		(56,597	)		(45,970	)		(23,899	)		(60,922	)		(35,793	)

Net premiums earned		152,185			125,845			96,368			163,743			128,855
Net losses and loss expenses		(124,047	)		(93,977	)		(43,834	)		(158,323	)		(55,190	)
Acquisition costs		(26,981	)		(28,828	)		(18,484	)		(36,805	)		(22,447	)
General and administrative expenses		(24,293	)		(24,033	)		(13,705	)		(31,304	)		(23,965	)
Other income		8			353			528			1,204			2,534

Underwriting (loss) income	$	(23,128	)	$	(20,640	)	$	20,873		$	(61,485	)	$	29,787

Loss ratio		81.5	%		74.7	%		45.5	%		96.7	%		42.8	%
Acquisition cost ratio		17.7	%		22.9	%		19.2	%		22.5	%		17.4	%
General and administrative expense ratio		16.0	%		19.1	%		14.2	%		19.1	%		18.6	%

Combined ratio		115.2	%		116.7	%		78.9	%		138.3	%		78.8	%

ALTERRA CAPITAL HOLDINGS LIMITED

LIFE AND ANNUITY REINSURANCE SEGMENT DATA (Unaudited)

(Expressed in thousands of United States Dollars)


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2010			Dec. 31, 2011			Dec. 31, 2010
Gross premiums written	$	2,219		$	2,187		$	2,998		$	3,356		$	4,935
Reinsurance premiums ceded		(257	)		(211	)		(234	)		(365	)		(400	)

Net premiums written	$	1,962		$	1,976		$	2,764		$	2,991		$	4,535

Earned premiums	$	2,219		$	2,187		$	2,998		$	3,356		$	4,935
Earned premiums ceded		(257	)		(211	)		(234	)		(365	)		(400	)

Net premiums earned		1,962			1,976			2,764			2,991			4,535
Net investment income		41,466			37,019			37,701			48,534			49,785
Net realized and unrealized (losses) gains on investments		—			(4,899	)		7,377			(10,408	)		11,358
Other income (loss)		—			(31	)		(71	)		382			286
Claims and policy benefits		(38,576	)		(44,818	)		(46,662	)		(59,382	)		(65,213	)
Acquisition costs		(407	)		(426	)		(440	)		(557	)		(361	)
General and administrative expenses		(227	)		(581	)		(1,876	)		(648	)		(2,964	)

Income (loss) before taxes	$	4,218		$	(11,760	)	$	(1,207	)	$	(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 NINE MONTHS ENDED							FOR THE YEARS ENDED
		Sept. 30, 2012		Sept. 30, 2011			Sept. 30, 2010		Dec. 31, 2011		Dec. 31, 2010
Property & Casualty:
Global Insurance:
Aviation	S	$	11,252	$	11,966		$	17,211	$	32,376	$	39,888
Excess Liability	L		80,367		77,301			71,230		98,582		89,933
Professional Liability	L		120,431		117,521			129,462		157,881		177,199
Property	S		61,624		61,313			51,101		76,922		63,100

			273,674		268,101			269,004		365,761		370,120
U.S. Insurance:
General Liability	L		76,590		73,036			76,205		104,655		104,777
Marine	S		79,168		64,687			49,696		88,493		67,454
Professional Liability	L		41,526		28,449			9,526		44,168		12,454
Property	S		107,190		106,245			110,818		137,380		139,305

			304,474		272,417			246,245		374,696		323,990
Reinsurance [a]:
Agriculture	S		23,379		30,496			30,628		30,682		29,222
Auto	S		42,593		77,812			9,707		98,360		32,285
Aviation	S		27,801		15,654			28,696		15,991		31,292
Credit/ Surety	S		58,134		34,446			5,447		41,210		7,004
General Casualty	L		49,763		61,522			32,316		74,652		50,394
Marine & Energy	S		23,264		20,605			17,930		24,012		16,381
Medical Malpractice	L		24,946		35,672			31,837		37,345		51,391
Other	S		4,104		3,252			2,209		3,071		2,729
Professional Liability	L		131,289		139,023			81,850		159,293		110,388
Property	S		347,019		330,146			156,995		351,791		166,129
Whole Account	S/L		4,478		33,392			3,582		35,800		3,871
Workers’ Compensation	L		36,053		28,224			16,542		34,979		30,826

