Exhibit 99.1

ALLEGHANY CORPORATION

7 Times Square Tower, 17^th Floor

New York, NY 10036

ALLEGHANY CORPORATION REPORTS 2012 SECOND QUARTER RESULTS:

STOCKHOLDERS’ EQUITY PER COMMON SHARE

INCREASES 8.4% SINCE 2011 YEAR-END

NEW YORK, NY, August 6, 2012 – Alleghany Corporation (NYSE-Y) reported stockholders’ equity per common share of $370.93 at June 30, 2012, an increase of 8.4% from stockholders’ equity per common share of $342.12 at 2011 year-end. Stockholders’ equity per common share as of June 30, 2012 reflects 8,360,959 shares issued in connection with the merger between Alleghany and Transatlantic Holdings, Inc., which closed on March 6, 2012.

Stockholders’ equity increased to approximately $6.3 billion as of June 30, 2012, compared with approximately $2.9 billion as of December 31, 2011, reflecting both the merger and Alleghany’s net earnings in the first six months of 2012. Alleghany’s results for the first six months of 2012 include Transatlantic’s operations subsequent to the closing date.

Alleghany’s cash and invested assets as of June 30, 2012 totaled approximately $18.5 billion, compared with $4.9 billion at December 31, 2011. Net premiums written for the second quarter of 2012 were $1,224 million, compared with $245 million for the second quarter of 2011. For the first six months of 2012, net premiums written totaled $1,658 million, compared with $411 million for the first six months of 2011.

Alleghany’s net earnings for the second quarter of 2012 were $109.3 million or $6.46 per common share (presented on a basic basis throughout), compared with $15.1 million, or $1.69 per common share for the second quarter of 2011. For the first six months of 2012, net earnings were $669.4 million or $48.03 per common share, compared with $86.4 million, or $9.69 per common share for the first six months of 2011. The first six months of 2012 include merger-related items associated with the purchase of Transatlantic, including a gain of $494.9 million resulting from the application of purchase accounting treatment, amortization of intangible assets of $140.0 million and transaction costs of $33.8 million.

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Alleghany’s pre-tax net earnings for the second quarter of 2012, before merger-related items, were $252.7 million, compared with $15.3 million in the second quarter of 2011. For the first six months of 2012, pre-tax net earnings, before merger-related items, were $434.6 million, compared with $105.6 million in the first six months of 2011. A summary of Alleghany’s pre-tax results for the three and six months ended June 30, 2012 and 2011 follows:

 

		Three Months ended June  30,												Six Months ended June 30,
(in millions)		2012				2011				Change				2012				2011				Change
Underwriting profit (loss):
Reinsurance		$	165.5			$	—			$	165.5			$	231.7			$	—			$	231.7
Insurance			10.4				(2.8	)			13.2				44.5				40.6				3.9
			175.9				(2.8	)			178.7				276.2				40.6				235.6
Net investment income			90.9				28.6				62.3				144.1				60.2				83.9
Net realized capital gains			39.4				6.5				32.9				107.5				41.2				66.3
Other than temporary impairment losses			(1.1	)			—				(1.1	)			(2.9	)			—				(2.9	)
Other income			9.3				0.2				9.1				9.6				1.1				8.5
Other operating expenses			(34.8	)			(7.9	)			(26.9	)			(50.5	)			(17.4	)			(33.1	)
Corporate administration			(11.1	)			(5.0	)			(6.1	)			(24.6	)			(11.4	)			(13.2	)
Interest expense			(15.8	)			(4.3	)			(11.5	)			(24.8	)			(8.7	)			(16.1	)
Net earnings before merger related items and income taxes		$	252.7			$	15.3			$	237.4			$	434.6			$	105.6			$	329.0
Merger-related items:
Gain on bargain purchase			—				—				—				494.9				—				494.9
Amortization of intangible assets*			(108.1	)			(0.8	)			(107.3	)			(140.0	)			(1.6	)			(138.4	)
Transaction costs			—				—				—				(33.8	)			—				(33.8	)
			(108.1	)			(0.8	)			(107.3	)			321.1				(1.6	)			322.7
Earnings before income taxes		$	144.6			$	14.5			$	130.1			$	755.7			$	104.0			$	651.7

 

*	Include immaterial amounts of ongoing amortization arising from the acquisition of subsidiaries other than Transatlantic.

