Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 24, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | Y | |
Entity Registrant Name | ALLEGHANY CORP /DE | |
Entity Central Index Key | 775,368 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 14,836,571 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Securities at fair value: | ||
Available for sale equity securities (cost: 2017 - $3,170,673) | $ 4,099,467 | |
Equity securities (cost: 2018 - $3,655,220) | $ 5,028,578 | |
Debt securities (amortized cost: 2018 - $12,179,758; 2017 - $12,536,772) | 12,071,191 | 12,721,399 |
Short-term investments | 690,627 | 578,054 |
Marketable Securities, Total | 17,790,396 | 17,398,920 |
Other invested assets | 556,438 | 743,358 |
Total investments | 19,042,723 | 18,800,642 |
Cash | 646,908 | 838,375 |
Accrued investment income | 98,723 | 105,877 |
Premium balances receivable | 839,017 | 797,346 |
Reinsurance recoverables | 1,768,841 | 1,746,488 |
Ceded unearned premiums | 228,459 | 190,252 |
Deferred acquisition costs | 471,282 | 453,346 |
Property and equipment at cost, net of accumulated depreciation and amortization | 196,314 | 125,337 |
Goodwill | 346,022 | 334,905 |
Intangible assets, net of amortization | 465,830 | 459,037 |
Current taxes receivable | 100,130 | 31,085 |
Net deferred tax assets | 136,489 | |
Funds held under reinsurance agreements | 755,734 | 706,042 |
Other assets | 835,901 | 659,096 |
Total assets | 25,795,884 | 25,384,317 |
Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity | ||
Loss and loss adjustment expenses | 11,854,859 | 11,871,250 |
Unearned premiums | 2,300,788 | 2,182,294 |
Senior Notes and other debt | 1,581,676 | 1,484,897 |
Reinsurance payable | 160,625 | 156,376 |
Net deferred tax liabilities | 6,198 | |
Other liabilities | 1,158,146 | 1,068,907 |
Total liabilities | 17,062,292 | 16,763,724 |
Redeemable noncontrolling interests | 138,507 | 106,530 |
Common stock (shares authorized: 2018 and 2017 - 22,000,000; shares issued: 2018 and 2017 - 17,459,961) | 17,460 | 17,460 |
Contributed capital | 3,612,862 | 3,612,109 |
Accumulated other comprehensive (loss) income | (220,808) | 618,118 |
Treasury stock, at cost (2018 - 2,541,581 shares; 2017 - 2,069,461 shares) | (1,103,835) | (824,906) |
Retained earnings | 6,289,406 | 5,091,282 |
Total stockholders' equity attributable to Alleghany stockholders | 8,595,085 | 8,514,063 |
Total liabilities, redeemable noncontrolling interest and stockholders' equity | 25,795,884 | 25,384,317 |
Commercial Mortgage Loan Portfolio | ||
Securities at fair value: | ||
Commercial mortgage loans | $ 695,889 | $ 658,364 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Available for sale equity securities, cost | $ 3,170,673 | |
Equity securities, cost | $ 3,655,220 | |
Debt securities, amortized cost | $ 12,179,758 | $ 12,536,772 |
Common stock, Shares authorized | 22,000,000 | 22,000,000 |
Common stock, Shares issued | 17,459,961 | 17,459,961 |
Treasury stock, shares | 2,541,581 | 2,069,461 |
Consolidated Statements of Earn
Consolidated Statements of Earnings and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||||
Net premiums earned | $ 1,225,346 | $ 1,239,721 | $ 3,670,161 | $ 3,692,838 |
Net investment income | 127,329 | 104,663 | 377,728 | 321,857 |
Change in the fair value of equity securities | 370,175 | 512,771 | ||
Net realized capital gains | 16,230 | 32,921 | 67,197 | 101,840 |
Other than temporary impairment losses | (6,131) | (13,095) | ||
Other than temporary impairment losses | (3) | (514) | ||
Total revenues | 2,177,415 | 1,667,483 | 5,660,033 | 4,753,853 |
Costs and Expenses | ||||
Net loss and loss adjustment expenses | 957,703 | 1,491,848 | 2,366,491 | 2,926,039 |
Commissions, brokerage and other underwriting expenses | 407,679 | 398,163 | 1,216,057 | 1,220,415 |
Other operating expenses | 415,378 | 277,918 | 1,023,440 | 678,226 |
Corporate administration | 19,094 | (4,689) | 40,998 | 26,601 |
Amortization of intangible assets | 5,500 | 5,765 | 16,730 | 14,140 |
Interest expense | 22,189 | 20,804 | 65,997 | 62,728 |
Total costs and expenses | 1,827,543 | 2,189,809 | 4,729,713 | 4,928,149 |
Earnings (losses) before income taxes | 349,872 | (522,326) | 930,320 | (174,296) |
Income taxes | 60,413 | (212,379) | 171,275 | (116,368) |
Net earnings (losses) | 289,459 | (309,947) | 759,045 | (57,928) |
Net earnings attributable to noncontrolling interest | 4,559 | 4,210 | 7,454 | 5,242 |
Net earnings (losses) attributable to Alleghany stockholders | 284,900 | (314,157) | 751,591 | (63,170) |
Net earnings (losses) | 289,459 | (309,947) | 759,045 | (57,928) |
Other comprehensive income (loss): | ||||
Change in unrealized gains (losses), net of deferred taxes of ($8,932)and $52,766 for the three months ended September 30, 2018 and 2017, respectively; and of ($56,690) and $196,336 for the nine months ended September 30, 2018 and 2017, respectively | (33,601) | 97,994 | (213,263) | 364,623 |
Less: reclassification for net realized capital gains and other than temporary impairments, net of taxes of ($3,408) and ($9,377) for the three months ended September 30, 2018 and 2017, respectively; and of ($4,398) and ($31,061) for the nine months ended September 30, 2018 and 2017, respectively | (12,819) | (17,414) | (16,546) | (57,684) |
Change in unrealized currency translation adjustment, net of deferred taxes of ($407) and $3,967 for the three months ended September 30, 2018 and 2017, respectively; and of ($1,848) and $12,050 for the nine months ended September 30, 2018 and 2017 respectively | (1,530) | 7,368 | (6,953) | 22,379 |
Retirement plans | (551) | 98 | (1,664) | (199) |
Comprehensive income (loss) | 240,958 | (221,901) | 520,619 | 271,191 |
Comprehensive income attributable to noncontrolling interests | 4,559 | 4,210 | 7,454 | 5,242 |
Comprehensive income (loss) attributable to Alleghany stockholders | $ 236,399 | $ (226,111) | $ 513,165 | $ 265,949 |
Basic earnings (losses) per share attributable to Alleghany stockholders | $ 19.07 | $ (20.38) | $ 49.55 | $ (4.10) |
Diluted earnings (losses) per share attributable to Alleghany stockholders | $ 19.07 | $ (20.90) | $ 49.53 | $ (4.10) |
Noninsurance Revenue | ||||
Revenues | ||||
Noninsurance revenue | $ 438,338 | $ 296,309 | $ 1,032,690 | $ 650,413 |
Consolidated Statements of Ea_2
Consolidated Statements of Earnings and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Change in unrealized gains (losses), deferred taxes | $ (8,932) | $ 52,766 | $ (56,690) | $ 196,336 |
Reclassification for net realized capital gains and other than temporary impairments,taxes | (3,408) | (9,377) | (4,398) | (31,061) |
Change in unrealized currency translation adjustment, deferred taxes | $ (407) | $ 3,967 | $ (1,848) | $ 12,050 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities | ||
Net earnings (losses) | $ 759,045 | $ (57,928) |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 95,427 | 106,197 |
Change in the fair value of equity securities | (512,771) | |
Net realized capital (gains) losses | (67,197) | (101,840) |
Other than temporary impairment losses | 13,095 | |
Other than temporary impairment losses | 514 | |
(Increase) decrease in reinsurance recoverables, net of reinsurance payable | (18,104) | (413,548) |
(Increase) decrease in premium balances receivable | (41,671) | (134,088) |
(Increase) decrease in ceded unearned premiums | (38,207) | (7,368) |
(Increase) decrease in deferred acquisition costs | (17,936) | (28,000) |
(Increase) decrease in funds held under reinsurance agreements | (49,692) | (94,222) |
Increase (decrease) in unearned premiums | 118,494 | 120,456 |
Increase (decrease) in loss and loss adjustment expenses | (16,391) | 1,369,176 |
Change in unrealized foreign currency exchange rate losses (gains) | 63,452 | (134,404) |
Other, net | 48,819 | (211,479) |
Net adjustments | (435,263) | 483,975 |
Net cash provided by (used in) operating activities | 323,782 | 426,047 |
Cash flows from investing activities | ||
Purchases of debt securities | (3,206,369) | (4,181,182) |
Purchases of equity securities | (3,218,941) | |
Purchase of equity securities | (678,311) | |
Sales of debt securities | 2,279,104 | 2,836,272 |
Maturities and redemptions of debt securities | 1,183,469 | 1,397,408 |
Sales of equity securities | 2,970,760 | |
Sales of equity securities | 532,864 | |
Net (purchases) sales of short-term investments | (113,699) | 174,501 |
Net (purchases) sales and maturities of commercial mortgage loans | (37,525) | (54,822) |
(Purchases) sales of property and equipment | (38,866) | 10,268 |
Purchases of affiliates and subsidiaries, net of cash acquired | (110,636) | (244,311) |
Other, net | 59,382 | 28,302 |
Net cash provided by (used in) investing activities | (130,587) | (281,745) |
Cash flows from financing activities | ||
Treasury stock acquisitions | (282,053) | (8,549) |
Increase (decrease) in other debt | 50,892 | (27,202) |
Cash dividends paid | (153,967) | |
Other, net | 7,854 | (17,070) |
Net cash provided by (used in) financing activities | (377,274) | (52,821) |
Effect of foreign exchange rate changes on cash | (7,388) | 16,269 |
Net increase (decrease) in cash | (191,467) | 107,750 |
Cash at beginning of period | 838,375 | 594,091 |
Cash at end of period | 646,908 | 701,841 |
Cash paid during period for: | ||
Interest paid | 59,806 | 58,133 |
Income taxes paid (refund received) | $ 33,332 | $ 29,320 |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Principles | 1. Summary of Significant Accounting Principles (a) Principles of Financial Statement Presentation This Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”) 10-Q Alleghany Corporation, a Delaware corporation, owns and manages certain operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. Through its wholly-owned subsidiary Transatlantic Holdings, Inc. (“TransRe”), Alleghany is engaged in the property and casualty reinsurance business. TransRe has been a subsidiary of Alleghany since March 2012. Through its wholly-owned subsidiary Alleghany Insurance Holdings LLC (“AIHL”), Alleghany is engaged in the property and casualty insurance business. AIHL’s insurance operations are principally conducted by its subsidiaries RSUI Group, Inc. (“RSUI”) and CapSpecialty, Inc. (“CapSpecialty”). RSUI has been a subsidiary of AIHL since July 2003 and CapSpecialty has been a subsidiary of AIHL since January 2002. AIHL Re LLC (“AIHL Re”), a captive reinsurance company which provides reinsurance to Alleghany’s current and former insurance operating subsidiaries and affiliates, has been a subsidiary of Alleghany since its formation in May 2006. Prior to December 31, 2017, AIHL’s insurance operations also included Pacific Compensation Corporation (“PacificComp”). On September 12, 2017, AIHL signed a definitive agreement to sell PacificComp to CopperPoint Mutual Insurance Company (“CopperPoint”) for total cash consideration of approximately $158 million. The transaction closed on December 31, 2017, at which time: (i) approximately $442 million of PacificComp assets, consisting primarily of debt securities, and approximately $316 million of PacificComp liabilities, consisting primarily of loss and loss adjustment expenses (“LAE”) reserves, were transferred to CopperPoint; and (ii) AIHL recorded an after-tax gain of approximately $16 million, which included a tax benefit. In connection with the transaction, AIHL Re will continue to provide adverse development reinsurance coverage on PacificComp’s pre-acquisition Although Alleghany’s primary sources of revenues and earnings are its reinsurance and insurance operations and investments, Alleghany also sources, executes, manages and monitors certain private investments primarily through its wholly-owned subsidiary Alleghany Capital Corporation (“Alleghany Capital”). Alleghany Capital’s investments include: • Bourn & Koch, Inc. (“Bourn & Koch”), a manufacturer/remanufacturer of specialty machine tools and supplier of replacement parts, accessories and services for a variety of cutting technologies, headquartered in Rockford, Illinois; • R.C. Tway Company, LLC (“Kentucky Trailer”), a manufacturer of custom trailers and truck bodies for the moving and storage industry and other markets, headquartered in Louisville, Kentucky; • IPS-Integrated Project Services, LLC (“IPS”), a technical service provider focused on the global pharmaceutical and biotechnology industries, headquartered in Blue Bell, Pennsylvania; • Jazwares, LLC (together with its affiliates, “Jazwares”), a global toy, entertainment and musical instrument company, headquartered in Sunrise, Florida; • WWSC Holdings, LLC (“W&W|AFCO Steel”), a structural steel fabricator and erector, headquartered in Oklahoma City, Oklahoma; and • a 45 percent equity interest in Wilbert Funeral Services, Inc. (“Wilbert”), a provider of products and services for the funeral and cemetery industries and precast concrete markets, headquartered in Overland Park, Kansas. The results of W&W|AFCO Steel have been included in Alleghany’s consolidated results beginning with its acquisition by Alleghany Capital on April 28, 2017. On February 7, 2018, W&W|AFCO Steel acquired Hirschfeld Holdings, LP (“Hirschfeld”). Wilbert is accounted for under the equity method of accounting and is included in other invested assets. The results of Wilbert have been included in Alleghany’s consolidated results beginning with its acquisition by Alleghany Capital on August 1, 2017. In addition, Alleghany owns certain other holding-company investments. Alleghany’s wholly-owned subsidiary Stranded Oil Resources Corporation (“SORC”), is an exploration and production company focused on enhanced oil recovery, headquartered in Golden, Colorado. Alleghany’s wholly-owned subsidiary, Alleghany Properties Holdings LLC (“Alleghany Properties”), owns and manages certain properties in the Sacramento, California region. Alleghany’s public equity investments are managed primarily through Alleghany’s wholly-owned subsidiary Roundwood Asset Management LLC. Unless the context otherwise requires, references to “Alleghany” include Alleghany together with its subsidiaries. The accompanying consolidated financial statements include the results of Alleghany and its wholly-owned and majority-owned The portion of stockholders’ equity, net earnings and comprehensive income that is not attributable to Alleghany stockholders is presented on the Consolidated Balance Sheets and the Consolidated Statements of Earnings and Comprehensive Income as noncontrolling interests. Because all noncontrolling interests have the option to sell their ownership interests to Alleghany in the future (generally through 2024), the portion of stockholders’ equity that is not attributable to Alleghany stockholders is presented on the Consolidated Balance Sheets as redeemable noncontrolling interests for all periods presented. During the first nine months of 2018, the noncontrolling interests outstanding were approximately as follows: Bourn & Koch - 11 percent; Kentucky Trailer - 21 percent; IPS - 15 percent; Jazwares - 23 percent; and W&W|AFCO Steel - 20 percent. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Alleghany relies on historical experience and on various other assumptions that it believes to be reasonable under the circumstances to make judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those reported results to the extent that those estimates and assumptions prove to be inaccurate. Changes in estimates are reflected in the Consolidated Statements of Earnings and Comprehensive Income in the period in which the changes are made. (b) Other Significant Accounting Principles Alleghany’s significant accounting principles can be found in Note 1 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K. (c) Recent Accounting Standards Recently Adopted In February 2018, the Financial Accounting Standards Board (the “FASB”) issued guidance on certain tax effects caused by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017. The Tax Act, among other things, reduced the U.S. corporate federal income tax rate from 35.0 percent to 21.0 percent, effective January 1, 2018 for the 2018 tax year. Under such circumstances, GAAP requires that the value of deferred tax assets and liabilities be reduced through tax expense. The new guidance provides an option to reclassify any stranded tax amounts that remain in accumulated other comprehensive income to retained earnings, either retrospectively or at the beginning of the period in which the adoption is elected. This guidance became effective in the first quarter of 2018 for public entities, with early adoption permitted in 2017. Alleghany adopted this new guidance in the first quarter of 2018 and has elected to reclassify stranded tax amounts that remain in accumulated other comprehensive income, in the amount of approximately $135 million, to retained earnings as of January 1, 2018. See Note 7(b) of this Form 10-Q 10-K In March 2017, the FASB issued guidance that reduces the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The guidance applies specifically to noncontingent call features that are callable at a predetermined and fixed price and date. The accounting for purchased callable debt securities held at a discount is not affected. This guidance is effective in the first quarter of 2019 for public entities with early adoption permitted. Alleghany adopted this guidance in the fourth quarter of 2017 and recorded a cumulative effect reduction of approximately $13 million directly to opening 2017 retained earnings and an offsetting increase in opening 2017 accumulated other comprehensive income. The implementation did not have a material impact on Alleghany’s results of operations and financial condition. See Note 7(b) of this Form 10-Q for further information on accumulated other comprehensive income. In May 2014, the FASB, together with the International Accounting Standards Board, issued guidance on the recognition of revenue from contracts with customers. Under this guidance, revenue is recognized as the transfer of goods and services to customers takes place and in amounts that reflect the payment or payments that are expected to be received from the customers for those goods and services. This guidance also requires new disclosures about revenue. Revenues related to insurance and reinsurance contracts and revenues from investments are not impacted by this guidance, whereas noninsurance revenues arising from the sale of manufactured goods and services is generally included within the scope of this guidance. This guidance, and all related amendments, became effective in the first quarter of 2018 for public entities, with early adoption permitted in 2017. Alleghany adopted this guidance in the first quarter of 2018 using the modified retrospective transition approach and the implementation did not have a material impact on its results of operations and financial condition. See Note 10 of this Form 10-Q In January 2016, the FASB issued guidance that changes the recognition and measurement of certain financial instruments. This guidance requires investments in equity securities (except those accounted for under the equity method of accounting, but including partnership investments not accounted for under the equity method) to be measured at fair value with changes in fair value recognized in net earnings. For equity securities that do not have readily determinable fair values, measurement may be at cost, adjusted for any impairment and changes resulting from observable price changes for a similar investment of the same issuer. This guidance also changes the presentation and disclosure of financial instruments by: (i) requiring that financial instrument disclosures of fair value use the exit price notion; (ii) requiring separate presentation of financial assets and financial liabilities by measurement category and form, either on the balance sheet or the accompanying notes to the financial statements; (iii) requiring separate presentation in other comprehensive income for the portion of the change in a liability’s fair value resulting from instrument-specific credit risk when an election has been made to measure the liability at fair value; and (iv) eliminating the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017 for public entities, including interim periods within those fiscal years. Except for the change in presentation for instrument-specific credit risk, this guidance does not permit early adoption. Alleghany adopted this guidance in the first quarter of 2018. As of January 1, 2018, approximately $736 million of net unrealized gains of equity securities, net of deferred taxes, were reclassified from accumulated other comprehensive income to retained earnings. Subsequently, all changes in unrealized gains or losses of equity securities, net of deferred taxes, were presented in the Consolidated Statements of Earnings rather than the Consolidated Statements of Comprehensive Income, under the caption “change in the fair value of equity securities.” Results arising from partnership investments, whether accounted for under the equity method or at fair value, continue to be reported as a component of net investment income. The implementation did not have a material impact on Alleghany’s financial condition. See Note 3 of this Form 10-Q for further information on Alleghany’s equity securities, and Note 7(b) of this Form 10-Q for further information on accumulated other comprehensive income. Future Application of Accounting Standards In February 2016, the FASB issued guidance on leases. Under this guidance, a lessee is required to recognize lease liabilities and corresponding right-of-use assets for leases with terms of more than one year, whereas under current guidance, a lessee is only required to recognize assets and liabilities for those leases qualifying as capital leases. This guidance also requires new disclosures about the amount, timing and uncertainty of cash flows arising from leases. The accounting by lessors is to remain largely unchanged. This guidance is effective in the first quarter of 2019 for public entities, with early adoption permitted. A modified retrospective transition approach is required for all leases in existence as of, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Alleghany will adopt this guidance in the first quarter of 2019 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. See Note 12(b) to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K for further information on Alleghany’s leases. In June 2016, the FASB issued guidance on credit losses. Under this guidance, a company is required to measure all expected credit losses on loans, reinsurance recoverables and other financial assets accounted for at cost or amortized cost, as applicable. Estimates of expected credit losses are to be based on historical experience, current conditions and reasonable and supportable forecasts. Credit losses for securities accounted for on an available-for-sale In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. Under this guidance, if an initial qualitative assessment indicates that the fair value of an operating subsidiary may be less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount of the operating subsidiary exceeds its estimated fair value. Any resulting impairment loss recognized cannot exceed the total amount of goodwill associated with the operating subsidiary. This guidance is effective in the first quarter of 2020 for public entities, with early adoption permitted. Alleghany will adopt this guidance in the first quarter of 2020 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. See Note 2 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K for further information on Alleghany’s goodwill. In August 2017, the FASB issued guidance that simplifies the requirements to achieve hedge accounting, better reflects the economic results of hedging in the financial statements and improves the alignment between hedge accounting and a company’s risk management activities. This guidance is effective in the first quarter of 2019 for public entities, with early adoption permitted. Alleghany will adopt this guidance in the first quarter of 2019 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. In August 2018, the FASB issued guidance that changes the financial statement disclosure requirements for measuring fair value. With respect to financial instruments classified as “Level 3” in the fair value disclosure hierarchy, the guidance requires certain additional disclosures for public entities related to amounts included in other comprehensive income and significant unobservable inputs used in the valuation, while removing disclosure requirements related to an entity’s overall valuation processes. The guidance also removes certain disclosure