ALLEGHANY CORPORATION Exhibit 99.1
ALLEGHANY CORPORATION
1411 Broadway, 34th Floor
New York, NY 10018
ALLEGHANY CORPORATION REPORTS 2021 THIRD QUARTER RESULTS
NEW YORK, NY, November 4, 2021 - Alleghany Corporation (NYSE-Y) announced its financial results for the third quarter of 2021. Book value per share was $644.37, a decrease of (2.1%) from June 30, 2021 and an increase of 3.3% from December 31, 2020, respectively. Excluding accumulated other comprehensive income, book value per share decreased (1.4%) from June 30, 2021 and increased 6.2% from December 31, 2020.
Highlights for the quarter are summarized below1:
- Net premiums written increased 21.1%, with reinsurance up 19.9% and insurance up 25.3%.
- Underwriting loss was $200 million (combined ratio of 110.8%), compared with an underwriting loss of $81 million (combined ratio of 105.2%); excluding catastrophe and Pandemic2 losses, underwriting profit was $232 million (combined ratio of 87.4%), compared with $189 million (combined ratio of 87.9%).
- Net investment income increased 2.9% to $133 million from $129 million.
- Alleghany Capital revenue3 increased 38.2% to $986 million from $714 million.
- Alleghany Capital earnings before income taxes and adjusted earnings before income taxes were $101 million and $114 million, respectively, compared with $70 million and $67 million, respectively.
- (Losses) earnings per diluted share were $(8.60), compared with $8.86.
- Adjusted (losses) earnings per diluted share were $(1.26), compared with $3.23.
Highlights for the first nine months are summarized below1:
- Net premiums written increased 20.8%, with reinsurance up 21.3% and insurance up 19.2%.
- Underwriting loss was $10 million (combined ratio of 100.2%), compared with an underwriting loss of $145 million (combined ratio of 103.2%); excluding catastrophe and Pandemic2 losses, underwriting profit was $692 million (combined ratio of 86.8%), compared with $471 million (combined ratio of 89.2%).
- Net investment income increased 14.9% to $413 million from $360 million.
- Alleghany Capital revenue3 increased 53.2% to $2,535 million from $1,654 million.
- Alleghany Capital earnings before income taxes and adjusted earnings before income taxes were $187 million and $221 million, respectively, compared with $80 million and $77 million, respectively.
- Earnings (losses) per diluted share were $37.22, compared with $(4.43).
- Adjusted earnings per diluted share were $26.29, compared with $8.83.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
- All comparisons are to the same period of the prior year, unless otherwise stated.
- The COVID-19 global pandemic is referred to herein as the "Pandemic."
- Relates to Alleghany Capital product and service revenues, formerly referred to as noninsurance revenue.
1
Weston Hicks, Chief Executive Officer, commented, "Alleghany's businesses produced very strong underlying operating performance but significant catastrophe losses, mostly at TransRe, resulted in an adjusted loss of $14 million in the quarter. We continue to believe that reinsurance catastrophe pricing needs to improve further to generate an appropriate rate of return on the capital required to support the business given a changing climate."
Joe Brandon, President, added, "TransRe and RSUI delivered strong double-digit growth in premiums written during the quarter, benefiting from rate increases and generally improving market conditions. Net premiums written increased by 21%, driven by RSUI (+32%), TransRe (+20%) and CapSpecialty (+8%). In particular, rate- driven growth in professional lines and umbrella contributed to the significant increase in premiums written.
"Alleghany incurred catastrophe losses of approximately $434 million in the third quarter resulting primarily from Hurricane Ida and European floods. Excluding the $315 million after-tax, after reinstatement premium impact of catastrophe losses, Alleghany produced over $300 million of adjusted earnings in the quarter, benefitting from strong ex-catastrophe underwriting results and another excellent quarter at Alleghany Capital.
"The underlying combined ratio excluding catastrophe losses was 87.4% at the (re)insurance subsidiaries. RSUI delivered a 90.3% combined ratio including the impact of the catastrophe losses, demonstrating the strength of its underlying underwriting performance as well as its more modest exposure to the events due to prior underwriting actions.
