EX-12 2 h83261exv12.htm EX-12 exv12
Exhibit 12
HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
                                 
    Six months ended June 30,     Three months ended June 30,  
    2011     2010     2011     2010  
Net loss ratio
                                
Loss and loss adjustment expense, net
   $ 681,868     $ 625,507     $ 334,282     $ 298,986  
Net earned premium
     1,032,731       1,015,972       524,251       506,385  
Net loss ratio (1)
     66.0 %     61.6 %     63.8 %     59.0 %
(Net loss ratio = incurred loss and loss adjustment expense divided by
net earned premium)
                
 
                                
Expense ratio
                                
Segment underwriting expense (2)
   $ 270,874     $ 265,562     $ 135,026     $ 130,405  
Segment revenue (3)
     1,047,285       1,041,106       531,580       515,084  
Expense ratio
     25.9 %     25.5 %     25.4 %     25.3 %
(Expense ratio = segment underwriting expense divided by segment revenue)                
 
                                
Combined ratio
     91.9 %     87.1 %     89.2 %     84.3 %
(Combined ratio = net loss ratio plus expense ratio)
                                
 
                                
Accident year loss ratio
                                
Loss and loss adjustment expense, net
   $ 681,868     $ 625,507     $ 334,282     $ 298,986  
Add: Favorable (adverse) development
     (22,266 )     (2,166 )     (13,251 )     2,844  
 
                        
Accident year net loss and loss adjustment expense
   $ 659,602     $ 623,341     $ 321,031     $ 301,830  
 
                        
 
                                
Net earned premium
   $ 1,032,731     $ 1,015,972     $ 524,251     $ 506,385  
Add: Prior year reinstatement premium
     —       3,177       —       3,177  
 
                        
Accident year net earned premium
   $ 1,032,731     $ 1,019,149     $ 524,251     $ 509,562  
 
                        
Accident year net loss ratio
     63.9 %     61.2 %     61.2 %     59.2 %
(Accident year net loss ratio = accident year net loss and loss adjustment
expense divided by accident year net earned premium)
 
(1)   Calculated for our insurance companies using financial data reported in accordance with generally accepted accounting principles.
 
(2)   Sum of Other Expense for each of our insurance segments.
 
(3)   Sum of Segment Revenue for each of our insurance segments.

 

 

HCC Insurance Holdings, Inc. and Subsidiaries
Statement of Ratios
(unaudited, in thousands except ratios)
                                 
    Six months ended June 30,     Three months ended June 30,  
    2011     2010     2011     2010  
Ratio of earnings to fixed charges
                                
Interest factor of rent expense (4)
   $ 2,731     $ 2,664     $ 1,390     $ 1,296  
Interest expense
     10,987       10,627       5,434       5,237  
Capitalized interest
     185       —       117       —  
 
                        
 
                                
Total fixed charges
   $ 13,903     $ 13,291     $ 6,941     $ 6,533  
 
                        
 
                                
Earnings before income tax expense
   $ 159,784     $ 222,778     $ 96,905     $ 119,753  
Interest factor of rent expense (4)
     2,731       2,664       1,390       1,296  
Interest expense
     10,987       10,627       5,434       5,237  
 
                        
Earnings per calculation
   $ 173,502     $ 236,069     $ 103,729     $ 126,286  
 
                        
 
                                
Ratio of earnings to fixed charges (5)
     12.48       17.76       14.94       19.33  
 
                        
 
(4)   Estimated to be 33% of total rent expense.
 
(5)   Earnings per calculation divided by total fixed charges.