requirements related to transfers between financial instruments classified as “Level 1” and “Level 2” and provides clarification on certain other existing disclosure requirements. This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted with respect to any eliminated or modified disclosures. Alleghany will adopt this guidance in the first quarter of 2020 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value of Financial Instruments | 2. Fair Value of Financial Instruments The following table presents the carrying value and estimated fair value of Alleghany’s consolidated financial instruments as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value ($ in millions) Assets Investments (excluding equity method investments and loans) (1) $ 17,791.3 $ 17,791.3 $ 17,406.5 $ 17,406.5 Liabilities Senior Notes and other debt (2) $ 1,581.7 $ 1,701.8 $ 1,484.9 $ 1,614.6 (1) This table includes debt and equity securities, as well as partnership and non-marketable (2) See Note 8 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K The following tables present Alleghany’s financial instruments measured at fair value and the level of the fair value hierarchy of inputs used as of September 30, 2018 and December 31, 2017: Level 1 Level 2 Level 3 Total ($ in millions) As of September 30, 2018 Equity securities: Common stock $ 5,016.7 $ 3.5 $ - $ 5,020.2 Preferred stock - - 8.4 8.4 Total equity securities 5,016.7 3.5 8.4 5,028.6 Debt securities: U.S. Government obligations - 1,028.6 - 1,028.6 Municipal bonds - 2,604.3 - 2,604.3 Foreign government obligations - 902.0 - 902.0 U.S. corporate bonds - 2,040.7 403.0 2,443.7 Foreign corporate bonds - 1,310.4 108.4 1,418.8 Mortgage and asset-backed securities: Residential mortgage-backed securities (“RMBS”) (1) - 1,115.6 - 1,115.6 Commercial mortgage-backed securities (“CMBS”) - 523.9 - 523.9 Other asset-backed securities (2) - 654.4 1,379.9 2,034.3 Total debt securities - 10,179.9 1,891.3 12,071.2 Short-term investments - 690.6 - 690.6 Other invested assets (3) - - 0.9 0.9 Total investments (excluding equity method investments and loans) $ 5,016.7 $ 10,874.0 $ 1,900.6 $ 17,791.3 Senior Notes and other debt $ - $ 1,504.1 $ 197.7 $ 1,701.8 Level 1 Level 2 Level 3 Total ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 4,090.7 $ 3.8 $ - $ 4,094.5 Preferred stock - 3.1 1.9 5.0 Total equity securities 4,090.7 6.9 1.9 4,099.5 Debt securities: U.S. Government obligations - 948.0 - 948.0 Municipal bonds - 3,682.1 - 3,682.1 Foreign government obligations - 1,006.6 - 1,006.6 U.S. corporate bonds - 2,173.0 260.0 2,433.0 Foreign corporate bonds - 1,424.6 75.2 1,499.8 Mortgage and asset-backed securities: RMBS (1) - 833.8 161.8 995.6 CMBS - 550.1 1.6 551.7 Other asset-backed securities (2) - 503.3 1,101.3 1,604.6 Total debt securities - 11,121.5 1,599.9 12,721.4 Short-term investments - 578.1 - 578.1 Other invested assets (3) - - 7.5 7.5 Total investments (excluding equity method investments and loans) $ 4,090.7 $ 11,706.5 $ 1,609.3 $ 17,406.5 Senior Notes and other debt $ - $ 1,513.6 $ 101.0 $ 1,614.6 (1) Primarily includes government agency pass-through securities guaranteed by a government agency or government sponsored enterprise, among other types of RMBS. (2) Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. (3) Includes partnership and non-marketable equity investments accounted for at fair value, and excludes investments accounted for using the equity method. As further described in Note 3(h), on March 15, 2018, most of AIHL’s limited partnership interests in certain subsidiaries of Ares Management LLC (“Ares”) were converted into Ares common units. As a result of the conversion, as of March 15, 2018, $208.2 million of Ares common units, classified as equity securities, was transferred into Level 1, and $58.7 million of Ares limited partner interests, classified as other invested assets, was transferred into Level 3. On September 24, 2018, AIHL’s remaining $56.9 million of Ares limited partner interests were converted into Ares common units and, as a result, was transferred from Level 3 other invested assets into Level 1 common stocks. Aside from the $56.9 million of Ares-related other invested assets transferred out of Level 3, in the nine months ended September 30, 2018, Alleghany transferred out of Level 3 an additional $153.7 million of financial instruments, principally due to an increase in observable inputs related to the valuation of such assets. Specifically, during the first nine months of 2018, there was a decrease in the weight given to non-binding In addition to the $58.7 million of Ares-related other invested assets transferred into Level 3, in the nine months ended September 30, 2018, Alleghany transferred into Level 3 $5.6 million of financial instruments, principally due to a decrease in observable inputs related to the valuation of such assets and, specifically, a decrease in broker quotes. Of the $5.6 million of transfers, $4.4 million related to preferred stock and $1.2 million related to U.S. corporate bonds. There were no other material transfers between Levels 1, 2 or 3 in the three and nine months ended September 30, 2018. In the nine months ended September 30, 2017, Alleghany transferred out of Level 3 $7.2 million of financial instruments, principally due to an increase in observable inputs related to the valuation of such assets and, specifically, an increase in broker quotes. Of the $7.2 million of transfers, $4.8 million related to U.S. corporate bonds and $2.4 million related to common stock. There were no transfers of financial instruments out of Level 3 in the third quarter of 2017. In the three and nine months ended September 30, 2017, Alleghany transferred into Level 3 $0.8 million and $5.5 million, respectively, of financial instruments, principally due to a decrease in observable inputs related to the valuation of such assets and, specifically, a decrease in broker quotes. Of the $5.5 million of transfers, $3.8 million related to U.S. corporate bonds, $1.4 million related to common stock and $0.3 million related to foreign corporate bonds. There were no other material transfers between Levels 1, 2 or 3 in the three and nine months ended September 30, 2017. The following tables present reconciliations of the changes during the nine months ended September 30, 2018 and 2017 in Level 3 assets measured at fair value: Debt Securities Mortgage and asset-backed Nine Months Ended September 30, 2018 Preferred U.S. Foreign RMBS CMBS Other Asset- Other (1) Total ($ in millions) Balance as of January 1, 2018 $ 1.9 $ 260.0 $ 75.2 $ 161.8 $ 1.6 $ 1,101.3 $ 7.5 $ 1,609.3 Net realized/unrealized gains (losses) included in: Net earnings (2) - - (0.1 ) (0.3 ) - 1.5 1.2 2.3 Other comprehensive income (loss) 0.2 (7.4 ) (2.5 ) (5.3 ) - (10.3 ) (4.0 ) (29.3 ) Purchases 2.0 153.7 38.9 - - 705.3 - 899.9 Sales (0.1 ) - - - - (56.7 ) (5.6 ) (62.4 ) Issuances - - - - - - - - Settlements - (3.2 ) (2.9 ) (5.6 ) - (361.2 ) - (372.9 ) Transfers into Level 3 4.4 1.2 - - - - 58.7 64.3 Transfers out of Level 3 - (1.3 ) (0.2 ) (150.6 ) (1.6 ) - (56.9 ) (210.6 ) Balance as of September 30, 2018 $ 8.4 $ 403.0 $ 108.4 $ - $ - $ 1,379.9 $ 0.9 $ 1,900.6 Equity Securities Debt Securities Mortgage and asset-backed Nine Months Ended September 30, 2017 Common Preferred Foreign U.S. Foreign RMBS CMBS Other Other (1) Total ($ in millions) Balance as of January 1, 2017 $ 4.3 $ - $ - $ 72.9 $ 0.4 $ 5.9 $ 4.3 $ 903.8 $ 28.1 $ 1,019.7 Net realized/unrealized gains Net earnings (2) 0.2 (0.2 ) - (0.2 ) - 0.2 - 3.9 10.8 14.7 Other comprehensive income - 0.2 - 3.2 0.8 0.3 0.1 15.0 (8.9 ) 10.7 Purchases - 5.6 4.7 220.4 38.6 - 9.6 746.7 - 1,025.6 Sales (2.6 ) (0.6 ) - (10.2 ) (0.2 ) - (2.2 ) (59.5 ) (21.6 ) (96.9 ) Issuances - - - - - - - - - - Settlements - - - (6.3 ) - (1.0 ) (0.4 ) (427.4 ) - (435.1 ) Transfers into Level 3 1.4 - - 3.8 0.3 - - - - 5.5 Transfers out of Level 3 (2.4 ) - - (4.8 ) - - - - - (7.2 ) Balance as of September 30, 2017 $ 0.9 $ 5.0 $ 4.7 $ 278.8 $ 39.9 $ 5.4 $ 11.4 $ 1,182.5 $ 8.4 $ 1,537.0 (1) Includes partnership and non-marketable equity investments accounted for at fair value. (2) There were no other than temporary impairment (“OTTI”) losses recorded in net earnings related to Level 3 assets still held as of September 30, 2018 and 2017. Net unrealized losses related to Level 3 assets as of September 30, 2018 and December 31, 2017 were not material. The increase in Senior Notes and other debt included in Level 3 for the first nine months of 2018 primarily reflects increased borrowings at W&W|AFCO Steel, including its acquisition of Hirschfeld. See Note 1(c) to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K for Alleghany’s accounting policy on fair value. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments | 3. Investments (a) Unrealized Gains and Losses The following tables present the amortized cost or cost and the fair value of AFS securities as of September 30, 2018 and December 31, 2017: Amortized Gross Gross Fair Value ($ in millions) As of September 30, 2018 Debt securities: U.S. Government obligations $ 1,069.4 $ 0.1 $ (40.9) $ 1,028.6 Municipal bonds 2,591.2 37.3 (24.2) 2,604.3 Foreign government obligations 905.8 5.5 (9.3) 902.0 U.S. corporate bonds 2,464.8 19.4 (40.5) 2,443.7 Foreign corporate bonds 1,428.7 10.6 (20.5) 1,418.8 Mortgage and asset-backed securities: RMBS 1,147.8 3.0 (35.2) 1,115.6 CMBS 530.7 2.3 (9.1) 523.9 Other asset-backed securities (1) 2,041.4 2.9 (10.0) 2,034.3 Total debt securities 12,179.8 81.1 (189.7) 12,071.2 Short-term investments 690.6 - - 690.6 Total investments $ 12,870.4 $ 81.1 $ (189.7) $ 12,761.8 Amortized Gross Gross Fair Value ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 3,165.8 $ 932.5 $ (3.8) $ 4,094.5 Preferred stock 4.9 0.1 - 5.0 Total equity securities 3,170.7 932.6 (3.8) 4,099.5 Debt securities: U.S. Government obligations 963.9 1.7 (17.6) 948.0 Municipal bonds 3,578.9 109.8 (6.6) 3,682.1 Foreign government obligations 1,000.1 11.2 (4.7) 1,006.6 U.S. corporate bonds 2,381.1 61.6 (9.7) 2,433.0 Foreign corporate bonds 1,481.8 24.5 (6.5) 1,499.8 Mortgage and asset-backed securities: RMBS 993.9 6.3 (4.6) 995.6 CMBS 545.0 9.0 (2.3) 551.7 Other asset-backed securities (1) 1,592.1 13.8 (1.3) 1,604.6 Total debt securities 12,536.8 237.9 (53.3) 12,721.4 Short-term investments 578.1 - - 578.1 Total investments $ 16,285.6 $ 1,170.5 $ (57.1) $ 17,399.0 (1) Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. (b) Contractual Maturity The following table presents the amortized cost or cost and estimated fair value of debt securities by contractual maturity as of September 30, 2018. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair Value ($ in millions) As of September 30, 2018 Short-term investments due in one year or less $ 690.6 $ 690.6 Mortgage and asset-backed securities (1) 3,719.9 3,673.8 Debt securities with maturity dates: One year or less 230.8 230.4 Over one through five years 3,011.7 2,987.0 Over five through ten years 3,029.1 2,991.9 Over ten years 2,188.3 2,188.1 Total debt securities $ 12,179.8 $ 12,071.2 (1) Mortgage and asset-backed securities by their nature do not generally have single maturity dates. (c) Net Investment Income The following table presents net investment income for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 ($ in millions) Interest income $ 106.4 $ 104.6 $ 313.2 $ 306.3 Dividend income 16.2 6.7 54.9 27.9 Investment expenses (6.8 ) (5.8 ) (25.4 ) (20.1 ) Pillar Investments (1) (0.8 ) (9.4 ) 1.2 (2.9 ) Limited partnership interests in certain subsidiaries of Ares (1) 7.0 6.9 20.2 (0.4 ) Other investment results 5.3 1.7 13.6 11.1 Total $ 127.3 $ 104.7 $ 377.7 $ 321.9 (1) See Note 3(h) of this Form 10-Q As of September 30, 2018, non-income producing invested assets were immaterial. (d) Change in the Fair Value of Equity Securities In the first quarter of 2018, Alleghany adopted new investment accounting guidance, which requires changes in the fair value of equity securities, except those accounted for under the equity method, to be recognized in net earnings. In earlier periods, equity securities were considered to be AFS and were included in the analysis of OTTI. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany’s adoption of this new guidance. The following table presents increases in the fair value of equity securities for the three and nine months ended September 30, 2018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 ($ in millions) Change in the fair value of equity securities sold during the period $ 7.3 $ 23.3 Change in the fair value of equity securities held at the end of the period 362.9 489.5 Change in the fair value of equity securities $ 370.2 $ 512.8 (e) Realized Gains and Losses The proceeds from sales of debt and equity securities were $0.9 billion and $1.6 billion for the three months ended September 30, 2018 and 2017, respectively, and $2.8 billion and $5.8 billion for the nine months ended September 30, 2018 and 2017, respectively. Realized capital gains and losses for the first nine months of 2018 primarily reflect a $45.7 million gain on AIHL’s conversion of its limited partnership interests in certain subsidiaries of Ares into Ares common units. See Note 3(h) of this Form 10-Q for additional information on this conversion. Realized capital gains and losses for the three and nine months ended September 30, 2018 also reflect the sale of debt securities. Realized capital gains and losses for the three and nine months ended September 30, 2017 primarily reflect the sale of equity securities and certain exchange traded funds. Realized capital gains for the first nine months of 2017 include the sale of certain equity securities resulting from a partial restructuring of the equity portfolio. The following table presents amounts of gross realized capital gains and gross realized capital losses for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 ($ in millions) Gross realized capital gains $ 16.9 $ 47.0 $ 83.3 $ 189.7 Gross realized capital losses (0.7) (14.1) (16.1) (87.9) Net realized capital gains $ 16.2 $ 32.9 $ 67.2 $ 101.8 Gross realized loss amounts exclude OTTI losses, as discussed below. (f) OTTI Losses Alleghany holds its debt securities as AFS and, as such, these securities are recorded at fair value. Alleghany continually monitors the difference between amortized cost and the estimated fair value of its debt investments, which involves uncertainty as to whether declines in value are temporary in nature. The analysis of a security’s decline in value is performed in its functional currency. If the decline is deemed temporary, Alleghany records the decline as an unrealized loss in stockholders’ equity. If the decline is deemed to be other than temporary, Alleghany writes its amortized cost-basis down to the fair value of the security and records an OTTI loss on its statement of earnings. In addition, any portion of such decline related to a debt security that is believed to arise from factors other than credit is recorded as a component of other comprehensive income rather than charged against earnings. Debt securities in an unrealized loss position are evaluated for OTTI if they meet any of the following criteria: (i) they are trading at a discount of at least 20 percent to amortized cost for an extended period of time (nine consecutive months or more); (ii) there has been a negative credit or news event with respect to the issuer that could indicate the existence of an OTTI; or (iii) Alleghany intends to sell, or it is more likely than not that Alleghany will sell, the debt security before recovery of its amortized cost basis. If Alleghany intends to sell, or it is more likely than not that Alleghany will sell, a debt security before recovery of its amortized cost basis, the total amount of the unrealized loss position is recognized as an OTTI loss in earnings. To the extent that a debt security that is in an unrealized loss position is not impaired based on the preceding, Alleghany will consider a debt security to be impaired when it believes it to be probable that Alleghany will not be able to collect the entire amortized cost basis. For debt securities in an unrealized loss position as of the end of each quarter, Alleghany develops a best estimate of the present value of expected cash flows. If the results of the cash flow analysis indicate that Alleghany will not recover the full amount of its amortized cost basis in the debt security, Alleghany records an OTTI loss in earnings equal to the difference between the present value of expected cash flows and the amortized cost basis of the debt security. If applicable, the difference between the total unrealized loss position on the debt security and the OTTI loss recognized in earnings is the non-credit In developing the cash flow analyses for debt securities, Alleghany considers various factors for the different categories of debt securities. For municipal bonds, Alleghany takes into account the taxing power of the issuer, source of revenue, credit risk and enhancements and pre-refunding. OTTI losses in the first nine months of 2018 reflect $0.5 million of unrealized losses on debt securities that were deemed to be other than temporary and, as such, were required to be charged against earnings. OTTI losses in the first nine months of 2017 reflect $13.1 million of unrealized losses that were deemed to be other than temporary and, as such, were required to be charged against earnings. Of the $13.1 million of OTTI losses, $11.8 million related to equity securities, primarily in the retail sector, and $1.3 million related to debt securities. The determination that unrealized losses on the securities were other than temporary was primarily due to the duration of the decline in the fair value of equity and debt securities relative to their costs. Of the $13.1 million of OTTI losses, $6.1 million was incurred in the third quarter of 2017. Upon the ultimate disposition of the securities for which OTTI losses have been recorded, a portion of the loss may be recoverable depending on market conditions at the time of disposition. After adjusting the amortized cost basis of securities for the recognition of OTTI losses, the remaining gross unrealized investment losses for debt securities as of September 30, 2018 were deemed to be temporary, based on, among other factors: (i) the duration of time and the relative magnitude to which the fair value of these investments had been below cost were not indicative of an OTTI loss; (ii) the absence of compelling evidence that would cause Alleghany to call into question the financial condition or near-term business prospects of the issuer of the security; and (iii) Alleghany’s ability and intent to hold the security for a period of time sufficient to allow for any anticipated recovery. Alleghany may ultimately record a realized loss after having originally concluded that the decline in value was temporary. Risks and uncertainties are inherent in the methodology. Alleghany’s methodology for assessing other than temporary declines in value contains inherent risks and uncertainties which could include, but are not limited to, incorrect assumptions about financial condition, liquidity or future prospects, inadequacy of any underlying collateral and unfavorable changes in economic conditions or social trends, interest rates or credit ratings. (g) Aging of Gross Unrealized Losses The following tables present gross unrealized losses and related fair values for Alleghany’s AFS securities, grouped by duration of time in a continuous unrealized loss position, as of September 30, 2018 and December 31, 2017: Less Than 12 Months 12 Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross ($ in millions) As of September 30, 2018 Debt securities: U.S. Government obligations $ 389.9 $ 7.8 $ 611.1 $ 33.1 $ 1,001.0 $ 40.9 Municipal bonds 695.0 12.2 261.7 12.0 956.7 24.2 Foreign government obligations 414.6 2.9 192.4 6.4 607.0 9.3 U.S. corporate bonds 1,238.9 27.0 294.9 13.5 1,533.8 40.5 Foreign corporate bonds 665.3 11.3 288.1 9.2 953.4 20.5 Mortgage and asset-backed securities: RMBS 891.7 28.1 130.3 7.1 1,022.0 35.2 CMBS 273.5 5.3 46.3 3.8 319.8 9.1 Other asset-backed securities 1,260.4 8.5 68.6 1.5 1,329.0 10.0 Total temporarily impaired securities $ 5,829.3 $ 103.1 $ 1,893.4 $ 86.6 $ 7,722.7 $ 189.7 Less Than 12 Months 12 Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 145.7 $ 3.8 $ - $ - $ 145.7 $ 3.8 Preferred stock - - - - - - Total equity securities 145.7 3.8 - - 145.7 3.8 Debt securities: U.S. Government obligations 447.8 4.4 416.6 13.2 864.4 17.6 Municipal bonds 240.0 1.5 267.3 5.1 507.3 6.6 Foreign government obligations 321.9 2.7 72.2 2.0 394.1 4.7 U.S. corporate bonds 568.8 6.1 207.3 3.6 776.1 9.7 Foreign corporate bonds 417.4 3.0 159.4 3.5 576.8 6.5 Mortgage and asset-backed securities: RMBS 284.2 1.6 131.5 3.0 415.7 4.6 CMBS 112.2 0.5 34.7 1.8 146.9 2.3 Other asset-backed securities 211.1 0.9 65.7 0.4 276.8 1.3 Total debt securities 2,603.4 20.7 1,354.7 32.6 3,958.1 53.3 Total temporarily impaired securities $ 2,749.1 $ 24.5 $ 1,354.7 $ 32.6 $ 4,103.8 $ 57.1 As of September 30, 2018, Alleghany held a total of 2,289 debt securities that were in an unrealized loss position, of which 617 securities were in an unrealized loss position continuously for 12 months or more. The unrealized losses associated with these debt securities consisted of losses related primarily to U.S. Government obligations, municipal bonds, U.S. corporate bonds, foreign corporate bonds and RMBS. As of September 30, 2018, the vast majority of Alleghany’s debt securities were rated investment grade, with 4.2 percent of debt securities having issuer credit ratings that were below investment grade or not rated, compared with 5.3 percent as of December 31, 2017. (h) Investments in Certain Other Invested Assets In December 2012, TransRe obtained an ownership interest in Pillar Capital Holdings Limited (“Pillar Holdings”), a Bermuda- based insurance asset manager focused on collateralized reinsurance and catastrophe insurance-linked securities. Additionally, TransRe invested $175.0 million and AIHL invested $25.0 million in limited partnership funds managed by Pillar Holdings (the “Funds”). The objective of the Funds is to create portfolios with attractive risk-reward characteristics and low correlation with other asset classes, using the extensive reinsurance and capital market experience of the principals of Pillar Holdings. Alleghany has concluded that both Pillar Holdings and the Funds (collectively, the “Pillar Investments”) represent variable interest entities and that Alleghany is not the primary beneficiary, as it does not have the ability to direct the activities that most significantly impact each entity’s economic performance. Therefore, the Pillar Investments are not consolidated and are accounted for under the equity method of accounting. Alleghany’s potential maximum loss in the Pillar Investments is limited to its cumulative net investment. As of September 30, 2018, Alleghany’s carrying value in the Pillar Investments, as determined under the equity method of accounting, was $201.3 million, which is net of returns of capital received from the Pillar Investments. In July 2013, AIHL invested $250.0 million in Ares, an asset manager, in exchange for a 6.25 percent equity stake in Ares, with an agreement to engage Ares to manage up to $1.0 billion in certain investment strategies. In May 2014, Ares completed an initial public offering of its common units. Upon completion of the initial public offering, Alleghany’s equity investment in Ares converted into limited partner interests in certain Ares subsidiaries that were convertible into Ares common units. On March 15, 2018, most of AIHL’s limited partner interests were converted into Ares common units. As a result of the conversion and with respect to the limited partnership interests that were converted into Ares common units, AIHL: (i) reclassified its converted interests from other invested assets to equity securities; (ii) increased its carrying value to $208.2 million to reflect the fair value of Ares common units; and (iii) recorded the $45.7 million increase in carrying value as a realized capital gain as of March 15, 2018. As a result of the conversion and with respect to the unconverted limited partnership interests, AIHL: (i) changed its accounting from the equity method to fair value; (ii) increased its carrying value to $58.7 million to reflect the fair value of Ares limited partnership interests; and (iii) recorded the $12.9 million increase in carrying value as a component of net investment income as of March 15, 2018. On September 24, 2018, AIHL’s remaining Ares limited partner interests were converted into Ares common units and, as a result, AIHL reclassified the remaining $56.9 million of its converted interests from other invested assets to equity securities. (i) Investments in Commercial Mortgage Loans As of September 30, 2018, the carrying value of Alleghany’s commercial mortgage loan portfolio was $695.9 million, representing the unpaid principal balance on the loans. As of September 30, 2018, there was no allowance for loan losses. The commercial mortgage loan portfolio consists primarily of first mortgages on commercial properties in major metropolitan areas in the U.S. The loans earn interest at fixed- |
