Investor Day November 22, 2013 Alleghany Exhibit 99.1 |
Jack Sennott Welcome and Introductions 22 November 2013 Alleghany 2 |
Alleghany 3 Investor Day Agenda Topic Presenters 10:00 AM Registration and Refreshments 10:30 AM Welcome and Introductions Jack Sennott Senior Vice President and Chief Financial Officer, Alleghany Corporation 10:35 AM Alleghany Overview Weston Hicks President and Chief Executive Officer, Alleghany Corporation 11:05 AM Alleghany Insurance Operations Joe Brandon Executive Vice President, Alleghany Corporation 11:35 PM TransRe Michael Sapnar President and CEO, Transatlantic Holdings 12:05 PM Lunch 1:00 PM RSUI Group, Inc. Dave Leonard Chairman and CEO, RSUI Group 1:30 PM Capitol Companies Stephen Sills Chairman and CEO, Capitol Companies 2:00 PM Investments Panel Roger Gorham Senior Vice President, Head of Fixed Income and Treasurer, Alleghany Corporation Jack Liebau President and CEO, Alleghany Capital Partners LLC David Van Geyzel President and CEO, Alleghany Capital Corporation Udi Toledano Chairman, Alleghany Capital Corporation 2:30 PM Financial Review Jack Sennott Senior Vice President and CFO, Alleghany Corporation 3:00 PM Closing Remarks 4:00 PM Alleghany Corporation Rings the Closing Bell |
Alleghany 4 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are not historical facts but instead represent only Alleghany’s belief regarding future events, many of which, by their nature, are inherently uncertain and outside Alleghany’s control. Except for Alleghany’s ongoing obligation to disclose material information as required by federal securities laws, Alleghany is not under any obligation (and expressly disclaims any obligation) to update or alter any projections, goals, assumptions, or other statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. Factors that could cause Alleghany’s actual results and experience to differ, possibly materially, from those expressed in the forward-looking statements include the factors set forth in Alleghany’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the United States Securities and Exchange Commission. |
Weston Hicks Alleghany Overview 22 November 2013 Alleghany |
Alleghany 6 Alleghany Today Alleghany Overview Insurance Reinsurance Capitol Companies (“Capitol”) Pacific Compensation (“PacificComp”) RSUI TransRe Statutory Surplus of $4.4 billion (2) 2012 Gross Premiums Written of $3.6 billion (3) Top 10 global reinsurer (4) Statutory Surplus of $1.5 billion (2) 2012 Gross Premiums Written of $1.1 billion 11 largest U.S. excess and surplus lines insurer (5) Statutory Surplus of $217 million (2) 2012 Gross Premiums Written of $158 million Focus on small niche specialty commercial lines Statutory Surplus of $99 million (2) 2012 Gross Premiums Written of $19.4 million Specializes in California workers’ compensation insurance Investments Alleghany Capital Corporation Alleghany Capital Partners $2.0 billion equity portfolio (2) Investments in: ~85 years as a public company (NYSE: Y) $6.7 billion in book value $6.6 billion equity market capitalization $19.2 billion in total cash & investments Baa2 senior debt rating from Moody’s BBB senior debt rating from Standard & Poor’s bbb+ senior debt rating from A.M. Best (1) Notes: Financial data as of September 30, 2013 unless otherwise specified; Market data as of November 21, 2013 (1) Moody’s = Long Term Rating; Standard & Poor’s = LT Local issuer Credit; and A.M. Best = Long Term Issuer Credit (2) As of September 30, 2013 (3) Pro forma from January 1, 2012 Fixed Income (4) Standard & Poor’s RatingsDirect, 2013 (5) A.M. Best’s U.S. Surplus Lines – Segment Review, September 2013 th – Kentucky Trailer – Bourn & Koch – Stranded Oil – ORX Exploration |
Alleghany 7 A History of Successful Strategic Investing 1929 1949 1954 1968 1974 1984 1999 2007 2013… Nickel Plate, Chesapeake & Ohio, Erie and Pere Marquette Railroads (merged into Penn Central in 1968) New York Central Railroad (merged into Penn Central in 1968) Investors Diversified Services (“IDS”) (sold to American Express in 1984) MSL Industries Jones Motor Company Alleghany Asset Management (sold to ABN Amro in 2001) Chicago Title (spun off in 1998/1999) Shelby Insurance (sold in 1991) Underwriters Reinsurance Company (sold to Swiss Re in 2000) Capitol RSUI World Minerals (sold in 2005) Darwin (IPO in 2006 and sold in 2008) PacificComp TransRe Alleghany Overview Legacy Alleghany Investment Current Alleghany Investment |
Alleghany 8 A Consistent Approach to Book Value Growth “We shun investment fads and fashions in favor of investing in basic financial and industrial enterprises that offer long-term value to the investor.” — John Burns, CEO 1992 - 2004 “Our objective is to create stockholder value through the ownership and management of a small group of operating subsidiaries and investments.” — Weston Hicks, CEO 2004 - Present “Alleghany’s operating units conduct their business on a quasi-autonomous basis while the parent company sets goals, provides incentives, and monitors performance through a small but select parent company staff.” — F. M. Kirby, CEO 1967 - 1992 Alleghany Overview |
Alleghany 9 Experienced Management Team Name Title Years Industry Experience Years Alleghany Experience Holding Company Weston Hicks President & Chief Executive Officer 29 11 Joseph Brandon Executive Vice President 27 2 Jack Sennott SVP – Chief Financial Officer 27 6 Christopher Dalrymple SVP – General Counsel 17 11 Roger Gorham SVP – Head of Fixed Income and Treasurer 29 9 Jerry Borrelli VP – Principal Accounting Officer 26 7 Investment Subsidiaries David Van Geyzel President & Chief Executive Officer, Alleghany Capital Corporation 14 6 Udi Toledano Chairman, Alleghany Capital Corporation 38 4 Jack Liebau President & Chief Executive Officer, Alleghany Capital Partners 29 1 Operating Companies Michael Sapnar President & Chief Executive Officer, TransRe 25 2 Dave Leonard Chairman & Chief Executive Officer, RSUI 34 10 Stephen Sills Chairman & Chief Executive Officer, Capitol Companies 35 6 Janet Frank Chairman / President & Chief Executive Officer, PacificComp 36 2 Mark See Chief Executive Officer, Stranded Oil Resources Corporation 26 2 Tim Helle President, Bourn & Koch 30 2 Gary Smith Chief Executive Officer, Kentucky Trailer 17 1 Alleghany Overview Note: Includes experience prior to acquisition by Alleghany |