"Alleghany Capital delivered record earnings in the third quarter reflecting strong seasonal order flow from Jazwares, excellent execution on substantial backlogs at W&W|AFCO Steel and significant growth at IPS. On a trailing twelve month basis, Alleghany Capital adjusted earnings before income taxes continued to grow and now exceed $295 million. On October 18, 2021, Alleghany Capital announced the acquisition of Linesight4 by IPS, a transformational transaction for these two companies as they expand globally and build on strong positions in several attractive long-term growth sectors.
"Looking to 2022, we are encouraged by the continuing underlying profitable growth in our businesses. In recognition of this and the strength of our balance sheet, we increased our pace of share buybacks during the quarter, repurchasing $91 million in shares."
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
4 Anchorbuoy Limited, along with its subsidiaries are known as "Linesight."
2
The following table summarizes results for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, | Percent | Nine Months Ended September 30, | Percent | |||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||
(in millions, except share and per share data) | ||||||||||||||||||
Revenues: | ||||||||||||||||||
Total revenues | $ | 2,866.6 | $ | 2,522.9 | 13.6% | $ | 8,449.1 | $ | 6,233.2 | 35.5% | ||||||||
Net premiums written | 1,983.1 | 1,637.1 | 21.1% | 5,616.1 | 4,648.8 | 20.8% | ||||||||||||
Alleghany Capital product and service | ||||||||||||||||||
revenues | 986.4 | 713.8 | 38.2% | 2,534.7 | 1,654.3 | 53.2% | ||||||||||||
Net investment income | 133.0 | 129.3 | 2.9% | 413.4 | 359.9 | 14.9% | ||||||||||||
Change in the fair value of equity securities | (136.1) | 92.8 | n/m | 180.6 | (188.0) | n/m | ||||||||||||
Earnings: | ||||||||||||||||||
(Losses) earnings before income taxes | $ | (112.0) | $ | 167.9 | n/m | $ | 706.8 | $ | (68.5) | n/m | ||||||||
Underwriting loss | (200.2) | (81.3) | 146.2% | (10.0) | (145.3) | (93.1%) | ||||||||||||
Net (losses) earnings attributable to | ||||||||||||||||||
Alleghany stockholders | (115.0) | 126.5 | n/m | 518.7 | (57.3) | n/m | ||||||||||||
Adjusted (losses) earnings | (13.5) | 46.2 | n/m | 366.7 | 132.4 | 177.0% | ||||||||||||
Share and per share data: | ||||||||||||||||||
(Losses) earnings per diluted share | $ | (8.60) | $ | 8.86 | n/m | $ | 37.22 | $ | (4.43) | n/m | ||||||||
Adjusted (losses) earnings per diluted share | (1.26) | 3.23 | n/m | 26.29 | 8.83 | n/m | ||||||||||||
Weighted average diluted shares outstanding | 13,854,638 | 14,275,487 | (2.9%) | 13,939,015 | 14,332,320 | (2.7%) |
The following table summarizes the reinsurance and insurance segment catastrophe losses for the three and nine months ended September 30, 2021:
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||||
Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | |||||
Segment | Segment | Segments | Segment | Segment | Segments |
Net loss and LAE: | (in millions) | |||||||||||
Hurricane Ida | $ | 222.6 | $ | 40.9 | $ | 263.5 | $ | 222.6 | $ | 40.9 | $ | 263.5 |
European Floods | 105.8 | 7.7 | 113.5 | 105.8 | 7.7 | 113.5 | ||||||
Winter Storms | 6.2 | 0.6 | 6.8 | 132.7 | 112.5 | 245.2 | ||||||
Other | 36.9 | 13.1 | 50.0 | 36.9 | 26.8 | 63.7 | ||||||
Total net loss and LAE | 371.5 | 62.3 | 433.8 | 498.0 | 187.9 | 685.9 | ||||||
Net reinstatement premiums earned(1) | (34.5) | - | (34.5) | (41.3) | - | (41.3) | ||||||
Losses before income taxes | 337.0 | 62.3 | 399.3 | 456.7 | 187.9 | 644.6 | ||||||
Income taxes | 70.8 | 13.1 | 83.9 | 95.9 | 39.5 | 135.4 | ||||||
Net losses attributable to Alleghany stockholders | $ | 266.2 | $ | 49.2 | $ | 315.4 | $ | 360.8 | $ | 148.4 | $ | 509.2 |