Reinsurance Ceded
Reinsurance Ceded | 9 Months Ended |
Sep. 30, 2018 | |
Reinsurance Ceded | 4. Reinsurance Ceded Alleghany’s reinsurance and insurance subsidiaries reinsure portions of the risks they underwrite in order to reduce the effect of individual or aggregate exposure to losses, manage capacity, protect capital resources, reduce volatility in specific lines of business, improve risk-adjusted portfolio returns and enable them to increase gross premium writings and risk capacity without requiring additional capital. Alleghany’s reinsurance and insurance subsidiaries purchase reinsurance and retrocessional coverages from highly- third-party TransRe enters into retrocession arrangements, including property catastrophe retrocession arrangements, in order to reduce the effect of individual or aggregate exposure to losses, reduce volatility in specific lines of business, improve risk-adjusted RSUI reinsures its property lines of business through a program consisting of surplus share treaties, facultative placements, per risk and catastrophe excess of loss treaties. RSUI’s catastrophe reinsurance program and property per risk reinsurance program run on an annual basis from May 1 to the following April 30 and portions expired on April 30, 2018. Both programs were renewed on May 1, 2018 with substantially similar terms as the expired programs. |
Liability for Loss and LAE
Liability for Loss and LAE | 9 Months Ended |
Sep. 30, 2018 | |
Liability for Loss and LAE | 5. Liability for Loss and LAE (a) Liability Rollforward The following table presents the activity in the liability for loss and LAE in the nine months ended September 30, 2018 and 2017: Nine Months Ended 2018 2017 ($ in millions) Reserves as of January 1 $ 11,871.3 $ 11,087.2 Less: reinsurance recoverables (1) 1,650.1 1,236.2 Net reserves as of January 1 10,221.2 9,851.0 Other adjustments 1.2 (0.7 ) Incurred loss and LAE, net of reinsurance, related to: Current year 2,579.3 3,099.0 Prior years (212.8 ) (173.0 ) Total incurred loss and LAE, net of reinsurance 2,366.5 2,926.0 Paid loss and LAE, net of reinsurance, related to: (2) Current year 444.9 390.6 Prior years 1,928.9 1,743.2 Total paid loss and LAE, net of reinsurance 2,373.8 2,133.8 Foreign currency exchange rate effect (77.0 ) 120.5 Net reserves as of September 30 10,138.1 10,763.0 Reinsurance recoverables as of September 30 (1) 1,716.8 1,693.4 Reserves as of September 30 $ 11,854.9 $ 12,456.4 (1) Reinsurance recoverables in this table include only ceded loss and LAE reserves. (2) Includes paid losses, net of reinsurance, related to commutations. Gross loss and LAE reserves as of September 30, 2018 decreased from December 31, 2017, primarily reflecting payments on catastrophe losses incurred in 2017 and favorable prior accident year loss reserve development, partially offset by catastrophe losses in September 2018. Such 2018 catastrophe losses, net of reinsurance, include $87.7 million related to Typhoon Jebi, $80.2 million related to Hurricane Florence and $38.5 million related to Typhoon Trami. (b) Liability Development The following table presents the (favorable) unfavorable prior accident year loss reserve development for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 ($ in millions) Reinsurance Segment Property: Catastrophe events $ 9.6 ( 1) $ (7.8) (2) $ (15.6) (3) $ (12.2) (2) Non-catastrophe (12.4) (4) (0.3) (42.2) (4) (50.4) (5) Total property (2.8) (8.1) (57.8) (62.6) Casualty & other: Malpractice Treaties (6) - - (3.4) (2.0) Ogden rate impact (7) - - - 24.4 Other (38.7) (8) (41.7) (9) (102.5) (10) (100.6) (11) Total casualty & other (38.7) (41.7) (105.9) (78.2) Total Reinsurance Segment (41.5) (49.8) (163.7) (140.8) Insurance Segment RSUI: Casualty (4.3) (12) (6.9) (13) (16.8) (12) (28.5) (13) Property and other (27.7) (14) (1.7) (15) (27.7) (14) 1.2 ( 16) Total RSUI (32.0) (8.6) (44.5) (27.3) CapSpecialty (1.5) (17) (2.3) (18) (4.6) (17) (3.1) (18) PacificComp - (0.8) (19) - (1.8) (19) Total incurred related to prior years $ (75.0) $ (61.5) $ (212.8) $ (173.0) (1) Primarily reflects unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. (2) Primarily reflects favorable prior accident year loss reserve development related to several catastrophes in the 2010 through 2016 accident years. (3) Primarily reflects favorable prior accident year loss reserve development related to Hurricane Harvey in the 2017 accident year and catastrophes in the 2016 accident year, partially offset by unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. (4) Primarily reflects favorable prior accident year loss reserve development in the 2017 accident year. (5) Primarily reflects favorable prior accident year loss reserve development in the 2013 through 2016 accident years. (6) Represents certain medical malpractice treaties pursuant to which the increased underwriting profits created by the favorable prior accident year loss reserve development are largely retained by the cedants. As a result, the favorable prior accident year loss reserve development is largely offset by an increase in profit commission expense incurred when such favorable prior accident year loss reserve development occurs. (7) Represents unfavorable prior accident year loss reserve development related to the U.K. Ministry of Justice’s reduction in the discount rate, referred to as the Ogden rate, used to calculate lump-sum bodily injury payouts in personal injury insurance claims in the U.K to negative 0.75 percent as of March 20, 2017 from 2.50 percent. (8) Primarily reflects favorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2007 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 through 2016 accident years. (9) Primarily reflects favorable prior accident year loss reserve development in the longer-tailed (10) Primarily reflects favorable prior accident year loss reserve development in the shorter-tailed casualty lines of business in the 2016 and 2017 accident years and in the longer-tailed casualty lines of business in the 2010 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 accident year. (11) Primarily reflects favorable prior accident year loss reserve development in longer-tailed U.S. professional liability lines of business in the 2005 through 2014 accident years, partially offset by unfavorable prior accident year loss reserve development in shorter-tailed casualty lines of business in the 2015 accident year in the U.S. and the U.K. (12) Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2012 accident years, partially offset by unfavorable prior accident year loss reserve development in the directors’ and officers’ liability lines of business in the 2009, 2012 and 2016 accident years. (13) Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2011 accident years. (14) Primarily reflects favorable prior accident year loss reserve development related to Hurricane Irma in the 2017 accident year and, to a lesser extent, Hurricane Matthew that occurred in the 2016 accident year, as well as various other losses not classified as catastrophes in recent accident years. (15) Primarily reflects favorable unallocated LAE development. (16) Primarily reflects unfavorable prior accident year property loss reserve development related to the binding authority lines of business in the 2015 and 2016 accident years, partially offset by favorable prior accident year catastrophe loss reserve development in the 2016 accident year. (17) Primarily reflects favorable prior accident year loss reserve development related to the surety lines of business in the 2016 and 2017 accident years. (18) Primarily reflects favorable prior accident year loss reserve development related to the casualty lines of business in the 2010, 2014, 2015 and 2016 accident years. (19) Primarily reflects favorable prior accident year loss reserve development in the 2013 and prior accident years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Taxes | 6. Income Taxes The effective tax rate on earnings before income taxes for the first nine months of 2018 was 18.4 percent, compared with 66.8 percent for the first nine months of 2017. The 66.8 percent effective tax rate for the first nine months of 2017 was calculated based on actual results through September 30, 2017 because management was not able to reliably estimate the annual effective tax rate in light of the significant catastrophe losses incurred in the third quarter of 2017. The decrease in the effective tax rate in the first nine months of 2018 from the first nine months of 2017 primarily reflects the decrease in the U.S. corporate federal income tax rate from 35.0 percent to 21.0 percent due to the Tax Act and losses before income taxes in the first nine months of 2017, which magnified the impact of certain tax adjustments, partially offset by new limitations on certain deductions as a result of the Tax Act. There continues to be a degree of uncertainty as to how certain provisions of the Tax Act will be interpreted and implemented in practice in the future. Alleghany believes that, as of September 30, 2018, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest or penalties accrued as of September 30, 2018. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | 7. Stockholders’ Equity (a) Common Stock Repurchases In November 2015, the Alleghany Board of Directors authorized the repurchase of shares of common stock of Alleghany, par value $1.00 per share (“Common Stock”), at such times and at prices as management determines to be advisable, up to an aggregate of $400.0 million (the “2015 Repurchase Program”). In June 2018, the Alleghany Board of Directors authorized, upon the completion of the 2015 Repurchase Program, the repurchase of additional shares of Common Stock, at such times and at prices as management determines to be advisable, up to an aggregate of $400.0 million. As of September 30, 2018, Alleghany had $481.1 million remaining under both share repurchase authorization programs. The following table presents the shares of Common Stock that Alleghany repurchased in the three and nine months ended September 30, 2018 and 2017 pursuant to the 2015 Repurchase Program: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Shares repurchased 76,299 15,916 479,922 15,916 Cost of shares repurchased (in millions) $ 46.0 $ 8.5 $ 282.1 $ 8.5 Average price per share repurchased $ 602.24 $ 537.14 $ 587.70 $ 537.14 (b) Accumulated Other Comprehensive Income (Loss) The following tables presents a reconciliation of the changes during the nine months ended September 30, 2018 and 2017 in accumulated other comprehensive income (loss) attributable to Alleghany stockholders: Unrealized Unrealized Retirement Total ($ in millions) Balance as of January 1, 2018 $ 718.2 $ (84.6) $ (15.5) $ 618.1 Cumulative effect of adoption of new accounting pronouncements (1) Reclassification of net unrealized gains on equity securities, net of tax (735.6) - - (735.6) Reclassification of stranded taxes 156.6 (18.2) (3.3) 135.1 Total (579.0) (18.2) (3.3) (600.5) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (213.3) (6.9) (1.7) (221.9) Reclassifications from accumulated other comprehensive income (16.5) - - (16.5) Total (229.8) (6.9) (1.7) (238.4) Balance as of September 30, 2018 $ (90.6) $ (109.7) $ (20.5) $ (220.8) Unrealized Unrealized Retirement Total ($ in millions) Balance as of January 1, 2017 $ 232.2 $ (111.2) $ (11.7) $ 109.3 Cumulative effect of adoption of new accounting pronouncements (1) 12.9 - - 12.9 Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications 364.6 22.4 (0.2) 386.8 Reclassifications from accumulated other comprehensive income (57.7) - - (57.7) Total 306.9 22.4 (0.2) 329.1 Balance as of September 30, 2017 $ 552.0 $ (88.8) $ (11.9) $ 451.3 (1) See Note 1(c) of this Form 10-Q The following table presents reclassifications out of accumulated other comprehensive income attributable to Alleghany stockholders during the three and nine months ended September 30, 2018 and 2017: Accumulated Other Three Months Ended September 30, Nine Months Ended September 30, Comprehensive Income Component Line in Consolidated Statement of Earnings 2018 2017 2018 2017 ($ in millions) Unrealized appreciation of investments: Net realized capital gains (1) $ (16.2) $ (32.9) $ (21.5) $ (101.8) Other than temporary impairment losses - 6.1 0.5 13.1 Income taxes 3.4 9.4 4.5 31.0 Total reclassifications: Net earnings $ (12.8) $ (17.4) $ (16.5) $ (57.7) (1) For the nine month period ended September 30, 2018, excludes a $45.7 million pre-tax 10-Q (c) Special Dividend In February 2018, the Alleghany Board of Directors declared a special dividend of $10 per share for stockholders of record on March 5, 2018. On March 15, 2018, Alleghany paid dividends to stockholders totaling $154.0 million. |
Earnings Per Share of Common St
Earnings Per Share of Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share of Common Stock | 8. Earnings Per Share of Common Stock The following table presents a reconciliation of the earnings and share data used in the basic and diluted earnings per share computations for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in millions, except share amounts) Net earnings (losses) available to Alleghany stockholders $ 284.9 $ (314.2 ) $ 751.6 $ (63.2 ) Effect of dilutive securities - (8.9 ) - - Income (loss) available to common stockholders for diluted earnings per share $ 284.9 $ (323.1 ) $ 751.6 $ (63.2 ) Weighted average common shares outstanding applicable to basic earnings 14,937,135 15,416,014 15,168,831 15,416,249 Effect of dilutive securities - 42,310 4,849 - Adjusted weighted average common shares outstanding applicable to diluted earnings per share 14,937,135 15,458,324 15,173,680 15,416,249 61,285 and 63,567 contingently issuable shares were potentially available during the first nine months of 2018 and 2017, respectively, but were not included in the diluted earnings per share computations because the impact was anti-dilutive to the earnings per share calculation. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | 9. Commitments and Contingencies (a) Legal Proceedings Certain of Alleghany’s subsidiaries are parties to pending litigation and claims in connection with the ordinary course of their businesses. Each such subsidiary makes provisions for estimated losses to be incurred in such litigation and claims, including legal costs. In the opinion of management, such provisions are adequate, and management does not believe that any pending litigation will have a material adverse effect on Alleghany’s consolidated results of operations, financial position or cash flows. (b) Leases Alleghany and its subsidiaries lease certain facilities, furniture and equipment under long-term lease agreements. Additional information about leases can be found in Note 12(b) to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K. (c) Energy Holdings As of September 30, 2018, Alleghany had holdings in energy sector businesses of $896.8 million, comprised of $294.0 million of debt securities, $483.5 million of equity securities and $119.3 million of Alleghany’s equity attributable to SORC. |
Segments of Business
Segments of Business | 9 Months Ended |
Sep. 30, 2018 | |
Segments of Business | 10. Segments of Business (a) Overview Alleghany’s segments are reported in a manner consistent with the way management evaluates the business. As such, Alleghany classifies its business into three reportable segments – reinsurance, insurance and Alleghany Capital. Alleghany determined that Alleghany Capital qualified as a reportable segment in the first quarter of 2018, reflecting the increased significance of Alleghany Capital’s business to Alleghany and its projected growth. Reinsurance and insurance underwriting activities are evaluated separately from investment and other activities. Segment accounting policies are described in Note 1 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K. The reinsurance segment consists of property and casualty reinsurance operations conducted by TransRe’s reinsurance operating subsidiaries and is further reported through two major product lines – property and casualty & other. TransRe provides property and casualty reinsurance to insurers and reinsurers through brokers and on a direct basis to ceding companies. TransRe also writes a modest amount of insurance business, which is included in the reinsurance segment. A significant portion of the premiums earned by TransRe’s operations are generated by offices located in Canada, Europe, Asia, Australia, Africa and those serving Latin America and the Caribbean. Although the majority of the premiums earned by these offices typically relate to the regions where they are located, a significant portion may be derived from other regions of the world, including the U.S. In addition, although a significant portion of the assets and liabilities of these foreign offices generally relate to the countries where ceding companies and reinsurers are located, most investments are located in the country of domicile of these offices. The insurance segment consists of property and casualty insurance operations conducted in the U.S. by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and, prior to its sale on December 31, 2017, PacificComp. RSUI also writes a modest amount of assumed reinsurance business, which is included in the insurance segment. The Alleghany Capital segment consists of industrial operations, non-industrial operations and corporate operations at the Alleghany Capital level. Industrial operations are conducted through Bourn & Koch, Kentucky Trailer, W&W|AFCO Steel beginning April 28, 2017 (the date on which Alleghany Capital acquired approximately 80 percent of the equity thereof), and a 45 percent equity interest in Wilbert, beginning August 1, 2017 (the date on which Alleghany Capital acquired a 45 percent equity interest therein). Non-industrial operations are conducted through IPS and Jazwares. On February 7, 2018, W&W|AFCO Steel acquired the outstanding equity of Hirschfeld, a fabricator of steel bridges and structural steel for stadiums, airports and other large commercial and industrial projects, for $111.3 million, consisting of $96.6 million in cash and $14.7 million of incremental debt. The acquisition-date consideration transferred and purchase price allocation to the acquired assets and assumed liabilities of Hirschfeld were based on estimated fair values that have not been finalized. As a result, the fair value recorded for these items is a provisional estimate and may be subject to adjustment. Once completed, any adjustment resulting from the valuations may impact the individual amounts recorded for acquired assets and assumed liabilities, as well as the residual goodwill. The acquisition accounting for Hirschfeld is expected to be finalized later in 2018. Corporate activities are not classified as a segment. The primary components of corporate activities are Alleghany Properties, SORC and activities at the Alleghany parent company. In addition, corporate activities include interest expense associated with the senior notes issued by Alleghany, whereas interest expense associated with senior notes issued by TransRe is included in “Total Segments” and interest expense associated with other debt is included in Alleghany Capital. Information related to the senior notes and other debt can be found in Note 8 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K. (b) Results The following tables present the results for Alleghany’s three reportable segments and for corporate activities for the three and nine months ended September 30, 2018 and 2017: Reinsurance Segment Insurance Segment Three Months Ended Property Casualty (1) Total RSUI Cap Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 451.4 $ 685.9 $ 1,137.3 $ 260.8 $ 83.9 $ 344.7 $ 1,482.0 $ - $ 1,482.0 $ (6.7) $ 1,475.3 Net premiums written 331.1 654.1 985.2 176.0 77.9 253.9 1,239.1 - 1,239.1 - 1,239.1 Net premiums earned 326.5 635.0 961.5 190.6 73.3 263.9 1,225.4 - 1,225.4 - 1,225.4 Net loss and LAE 387.6 421.4 809.0 107.0 41.7 148.7 957.7 - 957.7 - 957.7 Commissions, brokerage and other 113.3 211.6 324.9 52.8 30.0 82.8 407.7 - 407.7 - 407.7 Underwriting (loss) profit (3) $ (174.4 ) $ 2.0 $ (172.4 ) $ 30.8 $ 1.6 $ 32.4 (140.0 ) - (140.0 ) - (140.0 ) Net investment income 122.5 0.7 123.2 4.1 127.3 Change in the fair value of equity securities 373.9 - 373.9 (3.7 ) 370.2 Net realized capital gains 16.2 - 16.2 - 16.2 Other than temporary impairment losses - - - - - Noninsurance revenue 6.2 407.5 413.7 24.6 438.3 Other operating expenses 23.6 382.5 406.1 9.2 415.3 Corporate administration 1.3 - 1.3 17.8 19.1 Amortization of intangible assets (0.3 ) 5.8 5.5 - 5.5 Interest expense 6.7 2.6 9.3 12.9 22.2 Earnings (losses) before income taxes $ 347.5 $ 17.3 $ 364.8 $ (14.9 ) $ 349.9 Reinsurance Segment Insurance Segment Three Months Ended Property Casualty (1) Total RSUI Cap Pacific Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 445.5 $ 681.1 $ 1,126.6 $ 234.6 $ 74.3 $ 41.6 $ 350.5 $ 1,477.1 $ - $ 1,477.1 $ (5.3 ) $ 1,471.8 Net premiums written 329.0 649.5 978.5 170.8 69.5 41.5 281.8 1,260.3 - 1,260.3 - 1,260.3 Net premiums earned 310.8 642.4 953.2 179.0 66.1 41.4 286.5 1,239.7 - 1,239.7 - 1,239.7 Net loss and LAE 659.9 459.3 1,119.2 305.4 37.0 30.3 372.7 1,491.9 - 1,491.9 - 1,491.9 Commissions, brokerage and other 105.2 203.7 308.9 50.3 28.4 10.6 89.3 398.2 - 398.2 - 398.2 Underwriting (loss) profit (3) $ (454.3 ) $ (20.6 ) $ (474.9 ) $ (176.7 ) $ 0.7 $ 0.5 $ (175.5 ) (650.4 ) - (650.4 ) - (650.4 ) Net investment income 101.4 1.6 103.0 1.7 104.7 Change in the fair value of equity securities - - - - - Net realized capital gains 21.5 0.7 22.2 10.7 32.9 Other than temporary impairment losses (6.1 ) - (6.1 ) - (6.1 ) Noninsurance revenue 4.7 289.3 294.0 2.3 296.3 Other operating expenses 8.3 260.0 268.3 9.6 277.9 Corporate administration (1.5 ) - (1.5 ) (3.2 ) (4.7 ) Amortization of intangible assets (0.3 ) 6.0 5.7 - 5.7 Interest expense 6.6 1.2 7.8 13.0 20.8 Earnings (losses) before income taxes $ (542.0 ) $ 24.4 $ (517.6 ) $ (4.7 ) $ (522.3 ) Reinsurance Segment Insurance Segment Nine Months Ended Property Casualty (1) Total RSUI Cap Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 1,193.7 $ 2,130.9 $ 3,324.6 $ 854.2 $ 247.1 $ 1,101.3 $ 4,425.9 $ - $ 4,425.9 $ (19.2 ) $ 4,406.7 Net premiums written 912.1 2,046.8 2,958.9 579.8 229.6 809.4 3,768.3 - 3,768.3 - 3,768.3 Net premiums earned 893.7 2,009.3 2,903.0 556.2 211.0 767.2 3,670.2 - 3,670.2 - 3,670.2 Net loss and LAE 637.7 1,304.3 1,942.0 309.6 114.9 424.5 2,366.5 - 2,366.5 - 2,366.5 Commissions, brokerage and other 301.2 663.6 964.8 160.0 91.2 251.2 1,216.0 - 1,216.0 - 1,216.0 Underwriting (loss) profit (3) $ (45.2 ) $ 41.4 $ (3.8 ) $ 86.6 $ 4.9 $ 91.5 87.7 - 87.7 - 87.7 Net investment income 362.0 3.7 365.7 12.0 377.7 Change in the fair value of equity securities 506.7 - 506.7 6.1 512.8 Net realized capital gains 66.8 0.6 67.4 (0.2 ) 67.2 Other than temporary impairment losses (0.5 ) - (0.5 ) - (0.5 ) Noninsurance revenue 16.7 979.2 995.9 36.8 1,032.7 Other operating expenses 60.6 937.0 997.6 25.9 1,023.5 Corporate administration 1.8 - 1.8 39.2 41.0 Amortization of intangible assets (0.2 ) 17.0 16.8 - 16.8 Interest expense 20.5 6.1 26.6 39.4 66.0 Earnings (losses) before income taxes $ 956.7 $ 23.4 $ 980.1 $ (49.8 ) $ 930.3 Reinsurance Segment Insurance Segment Nine Months Ended Property Casualty (1) Total RSUI Cap Pacific Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 1,190.0 $ 2,037.7 $ 3,227.7 $ 794.1 $ 213.2 $ 124.2 $ 1,131.5 $ 4,359.2 $ - $ 4,359.2 $ (16.5 ) $ 4,342.7 Net premiums written 931.4 1,975.3 2,906.7 558.0 198.9 122.9 879.8 3,786.5 - 3,786.5 - 3,786.5 Net premiums earned 868.1 1,968.7 2,836.8 540.3 192.2 123.5 856.0 3,692.8 - 3,692.8 - 3,692.8 Net loss and LAE 904.6 1,344.7 2,249.3 479.7 105.7 91.3 676.7 2,926.0 - 2,926.0 - 2,926.0 Commissions, brokerage and other 283.7 662.9 946.6 158.3 83.3 32.2 273.8 1,220.4 - 1,220.4 - 1,220.4 Underwriting (loss) profit (3) $ (320.2 ) $ (38.9 ) $ (359.1 ) $ (97.7 ) $ 3.2 $ - $ (94.5 ) (453.6 ) - (453.6 ) - (453.6 ) Net investment income 311.7 2.1 313.8 8.1 321.9 Change in the fair value of equity securities - - - - - Net realized capital gains 90.8 0.9 91.7 10.1 101.8 Other than temporary impairment losses (13.1 ) - (13.1 ) - (13.1 ) Noninsurance revenue 10.5 626.8 637.3 13.1 650.4 Other operating expenses 57.4 591.0 648.4 29.8 678.2 Corporate administration 0.2 - 0.2 26.4 26.6 Amortization of intangible assets (1.2 ) 15.4 14.2 - 14.2 Interest expense 20.2 3.0 23.2 39.5 62.7 Earnings (losses) before income taxes $ (130.3 ) $ 20.4 $ (109.9 ) $ (64.4 ) $ (174.3 ) (1) Primarily consists of the following assumed reinsurance lines of business: directors’ and officers’ liability; errors and omissions liability; general liability; medical malpractice; ocean marine and aviation; auto liability; accident and health; surety; and credit. (2) Includes elimination of minor reinsurance activity between segments. (3) Underwriting profit represents net premiums earned less net loss and LAE and commissions, brokerage and other underwriting expenses, all as determined in accordance with GAAP, and does not include net investment income, change in the fair value of equity securities, net realized capital gains, OTTI losses, noninsurance revenue, other operating expenses, corporate administration, amortization of intangible assets or interest expense. Underwriting profit does not replace earnings before income taxes determined in accordance with GAAP as a measure of profitability. Rather, Alleghany believes that underwriting profit enhances the understanding of its reinsurance and insurance segments’ operating results by highlighting net earnings attributable to their underwriting performance. Earnings before income taxes (a GAAP measure) may show a profit despite an underlying underwriting loss. Where underwriting losses persist over extended periods, a reinsurance or an insurance company’s ability to continue as an ongoing concern may be at risk. Therefore, Alleghany views underwriting profit as an important measure in the overall evaluation of performance. (c) Identifiable Assets and Equity The following table presents identifiable assets, the portion of identifiable assets related to cash and invested assets, and equity attributable to Alleghany, for Alleghany’s reportable segments and for corporate activities as of September 30, 2018: Identifiable Invested Assets Equity ($ in millions) Reinsurance segment $ 16,740.1 $ 13,461.2 $ 5,167.6 Insurance segment 7,056.8 5,586.2 3,092.8 Subtotal 23,796.9 19,047.4 8,260.4 Alleghany Capital 1,476.6 195.4 855.8 Total segments 25,273.5 19,242.8 9,116.2 Corporate activities 522.4 446.8 (521.1) Consolidated $ 25,795.9 $ 19,689.6 $ 8,595.1 Included in Alleghany Capital is debt associated with its operating subsidiaries, which totaled $197.7 million as of September 30, 2018. The $197.7 million includes $102.3 million of borrowings by W&W|AFCO Steel under its available credit facility and term loans (including borrowings incurred and assumed from its acquisition of Hirschfeld), $43.0 million of borrowings by Jazwares under its available credit facility, $21.5 million of term loans at Kentucky Trailer primarily related to borrowings to finance small acquisitions and borrowings under its available credit facility, $16.5 million of borrowings by IPS under its available credit facility, and $14.4 million of term loans at Bourn & Koch related to borrowings to finance an acquisition and borrowings under its available credit facility. None of these liabilities are guaranteed by Alleghany or Alleghany Capital. (d) Alleghany Capital Noninsurance Revenue For Alleghany Capital’s industrial and non-industrial Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in millions) Industrial (1) $ 224.2 $ 137.9 $ 591.6 $ 254.2 Non-Industrial (2) 183.7 150.9 387.9 372.1 Corporate & other (0.4 ) 0.5 (0.3 ) 0.5 Alleghany Capital $ 407.5 $ 289.3 $ 979.2 $ 626.8 (1) For the three and nine months ended September 30, 2018, the vast majority of noninsurance revenues were recognized as goods and services transferred to customers over time. For the three and nine months ended September 30, 2017, approximately 77 percent and 67 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany’s adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. (2) For the three and nine months ended September 30, 2018, approximately 60 percent and 65 percent, respectively, of noninsurance revenues were recognized as services transferred to customers over time, with the remainder recognized as goods transferred at a point in time. For the three and nine months ended September 30, 2017, approximately 56 percent and 69 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods were transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany’s adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Principles of Financial Statement Presentation | (a) Principles of Financial Statement Presentation This Quarterly Report on Form 10-Q (this “Form 10-Q”) should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”) 10-Q Alleghany Corporation, a Delaware corporation, owns and manages certain operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. Through its wholly-owned subsidiary Transatlantic Holdings, Inc. (“TransRe”), Alleghany is engaged in the property and casualty reinsurance business. TransRe has been a subsidiary of Alleghany since March 2012. Through its wholly-owned subsidiary Alleghany Insurance Holdings LLC (“AIHL”), Alleghany is engaged in the property and casualty insurance business. AIHL’s insurance operations are principally conducted by its subsidiaries RSUI Group, Inc. (“RSUI”) and CapSpecialty, Inc. (“CapSpecialty”). RSUI has been a subsidiary of AIHL since July 2003 and CapSpecialty has been a subsidiary of AIHL since January 2002. AIHL Re LLC (“AIHL Re”), a captive reinsurance company which provides reinsurance to Alleghany’s current and former insurance operating subsidiaries and affiliates, has been a subsidiary of Alleghany since its formation in May 2006. Prior to December 31, 2017, AIHL’s insurance operations also included Pacific Compensation Corporation (“PacificComp”). On September 12, 2017, AIHL signed a definitive agreement to sell PacificComp to CopperPoint Mutual Insurance Company (“CopperPoint”) for total cash consideration of approximately $158 million. The transaction closed on December 31, 2017, at which time: (i) approximately $442 million of PacificComp assets, consisting primarily of debt securities, and approximately $316 million of PacificComp liabilities, consisting primarily of loss and loss adjustment expenses (“LAE”) reserves, were transferred to CopperPoint; and (ii) AIHL recorded an after-tax gain of approximately $16 million, which included a tax benefit. In connection with the transaction, AIHL Re will continue to provide adverse development reinsurance coverage on PacificComp’s pre-acquisition Although Alleghany’s primary sources of revenues and earnings are its reinsurance and insurance operations and investments, Alleghany also sources, executes, manages and monitors certain private investments primarily through its wholly-owned subsidiary Alleghany Capital Corporation (“Alleghany Capital”). Alleghany Capital’s investments include: • Bourn & Koch, Inc. (“Bourn & Koch”), a manufacturer/remanufacturer of specialty machine tools and supplier of replacement parts, accessories and services for a variety of cutting technologies, headquartered in Rockford, Illinois; • R.C. Tway Company, LLC (“Kentucky Trailer”), a manufacturer of custom trailers and truck bodies for the moving and storage industry and other markets, headquartered in Louisville, Kentucky; • IPS-Integrated Project Services, LLC (“IPS”), a technical service provider focused on the global pharmaceutical and biotechnology industries, headquartered in Blue Bell, Pennsylvania; • Jazwares, LLC (together with its affiliates, “Jazwares”), a global toy, entertainment and musical instrument company, headquartered in Sunrise, Florida; • WWSC Holdings, LLC (“W&W|AFCO Steel”), a structural steel fabricator and erector, headquartered in Oklahoma City, Oklahoma; and • a 45 percent equity interest in Wilbert Funeral Services, Inc. (“Wilbert”), a provider of products and services for the funeral and cemetery industries and precast concrete markets, headquartered in Overland Park, Kansas. The results of W&W|AFCO Steel have been included in Alleghany’s consolidated results beginning with its acquisition by Alleghany Capital on April 28, 2017. On February 7, 2018, W&W|AFCO Steel acquired Hirschfeld Holdings, LP (“Hirschfeld”). Wilbert is accounted for under the equity method of accounting and is included in other invested assets. The results of Wilbert have been included in Alleghany’s consolidated results beginning with its acquisition by Alleghany Capital on August 1, 2017. In addition, Alleghany owns certain other holding-company investments. Alleghany’s wholly-owned subsidiary Stranded Oil Resources Corporation (“SORC”), is an exploration and production company focused on enhanced oil recovery, headquartered in Golden, Colorado. Alleghany’s wholly-owned subsidiary, Alleghany Properties Holdings LLC (“Alleghany Properties”), owns and manages certain properties in the Sacramento, California region. Alleghany’s public equity investments are managed primarily through Alleghany’s wholly-owned subsidiary Roundwood Asset Management LLC. Unless the context otherwise requires, references to “Alleghany” include Alleghany together with its subsidiaries. The accompanying consolidated financial statements include the results of Alleghany and its wholly-owned and majority-owned The portion of stockholders’ equity, net earnings and comprehensive income that is not attributable to Alleghany stockholders is presented on the Consolidated Balance Sheets and the Consolidated Statements of Earnings and Comprehensive Income as noncontrolling interests. Because all noncontrolling interests have the option to sell their ownership interests to Alleghany in the future (generally through 2024), the portion of stockholders’ equity that is not attributable to Alleghany stockholders is presented on the Consolidated Balance Sheets as redeemable noncontrolling interests for all periods presented. During the first nine months of 2018, the noncontrolling interests outstanding were approximately as follows: Bourn & Koch - 11 percent; Kentucky Trailer - 21 percent; IPS - 15 percent; Jazwares - 23 percent; and W&W|AFCO Steel - 20 percent. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Alleghany relies on historical experience and on various other assumptions that it believes to be reasonable under the circumstances to make judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those reported results to the extent that those estimates and assumptions prove to be inaccurate. Changes in estimates are reflected in the Consolidated Statements of Earnings and Comprehensive Income in the period in which the changes are made. (b) Other Significant Accounting Principles Alleghany’s significant accounting principles can be found in Note 1 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K. |
Recent Accounting Standards | (c) Recent Accounting Standards Recently Adopted In February 2018, the Financial Accounting Standards Board (the “FASB”) issued guidance on certain tax effects caused by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which was signed into law on December 22, 2017. The Tax Act, among other things, reduced the U.S. corporate federal income tax rate from 35.0 percent to 21.0 percent, effective January 1, 2018 for the 2018 tax year. Under such circumstances, GAAP requires that the value of deferred tax assets and liabilities be reduced through tax expense. The new guidance provides an option to reclassify any stranded tax amounts that remain in accumulated other comprehensive income to retained earnings, either retrospectively or at the beginning of the period in which the adoption is elected. This guidance became effective in the first quarter of 2018 for public entities, with early adoption permitted in 2017. Alleghany adopted this new guidance in the first quarter of 2018 and has elected to reclassify stranded tax amounts that remain in accumulated other comprehensive income, in the amount of approximately $135 million, to retained earnings as of January 1, 2018. See Note 7(b) of this Form 10-Q 10-K In March 2017, the FASB issued guidance that reduces the amortization period for the premium on certain purchased callable debt securities to the earliest call date. The guidance applies specifically to noncontingent call features that are callable at a predetermined and fixed price and date. The accounting for purchased callable debt securities held at a discount is not affected. This guidance is effective in the first quarter of 2019 for public entities with early adoption permitted. Alleghany adopted this guidance in the fourth quarter of 2017 and recorded a cumulative effect reduction of approximately $13 million directly to opening 2017 retained earnings and an offsetting increase in opening 2017 accumulated other comprehensive income. The implementation did not have a material impact on Alleghany’s results of operations and financial condition. See Note 7(b) of this Form 10-Q for further information on accumulated other comprehensive income. In May 2014, the FASB, together with the International Accounting Standards Board, issued guidance on the recognition of revenue from contracts with customers. Under this guidance, revenue is recognized as the transfer of goods and services to customers takes place and in amounts that reflect the payment or payments that are expected to be received from the customers for those goods and services. This guidance also requires new disclosures about revenue. Revenues related to insurance and reinsurance contracts and revenues from investments are not impacted by this guidance, whereas noninsurance revenues arising from the sale of manufactured goods and services is generally included within the scope of this guidance. This guidance, and all related amendments, became effective in the first quarter of 2018 for public entities, with early adoption permitted in 2017. Alleghany adopted this guidance in the first quarter of 2018 using the modified retrospective transition approach and the implementation did not have a material impact on its results of operations and financial condition. See Note 10 of this Form 10-Q In January 2016, the FASB issued guidance that changes the recognition and measurement of certain financial instruments. This guidance requires investments in equity securities (except those accounted for under the equity method of accounting, but including partnership investments not accounted for under the equity method) to be measured at fair value with changes in fair value recognized in net earnings. For equity securities that do not have readily determinable fair values, measurement may be at cost, adjusted for any impairment and changes resulting from observable price changes for a similar investment of the same issuer. This guidance also changes the presentation and disclosure of financial instruments by: (i) requiring that financial instrument disclosures of fair value use the exit price notion; (ii) requiring separate presentation of financial assets and financial liabilities by measurement category and form, either on the balance sheet or the accompanying notes to the financial statements; (iii) requiring separate presentation in other comprehensive income for the portion of the change in a liability’s fair value resulting from instrument-specific credit risk when an election has been made to measure the liability at fair value; and (iv) eliminating the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. This guidance is effective for fiscal years beginning after December 15, 2017 for public entities, including interim periods within those fiscal years. Except for the change in presentation for instrument-specific credit risk, this guidance does not permit early adoption. Alleghany adopted this guidance in the first quarter of 2018. As of January 1, 2018, approximately $736 million of net unrealized gains of equity securities, net of deferred taxes, were reclassified from accumulated other comprehensive income to retained earnings. Subsequently, all changes in unrealized gains or losses of equity securities, net of deferred taxes, were presented in the Consolidated Statements of Earnings rather than the Consolidated Statements of Comprehensive Income, under the caption “change in the fair value of equity securities.” Results arising from partnership investments, whether accounted for under the equity method or at fair value, continue to be reported as a component of net investment income. The implementation did not have a material impact on Alleghany’s financial condition. See Note 3 of this Form 10-Q for further information on Alleghany’s equity securities, and Note 7(b) of this Form 10-Q for further information on accumulated other comprehensive income. Future Application of Accounting Standards In February 2016, the FASB issued guidance on leases. Under this guidance, a lessee is required to recognize lease liabilities and corresponding right-of-use assets for leases with terms of more than one year, whereas under current guidance, a lessee is only required to recognize assets and liabilities for those leases qualifying as capital leases. This guidance also requires new disclosures about the amount, timing and uncertainty of cash flows arising from leases. The accounting by lessors is to remain largely unchanged. This guidance is effective in the first quarter of 2019 for public entities, with early adoption permitted. A modified retrospective transition approach is required for all leases in existence as of, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Alleghany will adopt this guidance in the first quarter of 2019 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. See Note 12(b) to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K for further information on Alleghany’s leases. In June 2016, the FASB issued guidance on credit losses. Under this guidance, a company is required to measure all expected credit losses on loans, reinsurance recoverables and other financial assets accounted for at cost or amortized cost, as applicable. Estimates of expected credit losses are to be based on historical experience, current conditions and reasonable and supportable forecasts. Credit losses for securities accounted for on an available-for-sale In January 2017, the FASB issued guidance that simplifies the subsequent measurement of goodwill. Under this guidance, if an initial qualitative assessment indicates that the fair value of an operating subsidiary may be less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount of the operating subsidiary exceeds its estimated fair value. Any resulting impairment loss recognized cannot exceed the total amount of goodwill associated with the operating subsidiary. This guidance is effective in the first quarter of 2020 for public entities, with early adoption permitted. Alleghany will adopt this guidance in the first quarter of 2020 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. See Note 2 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K for further information on Alleghany’s goodwill. In August 2017, the FASB issued guidance that simplifies the requirements to achieve hedge accounting, better reflects the economic results of hedging in the financial statements and improves the alignment between hedge accounting and a company’s risk management activities. This guidance is effective in the first quarter of 2019 for public entities, with early adoption permitted. Alleghany will adopt this guidance in the first quarter of 2019 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. In August 2018, the FASB issued guidance that changes the financial statement disclosure requirements for measuring fair value. With respect to financial instruments classified as “Level 3” in the fair value disclosure hierarchy, the guidance requires certain additional disclosures for public entities related to amounts included in other comprehensive income and significant unobservable inputs used in the valuation, while removing disclosure requirements related to an entity’s overall valuation processes. The guidance also removes certain disclosure requirements related to transfers between financial instruments classified as “Level 1” and “Level 2” and provides clarification on certain other existing disclosure requirements. This guidance is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted with respect to any eliminated or modified disclosures. Alleghany will adopt this guidance in the first quarter of 2020 and does not currently believe that the implementation will have a material impact on its results of operations and financial condition. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Carrying Value and Estimated Fair Value of Consolidated Financial Instruments | The following table presents the carrying value and estimated fair value of Alleghany’s consolidated financial instruments as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value ($ in millions) Assets Investments (excluding equity method investments and loans) (1) $ 17,791.3 $ 17,791.3 $ 17,406.5 $ 17,406.5 Liabilities Senior Notes and other debt (2) $ 1,581.7 $ 1,701.8 $ 1,484.9 $ 1,614.6 (1) This table includes debt and equity securities, as well as partnership and non-marketable (2) See Note 8 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, “Financial Statements and Supplementary Data” of the 2017 Form 10-K |
Financial Instruments Measured at Fair Value and Level of Fair Value Hierarchy of Inputs | The following tables present Alleghany’s financial instruments measured at fair value and the level of the fair value hierarchy of inputs used as of September 30, 2018 and December 31, 2017: Level 1 Level 2 Level 3 Total ($ in millions) As of September 30, 2018 Equity securities: Common stock $ 5,016.7 $ 3.5 $ - $ 5,020.2 Preferred stock - - 8.4 8.4 Total equity securities 5,016.7 3.5 8.4 5,028.6 Debt securities: U.S. Government obligations - 1,028.6 - 1,028.6 Municipal bonds - 2,604.3 - 2,604.3 Foreign government obligations - 902.0 - 902.0 U.S. corporate bonds - 2,040.7 403.0 2,443.7 Foreign corporate bonds - 1,310.4 108.4 1,418.8 Mortgage and asset-backed securities: Residential mortgage-backed securities (“RMBS”) (1) - 1,115.6 - 1,115.6 Commercial mortgage-backed securities (“CMBS”) - 523.9 - 523.9 Other asset-backed securities (2) - 654.4 1,379.9 2,034.3 Total debt securities - 10,179.9 1,891.3 12,071.2 Short-term investments - 690.6 - 690.6 Other invested assets (3) - - 0.9 0.9 Total investments (excluding equity method investments and loans) $ 5,016.7 $ 10,874.0 $ 1,900.6 $ 17,791.3 Senior Notes and other debt $ - $ 1,504.1 $ 197.7 $ 1,701.8 Level 1 Level 2 Level 3 Total ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 4,090.7 $ 3.8 $ - $ 4,094.5 Preferred stock - 3.1 1.9 5.0 Total equity securities 4,090.7 6.9 1.9 4,099.5 Debt securities: U.S. Government obligations - 948.0 - 948.0 Municipal bonds - 3,682.1 - 3,682.1 Foreign government obligations - 1,006.6 - 1,006.6 U.S. corporate bonds - 2,173.0 260.0 2,433.0 Foreign corporate bonds - 1,424.6 75.2 1,499.8 Mortgage and asset-backed securities: RMBS (1) - 833.8 161.8 995.6 CMBS - 550.1 1.6 551.7 Other asset-backed securities (2) - 503.3 1,101.3 1,604.6 Total debt securities - 11,121.5 1,599.9 12,721.4 Short-term investments - 578.1 - 578.1 Other invested assets (3) - - 7.5 7.5 Total investments (excluding equity method investments and loans) $ 4,090.7 $ 11,706.5 $ 1,609.3 $ 17,406.5 Senior Notes and other debt $ - $ 1,513.6 $ 101.0 $ 1,614.6 (1) Primarily includes government agency pass-through securities guaranteed by a government agency or government sponsored enterprise, among other types of RMBS. (2) Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. (3) Includes partnership and non-marketable equity investments accounted for at fair value, and excludes investments accounted for using the equity method. |