Weston M. Hicks, President and chief executive officer, commented:

“Alleghany’s second quarter results demonstrated the benefit of owning a more diversified risk portfolio following the Transatlantic merger. In summary, solid underwriting results and strong fixed income performance during the quarter overcame a negative return on common equity investments to generate modest growth in Alleghany’s book value.”

“Transatlantic and RSUI produced favorable underwriting results in the second quarter. Transatlantic is performing well and is proving to be a great fit with the Alleghany family. RSUI continued to take advantage of improved market conditions by increasing its net premiums written by 15% during the quarter, with strong growth in both its property and casualty lines of business. Although Capitol Transamerica’s underwriting results were marred by an increase in loss reserves for a discontinued program, Capitol Transamerica’s continuing business produced a healthy underwriting margin and encouraging double-digit growth in premiums written.”

 

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“Having completed a $400 million senior debt offering in June, Alleghany is well-positioned for the future with over $800 million of corporate liquid assets and strongly capitalized operating subsidiaries with attractive books of business.”

Alleghany’s underwriting profit for the second quarter of 2012 was $175.9 million, compared with an underwriting loss of $2.8 million in the second quarter of 2011, reflecting the contribution of $165.5 million of underwriting profit from the reinsurance segment (comprised of Transatlantic’s operations), and to a lesser extent, an insurance segment underwriting profit in the second quarter of 2012, compared with an underwriting loss in the corresponding 2011 period. The reinsurance segment’s underwriting profit for the second quarter of 2012 was due primarily to the lack of large property losses and the favorable impact of purchase accounting on Transatlantic’s expense ratio. The insurance segment’s underwriting profit for the second quarter of 2012 was due primarily to strong second quarter performance at RSUI, including improved property market pricing, and the absence of adverse reserve development at PacificComp that was significant in the 2011 period, partially offset by the impact of higher net adverse reserve development at Capitol Transamerica. The insurance segment’s net written premium for the second quarter of 2012 increased by 14.8% to $280.8 million from the 2011 second quarter.

Alleghany’s combined ratio for the second quarter of 2012 was 83.9%, compared with 101.6% during the second quarter of 2011. For the second quarter of 2012, the reinsurance segment’s combined ratio was 81.5%, and the insurance segment’s combined ratio was 94.9%, compared with 101.6% during the second quarter of 2011.

Alleghany’s underwriting profit for the first six months of 2012 was $276.2 million, compared with $40.6 million in the first six months of 2011. The increase reflects the contribution of $231.7 million of underwriting profit from the reinsurance segment during the 116-day period of Alleghany’s ownership of Transatlantic, and to a lesser extent, an increase in the insurance segment’s underwriting profit.

The reinsurance segment’s underwriting profit for the first six months of 2012 was due primarily to the lack of large property losses and the favorable impact of purchase accounting on Transatlantic’s expense ratio. The insurance segment’s underwriting profit for the first six months of 2012 was due primarily to strong performance at RSUI, including improved property market pricing, and the absence of adverse reserve development at PacificComp that was significant in the 2011 period, partially offset by the impact of higher adverse reserve development at Capitol Transamerica. The insurance segment’s net written premium for the first six months of 2012 increased by 16.4% to $478.7 million from the first six months of 2011.

Alleghany’s combined ratio for the first six months of 2012 was 82.0%, compared with 88.9% during the first six months of 2011. For the six months of 2012, the reinsurance segment’s combined ratio was 79.6%, and the insurance segment’s combined ratio was 88.7%, compared with 88.9% during the first six months of 2011.

Alleghany’s net investment income for the second quarter and first six months of 2012 was $90.9 million and $144.1 million, respectively, an increase of 218% and 139% over the corresponding 2011

 

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periods, reflecting the addition of Transatlantic’s investment portfolio. The interest income earned on Transatlantic’s fixed income portfolio is net of a significant increase to amortization expense resulting from the write-up of the portfolio’s amortized cost basis to its fair value as of the acquisition date. This increased amortization expense reduced Transatlantic’s reported net investment income, compared with Transatlantic’s net investment income prior to the merger. Alleghany’s investment portfolio, excluding other invested assets, was $17.7 billion at June 30, 2012. The total return on the investment portfolio, excluding other invested assets, for the first six months of 2012 was 2.6%, including returns of 1.7% on the fixed income portfolio and 1.6% on the equity portfolio. The equity portfolio return compares with a 9.5% total return for the S&P 500 for the first six months of 2012. The total portfolio return exceeds the fixed income and equity returns due to favorable asset allocation shifts.

