Schedule 2 HCCIH Financial Statements

12 Months Ended

Dec. 31, 2012

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,
	2012		2011
			(as adjusted)
ASSETS
Cash	$	4,932	$	1,560
Fixed maturity securities – available for sale, at fair value
(amortized cost: 2012 – $311,085 and 2011 – $221,188)		325,552		233,566
Equity securities – available for sale, at fair value (cost: $114,649)		120,640		0
Short-term investments, at cost (approximates fair value)		22,409		1,422
Other investments, at fair value (amortized cost: 2012 – $18,375 and 2011 – $38,037)		20,908		35,703
Investment in subsidiaries		3,575,796		3,354,628
Intercompany loans to subsidiaries for acquisitions		177,052		158,560
Receivable from subsidiaries		58,209		89,750
Other assets		6,554		8,007
Total assets	$	4,312,052	$	3,883,196
LIABILITIES AND SHAREHOLDERS’ EQUITY
Payable to subsidiaries	$	17,375	$	22,677
Notes payable		583,944		478,790
Intercompany loan from subsidiary		25,300		0
Deferred Federal income tax		10,359		11,815
Accounts payable and accrued liabilities		132,462		95,932
Total liabilities		769,440		609,214
Total shareholders’ equity		3,542,612		3,273,982
Total liabilities and shareholders’ equity	$	4,312,052	$	3,883,196
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,
	2012		2011		2010
REVENUE
Equity in earnings of subsidiaries	$	400,294	$	238,602	$	363,539
Interest income from subsidiaries		8,858		12,231		14,247
Net investment income		10,290		4,561		107
Net realized investment loss		(309)		(1,653)		0
Other operating income		99		0		0
Total revenue		419,232		253,741		377,893
EXPENSE
Interest expense		25,132		22,481		20,493
Other operating expense		7,138		7,516		13,650
Total expense		32,270		29,997		34,143
Earnings before income tax		386,962		223,744		343,750
Income tax benefit		(4,278)		(31,499)		(1,346)
Net earnings	$	391,240	$	255,243	$	345,096
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,
						2012		2011		2010
Operating activities
	Net earnings					$	391,240	$	255,243	$	345,096
	Adjustments to reconcile net earnings to net cash provided by operating
		activities:
			Undistributed net earnings of subsidiaries				(392,486)		(103,395)		(169,500)
			Change in accrued interest receivable on intercompany loans				(3,154)		(5,000)		(14,769)
			Change in accounts payable and accrued liabilities				23,629		14,495		(6,139)
			Loss on investments				309		1,653		0
			Other, net				3,947		(10,588)		(21,657)
				Cash provided by operating activities			23,485		152,408		133,031
Investing activities
	Cash contributions to subsidiaries						(30,250)		(29,000)		(50,000)
	Sales of available for sale fixed maturity securities						87,099		109,655		0
	Sales of equity securities						9,780		0		0
	Sales of other investments						21,736		0		0
	Maturity or call of available for sale fixed maturity securities						105,982		58,189		0
	Cost of available for sale fixed maturity securities acquired						(6,666)		(130,322)		0
	Cost of equity securities acquired						(124,710)		0		0
	Cost of other investments acquired						0		(32,496)		(4,753)
	Change in short-term investments						(20,987)		103,684		(88,075)
	Change in receivable from/payable to subsidiaries						776		(34,767)		43,209
	Intercompany loans to subsidiaries for acquisitions						(66,765)		(1,911)		(54,959)
	Payments on intercompany loans to subsidiaries						51,427		43,548		70,474
				Cash provided (used) by investing activities			27,422		86,580		(84,104)
Financing activities
	Issuance of notes payable						25,000		0		13,000
	Payments on notes payable						0		(13,000)		0
	Advances on line of credit						185,000		305,000		50,000
	Payments on line of credit						(80,000)		(125,000)		(50,000)
	Payments on convertible notes						0		0		(64,472)
	Sale of common stock						59,838		36,044		29,193
	Purchase of common stock						(173,028)		(373,584)		(35,125)
	Dividends paid						(64,345)		(65,822)		(63,245)
	Other, net						0		(2,157)		0
				Cash used by financing activities			(47,535)		(238,519)		(120,649)
			Net increase (decrease) in cash				3,372		469		(71,722)
			Cash at beginning of year				1,560		1,091		72,813
				Cash at end of year		$	4,932	$	1,560	$	1,091
See Notes to Condensed Financial Information.