Alleghany Corp. Reports Operating Results (10-Q)
Alleghany Corp. has a market cap of $2.96 billion; its shares were traded at around $331.17 with a P/E ratio of 17.7 and P/S ratio of 3. Alleghany Corp. had an annual average earning growth of 2.6% over the past 10 years.
Highlight of Business Operations: Catastrophe losses, or the absence thereof, can have a significant impact on our results. For example, RSUIs pre-tax catastrophe losses, net of reinsurance, were $26.4 million in the first six months of 2011, compared with $19.0 million in the first six months of 2010, and were $31.0 million in 2010, $6.7 million in 2009 and $97.9 million in 2008. Catastrophe losses in the first six months of 2011 primarily reflect net losses from severe weather, particularly tornados, in the southeastern and midwestern U.S. in April and May 2011. Catastrophe losses in 2008 primarily reflect net losses from 2008 third quarter Hurricanes Ike, Gustav and Dolly. The incidence and severity of catastrophes in any short period of time are inherently unpredictable. Catastrophes can cause losses in a variety of our property lines of business, and most of our past catastrophe-related claims have resulted from severe hurricanes. Longer-term natural catastrophe trends may be changing due to climate change, a phenomenon that has been associated with extreme weather events linked to rising temperatures, and includes effects on global weather patterns, sea, land and air temperatures, sea levels, rain and snow. Climate change, to the extent it produces rising temperatures and changes in weather patterns, could impact the frequency or severity of weather events such as hurricanes. To the extent climate change increases the frequency and severity of such weather events, our insurance operating units, particularly RSUI, may face increased claims, particularly with respect to properties located in coastal areas. Our insurance operating units take certain measures to mitigate against the frequency and severity of such events by giving consideration to these risks in their underwriting and pricing decisions and through the purchase of reinsurance.
As of June 30, 2011, we had consolidated total investments of $4.9 billion, of which $2.8 billion was invested in debt securities, $1.6 billion was invested in equity securities, $0.3 billion was invested in short-term investments and $0.2 billion was invested in other invested assets. Net realized capital gains, other-than-temporary impairment losses and net investment income related to such investment assets are subject to market conditions and management investment decisions and as a result can have a significant impact on our results. In the first six months of 2011, net realized capital gains were $41.2 million, compared with $59.8 million in the corresponding 2010 period, and there were no other-than-temporary impairment losses in the first six months of 2011, compared with $6.8 million in the corresponding 2010 period.
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