Additional information regarding Alleghany’s 2012 second quarter and year-to-date results, including management’s discussion and analysis of Alleghany’s financial condition and results of operations, is contained in Alleghany’s Quarterly Report on Form 10-Q for the period ended June 30, 2012, to be filed with the U.S. Securities and Exchange Commission (the “SEC”) on or about the date hereof. The Form 10-Q will be available on Alleghany’s website at www.alleghany.com and on the SEC’s website at www.sec.gov. Readers are urged to review the Form 10-Q for a more complete discussion of Alleghany’s financial performance.

About Alleghany Corporation

Alleghany Corporation (NYSE-Y) creates stockholder value through the ownership and management of operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. Alleghany’s property and casualty subsidiaries include: Transatlantic Holdings, Inc., a leading global reinsurance organization headquartered in New York; RSUI Group, Inc., a national underwriter of specialty property and liability insurance coverages; Capitol Transamerica Corporation, an underwriter of specialty property, casualty and surety insurance coverages; and Pacific Compensation Corporation, an underwriter of workers’ compensation insurance primarily in California.

Comment on Regulation G

Throughout this press release, Alleghany’s results of operations have been presented in the way that Alleghany believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use financial information in evaluating the performance of Alleghany. This presentation includes the use of underwriting profit, which is a “non-GAAP financial measure,” as such term is defined in Regulation G promulgated by the SEC. Underwriting profit represents net premiums earned less net loss and loss adjustment expense and commissions, brokerage and other underwriting expenses, all as determined in accordance with U.S. GAAP, and does not include net investment income, net realized capital gains, other than temporary impairment losses, other income, other operating expenses, amortization of intangible assets and interest expense. Alleghany consistently uses underwriting profit as a supplement to earnings before income taxes, the most comparable U.S. GAAP financial measure, to evaluate the performance of its segments and believes that underwriting profit provides useful additional information to investors because it highlights net earnings attributable to a segment’s underwriting performance. Earnings before income taxes may show a profit despite an underlying underwriting loss, and when underwriting losses persist over

 

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extended periods, a reinsurance or insurance company’s ability to continue as an ongoing concern may be at risk. However, underwriting profit is not meant to be considered in isolation or as a substitute for earnings before income taxes or any other measures of operating performance prepared in accordance with U.S. GAAP. A reconciliation of underwriting profit to earnings before income taxes is presented in the schedules included herein.

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Forward-looking Statements

This release contains disclosures which are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are based upon Alleghany’s current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and Alleghany’s future financial condition and results. These statements are not guarantees of future performance, and Alleghany has no specific intention to update these statements. The uncertainties and risks include, but are not limited to,

 

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significant weather-related or other natural or human-made catastrophes and disasters;

 

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the cyclical nature of the property and casualty reinsurance and insurance industries;

 

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changes in market prices of our significant equity investments and changes in value of Alleghany’s debt securities portfolio;

 

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adverse loss development for events insured by Alleghany’s reinsurance and insurance operating units in either the current year or prior years;

 

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the long-tail and potentially volatile nature of certain casualty lines of business written by Alleghany’s reinsurance and insurance operating units;

 

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the cost and availability of reinsurance;

 

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exposure to terrorist acts and acts of war;

 

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the willingness and ability of Alleghany’s reinsurance and insurance operating units’ reinsurers to pay reinsurance recoverables owed to its reinsurance and insurance operating units;

 

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changes in the ratings assigned to Alleghany’s reinsurance and insurance operating units;

 

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claims development and the process of estimating reserves;

 

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legal, political, judicial and regulatory changes, including the federal financial regulatory reform of the insurance industry by the Dodd-Frank Wall Street Reform and Consumer Protection Act;

 

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the uncertain nature of damage theories and loss amounts;

 

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the reliance by Alleghany’s reinsurance operating units on a limited number of brokers;

 

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increases in the levels of risk retention by Alleghany’s reinsurance and insurance operating units;

 

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the loss of key personnel;

 

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fluctuation in foreign currency exchange rates;

 

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risks associated with Alleghany’s failure to comply with the restrictive covenants contained in the agreements governing its indebtedness;

 

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risks associated with Alleghany’s ability to make payments on, or repay or refinance, its debt;

 

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•

risks associated with Alleghany’s ability to successfully integrate Transatlantic’s operations and employees; and

 

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risks inherent in international operations.

