2022 First Quarter Press Release

ALLEGHANY CORPORATION1411 Broadway, 34thFloor

New York, NY 10018

ALLEGHANY CORPORATION REPORTS 2022 FIRST QUARTER RESULTS

NEW YORK, NY, May 5, 2022- Alleghany Corporation (NYSE-Y) announced its financial results for the first quarter of 2022. Book value per share was $638.83 at March 31, 2022, a decrease of 5.4% from December 31, 2021. Excluding the change in accumulated other comprehensive income, book value per share increased 1.2% from December 31, 2021.

Highlights for the first quarter are summarized below1:

• Net premiums written of $1,793 million increased 2.2%, with reinsurance down 2.6% and insurance up 20.8%.

  

• Underwriting profit2was $187 million (combined ratio of 88.4%), compared with an underwriting profit of $17 million (combined ratio of 99.0%); before catastrophe losses, underwriting profit was $237 million (combined ratio of 85.3%), compared with $198 million (combined ratio of 87.7%).

• Net investment income decreased 26.1% to $114 million from $154 million.

• Alleghany Capital revenue3increased 47.7% to $1,121 million from $759 million.

• Alleghany Capital earnings before income taxes and adjusted earnings2before income taxes were $95 million and $102 million, respectively, compared with $36 million and $46 million, respectively.

• Net earnings attributable to Alleghany stockholders of $126 million or $9.29 per diluted share, compared with $230 million or $16.37 per diluted share.

• Adjusted earnings of $255 million or $18.85 per diluted share, compared with $138 million or $9.81 per diluted share.

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• 1All comparisons are to the same period of the prior year, unless otherwise stated.

• 2Underwriting profit and adjusted earnings are non-GAAP financial measures as defined in SEC Regulation G. Refer to "Non-GAAP

Financial Measures" below.

3Relates to Alleghany Capital product and service revenues.

Joe Brandon, President and Chief Executive Officer, commented "Alleghany's businesses continued to generate strong operating results, producing adjusted earnings of $255 million in the first quarter. This excellent result was more than offset by the decline in investment values during the first quarter, which reduced book value per share by 5.4% to $638.83, predominantly reflecting unrealized losses on the bond portfolio resulting from rising interest rates.

"Net premiums earned of $1.6 billion and a combined ratio of 88.4% produced an underwriting profit of $187 million. RSUI net premiums written grew in the first quarter by 25.5% reflecting double-digit rate growth in its most significant product lines and producing a record underwriting profit of $115 million and a combined ratio of 66.9%. TransRe's net premiums written grew by 11.2% excluding the impact of a quota share treaty it decided not to renew in the 2021 fourth quarter. Despite catastrophe loss activity in the first quarter related to the Russia / Ukraine conflict and severe international weather activity, TransRe produced $72 million of underwriting profit and a 93.9% combined ratio, benefiting from profitable growth in casualty and specialty lines and continued reductions in net catastrophe exposure.

"Alleghany Capital had an excellent 2022 first quarter and more than doubled adjusted earnings before income taxes to $102 million, driven primarily by increased earnings at Jazwares, W&W|AFCO Steel and IPS. Strong order flow, building backlogs and margin expansion continues across the portfolio of companies.

"We remain excited about the pending merger with Berkshire Hathaway and the opportunities it presents for our businesses. The process is proceeding as expected and in line with the timeframes previously announced."

The following table summarizes results for the three months ended March 31, 2022 and 2021:

(in millions, except share and per share data)

Three Months Ended March 31, 20222021

Revenues: Total revenues

$

Net premiums written 1,792.8

Alleghany Capital product and service revenues 1,121.4

Net investment income

113.5

Change in the fair value of equity securities (138.9)

Earnings:

Earnings before income taxes$214.0Underwriting profit

Net earnings attributable to Alleghany stockholders Adjusted earnings

Share and per share data:

Earnings per diluted share$9.29Adjusted earnings per diluted share

Weighted average diluted shares outstanding

SEGMENT RESULTS

Percent Change

The following table summarizes the reinsurance and insurance segment results for the three months ended March 31, 2022 and 2021:

Reinsurance

TransRe's renewals at both January 1, 2022 and April 1, 2022 saw growth across the casualty and specialty business and reduced property catastrophe business. TransRe continues to benefit from underlying margin improvement from its predominantly proportional business.

TransRe's net premiums written decreased 2.6% in the first quarter of 2022 from the first quarter of 2021, reflecting the impact of TransRe's decision to not renew a certain large whole account quota share treaty, or the "Quota Share Treaty," as of December 31, 2021. Also contributing was, to a lesser extent, decreases in the property lines of business, partially offset by improving rates and growth in various U.S. professional liability and casualty lines of business.

