Alleghany Corporation ( Y Quick Quote Y - Free Report) reported fourth-quarter 2020 operating profit of $6.77 per share, which beat the Zacks Consensus Estimate by 48.8%. The company had reported operating loss of $6.09 per share in the year-ago quarter. The company reported net income of $11.28 per share in the reported quarter, which surged nearly six-fold from the year-ago quarter. The company witnessed growth in premiums, which was partially offset by rise in expenses and lower investment income. Alleghany Corporation Price, Consensus and EPS Surprise Full-Year Highlights
For 2020, Alleghany delivered operating income of $15.89 per share, which beat the Zacks Consensus Estimate by 15.1%. However, operating income decreased 33.1% from the previous year.
Revenues decreased 1.6% year over year to $8.9 billion. Operational Update
Revenues for the fourth quarter improved 15.8% year over year to $2.7 billion.
Net premiums written rose 12.6% year over year to $1.7 billion due to higher premiums in Reinsurance and Insurance segments. Net investment income came in at $130.9 million in the quarter under consideration, down 4.2% year over year. The decrease in net investment income was primarily due to lower interest income and, to a lesser extent, due to lower dividend income. Fourth-quarter underwriting profit was $16.5 million against the year-ago quarter’s loss of $199.3 million. Total costs and expenses escalated 10.4% to $8.7 billion due to higher net loss and loss adjustment expenses, commissions, brokerage and other underwriting expenses and other operating expenses. Segment Update Reinsurance Segment: Net premiums written improved 10.4% to $1.3 billion, reflecting improving rates overall, growth in various traditional casualty and other professional liability lines of business in the United States and to a lesser extent, the impact of changes in foreign exchange rates. The increase was partially offset by a decrease in automobile-related business in the United States, arising from rebates at TransRe cedants in reaction to pandemic-driven reduction in personal and commercial automobile usage worldwide. Underwriting loss of $34.6 million was narrower than the year-ago quarter’s loss of $162.8 million. Also, the segment’s fourth-quarter combined ratio improved 1150 basis points to 102.9%. Insurance Segment: Net premiums written increased 20% to $411.3 million due to growth at RSUI. Underwriting profit was $51.1 million against the year-ago quarter’s underwriting loss of $36.5 million. The combined ratio of the reported segment improved 2560 basis points to 86.2%. Alleghany Capital: Alleghany Capital’s revenues increased 46.3% year over year to $823 million. Adjusted earnings before income taxes increased nearly four-fold from the year-ago quarter to $76.9 million in the reported quarter. Financial Update
Debt balance of $2.1 billion increased 21.9% from 2019-end level.
Allegheny’s shareholder equity at the end of the fourth quarter decreased 0.2% to $8.7 billion from $8.8 billion as of Dec 31, 2019. Book value per share was $623.57 as of Dec 31, 2020, up 2.1% from the level as of Dec 31, 2019. Share Repurchase Update
As of Dec 31, 2020, the company had $432 million remaining under its share repurchase authorization.
Alleghany currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Other Insurance Releases
Fourth-quarter earnings of
Athene Holding Ltd. ( ATH Quick Quote ATH - Free Report) , Reinsurance Group of America ( RGA Quick Quote RGA - Free Report) and Kinsale Capital Group ( KNSL Quick Quote KNSL - Free Report) beat the respective Zacks Consensus Estimate. Biggest Tech Breakthrough in a Generation
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