Additional risks and uncertainties include general economic and political conditions, including the effects of a prolonged U.S. or global economic downturn or recession; changes in costs; variations in political, economic or other factors; risks relating to conducting operations in a competitive environment; effects of acquisition and disposition activities, inflation rates, or recessionary or expansive trends; changes in interest rates; extended labor disruptions, civil unrest, or other external factors over which Alleghany has no control; and changes in Alleghany’s plans, strategies, objectives, expectations, or intentions, which may happen at any time at its discretion. As a consequence, current plans, anticipated actions, and future financial condition and results may differ from those expressed in any forward-looking statements made by Alleghany or on its behalf.

For more information, please contact:

Jeff Majtyka/Mike Smargiassi

Brainerd Communicators, Inc.

212-986-6667

 

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ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

 

		June 30, 2012				December 31, 2011
		(unaudited)
		(in thousands, except share amounts)
Assets
Investments:
Available-for-sale securities at fair value:
Equity securities (cost: 2012 – $1,046,323; 2011 – $775,741)		$	1,047,070			$	870,950
Debt securities (amortized cost: 2012 – $15,372,156; 2011 – $2,538,872)			15,596,786				2,679,528
Short-term investments			1,023,144				1,096,517
			17,667,000				4,646,995
Other invested assets			433,930				179,815
Total investments			18,100,930				4,826,810
Cash			404,615				84,749
Accrued investment income			163,893				28,879
Premium balances receivable			762,145				147,006
Reinsurance recoverables			1,292,878				852,845
Ceded unearned premiums			171,054				142,946
Deferred acquisition costs			225,385				70,537
Property and equipment at cost, net of accumulated depreciation and amortization			31,541				17,906
Goodwill			82,495				48,095
Intangible assets, net of amortization			275,076				90,863
Current taxes receivable			69,356				—
Net deferred tax assets			500,076				80,975
Other assets			339,248				86,478
		$	22,418,692			$	6,478,089
Liabilities and Stockholders’ Equity
Loss and loss adjustment expenses		$	11,720,944			$	2,313,035
Unearned premiums			1,848,558				549,740
Senior Notes			1,819,825				299,035
Reinsurance payable			95,189				45,462
Current taxes payable			—				16,247
Other liabilities			654,051				328,893
Total liabilities			16,138,567				3,552,412
Common stock (shares authorized: 2012 and 2011 – 22,000,000; issued 2012 – 17,478,746; 2011 – 9,117,787)			17,479				9,118
Contributed capital			3,626,571				938,037
Accumulated other comprehensive income			139,031				155,532
Treasury stock, at cost (2012 – 547,953 shares; 2011 – 566,141 shares)			(161,944	)			(167,319	)
Retained earnings			2,658,988				1,990,309
Total stockholders’ equity			6,280,125				2,925,677
		$	22,418,692			$	6,478,089

 

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ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings and Comprehensive Income

(unaudited)

 

