Alleghany has posted strong second quarter results driven by what it called solid underwriting in its insurance and reinsurance businesses with Trans Re enjoying a good quarter despite tough market conditions.
The company posted net earnings of $149 million for the quarter, compared with $113.7 million for the second quarter of 2013.
Its reinsurance segment, Trans Re, generated an underwriting profit of $74.8 million in the quarter and a 91 percent combined ratio, compared with $60.5 million and a 92.8 percent combined ratio in the second quarter of 2013. Its gross written premiums grew to $947.1 million in the quarter, compared with $896.3 million.
Alleghany’s insurance segment nearly doubled its underwriting profit in the quarter to $35.3 million compared to $18.3 million in the second quarter of 2013. RSUI’s combined ratio improved to 77.7 percent, compared with 86.2 percent for the same quarter last year.
CapSpecialty generated an underwriting loss in the quarter due to non-catastrophe property fire losses and some slight adverse development. Alleghany added that PacificComp narrowed its underwriting loss in the quarter as it continues to execute its turnaround plan.
Weston Hicks, president and chief executive officer, said: “Solid underwriting performance at TransRe and RSUI and strong investment results across the company drove a book value per share increase of 4.8 percent in the current quarter and 9.4 percent for the year to date.
“Our insurance segment nearly doubled underwriting profit in the quarter to $35.3 million compared to $18.3 million in the second quarter of 2013. RSUI’s improved combined ratio of 77.7 percent in the quarter compared to 86.2 percent for the same quarter last year was the main reason for the improvement as RSUI had fewer catastrophe losses in the current quarter compared to the second quarter last year.
“However, RSUI is seeing significant price competition in its property business and has been disciplined in its market approach. Accordingly, RSUI’s gross premiums written decreased 4.6 percent in the quarter as it chose not to renew select accounts.
“We remain encouraged with the progress being made at both CapSpecialty and PacificComp as they continue to improve their expense ratios while executing on their respective strategies, despite significant start-up costs associated with new initiatives. We anticipate improvements in future underwriting performance as a result.”
Alleghany, Trans Re, Second Quarter 2014 Results, North America