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
1 Represents an increase in net premiums earned.
3
SEGMENT RESULTS
The following table summarizes the reinsurance and insurance segment results for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, | Percent | Nine Months Ended September 30, | Percent | |||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||
(in millions) | (in millions) | |||||||||||||||||||||||
Net premiums written: | ||||||||||||||||||||||||
Reinsurance segment | $ | 1,514.6 | $ | 1,263.2 | 19.9% | $ | 4,318.6 | $ | 3,560.7 | 21.3% | ||||||||||||||
Insurance segment | 468.5 | 373.9 | 25.3% | 1,297.5 | 1,088.1 | 19.2% | ||||||||||||||||||
$ | 1,983.1 | $ | 1,637.1 | 21.1% | $ | 5,616.1 | $ | 4,648.8 | 20.8% | |||||||||||||||
Underwriting (loss) profit: | ||||||||||||||||||||||||
Reinsurance segment | $ | (231.9) | $ | (23.4) | 891.0% | $ | (102.8) | $ | (132.7) | (22.5%) | ||||||||||||||
Insurance segment | 31.7 | (57.9) | n/m | 92.8 | (12.6) | n/m | ||||||||||||||||||
$ | (200.2) | $ | (81.3) | 146.2% | $ | (10.0) | $ | (145.3) | (93.1%) | |||||||||||||||
Underwriting profit excluding catastrophe and Pandemic losses: | ||||||||||||||||||||||||
Reinsurance segment | $ | 137.9 | $ | 108.2 | 27.4% | $ | 410.8 | $ | 287.0 | 43.1% | ||||||||||||||
Insurance segment | 94.0 | 80.3 | 17.1% | 280.7 | 183.7 | 52.8% | ||||||||||||||||||
$ | 231.9 | $ | 188.5 | 23.0% | $ | 691.5 | $ | 470.7 | 46.9% |
Reinsurance
TransRe's net premiums written increased 19.9% and 21.3% in the third quarter and first nine months of 2021, respectively, from the corresponding periods of 2020, reflecting a continued increase in rates overall and growth in U.S. professional liability and agriculture lines of business, partially offset by an increase in ceded premiums.
TransRe's combined ratios for the third quarter and first nine months of 2021 were 116.3% and 102.5%, respectively, compared with 102.0% and 103.9% for the corresponding periods of 2020, respectively. The increase in the combined ratio in the third quarter of 2021 from 2020 primarily reflects an increase in catastrophe losses, and the decrease in the combined ratio in the first nine months of 2021 from the first nine months of 2020 reflects an improved attritional loss ratio and more favorable prior year development, partially offset by higher catastrophe losses.
TransRe's current year catastrophe losses in the third quarter and first nine months of 2021 were $372 million and $498 million, respectively. The third quarter and first nine months of 2021 included $223 million from Hurricane Ida, $106 million from the European Floods and $37 million from severe weather in Europe and Asia. Catastrophe losses in the third quarter and first nine months of 2021 also include $6 million and $133 million, respectively, of losses related to Winter Storm Uri and other storms (collectively the "Winter Storms"). In the third quarter and first nine months of 2020, TransRe's catastrophe losses from the Pandemic were $48 million and $316 million, respectively, with an additional $48 million of catastrophe losses in the third quarter of 2020 resulting from Hurricane Laura.
In total, TransRe has incurred $407 million of Pandemic losses since inception including $2 million net favorable development in the third quarter and $16 million net adverse development in the first nine months of 2021. TransRe's underwriting profits before catastrophe and Pandemic losses were $138 million and $411 million in the third quarter and first nine months of 2021, respectively, increases of 27.4% and 43.1% compared with the corresponding periods of 2020, respectively.
Insurance
Insurance segment net premiums written increased 25.3% and 19.2% in the third quarter and first nine months of 2021, respectively, from the corresponding periods of 2020, reflecting growth at both RSUI and CapSpecialty.
4
RSUI's net premiums written increased 31.7% and 21.8% in the third quarter and first nine months of 2021, respectively, from the corresponding periods of 2020, reflecting growth in most lines of business due to increases in business opportunities, higher rates and improved general market conditions, particularly in the directors' and officers' liability, property, professional and umbrella/excess lines of business.