		Three Months Ended June 30,
		2012				2011
		(in thousands, except per share amounts)
Revenues
Net premiums earned		$	1,095,932			$	183,878
Net investment income			90,860				28,545
Net realized capital gains			39,452				6,490
Other than temporary impairment losses			(1,129	)			—
Gain on bargain purchase			—				—
Other income			9,276				248
Total revenues			1,234,391				219,161
Costs and Expenses
Net loss and loss adjustment expenses			680,885				122,619
Commissions, brokerage and other underwriting expenses			239,193				64,132
Other operating expenses			34,826				7,834
Corporate administration			11,094				5,002
Amortization of intangible assets			108,098				839
Interest expense			15,743				4,268
Total costs and expenses			1,089,839				204,694
Earnings before income taxes			144,552				14,467
Income taxes			35,243				(615	)
Net earnings		$	109,309			$	15,082
Other comprehensive income:
Change in unrealized gains, net of deferred taxes of $14,257 and $(13,154) for 2012 and 2011, respectively			26,477				(24,428	)
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of $(13,413) and $(2,271) for 2012 and 2011, respectively			(24,910	)			(4,218	)
Change in unrealized currency translation adjustment, net of deferred taxes of $(8,012) and $0 for 2012 and 2011, respectively			(14,880	)			—
Retirement plans			(14	)			(50	)
Comprehensive income		$	95,982			$	(13,614	)
Basic earnings per share*		$	6.46			$	1.69
Diluted earnings per share*			6.45				1.68

 

*	2011 amounts reflect subsequent common stock dividends.

 

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ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings and Comprehensive Income

(unaudited)

 

		Six Months Ended June 30,
		2012				2011
		(in thousands, except per share amounts)
Revenues
Net premiums earned		$	1,530,139			$	364,858
Net investment income			144,054				60,124
Net realized capital gains			107,441				41,182
Other than temporary impairment losses			(2,907	)			—
Gain on bargain purchase			494,940				—
Other income			9,591				1,133
Total revenues			2,283,258				467,297
Costs and Expenses
Net loss and loss adjustment expenses			914,831				193,641
Commissions, brokerage and other underwriting expenses			339,053				130,660
Other operating expenses			50,478				17,241
Corporate administration			58,387				11,381
Amortization of intangible assets			140,037				1,678
Interest expense			24,820				8,720
Total costs and expenses			1,527,606				363,321
Earnings before income taxes			755,652				103,976
Income taxes			86,240				17,554
Net earnings		$	669,412			$	86,422
Other comprehensive income:
Change in unrealized gains, net of deferred taxes of $34,402 and $40,295 for 2012 and 2011, respectively			63,889				74,834
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of $(36,587) and $(14,414) for 2012 and 2011, respectively			(67,947	)			(26,768	)
Change in unrealized currency translation adjustment, net of deferred taxes of $(6,282) and $0 for 2012 and 2011, respectively			(11,667	)			—
Retirement plans			(774	)			(179	)
Comprehensive income		$	652,913			$	134,309
Basic earnings per share*		$	48.03			$	9.69
Diluted earnings per share*			47.96				9.66

 

*	2011 amounts reflect subsequent common stock dividends.

 

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Alleghany Corporation and Subsidiaries

Cash and Investments

(in millions)

 

		June 30, 2012				December 31, 2011
Equity securities:
Common stock		$	1,047.1			$	871.0
Preferred stock			—				—
Total equity securities			1,047.1				871.0
Debt securities:
U.S. Government obligations			528.6				267.8
Municipal bonds			6,602.3				1,113.6
Foreign government obligations			824.2				—
U.S. corporate bonds			3,040.9				354.1
Foreign corporate bonds			1,944.9				83.5
Mortgage and asset-backed securities:
Residential mortgage-backed securities			1,978.7				497.3
Commercial mortgage-backed securities			427.8				144.7
Other asset-backed securities			249.4				218.5
Total debt securities			15,596.8				2,679.5
Other invested assets:
Equity method investments			196.6				129.8
Partnership investments			206.7				23.6
Other			30.6				26.4
			433.9				179.8
Short-term investments			1,023.1				1,096.5
Total investments			18,100.9				4,826.8
Cash			404.6				84.7
Total cash and investments		$	18,505.5			$	4,911.5

 

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Alleghany Corporation and Subsidiaries

Net Investment Income

(in millions)

 

		For the Three Months Ended June 30,
		2012				2011
Interest income		$	88.9			$	25.5
Dividends			4.3				10.5
Equity in income (losses) of Homesite			(2.2	)			(6.6	)
Equity in income (losses) of ORX			(1.5	)			(1.2	)
Other investment income (losses)			6.4				1.8
Total investment income			95.9				30.0
Investment expenses			(5.0	)			(1.4	)
Net investment income		$	90.9			$	28.6
		For the Six Months Ended June 30,
		2012				2011
Interest income		$	130.0			$	51.0
Dividends			6.2				20.3
Equity in income (losses) of Homesite			12.4				(7.1	)
Equity in income (losses) of ORX			(3.3	)			(2.2	)
Other investment income (losses)			6.6				1.4
Total investment income			151.9				63.4
Investment expenses			(7.8	)			(3.2	)
Net investment income		$	144.1			$	60.2