Reconciliations of Changes in Level Three Assets Measured at Fair Value | The following tables present reconciliations of the changes during the nine months ended September 30, 2018 and 2017 in Level 3 assets measured at fair value: Debt Securities Mortgage and asset-backed Nine Months Ended September 30, 2018 Preferred U.S. Foreign RMBS CMBS Other Asset- Other (1) Total ($ in millions) Balance as of January 1, 2018 $ 1.9 $ 260.0 $ 75.2 $ 161.8 $ 1.6 $ 1,101.3 $ 7.5 $ 1,609.3 Net realized/unrealized gains (losses) included in: Net earnings (2) - - (0.1 ) (0.3 ) - 1.5 1.2 2.3 Other comprehensive income (loss) 0.2 (7.4 ) (2.5 ) (5.3 ) - (10.3 ) (4.0 ) (29.3 ) Purchases 2.0 153.7 38.9 - - 705.3 - 899.9 Sales (0.1 ) - - - - (56.7 ) (5.6 ) (62.4 ) Issuances - - - - - - - - Settlements - (3.2 ) (2.9 ) (5.6 ) - (361.2 ) - (372.9 ) Transfers into Level 3 4.4 1.2 - - - - 58.7 64.3 Transfers out of Level 3 - (1.3 ) (0.2 ) (150.6 ) (1.6 ) - (56.9 ) (210.6 ) Balance as of September 30, 2018 $ 8.4 $ 403.0 $ 108.4 $ - $ - $ 1,379.9 $ 0.9 $ 1,900.6 Equity Securities Debt Securities Mortgage and asset-backed Nine Months Ended September 30, 2017 Common Preferred Foreign U.S. Foreign RMBS CMBS Other Other (1) Total ($ in millions) Balance as of January 1, 2017 $ 4.3 $ - $ - $ 72.9 $ 0.4 $ 5.9 $ 4.3 $ 903.8 $ 28.1 $ 1,019.7 Net realized/unrealized gains Net earnings (2) 0.2 (0.2 ) - (0.2 ) - 0.2 - 3.9 10.8 14.7 Other comprehensive income - 0.2 - 3.2 0.8 0.3 0.1 15.0 (8.9 ) 10.7 Purchases - 5.6 4.7 220.4 38.6 - 9.6 746.7 - 1,025.6 Sales (2.6 ) (0.6 ) - (10.2 ) (0.2 ) - (2.2 ) (59.5 ) (21.6 ) (96.9 ) Issuances - - - - - - - - - - Settlements - - - (6.3 ) - (1.0 ) (0.4 ) (427.4 ) - (435.1 ) Transfers into Level 3 1.4 - - 3.8 0.3 - - - - 5.5 Transfers out of Level 3 (2.4 ) - - (4.8 ) - - - - - (7.2 ) Balance as of September 30, 2017 $ 0.9 $ 5.0 $ 4.7 $ 278.8 $ 39.9 $ 5.4 $ 11.4 $ 1,182.5 $ 8.4 $ 1,537.0 (1) Includes partnership and non-marketable equity investments accounted for at fair value. (2) There were no other than temporary impairment (“OTTI”) losses recorded in net earnings related to Level 3 assets still held as of September 30, 2018 and 2017. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Amortized Cost or Cost and Fair Value of Available For Sale Securities | The following tables present the amortized cost or cost and the fair value of AFS securities as of September 30, 2018 and December 31, 2017: Amortized Gross Gross Fair Value ($ in millions) As of September 30, 2018 Debt securities: U.S. Government obligations $ 1,069.4 $ 0.1 $ (40.9) $ 1,028.6 Municipal bonds 2,591.2 37.3 (24.2) 2,604.3 Foreign government obligations 905.8 5.5 (9.3) 902.0 U.S. corporate bonds 2,464.8 19.4 (40.5) 2,443.7 Foreign corporate bonds 1,428.7 10.6 (20.5) 1,418.8 Mortgage and asset-backed securities: RMBS 1,147.8 3.0 (35.2) 1,115.6 CMBS 530.7 2.3 (9.1) 523.9 Other asset-backed securities (1) 2,041.4 2.9 (10.0) 2,034.3 Total debt securities 12,179.8 81.1 (189.7) 12,071.2 Short-term investments 690.6 - - 690.6 Total investments $ 12,870.4 $ 81.1 $ (189.7) $ 12,761.8 Amortized Gross Gross Fair Value ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 3,165.8 $ 932.5 $ (3.8) $ 4,094.5 Preferred stock 4.9 0.1 - 5.0 Total equity securities 3,170.7 932.6 (3.8) 4,099.5 Debt securities: U.S. Government obligations 963.9 1.7 (17.6) 948.0 Municipal bonds 3,578.9 109.8 (6.6) 3,682.1 Foreign government obligations 1,000.1 11.2 (4.7) 1,006.6 U.S. corporate bonds 2,381.1 61.6 (9.7) 2,433.0 Foreign corporate bonds 1,481.8 24.5 (6.5) 1,499.8 Mortgage and asset-backed securities: RMBS 993.9 6.3 (4.6) 995.6 CMBS 545.0 9.0 (2.3) 551.7 Other asset-backed securities (1) 1,592.1 13.8 (1.3) 1,604.6 Total debt securities 12,536.8 237.9 (53.3) 12,721.4 Short-term investments 578.1 - - 578.1 Total investments $ 16,285.6 $ 1,170.5 $ (57.1) $ 17,399.0 (1) Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. |
Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity | The following table presents the amortized cost or cost and estimated fair value of debt securities by contractual maturity as of September 30, 2018. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair Value ($ in millions) As of September 30, 2018 Short-term investments due in one year or less $ 690.6 $ 690.6 Mortgage and asset-backed securities (1) 3,719.9 3,673.8 Debt securities with maturity dates: One year or less 230.8 230.4 Over one through five years 3,011.7 2,987.0 Over five through ten years 3,029.1 2,991.9 Over ten years 2,188.3 2,188.1 Total debt securities $ 12,179.8 $ 12,071.2 (1) Mortgage and asset-backed securities by their nature do not generally have single maturity dates. |
Net Investment Income | The following table presents net investment income for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 ($ in millions) Interest income $ 106.4 $ 104.6 $ 313.2 $ 306.3 Dividend income 16.2 6.7 54.9 27.9 Investment expenses (6.8 ) (5.8 ) (25.4 ) (20.1 ) Pillar Investments (1) (0.8 ) (9.4 ) 1.2 (2.9 ) Limited partnership interests in certain subsidiaries of Ares (1) 7.0 6.9 20.2 (0.4 ) Other investment results 5.3 1.7 13.6 11.1 Total $ 127.3 $ 104.7 $ 377.7 $ 321.9 (1) See Note 3(h) of this Form 10-Q |
Summary of Increases in Fair Value of Equity Securities | The following table presents increases in the fair value of equity securities for the three and nine months ended September 30, 2018: Three Months Ended Nine Months Ended September 30, 2018 September 30, 2018 ($ in millions) Change in the fair value of equity securities sold during the period $ 7.3 $ 23.3 Change in the fair value of equity securities held at the end of the period 362.9 489.5 Change in the fair value of equity securities $ 370.2 $ 512.8 |
Amounts of Gross Realized Capital Gains and Gross Realized Capital Losses of Available For Sale Securities | The following table presents amounts of gross realized capital gains and gross realized capital losses for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 ($ in millions) Gross realized capital gains $ 16.9 $ 47.0 $ 83.3 $ 189.7 Gross realized capital losses (0.7) (14.1) (16.1) (87.9) Net realized capital gains $ 16.2 $ 32.9 $ 67.2 $ 101.8 |
Gross Unrealized Losses and Related Fair Values for AFS Securities Grouped by Duration of Time in Continuous Unrealized Loss Position | The following tables present gross unrealized losses and related fair values for Alleghany’s AFS securities, grouped by duration of time in a continuous unrealized loss position, as of September 30, 2018 and December 31, 2017: Less Than 12 Months 12 Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross ($ in millions) As of September 30, 2018 Debt securities: U.S. Government obligations $ 389.9 $ 7.8 $ 611.1 $ 33.1 $ 1,001.0 $ 40.9 Municipal bonds 695.0 12.2 261.7 12.0 956.7 24.2 Foreign government obligations 414.6 2.9 192.4 6.4 607.0 9.3 U.S. corporate bonds 1,238.9 27.0 294.9 13.5 1,533.8 40.5 Foreign corporate bonds 665.3 11.3 288.1 9.2 953.4 20.5 Mortgage and asset-backed securities: RMBS 891.7 28.1 130.3 7.1 1,022.0 35.2 CMBS 273.5 5.3 46.3 3.8 319.8 9.1 Other asset-backed securities 1,260.4 8.5 68.6 1.5 1,329.0 10.0 Total temporarily impaired securities $ 5,829.3 $ 103.1 $ 1,893.4 $ 86.6 $ 7,722.7 $ 189.7 Less Than 12 Months 12 Months or More Total Fair Value Gross Fair Value Gross Fair Value Gross ($ in millions) As of December 31, 2017 Equity securities: Common stock $ 145.7 $ 3.8 $ - $ - $ 145.7 $ 3.8 Preferred stock - - - - - - Total equity securities 145.7 3.8 - - 145.7 3.8 Debt securities: U.S. Government obligations 447.8 4.4 416.6 13.2 864.4 17.6 Municipal bonds 240.0 1.5 267.3 5.1 507.3 6.6 Foreign government obligations 321.9 2.7 72.2 2.0 394.1 4.7 U.S. corporate bonds 568.8 6.1 207.3 3.6 776.1 9.7 Foreign corporate bonds 417.4 3.0 159.4 3.5 576.8 6.5 Mortgage and asset-backed securities: RMBS 284.2 1.6 131.5 3.0 415.7 4.6 CMBS 112.2 0.5 34.7 1.8 146.9 2.3 Other asset-backed securities 211.1 0.9 65.7 0.4 276.8 1.3 Total debt securities 2,603.4 20.7 1,354.7 32.6 3,958.1 53.3 Total temporarily impaired securities $ 2,749.1 $ 24.5 $ 1,354.7 $ 32.6 $ 4,103.8 $ 57.1 |
Liability for Loss and LAE (Tab
Liability for Loss and LAE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Activity in Liability for Loss and Loss Adjustment Expense | The following table presents the activity in the liability for loss and LAE in the nine months ended September 30, 2018 and 2017: Nine Months Ended 2018 2017 ($ in millions) Reserves as of January 1 $ 11,871.3 $ 11,087.2 Less: reinsurance recoverables (1) 1,650.1 1,236.2 Net reserves as of January 1 10,221.2 9,851.0 Other adjustments 1.2 (0.7 ) Incurred loss and LAE, net of reinsurance, related to: Current year 2,579.3 3,099.0 Prior years (212.8 ) (173.0 ) Total incurred loss and LAE, net of reinsurance 2,366.5 2,926.0 Paid loss and LAE, net of reinsurance, related to: (2) Current year 444.9 390.6 Prior years 1,928.9 1,743.2 Total paid loss and LAE, net of reinsurance 2,373.8 2,133.8 Foreign currency exchange rate effect (77.0 ) 120.5 Net reserves as of September 30 10,138.1 10,763.0 Reinsurance recoverables as of September 30 (1) 1,716.8 1,693.4 Reserves as of September 30 $ 11,854.9 $ 12,456.4 (1) Reinsurance recoverables in this table include only ceded loss and LAE reserves. (2) Includes paid losses, net of reinsurance, related to commutations. |
(Favorable) Unfavorable Prior Accident Year Loss Reserve Development | The following table presents the (favorable) unfavorable prior accident year loss reserve development for the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended 2018 2017 2018 2017 ($ in millions) Reinsurance Segment Property: Catastrophe events $ 9.6 ( 1) $ (7.8) (2) $ (15.6) (3) $ (12.2) (2) Non-catastrophe (12.4) (4) (0.3) (42.2) (4) (50.4) (5) Total property (2.8) (8.1) (57.8) (62.6) Casualty & other: Malpractice Treaties (6) - - (3.4) (2.0) Ogden rate impact (7) - - - 24.4 Other (38.7) (8) (41.7) (9) (102.5) (10) (100.6) (11) Total casualty & other (38.7) (41.7) (105.9) (78.2) Total Reinsurance Segment (41.5) (49.8) (163.7) (140.8) Insurance Segment RSUI: Casualty (4.3) (12) (6.9) (13) (16.8) (12) (28.5) (13) Property and other (27.7) (14) (1.7) (15) (27.7) (14) 1.2 ( 16) Total RSUI (32.0) (8.6) (44.5) (27.3) CapSpecialty (1.5) (17) (2.3) (18) (4.6) (17) (3.1) (18) PacificComp - (0.8) (19) - (1.8) (19) Total incurred related to prior years $ (75.0) $ (61.5) $ (212.8) $ (173.0) (1) Primarily reflects unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. (2) Primarily reflects favorable prior accident year loss reserve development related to several catastrophes in the 2010 through 2016 accident years. (3) Primarily reflects favorable prior accident year loss reserve development related to Hurricane Harvey in the 2017 accident year and catastrophes in the 2016 accident year, partially offset by unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. (4) Primarily reflects favorable prior accident year loss reserve development in the 2017 accident year. (5) Primarily reflects favorable prior accident year loss reserve development in the 2013 through 2016 accident years. (6) Represents certain medical malpractice treaties pursuant to which the increased underwriting profits created by the favorable prior accident year loss reserve development are largely retained by the cedants. As a result, the favorable prior accident year loss reserve development is largely offset by an increase in profit commission expense incurred when such favorable prior accident year loss reserve development occurs. (7) Represents unfavorable prior accident year loss reserve development related to the U.K. Ministry of Justice’s reduction in the discount rate, referred to as the Ogden rate, used to calculate lump-sum bodily injury payouts in personal injury insurance claims in the U.K to negative 0.75 percent as of March 20, 2017 from 2.50 percent. (8) Primarily reflects favorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2007 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 through 2016 accident years. (9) Primarily reflects favorable prior accident year loss reserve development in the longer-tailed (10) Primarily reflects favorable prior accident year loss reserve development in the shorter-tailed casualty lines of business in the 2016 and 2017 accident years and in the longer-tailed casualty lines of business in the 2010 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 accident year. (11) Primarily reflects favorable prior accident year loss reserve development in longer-tailed U.S. professional liability lines of business in the 2005 through 2014 accident years, partially offset by unfavorable prior accident year loss reserve development in shorter-tailed casualty lines of business in the 2015 accident year in the U.S. and the U.K. (12) Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2012 accident years, partially offset by unfavorable prior accident year loss reserve development in the directors’ and officers’ liability lines of business in the 2009, 2012 and 2016 accident years. (13) Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2011 accident years. (14) Primarily reflects favorable prior accident year loss reserve development related to Hurricane Irma in the 2017 accident year and, to a lesser extent, Hurricane Matthew that occurred in the 2016 accident year, as well as various other losses not classified as catastrophes in recent accident years. (15) Primarily reflects favorable unallocated LAE development. (16) Primarily reflects unfavorable prior accident year property loss reserve development related to the binding authority lines of business in the 2015 and 2016 accident years, partially offset by favorable prior accident year catastrophe loss reserve development in the 2016 accident year. (17) Primarily reflects favorable prior accident year loss reserve development related to the surety lines of business in the 2016 and 2017 accident years. (18) Primarily reflects favorable prior accident year loss reserve development related to the casualty lines of business in the 2010, 2014, 2015 and 2016 accident years. (19) Primarily reflects favorable prior accident year loss reserve development in the 2013 and prior accident years. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Common Stock Repurchases | The following table presents the shares of Common Stock that Alleghany repurchased in the three and nine months ended September 30, 2018 and 2017 pursuant to the 2015 Repurchase Program: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Shares repurchased 76,299 15,916 479,922 15,916 Cost of shares repurchased (in millions) $ 46.0 $ 8.5 $ 282.1 $ 8.5 Average price per share repurchased $ 602.24 $ 537.14 $ 587.70 $ 537.14 |
Reconciliation of Accumulated Other Comprehensive Income (Loss) | The following tables presents a reconciliation of the changes during the nine months ended September 30, 2018 and 2017 in accumulated other comprehensive income (loss) attributable to Alleghany stockholders: Unrealized Unrealized Retirement Total ($ in millions) Balance as of January 1, 2018 $ 718.2 $ (84.6) $ (15.5) $ 618.1 Cumulative effect of adoption of new accounting pronouncements (1) Reclassification of net unrealized gains on equity securities, net of tax (735.6) - - (735.6) Reclassification of stranded taxes 156.6 (18.2) (3.3) 135.1 Total (579.0) (18.2) (3.3) (600.5) Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications (213.3) (6.9) (1.7) (221.9) Reclassifications from accumulated other comprehensive income (16.5) - - (16.5) Total (229.8) (6.9) (1.7) (238.4) Balance as of September 30, 2018 $ (90.6) $ (109.7) $ (20.5) $ (220.8) Unrealized Unrealized Retirement Total ($ in millions) Balance as of January 1, 2017 $ 232.2 $ (111.2) $ (11.7) $ 109.3 Cumulative effect of adoption of new accounting pronouncements (1) 12.9 - - 12.9 Other comprehensive income (loss), net of tax: Other comprehensive income (loss) before reclassifications 364.6 22.4 (0.2) 386.8 Reclassifications from accumulated other comprehensive income (57.7) - - (57.7) Total 306.9 22.4 (0.2) 329.1 Balance as of September 30, 2017 $ 552.0 $ (88.8) $ (11.9) $ 451.3 (1) See Note 1(c) of this Form 10-Q |
Reclassifications of Accumulated Other Comprehensive Income | The following table presents reclassifications out of accumulated other comprehensive income attributable to Alleghany stockholders during the three and nine months ended September 30, 2018 and 2017: Accumulated Other Three Months Ended September 30, Nine Months Ended September 30, Comprehensive Income Component Line in Consolidated Statement of Earnings 2018 2017 2018 2017 ($ in millions) Unrealized appreciation of investments: Net realized capital gains (1) $ (16.2) $ (32.9) $ (21.5) $ (101.8) Other than temporary impairment losses - 6.1 0.5 13.1 Income taxes 3.4 9.4 4.5 31.0 Total reclassifications: Net earnings $ (12.8) $ (17.4) $ (16.5) $ (57.7) (1) For the nine month period ended September 30, 2018, excludes a $45.7 million pre-tax 10-Q |
Earnings Per Share of Common _2
Earnings Per Share of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reconciliation of Earnings and Share Data used in Basic and Diluted Earnings per Share Computations | The following table presents a reconciliation of the earnings and share data used in the basic and diluted earnings per share computations for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in millions, except share amounts) Net earnings (losses) available to Alleghany stockholders $ 284.9 $ (314.2 ) $ 751.6 $ (63.2 ) Effect of dilutive securities - (8.9 ) - - Income (loss) available to common stockholders for diluted earnings per share $ 284.9 $ (323.1 ) $ 751.6 $ (63.2 ) Weighted average common shares outstanding applicable to basic earnings 14,937,135 15,416,014 15,168,831 15,416,249 Effect of dilutive securities - 42,310 4,849 - Adjusted weighted average common shares outstanding applicable to diluted earnings per share 14,937,135 15,458,324 15,173,680 15,416,249 |
Segments of Business (Tables)
Segments of Business (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Results for Reportable Segments and Corporate Activities | The following tables present the results for Alleghany’s three reportable segments and for corporate activities for the three and nine months ended September 30, 2018 and 2017: Reinsurance Segment Insurance Segment Three Months Ended Property Casualty (1) Total RSUI Cap Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 451.4 $ 685.9 $ 1,137.3 $ 260.8 $ 83.9 $ 344.7 $ 1,482.0 $ - $ 1,482.0 $ (6.7) $ 1,475.3 Net premiums written 331.1 654.1 985.2 176.0 77.9 253.9 1,239.1 - 1,239.1 - 1,239.1 Net premiums earned 326.5 635.0 961.5 190.6 73.3 263.9 1,225.4 - 1,225.4 - 1,225.4 Net loss and LAE 387.6 421.4 809.0 107.0 41.7 148.7 957.7 - 957.7 - 957.7 Commissions, brokerage and other 113.3 211.6 324.9 52.8 30.0 82.8 407.7 - 407.7 - 407.7 Underwriting (loss) profit (3) $ (174.4 ) $ 2.0 $ (172.4 ) $ 30.8 $ 1.6 $ 32.4 (140.0 ) - (140.0 ) - (140.0 ) Net investment income 122.5 0.7 123.2 4.1 127.3 Change in the fair value of equity securities 373.9 - 373.9 (3.7 ) 370.2 Net realized capital gains 16.2 - 16.2 - 16.2 Other than temporary impairment losses - - - - - Noninsurance revenue 6.2 407.5 413.7 24.6 438.3 Other operating expenses 23.6 382.5 406.1 9.2 415.3 Corporate administration 1.3 - 1.3 17.8 19.1 Amortization of intangible assets (0.3 ) 5.8 5.5 - 5.5 Interest expense 6.7 2.6 9.3 12.9 22.2 Earnings (losses) before income taxes $ 347.5 $ 17.3 $ 364.8 $ (14.9 ) $ 349.9 Reinsurance Segment Insurance Segment Three Months Ended Property Casualty (1) Total RSUI Cap Pacific Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 445.5 $ 681.1 $ 1,126.6 $ 234.6 $ 74.3 $ 41.6 $ 350.5 $ 1,477.1 $ - $ 1,477.1 $ (5.3 ) $ 1,471.8 Net premiums written 329.0 649.5 978.5 170.8 69.5 41.5 281.8 1,260.3 - 1,260.3 - 1,260.3 Net premiums earned 310.8 642.4 953.2 179.0 66.1 41.4 286.5 1,239.7 - 1,239.7 - 1,239.7 Net loss and LAE 659.9 459.3 1,119.2 305.4 37.0 30.3 372.7 1,491.9 - 1,491.9 - 1,491.9 Commissions, brokerage and other 105.2 203.7 308.9 50.3 28.4 10.6 89.3 398.2 - 398.2 - 398.2 Underwriting (loss) profit (3) $ (454.3 ) $ (20.6 ) $ (474.9 ) $ (176.7 ) $ 0.7 $ 0.5 $ (175.5 ) (650.4 ) - (650.4 ) - (650.4 ) Net investment income 101.4 1.6 103.0 1.7 104.7 Change in the fair value of equity securities - - - - - Net realized capital gains 21.5 0.7 22.2 10.7 32.9 Other than temporary impairment losses (6.1 ) - (6.1 ) - (6.1 ) Noninsurance revenue 4.7 289.3 294.0 2.3 296.3 Other operating expenses 8.3 260.0 268.3 9.6 277.9 Corporate administration (1.5 ) - (1.5 ) (3.2 ) (4.7 ) Amortization of intangible assets (0.3 ) 6.0 5.7 - 5.7 Interest expense 6.6 1.2 7.8 13.0 20.8 Earnings (losses) before income taxes $ (542.0 ) $ 24.4 $ (517.6 ) $ (4.7 ) $ (522.3 ) Reinsurance Segment Insurance Segment Nine Months Ended Property Casualty (1) Total RSUI Cap Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 1,193.7 $ 2,130.9 $ 3,324.6 $ 854.2 $ 247.1 $ 1,101.3 $ 4,425.9 $ - $ 4,425.9 $ (19.2 ) $ 4,406.7 Net premiums written 912.1 2,046.8 2,958.9 579.8 229.6 809.4 3,768.3 - 3,768.3 - 3,768.3 Net premiums earned 893.7 2,009.3 2,903.0 556.2 211.0 767.2 3,670.2 - 3,670.2 - 3,670.2 Net loss and LAE 637.7 1,304.3 1,942.0 309.6 114.9 424.5 2,366.5 - 2,366.5 - 2,366.5 Commissions, brokerage and other 301.2 663.6 964.8 160.0 91.2 251.2 1,216.0 - 1,216.0 - 1,216.0 Underwriting (loss) profit (3) $ (45.2 ) $ 41.4 $ (3.8 ) $ 86.6 $ 4.9 $ 91.5 87.7 - 87.7 - 87.7 Net investment income 362.0 3.7 365.7 12.0 377.7 Change in the fair value of equity securities 506.7 - 506.7 6.1 512.8 Net realized capital gains 66.8 0.6 67.4 (0.2 ) 67.2 Other than temporary impairment losses (0.5 ) - (0.5 ) - (0.5 ) Noninsurance revenue 16.7 979.2 995.9 36.8 1,032.7 Other operating expenses 60.6 937.0 997.6 25.9 1,023.5 Corporate administration 1.8 - 1.8 39.2 41.0 Amortization of intangible assets (0.2 ) 17.0 16.8 - 16.8 Interest expense 20.5 6.1 26.6 39.4 66.0 Earnings (losses) before income taxes $ 956.7 $ 23.4 $ 980.1 $ (49.8 ) $ 930.3 Reinsurance Segment Insurance Segment Nine Months Ended Property Casualty (1) Total RSUI Cap Pacific Total Subtotal Alleghany Total Corporate (2) Consolidated ($ in millions) Gross premiums written $ 1,190.0 $ 2,037.7 $ 3,227.7 $ 794.1 $ 213.2 $ 124.2 $ 1,131.5 $ 4,359.2 $ - $ 4,359.2 $ (16.5 ) $ 4,342.7 Net premiums written 931.4 1,975.3 2,906.7 558.0 198.9 122.9 879.8 3,786.5 - 3,786.5 - 3,786.5 Net premiums earned 868.1 1,968.7 2,836.8 540.3 192.2 123.5 856.0 3,692.8 - 3,692.8 - 3,692.8 Net loss and LAE 904.6 1,344.7 2,249.3 479.7 105.7 91.3 676.7 2,926.0 - 2,926.0 - 2,926.0 Commissions, brokerage and other 283.7 662.9 946.6 158.3 83.3 32.2 273.8 1,220.4 - 1,220.4 - 1,220.4 Underwriting (loss) profit (3) $ (320.2 ) $ (38.9 ) $ (359.1 ) $ (97.7 ) $ 3.2 $ - $ (94.5 ) (453.6 ) - (453.6 ) - (453.6 ) Net investment income 311.7 2.1 313.8 8.1 321.9 Change in the fair value of equity securities - - - - - Net realized capital gains 90.8 0.9 91.7 10.1 101.8 Other than temporary impairment losses (13.1 ) - (13.1 ) - (13.1 ) Noninsurance revenue 10.5 626.8 637.3 13.1 650.4 Other operating expenses 57.4 591.0 648.4 29.8 678.2 Corporate administration 0.2 - 0.2 26.4 26.6 Amortization of intangible assets (1.2 ) 15.4 14.2 - 14.2 Interest expense 20.2 3.0 23.2 39.5 62.7 Earnings (losses) before income taxes $ (130.3 ) $ 20.4 $ (109.9 ) $ (64.4 ) $ (174.3 ) (1) Primarily consists of the following assumed reinsurance lines of business: directors’ and officers’ liability; errors and omissions liability; general liability; medical malpractice; ocean marine and aviation; auto liability; accident and health; surety; and credit. (2) Includes elimination of minor reinsurance activity between segments. (3) Underwriting profit represents net premiums earned less net loss and LAE and commissions, brokerage and other underwriting expenses, all as determined in accordance with GAAP, and does not include net investment income, change in the fair value of equity securities, net realized capital gains, OTTI losses, noninsurance revenue, other operating expenses, corporate administration, amortization of intangible assets or interest expense. Underwriting profit does not replace earnings before income taxes determined in accordance with GAAP as a measure of profitability. Rather, Alleghany believes that underwriting profit enhances the understanding of its reinsurance and insurance segments’ operating results by highlighting net earnings attributable to their underwriting performance. Earnings before income taxes (a GAAP measure) may show a profit despite an underlying underwriting loss. Where underwriting losses persist over extended periods, a reinsurance or an insurance company’s ability to continue as an ongoing concern may be at risk. Therefore, Alleghany views underwriting profit as an important measure in the overall evaluation of performance. |
Summary of Identifiable Assets and Equity | The following table presents identifiable assets, the portion of identifiable assets related to cash and invested assets, and equity attributable to Alleghany, for Alleghany’s reportable segments and for corporate activities as of September 30, 2018: Identifiable Invested Assets Equity ($ in millions) Reinsurance segment $ 16,740.1 $ 13,461.2 $ 5,167.6 Insurance segment 7,056.8 5,586.2 3,092.8 Subtotal 23,796.9 19,047.4 8,260.4 Alleghany Capital 1,476.6 195.4 855.8 Total segments 25,273.5 19,242.8 9,116.2 Corporate activities 522.4 446.8 (521.1) Consolidated $ 25,795.9 $ 19,689.6 $ 8,595.1 |
