Alleghany Corp. (Y) Tops Q4 EPS by 25c

Alleghany Corp. (NYSE: Y) reported Q4 EPS of $8.61, $0.25 better than the analyst estimate of $8.36.

Weston M. Hicks, President and chief executive officer, commented, “Our two largest franchises TransRe and RSUI both produced excellent underwriting results in the fourth quarter and in 2014 benefitted from a light property catastrophe loss year. These two businesses contributed to a consolidated combined ratio of 88.9% for the quarter compared with 90.6% for the fourth quarter of last year and 88.8% in 2014 compared with 90.1% for last year. Focusing on the longer-term, RSUI’s strong underwriting expertise and experience has helped produce a remarkable inception to date combined ratio of 81.8% over our 11-plus years of ownership. While we have owned TransRe for slightly less than three years, its results have also been impressive, producing a combined ratio of 90.1% over our ownership period while maintaining excellent customer relationships and a strong balance sheet.”

“Despite competitive headwinds, net premiums written were up 2.5% in the quarter aided by top line growth primarily in our reinsurance segment where TransRe benefitted from favorable signings with its clients, particularly in the property line of business. Net premiums written in the insurance segment in the fourth quarter of 2014 were flat compared to those of the fourth quarter of 2013, with continued top-line expansion at both PacificComp and CapSpecialty being offset by a decline in premium volume at RSUI as the company maintains underwriting discipline in a more competitive market, particularly in property lines. While we anticipate that PacificComp and CapSpecialty will continue to find opportunities to expand their current premium bases, our two major holdings will likely find top-line growth challenging in this environment.”

For earnings history and earnings-related data on Alleghany Corp. (Y) click here.

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