Alleghany 10 Attractive Long-Term Returns (%) Alleghany BVPS Alleghany Price S&P 500 2002 – 3Q’13 CAGR (%) (1) Alleghany BVPS 8.0% Alleghany Price 8.4% S&P 500 5.4% +148% +159% +85% Focus on Book Value per Share Growth Long-term Conservative Orientation Quasi-autonomous Subsidiary Operating Model Source: SNL Financial, Company filings, CapIQ (1) Alleghany price and S&P500 CAGR calculated on a total return basis Alleghany has a demonstrated track record of creating long-term stockholder value Alleghany Overview 50 100 150 200 250 300 |
Strong Culture of Underwriting Discipline Experienced underwriters with deep understanding of products and pricing of specialty business Focus on underwriting profits, not premium production - Compensation structured to reward underwriting profits Alleghany has outperformed its specialty insurance peer group Underwriting profitability and resulting book value growth are key performance metrics Alleghany GAAP Combined Ratio vs. Peer Average Alleghany Overview Alleghany Average (1) Peer Group Average (2),(3) Alleghany Peer Group Average (%) (1) Includes all current (re)insurance operations (2003 – YTD 2013) (2) Peer Group Average includes ACGL, AWH, AXS, MKL and WRB (2003 – 2011) (3) Represents Peer Group Average for 2012 and YTD 2013; includes ACGL, AWH, AXS, MKL, WRB, PRE, PTP and RE 120.0 110.0 100.0 90.0 80.0 70.0 60.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q3 '13 87.0 83.5 88.8 90.2 114.3 96.8 83.0 71.3 72.5 82.8 92.4 90.3 86.2 84.7 89.0 83.0 93.4 103.3 94.1 89.9 93.6 87.0 Alleghany 11 87.9% 90.2% |
Alleghany 12 Leading Specialty Franchises Reinsurance Insurance TransRe – top 10 global reinsurer (1) Best-in-class D&O, E&O and medical malpractice reinsurer Significant property catastrophe reinsurer Premier excess & surplus lines insurer RSUI – 11 th largest U.S. excess and surplus lines insurer (2) Capitol– small niche specialty commercial insurer Assets: $16.6 billion (3) 2012 Gross Premiums Written: $3.6 billion (4) Financial Strength Rating of “A+” by S&P and “A” by A.M. Best Assets: $6.0 billion (3) 2012 Gross Premiums Written: $1.3 billion Financial Strength Rating of “A” by A.M. Best (5) Leader in specialty reinsurance Global footprint Strong underwriting culture Leader in specialty insurance Strong underwriting culture Business Size and Ratings Complementary Strengths (1) Standard & Poor’s RatingsDirect, 2013 (2) A.M. Best’s U.S. Surplus Lines – Segment Review, September 2013 (3) At 9/30/2013 (4) Pro forma from 1/1/12 (5) For RSUI and Capitol Alleghany Overview |
Alleghany 13 How We Think about Investment Risk Alleghany Overview Investments are a significant part of our earnings power Total Cash & Investments Total Equity = $19.2 billion $6.7 billion = 2.87x investment leverage Central banks are trying to keep the economy “in the fairway” but there is no guarantee this will be successful We have structured our portfolio to withstand any of these macroeconomic tailwinds (1) (1) Pro forma assuming Ares and deflation-protected strips allocation are fully-deployed The economy remains vulnerable to deflationary shocks or recessionary trends due to: Falling money demand Demographics Weak employment data Potential trade wars |
Alleghany 14 Key Alleghany Takeaways Alleghany Overview TransRe and RSUI are “true franchises” Proprietary investment capability Non-financial businesses likely to be a larger contributor in the future Holding company maintains significant optionality through excess liquidity and avoidance of excessive leverage Goal is to compound book value per share at 7-10% per year with below average risk |
Alleghany 15 Questions? Alleghany Overview |
Joe Brandon Insurance Operations 22 November 2013 Alleghany 16 |
Alleghany 17 Alleghany’s (Re)insurance Operations – Consolidated View Insurance Operations Gross Premiums Written: – 2012 $4.9 billion – 2013 YTD (1) $3.8 billion Investments and Cash $18.3 billion Net Loss and LAE Reserves $10.7 billion Stockholders’ Equity $6.4 billion (1) YTD as of September 30, 2013 |
Alleghany 18 Alleghany’s (Re)insurance Operations – By Company Insurance Operations Gross Premiums Written: 2012 (1) $3.6 billion 2013 YTD (2) $2.6 billion Cash & Investments (2) $14.4 billion GAAP Equity (2) $4.4 billion Michael Sapnar Dave Leonard Stephen Sills Jan Frank (1) Full year 2012 (2) As of September 30, 2013 Gross Premiums Written: 2012 $1.1 billion 2013 YTD (2) $962 million Cash & Investments (2) $3.1 billion GAAP Equity (2) $1.6 billion Gross Premiums Written: 2012 $19 million 2013 YTD (2) $30 million Cash & Investments (2) $229 million GAAP Equity (2) $109 million Gross Premiums Written: 2012 $158 million 2013 YTD (2) $135 million Cash & Investments (2) $507 million GAAP Equity (2) $305 million |
Alleghany 19 What Does Quasi-Autonomous Mean? Insurance Operations Alleghany Corporate Governance & Risk Management Investment Management Management Compensation Strategy / Capital Allocation |
Alleghany 20 Investment Management Insurance Operations Macroeconomic views and long-term expected performance relative to risk drive our investment allocations Investments managed at the holding company level through a combination of in-house and third-party resources Risk asset allocations and liquidity requirements by subsidiary are determined in conjunction with each operating company |
Alleghany 21 Management Compensation Insurance Operations Substantial part of senior management compensation is tied to their respective operation’s underwriting profits and growth in book value No incentive to grow premium by underpricing risk Incented to think and act like long-term owners of their companies Annual incentive compensation based on underwriting results Long-term awards tied to growth in book value – Management shares in both profits and losses – Serves as retention vehicle Incentive Compensation Directly Tied to Profitability |