			772,823		810,244			417,739		907,186		531,912
Alterra at Lloyd’s:
Accident & Health	S		35,256		31,447			25,351		37,093		30,921
Agriculture	S		18,355		—			—		—		—
Aviation	S		8,620		7,707			10,914		13,269		16,138
Financial Institutions	L		18,870		19,068			19,064		27,205		18,763
International Casualty	L		63,784		49,955			23,559		51,902		26,174
Marine	S		7,022		—			—		1,493		—
Professional Liability	L		17,539		18,828			15,387		20,696		19,591
Property	S		91,779		98,129			65,072		101,409		68,187

			261,225		225,134			159,347		253,067		179,774

Aggregate Property & Casualty		$	1,612,196	$	1,575,896		$	1,092,335	$	1,900,710	$	1,405,796

Life & Annuity:
Annuity		$	—	$	1,056		$	6	$	1,826	$	1,135
Life			2,219		1,131			2,992		1,530		3,800

Aggregate Life & Annuity		$	2,219	$	2,187		$	2,998	$	3,356	$	4,935

Aggregate Property & Casualty and Life & Annuity		$	1,614,415	$	1,578,083		$	1,095,333	$	1,904,066	$	1,410,731

S = Short tail lines		$	948,799	$	910,601		$	583,566	$	1,071,452	$	711,971
L = Long tail lines			663,397		665,295			508,769		829,258		693,825

Aggregate Property & Casualty		$	1,612,196	$	1,575,896		$	1,092,335	$	1,900,710	$	1,405,796

Property [b]		$	607,612		37.7	%			$	667,502		38.5	%
Casualty [c]			661,158		41.0	%				811,358		37.8	%
Specialty [d]			343,426		21.3	%				421,850		23.7	%

Aggregate Property & Casualty		$	1,612,196						$	1,900,710

[a]	Includes the results for Harbor Point 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/surety, energy, marine, other, 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 Sept. 30, 2012		Investment Distribution			As of Dec. 31, 2011		Investment Distribution			As of Sept. 30, 2012		Investment Distribution			As of Dec. 31, 2011		Investment Distribution
Cash and cash equivalents	$	651,556		8.2	%	$	922,844		11.8	%	$	651,556		8.0	%	$	922,844		11.6	%

U.S. government and agencies		811,788		10.2	%		751,806		9.6	%		811,788		9.9	%		751,806		9.5	%
Non-U.S. governments		240,463		3.0	%		164,621		2.1	%		240,463		2.9	%		164,621		2.1	%
Corporate securities		2,673,789		33.5	%		2,646,358		33.9	%		2,673,788		32.7	%		2,646,358		33.3	%
Municipal securities		270,501		3.4	%		263,007		3.4	%		270,501		3.3	%		263,007		3.3	%
Asset-backed securities		354,739		4.5	%		247,965		3.2	%		354,740		4.3	%		247,965		3.1	%
Residential mortgage-backed securities		1,310,149		16.4	%		1,296,277		16.6	%		1,310,149		16.0	%		1,296,277		16.3	%
Commercial mortgage-backed securities		443,709		5.6	%		361,097		4.6	%		443,709		5.4	%		361,097		4.5	%

Fixed maturities carried at fair value	$	6,105,138		76.6	%	$	5,731,131		73.3	%	$	6,105,138		74.8	%	$	5,731,131		72.1	%

Other investments	$	376,870		4.7	%	$	286,515		3.7	%	$	376,870		4.6	%	$	286,515		3.6	%

Total investments carried at fair value	$	7,133,564		89.5	%	$	6,940,490		88.8	%	$	7,133,564		87.4	%	$	6,940,490		87.3	%

U.S. government and agencies	$	27,627		0.3	%	$	29,201		0.4	%	$	31,700		0.4	%	$	32,906		0.4	%
Non-U.S. governments		516,673		6.5	%		524,449		6.7	%		651,431		8.0	%		623,080		7.8	%
Corporate securities		292,392		3.7	%		319,609		4.1	%		348,310		4.3	%		354,504		4.5	%
Asset-backed securities		656		0.0	%		1,000		0.0	%		658		0.0	%		1,003		0.0	%

Fixed maturities carried at amortized cost	$	837,348		10.5	%	$	874,259		11.2	%	$	1,032,099		12.6	%	$	1,011,493		12.7	%

Total invested assets	$	7,970,912		100.0	%	$	7,814,749		100.0	%	$	8,165,663		100.0	%	$	7,951,983		100.0	%

As of September 30, 2012, the weighted average book yield of the cash and fixed maturities portfolio was 3.21%, and the weighted average duration was 4.4 years.