 

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Alleghany Corporation and Subsidiaries

Premiums Written

(in millions)

 

		For the Three Months Ended June 30,
		Gross Premiums Written																Net Premiums Written
		2012				2011				Change				% Change				2012				2011				Change				% Change
Reinsurance segment:
Property		$	307.8			$	—			$	307.8				NM			$	296.9			$	—			$	296.9				NM
Casualty and Other			656.5				—				656.5				NM				646.0				—				646.0				NM
			964.3				—				964.3				NM				942.9				—				942.9				NM
Insurance segment:
RSUI			365.2				320.7				44.5				13.9	%			237.7				206.6				31.1				15.1	%
CATA			41.7				38.6				3.1				8.0	%			39.4				36.2				3.2				8.8	%
PCC			3.6				0.7				2.9				414.3	%			3.7				1.8				1.9				105.6	%
			410.5				360.0				50.5				14.0	%			280.8				244.6				36.2				14.8	%
Intercompany elimination			(5.8	)			—				(5.8	)			NM				—				—				—
Total		$	1,369.0			$	360.0			$	1,009.0				NM			$	1,223.7			$	244.6			$	979.1				NM

 

		For the Six Months Ended June 30,
		Gross Premiums Written																Net Premiums Written
		2012				2011				Change				% Change				2012				2011				Change				% Change
Reinsurance segment:
Property		$	378.9			$	—			$	378.9				NM			$	360.6			$	—			$	360.6				NM
Casualty and Other			831.5				—				831.5				NM				818.6				—				818.6				NM
			1,210.4				—				1,210.4				NM				1,179.2				—				1,179.2				NM
Insurance segment:
RSUI			612.5				532.9				79.6				14.9	%			396.6				337.4				59.2				17.5	%
CATA			80.2				76.2				4.0				5.2	%			75.7				71.6				4.1				5.7	%
PCC			6.3				1.1				5.2				472.7	%			6.4				2.2				4.2				190.9	%
			699.0				610.2				88.8				14.6	%			478.7				411.2				67.5				16.4	%
Intercompany elimination			(7.0	)			—				(7.0	)			NM				—				—				—
Total		$	1,902.4			$	610.2			$	1,292.2				NM			$	1,657.9			$	411.2			$	1,246.7				NM

 

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Alleghany Corporation and Subsidiaries

Underwriting Results

For the Three Months Ended June 30, 2012

(in millions)

 

		Reinsurance Segment												Insurance Segment
						Casualty &																								Total				Corporate
		Property				Other				Total				RSUI				CATA				PCC				Total				Segments				Activities				Consolidated
Premiums written:
Gross		$	307.8			$	656.5			$	964.3			$	365.2			$	41.7			$	3.6			$	410.5			$	1,374.8			$	(5.8	)		$	1,369.0
Net			296.9				646.0				942.9				237.7				39.4				3.7				280.8				1,223.7				—				1,223.7
Net premiums earned		$	272.8			$	620.5			$	893.3			$	163.9			$	35.6			$	3.1			$	202.6			$	1,095.9			$	—			$	1,095.9
Net loss and LAE:
Current year			94.0				466.8				560.8				86.1				17.0				2.3				105.4				666.2				—				666.2
Prior years			—				—				—				5.6				8.4				0.7				14.7				14.7				—				14.7
			94.0				466.8				560.8				91.7				25.4				3.0				120.1				680.9				—				680.9
Commissions, brokerage and other underwriting expenses			57.6				109.4				167.0				45.8				19.6				6.7				72.1				239.1				—				239.1
Underwriting profit (loss)		$	121.2			$	44.3			$	165.5			$	26.4			$	(9.4	)		$	(6.6	)		$	10.4				175.9				—				175.9
Net investment income																															95.3				(4.4	)			90.9
Net realized capital gains																															39.4				—				39.4
OTTI losses																															(1.1	)			—				(1.1	)
Gain on bargain purchase																															—				—				—
Other income																															0.7				8.6				9.3
Other operating expenses																															23.7				11.1				34.8
Corporate administration																															—				11.1				11.1
Amortization of intangible assets																															108.1				—				108.1
Interest expense																															11.1				4.7				15.8
Earnings before income taxes																														$	167.3			$	(22.7	)		$	144.6
Ratios:
Net loss and LAE
Current year			34.5	%			75.2	%			62.8	%			52.5	%			47.8	%			74.2	%			52.0	%			60.8	%
Prior years			0.0	%			0.0	%			0.0	%			3.4	%			23.5	%			22.9	%			7.3	%			1.3	%
			34.5	%			75.2	%			62.8	%			55.9	%			71.3	%			97.1	%			59.3	%			62.1	%
Expense			21.1	%			17.6	%			18.7	%			27.9	%			55.1	%			215.8	%			35.6	%			21.8	%
Combined			55.6	%			92.8	%			81.5	%			83.8	%			126.4	%			312.9	%			94.9	%			83.9	%

