Alterra Capital Reports Fourth Quarter and Year End 2012 Results

  Alterra Capital Reports Fourth Quarter and Year End 2012 Results

         Fourth Quarter Net Operating Loss of $0.52 per Diluted Share

             2012 Net Operating Income of $1.18 per Diluted Share

    2012 Diluted Book Value per Share Growth of 7.5%, including Dividends

Business Wire

HAMILTON, Bermuda -- February 5, 2013

Alterra Capital Holdings Limited (NASDAQ: ALTE; BSX: ALTE.BH) (“Alterra”)
today reported a net loss of $51.8 million, or a loss of $0.54 per diluted
share, for the fourth quarter of 2012, compared to net income of $30.9
million, or $0.30 per diluted share, for the same quarter of 2011.

The net operating loss for the fourth quarter of 2012 was $49.7 million, or a
loss of $0.52 per diluted share, compared to net operating income of $31.7
million, or $0.30 per diluted share, for the same quarter of 2011.

For the year ended December 31, 2012, Alterra reported net income of $143.8
million, or $1.43 per diluted share, compared to net income of $65.3 million,
or $0.61 per diluted share, for the year ended December 31, 2011. Net
operating income for the year ended December 31, 2012 was $119.1 million, or
$1.18 per diluted share, compared to net operating income of $96.6 million, or
$0.91 per diluted share, for the year ended December 31, 2011. Net operating
return on average shareholders’ equity for the year ended December 31, 2012
was 4.2%.

W. Marston (Marty) Becker, President and Chief Executive Officer of Alterra,
said: "Alterra's fourth quarter operating results were impacted heavily by
Hurricane Sandy. However, for the year, we are pleased to report net income of
$143.8 million and growth in diluted book value per share of 7.5%, including
dividends. Our 2012 results reflect the diversified underwriting strategy and
risk management discipline that has served us well, particularly in years with
major industry losses such as Sandy.

"On December 19 we ended the year with the announcement of a merger agreement
pursuant to which Alterra will be acquired by Markel Corporation. The
transaction is subject to shareholder and regulatory approval and is expected
to close in the first half of 2013. We believe the combined company will
establish itself as a leading specialty insurance and reinsurance company with
greater capacity and a broader range of products and services, and will be
better positioned for long-term success, including the creation of superior
shareholder value," Mr. Becker concluded.

Fourth quarter 2012 results for Alterra include:

  *Property and casualty gross premiums written of $356.4 million,
    representing an increase of $31.6 million or 9.7% compared to the same
    quarter of 2011;
  *Net premiums written of $242.6 million, representing an increase of $24.8
    million or 11.4%, compared to the same quarter of 2011;
  *A combined ratio on property and casualty business of 119.0%, compared to
    97.4% for the same quarter of 2011;
  *Significant property catastrophe event net losses of $115.0 million, net
    of reinstatement premiums, related to Hurricane Sandy, principally within
    the U.S. insurance segment, compared to net losses of $55.5 million, net
    of reinstatement premiums, in the same quarter of 2011. A smaller
    proportion of 2012's property catastrophe losses fell within the
    attritional loss ratio, contributing to a higher combined ratio in 2012;
  *Net favorable development on prior years’ loss reserves of $37.0 million,
    or 10.8 combined ratio points, compared to $43.0 million, or 12.3 combined
    ratio points, in the same quarter of 2011;
  *Net investment income of $52.0 million, compared to $57.1 million in the
    same quarter of 2011, a decrease of 8.8%;
  *Income of $6.9 million from New Point Re IV Limited, a sidecar in which
    Alterra has an indirect 34.8% equity interest, consisting of fees and
    equity share earnings; and
  *A deferred tax expense of $21.8 million to record a valuation allowance
    against net deferred tax assets in the U.S. Uncertainty regarding the
    future utilization of these deferred tax assets resulted in the valuation
    allowance.

Gross premiums written and net premiums written from property and casualty
underwriting for the fourth quarter of 2012 are shown in the following table,
with the increase/decrease compared to the same quarter of 2011:

                                                              
Segment ($ in            GPW     % Inc/(Dec)     NPW     %            Combined
millions)                                                Inc/(Dec)    Ratio
                                                                      
Global Insurance       $ 98.0    0.3%          $ 49.3    3.7%         102.1%
Reinsurance              125.6   29.6%           114.7   21.5%        100.2%
U.S. Insurance           94.6    (7.5)%          38.7    (31.9)%      286.8%
Alterra at               38.2   36.9%         39.9   109.7%      96.6%
Lloyd’s
Total                  $ 356.4   9.7%          $ 242.6   11.4%        119.0%
                                                                      

Results for the year ended December 31, 2012 include:

  *Property and casualty gross premiums written of $1,968.6 million,
    representing an increase of $67.9 million, or 3.6%, compared to the year
    ended December 31, 2011;
  *Net premiums written of $1,317.2 million, representing a decrease of
    $111.8 million, or 7.8%, compared to the year ended December 31, 2011.
    This decrease reflects increased property reinsurance premiums ceded in
    order to manage aggregate property exposures across all segments, and a
    decrease in net premiums written on the contract binding business in the
    U.S. insurance segment resulting from the sale of the renewal rights for
    this business in 2011;
  *A combined ratio on property and casualty business of 99.5%, compared to
    98.2% for the year ended December 31, 2011;
  *Significant property catastrophe event net losses of $130.0 million, net
    of reinstatement premiums, compared to net losses of $253.4 million, net
    of reinstatement premiums, in 2011;
  *Net underwriting losses of $17.5 million on agriculture reinsurance, net
    of premiums and acquisition costs earned;
  *Net favorable development on prior years’ loss reserves of $90.8 million,
    or 6.7 combined ratio points, compared to $153.3 million, or 10.8 combined
    ratio points, in 2011;
  *Net investment income of $219.0 million, compared to $234.8 million in
    2011, a decrease of 6.8%;
  *Income of $30.3 million from New Point Re IV Limited consisting of fees
    and equity share earnings; and
  *A deferred tax expense of $24.6 million to record a valuation allowance
    against net deferred tax assets in the U.S.