	Carrying Value										Fair Value
Credit Ratings	As of Sept. 30, 2012		Ratings Distribution			As of Dec. 31, 2011		Ratings Distribution			As of Sept. 30, 2012		Ratings Distribution			As of Dec. 31, 2011		Ratings Distribution
U.S. government and agencies [a]	$	2,084,315		30.0	%	$	1,869,405		28.3	%	$	2,084,315		29.2	%	$	1,869,405		27.7	%
AAA		1,203,508		17.3	%		948,861		14.4	%		1,203,508		16.9	%		948,861		14.1	%
AA		757,361		10.9	%		883,783		13.4	%		757,361		10.6	%		883,783		13.1	%
A		1,480,920		21.3	%		1,378,361		20.9	%		1,480,920		20.7	%		1,378,361		20.4	%
BBB		321,374		4.6	%		281,983		4.3	%		321,374		4.5	%		281,983		4.2	%
BB		67,285		1.0	%		84,803		1.3	%		67,285		0.9	%		84,803		1.3	%
B		140,223		2.0	%		131,159		2.0	%		140,223		2.0	%		131,159		1.9	%
CCC or lower		33,576		0.5	%		53,157		0.8	%		33,576		0.5	%		53,157		0.8	%
Not rated		16,576		0.2	%		99,619		1.5	%		16,576		0.2	%		99,619		1.5	%

Fixed maturities carried at fair value	$	6,105,138		87.9	%	$	5,731,131		86.8	%	$	6,105,138		85.5	%	$	5,731,131		85.0	%

U.S. government and agencies	$	27,627		0.4	%	$	29,201		0.4	%	$	31,700		0.4	%	$	32,906		0.5	%
AAA		583,187		8.4	%		619,832		9.4	%		734,678		10.3	%		733,632		10.9	%
AA		92,473		1.3	%		82,511		1.2	%		105,763		1.5	%		88,631		1.3	%
A		101,119		1.5	%		117,600		1.8	%		120,707		1.7	%		129,791		1.9	%
BBB		30,567		0.4	%		24,117		0.4	%		36,974		0.5	%		25,705		0.4	%
BB		2,375		0.0	%		998		0.0	%		2,278		0.0	%		828		0.0	%

Fixed maturities carried at amortized cost	$	837,348		12.1	%	$	874,259		13.2	%	$	1,032,100		14.5	%	$	1,011,493		15.0	%

Total fixed maturities	$	6,942,486		100.0	%	$	6,605,390		100.0	%	$	7,137,238		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 $1,272,527 (December 31, 2011: $1,117,599).

Percentage totals may not add due to rounding.


	Quarter Ended Sept. 30, 2012			Quarter Ended June 30, 2012			Quarter Ended Mar. 31, 2012			Quarter Ended Dec. 31, 2011			Quarter Ended Sept. 30, 2011			Quarter Ended Sept. 30, 2010
Net investment income	$	53,518		$	54,729		$	58,678		$	57,080		$	60,335		$	59,711

Realized and unrealized gains on trading fixed maturities	$	3,621		$	587		$	1,066		$	763		$	1,663		$	883
Net realized gains on available for sale fixed maturities		3,087			11,990			7,759			1,990			6,096			6,395
Increase (decrease) in fair value of hedge funds		8,245			(2,894	)		3,679			(5,415	)		(7,669	)		4,820
Increase (decrease) in fair value of structured deposit		1,003			(655	)		365			(313	)		(2,007	)		786
Income from equity method investments		5,167			5,583			4,927			1,024			579			1,660
(Decrease) increase in fair value of derivatives		(687	)		(1,130	)		7,697			(3,824	)		(6,634	)		867

Net realized and unrealized gains (losses) on investments	$	20,436		$	13,481		$	25,493		$	(5,775	)	$	(7,972	)	$	15,411

Net impairment losses recognized in earnings	$	(592	)	$	(570	)	$	(5,369	)	$	(702	)	$	(861	)	$	(151	)

ALTERRA CAPITAL HOLDINGS LIMITED

INVESTMENT PORTFOLIO (Unaudited)

(Expressed in thousands of United States Dollars)