Alleghany 22 Corporate Governance and Risk Management Insurance Operations Alleghany senior management team sits on operating company boards Risk assessment and management coordinated at holding company Catastrophe exposures across entities modeled on a consolidated basis Quarterly subsidiary board meetings include operational reviews by line of business Price monitoring performed at operating company level and reviewed corporately Regular actuarial loss reserve reviews (both internal and external) Reinsurance security committee reviews reinsurer credit risk and sets tolerances on a consolidated basis Internal audit function in place at each major subsidiary and holding company |
Alleghany 23 Strong Catastrophe Risk Management Insurance Operations Catastrophe risk principally managed at TransRe and RSUI levels Fixed caps established as a percentage of TransRe's and RSUI's respective surplus Combined catastrophe risk modeled and monitored at parent level Modeled combined catastrophe losses are managed to as a percentage of consolidated equity Regularly reviewed with Alleghany board 1-in-250 Year PML / Equity 1-in-100 Year PML / Equity PML/Equity 16 12 8 4 0 7 7 11 10 6 10 5 8 Florida - Wind California - Earthquake Northeast U.S. - Wind Gulf Coast - Wind |
Alleghany 24 Historical Underwriting Results Insurance Operations Year Amount (1) 2002 (20) 2003 67 2004 74 2005 (115) 2006 259 2007 297 2008 143 2009 129 2010 131 2011 50 2012 220 2013 YTD (2) 322 Total $1,557 (1) Includes Darwin Professional Underwriters, Inc.’s underwriting results from 2003 through 2008 (2) YTD through September 30, 2013 ($ in millions) Annual average underwriting profit of $137 million Significant negative “cost of float” over time |
Alleghany 25 Key Takeaways Insurance Operations + Operating company management is empowered • Set operating strategy • Run its business + Alleghany management provides assistance when needed but focuses on capital allocation and investment management + Risk management is everyone’s job • Operating companies focus on their enterprises • Alleghany focuses on aggregations across the entities + Compensation aligns management and owners = Builds franchise value and creates outperformance over long-term |
Alleghany 26 Questions? Insurance Operations |
Michael Sapnar TransRe 22 November 2013 Alleghany 27 |
Alleghany 28 A Leading Reinsurance Franchise CULTURE Stable Focused Resilient Profitable DIVERSITY Products Territories Distribution Clients People LEADERSHIP Treaties Industry Issues Longevity Information FLEXIBILITY Balance Sheet Infrastructure Business Model Capital Management INITIATIVES Fairco/Calpe/Capitol Managed Capital TReIMCo Public to Private TransRe |
Alleghany 29 Leadership Provides a Tangible Advantage Years (1) 2012 Assumed Premiums, excluding AIG (2) Estimated current underwriting year treaty premium 57% 60% 54% 55% 56% 163 underwriters worldwide – 107 at officer level – Average tenure of 11.4 years Experience drives advantages – Calibrates in-house economic capital & pricing models – Reduces reliance on generic industry data – Increases ability to construct bespoke deals – 10% of premium from private placement Led Co-led TransRe % Signed vs. Authorized by Class Leadership Profile 11% 12% 8% 9% 60% 0% 25% 50% 75% <5 6 - 10 11 - 15 16 - 20 >20 48% 52% 48% 48% 46% 9% 8% 6% 7% 10% 0% 25% 50% 75% 2008 2009 2010 2011 2012 0% 25% 50% 75% 100% Guaranty Marine & Aviation Catastrophe Specialty Casualty Traditional Casualty 2010 2011 2012 2013 (1) % of Premium by Length of Relationship % of Premium Led and Co-Led (2) |
Alleghany 30 Leadership from a Stable and Experienced Senior Team Management Team Michael Sapnar President & CEO 18 YEARS OF SERVICE TransRe Ken Brandt North America 7 YEARS OF SERVICE Javier Vijil Latin America & Caribbean 20 YEARS OF SERVICE Paul Bonny Europe & Asia Pacific 31 YEARS OF SERVICE Beth Levene Claims 15 YEARS OF SERVICE Ken Apfel Actuarial 9 YEARS OF SERVICE Julian Spence Risk 12 YEARS OF SERVICE Steve Skalicky Finance 18 YEARS OF SERVICE Gary Schwartz Legal 23 YEARS OF SERVICE Donna Byron HR 10 YEARS OF SERVICE George DiMartino IT 18 YEARS OF SERVICE Bob Baldrey Global Property Cat 32 YEARS OF SERVICE Tom Cholnoky Strategy & Communications 4 YEARS OF SERVICE |
Alleghany 31 Leadership Builds Strong Customer Relationships Factor North America Latin America Europe Strong Underwriting Capabilities 7.89 7.82 6.96 Financial Value 7.78 7.93 6.85 Financial Security 8.05 8.04 7.02 Strong Client Orientation 7.79 7.52 6.70 Valuable Expertise & Market Knowledge 7.75 8.07 6.92 Timely Service 7.87 7.68 7.08 Helps Your Company Improve Profitability 7.27 7.14 Not Rated Strong Claims Handling Ability 7.74 7.81 7.00 Reasonable Approach to Contracts 7.48 7.64 Not Rated Note: Reproduced with the permission of Flaspöhler Research Group, Inc. Problematic Average Good Excellent < 6 >6 and < 7 Top Quartile or >7 Top Quartile and > 7 TransRe Our ability to execute on our strategic objectives relies upon the strength of our customer relationships. The independent Flaspöhler Research Group, Inc.’s annual satisfaction surveys in North America, Latin America and Europe measures how reinsurers are perceived |
Alleghany 32 Diversity of Reach, Capability and Perspective Note: Based on YTD September 2013 Net Written Premiums of $2.5 billion Product Mix Geographic Mix TransRe E&O / D&O 19% All Other Property 18% Property Catastrophe 12% General Liability 11% Auto / Motor 8% A&H 7% Guaranty 6% Marine & Energy 6% Medical Malpractice 5% Engineering 3% Other Casualty 3% Aviation 2% United States 53% London 20% Zurich 8% Latin 3% American Division 6% Munich Hong Kong 3% Toronto 2% Tokyo 2% Paris 2% Sydney 1% |
Alleghany 33 Diversity of Source 2002 2012 Distribution Customer Mix 2002 2012 TransRe Other Direct 14% AON 13% AIG 13% Other Broker 48% Guy Carp 12% Guy Carp 20% Other Direct 19% Other Broker 35% AON 26% All Others 32% AIG 13% Next 49 55% All Others 35% Next 49 61% Largest Client 4% |
Alleghany 34 Diversity of Portfolio Minimizes Underwriting Volatility Historical Market Share Peer Group Cat Loss Points Market Share > Loss Share TransRe |
