Alleghany Corporation reported a combined ratio of 99% for the first quarter of 2021 compared to 101.7% in the year-ago period, partly aided by a $ 5 million underwriting profit at TransRe despite the impact of the US winter storms and pandemic .
Overall, Alleghany has announced sales growth of 79% to around USD 2.7 billion for the first quarter of 2021, while net written premiums rose by 14.4% to around USD 1.8 billion and the investment result increased by more than 37%. improved to $ 153.5 million.
The airline posted an underwriting profit of $ 16.7 million across all businesses compared to a loss of $ 24.4 million in the same period last year. and net income attributable to Alleghany shareholders of $ 230 million compared to a loss of $ 361.2 million in the first quarter of 2020.
TransRe, Alleghany’s reinsurance business, posted net premium growth of 15.2% year over year to approximately $ 1.4 billion.
The company attributes this growth to general price improvements across the board, growth in various U.S. professional debt and agricultural businesses, and to a lesser extent the effects of changes in foreign exchange rates. However, the increases here were somewhat offset by declines in shorter rear accident lines including automobile, accident and health.
TransRe posted an underwriting profit of $ 5 million in the first quarter of 2021 compared to a loss of $ 78.9 million in the same period last year, representing a combined ratio of 99.6% compared to 107% in the first quarter of 2020.
Alleghany attributes the improvement in the TransRe combination ratio to lower losses in both natural disasters and the pandemic.
In the first quarter of 2021, TransRe suffered $ 100 million in winter storm losses and $ 18 million in pandemic losses, bringing TransRe’s total pandemic loss since inception to $ 410 million.
Excluding the impact of disasters and the pandemic, TransRe’s underwriting profit reached $ 123 million in the first quarter of 2021, a year-over-year growth of 31.5%.
Within Alleghany’s insurance business, net written premiums increased 11.5% to $ 359.9 million in the first quarter of 2021, reflecting growth at both RSUI and CapSpecialty.
Overall, the underwriting result for the insurance segment declined from a profit of $ 54.5 million in the first quarter of 2020 to a profit of $ 11.7 million in the first quarter of 2021.
At RSUI, net written premiums increased 11.5% as the combined ratio decreased from 75.8% to 96%, primarily driven by increased catastrophe claims of $ 80 million from the winter storms.
The net written premiums of CapSpecialty increased by 11.8% in the first quarter of 2021 as the combined ratio improved from 101.3% to 99.6%.
Weston Hicks, Alleghany’s chief executive officer (CEO) commented, “Alleghany posted net income of over $ 230 million, or $ 16.37 per share, for the quarter, with our businesses performing well in an improving economic environment and continued to have favorable re / insurance market conditions and the benefit of strong investment income. However, book value per share remained unchanged in the first quarter of 2021 as unrealized bond losses offset our solid operating performance. “
Joe Brandon, President added, “Each of our reinsurance companies posted double-digit net premium growth driven by continued broad-based rate hikes and posted modest underwriting profit despite a total of $ 181 million in catastrophe losses related to winter storm Uri and related storms. Underwriting profit excluding catastrophe and pandemic losses was $ 216 million, up 37% from the first quarter last year.
“Alleghany Capital had an excellent first quarter with strong earnings from W&W | AFCO Steel, IPS and Wilbert. After twelve months, Alleghany Capital’s pre-tax adjusted profit continues to grow and now exceeds $ 195 million.
“Looking ahead, we continue to see encouraging momentum in our businesses, which is reflected in continued rate increases and strong, profitable growth in our re / insurance businesses, as well as the breadth of current projects, backlogs and order flows at Alleghany Capital.”