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$81mn Q3 underwriting loss pushes Alleghany’s CR to 105.2%

4th November 2020 - Author: Charlie Wood

Investment holding company Alleghany has produced an $81 million underwriting loss for the third quarter of 2020, pushing its combined ratio to 105.2%.

AlleghanyThe prior year quarter saw Alleghany achieve an underwriting profit of $33 million and a combined ratio of 97.6%.

Underwriting losses in the quarter were driven by a $270 million in cat hit and $51 million from the ongoing global pandemic.

Meanwhile, net premiums written increased 15.8%, thanks to generally improving rates overall, growth in various traditional casualty and other professional liability lines of business in the US and UK.

TransRe’s combined ratio was 102.0% for the third quarter, compared with 99.5% in 2019.

The higher combined ratio primarily reflects higher cat losses, with TransRe hit by a $48 million loss from the pandemic.

Alleghany Capital revenue increased 13.7% to $714 million for the third quarter, while its earnings before income taxes for the quarter were $70 million.

Net investment income decreased 12.5% to $129 million for the quarter, driven by a decline in fixed income investment yields.

“Alleghany grew book value per share 2.6% in the third quarter reflecting good investment performance and strong earnings from Alleghany Capital, partially offset by catastrophe driven underwriting losses,” said Weston Hicks, President and chief executive officer.

“Excluding the catastrophe losses, underlying underwriting performance at the (re)insurance subsidiaries was good, reflecting an ex-cat combined ratio of 87.9%.

“Alleghany Capital had a strong third quarter benefiting from a resumption of economic activity, strong seasonal order flow at Jazwares and easing of certain Pandemic-related restrictions across subsidiaries.

“Adjusted earnings before income taxes increased over 45% from the prior year quarter most significantly due to increased earnings at Jazwares and the inclusion of Wilbert in our results.”

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