Alleghany 35 Diversity Delivers Quality Earnings (1) TransRe Adjusted ROE to exclude merger related expenses and break-up fee in 2011 and 2012 (2) Peer Group – ACE, ACGL AXS, RE, PRE, AWH, Alterra, AHL, ENH, PTP and XL TransRe -10% -5% 0% 5% 10% 15% 20% 25% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 TransRe Peer Group |
Alleghany 36 Flexibility from Financial Strength Profitable book Improved combined ratio New Opportunities – products/lines/territories/business relationships Prudent casualty reserving philosophies Efficient business model $4.7 billion of new and renewed business since 3/6/12 $757 million business cancelled (AIG, auto, Medex) $685 million new business (mortgage guaranty, property cat, property pro rata) Note: All 2012 figures are for full 12 months (1) YTD through September 30, 2013 ($ in millions) FY2012 YTD 2013 (1) Gross premiums written $3,617 $2,643 Net premiums written $3,491 $2,499 Net premiums earned $3,585 $2,481 Net losses and loss expenses (2,561) (1,473) Acquisition costs (599) (614) General & administrative expenses (201) (146) Underwriting income $223 $248 Consolidated GAAP Ratios Loss and loss expense ratio 71.5% 59.4% Acquisition cost ratio 16.7% 24.7% General & administrative expense ratio 5.6% 5.9% Combined ratio 93.8% 90.0% Cash & Invested Assets $14.5 billion $14.4 billion GAAP Equity $4.3 billion $4.4 billion TransRe Highlights Summary Financials |
Alleghany 37 Flexibility from Strength of Reserve Profile Source: Annual Statements, Schedule P Note: Medmal (claims made) other liabilities (losses occurring and claims made) and Reinsurance B; Peers includes ACGL, AXS, ENH, PRE, XL, AWH, ENH and Odyssey Re Holdings; Excludes 2008 AY for RE TransRe IBNR as % of Earned Premium IBNR as % of AY Incurred Losses |
Flexibility from Strength of Reserve Profile (cont.) As % Of Original Reserves Favorable/(Unfavorable) (In millions) By Accident Year – As of 12/31/2012 TransRe As of 9/30/2013 Total: $9.34 billion Alleghany 38 2003-2011 AY Development (1) Reserve Development (AY) Reserve Breakdown Source: Company 10-K disclosure (1) Peer Group: ACE, AWH, Alterra, ACGL, AHL, AXS, ENH, RE, PRE, PTP, and XL |
Alleghany 39 A Dynamic Competitive Environment Hedge Fund Reinsurers Implications Growth will continue to be challenging See it all, sign what you want New initiatives are paramount Patience and preparedness will be rewarded TransRe |
Alleghany 40 Engage Focus on Efficiency Focus on Insights Penetrate/ Alternate Initiatives to Address the Challenges Increased Supply Increased Acquisition Costs Decreased Information Leverage Decreased Demand Data analytics Additional value propositions (Underwriting & Claims Audits – benchmarking) Local network Global Customer Program (larger lines, non-concurrent, private, direct) Global Product Teams (property, aviation, marine) Select insurance opportunities (Calpe/Fairco/TreIMCo) Mortgage indemnity, terrorism Pillar Pangaea Retro TransRe Capital Partners Profitable Growth Without changing the culture of the company TransRe Hub & Spoke branch network (Europe & Asia) Infrastructure supports contraction or expansion Leverage of labor, invested assets to equity and balance sheet Intra-Y synergies (Capitol re-organization, modeling expenses) |
Alleghany 41 Culture of Profitable Growth $4B 3 2 1 0 New York Toronto London Tokyo Hong Kong Miami Paris Zurich Buenos Aires Shanghai Rio de Janeiro Johannesburg Warsaw Sydney Panama Stockholm Munich Hamilton Gibraltar San Francisco Singapore Equity/Surplus (1) Global City Network (1) Statutory surplus from 1978-1989, stockholders’ equity from 1990 onwards (2) CAGR includes cumulative dividends and share repurchases from March 31, 1990 to September 30, 2013 TransRe Alleghany 41 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 9M13 |
Alleghany 42 Culture of Experience January 1 Themes Capacity is abundant Retentions are up Peak price pressure in peak cat zones Clients are increasingly attentive to who they trade with Underlying casualty prices continue to improve ‘Unexpectedly’ large losses continue to occur (German hail, Costa Concordia, SK Hynix, Quebec train, Alberta floods) TransRe |
Alleghany 43 Truly a Franchise CULTURE DIVERSITY LEADERSHIP FLEXIBILITY INITIATIVES TransRe |
Alleghany 44 Questions? TransRe |
Dave Leonard RSUI 22 November 2013 Alleghany 45 |
Alleghany 46 A Leading Specialty Insurer Specialty Insurance Focus on specialty lines of business where underwriting expertise and experience are the primary differentiators Disciplined Underwriting RSUI has demonstrated the ability to grow aggressively when market conditions are favorable and the willingness to write less business when conditions are not supportive of underwriting profit Marketing through a focused distribution channel is efficient and cost effective Comparison of Direct Written Premium RSUI Wholesale Only Source: AM Best Special Report, U.S. Surplus Lines – Segment Review, Thriving Through Turmoil, September 2013 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $- $5 $10 $15 $20 $25 $30 $35 $40 $45 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Surplus Lines RSUI Group, Inc. |
Alleghany 47 A Diversified Specialty Product Mix RSUI GWP Trend Demonstrated track record of portfolio management based upon pricing, loss experience and economic conditions $- $200 $400 $600 $800 $1,000 $1,200 $1,400 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY2009 FY 2010 FY2011 FY2012 |
Alleghany 48 THE RSUI VALUE CHAIN Overview of the RSUI Value Chain Severity Focused Risk Appetite Cycle Management Property Catastrophe Exposure Management Employee Expertise and Experience “Most important thing we do is hire people” Service “Respond with speed; positive interactions and relationships” Management and Infrastructure “Contrarian and reactive approach to market changes” Information Technology “Productive employees, effective communication, and reliable reporting” Core Measurements of Success Wholesale Distribution Reinsurance Usage Risk Mitigation Strategies Underwriting Profits What Makes RSUI Special RSUI |
