Alleghany Corporation Y reported second-quarter 2020 adjusted income of 86 cents per share against the Zacks Consensus Estimate of a loss of $1.46 per share. The bottom line plunged 93.1% year over year attributable to soft performance at both its Insurance and Reinsurance segment.
Revenues declined 1.4% year over year to $2.2 billion on lower net investment income and noninsurance revenues.
Net premiums written rose 2.2% year over year to $1.5 billion.
Net investment income came in at $118.7 million, down 16.8% year over year, primarily attributable to reflect decreases in interest income due to low reinvestment yields on debt securities and lower yields on short-term investments and floating-rate debt securities.
Underwriting loss was $39.5 million against the year-ago quarter’s profit of $114.9 million.
Total costs and expenses increased 6.1% to $2 billion.
Alleghany Capital’s pretax earnings were $5.3 million, down 87.3% from the year-ago quarter.
Alleghany Corporation Price, Consensus and EPS Surprise
Alleghany Corporation price-consensus-eps-surprise-chart | Alleghany Corporation Quote
Reinsurance Segment: Net premiums written declined 2.4% to $1.1 billion owing to an automobile-related premium rebates, decreases in the guaranty lines of business and the impact of changes in foreign currency exchange rates.
Underwriting loss was $30.3 million against the year-ago quarter’s income of $75.9 million. Combined ratio deteriorated 1000 basis points to 102.9%, reflecting catastrophe losses, largely related to the pandemic.
Insurance Segment: Net premiums written increased 17.4% to $391.5 million, driven by growth at RSUI.
Underwriting loss was $9.2 million against the year-ago quarter’s income of $39 million. The combined ratio of the reported segment deteriorated 2210 basis points to 102.9%.
Cash balance was $1.6 billion, up 40.2% from 2019 end level.
Debt balance of $2 billion increased 15.2% from 2019-end level.
Allegheny’s shareholder equity at the end of the second quarter was $8.5 billion, down 3.7% from 2019 end level.
Book value per share was $590.85 as of Jun 30, 2020, down 0.8% from the level as of Dec 31, 2019.
As of Jun 30, 2020, the company had $583 million remaining under its share repurchase authorization.
Alleghany currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation PGR, Cincinnati Financial CINF and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings.
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