Gross premiums written and net premiums written from property and casualty
underwriting for the year ended December 31, 2012 are shown in the following
table, with the increase/decrease compared to the same period of 2011:

                                                              
Segment ($ in         GPW       %              NPW       %            Combined
millions)                       Inc/(Dec)                Inc/(Dec)    Ratio
                                                                      
Global              $ 371.6     1.6%         $ 182.3     (1.1)%       75.7%
Insurance
Reinsurance           898.5     (1.0)%         727.2     (11.7)%      91.5%
U.S.                  399.1     6.5%           181.1     (22.0)%      142.0%
Insurance
Alterra at            299.5    18.3%        226.7    19.7%       109.8%
Lloyd’s
Total               $ 1,968.6   3.6%         $ 1,317.2   (7.8)%       99.5%
                                                                      

Balance Sheet

Total invested assets, including cash and cash equivalents, were $8,032.6
million as of December31, 2012, an increase of $217.9 million from December
31, 2011. As of December31, 2012, 95.9% of the fixed maturities portfolio (by
carrying value) was investment-grade, an increase from 94.4% as of December
31, 2011. As of December31, 2012, the weighted average book yield of
Alterra’s cash and fixed maturities portfolio was 3.15%, and the weighted
average duration was 4.5 years.

Share repurchases under the Board-approved share repurchase authorization for
the year ended December 31, 2012 were 6,626,684 common shares at an average
price of $23.03 per share for a total of $152.6 million. Alterra did not
repurchase any common shares under the share repurchase authorization during
the fourth quarter of 2012. As of December 31, 2012, $301.7 million remained
under the share repurchase authorization.

Shareholders’ equity was $2,839.7 million as of December31, 2012, an increase
of 1.1% from December31, 2011. Diluted book value per share as of
December31, 2012 was $28.34. Including dividends declared, diluted book value
per share decreased for the fourth quarter of 2012 by 3.6%, and grew by 7.5%
for the year ended December 31, 2012. Not included in shareholders’ equity as
of December31, 2012 were $218.0 million of unrecognized gains on
held-to-maturity securities, which represented $2.18 in unrecognized diluted
book value per share.

A copy of Alterra’s fourth quarter financial supplement is available on
Alterra’s website at www.alterracap.com.

Alterra Capital Holdings Limited is a global enterprise dedicated to providing
diversified specialty insurance and reinsurance products to corporations,
public entities and property and casualty insurers.

Non-GAAP Financial Measures

In presenting Alterra’s results, management has included and discussed net
operating income, net operating income per diluted share, annualized net
operating return on average shareholders’ equity, net operating return on
average shareholders' equity and diluted tangible book value per share. These
measures are “non-GAAP financial measures” as defined in Regulation G.
Management believes that these non-GAAP financial measures, which may be
defined differently by other companies, allow for a more complete
understanding of Alterra’s business. These measures, however, should not be
viewed as a substitute for measures determined in accordance with U.S. GAAP.
The reconciliation of these measures to their respective most directly
comparable U.S. GAAP financial measures is presented in the attached financial
information in accordance with Regulation G.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

This release includes statements about future economic performance, finances,
expectations, plans and prospects of Alterra and Markel, both individually and
on a combined basis, that are forward-looking statements for purposes of the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are risks and uncertainties that could cause actual results to
differ materially from those expressed in or suggested by such statements. For
further information regarding factors affecting future results of Alterra and
Markel, please refer to their respective Annual Report on Form 10-K for the
year ended December 31, 2011 and Quarterly Reports on Form 10-Q and other
documents filed by Alterra and Markel since March 1, 2012 with the Securities
Exchange Commission (“SEC”). These documents are also available free of
charge, in the case of Alterra, by directing a request to Alterra through Joe
Roberts, Chief Financial Officer, or Susan Spivak Bernstein, Senior Vice
President, Investor Relations, at 441-295-8800 and, in the case of Markel, by
directing a request to Bruce Kay, Investor Relations, at 804-747-0136. Neither
Alterra nor Markel undertakes any obligation to update or revise publicly any
forward-looking statement whether as a result of new information, future
developments or otherwise.

This release contains certain forward-looking statements within the meaning of
the U.S. federal securities laws. Statements that are not historical facts,
including statements about Alterra's and Markel's beliefs, plans or
expectations, are forward-looking statements. These statements are based on
Alterra's or Markel's current plans, estimates and expectations. Some
forward-looking statements may be identified by use of terms such as
“believe,” “anticipate,” “intend,” “expect,” “project,” “plan,” “may,”
“should,” “could,” “will,” “estimate,” “predict,” “potential,” “continue,” and
similar words, terms or statements of a future or forward-looking nature. In
light of the inherent risks and uncertainties in all forward-looking
statements, the inclusion of such statements in this release should not be
considered as a representation by Alterra, Markel or any other person that
Alterra's or Markel's objectives or plans, both individually and on a combined
basis, will be achieved. A non-exclusive list of important factors that could
cause actual results to differ materially from those in such forward-looking
statements includes the following: (a) the occurrence of natural or man-made
catastrophic events with a frequency or severity exceeding expectations; (b)
the adequacy of loss reserves and the need to adjust such reserves as claims
develop over time; (c) the failure of any of the loss limitation methods the
parties employ; (d) any adverse change in financial ratings of either company
or their subsidiaries; (e) the effect of competition on market trends and
pricing; (f) cyclical trends, including with respect to demand and pricing in
the insurance and reinsurance markets; (g) changes in general economic
conditions, including changes in interest rates and/or equity values in the
United States of America and elsewhere; and (h) other factors set forth in
Alterra's and Markel's recent reports on Form 10-K, Form 10-Q and other
documents filed with the SEC by Alterra and Markel.

                                  * * * * *

Risks and uncertainties relating to the proposed transaction include the risks
that: (1) the parties will not obtain the requisite shareholder or regulatory
approvals for the transaction; (2) the anticipated benefits of the transaction
will not be realized or the parties may experience difficulties in
successfully integrating the two companies; (3) the parties may not be able to
retain key personnel; (4) the conditions to the closing of the proposed merger
may not be satisfied or waived; (5) the outcome of any legal proceedings to
the extent initiated against Alterra or Markel or its respective directors and
officers following the announcement of the proposed merger is uncertain; (6)
the acquisition may involve unexpected costs; and (7) the businesses may
suffer as a result of uncertainty surrounding the acquisition. These risks, as
well as other risks of the combined company and its subsidiaries may be
different from what the companies expect, or have previously experienced, and
each party's management may respond differently to any of the aforementioned
factors. These risks, as well as other risks associated with the merger, are
more fully discussed in the joint proxy statement/prospectus of Markel and
Alterra that has been filed with the SEC. Readers are cautioned not to place
undue reliance on any forward-looking statements, which speak only as of the
date on which they are made.

ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO FIND IT:

This release relates to a proposed merger between Alterra and Markel. On
December 27, 2012, Markel filed with the SEC a registration statement on Form
S-4, and on January 18, 2013, Markel and Alterra each filed the definitive
joint proxy statement/prospectus. This release is not a substitute for the
definitive joint proxy statement/prospectus or any other document that Markel
or Alterra filed or may file with the SEC or send to its shareholders in
connection with the proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED
TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT
DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC OR SENT TO SHAREHOLDERS AS
THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER. All documents, when filed, will be
available free of charge at the SEC's website (www.sec.gov) or, in the case of
Alterra, by directing a request to Joe Roberts, Chief Financial Officer, or
Susan Spivak Bernstein, Senior Vice President, Investor Relations, at
441-295-8800 and, in the case of Markel, by directing a request to Bruce Kay,
Investor Relations, at 804-747-0136.

PARTICIPANTS IN THE SOLICITATION:

Alterra and Markel and their respective directors and executive officers may
be deemed to be participants in any solicitation of proxies from both
Alterra's and Markel's shareholders in favor of the proposed transaction.
Information about Alterra's directors and executive officers and their
ownership in Alterra common stock is available in the proxy statement dated
March 26, 2012 for Alterra's 2012 annual general meeting of shareholders.
Information about Markel's directors and executive officers and their
ownership of Markel common stock is available in the proxy statement dated
March 16, 2012 for Markel's 2012 annual meeting of shareholders.

                                                             
ALTERRA CAPITAL HOLDINGS LIMITED
                                                                  
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share
amounts)
                                                                  
                                                 December 31,     December 31,
                                                 2012             2011
                                                 (Unaudited)
ASSETS
Cash and cash equivalents                        $ 440,298        $ 469,477
Fixed maturities, trading, at fair value         429,246          229,206
Fixed maturities, available for sale, at         5,647,303        5,501,925
fair value
Fixed maturities, held to maturity, at           852,266          874,259
amortized cost (fair value $1,070,308)
Equity method investments                        92,050           13,670
Other investments, at fair value                 316,955          272,845
Restricted cash and cash equivalents             254,458          453,367
Accrued interest income                          65,361           71,322
Premiums receivable                              729,877          715,154
Losses and benefits recoverable from             1,289,577        1,068,119
reinsurers
Deferred acquisition costs                       146,328          145,850
Prepaid reinsurance premiums                     247,740          212,238
Trades pending settlement                        27,768           22,887
Goodwill and intangible assets                   54,751           56,111
Other assets                                     64,272           79,417
Total assets                                     $ 10,658,250    $ 10,185,847
                                                                  
LIABILITIES
Property and casualty losses                     $ 4,690,344      $ 4,216,538
Life and annuity benefits                        1,159,545        1,190,697
Deposit liabilities                              132,910          151,035
Funds withheld from reinsurers                   92,733           112,469
Unearned property and casualty premiums          1,031,633        1,020,639
Reinsurance balances payable                     157,199          134,354
Accounts payable and accrued expenses            107,742          110,380
Trades pending settlement                        5,890            —
Senior notes                                     440,532          440,500
Total liabilities                                7,818,528       7,376,612
                                                                  
SHAREHOLDERS’ EQUITY
Common shares (par value $1.00 per share);
96,059,645 (2011—102,101,950) shares             96,060           102,102
issued and outstanding
Additional paid-in capital                       1,721,241        1,847,034
Accumulated other comprehensive income           244,172          166,957
Retained earnings                                778,249          693,142
Total shareholders’ equity                       2,839,722       2,809,235
                                                                  
Total liabilities and shareholders’ equity       $ 10,658,250    $ 10,185,847
                                                                  
Book value per share                             $ 29.56         $ 27.51
                                                                  
Diluted book value per share                     $ 28.34         $ 26.91
                                                                  
Diluted tangible book value per share [a]        $ 27.79         $ 26.37
                                                                  
Diluted shares outstanding                       100,213,325      104,406,779
                                                                  

[a] Non-GAAP financial measure as defined by Regulation G.

                                                            
ALTERRA CAPITAL HOLDINGS LIMITED
                                                                               
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except per share and share amounts)

                                                                               
                           Three Months Ended                Year Ended
                           December 31,                      December 31,
                           2012              2011            2012              2011
REVENUES
Gross premiums             $ 357,043         $  325,983      $ 1,971,458       $ 1,904,066
written
Reinsurance premiums       (113,881      )   (107,203    )   (651,699      )   (472,077    )
ceded
Net premiums written       $ 243,162        $  218,780     $ 1,319,759      $ 1,431,989 
                                                                               
Earned premiums            $ 504,757         $  460,636      $ 1,962,685       $ 1,845,837
Earned premiums            (161,125      )   (111,532    )   (597,462      )   (420,863    )
ceded
Net premiums earned        343,632           349,104         1,365,223         1,424,974
                                                                               
Net investment             52,039            57,080          218,964           234,846
income
Net realized and
unrealized gains           11,476            (5,775      )   70,886            (38,339     )
(losses) on
investments
                                                                               
Total
other-than-temporary       (3,143        )   (703        )   (9,552        )   (2,706      )
impairment losses
Portion of loss
recognized in other        2,766            1              2,644            (239        )
comprehensive income
(loss), before taxes
Net impairment
losses recognized in       (377          )   (702        )   (6,908        )   (2,945      )
earnings
                                                                               
Other income               1,425             2,017           10,301            5,396
                                                                            
Total revenues             408,195          401,724        1,658,466        1,623,932   
                                                                               
LOSSES AND EXPENSES
Net losses and loss        295,123           231,533         926,445           945,593
expenses
Claims and policy          17,006            14,564          55,582            59,382
benefits
Acquisition costs          66,595            64,380          250,413           261,102
Interest expense           8,355             13,296          35,644            43,688
Net foreign exchange       (71           )   (753        )   (160          )   1,312
(gains) losses
Merger and                 3,289             —               3,289             —
acquisition expenses
General and
administrative             55,188            54,657          231,562           257,074
expenses
                                                                            
Total losses and           445,485          377,677        1,502,775        1,568,151   
expenses
                                                                               
INCOME (LOSS) BEFORE       (37,290       )   24,047          155,691           55,781
TAXES
                                                                               
Income tax expense         14,520           (6,901      )   11,885           (9,501      )
(benefit)
                                                                               
NET INCOME (LOSS)          (51,810       )   30,948          143,806           65,282
                                                                               
Holding (losses)
gains on available
for sale securities        (2,988        )   (566        )   114,263           97,044
arising in period
[a]
Net realized gains
on available for
sale securities            (3,157        )   (3,103      )   (25,966       )   (11,179     )
included in net
income [a]
Portion of
other-than-temporary
impairment losses          (2,765        )   (1          )   (2,643        )   239
recognized in other
comprehensive income
[a]
Impact of net
unrealized
investment gains on        (2,842        )   —               (2,842        )   —
life & annuity
deferred acquisition
costs
Foreign currency
translation                (9,308        )   (2,398      )   (5,597        )   (18,093     )
adjustment
Other comprehensive        (21,060       )   (6,068      )   77,215            68,011
income (loss)
                                                                            