Summary of Alleghany Capital Noninsurance Revenue | The following table presents noninsurance revenue for the Alleghany Capital segment for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 ($ in millions) Industrial (1) $ 224.2 $ 137.9 $ 591.6 $ 254.2 Non-Industrial (2) 183.7 150.9 387.9 372.1 Corporate & other (0.4 ) 0.5 (0.3 ) 0.5 Alleghany Capital $ 407.5 $ 289.3 $ 979.2 $ 626.8 (1) For the three and nine months ended September 30, 2018, the vast majority of noninsurance revenues were recognized as goods and services transferred to customers over time. For the three and nine months ended September 30, 2017, approximately 77 percent and 67 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany’s adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. (2) For the three and nine months ended September 30, 2018, approximately 60 percent and 65 percent, respectively, of noninsurance revenues were recognized as services transferred to customers over time, with the remainder recognized as goods transferred at a point in time. For the three and nine months ended September 30, 2017, approximately 56 percent and 69 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods were transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany’s adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 01, 2018 | Aug. 01, 2017 | Jan. 01, 2017 | ||
Significant Accounting Policies [Line Items] | |||||||
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% | ||||
Accumulated Other Comprehensive Income | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | [1] | $ (600.5) | $ 12.9 | ||||
Accounting Standards Update 2018-02 | Accumulated Other Comprehensive Income | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | [1] | 135.1 | |||||
Accounting Standards Update 2018-02 | Retained Earnings | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | (135) | ||||||
Accounting Standards Update 2017-08 | Accumulated Other Comprehensive Income | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | 13 | ||||||
Accounting Standards Update 2017-08 | Retained Earnings | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | $ (13) | ||||||
Accounting Standards Update 2016-01 | Accumulated Other Comprehensive Income | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | [1] | (735.6) | |||||
Accounting Standards Update 2016-01 | Retained Earnings | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cumulative effective of adoption of new accounting pronouncements | $ 736 | ||||||
Wilbert Funeral Services, Inc | |||||||
Significant Accounting Policies [Line Items] | |||||||
Equity interest percentage | 45.00% | 45.00% | |||||
Pacific Comp | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cash consideration from sale | $ 158 | ||||||
Disposal date | Dec. 31, 2017 | ||||||
Assets disposed of | $ 442 | ||||||
Liabilities disposed of | 316 | ||||||
Gain on sale of business, after tax | 16 | ||||||
Alleghany Corporation | Financial Guarantee | AIHL Re Limited Liability Company reinsurance of Pacific Compensation Insurance Company | |||||||
Significant Accounting Policies [Line Items] | |||||||
Guaranteed obligation, aggregate limit | 150 | ||||||
Aihl Re Limited Liability Company | AIHL Re Limited Liability Company reinsurance of Pacific Compensation Insurance Company | |||||||
Significant Accounting Policies [Line Items] | |||||||
Aggregate limit | $ 150 | ||||||
Final commutation and settlement date | Dec. 31, 2024 | ||||||
WWSC Holdings, LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership of interest held by noncontrolling partners | 20.00% | ||||||
Kentucky Trailer | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership of interest held by noncontrolling partners | 21.00% | ||||||
Integrated Project Services LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership of interest held by noncontrolling partners | 15.00% | ||||||
Bourn & Koch, Inc. | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership of interest held by noncontrolling partners | 11.00% | ||||||
Jazwares, LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership of interest held by noncontrolling partners | 23.00% | ||||||
WWSC Holdings, LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Business acquisition date | Apr. 28, 2017 | ||||||
Hirschfeld Holdings, LP | WWSC Holdings, LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Business acquisition date | Feb. 7, 2018 | ||||||
[1] | See Note 1(c) of this Form 10-Q for additional information regarding Alleghany's adoption of new investment accounting guidance and new guidance on certain tax effects caused by the Tax Act. |
Carrying Value and Estimated Fa
Carrying Value and Estimated Fair Value of Consolidated Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | |
Assets | |||
Investments (excluding equity method investments and loans) | [1] | $ 17,791.3 | $ 17,406.5 |
Liabilities | |||
Senior Notes and other debt | [2] | 1,701.8 | 1,614.6 |
Carrying Value | |||
Assets | |||
Investments (excluding equity method investments and loans) | [1] | 17,791.3 | 17,406.5 |
Liabilities | |||
Senior Notes and other debt | [2] | $ 1,581.7 | $ 1,484.9 |
[1] | This table includes debt and equity securities, as well as partnership and non-marketable equity investments carried at fair value that are included in other invested assets. This table excludes investments accounted for using the equity method and commercial mortgage loans that are carried at unpaid principal balance. The fair value of short-term investments approximates amortized cost. The fair value of all other categories of investments is discussed below. | ||
[2] | See Note 8 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K for additional information on the senior notes and other debt. |
Financial Instruments Measured
Financial Instruments Measured at Fair Value and Level of Fair Value Hierarchy of Inputs (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | $ 5,028,578 | ||
Estimated fair value of available for sale debt securities | 12,071,191 | $ 12,721,399 | |
Estimated fair value of investments (excluding equity method investments and loans) | [1] | 17,791,300 | 17,406,500 |
Senior Notes and other debt | [2] | 1,701,800 | 1,614,600 |
Estimated fair value of equities | 4,099,467 | ||
Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 5,020,200 | ||
Estimated fair value of equities | 4,094,500 | ||
Preferred Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 8,400 | ||
Estimated fair value of equities | 5,000 | ||
U.S. Government obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 1,028,600 | 948,000 | |
Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 2,604,300 | 3,682,100 | |
Foreign government obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 902,000 | 1,006,600 | |
U.S. corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 2,443,700 | 2,433,000 | |
Foreign corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 1,418,800 | 1,499,800 | |
RMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [3] | 1,115,600 | 995,600 |
CMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 523,900 | 551,700 | |
Other asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [4] | 2,034,300 | 1,604,600 |
Short-term Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of investments (excluding equity method investments and loans) | 690,600 | 578,100 | |
Other invested assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of investments (excluding equity method investments and loans) | [5] | 900 | 7,500 |
Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 5,016,700 | ||
Estimated fair value of investments (excluding equity method investments and loans) | 5,016,700 | 4,090,700 | |
Estimated fair value of equities | 4,090,700 | ||
Level 1 | Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 5,016,700 | ||
Estimated fair value of equities | 4,090,700 | ||
Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 3,500 | ||
Estimated fair value of available for sale debt securities | 10,179,900 | 11,121,500 | |
Estimated fair value of investments (excluding equity method investments and loans) | 10,874,000 | 11,706,500 | |
Senior Notes and other debt | 1,504,100 | 1,513,600 | |
Estimated fair value of equities | 6,900 | ||
Level 2 | Common Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 3,500 | ||
Estimated fair value of equities | 3,800 | ||
Level 2 | Preferred Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 3,100 | ||
Level 2 | U.S. Government obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 1,028,600 | 948,000 | |
Level 2 | Municipal bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 2,604,300 | 3,682,100 | |
Level 2 | Foreign government obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 902,000 | 1,006,600 | |
Level 2 | U.S. corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 2,040,700 | 2,173,000 | |
Level 2 | Foreign corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 1,310,400 | 1,424,600 | |
Level 2 | RMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [3] | 1,115,600 | 833,800 |
Level 2 | CMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 523,900 | 550,100 | |
Level 2 | Other asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [4] | 654,400 | 503,300 |
Level 2 | Short-term Investments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of investments (excluding equity method investments and loans) | 690,600 | 578,100 | |
Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 8,400 | ||
Estimated fair value of available for sale debt securities | 1,891,300 | 1,599,900 | |
Estimated fair value of investments (excluding equity method investments and loans) | 1,900,600 | 1,609,300 | |
Senior Notes and other debt | 197,700 | 101,000 | |
Estimated fair value of equities | 1,900 | ||
Level 3 | Preferred Stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of equities | 8,400 | ||
Estimated fair value of equities | 1,900 | ||
Level 3 | U.S. corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 403,000 | 260,000 | |
Level 3 | Foreign corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 108,400 | 75,200 | |
Level 3 | RMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [3] | 161,800 | |
Level 3 | CMBS | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | 1,600 | ||
Level 3 | Other asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [4] | 1,379,900 | 1,101,300 |
Level 3 | Other invested assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of investments (excluding equity method investments and loans) | [5] | $ 900 | $ 7,500 |
[1] | This table includes debt and equity securities, as well as partnership and non-marketable equity investments carried at fair value that are included in other invested assets. This table excludes investments accounted for using the equity method and commercial mortgage loans that are carried at unpaid principal balance. The fair value of short-term investments approximates amortized cost. The fair value of all other categories of investments is discussed below. | ||
[2] | See Note 8 to Notes to Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" of the 2017 Form 10-K for additional information on the senior notes and other debt. | ||
[3] | Primarily includes government agency pass-through securities guaranteed by a government agency or government sponsored enterprise, among other types of RMBS. | ||
[4] | Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. | ||
[5] | Includes partnership and non-marketable equity investments accounted for at fair value, and excludes investments accounted for using the equity method. |
Financial Instruments Measure_2
Financial Instruments Measured at Fair Value and Level of Fair Value Hierarchy of Inputs (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | $ 12,071,191 | $ 12,721,399 | |
Other asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | [1] | 2,034,300 | 1,604,600 |
Collateralized loan obligations | Other asset-backed securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated fair value of available for sale debt securities | $ 1,368,900 | $ 1,101,300 | |
[1] | Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions | Sep. 24, 2018 | Mar. 15, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | $ 0.8 | $ 64.3 | $ 5.5 | |||
Gross transfers out of Level 3 | 210.6 | 7.2 | ||||
All investment issuers other than Ares | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | 5.6 | |||||
Gross transfers out of Level 3 | 153.7 | |||||
Common Stock | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | 1.4 | |||||
Gross transfers out of Level 3 | 2.4 | |||||
Common Stock | Ares | Insurance Segment | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 1 | $ 56.9 | $ 208.2 | ||||
U.S. corporate bonds | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | 1.2 | 3.8 | ||||
Gross transfers out of Level 3 | 1.3 | 4.8 | ||||
Foreign corporate bonds | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | $ 0.3 | |||||
Gross transfers out of Level 3 | 0.2 | |||||
Other invested assets | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | [1] | 58.7 | ||||
Gross transfers out of Level 3 | [1] | 56.9 | ||||
Other invested assets | Limited partnership interests in certain subsidiaries of Ares | Insurance Segment | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | $ 58.7 | 58.7 | ||||
Gross transfers out of Level 3 | $ 56.9 | 56.9 | ||||
Preferred Stock | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers into Level 3 | 4.4 | |||||
RMBS | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers out of Level 3 | 150.6 | |||||
CMBS | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Gross transfers out of Level 3 | $ 1.6 | |||||
[1] | Includes partnership and non-marketable equity investments accounted for at fair value. |
Reconciliations of Changes in L
Reconciliations of Changes in Level Three Assets Measured at Fair Value (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | $ 1,609.3 | $ 1,019.7 | ||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | 2.3 | 14.7 | |
Other comprehensive income (loss) | (29.3) | 10.7 | ||
Purchases | 899.9 | 1,025.6 | ||
Sales | (62.4) | (96.9) | ||
Issuances | 0 | 0 | ||
Settlements | (372.9) | (435.1) | ||
Transfers into Level 3 | $ 0.8 | 64.3 | 5.5 | |
Transfers out of Level 3 | (210.6) | (7.2) | ||
Ending balance | 1,537 | 1,900.6 | 1,537 | |
Preferred Stock | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 1.9 | |||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | (0.2) | ||
Other comprehensive income (loss) | 0.2 | 0.2 | ||
Purchases | 2 | 5.6 | ||
Sales | (0.1) | (0.6) | ||
Issuances | 0 | 0 | ||
Transfers into Level 3 | 4.4 | |||
Ending balance | 5 | 8.4 | 5 | |
Common Stock | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 4.3 | |||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | 0.2 | ||
Sales | (2.6) | |||
Issuances | 0 | |||
Transfers into Level 3 | 1.4 | |||
Transfers out of Level 3 | (2.4) | |||
Ending balance | 0.9 | 0.9 | ||
Foreign corporate bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 75.2 | 0.4 | ||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | (0.1) | ||
Other comprehensive income (loss) | (2.5) | 0.8 | ||
Purchases | 38.9 | 38.6 | ||
Sales | (0.2) | |||
Issuances | 0 | 0 | ||
Settlements | (2.9) | |||
Transfers into Level 3 | 0.3 | |||
Transfers out of Level 3 | (0.2) | |||
Ending balance | 39.9 | 108.4 | 39.9 | |
U.S. corporate bonds | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 260 | 72.9 | ||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | (0.2) | ||
Other comprehensive income (loss) | (7.4) | 3.2 | ||
Purchases | 153.7 | 220.4 | ||
Sales | (10.2) | |||
Issuances | 0 | 0 | ||
Settlements | (3.2) | (6.3) | ||
Transfers into Level 3 | 1.2 | 3.8 | ||
Transfers out of Level 3 | (1.3) | (4.8) | ||
Ending balance | 278.8 | 403 | 278.8 | |
Foreign government obligations | ||||
Net realized/unrealized gains (losses) included in: | ||||
Purchases | 4.7 | |||
Issuances | 0 | |||
Ending balance | 4.7 | 4.7 | ||
RMBS | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 161.8 | 5.9 | ||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | (0.3) | 0.2 | |
Other comprehensive income (loss) | (5.3) | 0.3 | ||
Issuances | 0 | 0 | ||
Settlements | (5.6) | (1) | ||
Transfers out of Level 3 | (150.6) | |||
Ending balance | 5.4 | 5.4 | ||
CMBS | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 1.6 | 4.3 | ||
Net realized/unrealized gains (losses) included in: | ||||
Other comprehensive income (loss) | 0.1 | |||
Purchases | 9.6 | |||
Sales | (2.2) | |||
Issuances | 0 | 0 | ||
Settlements | (0.4) | |||
Transfers out of Level 3 | (1.6) | |||
Ending balance | 11.4 | 11.4 | ||
Other asset-backed securities | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | 1,101.3 | 903.8 | ||
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1] | 1.5 | 3.9 | |
Other comprehensive income (loss) | (10.3) | 15 | ||
Purchases | 705.3 | 746.7 | ||
Sales | (56.7) | (59.5) | ||
Issuances | 0 | 0 | ||
Settlements | (361.2) | (427.4) | ||
Ending balance | 1,182.5 | 1,379.9 | 1,182.5 | |
Other invested assets | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning balance | [2] | 7.5 | 28.1 | |
Net realized/unrealized gains (losses) included in: | ||||
Net earnings | [1],[2] | 1.2 | 10.8 | |
Other comprehensive income (loss) | [2] | (4) | (8.9) | |
Sales | [2] | (5.6) | (21.6) | |
Issuances | [2] | 0 | 0 | |
Transfers into Level 3 | [2] | 58.7 | ||
Transfers out of Level 3 | [2] | (56.9) | ||
Ending balance | [2] | $ 8.4 | $ 0.9 | $ 8.4 |
[1] | There were no other than temporary impairment ("OTTI") losses recorded in net earnings related to Level 3 assets still held as of September 30, 2018 and 2017. | |||
[2] | Includes partnership and non-marketable equity investments accounted for at fair value. |
Amortized Cost or Cost and Fair
Amortized Cost or Cost and Fair Value of Available For Sale Securities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale [Line Items] | |||
Amortized Cost or Cost | $ 12,870,400 | $ 16,285,600 | |
Gross Unrealized Gains | 81,100 | 1,170,500 | |
Gross Unrealized Losses | (189,700) | (57,100) | |
Fair Value | 12,761,800 | 17,399,000 | |
Equity securities, cost | 3,170,673 | ||
Equity securities, gross unrealized gains | 932,600 | ||
Equity securities, gross unrealized losses | (3,800) | ||
Equity securities, fair value | 4,099,467 | ||
Debt securities, amortized cost | 12,179,758 | 12,536,772 | |
Debt securities, gross unrealized gains | 81,100 | 237,900 | |
Debt securities, gross unrealized losses | (189,700) | (53,300) | |
Debt securities, fair value | 12,071,191 | 12,721,399 | |
U.S. Government obligations | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 1,069,400 | 963,900 | |
Debt securities, gross unrealized gains | 100 | 1,700 | |
Debt securities, gross unrealized losses | (40,900) | (17,600) | |
Debt securities, fair value | 1,028,600 | 948,000 | |
Municipal bonds | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 2,591,200 | 3,578,900 | |
Debt securities, gross unrealized gains | 37,300 | 109,800 | |
Debt securities, gross unrealized losses | (24,200) | (6,600) | |
Debt securities, fair value | 2,604,300 | 3,682,100 | |
Foreign government obligations | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 905,800 | 1,000,100 | |
Debt securities, gross unrealized gains | 5,500 | 11,200 | |
Debt securities, gross unrealized losses | (9,300) | (4,700) | |
Debt securities, fair value | 902,000 | 1,006,600 | |
U.S. corporate bonds | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 2,464,800 | 2,381,100 | |
Debt securities, gross unrealized gains | 19,400 | 61,600 | |
Debt securities, gross unrealized losses | (40,500) | (9,700) | |
Debt securities, fair value | 2,443,700 | 2,433,000 | |
Foreign corporate bonds | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 1,428,700 | 1,481,800 | |
Debt securities, gross unrealized gains | 10,600 | 24,500 | |
Debt securities, gross unrealized losses | (20,500) | (6,500) | |
Debt securities, fair value | 1,418,800 | 1,499,800 | |
RMBS | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 1,147,800 | 993,900 | |
Debt securities, gross unrealized gains | 3,000 | 6,300 | |
Debt securities, gross unrealized losses | (35,200) | (4,600) | |
Debt securities, fair value | [1] | 1,115,600 | 995,600 |
CMBS | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | 530,700 | 545,000 | |
Debt securities, gross unrealized gains | 2,300 | 9,000 | |
Debt securities, gross unrealized losses | (9,100) | (2,300) | |
Debt securities, fair value | 523,900 | 551,700 | |
Other asset-backed securities | |||
Available-for-sale [Line Items] | |||
Debt securities, amortized cost | [2] | 2,041,400 | 1,592,100 |
Debt securities, gross unrealized gains | [2] | 2,900 | 13,800 |
Debt securities, gross unrealized losses | [2] | (10,000) | (1,300) |
Debt securities, fair value | [2] | 2,034,300 | 1,604,600 |
Common Stock | |||
Available-for-sale [Line Items] | |||
Equity securities, cost | 3,165,800 | ||
Equity securities, gross unrealized gains | 932,500 | ||
Equity securities, gross unrealized losses | (3,800) | ||
Equity securities, fair value | 4,094,500 | ||
Preferred Stock | |||
Available-for-sale [Line Items] | |||
Equity securities, cost | 4,900 | ||
Equity securities, gross unrealized gains | 100 | ||
Equity securities, fair value | 5,000 | ||
Short-term Investments | |||
Available-for-sale [Line Items] | |||
Amortized Cost or Cost | 690,600 | 578,100 | |
Fair Value | $ 690,600 | $ 578,100 | |
[1] | Primarily includes government agency pass-through securities guaranteed by a government agency or government sponsored enterprise, among other types of RMBS. | ||
[2] | Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. |
Amortized Cost or Cost and Fa_2
Amortized Cost or Cost and Fair Value of Available For Sale Securities (Parenthetical) (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale [Line Items] | |||
Estimated fair value of available for sale debt securities | $ 12,071,191 | $ 12,721,399 | |
Other asset-backed securities | |||
Available-for-sale [Line Items] | |||
Estimated fair value of available for sale debt securities | [1] | 2,034,300 | 1,604,600 |
Collateralized loan obligations | Other asset-backed securities | |||
Available-for-sale [Line Items] | |||
Estimated fair value of available for sale debt securities | $ 1,368,900 | $ 1,101,300 | |
[1] | Includes $1,368.9 million and $1,101.3 million of collateralized loan obligations as of September 30, 2018 and December 31, 2017, respectively. |
Amortized Cost and Estimated Fa
Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Available-for-sale [Line Items] | |||
Short-term investments due in one year or less, amortized cost or cost | $ 690,600 | ||
Mortgage and asset-backed securities, amortized cost or cost | [1] | 3,719,900 | |
Debt securities with maturity dates, amortized cost or cost: | |||
One year or less | 230,800 | ||
Over one through five years | 3,011,700 | ||
Over five through ten years | 3,029,100 | ||
Over ten years | 2,188,300 | ||
Debt securities, amortized cost | 12,179,758 | $ 12,536,772 | |
Short-term investments due in one year or less, fair value | 690,627 | 578,054 | |
Mortgage and asset-backed securities, fair value | [1] | 3,673,800 | |
Debt securities with maturity dates, fair value: | |||
One year or less | 230,400 | ||
Over one through five years | 2,987,000 | ||
Over five through ten years | 2,991,900 | ||
Over ten years | 2,188,100 | ||
Debt securities, fair value | $ 12,071,191 | $ 12,721,399 | |
[1] | Mortgage and asset-backed securities by their nature do not generally have single maturity dates. |
Net Investment Income (Detail)
Net Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Net Investment Income [Line Items] | |||||
Interest income | $ 106,400 | $ 104,600 | $ 313,200 | $ 306,300 | |
Dividend income | 16,200 | 6,700 | 54,900 | 27,900 | |
Investment expenses | (6,800) | (5,800) | (25,400) | (20,100) | |
Other investment results | 5,300 | 1,700 | 13,600 | 11,100 | |
Net investment income | 127,329 | 104,663 | 377,728 | 321,857 | |
Limited partnership interests in certain subsidiaries of Ares | |||||
Net Investment Income [Line Items] | |||||
Equity results | [1] | 7,000 | 6,900 | 20,200 | (400) |
Pillar Capital Holdings Limited And Managed Funds | |||||
Net Investment Income [Line Items] | |||||
Equity results | [1] | $ (800) | $ (9,400) | $ 1,200 | $ (2,900) |
[1] | See Note 3(h) of this Form 10-Q for discussion of the Pillar Investments, as defined therein, and limited partnership interests in certain subsidiaries of Ares. |
Investments - Summary of Increa
Investments - Summary of Increases in Fair Value of Equity Securities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Equity Securities, FV-NI, Gain (Loss) [Abstract] | ||