 

13

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Alleghany Corporation and Subsidiaries

Underwriting Results

For the Three Months Ended June 30, 2011

(in millions)

 

		Reinsurance Segment												Insurance Segment
						Casualty &																								Total				Corporate
		Property				Other				Total				RSUI				CATA				PCC				Total				Segments				Activities				Consolidated
Premiums written:
Gross		$	—			$	—			$	—			$	320.7			$	38.6			$	0.7			$	360.0			$	360.0			$	—			$	360.0
Net			—				—				—				206.6				36.2				1.8				244.6				244.6				—				244.6
Net premiums earned		$	—			$	—			$	—			$	144.4			$	37.9			$	1.6			$	183.9			$	183.9			$	—			$	183.9
Net loss and LAE:
Current year			—				—				—				97.6				19.8				0.6				118.0				118.0				—				118.0
Prior years			—				—				—				(13.6	)			2.7				15.5				4.6				4.6				—				4.6
			—				—				—				84.0				22.5				16.1				122.6				122.6				—				122.6
Commissions, brokerage and other underwriting expenses			—				—				—				40.9				17.1				6.1				64.1				64.1				—				64.1
Underwriting profit (loss)		$	—			$	—			$	—			$	19.5			$	(1.7	)		$	(20.6	)		$	(2.8	)			(2.8	)			—				(2.8	)
Net investment income																															31.0				(2.4	)			28.6
Net realized capital gains																															6.5				—				6.5
OTTI losses																															—				—				—
Gain on bargain purchase																															—				—				—
Other income																															0.1				0.1				0.2
Other operating expenses																															6.5				1.4				7.9
Corporate administration																															—				5.0				5.0
Amortization of intangible assets																															0.8				—				0.8
Interest expense																															—				4.3				4.3
Earnings before income taxes																														$	27.5			$	(13.0	)		$	14.5
Ratios:
Net loss and LAE
Current year															67.6	%			52.4	%			37.3	%			64.2	%			64.2	%
Prior years															-9.4	%			7.1	%			968.8	%			2.5	%			2.5	%
															58.2	%			59.5	%			1006.1	%			66.7	%			66.7	%
Expense															28.3	%			45.1	%			386.6	%			34.9	%			34.9	%
Combined															86.5	%			104.6	%			1392.7	%			101.6	%			101.6	%

 

14

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Alleghany Corporation and Subsidiaries

Underwriting Results

For the Six Months Ended June 30, 2012

(in millions)

 

