Alleghany enjoys strong growth but outside insurance sector

Alleghany Corporation, which owns reinsurer  TransRe and insurers RSUI and CapSpecialty, enjoyed strong growth in the third quarter of 2018 – but this was mainly driven by non-insurance related revenues. Its profits were also hit by exposure to losses from natural catastrophes.

The company’s revenues increase by 30.6 percent overall to reach $2.1 billion. Within this, its insurance businesses increased by 1.7 percent to reach $1.2 billion and its non-insurance revenues by 47.9 percent to reach $438.3 million. Its investment income increased by 21.6 percent to reach $127.3 million.

The company absorbed catastrophe losses of $179.3 million in the period primarily arising from Hurricane Florence in the US and Typhoons Jebi and Trami in Japan.

This translated into a net profit of $284.9 million in the quarter, a big turnaround on the $314.2 million loss it made in the same period a year earlier.

The company said that TransRe’s premiums written were up modestly as the company “continues to maintain its underwriting discipline in the current market environment.”

At Alleghany’s insurance segment, growth in premiums written at both RSUI and CapSpecialty was offset by the absence of premiums from PacificComp, which was sold at year-end 2017.

Weston Hicks, president and chief executive officer of Alleghany Corporation, said: “Book value per common share1 increased 2.8 percent in the third quarter and 4.1 percent year to date to $576.14 as of September 30, 2018. Including the $10.00 per share special dividend paid on March 15, 2018, book value per common share1 increased 6.0 percent year to date.

“The growth in book value per share in the third quarter was driven mostly by appreciation of our equity securities and to a lesser extent increased investment income, partially offset by catastrophe losses totaling $179.3 million after tax in the third quarter, primarily arising from Hurricane Florence in the United States and Typhoons Jebi and Trami in Japan.

“In addition, during 2018, Alleghany Capital continued to grow its portfolio of noninsurance businesses with noninsurance revenues increasing by 56% in the first nine months of this year.”

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