				Periodic Rate of Return
	As of Sept. 30, 2012			Last 3 Months			Year to Date			Last 12 months			Last 60 months*
Cash and fixed maturities	$	7,594,042			1.94	%		4.69	%		5.66	%		5.65	%

Distressed securities	$	24,861			3.00	%		6.76	%		5.19	%		2.77	%
Diversified arbitrage		12,284			3.75	%		10.05	%		8.94	%		(4.22	%)
Emerging markets		3,533			(0.69	%)		(28.34	%)		(28.60	%)		(5.84	%)
Event-driven arbitrage		7,710			3.17	%		(12.47	%)		(27.55	%)		(9.52	%)
Fixed income arbitrage		—			0.00	%		0.00	%		0.00	%		9.56	%
Fund of funds		16,791			2.69	%		5.97	%		6.36	%		2.16	%
Global macro		49,517			2.35	%		5.53	%		3.80	%		4.99	%
Long / short credit		534			(1.88	%)		(4.49	%)		(10.49	%)		(1.03	%)
Long / short equity		148,578			3.99	%		6.85	%		7.93	%		2.91	%
Opportunistic		1,660			0.00	%		(2.00	%)		(2.29	%)		(24.48	%)

Hedge funds **		265,468			2.56	%		2.98	%		1.14	%		(0.49	%)

Derivatives		(649	)
Structured deposits		25,254
Equity investments		86,797

Total other investments	$	376,870

Total invested assets	$	7,970,912

Hedge Fund Investment Return Data:

HFRI Fund of Funds Composite Index [a]					2.37	%		3.38	%		2.89	%		(1.64	%)

Hedge Fund Performance History—60 months ended September 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		0.81	%		0.15	%		0.36	%		1.40	%		(4.12	%)
August		1.20	%		(1.37	%)		(0.28	%)		0.78	%		(2.14	%)
September		0.53	%		(1.13	%)		1.28	%		1.71	%		(7.31	%)
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		2.56	%		(2.33	%)		1.35	%		3.94	%		(13.03	%)
Q4					(1.79	%)		1.56	%		2.66	%		(8.31	%)		4.11	%
Period return		2.98	%		(3.57	%)		4.25	%		12.27	%		(19.38	%)		4.11	%

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

[a]	As reported by HFRI as of October 19, 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 September 30, 2012
	Amortized Cost		Fair Value
Issuer
General Electric Co.	$	86,017	$	92,285
JP Morgan Chase & Co		82,580		85,800
European Investment Bank		64,100		75,071
Citigroup Inc		58,289		62,322
KFW		50,909		59,274
Bank of America Corp		47,334		51,153
Wells Fargo & Co		41,556		45,598
Goldman Sachs Group Inc		38,069		40,055
Novartis AG		33,610		35,626
Morgan Stanley		33,864		35,569
Pepsico Inc		33,316		35,441
Credit Suisse Group AG		32,645		34,680
UBS AG		29,780		33,502
HSBC Holdings PLC		31,430		32,721
Metlife Inc		28,912		31,908
Verizon Communications Inc		29,582		31,691
BP plc		29,978		31,590
Ally Financial Inc		31,517		31,563
National Australia Bank Ltd		29,958		30,521
Wal-Mart Stores Inc		27,879		30,468
Canadian Imperial Bank of Commerce		29,477		29,931
AT&T Inc		27,372		29,740
International Business Machines Corp		26,295		28,967
Barclays plc		26,338		27,607
Coca-Cola Co		24,374		26,814

	$	975,181	$	1,049,897

[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 September 30, 2012
	Fair Value		% of Total
Largest European Government Holdings
France	$	285,840		35.6	%
Germany		266,144		33.1	%
Netherlands		154,432		19.2	%
United Kingdom		56,689		7.1	%
Belgium		21,945		2.7	%
Norway		7,267		0.9	%
Denmark		4,290		0.5	%
All Other European Governments		6,522		0.8	%

Total European Government Holdings	$	803,129		100.0	%


	As of September 30, 2012
	Fair Value		% of Total
Largest European Banking Institution Holdings
European Investment Bank	$	75,071		15.9	%
KFW		59,274		12.6	%
Credit Suisse Group AG		34,680		7.4	%
UBS AG		33,502		7.1	%
HSBC Holdings plc		32,721		6.9	%
Barclays plc		27,607		5.9	%
Lloyds Banking Group plc		26,413		5.6	%
Cooperatieve Centrale Raiffeisen-Boerenlee		19,225		4.1	%
BNP Paribas SA		18,962		4.0	%
All Other		143,688		30.5	%

