Schedule 2 HCCIH Financial Statements

12 Months Ended

Dec. 31, 2011

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

			SCHEDULE 2
HCC INSURANCE HOLDINGS, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
BALANCE SHEETS
(in thousands)
	December 31,
	2011		2010
ASSETS
Cash	$	1,560	$	1,091
Fixed income securities - available for sale, at fair value
(amortized cost: 2011 - $221,188; 2010 - $130,344)		233,566		134,280
Short-term investments		1,422		105,107
Investment in subsidiaries		3,372,660		3,171,889
Other investments		35,703		5,560
Intercompany loans to subsidiaries for acquisitions		158,560		242,650
Receivable from subsidiaries		89,750		27,869
Other assets		8,007		26,172
Total assets	$	3,901,228	$	3,714,618
LIABILITIES AND SHAREHOLDERS' EQUITY
Payable to subsidiaries	$	22,677	$	20,625
Notes payable		478,790		298,637
Intercompany loans from subsidiaries		0		13,000
Deferred Federal income tax		11,815		28,036
Accounts payable and accrued liabilities		95,932		57,888
Total liabilities		609,214		418,186
Total shareholders' equity		3,292,014		3,296,432
Total liabilities and shareholders' equity	$	3,901,228	$	3,714,618
See Notes to Condensed Financial Information.

					SCHEDULE 2
HCC INSURANCE HOLDINGS, INC.
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF EARNINGS
(in thousands)
	Years ended December 31,
	2011		2010		2009
REVENUE
Equity in earnings of subsidiaries	$	238,602	$	363,539	$	380,870
Interest income from subsidiaries		12,231		14,247		13,281
Net investment income		2,908		107		56
Other operating income		0		0		253
Total revenue		253,741		377,893		394,460
EXPENSE
Interest expense		22,481		20,493		15,186
Other operating expense		7,516		13,650		10,908
Total expense		29,997		34,143		26,094
Earnings before income tax expense		223,744		343,750		368,366
Income tax (benefit) expense		(31,499)		(1,346)		14,498
Net earnings	$	255,243	$	345,096	$	353,868
See Notes to Condensed Financial Information

							SCHEDULE 2
		HCC INSURANCE HOLDINGS, INC.
		CONDENSED FINANCIAL INFORMATION OF REGISTRANT
		STATEMENTS OF CASH FLOWS
		(in thousands)
			Years ended December 31,
			2011		2010		2009
Operating Activities
	Net earnings		$	255,243	$	345,096	$	353,868
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Undistributed net earnings of subsidiaries		(103,395)		(169,500)		(245,104)
		Change in accrued interest receivable added to intercompany loan balances		(5,000)		(14,769)		(13,306)
		Change in accounts payable and accrued liabilities		14,495		(6,139)		1,303
		Other, net		(8,935)		(21,657)		13,560
		Cash provided by operating activities		152,408		133,031		110,321
Investing Activities
		Cash contributions to subsidiaries		(29,000)		(50,000)		(7,000)
		Sales of available for sale fixed income securities		109,655		0		0
		Maturity or call of available for sale fixed income securities		58,189		0		0
		Cost of available for sale fixed income securities acquired		(130,322)		0		0
		Cost of other investments acquired		(32,496)		(4,753)		0
		Change in short-term investments		103,684		(88,075)		(4,867)
		Change in receivable/payable from subsidiaries		(34,767)		43,209		859
		Intercompany loans to subsidiaries for acquisitions		(1,911)		(54,959)		(23,098)
		Payments on intercompany loans to subsidiaries		43,548		70,474		54,346
		Cash provided (used) by investing activities		86,580		(84,104)		20,240
Financing Activities
		Issuance of notes payable		0		13,000		296,096
		Payments on notes payable		(13,000)		0		0
		Advances on line of credit		305,000		50,000		130,000
		Payments on line of credit		(125,000)		(50,000)		(350,032)
		Payments on convertible notes		0		(64,472)		(60,210)
		Sale of common stock		36,044		29,193		19,198
		Purchase of common stock		(373,584)		(35,125)		(35,464)
		Dividends paid		(65,822)		(63,245)		(57,437)
		Other, net		(2,157)		0		0
		Cash used by financing activities		(238,519)		(120,649)		(57,849)
		Net increase (decrease) in cash		469		(71,722)		72,712
		Cash at beginning of year		1,091		72,813		101
		Cash at end of year	$	1,560	$	1,091	$	72,813
See Notes to Condensed Financial Information