##### 



Exhibit 12
 HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
 STATEMENT OF RATIOS
 Years ended December 31,(in thousands)2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Gross premium to surplus ratio:Gross written premium
    
    $
    2,243,843
    
    
    $
    2,049,116
    
    
    $
    1,992,361
    
    
    $
    1,746,413
    
    
    $
    1,163,397Policyholders surplus
    
    
    1,342,054
    
    
    
    1,110,268
    
    
    
    844,851
    
    
    
    591,889
    
    
    
    523,807Premium to surplus ratio (1)
    
    
    167.2
    %
    
    
    184.6
    %
    
    
    235.8
    %
    
    
    295.1
    %
    
    
    222.1
    %(Gross premium to surplus ratio = gross written premium divided by policyholders surplus)Net premium to surplus ratio:Net written premium
    
    $
    1,812,896
    
    
    $
    1,495,931
    
    
    $
    1,121,343
    
    
    $
    867,795
    
    
    $
    545,475Policyholders surplus
    
    
    1,342,054
    
    
    
    1,110,268
    
    
    
    844,851
    
    
    
    591,889
    
    
    
    523,807Premium to surplus ratio (1)
    
    
    135.1
    %
    
    
    134.7
    %
    
    
    132.7
    %
    
    
    146.6
    %
    
    
    104.1
    %(Net premium to surplus ratio = net written premium divided by policyholders surplus)Loss ratio:Incurred loss and loss adjustment expense
    
    $
    1,020,221
    
    
    $
    925,130
    
    
    $
    651,675
    
    
    $
    494,024
    
    
    $
    313,744Net earned premium
    
    
    1,700,373
    
    
    
    1,378,100
    
    
    
    1,013,573
    
    
    
    739,376
    
    
    
    506,371Loss ratio (1)
    
    
    60.0
    %
    
    
    67.1
    %
    
    
    64.3
    %
    
    
    66.8
    %
    
    
    62.0
    %(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium)Expense ratio:Underwriting expense
    
    $
    435,371
    
    
    $
    381,680
    
    
    $
    299,789
    
    
    $
    199,927
    
    
    $
    130,578Net written premium
    
    
    1,812,896
    
    
    
    1,495,931
    
    
    
    1,121,343
    
    
    
    867,795
    
    
    
    545,475Expense ratio (1)
    
    
    24.0
    %
    
    
    25.5
    %
    
    
    26.7
    %
    
    
    23.0
    %
    
    
    23.9
    %(Expense ratio = underwriting expense divided by net written premium)Combined ratio (1)
    
    
    84.0
    %
    
    
    92.6
    %
    
    
    91.0
    %
    
    
    89.8
    %
    
    
    85.9
    %(Combined ratio = loss ratio plus expense ratio)
 
 (1)
    
    Calculated for our insurance companies using financial data reported in accordance with
statutory accounting principles.




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##### 



Exhibit 12
 HCC INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
STATEMENT OF RATIOS
 Years ended December 31,(in thousands)2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Loss ratio:Incurred loss and loss adjustment expense
    
    $
    1,011,856
    
    
    $
    919,697
    
    
    $
    645,230
    
    
    $
    488,000
    
    
    $
    307,143Net earned premium
    
    
    1,709,189
    
    
    
    1,369,988
    
    
    
    1,010,692
    
    
    
    738,272
    
    
    
    505,521Loss ratio (2)
    
    
    59.2
    %
    
    
    67.1
    %
    
    
    63.8
    %
    
    
    66.1
    %
    
    
    60.8
    %(Loss ratio = incurred loss and loss adjustment expense divided by net earned premium)Expense ratio:Underwriting expense
    
    $
    427,456
    
    
    $
    357,727
    
    
    $
    269,390
    
    
    $
    181,637
    
    
    $
    128,938Net earned premium
    
    
    1,709,189
    
    
    
    1,369,988
    
    
    
    1,010,692
    
    
    
    738,272
    
    
    
    505,521Expense ratio (2)
    
    
    25.0
    %
    
    
    26.1
    %
    
    
    26.7
    %
    
    
    24.6
    %
    
    
    25.5
    %(Expense ratio = underwriting expense divided by net earned premium)Combined ratio (2)
    
    
    84.2
    %
    
    
    93.2
    %
    
    
    90.5
    %
    
    
    90.7
    %
    
    
    86.3
    %(Combined ratio = loss ratio plus expense ratio)
 Ratio of earnings to fixed charges:Interest factor of rent expense (3)

$
3,944


$
3,373


$
3,319


$
3,067


$
2,838Interest expense


11,396



7,684



8,374



7,453



8,301Total fixed charges

$
15,340


$
11,057


$
11,693


$
10,520


$
11,139Earnings from continuing
    operations before income tax expense

$
509,834


$
272,609


$
240,635


$
164,725


$
150,326Fixed charges


15,340



11,057



11,693



10,520



11,139Earnings per calculation

$
525,174


$
283,666


$
252,328


$
175,245


$
161,465Ratio of earnings to fixed charges
    (4)


34.24



25.65



21.58



16.66



14.50     (2)
    Calculated for our insurance companies using financial data
    reported in accordance with generally accepted accounting
    principles.(3)
    Estimated to be 33% of total rent expense.(4)
    Earnings per calculation divided by total fixed charges.