Alleghany 49 Stable, Experienced Senior Team Dave Leonard Chairman and CEO 13 YEARS OF SERVICE RSUI Management Team Greg Buonocore President 14 YEARS OF SERVICE Phillip McCrorie Executive Vice President 10 YEARS OF SERVICE Bill Kautter SVP Claims 11 YEARS OF SERVICE David Norris SVP Property 18 YEARS OF SERVICE Nancy Davis SVP Professional Liability 14 YEARS OF SERVICE Clint Nokes SVP Binding Authority 5 YEARS OF SERVICE Lee Sjostrom SVP Chief Financial Officer 9 YEARS OF SERVICE Kathy Aberson SVP Administration 11 YEARS OF SERVICE Phil Coletti SVP Casualty 24 YEARS OF SERVICE Michelle Eason SVP D&O 23 YEARS OF SERVICE Kelly Walls SVP Information Technology 22 YEARS OF SERVICE Average Industry Experience (years) Binding Authority D&O Liability General Liability Professional Liability Property Umbrella/ Excess Underwriting 15 15 25 19 23 27 Claims 27 14 26 17 27 32 |
Alleghany 50 Property RSUI There is widespread discussion about an over-capitalized market, the impact that alternative markets are having on reinsurance costs, and the effect of RMS v13.0 Property Market Conditions and Outlook Renewal Rate Change YTD 3Q 2013 $452.8m 5.8% 1.4% 5,133 8.9% 34,540 2.7% 2012 $527.8m 15.5% 5.2% 6,065 10.7% 44,543 15.3% Premium Policy Count New Submissions Property Coverage Ground up, primary and excess commercial property business with $100 million in risk capacity (4 walls) Preference for business that can be “underwritten from the desk” like institutional, public entity, real estate, habitational, hospitality, and natural catastrophe risks |
Alleghany 51 Umbrella / Excess RSUI Underwriters are seeing opportunities at attachment points and rate levels they are comfortable with Umbrella / Excess Market Conditions and Outlook Renewal Rate Change YTD 3Q 2013 $134.5m 16.3% 7.4% 4,781 10.7% 24,277 6.9% 2012 $160.7m 8.1% 4.1% 5,884 1.6% 30,179 6.1% Premium Policy Count New Submissions Specialty book with up to $30 million in limits per risk Common markets are contractors, manufacturers, wholesalers, distributors and certain public entities Umbrella / Excess Coverage |
Alleghany 52 D&O Liability Coverage D&O Liability RSUI Renewal retention continues to be very strong and is ahead of the prior year for all sectors of the business. Similarly, we have seen renewal rate increases in all sectors, especially in the private company market D&O Liability Market Conditions and Outlook Renewal Rate Change YTD 3Q 2013 $119.5m 17.8% 5.5% 4,517 12.3% 15,713 19.3% 2012 $145.6m 11.5% 4.6% 5,473 9.8% 18,042 31.2% Premium Policy Count New Submissions Both primary and excess risks with capacity up to $20 million The risks include public, non-profit, and private organizations. Policies typically include Employment Practices Liability |
Alleghany 53 Professional Liability RSUI Premium growth has come from “micro hard markets” in Lawyers, Real Estate Agents, and CyberTech Both primary and excess risks with capacity up to $10 million Risks are predominantly written claims made Common classes include Miscellaneous Medical, Miscellaneous, Architects and Engineers, Lawyers, Insurance Agents and Brokers, Real Estate Agent and Brokers, Environmental, CyberTech, Physicians, Surgeons & Dentists, and Media Professional Liability Coverage Renewal Rate Change YTD 3Q 2013 $91.8m 16.8% 3.9% 6,403 15.1% 30,454 7.7% 2012 $103.1m 12.7% 3.4% 7,312 11.9% 36,948 19.9% Premium Policy Count New Submissions Professional Liability Market Conditions and Outlook |
Alleghany 54 Binding Authority RSUI Business opportunities are flowing to Binding Authority as many carriers reevaluate their books of business, or face difficult financial challenges RSUI strives to be the company that the market looks to as a consistent leader in both service and technology Binding Authority Market Conditions and Outlook Renewal Rate Change - GL Renewal Rate Change - Property YTD 3Q 2013 $98.1m 32.1% 1.3% 4.6% 44,231 28.9% 2012 $99.3m 13.8% 0.6% 4.0% 45,795 9.7% Premium Policy Count Binding Authority Coverage Combined Property and Casualty contracts underwritten through 28 appointed Managing General Agents with limited statements of authority for core Specialty Insurance classes Premium mix 47% property, 53% casualty |
Alleghany 55 General Liability RSUI Maintain discipline and look for opportunities that are supportive of underwriting profit General Liability Market Conditions and Outlook Renewal Rate Change YTD 3Q 2013 $27.6m 0.7% 3.9% 959 3.1% 14,939 2.4% 2012 $42.8m 13.6% 0.4% 1,347 8.5% 19,355 2.9% Premium Policy Count New Submissions General Liability Coverage Mainly low frequency/high severity primary risks with limits of up to $2 million Common markets are specialty contractors, manufacturers, wholesalers, and distributors |
Alleghany 56 Alternative Structures RSUI Assumed Reinsurance Solar Panel Warranty Crop Reinsurance Other Total YTD 3Q 2013 $26.3m $5.5m $2.9m $2.5m $37.2m 2012 $34.9m $6.8m $1.5m $0.0m $43.2m Alternative Structures Market Conditions and Outlook Alternative Structures Coverage Unusual insurance risks that require specialized analysis and underwriting. Available to our producers to consider risks that are truly unique Also includes Assumed Property Reinsurance and Property Retrocession |
Alleghany 57 Challenges and Opportunities RSUI Challenges Opportunities Imitators, newly aggressive competitors or start-up operations entering the E&S space Pricing sustainability (especially in Property) More frequent and more severe weather related catastrophic loss activity Maintaining close distribution relationships as major consolidations occur RSUI is recognized as the premier Specialty Insurance franchise with underwriting staff that has expertise and authority to quickly react to opportunities Weakness and disruption in competitors provide opportunities across our product lines Umbrella/Excess, D&O, and Professional Liability are experiencing growth opportunities within sub-segments of their operations |