Change in the fair value of equity securities sold during the period | $ 7,300 | $ 23,300 |
Change in the fair value of equity securities held at the end of the period | 362,900 | 489,500 |
Change in the fair value of equity securities | $ 370,175 | $ 512,771 |
Investments - Additional Inform
Investments - Additional Information (Detail) | Sep. 24, 2018USD ($) | Mar. 15, 2018USD ($) | Jul. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Sep. 30, 2018USD ($)Investment | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Investment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Investment [Line Items] | |||||||||
Proceeds from sales of debt and equity securities | $ 900,000,000 | $ 1,600,000,000 | $ 2,800,000,000 | $ 5,800,000,000 | |||||
Net realized capital gains | 16,230,000 | 32,921,000 | $ 67,197,000 | 101,840,000 | |||||
Securities impairment test description | Debt securities in an unrealized loss position are evaluated for OTTI if they meet any of the following criteria: (i) they are trading at a discount of at least 20 percent to amortized cost for an extended period of time (nine consecutive months or more); (ii) there has been a negative credit or news event with respect to the issuer that could indicate the existence of an OTTI; or (iii) Alleghany intends to sell, or it is more likely than not that Alleghany will sell, the debt security before recovery of its amortized cost basis.If Alleghany intends to sell, or it is more likely than not that Alleghany will sell, a debt security before recovery of its amortized cost basis, the total amount of the unrealized loss position is recognized as an OTTI loss in earnings. To the extent that a debt security that is in an unrealized loss position is not impaired based on the preceding, Alleghany will consider a debt security to be impaired when it believes it to be probable that Alleghany will not be able to collect the entire amortized cost basis. For debt securities in an unrealized loss position as of the end of each quarter, Alleghany develops a best estimate of the present value of expected cash flows. If the results of the cash flow analysis indicate that Alleghany will not recover the full amount of its amortized cost basis in the debt security, Alleghany records an OTTI loss in earnings equal to the difference between the present value of expected cash flows and the amortized cost basis of the debt security. If applicable, the difference between the total unrealized loss position on the debt security and the OTTI loss recognized in earnings is the non-credit related portion, which is recorded as a component of other comprehensive income.In developing the cash flow analyses for debt securities, Alleghany considers various factors for the different categories of debt securities. For municipal bonds, Alleghany takes into account the taxing power of the issuer, source of revenue, credit risk and enhancements and pre-refunding. For mortgage and asset-backed securities, Alleghany discounts its best estimate of future cash flows at an effective rate equal to the original effective yield of the security or, in the case of floating rate securities, at the current coupon. Alleghany’s models include assumptions about prepayment speeds, default and delinquency rates, underlying collateral (if any), credit ratings, credit enhancements and other observable market data. For corporate bonds, Alleghany reviews business prospects, credit ratings and available information from asset managers and rating agencies for individual securities. | ||||||||
Other than temporary impairment losses | $ 3,000 | $ 514,000 | |||||||
Other than temporary impairment losses | 6,131,000 | 13,095,000 | |||||||
Percentage of debt securities owned with credit rating below investment grade or not rated | 4.20% | 4.20% | 5.30% | ||||||
Other invested assets | $ 556,438,000 | $ 556,438,000 | $ 743,358,000 | ||||||
Fair value of common units | 5,028,578,000 | 5,028,578,000 | |||||||
Fair value of investment | 12,761,800,000 | 12,761,800,000 | 17,399,000,000 | ||||||
Net investment income | 127,329,000 | $ 104,663,000 | 377,728,000 | 321,857,000 | |||||
Pillar Capital Holdings Limited And Managed Funds | |||||||||
Investment [Line Items] | |||||||||
Other invested assets | 201,300,000 | 201,300,000 | |||||||
Pillar Capital Holdings Limited And Managed Funds | Reinsurance Segment | |||||||||
Investment [Line Items] | |||||||||
Investment in other invested asset | $ 175,000,000 | ||||||||
Pillar Capital Holdings Limited And Managed Funds | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Investment in other invested asset | $ 25,000,000 | ||||||||
Limited partnership interests in certain subsidiaries of Ares | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Net investment income | $ 12,900,000 | ||||||||
Ares | |||||||||
Investment [Line Items] | |||||||||
Net realized capital gains | 45,700,000 | ||||||||
Ares | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Net realized capital gains | 45,700,000 | 45,700,000 | |||||||
Investment in other invested asset | $ 250,000,000 | ||||||||
Percentage of equity stake | 6.25% | ||||||||
Commercial Mortgage Loan Portfolio | |||||||||
Investment [Line Items] | |||||||||
Commercial mortgage loans | 695,889,000 | 695,889,000 | $ 658,364,000 | ||||||
Allowance for loan losses on commercial mortgage loans | $ 0 | 0 | |||||||
Equity Securities | |||||||||
Investment [Line Items] | |||||||||
Other than temporary impairment losses | 11,800,000 | ||||||||
Debt Securities | |||||||||
Investment [Line Items] | |||||||||
Other than temporary impairment losses | $ 500,000 | ||||||||
Other than temporary impairment losses | $ 1,300,000 | ||||||||
Number of securities in an unrealized loss position | Investment | 2,289 | 2,289 | |||||||
Number of securities in an unrealized loss position for 12 months or more | Investment | 617 | 617 | |||||||
Other invested assets | Limited partnership interests in certain subsidiaries of Ares | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Fair value of investment | 58,700,000 | ||||||||
Common Stock | |||||||||
Investment [Line Items] | |||||||||
Fair value of common units | $ 5,020,200,000 | $ 5,020,200,000 | |||||||
Common Stock | Ares | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Fair value of common units | $ 208,200,000 | ||||||||
Reclassification of converted interests from other invested assets to equity securities | $ 56,900,000 | ||||||||
Minimum | Commercial Mortgage Loan Portfolio | |||||||||
Investment [Line Items] | |||||||||
Term of commercial mortgage loans | 2 years | ||||||||
Minimum | Debt Securities | |||||||||
Investment [Line Items] | |||||||||
Percentage of unrealized loss to cost where a security would be evaluated for other than temporarily impairment | 20.00% | ||||||||
Maximum | Ares | Insurance Segment | |||||||||
Investment [Line Items] | |||||||||
Investment commitment in investment fund | $ 1,000,000,000 | ||||||||
Maximum | Commercial Mortgage Loan Portfolio | |||||||||
Investment [Line Items] | |||||||||
Term of commercial mortgage loans | 10 years | ||||||||
Percentage of principal amounts of loans to the property's appraised value | 0.667% |
Amounts of Gross Realized Capit
Amounts of Gross Realized Capital Gains and Gross Realized Capital Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Gross Gains (Losses) [Line Items] | ||||
Gross realized capital gains | $ 16,900 | $ 47,000 | $ 83,300 | $ 189,700 |
Gross realized capital losses | (700) | (14,100) | (16,100) | (87,900) |
Net realized capital gains | $ 16,230 | $ 32,921 | $ 67,197 | $ 101,840 |
Gross Unrealized Losses and Rel
Gross Unrealized Losses and Related Fair Values for AFS Securities Grouped by Duration of Time in Continuous Unrealized Loss Position (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | $ 5,829.3 | |
Securities, less than 12 months, gross unrealized losses | 103.1 | |
Securities, 12 months or more, fair value | 1,893.4 | |
Securities, 12 months or more, gross unrealized losses | 86.6 | |
Total, fair value | 7,722.7 | |
Total, gross unrealized losses | 189.7 | |
Securities, less than 12 months, fair value | $ 2,749.1 | |
Securities, less than 12 months, gross unrealized losses | 24.5 | |
Securities, 12 months or more, fair value | 1,354.7 | |
Securities, 12 months or more, gross unrealized losses | 32.6 | |
Total, fair value | 4,103.8 | |
Total, gross unrealized losses | 57.1 | |
Common Stock | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 145.7 | |
Securities, less than 12 months, gross unrealized losses | 3.8 | |
Total, fair value | 145.7 | |
Total, gross unrealized losses | 3.8 | |
Equity Securities | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 145.7 | |
Securities, less than 12 months, gross unrealized losses | 3.8 | |
Total, fair value | 145.7 | |
Total, gross unrealized losses | 3.8 | |
U.S. Government obligations | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 389.9 | |
Securities, less than 12 months, gross unrealized losses | 7.8 | |
Securities, 12 months or more, fair value | 611.1 | |
Securities, 12 months or more, gross unrealized losses | 33.1 | |
Total, fair value | 1,001 | |
Total, gross unrealized losses | 40.9 | |
Securities, less than 12 months, fair value | 447.8 | |
Securities, less than 12 months, gross unrealized losses | 4.4 | |
Securities, 12 months or more, fair value | 416.6 | |
Securities, 12 months or more, gross unrealized losses | 13.2 | |
Total, fair value | 864.4 | |
Total, gross unrealized losses | 17.6 | |
Municipal bonds | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 695 | |
Securities, less than 12 months, gross unrealized losses | 12.2 | |
Securities, 12 months or more, fair value | 261.7 | |
Securities, 12 months or more, gross unrealized losses | 12 | |
Total, fair value | 956.7 | |
Total, gross unrealized losses | 24.2 | |
Securities, less than 12 months, fair value | 240 | |
Securities, less than 12 months, gross unrealized losses | 1.5 | |
Securities, 12 months or more, fair value | 267.3 | |
Securities, 12 months or more, gross unrealized losses | 5.1 | |
Total, fair value | 507.3 | |
Total, gross unrealized losses | 6.6 | |
Foreign government obligations | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 414.6 | |
Securities, less than 12 months, gross unrealized losses | 2.9 | |
Securities, 12 months or more, fair value | 192.4 | |
Securities, 12 months or more, gross unrealized losses | 6.4 | |
Total, fair value | 607 | |
Total, gross unrealized losses | 9.3 | |
Securities, less than 12 months, fair value | 321.9 | |
Securities, less than 12 months, gross unrealized losses | 2.7 | |
Securities, 12 months or more, fair value | 72.2 | |
Securities, 12 months or more, gross unrealized losses | 2 | |
Total, fair value | 394.1 | |
Total, gross unrealized losses | 4.7 | |
U.S. corporate bonds | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 1,238.9 | |
Securities, less than 12 months, gross unrealized losses | 27 | |
Securities, 12 months or more, fair value | 294.9 | |
Securities, 12 months or more, gross unrealized losses | 13.5 | |
Total, fair value | 1,533.8 | |
Total, gross unrealized losses | 40.5 | |
Securities, less than 12 months, fair value | 568.8 | |
Securities, less than 12 months, gross unrealized losses | 6.1 | |
Securities, 12 months or more, fair value | 207.3 | |
Securities, 12 months or more, gross unrealized losses | 3.6 | |
Total, fair value | 776.1 | |
Total, gross unrealized losses | 9.7 | |
Foreign corporate bonds | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 665.3 | |
Securities, less than 12 months, gross unrealized losses | 11.3 | |
Securities, 12 months or more, fair value | 288.1 | |
Securities, 12 months or more, gross unrealized losses | 9.2 | |
Total, fair value | 953.4 | |
Total, gross unrealized losses | 20.5 | |
Securities, less than 12 months, fair value | 417.4 | |
Securities, less than 12 months, gross unrealized losses | 3 | |
Securities, 12 months or more, fair value | 159.4 | |
Securities, 12 months or more, gross unrealized losses | 3.5 | |
Total, fair value | 576.8 | |
Total, gross unrealized losses | 6.5 | |
RMBS | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 891.7 | |
Securities, less than 12 months, gross unrealized losses | 28.1 | |
Securities, 12 months or more, fair value | 130.3 | |
Securities, 12 months or more, gross unrealized losses | 7.1 | |
Total, fair value | 1,022 | |
Total, gross unrealized losses | 35.2 | |
Securities, less than 12 months, fair value | 284.2 | |
Securities, less than 12 months, gross unrealized losses | 1.6 | |
Securities, 12 months or more, fair value | 131.5 | |
Securities, 12 months or more, gross unrealized losses | 3 | |
Total, fair value | 415.7 | |
Total, gross unrealized losses | 4.6 | |
CMBS | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 273.5 | |
Securities, less than 12 months, gross unrealized losses | 5.3 | |
Securities, 12 months or more, fair value | 46.3 | |
Securities, 12 months or more, gross unrealized losses | 3.8 | |
Total, fair value | 319.8 | |
Total, gross unrealized losses | 9.1 | |
Securities, less than 12 months, fair value | 112.2 | |
Securities, less than 12 months, gross unrealized losses | 0.5 | |
Securities, 12 months or more, fair value | 34.7 | |
Securities, 12 months or more, gross unrealized losses | 1.8 | |
Total, fair value | 146.9 | |
Total, gross unrealized losses | 2.3 | |
Other asset-backed securities | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 1,260.4 | |
Securities, less than 12 months, gross unrealized losses | 8.5 | |
Securities, 12 months or more, fair value | 68.6 | |
Securities, 12 months or more, gross unrealized losses | 1.5 | |
Total, fair value | 1,329 | |
Total, gross unrealized losses | $ 10 | |
Securities, less than 12 months, fair value | 211.1 | |
Securities, less than 12 months, gross unrealized losses | 0.9 | |
Securities, 12 months or more, fair value | 65.7 | |
Securities, 12 months or more, gross unrealized losses | 0.4 | |
Total, fair value | 276.8 | |
Total, gross unrealized losses | 1.3 | |
Debt Securities | ||
Available-for-sale [Line Items] | ||
Securities, less than 12 months, fair value | 2,603.4 | |
Securities, less than 12 months, gross unrealized losses | 20.7 | |
Securities, 12 months or more, fair value | 1,354.7 | |
Securities, 12 months or more, gross unrealized losses | 32.6 | |
Total, fair value | 3,958.1 | |
Total, gross unrealized losses | $ 53.3 |
Activity in the Liability for L
Activity in the Liability for Loss and Loss Adjustment Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Reserves as of January 1 | $ 11,871,250 | $ 11,087,200 | |||
Less: reinsurance recoverables | [1] | 1,650,100 | 1,236,200 | ||
Net reserves as of January 1 | 10,221,200 | 9,851,000 | |||
Other adjustments | 1,200 | (700) | |||
Incurred loss and LAE, net of reinsurance, related to: | |||||
Current year | 2,579,300 | 3,099,000 | |||
Prior years | $ (75,000) | $ (61,500) | (212,800) | (173,000) | |
Total incurred loss and LAE, net of reinsurance | 957,703 | 1,491,848 | 2,366,491 | 2,926,039 | |
Paid loss and LAE, net of reinsurance, related to: | |||||
Current year | [2] | 444,900 | 390,600 | ||
Prior years | [2] | 1,928,900 | 1,743,200 | ||
Total paid loss and LAE, net of reinsurance | [2] | 2,373,800 | 2,133,800 | ||
Foreign currency exchange rate effect | (77,000) | 120,500 | |||
Net reserves as of September 30 | 10,138,100 | 10,763,000 | 10,138,100 | 10,763,000 | |
Reinsurance recoverables as of September 30 | [1] | 1,716,800 | 1,693,400 | 1,716,800 | 1,693,400 |
Reserves as of September 30 | $ 11,854,859 | $ 12,456,400 | $ 11,854,859 | $ 12,456,400 | |
[1] | Reinsurance recoverables in this table include only ceded loss and LAE reserves. | ||||
[2] | Includes paid losses, net of reinsurance, related to commutations. |
Liability for Loss and LAE - Ad
Liability for Loss and LAE - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Losses incurred, net of reinsurance | $ 957,703 | $ 1,491,848 | $ 2,366,491 | $ 2,926,039 |
Typhoon Jebi | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Losses incurred, net of reinsurance | 87,700 | |||
Hurricane Florence | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Losses incurred, net of reinsurance | 80,200 | |||
Typhoon Trami | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Losses incurred, net of reinsurance | $ 38,500 |
(Favorable) Unfavorable Prior A
(Favorable) Unfavorable Prior Accident Year Loss Reserve Development (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | $ (75) | $ (61.5) | $ (212.8) | $ (173) | |||||
Reinsurance Segment | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (41.5) | (49.8) | (163.7) | (140.8) | |||||
Reinsurance Segment | Property | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (2.8) | (8.1) | (57.8) | (62.6) | |||||
Reinsurance Segment | Property | Property Catastrophe | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | 9.6 | [1] | (7.8) | [2] | (15.6) | [3] | (12.2) | [2] | |
Reinsurance Segment | Property | Property Non-catastrophe | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (12.4) | [4] | (0.3) | (42.2) | [4] | (50.4) | [5] | ||
Reinsurance Segment | Casualty & Other | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (38.7) | (41.7) | (105.9) | (78.2) | |||||
Reinsurance Segment | Casualty & Other | Ogden Rate Impact | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | [6] | 24.4 | |||||||
Reinsurance Segment | Casualty & Other | Malpractice Treaties | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | [7] | (3.4) | (2) | ||||||
Reinsurance Segment | Casualty & Other | All Other Casualty and Other | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (38.7) | [8] | (41.7) | [9] | (102.5) | [10] | (100.6) | [11] | |
Insurance Segment | RSUI | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (32) | (8.6) | (44.5) | (27.3) | |||||
Insurance Segment | RSUI | Casualty Insurance | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (4.3) | [12] | (6.9) | [13] | (16.8) | [12] | (28.5) | [13] | |
Insurance Segment | RSUI | Property and Other Insurance | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | (27.7) | [14] | (1.7) | [15] | (27.7) | [14] | 1.2 | [16] | |
Insurance Segment | CapSpecialty Incorporated | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | $ (1.5) | [17] | (2.3) | [18] | $ (4.6) | [17] | (3.1) | [18] | |
Insurance Segment | Pacific Comp | |||||||||
Claims Development [Line Items] | |||||||||
Claims incurred related to prior years | [19] | $ (0.8) | $ (1.8) | ||||||
[1] | Primarily reflects unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. | ||||||||
[2] | Primarily reflects favorable prior accident year loss reserve development related to several catastrophes in the 2010 through 2016 accident years. | ||||||||
[3] | Primarily reflects favorable prior accident year loss reserve development related to Hurricane Harvey in the 2017 accident year and catastrophes in the 2016 accident year, partially offset by unfavorable prior accident year loss reserve development related to Hurricanes Maria and Irma in the 2017 accident year. | ||||||||
[4] | Primarily reflects favorable prior accident year loss reserve development in the 2017 accident year. | ||||||||
[5] | Primarily reflects favorable prior accident year loss reserve development in the 2013 through 2016 accident years. | ||||||||
[6] | Represents unfavorable prior accident year loss reserve development related to the U.K. Ministry of Justice's reduction in the discount rate, referred to as the Ogden rate, used to calculate lump-sum bodily injury payouts in personal injury insurance claims in the U.K to negative 0.75 percent as of March 20, 2017 from 2.50 percent. | ||||||||
[7] | Represents certain medical malpractice treaties pursuant to which the increased underwriting profits created by the favorable prior accident year loss reserve development are largely retained by the cedants. As a result, the favorable prior accident year loss reserve development is largely offset by an increase in profit commission expense incurred when such favorable prior accident year loss reserve development occurs. | ||||||||
[8] | Primarily reflects favorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2007 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 through 2016 accident years. | ||||||||
[9] | Primarily reflects favorable prior accident year loss reserve development in the longer-tailed U.S. professional liability lines of business related to older accident years and shorter-tailed casualty lines of business in the U.K. related to recent accident years. | ||||||||
[10] | Primarily reflects favorable prior accident year loss reserve development in the shorter-tailed casualty lines of business in the 2016 and 2017 accident years and in the longer-tailed casualty lines of business in the 2010 and earlier accident years, partially offset by unfavorable prior accident year loss reserve development in the longer-tailed casualty lines of business in the 2014 accident year. | ||||||||
[11] | Primarily reflects favorable prior accident year loss reserve development in longer-tailed U.S. professional liability lines of business in the 2005 through 2014 accident years, partially offset by unfavorable prior accident year loss reserve development in shorter-tailed casualty lines of business in the 2015 accident year in the U.S. and the U.K. | ||||||||
[12] | Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2012 accident years, partially offset by unfavorable prior accident year loss reserve development in the directors' and officers' liability lines of business in the 2009, 2012 and 2016 accident years. | ||||||||
[13] | Primarily reflects favorable prior accident year loss reserve development in the umbrella/excess lines of business in the 2005 through 2011 accident years. | ||||||||
[14] | Primarily reflects favorable prior accident year loss reserve development related to Hurricane Irma in the 2017 accident year and, to a lesser extent, Hurricane Matthew that occurred in the 2016 accident year, as well as various other losses not classified as catastrophes in recent accident years. | ||||||||
[15] | Primarily reflects favorable unallocated LAE development. | ||||||||
[16] | Primarily reflects unfavorable prior accident year property loss reserve development related to the binding authority lines of business in the 2015 and 2016 accident years, partially offset by favorable prior accident year catastrophe loss reserve development in the 2016 accident year. | ||||||||
[17] | Primarily reflects favorable prior accident year loss reserve development related to the surety lines of business in the 2016 and 2017 accident years. | ||||||||
[18] | Primarily reflects favorable prior accident year loss reserve development related to the casualty lines of business in the 2010, 2014, 2015 and 2016 accident years. | ||||||||
[19] | Primarily reflects favorable prior accident year loss reserve development in the 2013 and prior accident years. |
(Favorable) Unfavorable Prior_2
(Favorable) Unfavorable Prior Accident Year Loss Reserve Development (Parenthetical) (Detail) | Mar. 20, 2017 | Mar. 19, 2017 |
Claims Development [Line Items] | ||
Ogden discount rate | (0.75%) | 2.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Effective income tax rate | 18.40% | 66.80% | |
Statutory federal income tax rate | 21.00% | 35.00% | 35.00% |
Interest or penalties accrued for uncertain tax positions | $ 0 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 15, 2018 | Feb. 28, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Nov. 30, 2015 |
Stockholders Equity Note [Line Items] | |||||
Par value of common stock | $ 1 | ||||
Dividends paid | $ 154,000 | $ 153,967 | |||
Dividend Declared [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Dividend record date | Mar. 5, 2018 | ||||
Special dividend per share | $ 10 | ||||
Dividend payable nature | Special | ||||
2015 Repurchase Program | |||||
Stockholders Equity Note [Line Items] | |||||
Aggregate amount of common stock authorized for repurchase | $ 400,000 | ||||
2018 Repurchase Program | |||||
Stockholders Equity Note [Line Items] | |||||
Aggregate amount of common stock authorized for repurchase | $ 400,000 | ||||
2015 Repurchase Program and 2018 Repurchase Program | |||||
Stockholders Equity Note [Line Items] | |||||
Remaining authorized repurchases under share repurchase program | $ 481,100 |
Schedule of Common Stock Repurc
Schedule of Common Stock Repurchases (Detail) - 2015 Repurchase Program - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule Of Common Share Purchase [Line Items] | ||||
Shares repurchased | 76,299 | 15,916 | 479,922 | 15,916 |
