Back to top

Image: Bigstock

Alleghany (Y) Q4 Loss Widens Year Over Year, Revenues Rise

Read MoreHide Full Article

Alleghany Corporation Y incurred fourth-quarter 2019 operating loss of $6.09 per share, against the Zacks Consensus Estimate of operating profit of $8.86. Also, the quarterly loss was wider than the year-ago quarter’s operating loss of $4.35 per share.

The company reported net income of $1.98 per share in the reported quarter against the year-ago quarter’s loss of $48.30.

The company witnessed higher investment income and growth in premiums, offset by rise in expenses.

Alleghany Corporation Price, Consensus and EPS Surprise

Full-Year Highlights

For 2019, Alleghany delivered operating income of $23.77 per share, missing the Zacks Consensus Estimate by 38.3%. However, operating income increased 47.4% from the previous year.

Revenues improved 9.1% year over year to $5.9 billion.

Operational Update

Revenues for the fourth quarter improved 9.5% year over year to $1.6 billion.

Net premiums written rose 17.6% year over year to $1.5 billion.
Net investment income came in at $136.6 million in the quarter under consideration, up nearly 11.2% year over year. The increase in net investment income was primarily due to higher interest income, partially offset by lower dividend income.

Fourth-quarter underwriting loss was $199 million, down 20% from the year-ago quarter’s loss of $249 million.

Total costs and expenses escalated 5.7% to $2.2 billion.

Segment Update

Reinsurance Segment: Net premiums written improved 15% to $1.2 billion owing to growth in TransRe’s domestic operations, which includes the impact of TransRe’s Aug 29, 2018 purchase of the renewal rights to a block of U.S. treaty reinsurance business.

Underwriting loss of $162.8 million was narrower than year-ago quarter’s loss of $208.9 million. Also, the segment’s fourth-quarter combined ratio improved 570 basis points to 114.4%.

Insurance Segment: Net premiums written increased 27% to $342.8 million.

Underwriting loss of $36.5 million was narrower than the year-ago quarter’s underwriting loss of $40.3 million. The combined ratio of the reported segment improved 310 basis points to 111.8%.

Financial Update

Debt balance of $1.8 billion increased 4.9% from 2018-end level.
Allegheny’s shareholder equity at the end of the fourth quarter increased 14.1% to $8.8 billion from $7.7 billion as of Dec 31, 2018.

Book value per share was $611 as of Dec 31, 2019, up 15.8% from the level as of Dec 31, 2018.

Share Repurchase Update

As of Dec 31, 2019, the company had $627 million remaining under its share repurchase authorization.

Zacks Rank

Alleghany currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Among other players from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of Brown & Brown, Inc. BRO, First American Financial Corporation FAF and RLI Corp. RLI beat the respective Zacks Consensus Estimate.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>