Alleghany 58 Financial Snapshot $1.2 billion net underwriting income since 2003 Combined ratio of 81.9% since 2003 Since becoming a subsidiary of Alleghany in 2003, Stockholder’s equity has grown at a compound annual growth rate of 11.53% RSUI has produced an underwriting profit in 9 out of the last 10 years RSUI Highlights Summary Financials ($ in millions) FY 2011 FY 2012 YTD Q3 2013 Gross premiums written $986 $1,123 $962 Net premiums written $628 $715 $631 Net premiums earned $594 $656 $560 Net losses and loss expenses (315) (466) (302) Acquisition costs (75) (86) (76) General & administrative expenses (96) (99) (79) Underwriting income $108 $5 $103 GAAP Ratios Loss and loss expense ratio 53.1% 71.1% 53.9% Acquisition cost ratio 12.7% 13.1% 13.6% General & administrative expense ratio 16.1% 15.0% 14.1% Combined ratio 81.9% 99.2% 81.6% |
Alleghany 59 Key Takeaways RSUI Leverage our 25 year track record as leading specialty insurer Produce underwriting profits Maintain our highly employee-centric culture Remain singularly dedicated to the wholesale distribution channel Continue to embed Risk Management within each line of business/operation |
Alleghany 60 Questions? RSUI |
Stephen Sills Capitol 22 November 2013 Alleghany 61 |
Alleghany 62 Capitol Companies Capitol Committed to becoming the preeminent specialty insurance company for small and mid-sized businesses Product Distribution Technology |
Alleghany 63 Capitol and PRMS Today P&C includes admitted and surplus lines business Surety includes commercial and contract bonds Professional lines includes miscellaneous professional liability, healthcare professional, medical malpractice, and environmental professional Distribute through general and independent agents Capitol |
Alleghany 64 Management Team Stephen Sills Chairman and CEO 36 YEARS OF EXPERIENCE Management Team Dan McGinnis President Professional Liability Division 19 YEARS OF EXPERIENCE Rich Allen President Surety & Fidelity Operations 28 YEARS OF EXPERIENCE Larry Seymour Vice President Actuarial & Chief Actuary 20 YEARS OF EXPERIENCE Alan Ogilvie Chief Operating Officer 22 YEARS OF EXPERIENCE Troy Lethem Vice President Information Services & CIO 22 YEARS OF EXPERIENCE John DiBiasi Vice President Distribution 36 YEARS OF EXPERIENCE Paula Pearce President Director of Marketing 16 YEARS OF EXPERIENCE John Rzepinski Vice President CFO & Treasurer 30 YEARS OF EXPERIENCE Capitol |
Alleghany 65 Product and Geographic Mix Product Mix Geographic Mix Note: YTD September 30, 2013 Capitol Casualty 37% Commercial Surety 25% Property 17% BOP 7% Contract Surety 5% Misc. Prof. Lines 5% Workers’ Comp. 3% Comm. Auto 1% A&H 0.3% Midwest 31% Southwest 26% Southeast 19% 13% Northwest 7% Northeast 4% Mid-Atlantic |
Alleghany 66 Industry Mix Industry Note: YTD September 30, 2013 Capitol Commercial Surety 25% Contract Surety 5% Misc. Prof. Lines 5% Bars / Taverns (P&C) 8% Habit. Dwellings (P&C) 8% Restaurants (P&C) 7% Bus. Services (P&C) 6% Retail (P&C) 5% Child Care (P&C) 5% Construction (P&C) 4% Amusement (P&C) 3% Barber / Beauty (P&C) 3% Hotel / Motel (P&C) 3% Detective/Security (P&C) All Other (P&C) 12% 1% |
Alleghany 67 Opportunity to Drive Growth with a Compelling Offering in the Large and Fragmented SME Market The SME market is highly fragmented Few large insurers have focused on the SME market in the past Larger insurers are starting to pursue SME with a micro-targeting strategy, but are moving slowly Small insurers lack product breadth, distribution breadth, and resources to take more market share A compelling offering would allow Capitol to gain profitable share quickly and become a market leader in its selected markets (1) Conning Research Report 2011 ($ in Billions) SME Market Share (1) Capitol $0 $10 $20 $30 $40 $50 $60 $70 $80 2011 Market Share AIG (3%) Hartford (4%) State Farm (4%) Travelers (4%) Other Small Insurers (38%) (Capitol ~0.13%) Other Medium Insurers (23%) Other Large Insurers (23%) Nationwide (4%) $ 78 Billion |
Alleghany 68 Competitive Landscape of Business Model Options Key competitors are evolving toward a buyer-centric approach and some are preparing to venture into the direct space Small Business Buyers Medium Sized Business Buyers Large Business Buyers Product Focus Business Model Buyer-Centric Business Model Direct to Buyer Business Model Limited products to serve the spectrum of buyer Lack of focus on targeted buyers (Product first, buyer second) Manual underwriting Limited Package offerings Industry-targeted appetite with full product suite Automated Packaged products Industry-focused marketing materials Package and sell commercial & consumer products Marketing is targeted to buyers Direct-to-buyer web portal and sales channel Policy and customer service centers work directly with buyers Capitol |
Alleghany 69 Challenges and Opportunities Opportunities Significant underwriting involvement is required Product set is not tailored to any segments of the SME market “We will entertain anything” approach precludes any differentiation and is time consuming and resource intensive Lack of automation We will be more important to our distribution partners as we identify the buyers that we want to target Select segments where we bring expertise and can leverage cross-division products into one-stop shop solutions Continuously assess, prioritize, and launch new targeted segments and distribution partners Build a unified small business system Challenges Capitol |
Alleghany 70 Where We Want to Go 70 Capitol P&C Surety Professional Lines FY2012 YTD2013 FY2014 FY2015 FY2016 |
Alleghany 71 Financial Snapshot (1) YTD through September 30, 2013 Highlights Summary Financials Modest underwriting losses in each year presented Loss ratio overshadowed by high expense ratio Surety business continues to perform well Prior year results negatively impacted by Axiom Capitol ($ in millions) FY 2011 FY 2012 YTD 2013 (1) Gross premiums written $150 $158 $135 Net premiums written $142 $149 $126 Net premiums earned $149 $145 $114 Net losses and loss expenses (83) (86) (57) Acquisition costs (36) (40) (27) General & administrative expenses (36) (40) (33) Underwriting income (loss) ($7) ($21) ($4) GAAP Ratios Loss and loss expense ratio 55.7% 59.4% 50.0% Acquisition cost ratio 24.3% 27.4% 24.0% General & administrative expense ratio 24.4% 27.4% 29.3% Combined ratio 104.4% 114.2% 103.2% |
Alleghany 72 Questions? Capitol |
Roger Gorham – Fixed Income Jack Liebau – Public Equity David Van Geyzel and Udi Toledano – Private Capital Investments 22 November 2013 Alleghany 73 |