TransRe's combined ratio for the first quarter of 2022 was 93.9% compared with 99.6% for the first quarter of 2021. The decrease in the combined ratio in the first quarter of 2022 from 2021 primarily reflects a decrease in catastrophe losses and an improved current year attritional loss ratio.

TransRe's current year catastrophe losses in the 2022 first quarter were $48 million and included $35 million from the ongoing conflict between Russia and Ukraine and $13 million from Australian floods. In the first quarter of 2021, TransRe incurred $100 million of losses related to Winter Storm Uri and other storms (collectively, "Winter Storms"). TransRe's underwriting profits excluding catastrophe losses were $120 million in the first quarter of 2022, an increase of 14.1% compared with the first quarter of 2021.

Insurance

Insurance segment net premiums written increased 20.8% in the first quarter of 2022 from the first quarter of 2021, reflecting growth at both RSUI and, to a lesser extent, CapSpecialty.

RSUI's net premiums written increased 25.5% in the first quarter of 2022 from the first quarter of 2021, primarily reflecting growth in most lines of business due to increases in business opportunities, higher rates and improved general market conditions, particularly in the property, professional liability and management liability lines of business.

RSUI's combined ratio for the first quarter of 2022 was 66.9% compared with 96.0% for the first quarter of 2021. The decrease in the combined ratio in the first quarter of 2022 from the first quarter of 2021 primarily reflects lower catastrophe losses and the impact of higher net premiums earned.

RSUI's catastrophe losses in the first quarter of 2022 were $2 million related to severe weather in the U.S. Catastrophe losses in the first quarter of 2021 were $80 million, virtually all of which related to the Winter Storms. RSUI's underwriting profits excluding catastrophe losses were $117 million in the first quarter of 2022, an increase of 27.9% compared with the first quarter of 2021.

CapSpecialty's net premiums written increased 6.1% in the first quarter of 2022 from the first quarter of 2021 primarily reflecting growth in the certain specialty casualty and professional liability lines of business and, to a lesser extent, growth in the surety lines of business, partially offset by a curtailment of certain unprofitable producer relationships and declines in property lines of business.

CapSpecialty's combined ratio for the first quarter of 2022 was 99.8% compared with 99.6% for the first quarter of 2021. The increase in the combined ratio in the first quarter of 2022 reflectshigherunfavorableprior accidentyearlossreservedevelopment,partiallyoffsetbylowercatastrophelossesandanimprovedexpenseratio.

Alleghany Capital

The following table summarizes earnings before income taxes and adjusted earnings before income taxes for the Alleghany Capital segment for the three months ended March 31, 2022 and 2021:

The increase in earnings before income taxes in the first quarter of 2022 from the first quarter of 2021 primarily reflects higher revenues and improved margins at Jazwares as its popular products such as Squishmallows continue to resonate. Increased earnings from W&W|AFCO Steel and IPS also contributed to the improved results in the first quarter of 2022 as each successfully executed on higher margin projects. IPS's revenues and earnings also reflect the addition of Linesight, acquired in October 2021.

INVESTMENTS

Alleghany reported net investment income for the first quarter of 2022 of $114 million, representing a decrease of 26.1% from the first quarter of 2021, primarily reflecting lower partnership income and, to a lesser extent, lower dividend income due to a lower concentration of higher yielding equity securities. The lower partnership income in the first quarter of 2022 reflects a lack of appreciation compared with significant appreciation in a partnership with some exposure to cryptocurrencies, as well as lower returns in certain partnerships that invest in lower-quality debt securities.

Financial statement total return4on investments was (3.7%) for the first quarter of 2022, compared with 0.0% for the first quarter of 2021, primarily reflecting depreciation in the value of Alleghany's debt and equity securities portfolio.

OTHER FINANCIAL INFORMATION

As of March 31, 2022, Alleghany had 13,454,888 shares of its common stock outstanding, compared with 13,598,535 shares of its common stock outstanding as of December 31, 2021.

Through March 18, 2022, Alleghany repurchased an aggregate of 144,864 shares of its common stock in the open market for $96.0 million, at an average price per share of $662.60. Upon the public announcement of the merger agreement, repurchases of shares of common stock ceased.

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4As calculated in Alleghany's financial supplement available on Alleghany's website. See "Additional Information".

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Alleghany Corporation published this content on 05 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2022 20:37:59 UTC.