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Alleghany Corporation (Y) has reported 18.45 percent fall in profit for the year ended Dec. 31, 2016. The company has earned $456.92 million, or $29.59 a share in the year, compared with $560.32 million, or $35.13 a share for the last year. Revenue during the year grew 22.63 percent to $6,131.02 million from $4,999.48 million in the previous year. Net premium earned for the year increased 17.62 percent or $745.49 million to $4,975.78 million.
Total expenses increase substantiallyBenefits, losses and expenses for the year were at $5,483.21 million, or 110.20 percent of premium earned from $4,242.11 million or 100.28 percent of premium earned in the last year. Operating income for the year was $647.80 million, compared with $757.37 million in the previous year. However, the adjusted EBITDA for the year stood at $25.10 million compared with $0.40 million in the prior year period. At the same time, adjusted EBITDA margin improved 40 basis points in the year to 0.41 percent from 0.01 percent in the last year period.
Net investment income for the year was almost stable at $438.46 million, when compared with the last year. The company has recorded a gain on investments of $18.04 million in the year compared with a gain of $80.03 million for the previous year.
Weston Hicks, President and chief executive officer of Alleghany, stated, “Our fourth quarter and full year results reflect solid underwriting performance from each of our (re)insurance businesses as they continued to execute their respective business plans, somewhat offset by an impairment charge at SORC. The combined ratio was 91.7% in the fourth quarter and 91.9% for the full year, despite elevated catastrophe losses. The fourth quarter underwriting results reflect favorable prior accident year reserve development of $106.3 million, primarily at TransRe and RSUI, partially offset by catastrophe losses of $66.1 million, primarily from Hurricane Matthew in October 2016. TransRe and RSUI continue to demonstrate leadership in their respective markets and remain well positioned for 2017. CapSpecialty and PacificComp also performed well as both achieved underwriting profitability in the quarter, and in CapSpecialty’s case, for the full year. These strong underwriting results were offset by a challenging investment environment in the fourth quarter, when rising rates negatively impacted book value.”
Assets outpace liabilities growthTotal assets increased 3.98 percent or $910.26 million to $23,756.59 million on Dec. 31, 2016. On the other hand, total liabilities were at $15,741.93 million as on Dec. 31, 2016, up 3.12 percent or $476.02 million from year-ago. Return on assets stood at 2.28 percent in the year, down 0.58 from 2.86 percent in the last year. At the same time, return on equity was at 5.75 percent in the year, down 1.66 from 7.42 percent in the last year.
Investments move up marginally
Investments stood at $18,111.27 million as on Dec. 31, 2016, up 1.56 percent or $278.83 million from year-ago. Meanwhile, yield on investments went down 4 basis points to 2.42 percent in the year. Meanwhile, reinsurance recoverables moved up 1.78 percent or $22.27 million over the year to $1,272.22 million on Dec. 31, 2016.
Total debt was at $1,476.49 million as on Dec. 31, 2016, up 4.02 percent or $57.13 million from year-ago. Shareholders equity stood at $7,939.94 million as on Dec. 31, 2016, up 5.10 percent or $385.24 million from year-ago. As a result, debt to equity ratio was almost stable at 0.19 percent in the year, when compared with the last year.
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