Total European Banking Institutions	$	471,143		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 September 30, 2012
	Banking Institutions		Other Financial Institutions		Other Corporates		Total
Country
United Kingdom	$	98,044	$	30,304	$	99,543	$	227,891
Netherlands		48,522		2,552		58,796		109,870
France		44,111		841		55,923		100,875
Germany		86,571		—		12,538		99,109
Supranational		79,806		—		—		79,806
Switzerland		65,491		—		2,099		67,590
Norway		18,941		—		23,502		42,443
Sweden		25,469		—		—		25,469
Luxembourg		—		—		12,084		12,084
Ireland		1,181		—		2,274		3,455
Denmark		3,007		—		—		3,007
Jersey		—		—		1,670		1,670
Spain		—		—		515		515

Fair value	$	471,143	$	33,697	$	268,944	$	773,784

Balance sheet carrying value [a]	$	434,854	$	41,860	$	258,379	$	735,093

Credit rating
AAA	$	256,712	$	27,231	$	—	$	283,943
AA		65,701		1,548		58,320		125,569
A		127,976		3,419		179,278		310,673
BBB		14,065		—		21,640		35,705
BB		4,736		1,499		3,437		9,672
B		1,953		—		6,269		8,222

Fair value	$	471,143	$	33,697	$	268,944	$	773,784

Balance sheet carrying value [a]	$	434,854	$	41,860	$	258,379	$	735,093

[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 NINE MONTHS ENDED
	Sept. 30, 2012		Sept. 30, 2011		Sept. 30, 2012		Sept. 30, 2011
Gross Premiums Written by New Point IV [a]	$	—	$	8,843	$	75,430	$	8,843


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

Balance Sheet
Other investments [b]	$	83,128	$	9,044	$	83,128	$	9,044

Statement of Operations and Comprehensive Income
Other income [c]	$	1,500	$	537	$	7,622	$	537

Income from equity method investment [d]	$	5,250	$	409	$	15,772	$	409

[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 NINE MONTHS ENDED						FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2012			Sept. 30, 2011			Dec. 31, 2011			Dec. 31, 2010
Income and Return on Equity:
Net income	$	37,652		$	48,386		$	195,616		$	34,334		$	65,282		$	302,335

Net operating income	$	32,133		$	50,082		$	168,816		$	64,915		$	96,600		$	251,712

Average shareholders’ equity	$	2,887,456		$	2,818,910		$	2,856,401		$	2,799,260		$	2,806,191		$	2,467,429
Annualized return on average shareholders’ equity [a]		5.2	%		6.9	%		9.1	%		1.6	%		2.3	%		12.3	%
Annualized net operating return on average shareholders’ equity [a]		4.5	%		7.1	%		7.9	%		3.1	%		3.4	%		10.2	%
Book value and dividends per share:

Diluted book value per share	$	29.57		$	27.18		$	29.57		$	27.18		$	26.91		$	25.99

Dividends paid per share	$	0.16		$	0.14		$	0.44		$	0.38		$	0.52		$	2.94
Change in diluted book value per share		3.1	%		4.6	%		9.9	%		4.6	%		3.5	%		(5.0	%)
Dividend payout ratio [b]		0.5	%		0.5	%		1.5	%		1.4	%		1.9	%		22.4	%

Total return to shareholders [c]		3.6	%		5.1	%		11.4	%		5.9	%		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 NINE MONTHS ENDED				FOR THE YEARS ENDED
	Sept. 30, 2012		Sept. 30, 2011		Sept. 30, 2012		Sept. 30, 2011		Dec. 31, 2011		Dec. 31, 2010
Net income available to common shareholders	$	37,652	$	48,386	$	195,616	$	34,334	$	65,282	$	302,335
Denominator:
Weighted average shares—basic
Outstanding [a]		95,461,087		104,589,483		98,479,628		105,644,318		105,022,397		94,426,055
Unvested restricted share units		330,379		240,817		306,371		222,453		227,286		256,224

		95,791,466		104,830,300		98,785,999		105,866,771		105,249,683		94,682,279
Share equivalents:
Warrants		2,057,064		521,292		1,921,734		948,670		1,023,278		537,399
Options		137,445		95,228		127,415		131,600		124,022		183,258
Employee stock purchase plan		3,759		1,909		3,875		1,472		1,386		2,301
Non participating restricted shares		620,533		216,553		413,904		144,369		104,524		54,138