74 Jack Liebau President & CEO Jack Liebau President & CEO Alleghany Investments Team includes 6 investment professionals Weston Hicks Alleghany Corporation, President & CEO Roger Gorham SVP, Head of Fixed Income, and Treasurer Roger Gorham SVP, Head of Fixed Income, and Treasurer David Van Geyzel President & CEO David Van Geyzel President & CEO An integrated investment platform that balances fixed income exposure with public and private capital Udi Toledano Chairman Udi Toledano Chairman Investments Team includes 2 Vice Presidents Support from Alleghany legal, accounting, and tax groups Fixed Income Alleghany Capital Partners Public Equity Alleghany Capital Corporation Private Capital Alleghany |
Alleghany 75 Property & Casualty Insurance Cycle – > Drives operational cash flow Catastrophe Losses – > Drive near term cash flow demands Long-Term Casualty Loss Reserves – > Subject to loss cost inflation risk Mandatory Fixed Income Holdings – > Subject to inflation risk Manage duration and credit quality, incorporate fixed rate and floating rate securities Macro Environment and Strategy Investments Our Environment Our Strategy Maintain sufficient liquidity Own assets and businesses that do well in inflationary environments Alleghany Capital Corporation Private Capital Alleghany Capital Partners Public Equity Fixed Income |
Portfolio Allocation Investments Debt Securities: $15.0 billion Equity Securities: $2.0 billion Short-Term Investments: $1.0 billion Other Invested Assets: $0.8 billion Cash: $415 million Total: $19.2 billion Note: Data as of September 30, 2013 Alleghany 76 |
Alleghany 77 Fixed Income: Introduction Investments Sector Allocation Credit Quality ($ in billions) Duration: 4.3 years Note: Data as of September 30, 2013 Our goal is to preserve capital and maximize after-tax return Municipals 37.4% MBS and ABS 19.1% U.S. Corporate 13.6% Foreign Corporate 11.1% Foreign Government 6.6% U.S. Government 6.3% Short 5.9% 0.0% 0.0% Term $0.1 $1.3 $3.2 $7.8 $2.6 $ - $4.0 $8.0 Below BBB/Baa BBB/Baa A/A AA/Aa AAA/Aaa |
Alleghany 78 Fixed Income: Ares Management, LLC Investments July 2013 $250 million direct equity investment $1 billion total management opportunity Transaction: On July 31, 2013, Alleghany acquired a 6.25% stake in Ares Management, LLC for a purchase price of $250 million and agreed to invest as much as $1.0 billion in existing and new Ares investment strategies Investment Thesis: Investment in a broad spectrum of products, including both investment and non-investment grade securities. Opportunity for Alleghany to access Ares’ expertise in these products to prudently enhance Alleghany’s fixed income returns and help Ares expand into the insurance industry has acquired a stake in: Fixed Income Assets and Related Funds Fixed Income Assets 6% 94% Investment grade assets 2% Below investment grade assets 3% Funds 1% Ares Managed |
Alleghany 79 Alleghany Capital Partners (“ACP”): Goal and Strategy Investments ACP’s goal is to grow the equity portfolios of Alleghany and its (re)insurance subsidiaries over the long term, at a rate consistently above market averages, risk adjusted ACP believes that intensive fundamental research, concentrated positions, and long-term holding periods are necessary to produce consistently superior investment results |
Alleghany 80 Alleghany Capital Partners: Highlights Total equity exposure: $2.0 billion Dividend yield: 2.2% Team includes 6 investment professionals Top 5 positions represent more than one third of total equities Investments Note: Data as of September 30, 2013 |
Alleghany 81 Alleghany Capital Corporation (“ACC”): Goal and Strategy Horizon Minimum investment of $50 million, minimum annual EBITDA of $10 million Growth Capital and Special Situations Acquisitions, Recapitalizations, and Management Buyouts Control Investment Majority Prefer majority control, but will consider minority investments 1 2 Minimum investment of $20 million, includes pre-revenue companies Long-term Flexible Investments ACC’s goal is to generate above-market returns over the long-term, investing primarily in equity securities of private companies ACC’s strategy is to leverage its competitive advantages of permanent and scalable capital to generate proprietary deal flow and then partner with a select group of owner- managers to grow their businesses |
Alleghany 82 Company Highlights Kentucky Trailer is a leading manufacturer of custom trailers for the moving and storage industry and other niche markets. Investment closed in August 2013 ACC’s differentiated business model compared with standard private equity funds was critical to Gary A. Smith, Sr. (CEO) and the Tway Family Growing business with a dedicated management team, significant competitive advantages, and meaningful organic and acquisition growth opportunities Bourn & Koch is a manufacturer of precision machine tools and provider of related replacement parts and services. Investment closed in April 2012 ACC’s long-term investment horizon and willingness to put limited leverage on the company were critical to the partnership with Tim Helle (President) Niche business with a driven management team, significant competitive advantages, and strong cash flow dynamics. Platform for future acquisitions Growth capital investments in the oil and gas E&P industry. The core thesis for both investments is based on technology unlocking additional resources SORC was founded in 2011 and ACC’s initial investment in ORX was made in 2008 ACC’s scalable capital model and long-term investment horizon were key to ACC’s partnerships with Mark See (CEO of SORC) and Luis Baños (CEO of ORX ) Alleghany Capital Corporation: Select Portfolio Company Highlights Investments |
Alleghany 83 Questions? Investments |
Jack Sennott Financial Statements 22 November 2013 Alleghany 84 |
