Alleghany Corporation, parent company of TransRe, has reported an underwriting loss of $200 million for the third quarter, following a prior year period loss of $81 million.
The firm’s combined ratio rose to 110.8%, having previously been reported at 105.2% in Q3 2020.
Net premiums written increased 21.1%, with reinsurance (TransRe) up 19.9% and insurance up 25.3%.
TransRe’s combined ratio for the quarter was 116.3%, a considerable increase from the 102% reported this time last year.
This increased combined ratio is attributed to catastrophe losses which totalled $372 million in the third quarter.
$223 million of that figure is from Hurricane Ida, $106 million the result of European Floods and $37 million from severe weather in Europe and Asia.
Cat losses for the quarter also include $6 million of losses related to Winter Storm Uri and other storms.
TransRe’s catastrophe losses from the pandemic was $48 million, while Hurricane Laura drove an additional $48 million of losses.
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.
The reinsurer’s underwriting profits before cat and pandemic losses were $138 million for the quarter.
“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,” said Weston Hicks, Chief Executive Officer.
“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.”
“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.
“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.”