Weighted average shares—diluted [b]		98,610,267		105,665,282		101,252,927		107,092,882		106,502,893		95,459,375

Net income per share	$	0.39	$	0.46	$	1.98	$	0.32	$	0.62	$	3.19

Net income per diluted share	$	0.38	$	0.46	$	1.93	$	0.32	$	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 NINE MONTHS ENDED					FOR THE YEARS ENDED
	Sept. 30, 2012			Sept. 30, 2011			Sept. 30, 2012			Sept. 30, 2011		Dec. 31, 2011		Dec. 31, 2010
Before tax
Net income	$	38,837		$	52,813		$	192,981		$	31,734	$	55,781	$	306,491
Net realized and unrealized (gains) losses on investments excluded from operating income, before tax [a]		(6,348	)		1,164			(28,076	)		28,427		29,486		65
Foreign exchange (gains) losses, before tax		(82	)		(147	)		(89	)		2,065		1,312		(115	)
Merger and acquisition expenses, before tax		—			—			—			—		—		(48,776	)

Net operating income	$	32,407		$	53,830		$	164,816		$	62,226	$	86,579	$	257,665

Net of tax
Net income	$	37,652		$	48,386		$	195,616		$	34,334	$	65,282	$	302,335
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(5,465	)		1,807			(26,732	)		29,120		30,391		(865	)
Foreign exchange (gains) losses, before tax		(54	)		(111	)		(68	)		1,461		927		363
Merger and acquisition expenses, net of tax		—			—			—			—		—		(50,121	)

Net operating income	$	32,133		$	50,082		$	168,816		$	64,915	$	96,600	$	251,712

Weighted average shares outstanding:
Basic		95,791,466			104,830,300			98,785,999			105,866,771		105,249,683		94,682,279
Diluted		98,610,267			105,665,282			101,252,927			107,092,882		106,502,893		95,459,375
Basic per share data
Net income per share	$	0.39		$	0.46		$	1.98		$	0.32	$	0.62	$	3.19
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(0.06	)		0.02			(0.27	)		0.28		0.29		(0.01	)
Foreign exchange (gains) losses, net of tax		—			—			—			0.01		0.01		0.01
Merger and acquisition expenses, net of tax		—			—			—			—		—		(0.53	)

Net operating income per share	$	0.34		$	0.48		$	1.71		$	0.61	$	0.92	$	2.66

Diluted per share data
Net income per diluted share	$	0.38		$	0.46		$	1.93		$	0.32	$	0.61	$	3.17
Net realized and unrealized (gains) losses on investments excluded from operating income, net of tax [a]		(0.06	)		0.02			(0.26	)		0.27		0.29		(0.01	)
Foreign exchange (gains) losses, net of tax		—			—			—			0.01		0.02		0.01
Merger and acquisition expenses, net of tax		—			—			—			—		—		(0.53	)

Net operating income per diluted share	$	0.33		$	0.47		$	1.67		$	0.61	$	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 Sept. 30, 2012		As of Dec. 31, 2011
Price per share at period end	$	23.94	$	23.63

Shareholders’ equity	$	2,923,176	$	2,809,235

Goodwill and intangible assets	$	55,371	$	56,111

Tangible book value	$	2,867,805	$	2,753,124

Basic common shares outstanding [a]		95,985,461		102,101,950

Add: unvested restricted stock units		360,611		241,108

Add: dilutive impact of warrants outstanding		2,236,063		1,938,297

Add: dilutive impact of options outstanding		137,927		125,424

Add: unvested performance based restricted shares		127,847		—

Add: employee stock purchase plan		3,052		—

Diluted shares outstanding [b]		98,850,961		104,406,779

Basic book value per share	$	30.45	$	27.51
Diluted book value per share	$	29.57	$	26.91

Basic tangible book value per share	$	29.88	$	26.96
Diluted tangible book value per share	$	29.01	$	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.

[c]	Not included in shareholders’ equity as of September 30, 2012 were $194.8 million of unrecognized net gains on held-to-maturity securities, which if included, would increase diluted book value per share by $1.97 as of September 30, 2012.

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 investments excluded from operating income 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 FOR THE QUARTER ENDED SEPTEMBER 30, 2012 - November 6, 2012

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