COMPREHENSIVE INCOME       $ (72,870     )   $  24,880      $ 221,021        $ 133,293   
(LOSS)
                                                                               
Net income (loss)          $ (0.54       )   $  0.30        $ 1.47           $ 0.62      
per share
Net income (loss)          $ (0.54       )   $  0.30        $ 1.43           $ 0.61      
per diluted share
Net operating (loss)
income per diluted         $ (0.52       )   $  0.30        $ 1.18           $ 0.91      
share [b]
                                                                               
Weighted average
common shares              95,691,699       103,323,377    98,012,424       105,249,683 
outstanding—basic
Weighted average
common shares              95,691,699       104,672,891    100,557,352      106,502,893 
outstanding—diluted
                                                                                           

[a] Net of tax.
[b] Non-GAAP financial measure as defined by Regulation G.

                                                                  
ALTERRA CAPITAL HOLDINGS LIMITED
                                                                            
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
                                                                            
                                                 Year Ended December 31,
                                                 2012           2011
Common shares
Balance, beginning of year                       $ 102,102       $ 110,963
Issuance of common shares, net                   842             1,529
Repurchase of shares                             (6,884      )   (10,390     )
Balance, end of year                             96,060         102,102     
                                                                 
Additional paid-in capital
Balance, beginning of year                       1,847,034       2,026,045
Issuance of common shares, net                   3,577           2,480
Stock based compensation expense                 22,434          33,208
Repurchase of shares                             (151,804    )   (214,699    )
Balance, end of year                             1,721,241      1,847,034   
                                                                 
Accumulated other comprehensive income
Unrealized holdings gains on investments:
Balance, beginning of year                       204,301         118,197
Holding gains on available for sale fixed        114,263         97,044
maturities arising in period, net of tax
Net realized gains on available for sale
securities included in net income, net of        (25,966     )   (11,179     )
tax
Portion of other-than-temporary impairment
losses recognized in other comprehensive         (2,643      )   239
income, net of tax
Impact of net unrealized investment gains
on life & annuity deferred acquisition           (2,842      )   —           
costs
Balance, end of year                             287,113        204,301     
                                                                 
Cumulative foreign currency translation
adjustment:
Balance, beginning of year                       (37,344     )   (19,251     )
Foreign currency translation adjustment          (5,597      )   (18,093     )
Balance, end of year                             (42,941     )   (37,344     )
                                                                
Total accumulated other comprehensive            244,172        166,957     
income, end of year
                                                                 
Retained earnings
Balance, beginning of year                       693,142         682,316
Net income                                       143,806         65,282
Dividends                                        (58,699     )   (54,456     )
Balance, end of year                             778,249        693,142     
                                                                 
Total shareholders’ equity                       $ 2,839,722    $ 2,809,235 
                                                                             

                                                                  
ALTERRA CAPITAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASHFLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
                                                                            
                                                   Year Ended December 31,
                                                   2012          2011
OPERATING ACTIVITIES
Net income                                         $  143,806     $ 65,282
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock based compensation                           22,434         33,208
Amortization of premium on fixed maturities        33,403         23,562
Accretion of deposit liabilities                   1,816          9,298
Net realized and unrealized (gains) losses         (70,886    )   38,339
on investments
Net impairment losses recognized in earnings       6,908          2,945
Changes in:
Accrued interest income                            5,996          4,079
Premiums receivable                                (10,822    )   (128,754   )
Losses and benefits recoverable from               (219,516   )   (114,759   )
reinsurers
Deferred acquisition costs                         3,348          (34,591    )
Prepaid reinsurance premiums                       (34,768    )   (63,564    )
Other assets                                       17,280         (1,476     )
Property and casualty losses                       459,066        308,587
Life and annuity benefits                          (51,231    )   (59,010    )
Funds withheld from reinsurers                     (19,736    )   (8,680     )
Unearned property and casualty premiums            6,397          118,401
Reinsurance balances payable                       22,711         31,931
Accounts payable and accrued expenses              (3,093     )   10,769
                                                                
Cash provided by operating activities              313,113      235,567    
                                                                  
INVESTING ACTIVITIES
Purchases of available for sale securities         (2,236,243 )   (2,317,677 )
Sales of available for sale securities             923,875        1,311,423
Redemptions/maturities of available for sale       1,250,105      965,974
securities
Purchases of trading securities                    (532,454   )   (76,355    )
Sales of trading securities                        305,184        24,563
Redemptions/maturities of trading securities       37,283         68,848
Purchases of held to maturity securities           —              (2,580     )
Redemptions/maturities of held to maturity         32,040         45,713
securities
Net (purchases) sales of other investments         (28,175    )   60,783
Net purchases of equity method investments         (66,145    )   (6,766     )
Dividends from equity method investments           8,694          —
Change in restricted cash and cash                 198,909        (103,458   )
equivalents
                                                                 
Cash used in investing activities                  (106,927   )   (29,532    )
                                                                  
FINANCING ACTIVITIES
Net proceeds from issuance of common shares        4,419          4,009
Repurchase of common shares                        (158,688   )   (225,089   )
Dividends paid                                     (58,322    )   (54,456    )
Additions to deposit liabilities                   8,940          1,061
Payments of deposit liabilities                    (28,881    )   (6,733     )
                                                                 
Cash used in financing activities                  (232,532   )   (281,208   )
                                                                  
Effect of exchange rate changes on foreign         (2,833     )   (11,047    )
currency cash and cash equivalents
                                                                  
Net decrease in cash and cash equivalents          (29,179    )   (86,220    )
                                                                  
Cash and cash equivalents, beginning of year       469,477        555,697
                                                                 
CASH AND CASH EQUIVALENTS, END OF YEAR             $  440,298    $ 469,477  
                                                                             

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid totaled $28,400 and $28,582 for the years ended December 31,
2012 and 2011, respectively.
Income taxes paid totaled $7,954 and $2,049 for the years ended December 31,
2012 and 2011, respectively.

