Investment holding company Alleghany Corporation has seen net premiums written for its reinsurance business TransRe decrease 9.1% in the second quarter of 2022.
At the same time net premiums written for H122 decreased 5.9% compared to the same period last year, primarily related to decreases in property lines of business.
Trans Re’s combined ratio for the second quarter was 92.9%, compared to 91.1% from the second quarter of 2021, which primarily reflected the impact of higher commission rates and less favourable prior accident year loss and LAE reserve development.
However, Trans Re’s combined ratio for H122 was 93.4%, compared to 95% from H121.
At the same time, TransRe’s current year catastrophe losses in Q2 22 and H122 were $27 million and $75 million, respectively. The company reported that catastrophe losses in the second quarter and first six months included $9 million and $44 million, respectively, from the ongoing conflict between Russia and Ukraine and $18 million and $31 million, respectively, from Australian floods.
Additionally, the insurance segment has reported a 17.2% and 18.8% increase in net premiums written in both Q2 22 and H122, respectively.
Meanwhile, underwriting profit for Alleghany Corporation for Q2 22 was $165 million, compared to an underwriting profit of $174 million from Q2 21.
Furthermore, net investment income decreased 16.9% to $106 million for the quarter, compared to $127 million from the prior year quarter.
Joe Brandon, President and Chief Executive Officer, commented: “Alleghany produced good underwriting and operating results in the second quarter and first half of the year, generating adjusted earnings of $233 million and $487 million, respectively. However, consistent with overall financial markets in the first six months of this year, these operating results were overtaken by (mostly unrealized) losses on our bond and stock portfolios. Consequently, book value per share decreased by 13% from the start of the year to $587.62.
“During the second quarter, our re/insurance businesses generated an underwriting profit of $165 million and a combined ratio of 90.4%, reflecting continued rate increases and attractive new business opportunities. RSUI grew net premiums written by 21.5% in the second quarter, reflecting strong rate growth and new business opportunities, and generated an underwriting profit of $82 million and a combined ratio of 77.4%.
“Excluding a large quota share treaty TransRe elected not to renew at the end of 2021, TransRe’s casualty and specialty net premiums written grew by 14.6%, while its property business declined by 17.2% as it continued to reshape its property catastrophe portfolio. Despite continued global catastrophe losses, TransRe produced $88 million of underwriting profit and a 92.9% combined ratio in the second quarter.
“Alleghany Capital delivered 60% revenue growth and adjusted earnings before income taxes of $119 million in the quarter. Growth was driven predominantly by Jazwares and IPS. Alleghany Capital’s operating companies are experiencing strong order flow and are positioned to continue to grow.
“We are pleased with the operating performance of our businesses in the first half of 2022 and look forward to becoming part of Berkshire Hathaway later this year, subject to satisfaction of customary closing conditions.”