Alleghany Corp (Y) has reported a 61.43 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $155.83 million, or $10.09 a share in the quarter, compared with $96.53 million, or $6.07 a share for the same period last year.
Revenue during the quarter surged 35.79 percent to $1,614.62 million from $1,189.04 million in the previous year period. Net premium earned for the quarter increased 19.49 percent or $204.44 million to $1,253.52 million.
Total expenses increase substantially
Benefits, losses and expenses for the quarter were at $1,407.44 million, or 112.28 percent of premium earned from $1,055.89 million or 100.65 percent of premium earned in the last year period. Operating income for the quarter was $207.18 million, compared with $133.14 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $20.30 million compared with $0.30 million in the prior year period. At the same time, adjusted EBITDA margin improved 123 basis points in the quarter to 1.26 percent from 0.03 percent in the last year period.
Net investment income was at $120.60 million for the quarter, up 2.07 percent or $2.44 million from year-ago period. The company has recorded a gain on investments of $15.49 million in the quarter compared with a loss of $23.48 million for the previous year period.
Weston Hicks, president and chief executive officer of Alleghany, stated, "Our third quarter results were strong and represent solid underwriting performance from each of our (re)insurance businesses and a positive contribution from Alleghany Capital as all of its businesses delivered improved results. A rebound in equity markets also contributed to Alleghany’s 2.4% growth in book value in the quarter. Alleghany’s underwriting results produced a combined ratio of 91.0% in the third quarter and 92.0% for the year to date. The third quarter underwriting results reflect favorable prior year reserve development of $86.4 million, primarily at TransRe and RSUI, partially offset by catastrophe losses of $32.1 million. We remain pleased with the performance at TransRe and our insurance businesses both of which are successfully executing on their operating plans in challenging markets."
Assets grow, liabilities fall
Total assets increased 2.91 percent or $682.86 million to $24,117 million on Sep. 30, 2016.
Return on assets stood at 0.74 percent in the quarter, up 0.23 from 0.51 percent in the last year period. At the same time, return on equity was at 1.92 percent in the quarter, up 0.63 from 1.29 percent in the last year period.
Investments come down marginally
Investments stood at $18,526.66 million as on Sep. 30, 2016, down 0.62 percent or $115.05 million from year-ago. Meanwhile, yield on investments went up 2 basis points to 0.65 percent in the quarter.
Total debt was at $1,383.68 million as on Sep. 30, 2016, down 21.36 percent or $375.81 million from year-ago. Shareholders equity stood at $8,105.12 million as on Sep. 30, 2016, up 8.64 percent or $644.34 million from year-ago. As a result, debt to equity ratio went down 7 basis points to 0.17 percent in the quarter from 0.24 percent in the last year period.
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