Profile: Alleghany Corp (Y.N)
9 Dec 2013
Alleghany Corporation (Alleghany), incorporated in November 16, 1984, is engaged, through Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries RSUI Group, Inc. (RSUI), Capitol Transamerica Corporation (CATA) and Pacific Compensation Corporation (PCC), in the property and casualty and surety insurance business. Property and casualty and surety insurance operations are conducted by AIHL through its insurance operating units RSUI, CATA and PCC. In addition, AIHL Re LLC (AIHL Re) is a wholly owned subsidiary of AIHL that has in the past provided reinsurance to Alleghany’s insurance operating units and affiliates. Alleghany Capital Partners LLC (Alleghany Capital Partners) was established to manage its equity investments, including those held by its insurance operating units. Alleghany also owns and manages land in Sacramento, California through its subsidiary Alleghany Properties. On March 6, 2012, it merged with Transatlantic Holdings, Inc. (Transatlantic). On April 26, 2012, its subsidiary Bourn & Koch acquired BKI, a manufacturer and remanufacturer/retrofitter of precision machine tools and supplier of replacement parts. Effective July 31, 2013, Alleghany Corp acquired a 6.25% interest in Ares Management LLC.
As of December 31, 2012, the Company held an approximately 38% ownership stake in ORX Exploration, Inc. (ORX). ORX is a regional oil and gas exploration and production company. Alleghany also owns an approximately 33% stake in Homesite Group Incorporated (Homesite), which is a national, full-service, mono-line provider of homeowners insurance.
Property and Casualty and Surety Insurance Businesses
AIHL is the Company’s holding company for its property and casualty and surety insurance operations. Property and casualty operations are conducted through RSUI, CATA and PCC. Surety operations are conducted through CATA. AIHL Re, the Company’s Vermont-domiciled captive reinsurance company, has provided reinsurance to its insurance operating units and affiliates. Alleghany also owns an approximately 33% interest in Homesite Group Incorporated (Homesite), which is a national, full-service, mono-line provider of homeowners insurance. RSUI, which includes the operations of its operating subsidiaries RSUI Indemnity Company (RIC), Landmark American Insurance Company (Landmark) and Covington Specialty Insurance Company (Covington), underwrites specialty insurance coverages in the property, umbrella/excess, general liability, directors and officers (D&O) liability and professional liability lines of business.
RSUI writes specialty business in the admitted specialty market primarily through RIC in the 50 states and the District of Columbia. RSUI writes business primarily through Landmark. As of December 31, 2012, Landmark was approved to write business on a non-admitted basis in 49 states and is a domestic surplus lines company in Oklahoma. Covington, which is an insurer, was formed to support non-admitted business written primarily by RSUI’s binding authority department, which writes small, specialized coverages pursuant to underwriting authority arrangements with managing general agents. As of December 31, 2012, RSUI conducted its insurance business through approximately 146 independent wholesale insurance brokers located throughout the United States and 31 managing general agents.
CATA, primarily through its wholly owned subsidiaries Capitol Indemnity Corporation (Capitol Indemnity) and Capitol Specialty Insurance Corporation (CSIC), operates in the 50 states and the District of Columbia. Capitol Indemnity conducts its property and casualty insurance business on an admitted basis, with a geographic concentration in the Midwestern and Plains states. Capitol Indemnity also writes surety products, such as commercial surety bonds and contract surety bonds on a national basis. Commercial surety bonds include all surety bonds other than contract surety bonds and cover obligations required by law or regulation, such as licenses and permits. Capitol Indemnity offers contract surety bonds in the non-construction segment. CSIC conducts all of its business on an approved, non-admitted basis on a national basis and writes primarily specialty lines of property and casualty insurance. Platte River is licensed in 50 states and the District of Columbia and operates in conjunction with Capitol Indemnity primarily by providing surety products.
CATA conducts its insurance business through independent and general insurance agents located throughout the United States, with a concentration in the Midwestern and Plains states. As of December 31, 2012, CATA had approximately 316 independent agents and 59 general agents licensed to write property and casualty and surety coverages, approximately 91 agents specializing in professional liability and approximately 283 independent agents licensed only to write surety coverages.
Reinsurance segment consists of property and casualty reinsurance operations conducted by TransRe’s reinsurance operating units. TransRe, an international reinsurance organization, through its principal wholly-owned subsidiaries, Transatlantic Reinsurance Company, (TRC), TransRe Zurich Ltd. (TRZ) and Fair American Insurance and Reinsurance Company, (FAIRCO), offers reinsurance capacity to reinsurance and insurance companies for a range of property and casualty products. TransRe’s principal lines of business within property include fire, allied lines, auto physical damage and homeowners multiple peril lines (which include property catastrophe risks). In 2012, property reinsurance accounted for approximately 32.9% of TransRe’s gross premiums written. TransRe’s principal lines of business within casualty and other include liability, medical malpractice, ocean marine and aviation, auto liability (including non-standard risks), accident and health, surety, and credit. In 2012, casualty reinsurance accounted for approximately 67.1% of TransRe’s gross premiums written.
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