HCC Insurance Holdings Inc. (HCC, Financial) filed Quarterly Report for the period ended 2010-06-30.
Hcc Insurance Holdings Inc. has a market cap of $2.99 billion; its shares were traded at around $25.98 with a P/E ratio of 8.7 and P/S ratio of 1.3. The dividend yield of Hcc Insurance Holdings Inc. stocks is 2.1%. Hcc Insurance Holdings Inc. had an annual average earning growth of 16.5% over the past 10 years. GuruFocus rated Hcc Insurance Holdings Inc. the business predictability rank of 4-star.HCC is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Keeley of Keeley Fund Management, Third Avenue Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Chuck Royce of Royce& Associates, David Dreman of Dreman Value Management, NWQ Managers of NWQ Investment Management Co, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Bruce Kovner of Caxton Associates.
($0.81 per diluted share) in the second quarter of 2009. Net earnings for the first six months of 2010 included $20.6 million (pretax) of net catastrophic losses, primarily from the Chilean earthquake, partially offset by a $5.0 million pretax gain, net of related expenses, that we realized from commuting a derivative contract. The year-to-date 2009 net earnings included a $15.6 million pretax gain, net of related expenses, from the commutation of a reinsurance contract with Mortgage Guarantee Insurance Corporation (MGIC). Net earnings decreased quarter-over-quarter primarily due to redundant reserve development in the 2009 quarter.
Other operating income was $12.0 million in the first half of 2010, compared to $28.4 million in the first half of 2009 and $2.1 million in the second quarter of 2010, compared to $5.5 million in the second quarter of 2009. The first half of 2010 included an $8.0 million gain related to commuting a derivative contract. The first half of 2009 included $20.5 million from the commutation of the MGIC reinsurance contract. Period to period comparisons of our other operating income may vary substantially, depending on earnings generated by new transactions or investments, income or loss related to changes in the fair value of certain investments, and gains or losses related to dispositions.
Other operating expense, which includes compensation expense, decreased 1% year-over-year and increased 2% quarter-over-quarter. We had 1,893 employees at June 30, 2010 compared to 1,922 a year earlier. In 2009, we sold our U.K. reinsurance broker and the operations of our commercial marine agency business, which primarily accounts for the reduction in other operating expense and the number of employees in 2010. In addition, year-to-date other operating expense for 2010 and 2009 included $3.0 million and $9.9 million of expense for costs directly related to the commutations of a derivative contract and the MGIC reinsurance contract, respectively. Currency conversion expense was $2.7 million and $1.2 million in the first six months and the second quarter of 2010, respectively, compared to a $0.2 million and $0.1 million benefit in the first six months and the second quarter of 2009, respectively.
At June 30, 2010, total assets were $9.0 billion and shareholders equity was $3.2 billion, compared to $8.8 billion and $3.0 billion, respectively, at December 31, 2009. Our book value per share was $27.78, which increased from $26.58 at December 31, 2009.
Net earnings of our insurance company segment decreased $11.4 million, or 6%, and $2.1 million, or 2%, in the first six months and second quarter of 2010, compared to the same periods in 2009. We recognized catastrophe losses in the first quarter of 2010 of $20.6 million (pretax and net of reinsurance). In addition, the commutation of the MGIC reinsurance contract generated $20.5 million in insurance company revenue in the first quarter of 2009. These two items more than offset the effect of higher net earned premium and greater investment income recognized in the first six months of 2010, as well as the gain in the first half of 2010 from the commutation of a derivative contract.
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Hcc Insurance Holdings Inc. has a market cap of $2.99 billion; its shares were traded at around $25.98 with a P/E ratio of 8.7 and P/S ratio of 1.3. The dividend yield of Hcc Insurance Holdings Inc. stocks is 2.1%. Hcc Insurance Holdings Inc. had an annual average earning growth of 16.5% over the past 10 years. GuruFocus rated Hcc Insurance Holdings Inc. the business predictability rank of 4-star.HCC is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Keeley of Keeley Fund Management, Third Avenue Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Paul Tudor Jones of The Tudor Group, Chuck Royce of Royce& Associates, David Dreman of Dreman Value Management, NWQ Managers of NWQ Investment Management Co, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Bruce Kovner of Caxton Associates.
Highlight of Business Operations:
Net earnings were $154.7 million ($1.34 per diluted share) in the first half of 2010, compared to $174.8 million ($1.54 per diluted share) in the same period of 2009 and $83.4 million ($0.72 per diluted share) in the second quarter of 2010, compared to $91.6 million($0.81 per diluted share) in the second quarter of 2009. Net earnings for the first six months of 2010 included $20.6 million (pretax) of net catastrophic losses, primarily from the Chilean earthquake, partially offset by a $5.0 million pretax gain, net of related expenses, that we realized from commuting a derivative contract. The year-to-date 2009 net earnings included a $15.6 million pretax gain, net of related expenses, from the commutation of a reinsurance contract with Mortgage Guarantee Insurance Corporation (MGIC). Net earnings decreased quarter-over-quarter primarily due to redundant reserve development in the 2009 quarter.
Other operating income was $12.0 million in the first half of 2010, compared to $28.4 million in the first half of 2009 and $2.1 million in the second quarter of 2010, compared to $5.5 million in the second quarter of 2009. The first half of 2010 included an $8.0 million gain related to commuting a derivative contract. The first half of 2009 included $20.5 million from the commutation of the MGIC reinsurance contract. Period to period comparisons of our other operating income may vary substantially, depending on earnings generated by new transactions or investments, income or loss related to changes in the fair value of certain investments, and gains or losses related to dispositions.
Other operating expense, which includes compensation expense, decreased 1% year-over-year and increased 2% quarter-over-quarter. We had 1,893 employees at June 30, 2010 compared to 1,922 a year earlier. In 2009, we sold our U.K. reinsurance broker and the operations of our commercial marine agency business, which primarily accounts for the reduction in other operating expense and the number of employees in 2010. In addition, year-to-date other operating expense for 2010 and 2009 included $3.0 million and $9.9 million of expense for costs directly related to the commutations of a derivative contract and the MGIC reinsurance contract, respectively. Currency conversion expense was $2.7 million and $1.2 million in the first six months and the second quarter of 2010, respectively, compared to a $0.2 million and $0.1 million benefit in the first six months and the second quarter of 2009, respectively.
At June 30, 2010, total assets were $9.0 billion and shareholders equity was $3.2 billion, compared to $8.8 billion and $3.0 billion, respectively, at December 31, 2009. Our book value per share was $27.78, which increased from $26.58 at December 31, 2009.
Net earnings of our insurance company segment decreased $11.4 million, or 6%, and $2.1 million, or 2%, in the first six months and second quarter of 2010, compared to the same periods in 2009. We recognized catastrophe losses in the first quarter of 2010 of $20.6 million (pretax and net of reinsurance). In addition, the commutation of the MGIC reinsurance contract generated $20.5 million in insurance company revenue in the first quarter of 2009. These two items more than offset the effect of higher net earned premium and greater investment income recognized in the first six months of 2010, as well as the gain in the first half of 2010 from the commutation of a derivative contract.
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