                 
ALTERRA CAPITAL HOLDINGS LIMITED
                     
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED DECEMBER 31, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)
                                                                                                                     
                     Property & Casualty                                                     Life &
                     Global       U.S.         Reinsurance  Alterra at   Total          Annuity      Corporate    Consolidated
                     Insurance     Insurance                   Lloyd’s                       Reinsurance
Gross premiums       $ 97,964     $ 94,587     $ 125,630    $ 38,233     $ 356,414       $  629        $ —           $ 357,043
written
Reinsurance          (48,698   )  (55,863   )  (10,950   )  1,704       (113,807    )  (74       )  —           (113,881    )
premiums ceded
Net premiums         $ 49,266    $ 38,724    $ 114,680   $ 39,937    $ 242,607     $  555      $ —         $ 243,162   
written
                                                                                                                         
Earned               $ 94,486      $ 98,142      $ 240,252     $ 71,248      $ 504,128       $  629        $ —           $ 504,757
premiums
Earned               (47,524   )  (62,839   )  (41,447   )  (9,241    )  (161,051    )  (74       )  —           (161,125    )
premiums ceded
Net premiums         46,962        35,303        198,805       62,007        343,077         555           —             343,632
earned
                                                                                                                         
Net losses and       (39,503   )   (85,476   )   (130,869  )   (39,275   )   (295,123    )   —             —             (295,123    )
loss expenses
Claims and
policy               —             —             —             —             —             (17,006   )   —             (17,006     )
benefits
Acquisition          (552      )   (4,915    )   (49,339   )   (11,880   )   (66,686     )   91            —             (66,595     )
costs
General and
administrative       (7,871    )   (10,849   )   (19,002   )   (8,722    )   (46,444     )   (76       )   —             (46,520     )
expenses
Other income         —           —           1,400       —           1,400         —           —           1,400       
Underwriting         $ (964    )   $ (65,937 )   $ 995         $ 2,130       $ (63,776   )   n/a           —             n/a
income (loss)
Net investment                                                                               13,727        38,312        52,039
income
Net realized and unrealized                                                                                11,476        11,476
gains on investments
Net impairment
losses                                                                                                     (377      )   (377        )
recognized in
earnings
Corporate                                                                                                  25            25
other income
Interest                                                                                                   (8,355    )   (8,355      )
expense
Net foreign                                                                                                71            71
exchange gains
Merger and
acquisition                                                                                                (3,289    )   (3,289      )
expenses
Corporate
general and                                                                                              (8,668    )  (8,668      )
administrative
expenses
Income (loss)                                                                                $  (2,709 )  $ 29,195    $ (37,290   )
before taxes
Loss ratio (a)       84.1      %   242.1     %   65.8      %   63.3      %   86.0        %
Acquisition          1.2       %   13.9      %   24.8      %   19.2      %   19.4        %
cost ratio (b)
General and
administrative       16.8      %  30.7      %  9.6       %  14.1      %  13.5        %
expense ratio
(c)
Combined ratio       102.1     %  286.8     %  100.2     %  96.6      %  119.0       %
(d)
                                                                                                                         
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - YEAR ENDED DECEMBER 31, 2012 (Unaudited)
(Expressed in thousands of United States Dollars)

                     Property & Casualty                                                     Life &
                     Global       U.S.         Reinsurance  Alterra at   Total          Annuity      Corporate    Consolidated
                     Insurance     Insurance                   Lloyd’s                       Reinsurance
Gross premiums       $ 371,638     $ 399,061     $ 898,453     $ 299,458     $ 1,968,610     $  2,848      $ —           $ 1,971,458
written
Reinsurance          (189,330  )  (217,964  )  (171,285  )  (72,789   )  (651,368    )  (331      )  —           (651,699    )
premiums ceded
Net premiums         $ 182,308   $ 181,097   $ 727,168   $ 226,669   $ 1,317,242   $  2,517    $ —         $ 1,319,759 
written
                                                                                                                         
Earned               $ 373,918     $ 394,870     $ 911,019     $ 280,030     $ 1,959,837     $  2,848      $ —           $ 1,962,685
premiums
Earned               (188,416  )  (200,007  )  (142,870  )  (65,838   )  (597,131    )  (331      )  —           (597,462    )
premiums ceded
Net premiums         185,502       194,863       768,149       214,192       1,362,706       2,517         —             1,365,223
earned
                                                                                                                         
Net losses and       (111,940  )   (206,862  )   (444,321  )   (163,322  )   (926,445    )   —             —             (926,445    )
loss expenses
Claims and
policy               —             —             —             —             —               (55,582   )   —             (55,582     )
benefits
Acquisition          (974      )   (23,184   )   (187,078  )   (38,861   )   (250,097    )   (316      )   —             (250,413    )
costs
General and
administrative       (27,593   )   (46,658   )   (71,633   )   (33,015   )   (178,899    )   (303      )   —             (179,202    )
expenses
Other income         816         81          9,296       8           10,201        —           —           10,201      
Underwriting         $ 45,811      $ (81,760 )   $ 74,413      $ (20,998 )   $ 17,466        n/a           —             n/a
income (loss)
Net investment                                                                               55,193        163,771       218,964
income
Net realized and unrealized                                                                                70,886        70,886
gains on investments
Net impairment
losses                                                                                                     (6,908    )   (6,908      )
recognized in
earnings
Corporate                                                                                                  100           100
other income
Interest                                                                                                   (35,644   )   (35,644     )
expense
Net foreign                                                                                                160           160
exchange gains
Merger and
acquisition                                                                                                (3,289    )   (3,289      )
expenses
Corporate
general and                                                                                              (52,360   )  (52,360     )
administrative
expenses
Income before                                                                                $  1,509    $ 136,716   $ 155,691   
taxes
Loss ratio (a)       60.3      %   106.2     %   57.8      %   76.3      %   68.0        %
Acquisition          0.5       %   11.9      %   24.4      %   18.1      %   18.4        %
cost ratio (b)
General and
administrative       14.9      %  23.9      %  9.3       %  15.4      %  13.1        %
expense ratio
(c)
Combined ratio       75.7      %  142.0     %  91.5      %  109.8     %  99.5        %
(d)
                                                                                                                         

(a) The loss ratio is calculated by dividing net losses and loss expenses by
net premiums earned.
(b) The acquisition cost ratio is calculated by dividing acquisition costs by
net premiums earned.
(c) The general and administrative expense ratio is calculated by dividing
general and administrative expenses by net premiums earned.
(d) The combined ratio is calculated by dividing the sum of net losses and
loss expenses, acquisition costs and general and administrative expenses by
net premiums earned.
n/a Not applicable
Percentage totals may not add due to rounding.


SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - THREE MONTHS ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)                                                                    
                                                                                                                         
                  Property & Casualty                                                      Life &
                     Global        U.S.         Reinsurance  Alterra at   Total          Annuity      Corporate   Consolidated
                     Insurance      Insurance                   Lloyd’s                       Reinsurance
Gross premiums       $ 97,660      $ 102,279    $ 96,942     $ 27,933     $ 324,814       $ 1,169       $ —          $ 325,983
written
Reinsurance          (50,172   )   (45,443   )  (2,546    )  (8,888    )  (107,049    )  (154      )  —          (107,203    )
premiums ceded
Net premiums         $ 47,488     $ 56,836    $ 94,396    $ 19,045    $ 217,765     $ 1,015     $ —        $ 218,780   
written
                                                                                                                         
Earned               $ 91,077       $ 90,048      $ 225,492     $ 52,850      $ 459,467       $ 1,169       $ —          $ 460,636
premiums
Earned               (42,827   )   (34,078   )  (19,521   )  (14,952   )  (111,378    )  (154      )  —          (111,532    )
premiums ceded
Net premiums         48,250         55,970        205,971       37,898        348,089         1,015         —            349,104
earned
                                                                                                                         
Net losses and       (15,152   )    (45,129   )   (106,906  )   (64,346   )   (231,533    )   —             —            (231,533    )
loss expenses
Claims and
policy               —              —             —             —             —               (14,564   )   —            (14,564     )
benefits
Acquisition          (1,084    )    (8,349    )   (46,839   )   (7,977    )   (64,249     )   (131      )   —            (64,380     )
costs
General and
administrative       (6,952    )    (12,299   )   (16,690   )   (7,271    )   (43,212     )   (67       )   —            (43,279     )
expenses
Other income         (128      )   84          (100      )  851         707           413         —          1,120       
Underwriting         $ 24,934       $ (9,723  )   $ 35,436      $ (40,845 )   $ 9,802         n/a           —            n/a
income (loss)
Net investment                                                                                11,515        45,565       57,080
income
Net realized and unrealized                                                                   (5,509    )   (266     )   (5,775      )
losses on investments
Net impairment
losses                                                                                                      (702     )   (702        )
recognized in
earnings
Corporate                                                                                                   897          897
other income
Interest                                                                                                    (13,296  )   (13,296     )
expense
Net foreign                                                                                                 753          753
exchange gains
Corporate
general and                                                                                               (11,378  )  (11,378     )
administrative
expenses
Income (loss)                                                                                 $ (7,328  )  $ 21,573   $ 24,047    
before taxes
Loss ratio (a)       31.4      %    80.6      %   51.9      %   169.8     %   66.5        %
Acquisition          2.2       %    14.9      %   22.7      %   21.0      %   18.5        %
cost ratio (b)
General and
administrative       14.4      %   22.0      %  8.1       %  19.2      %  12.4        %
expense ratio
(c)
Combined ratio       48.1      %   117.5     %  82.7      %  210.0     %  97.4        %
(d)
                                                                                                                         
SCHEDULE OF SUPPLEMENTAL SEGMENT DATA - YEAR ENDED DECEMBER 31, 2011 (Unaudited)
(Expressed in thousands of United States Dollars)
                                                                                                                         
                     Property & Casualty                                                      Life &
                     Global        U.S.         Reinsurance  Alterra at   Total          Annuity      Corporate   Consolidated
                     Insurance      Insurance                   Lloyd’s                       Reinsurance
Gross premiums       $ 365,761      $ 374,696     $ 907,186     $ 253,067     $ 1,900,710     $ 3,356       $ —          $ 1,904,066
written
Reinsurance          (181,454  )   (142,566  )  (83,984   )  (63,708   )  (471,712    )  (365      )  —          (472,077    )
premiums ceded
Net premiums         $ 184,307    $ 232,130   $ 823,202   $ 189,359   $ 1,428,998   $ 2,991     $ —        $ 1,431,989 
written
                                                                                                                         
Earned               $ 364,087      $ 337,041     $ 916,688     $ 224,665     $ 1,842,481     $ 3,356       $ —          $ 1,845,837
premiums
Earned               (175,348  )   (113,718  )  (70,510   )  (60,922   )  (420,498    )  (365      )  —          (420,863    )
premiums ceded
Net premiums         188,739        223,323       846,178       163,743       1,421,983       2,991         —            1,424,974
earned
                                                                                                                         
Net losses and       (91,753   )    (153,558  )   (541,959  )   (158,323  )   (945,593    )   —             —            (945,593    )
loss expenses
Claims and
policy               —              —             —             —             —               (59,382   )   —            (59,382     )
benefits
Acquisition          517            (36,404   )   (187,853  )   (36,805   )   (260,545    )   (557      )   —            (261,102    )
costs
General and
administrative       (28,377   )    (45,171   )   (85,019   )   (31,304   )   (189,871    )   (648      )   —            (190,519    )
expenses
Other income         686          279         1,225       1,204       3,394         382         —          3,776       
Underwriting         $ 69,812       $ (11,531 )   $ 32,572      $ (61,485 )   $ 29,368        n/a           —            n/a
income (loss)
Net investment                                                                                48,534        186,312      234,846
income
Net realized and unrealized                                                                   (10,408   )   (27,931  )   (38,339     )
losses on investments
Net impairment
losses                                                                                                      (2,945   )   (2,945      )
recognized in
earnings
Corporate                                                                                                   1,620        1,620
other income
Interest                                                                                                    (43,688  )   (43,688     )
expense
Net foreign
exchange                                                                                                    (1,312   )   (1,312      )
losses
Corporate
general and                                                                                               (66,555  )  (66,555     )
administrative
expenses
Income (loss)                                                                                 $ (19,088 )  $ 45,501   $ 55,781    
before taxes
Loss ratio (a)       48.6      %    68.8      %   64.0      %   96.7      %   66.5        %
Acquisition          (0.3      )%   16.3      %   22.2      %   22.5      %   18.3        %
cost ratio (b)
General and
administrative       15.0      %   20.2      %  10.0      %  19.1      %  13.4        %
expense ratio
(c)
Combined ratio       63.4      %   105.3     %  96.3      %  138.3     %  98.2        %
(d)
                                                                                                                         

(a) The loss ratio is calculated by dividing net losses and loss expenses by
net premiums earned.
(b) The acquisition cost ratio is calculated by dividing acquisition costs by
net premiums earned.
(c) The general and administrative expense ratio is calculated by dividing
general and administrative expenses by net premiums earned.
(d) The combined ratio is calculated by dividing the sum of net losses and
loss expenses, acquisition costs and general and administrative expenses by
net premiums earned.
n/a Not applicable
Percentage totals may not add due to rounding.