Cost of shares repurchased (in millions) | $ 46 | $ 8.5 | $ 282.1 | $ 8.5 |
Average price per share repurchased | $ 602.24 | $ 537.14 | $ 587.70 | $ 537.14 |
Reconciliation of Accumulated O
Reconciliation of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Jan. 01, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | $ 8,514,063 | ||||||
Other comprehensive income (loss), net of tax: | |||||||
Reclassifications from accumulated other comprehensive income | $ (12,800) | $ (17,400) | (16,500) | $ (57,700) | |||
Ending Balance | 8,595,085 | 8,595,085 | |||||
Accumulated Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | 618,100 | 109,300 | |||||
Cumulative effect of adoption of new accounting pronouncements | [1] | $ (600,500) | $ 12,900 | ||||
Other comprehensive income (loss), net of tax: | |||||||
Other comprehensive income (loss) before reclassifications | (221,900) | 386,800 | |||||
Reclassifications from accumulated other comprehensive income | (16,500) | (57,700) | |||||
Total | (238,400) | 329,100 | |||||
Ending Balance | (220,800) | 451,300 | (220,800) | 451,300 | |||
Accumulated Other Comprehensive Income | Accounting Standards Update 2016-01 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (735,600) | |||||
Accumulated Other Comprehensive Income | Accounting Standards Update 2018-02 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | 135,100 | |||||
Accumulated Unrealized Gain (Loss) on Investments in Available-For-Sale Debt and Equity Securities [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | 232,200 | ||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | $ 12,900 | |||||
Other comprehensive income (loss), net of tax: | |||||||
Other comprehensive income (loss) before reclassifications | 364,600 | ||||||
Reclassifications from accumulated other comprehensive income | (57,700) | ||||||
Total | 306,900 | ||||||
Ending Balance | 552,000 | 552,000 | |||||
Unrealized Currency Translation Adjustment | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (84,600) | (111,200) | |||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (18,200) | |||||
Other comprehensive income (loss), net of tax: | |||||||
Other comprehensive income (loss) before reclassifications | (6,900) | 22,400 | |||||
Total | (6,900) | 22,400 | |||||
Ending Balance | (109,700) | (88,800) | (109,700) | (88,800) | |||
Unrealized Currency Translation Adjustment | Accounting Standards Update 2018-02 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (18,200) | |||||
Retirement Plans | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | (15,500) | (11,700) | |||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (3,300) | |||||
Other comprehensive income (loss), net of tax: | |||||||
Other comprehensive income (loss) before reclassifications | (1,700) | (200) | |||||
Total | (1,700) | (200) | |||||
Ending Balance | (20,500) | $ (11,900) | (20,500) | $ (11,900) | |||
Retirement Plans | Accounting Standards Update 2018-02 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (3,300) | |||||
Unrealized Appreciation of Investments | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Beginning Balance | 718,200 | ||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (579,000) | |||||
Other comprehensive income (loss), net of tax: | |||||||
Other comprehensive income (loss) before reclassifications | (213,300) | ||||||
Reclassifications from accumulated other comprehensive income | (16,500) | ||||||
Total | (229,800) | ||||||
Ending Balance | $ (90,600) | $ (90,600) | |||||
Unrealized Appreciation of Investments | Accounting Standards Update 2016-01 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | (735,600) | |||||
Unrealized Appreciation of Investments | Accounting Standards Update 2018-02 | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Cumulative effect of adoption of new accounting pronouncements | [1] | $ 156,600 | |||||
[1] | See Note 1(c) of this Form 10-Q for additional information regarding Alleghany's adoption of new investment accounting guidance and new guidance on certain tax effects caused by the Tax Act. |
Reclassifications of Accumulate
Reclassifications of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | $ (16,230) | $ (32,921) | $ (67,197) | $ (101,840) | |
Other than temporary impairment losses | 3 | 514 | |||
Other than temporary impairment losses | 6,131 | 13,095 | |||
Income taxes | 60,413 | (212,379) | 171,275 | (116,368) | |
Total reclassifications | (12,800) | (17,400) | (16,500) | (57,700) | |
Accumulated Unrealized Gain (Loss) on Investments in Available-For-Sale Debt and Equity Securities [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Total reclassifications | (57,700) | ||||
Unrealized Appreciation of Investments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Total reclassifications | (16,500) | ||||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Unrealized Gain (Loss) on Investments in Available-For-Sale Debt and Equity Securities [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | [1] | (32,900) | (101,800) | ||
Other than temporary impairment losses | 6,100 | 13,100 | |||
Income taxes | $ 9,400 | $ 31,000 | |||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Appreciation of Investments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | [1] | (16,200) | (21,500) | ||
Other than temporary impairment losses | 500 | ||||
Income taxes | $ 3,400 | $ 4,500 | |||
[1] | For the nine month period ended September 30, 2018, excludes a $45.7 million pre-tax gain from AIHL's conversion of its limited partnership interests in certain subsidiaries of Ares into Ares common units. See Note 3(h) of this Form 10-Q for additional information. |
Reclassifications of Accumula_2
Reclassifications of Accumulated Other Comprehensive Income (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 15, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | $ 16,230 | $ 32,921 | $ 67,197 | $ 101,840 | |
Ares | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | 45,700 | ||||
Ares | Insurance Segment | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net realized capital gains | $ 45,700 | $ 45,700 |
Reconciliation of Earnings and
Reconciliation of Earnings and Share Data used in Basic and Diluted Earnings per Share Computations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share Disclosure [Line Items] | ||||
Net earnings (losses) available to Alleghany stockholders | $ 284,900 | $ (314,157) | $ 751,591 | $ (63,170) |
Effect of dilutive securities | (8,900) | |||
Income (loss) available to common stockholders for diluted earnings per share | $ 284,900 | $ (323,100) | $ 751,600 | $ (63,200) |
Weighted average common shares outstanding applicable to basic earnings per share | 14,937,135 | 15,416,014 | 15,168,831 | 15,416,249 |
Effect of dilutive securities | 42,310 | 4,849 | ||
Adjusted weighted average common shares outstanding applicable to diluted earnings per share | 14,937,135 | 15,458,324 | 15,173,680 | 15,416,249 |
Earnings Per Share of Common _3
Earnings Per Share of Common Stock - Additional Information (Detail) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Line Items] | ||
Shares excluded in diluted earnings per share computation | 61,285 | 63,567 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Line Items] | ||
Investments, debt securities | $ 12,071,191 | $ 12,721,399 |
Investments, equity securities | 5,028,578 | |
Stockholders' equity | 8,595,085 | $ 8,514,063 |
Energy Sector Business | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Investments and equity in consolidated subsidiaries | 896,800 | |
Investments, debt securities | 294,000 | |
Investments, equity securities | 483,500 | |
Energy Sector Business | Stranded Oil Resources Corporation | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Stockholders' equity | $ 119,300 |
Segments of Business - Addition
Segments of Business - Additional Information (Detail) $ in Thousands | Feb. 07, 2018USD ($) | Sep. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Aug. 01, 2017 | Apr. 28, 2017 |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | Segment | 3 | ||||
Debt amount | $ 1,581,676 | $ 1,484,897 | |||
WWSC Holdings, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Business acquisition date | Apr. 28, 2017 | ||||
WWSC Holdings, LLC | Hirschfeld Holdings, LP | |||||
Segment Reporting Information [Line Items] | |||||
Business acquisition date | Feb. 7, 2018 | ||||
Wilbert Funeral Services, Inc | |||||
Segment Reporting Information [Line Items] | |||||
Equity interest percentage | 45.00% | 45.00% | |||
Operating Segments | Alleghany Capital Corporation Segment | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | $ 197,700 | ||||
Operating Segments | Alleghany Capital Corporation Segment | WWSC Holdings, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Business acquisition date | Apr. 28, 2017 | ||||
Ownership interest acquired | 80.00% | ||||
Operating Segments | Alleghany Capital Corporation Segment | WWSC Holdings, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | $ 102,300 | ||||
Operating Segments | Alleghany Capital Corporation Segment | WWSC Holdings, LLC | Hirschfeld Holdings, LP | |||||
Segment Reporting Information [Line Items] | |||||
Business acquisition date | Feb. 7, 2018 | ||||
Purchase price for acquisition | $ 111,300 | ||||
Cash consideration for acquisition | 96,600 | ||||
Incremental debt acquired | $ 14,700 | ||||
Operating Segments | Alleghany Capital Corporation Segment | Jazwares, LLC | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | 43,000 | ||||
Operating Segments | Alleghany Capital Corporation Segment | Bourn & Koch, Inc. | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | 14,400 | ||||
Operating Segments | Alleghany Capital Corporation Segment | Integrated Project Services LLC | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | 16,500 | ||||
Operating Segments | Alleghany Capital Corporation Segment | Kentucky Trailer | |||||
Segment Reporting Information [Line Items] | |||||
Debt amount | $ 21,500 | ||||
Pacific Comp | |||||
Segment Reporting Information [Line Items] | |||||
Disposal date | Dec. 31, 2017 |
Results for Reportable Segments
Results for Reportable Segments and Corporate Activities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | $ 1,475,300 | $ 1,471,800 | $ 4,406,700 | $ 4,342,700 | |
Net premiums written | 1,239,100 | 1,260,300 | 3,768,300 | 3,786,500 | |
Net premiums earned | 1,225,346 | 1,239,721 | 3,670,161 | 3,692,838 | |
Net loss and LAE | 957,703 | 1,491,848 | 2,366,491 | 2,926,039 | |
Commissions, brokerage and other underwriting expenses | 407,679 | 398,163 | 1,216,057 | 1,220,415 | |
Underwriting (loss) profit | [1] | (140,000) | (650,400) | 87,700 | (453,600) |
Net investment income | 127,329 | 104,663 | 377,728 | 321,857 | |
Change in the fair value of equity securities | 370,175 | 512,771 | |||
Net realized capital gains | 16,230 | 32,921 | 67,197 | 101,840 | |
Other than temporary impairment losses | (3) | (514) | |||
Other than temporary impairment losses | (6,131) | (13,095) | |||
Other operating expenses | 415,378 | 277,918 | 1,023,440 | 678,226 | |
Corporate administration | 19,094 | (4,689) | 40,998 | 26,601 | |
Amortization of intangible assets | 5,500 | 5,765 | 16,730 | 14,140 | |
Interest expense | 22,189 | 20,804 | 65,997 | 62,728 | |
Earnings (losses) before income taxes | 349,872 | (522,326) | 930,320 | (174,296) | |
Noninsurance Revenue | |||||
Segment Reporting Information [Line Items] | |||||
Noninsurance revenue | 438,338 | 296,309 | 1,032,690 | 650,413 | |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 1,482,000 | 1,477,100 | 4,425,900 | 4,359,200 | |
Net premiums written | 1,239,100 | 1,260,300 | 3,768,300 | 3,786,500 | |
Net premiums earned | 1,225,400 | 1,239,700 | 3,670,200 | 3,692,800 | |
Net loss and LAE | 957,700 | 1,491,900 | 2,366,500 | 2,926,000 | |
Commissions, brokerage and other underwriting expenses | 407,700 | 398,200 | 1,216,000 | 1,220,400 | |
Underwriting (loss) profit | [1] | (140,000) | (650,400) | 87,700 | (453,600) |
Net investment income | 123,200 | 103,000 | 365,700 | 313,800 | |
Change in the fair value of equity securities | 373,900 | 506,700 | |||
Net realized capital gains | 16,200 | 22,200 | 67,400 | 91,700 | |
Other than temporary impairment losses | (500) | ||||
Other than temporary impairment losses | (6,100) | (13,100) | |||
Other operating expenses | 406,100 | 268,300 | 997,600 | 648,400 | |
Corporate administration | 1,300 | (1,500) | 1,800 | 200 | |
Amortization of intangible assets | 5,500 | 5,700 | 16,800 | 14,200 | |
Interest expense | 9,300 | 7,800 | 26,600 | 23,200 | |
Earnings (losses) before income taxes | 364,800 | (517,600) | 980,100 | (109,900) | |
Operating Segments | Noninsurance Revenue | |||||
Segment Reporting Information [Line Items] | |||||
Noninsurance revenue | 413,700 | 294,000 | 995,900 | 637,300 | |
Operating Segments | Reinsurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 1,137,300 | 1,126,600 | 3,324,600 | 3,227,700 | |
Net premiums written | 985,200 | 978,500 | 2,958,900 | 2,906,700 | |
Net premiums earned | 961,500 | 953,200 | 2,903,000 | 2,836,800 | |
Net loss and LAE | 809,000 | 1,119,200 | 1,942,000 | 2,249,300 | |
Commissions, brokerage and other underwriting expenses | 324,900 | 308,900 | 964,800 | 946,600 | |
Underwriting (loss) profit | [1] | (172,400) | (474,900) | (3,800) | (359,100) |
Operating Segments | Reinsurance Segment | Property | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 451,400 | 445,500 | 1,193,700 | 1,190,000 | |
Net premiums written | 331,100 | 329,000 | 912,100 | 931,400 | |
Net premiums earned | 326,500 | 310,800 | 893,700 | 868,100 | |
Net loss and LAE | 387,600 | 659,900 | 637,700 | 904,600 | |
Commissions, brokerage and other underwriting expenses | 113,300 | 105,200 | 301,200 | 283,700 | |
Underwriting (loss) profit | [1] | (174,400) | (454,300) | (45,200) | (320,200) |
Operating Segments | Reinsurance Segment | Casualty & Other | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | [2] | 685,900 | 681,100 | 2,130,900 | 2,037,700 |
Net premiums written | [2] | 654,100 | 649,500 | 2,046,800 | 1,975,300 |
Net premiums earned | [2] | 635,000 | 642,400 | 2,009,300 | 1,968,700 |
Net loss and LAE | [2] | 421,400 | 459,300 | 1,304,300 | 1,344,700 |
Commissions, brokerage and other underwriting expenses | [2] | 211,600 | 203,700 | 663,600 | 662,900 |
Underwriting (loss) profit | [1],[2] | 2,000 | (20,600) | 41,400 | (38,900) |
Operating Segments | Insurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 344,700 | 350,500 | 1,101,300 | 1,131,500 | |
Net premiums written | 253,900 | 281,800 | 809,400 | 879,800 | |
Net premiums earned | 263,900 | 286,500 | 767,200 | 856,000 | |
Net loss and LAE | 148,700 | 372,700 | 424,500 | 676,700 | |
Commissions, brokerage and other underwriting expenses | 82,800 | 89,300 | 251,200 | 273,800 | |
Underwriting (loss) profit | [1] | 32,400 | (175,500) | 91,500 | (94,500) |
Operating Segments | Insurance Segment | RSUI | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 260,800 | 234,600 | 854,200 | 794,100 | |
Net premiums written | 176,000 | 170,800 | 579,800 | 558,000 | |
Net premiums earned | 190,600 | 179,000 | 556,200 | 540,300 | |
Net loss and LAE | 107,000 | 305,400 | 309,600 | 479,700 | |
Commissions, brokerage and other underwriting expenses | 52,800 | 50,300 | 160,000 | 158,300 | |
Underwriting (loss) profit | [1] | 30,800 | (176,700) | 86,600 | (97,700) |
Operating Segments | Insurance Segment | CapSpecialty Incorporated | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 83,900 | 74,300 | 247,100 | 213,200 | |
Net premiums written | 77,900 | 69,500 | 229,600 | 198,900 | |
Net premiums earned | 73,300 | 66,100 | 211,000 | 192,200 | |
Net loss and LAE | 41,700 | 37,000 | 114,900 | 105,700 | |
Commissions, brokerage and other underwriting expenses | 30,000 | 28,400 | 91,200 | 83,300 | |
Underwriting (loss) profit | [1] | 1,600 | 700 | 4,900 | 3,200 |
Operating Segments | Insurance Segment | Pacific Comp | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 41,600 | 124,200 | |||
Net premiums written | 41,500 | 122,900 | |||
Net premiums earned | 41,400 | 123,500 | |||
Net loss and LAE | 30,300 | 91,300 | |||
Commissions, brokerage and other underwriting expenses | 10,600 | 32,200 | |||
Underwriting (loss) profit | [1] | 500 | |||
Operating Segments | Reinsurance Segment and Insurance Segment | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | 1,482,000 | 1,477,100 | 4,425,900 | 4,359,200 | |
Net premiums written | 1,239,100 | 1,260,300 | 3,768,300 | 3,786,500 | |
Net premiums earned | 1,225,400 | 1,239,700 | 3,670,200 | 3,692,800 | |
Net loss and LAE | 957,700 | 1,491,900 | 2,366,500 | 2,926,000 | |
Commissions, brokerage and other underwriting expenses | 407,700 | 398,200 | 1,216,000 | 1,220,400 | |
Underwriting (loss) profit | [1] | (140,000) | (650,400) | 87,700 | (453,600) |
Net investment income | 122,500 | 101,400 | 362,000 | 311,700 | |
Change in the fair value of equity securities | 373,900 | 506,700 | |||
Net realized capital gains | 16,200 | 21,500 | 66,800 | 90,800 | |
Other than temporary impairment losses | (500) | ||||
Other than temporary impairment losses | (6,100) | (13,100) | |||
Other operating expenses | 23,600 | 8,300 | 60,600 | 57,400 | |
Corporate administration | 1,300 | (1,500) | 1,800 | 200 | |
Amortization of intangible assets | (300) | (300) | (200) | (1,200) | |
Interest expense | 6,700 | 6,600 | 20,500 | 20,200 | |
Earnings (losses) before income taxes | 347,500 | (542,000) | 956,700 | (130,300) | |
Operating Segments | Reinsurance Segment and Insurance Segment | Noninsurance Revenue | |||||
Segment Reporting Information [Line Items] | |||||
Noninsurance revenue | 6,200 | 4,700 | 16,700 | 10,500 | |
Operating Segments | Alleghany Capital | |||||
Segment Reporting Information [Line Items] | |||||
Net investment income | 700 | 1,600 | 3,700 | 2,100 | |
Net realized capital gains | 700 | 600 | 900 | ||
Other operating expenses | 382,500 | 260,000 | 937,000 | 591,000 | |
Amortization of intangible assets | 5,800 | 6,000 | 17,000 | 15,400 | |
Interest expense | 2,600 | 1,200 | 6,100 | 3,000 | |
Earnings (losses) before income taxes | 17,300 | 24,400 | 23,400 | 20,400 | |
Operating Segments | Alleghany Capital | Noninsurance Revenue | |||||
Segment Reporting Information [Line Items] | |||||
Noninsurance revenue | 407,500 | 289,300 | 979,200 | 626,800 | |
Corporate Activities | |||||
Segment Reporting Information [Line Items] | |||||
Gross premiums written | [3] | (6,700) | (5,300) | (19,200) | (16,500) |
Net investment income | [3] | 4,100 | 1,700 | 12,000 | 8,100 |
Change in the fair value of equity securities | [3] | (3,700) | 6,100 | ||
Net realized capital gains | [3] | 10,700 | (200) | 10,100 | |
Other operating expenses | [3] | 9,200 | 9,600 | 25,900 | 29,800 |
Corporate administration | [3] | 17,800 | (3,200) | 39,200 | 26,400 |
Interest expense | [3] | 12,900 | 13,000 | 39,400 | 39,500 |
Earnings (losses) before income taxes | [3] | (14,900) | (4,700) | (49,800) | (64,400) |
Corporate Activities | Noninsurance Revenue | |||||
Segment Reporting Information [Line Items] | |||||
Noninsurance revenue | [3] | $ 24,600 | $ 2,300 | $ 36,800 | $ 13,100 |
[1] | Underwriting profit represents net premiums earned less net loss and LAE and commissions, brokerage and other underwriting expenses, all as determined in accordance with GAAP, and does not include net investment income, change in the fair value of equity securities, net realized capital gains, OTTI losses, noninsurance revenue, other operating expenses, corporate administration, amortization of intangible assets or interest expense. Underwriting profit does not replace earnings before income taxes determined in accordance with GAAP as a measure of profitability. Rather, Alleghany believes that underwriting profit enhances the understanding of its reinsurance and insurance segments' operating results by highlighting net earnings attributable to their underwriting performance. Earnings before income taxes (a GAAP measure) may show a profit despite an underlying underwriting loss. Where underwriting losses persist over extended periods, a reinsurance or an insurance company's ability to continue as an ongoing concern may be at risk. Therefore, Alleghany views underwriting profit as an important measure in the overall evaluation of performance. | ||||
[2] | Primarily consists of the following assumed reinsurance lines of business: directors' and officers' liability; errors and omissions liability; general liability; medical malpractice; ocean marine and aviation; auto liability; accident and health; surety; and credit. | ||||
[3] | Includes elimination of minor reinsurance activity between segments. |
Summary of Identifiable Assets
Summary of Identifiable Assets and Equity (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 25,795,884 | $ 25,384,317 |
Invested Assets and Cash | 19,689,600 | |
Equity attributable to Alleghany | 8,595,085 | $ 8,514,063 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 25,273,500 | |
Invested Assets and Cash | 19,242,800 | |
Equity attributable to Alleghany | 9,116,200 | |
Operating Segments | Reinsurance Segment | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 16,740,100 | |
Invested Assets and Cash | 13,461,200 | |
Equity attributable to Alleghany | 5,167,600 | |
Operating Segments | Insurance Segment | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 7,056,800 | |
Invested Assets and Cash | 5,586,200 | |
Equity attributable to Alleghany | 3,092,800 | |
Operating Segments | Reinsurance Segment and Insurance Segment | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 23,796,900 | |
Invested Assets and Cash | 19,047,400 | |
Equity attributable to Alleghany | 8,260,400 | |
Operating Segments | Alleghany Capital | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 1,476,600 | |
Invested Assets and Cash | 195,400 | |
Equity attributable to Alleghany | 855,800 | |
Corporate Activities | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 522,400 | |
Invested Assets and Cash | 446,800 | |
Equity attributable to Alleghany | $ (521,100) |
Summary of Alleghany Capital No
Summary of Alleghany Capital Non-Insurance Revenue (Detail) - Noninsurance Revenue - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Other Revenues [Line Items] | |||||
Noninsurance revenue | $ 438,338 | $ 296,309 | $ 1,032,690 | $ 650,413 | |
Operating Segments | |||||
Other Revenues [Line Items] | |||||
Noninsurance revenue | 413,700 | 294,000 | 995,900 | 637,300 | |
Operating Segments | Alleghany Capital | |||||
Other Revenues [Line Items] | |||||
Noninsurance revenue | 407,500 | 289,300 | 979,200 | 626,800 | |
Operating Segments | Alleghany Capital | Industrial Segment | |||||
Other Revenues [Line Items] | |||||
Noninsurance revenue | [1] | 224,200 | 137,900 | 591,600 | 254,200 |
Operating Segments | Alleghany Capital | Non-Industrial Segment | |||||
Other Revenues [Line Items] | |||||
Noninsurance revenue | [2] | 183,700 | 150,900 | 387,900 | 372,100 |
Operating Segments | Alleghany Capital | Corporate & Other | |||||
Other Revenues [Line Items] | |||||
Noninsurance revenue | $ (400) | $ 500 | $ (300) | $ 500 | |
[1] | For the three and nine months ended September 30, 2018, the vast majority of noninsurance revenues were recognized as goods and services transferred to customers over time. For the three and nine months ended September 30, 2017, approximately 77 percent and 67 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany's adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. | ||||
[2] | For the three and nine months ended September 30, 2018, approximately 60 percent and 65 percent, respectively, of noninsurance revenues were recognized as services transferred to customers over time, with the remainder recognized as goods transferred at a point in time. For the three and nine months ended September 30, 2017, approximately 56 percent and 69 percent, respectively, of noninsurance revenues were recognized as services were transferred to customers over time, with the remainder recognized as goods were transferred at a point in time. See Note 1(c) of this Form 10-Q for additional information regarding Alleghany's adoption of new revenue recognition accounting guidance effective in the first quarter of 2018. |
Summary of Alleghany Capital _2
Summary of Alleghany Capital Non-Insurance Revenue (Parenthetical) (Detail) - Operating Segments - Alleghany Capital - Transferred over Time [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Industrial Segment | ||||
Other Revenues [Line Items] | ||||
Noninsurance revenue percentage | 77.00% | 67.00% | ||
Non-Industrial Segment | ||||
Other Revenues [Line Items] | ||||
Noninsurance revenue percentage | 60.00% | 56.00% | 65.00% | 69.00% |