Alleghany Corporation’s third-quarter 2019 operating earnings of $7.61 per share beat the Zacks Consensus Estimate by 25.2% on the back of higher revenues. In the year-ago quarter, the company had incurred a loss of $1.07 per share.
Alleghany Corporation Price, Consensus and EPS Surprise
Operational Update
Revenues in the quarter declined 0.8% year over year to $2.2 billion.
Net premiums written rose 14.1% year over year to $1.4 billion, attributable to growth in gross premiums written in the recent quarters.
Net investment income came in at $148 million in the quarter, up 16.1% year over year. The upside was driven by higher interest income, partially offset by lower dividend income.
Total costs and expenses escalated 11.1% to $2 billion.
Segment Update
Reinsurance Segment: Net premiums written increased 12.8% to $1.1 billion owing to TransRe’s purchase of the renewal rights to a block of U.S. treaty reinsurance business, partially offset by a decrease in net premiums written related to a certain large whole account quota share treaty and the impact of changes in foreign currency exchange rates.
The segment's underwriting profit was $6 million against underwriting loss of $172.4 million reported in the year-ago quarter. Also, its third-quarter combined ratio contracted 1840 basis points (bps) to 99.5%, primarily due to significantly lower net catastrophe losses.
Insurance Segment: Net premiums written rose 19% year over year to $302.2 million driven by robust contribution from CapSpecialty and RSUI.
Underwriting profit of $26.8 million declined 17.3% year over year. The combined ratio of this reported segment increased 320 bps to 90.9% due to lower favorable prior accident year loss reserve development, partially offset by lower catastrophe losses.
Financial Update
Alleghany exited the third quarter with $897.5 million cash, down 13.6% from the figure at 2018 end.
Senior notes and other debt increased 1.6% from the level at 2018 end to $1.7 billion.
Alleghany’s shareholder equity at the end of the third quarter increased 14.8% from the level as of Dec 31, 2018 to $8.8 billion.
Book value per share was $612.87 as of Sep 30, 2019, up 16.1% from the level as of Dec 31, 2018.
Share Repurchase Update
As of Sep 30, 2019, the company had $659 million remaining under its share repurchase authorization.
Zacks Rank
Alleghany currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Insurance Releases
Of the insurance industry players that have reported third-quarter results so far, Reinsurance Group of America (RGA - Free Report) , Brighthouse Financial Inc. (BHF - Free Report) and CNA Financial Corporation (CNA - Free Report) beat the respective Zacks Consensus Estimate for earnings.
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Alleghany Corporation’s third-quarter 2019 operating earnings of $7.61 per share beat the Zacks Consensus Estimate by 25.2% on the back of higher revenues. In the year-ago quarter, the company had incurred a loss of $1.07 per share.
Alleghany Corporation Price, Consensus and EPS Surprise
Operational Update
Revenues in the quarter declined 0.8% year over year to $2.2 billion.
Net premiums written rose 14.1% year over year to $1.4 billion, attributable to growth in gross premiums written in the recent quarters.
Net investment income came in at $148 million in the quarter, up 16.1% year over year. The upside was driven by higher interest income, partially offset by lower dividend income.
Total costs and expenses escalated 11.1% to $2 billion.
Segment Update
Reinsurance Segment: Net premiums written increased 12.8% to $1.1 billion owing to TransRe’s purchase of the renewal rights to a block of U.S. treaty reinsurance business, partially offset by a decrease in net premiums written related to a certain large whole account quota share treaty and the impact of changes in foreign currency exchange rates.
The segment's underwriting profit was $6 million against underwriting loss of $172.4 million reported in the year-ago quarter. Also, its third-quarter combined ratio contracted 1840 basis points (bps) to 99.5%, primarily due to significantly lower net catastrophe losses.
Insurance Segment: Net premiums written rose 19% year over year to $302.2 million driven by robust contribution from CapSpecialty and RSUI.
Underwriting profit of $26.8 million declined 17.3% year over year. The combined ratio of this reported segment increased 320 bps to 90.9% due to lower favorable prior accident year loss reserve development, partially offset by lower catastrophe losses.
Financial Update
Alleghany exited the third quarter with $897.5 million cash, down 13.6% from the figure at 2018 end.
Senior notes and other debt increased 1.6% from the level at 2018 end to $1.7 billion.
Alleghany’s shareholder equity at the end of the third quarter increased 14.8% from the level as of Dec 31, 2018 to $8.8 billion.
Book value per share was $612.87 as of Sep 30, 2019, up 16.1% from the level as of Dec 31, 2018.
Share Repurchase Update
As of Sep 30, 2019, the company had $659 million remaining under its share repurchase authorization.
Zacks Rank
Alleghany currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Insurance Releases
Of the insurance industry players that have reported third-quarter results so far, Reinsurance Group of America (RGA - Free Report) , Brighthouse Financial Inc. (BHF - Free Report) and CNA Financial Corporation (CNA - Free Report) beat the respective Zacks Consensus Estimate for earnings.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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