                                                                             
ALTERRA CAPITAL HOLDINGS LIMITED
SCHEDULE OF SUPPLEMENTAL PREMIUM DATA - YEAR ENDED DECEMBER 31, 2012 (Unaudited)

(Expressed in thousands of United States Dollars)
                                                                                             
                           Year Ended December 31,                  Year Ended December 31,
                           2012                                     2011
                                           Percentage                               Percentage
                           Gross           of Total     Movement    Gross           of Total
                           Premiums       Gross        on Prior    Premiums       Gross
                           Written         Premiums     Year        Written [a]     Premiums
                                           Written      Period                      Written
                                                                                    [a]
Property &
Casualty:
Global
Insurance:
Aviation             S     $ 27,514        1.4      %   (15.0  )%   $ 32,376        1.7      %
Excess               L     102,754         5.2      %   4.2    %    98,582          5.2      %
Liability
Professional         L     166,457         8.4      %   5.4    %    157,881         8.3      %
Liability
Property             S     74,913         3.8      %   (2.6   )%   76,922         4.0      %
                           371,638         18.9     %   1.6    %    365,761         19.2     %
U.S.
Insurance:
General/Excess       L     100,265         5.1      %   (4.2   )%   104,654         5.5      %
Liability
Marine               S     100,887         5.1      %   14.0   %    88,493          4.6      %
Professional         L     61,238          3.1      %   38.6   %    44,169          2.3      %
Liability
Property             S     136,671        6.9      %   (0.5   )%   137,380        7.2      %
                           399,061         20.2     %   6.5    %    374,696         19.7     %
Reinsurance:
Agriculture          S     23,074          1.2      %   (24.8  )%   30,682          1.6      %
Auto                 S     53,443          2.7      %   (45.7  )%   98,360          5.2      %
Aviation             S     28,332          1.4      %   77.2   %    15,991          0.8      %
Credit/Surety        S     64,978          3.3      %   57.7   %    41,210          2.2      %
General              L     83,212          4.2      %   11.5   %    74,652          3.9      %
Casualty
Marine &             S     25,851          1.3      %   7.7    %    24,012          1.3      %
Energy
Medical              L     22,708          1.2      %   (39.2  )%   37,345          2.0      %
Malpractice
Other                S     4,081           0.2      %   32.9   %    3,071           0.2      %
Professional         L     164,719         8.4      %   3.4    %    159,293         8.4      %
Liability
Property             S     382,566         19.4     %   8.7    %    351,791         18.5     %
Whole Account        S/L   6,302           0.3      %   (82.4  )%   35,800          1.9      %
Workers'             L     39,187         2.0      %   12.0   %    34,979         1.8      %
Compensation
                           898,453         45.6     %   (1.0   )%   907,186         47.6     %
Alterra at
Lloyd's:
Accident &           S     43,045          2.2      %   16.0   %    37,093          1.9      %
Health
Agriculture          S     18,321          0.9      %   n/m         —               —
Aviation             S     16,287          0.8      %   22.7   %    13,269          0.7      %
Financial            L     26,238          1.3      %   (3.6   )%   27,205          1.4      %
Institutions
International        L     65,919          3.3      %   27.0   %    51,902          2.7      %
Casualty
Marine               S     9,262           0.5      %   n/m         1,493           0.1      %
Professional         L     20,053          1.0      %   (3.1   )%   20,696          1.1      %
Liability
Property             S     100,333        5.1      %   (1.1   )%   101,409        5.3      %
                           299,458         15.2     %   18.3   %    253,067         13.3     %
                                                                                
Aggregate
Property &                 $ 1,968,610    99.9     %   3.6    %    $ 1,900,710    99.8     %
Casualty
                                                                                    
Life &
Annuity:
Life                       $ 2,848         0.1      %   86.1   %    $ 1,530         0.1      %
Annuity                    —              —           (100.0 )%   1,826          0.1      %
                                                                                    
Aggregate Life             $ 2,848        0.1      %   (15.1  )%   $ 3,356        0.2      %
& Annuity
                                                                                
Aggregate
Property &                 $ 1,971,458    100.0    %   3.5    %    $ 1,904,066    100.0    %
Casualty and
Life & Annuity
                                                                                    
                                                                                    
S = Short tail             $ 1,112,708     56.5     %               $ 1,071,452     56.4     %
lines
L = Long tail              855,902        43.5     %               829,258        43.6     %
lines
Aggregate
Property &                 $ 1,968,610                             $ 1,900,710 
Casualty
                                                                                    
Property [b]               $ 694,483       35.3     %               $ 667,502       35.1     %
Casualty [c]               852,750         43.3     %               811,358         42.7     %
Specialty [d]              421,377        21.4     %               421,850        22.2     %
Aggregate
Property &                 $ 1,968,610                             $ 1,900,710 
Casualty
                                                                                    

[a] Comparative period has been re-presented to conform with the current
period's presentation.
[b] Property includes property lines of business.
[c] Casualty includes excess liability, financial institutions, general
liability, 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.

Percentage totals may not add due to rounding.
n/m Not meaningful.

                                                             
ALTERRA CAPITAL HOLDINGS LIMITED
                                                                              
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS (UNAUDITED)
Net Operating Income and Net Operating Income per Diluted Share
(Expressed in thousands of United States Dollars, except per share and share
amounts)

                                                                              
                  Three Months Ended December    Year Ended December 31,
                  31,
                  2012          2011            2012           2011
                                                                 
Net income
(loss)            $  (37,290 )   $  24,047       $   155,691     $ 55,781
before tax
Net
realized
and
unrealized
(gains)
losses on
investments       (888       )   1,059           (28,964     )   29,486
not
included in
operating
income,
before tax
[a]
Foreign
exchange
(gains)           (71        )   (753        )   (160        )   1,312
losses,
before tax
Merger and
acquisition       3,239         —              3,239          —
expenses,
before tax
Net
operating
income            $  (35,010 )   $  24,353      $   129,806    $ 86,579
(loss)
before tax
                                                                 
Net income        $  (51,810 )   $  30,948       $   143,806     $ 65,282
(loss)
Net
realized
and
unrealized
(gains)
losses on         (1,094     )   1,271           (27,826     )   30,391
investments
not
included in
operating
income, net
of tax [a]
Foreign
exchange
(gains)           (48        )   (534        )   (116        )   927
losses, net
of tax
Merger and
acquisition       3,239         —              3,239          —
expenses,
net tax
Net
operating         $  (49,713 )   $  31,685      $   119,103    $ 96,600
income
(loss)
                                                                 
Net income
(loss) per        $  (0.54   )   $  0.30         $   1.43        $ 0.61
diluted
share
Net
realized
and
unrealized
(gains)
losses on         (0.01      )   0.01            (0.28       )   0.29
investments
not
included in
operating
income, net
of tax [a]
Foreign
exchange          —              (0.01       )   —               0.01
losses, net
of tax
Merger and
acquisition       0.03          —              0.03           —
expenses,
net of tax
Net
operating
income            $  (0.52   )   $  0.30        $   1.18       $ 0.91
(loss) per
diluted
share
                                                                 
Weighted
average
shares            95,691,699    103,323,377    98,012,424     105,249,683
outstanding
- basic
Weighted
average
shares            95,691,699    104,672,891    100,557,352    106,502,893
outstanding
- diluted
                                                                 

[a] Net realized and unrealized (gains) losses on investments not included in
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.