Alleghany 85 Financial Goal and Strategy Financial Statements Grow BVPS at a rate exceeding total return on S&P 500 Total Return Investment Strategy Global Reinsurance U.S. Specialty Insurance Superior Risk Adjusted Returns Core Tenets of Our Strategy Financial Goal Own well-capitalized and financially secure reinsurance and insurance operations run by high quality management teams Align owners’ and managers’ interests by structuring compensation to reward underwriting profits Maintain a strong balance sheet with conservative reporting and reserving practices Maintain flexibility to allocate capital to highest risk-adjusted return opportunities Take a long-term approach |
Alleghany 86 Alleghany Consolidated Statement of Earnings Financial Statements ($ in millions, except per share data) September 30, 2013 September 30, 2012 Premiums written: Gross premiums written 3,752.1 $ 3,078.8 $ Net premiums written 3,285.9 2,700.4 Revenues Net premiums earned 3,183.2 $ 2,622.9 $ Net investment income 334.5 234.6 Net realized investment gains 95.6 119.8 Other than temporary impairment losses (41.9) (2.9) Gain on bargain purchase - 494.9 Other income 37.8 43.4 Total revenues 3,609.2 3,512.7 Costs and Expenses Net loss and loss expenses incurred 1,862.4 1,587.8 Commissions, brokerage and other underwriting expenses 998.8 592.8 All other expenses 134.6 379.0 Interest expense 65.0 46.5 Total costs and expenses 3,060.8 2,606.1 Earnings before income taxes 548.4 906.6 Income taxes 125.0 111.7 Net earnings 423.4 794.9 Net earnings attributable to noncontrolling interest 0.2 - Net earnings attributable to Alleghany stockholders 423.2 $ 794.9 $ Basic earnings per share attributable to Alleghany stockholders 25.20 $ 53.19 $ Diluted earnings per share attributable to Alleghany stockholders 25.20 53.14 Ratios and Supplemental Information Net loss and loss expenses incurred: Current year 2,043.8 1,594.6 Prior years (181.4) (6.8) 1,862.4 $ 1,587.8 $ Loss and loss expense ratio 58.5% 60.5% Expense ratio 31.4% 22.6% Combined ratio 89.9% 83.1% Nine Months Ended |
Alleghany 87 Alleghany Balance Sheet Financial Statements ($ in millions) September 30, 2013 December 31, 2012 Assets Investments: Available-for-sale securities at fair value: Equity securities 2,035.2 $ 1,424.0 $ Debt securities 15,041.1 15,999.5 Short-term investments 949.3 366.0 18,025.6 17,789.6 Other invested assets 771.7 537.4 Total investments 18,797.3 18,326.9 Cash 414.7 649.5 Reinsurance recoverables 1,376.1 1,348.6 Goodwill and intangible assets 225.6 212.2 All other assets 2,428.1 2,270.7 Total assets 23,241.8 $ 22,808.0 $ Liabilities and Stockholders’ Equity Loss and loss adjustment expenses 12,030.3 $ 12,239.8 $ Unearned premiums 1,830.0 1,705.3 Senior Notes 1,798.7 1,811.5 All other liabilities 843.2 647.6 Total liabilities 16,502.2 16,404.2 $ - $ - Total stockholders’ equity attributable to Alleghany stockholders 6,716.5 6,403.8 Noncontrolling interest 23.0 - Total stockholders’ equity 6,739.6 6,403.8 Total liabilities and stockholders’ equity 23,241.8 $ 22,808.0 $ |
Alleghany 88 Capital Structure and Leverage Ratios Financial Statements ($ in millions, except ratios) September 30, 2013 December 31, 2012 Capital Structure Senior Notes 1,798.7 $ 1,811.5 $ Total stockholders’ equity attributable to Alleghany stockholders 6,716.5 6,403.8 Total capitalization 8,515.2 $ 8,215.3 $ Debt Detail Total Debt 1,798.7 $ 1,811.5 $ Less: Holding Company Liquidity (629.2) (731.7) Total Net Debt 1,169.5 $ 1,079.8 $ Leverage ratios Total Debt to Capitalization 0.2 0.2 Total Net Debt to Capitalization 0.1 0.1 Net premiums written (trailing 12 months) 4,309.4 $ 3,724.0 $ Net premiums written (trailing 12 months) to stockholders’ equity 0.6 0.6 Total investments and cash 19,212.0 $ 18,976.4 $ Total investments and cash to stockholders’ equity 2.9 3.0 Reserve for losses and loss expenses 12,030.3 $ 12,239.8 $ Deduct: reinsurance recoverable on ceded losses (1,310.5) (1,305.9) Net reserve for losses and loss expenses 10,719.8 10,933.9 Net reserve for losses and loss expenses to stockholders’ equity 1.6 1.7 |
Alleghany 89 Return on Average Stockholders’ Equity Financial Statements Book Value Per Share (through 9/30/13) Annualized BVPS growth 5.7% 7.5% ($ in millions, except ratios) September 30, 2013 Opening stockholders’ equity attributable to Alleghany stockholders 6,403.8 $ Closing stockholders’ equity attributable to Alleghany stockholders 6,716.5 Average stockholders’ equity 6,560.2 $ Net earnings attributable to Alleghany stockholders 423.2 $ Return on average stockholders’ equity 6.5% Annualized return on average stockholders’ equity 8.6% Nine Months Ended |
Alleghany 90 Alleghany Consolidated Performance Financial Statements Net Premiums Written Source: Company filings Consolidated Net Income (1) Combined Ratio Total Equity (1) (1) Attributable to Alleghany stockholders $299 $148 $271 $199 $143 $702 $423 $0 $200 $400 $600 $800 2007 2008 2009 2010 2011 2012 9/30 2013 $963 $898 $831 $736 $775 $3,724 $3,286 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2007 2008 2009 2010 2011 2012 9/30 2013 72.5 90.3 84.7 83.0 93.4 94.1 89.9 0 20 40 60 80 100 2007 2008 2009 2010 2011 2012 9/30 2013 $2,485 $2,347 $2,718 $2,909 $2,926 $6,404 $6,717 $0 $1,500 $3,000 $4,500 $6,000 $7,500 2007 2008 2009 2010 2011 2012 9/30 2013 |
Alleghany 91 Attractive Long-Term Returns (%) Alleghany BVPS Alleghany Price S&P 500 2002 – 3Q’13 CAGR (%) (1) Alleghany BVPS 8.0% Alleghany Price 8.4% S&P 500 5.4% +148% +159% +85% Focus on Book Value per Share Growth Long-term Conservative Orientation Quasi-autonomous Subsidiary Operating Model Source: SNL Financial, Company filings, CapIQ (1) Alleghany price and S&P500 CAGR calculated on a total return basis Alleghany has a demonstrated track record of creating long-term stockholder value Financial Statements 50 100 150 200 250 300 |
Alleghany 92 Summary Financial Statements Long-term focus with track record of book value growth Highly-experienced management team with a demonstrated track record Leading franchise across global reinsurance and U.S. specialty insurance with significant capital and scale Disciplined underwriter with superior risk management through insurance cycles Strong balance sheet with solid financial performance An integrated investment platform that balances fixed income exposure with public and private capital Significant financial flexibility at the holding company level |
Alleghany 93 Questions? Financial Statements |