		Reinsurance Segment																Insurance Segment
		Property				Casualty & Other				Total				RSUI				CATA				PCC				Total				Total Segments				Corporate Activities				Consolidated
Premiums written:
Gross		$	378.9			$	831.5			$	1,210.4			$	612.5			$	80.2			$	6.3			$	699.0			$	1,909.4			$	(7.0	)		$	1,902.4
Net			360.6				818.6				1,179.2				396.6				75.7				6.4				478.7				1,657.9				—				1,657.9
Net premiums earned		$	338.9			$	797.5			$	1,136.4			$	317.8			$	70.3			$	5.6			$	393.7			$	1,530.1			$	—			$	1,530.1
Net loss and LAE:
Current year			111.8				596.7				708.5				168.8				34.0				4.2				207.0				915.5				—				915.5
Prior years			—				—				—				(12.0	)			9.9				1.4				(0.7	)			(0.7	)			—				(0.7	)
			111.8				596.7				708.5				156.8				43.9				5.6				206.3				914.8				—				914.8
Commissions, brokerage and other underwriting expenses			65.7				130.5				196.2				90.6				38.9				13.4				142.9				339.1				—				339.1
Underwriting profit (loss)		$	161.4			$	70.3			$	231.7			$	70.4			$	(12.5	)		$	(13.4	)		$	44.5				276.2				—				276.2
Net investment income																															136.0				8.1				144.1
Net realized capital gains																															68.8				38.7				107.5
OTTI losses																															(2.9	)			—				(2.9	)
Gain on bargain purchase																															—				494.9				494.9
Other income																															1.0				8.6				9.6
Other operating expenses																															37.5				13.0				50.5
Corporate administration																															—				58.4				58.4
Amortization of intangible assets																															140.0				—				140.0
Interest expense																															15.8				9.0				24.8
Earnings before income taxes																														$	285.8			$	469.9			$	755.7
Ratios:
Net loss and LAE
Current year			33.0	%			74.8	%			62.3	%			53.1	%			48.4	%			75.0	%			52.6	%			59.8	%
Prior years			0.0	%			0.0	%			0.0	%			-3.8	%			14.2	%			24.4	%			-0.2	%			0.0	%
			33.0	%			74.8	%			62.3	%			49.3	%			62.6	%			99.4	%			52.4	%			59.8	%
Expense			19.4	%			16.4	%			17.3	%			28.5	%			55.2	%			239.1	%			36.3	%			22.2	%
Combined			52.4	%			91.2	%			79.6	%			77.8	%			117.8	%			338.5	%			88.7	%			82.0	%

 

15

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Alleghany Corporation and Subsidiaries

Underwriting Results

For the Six Months Ended June 30, 2011

(in millions)

 

		Reinsurance Segment																Insurance Segment
		Property				Casualty & Other				Total				RSUI				CATA				PCC				Total				Total Segments				Corporate Activities				Consolidated
Premiums written:
Gross		$	—			$	—			$	—			$	532.9			$	76.2			$	1.1			$	610.2			$	610.2			$	—			$	610.2
Net			—				—				—				337.4				71.6				2.2				411.2				411.2				—				411.2
Net premiums earned		$	—			$	—			$	—			$	286.0			$	77.1			$	1.7			$	364.8			$	364.8			$	—			$	364.8
Net loss and LAE:
Current year			—				—				—				166.8				40.6				0.7				208.1				208.1				—				208.1
Prior years			—				—				—				(31.6	)			1.0				16.1				(14.5	)			(14.5	)			—				(14.5	)
			—				—				—				135.2				41.6				16.8				193.6				193.6				—				193.6
Commissions, brokerage and other underwriting expenses			—				—				—				82.3				36.5				11.8				130.6				130.6				—				130.6
Underwriting profit (loss)		$	—			$	—			$	—			$	68.5			$	(1.0	)		$	(26.9	)		$	40.6				40.6				—				40.6
Net investment income																															61.2				(1.0	)			60.2
Net realized capital gains																															41.2				—				41.2
OTTI losses																															—				—				—
Gain on bargain purchase																															—				—				—
Other income																															0.3				0.8				1.1
Other operating expenses																															15.6				1.8				17.4
Corporate administration																															—				11.4				11.4
Amortization of intangible assets																															1.6				—				1.6
Interest expense																															—				8.7				8.7
Earnings before income taxes																														$	126.1			$	(22.1	)		$	104.0
Ratios:
Net loss and LAE
Current year															58.3	%			52.7	%			41.2	%			57.0	%			57.0	%
Prior years															-11.0	%			1.2	%			951.1	%			-4.0	%			-4.0	%
															47.3	%			53.9	%			992.3	%			53.1	%			53.1	%
Expense															28.8	%			47.4	%			697.2	%			35.8	%			35.8	%
Combined															76.1	%			101.3	%			1689.6	%			88.9	%			88.9	%

 

16