                                                                 
Annualized Net Operating Return on Average Shareholders' Equity
(Expressed in thousands of United States Dollars)
                                                                                  
                    Three Months Ended December      Year Ended December 31,
                    31,
                    2012            2011            2012           2011
                                                                     
Net income          $ (51,810   )    $ 30,948        $ 143,806       $ 65,282
(loss)
Annualized
net income          (207,240    )    123,792         143,806         65,282
(loss)
                                                                     
Net operating       $ (49,713   )    $ 31,685        $ 119,103       $ 96,600
income (loss)
Annualized
net operating       (198,852    )    126,740         119,103         96,600
income (loss)
                                                                     
Average
shareholders'       $ 2,881,449      $ 2,826,987     $ 2,862,663     $ 2,806,191
equity [b]
                                                                     
Annualized
return on
average             (7.2        )%   4.4         %   5.0         %   2.3          %
shareholders'
equity
Annualized
net operating
return on           (6.9        )%   4.5         %   4.2         %   3.4          %
average
shareholders'
equity
                                                                                  

[b] Average shareholders equity is computed as the average of the quarterly
average shareholders' equity balances.

                                                        
Diluted Tangible Book Value Per Share
(Expressed in thousands of United States Dollars, except per share and share
amounts)

                                                             
                                         December 31, 2012   December 31, 2011
Shareholders' equity                     $   2,839,722       $    2,809,235
Goodwill and intangible assets           54,751             56,111
Tangible book value                      $   2,784,971      $    2,753,124
                                                             
Diluted shares outstanding               100,213,325         104,406,779
                                                             
Diluted tangible book value per          $   27.79           $    26.37
share
                                                                  

                                                              
ALTERRA CAPITAL HOLDINGS LIMITED
                                                                     
SCHEDULE OF SUPPLEMENTAL INVESTMENT DATA - DECEMBER 31, 2012 (UNAUDITED)
(Expressed in thousands of United States Dollars)
                                                                     
Type of               As of           Investment     As of           Investment
Investment            December        Distribution   December        Distribution
                      31, 2012                       31, 2011
                                                                     
Cash and cash
equivalents           $ 694,756      8.6      %     $ 922,844      11.8    %
(restricted and
unrestricted)
                                                                     
U.S. government       $ 885,370       11.0     %     $ 751,806       9.6     %
and agencies
Non-U.S.              246,712         3.1      %     164,621         2.1     %
governments
Corporate             2,610,605       32.5     %     2,646,358       33.9    %
securities
Municipal             273,336         3.4      %     263,007         3.4     %
securities
Asset-backed          371,597         4.6      %     247,965         3.2     %
securities
Residential
mortgage-backed       1,234,670       15.4     %     1,296,277       16.6    %
securities
Commercial
mortgage-backed       454,259        5.7      %     361,097        4.6     %
securities
                                                                     
Fixed
maturities at         $ 6,076,549    75.6     %     $ 5,731,131    73.3    %
fair value
                                                                     
U.S. government       $ 27,639        0.3      %     $ 29,201        0.4     %
and agencies
Non-U.S.              527,843         6.6      %     524,449         6.7     %
governments
Corporate             296,360         3.7      %     319,609         4.1     %
securities
Asset-backed          424            —             1,000          —       
securities
                                                                     
Fixed
maturities at         $ 852,266      10.6     %     $ 874,259      11.2    %
amortized cost
                                                                  
Equity method         $ 92,050       1.1      %     $ 13,670       0.2     %
investments
                                                                  
Other                 $ 316,955      3.9      %     $ 272,845      3.5     %
investments
                                                                     
Total invested        $ 8,032,576    100.0    %     $ 7,814,749    100.0   %
assets
                                                                     
                      As of           Ratings        As of           Ratings
Credit Rating         December        Distribution  December       Distribution
                      31, 2012                       31, 2011
                                                                     
U.S. government
and agencies          $ 2,092,893     30.2     %     $ 1,869,405     28.3      %
[a]
AAA                   1,170,299       16.9     %     948,861         14.4      %
AA                    693,411         10.0     %     883,783         13.4      %
A                     1,520,959       22.0     %     1,378,361       20.9      %
BBB                   320,215         4.6      %     281,983         4.3       %
BB                    67,041          1.0      %     84,803          1.3       %
B                     158,934         2.3      %     131,159         2.0       %
CCC or lower          38,420          0.6      %     53,157          0.8       %
Not rated             14,377         0.2      %    99,619        1.5       %
Fixed
maturities at         $ 6,076,549    87.7     %    $ 5,731,131   86.8      %
fair value
                                                                     
U.S. government       $ 27,639        0.4      %     $ 29,201        0.4       %
and agencies
AAA                   406,659         5.9      %     619,832         9.4       %
AA                    284,282         4.1      %     82,511          1.2       %
A                     99,235          1.4      %     117,600         1.8       %
BBB                   32,031          0.5      %     24,117          0.4       %
BB                    2,420          —            998           —         
Fixed
maturities at         $ 852,266       12.3     %     $ 874,259       13.2      %
amortized cost
                                                                
Total fixed           $ 6,928,815    100.0    %    $ 6,605,390   100.0     %
maturities
                                                                               

[a] Included within U.S. government and agencies are agency-issued residential
mortgage-backed securities with a fair value of $1,207,523 (December 31, 2011:
$1,117,599).

Percentage totals may not add due to rounding.

<td class="bwpadl0 bwnowrap bwpadr0 bwvertalignb bwalignr" colspa*Story too
large*

                    Three Months Ended December  Year Ended December 31,
                       31,
                       2012            2011         2012        2011
                                                                  
Net investment         $  52,039       $  57,080    $ 218,964   $ 234,846 
income
                                                                  
Realized and
unrealized
(losses) gains         (1,322     )     763           3,952        2,031
on trading fixed
maturities
Net realized
gains on
available for          3,312            1,990         26,148
sale fixed
maturities

[TRUNCATED]
 
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