RSUI's combined ratios for the third quarter and first nine months of 2021 were 90.3% and 89.8%,
respectively, compared with 121.1% and 100.9% for the corresponding periods of 2020, respectively. The decrease in the combined ratio in the third quarter of 2021 from the third quarter of 2020 primarily reflects lower catastrophe losses. The decrease in the combined ratio in the first nine months of 2021 from the first nine months of 2020 primarily reflects favorable prior accident year loss reserve development, compared with unfavorable prior accident year loss reserve development in the first nine months of 2020 and, to a lesser extent, a lower expense ratio and a lower overall current accident year loss ratio including catastrophe losses.
RSUI's catastrophe losses in the third quarter and first nine months of 2021 were $62 million and $186 million, respectively, and included $41 million from Hurricane Ida and, in the first nine months of 2021, $112 million of catastrophe losses related to the Winter Storms. The remaining catastrophe losses related primarily to severe weather and flooding in the Midwestern U.S. in the spring and summer of 2021. Catastrophe losses in the third quarter and first nine months of 2020 were $135 million and $191 million, respectively, which include $57 million from Hurricane Sally and $53 million from Hurricane Laura. Catastrophe losses in the first nine months of 2020 also include losses from severe weather and flooding in the Southeastern U.S. and a tornado in Tennessee, as well as $20 million of Pandemic losses. RSUI's underwriting profits before catastrophe and Pandemic losses were $92 million and $277 million in the third quarter and first nine months of 2021, respectively, increases of 15.8% and 49.7%, compared with the corresponding periods of 2020, respectively.
CapSpecialty's net premiums written increased 8.3% and 11.6% in the third quarter and first nine months of 2021, respectively, from the corresponding periods of 2020, primarily reflecting growth in professional liability and other specialty casualty lines of business due to increases in business opportunities and higher rates and CapSpecialty's expanded product offerings, partially offset by the impact of curtailing certain unprofitable broker relationships.
CapSpecialty's combined ratios for the third quarter and first nine months of 2021 were 99.0% and 99.3%, respectively, compared with 103.2% and 102.3% for the corresponding periods of 2020, respectively. The decrease in the combined ratio in the third quarter and first nine months of 2021 reflects a lower expense ratio and reduced catastrophe losses.
Alleghany Capital
The following table summarizes earnings (losses) before income taxes and adjusted earnings (losses) before income taxes for the Alleghany Capital segment for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, | |||||||||||||||
2021 | 2020 | ||||||||||||||
Non- | Corp. & | Non- | Corp. & | ||||||||||||
Industrial | industrial | other | Total | Industrial | industrial | other | Total | ||||||||
($ in millions) | ($ in millions) | ||||||||||||||
Earnings (losses) before income taxes | $ | 33.2 | $ | 72.1 | $ | (3.9) $ | 101.4 | $ | 27.3 | $ | 33.0 | $ | 9.7 | $ | 70.0 |
Less: net realized capital gains | 0.4 | 0.1 | - | 0.5 | (0.3) | 0.1 | (13.7) | (13.9) | |||||||
Add: amortization of intangible assets | 4.7 | 7.0 | - | 11.7 | 4.0 | 7.0 | - | 11.0 | |||||||
Adjusted earnings (losses) before income taxes $ | 38.3 | $ | 79.2 | $ | (3.9) $ | 113.6 | $ | 31.0 | $ | 40.1 | $ | (4.0) | $ | 67.1 | |
Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | ||||||||||||||
Non- | Corp. & | Non- | Corp. & | ||||||||||||
Industrial | industrial | other | Total | Industrial | industrial | other | Total | ||||||||
($ in millions) | ($ in millions) |
Earnings (losses) before income taxes | $ | 88.0 | $ | 112.9 | $ | (13.8 | ) | $ | 187.1 | $ | 37.1 | $ | 20.4 | $ | 22.5 | $ | 80.0 | |||||||||||||
Less: net realized capital gains | 0.1 | (0.8) | - | (0.7) | (5.6) | 0.4 | (30.1) | (35.3) | ||||||||||||||||||||||
Add: amortization of intangible assets | 13.2 | 21.5 | - | 34.7 | 11.4 | 20.9 | - | 32.3 | ||||||||||||||||||||||
Adjusted earnings (losses) before income taxes | $ | 101.3 | $ | 133.6 | $ | (13.8 | ) | $ | 221.1 | $ | 42.9 | $ | 41.7 | $ | (7.6) | $ | 77.0 |
5
Attachments
- Original document
- Permalink
Disclaimer
Alleghany Corporation published this content on 04 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2021 20:16:13 UTC.
