Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

10. Stockholders’ Equity

(a) Common Stock Repurchases

In June 2018, the Alleghany Board of Directors authorized, upon the completion of the program authorized in 2015, 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. In September 2019, the Alleghany Board of Directors authorized, upon the completion of the program authorized in 2018, 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 $500.0 million. As of December 31, 2021, Alleghany had $141.9 million remaining in the aggregate under its share repurchase authorizations.

The following table presents the shares of Common Stock that Alleghany repurchased in 2021, 2020 and 2019:

	Year Ended December 31,
	2021		2020		2019
Shares repurchased		446,596		333,393		215,091
Cost of shares repurchased (in millions)	$	290.5	$	194.8	$	144.4
Average price per share repurchased	$	650.52	$	584.18	$	671.44

(b) Accumulated Other Comprehensive Income (Loss)

The following table presents a reconciliation of the changes during 2021 and 2020 in accumulated other comprehensive income attributable to Alleghany stockholders:

	Unrealized Appreciation of Investments			Unrealized Currency Translation Adjustment			Retirement Plans			Total
	($ in millions)
Balance as of January 1, 2021	$	564.9		$	(99.4	)	$	(13.1	)	$	452.4
Other comprehensive income (loss), net of tax:
Other comprehensive loss before reclassifications		(253.3	)		(4.3	)		(0.5	)		(258.1	)
Reclassifications from accumulated other comprehensive income		(52.5	)		—			—			(52.5	)
Total		(305.8	)		(4.3	)		(0.5	)		(310.6	)
Balance as of December 31, 2021	$	259.1		$	(103.7	)	$	(13.6	)	$	141.8

	Unrealized Appreciation of Investments			Unrealized Currency Translation Adjustment			Retirement Plans(1)			Total
	($ in millions)
Balance as of January 1, 2020	$	321.0		$	(121.8	)	$	(27.9	)	$	171.3
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications		277.0			22.4			(0.4	)		299.0
Reclassifications from accumulated other comprehensive income		(33.1	)		—			15.2			(17.9	)
Total		243.9			22.4			14.8			281.1
Balance as of December 31, 2020	$	564.9		$	(99.4	)	$	(13.1	)	$	452.4

(1)See Note 15 for further information on retirement plan-related reclassifications from accumulated other comprehensive income.

The following table presents unrealized appreciation of investment reclassifications out of accumulated other comprehensive income attributable to Alleghany stockholders during 2021 and 2020:

Accumulated Other		Year Ended December 31,
Comprehensive Income Component	Line in Consolidated Statement of Earnings	2021			2020
		($ in millions)
Unrealized appreciation of investments:	Net realized capital gains(1)	$	(64.4	)	$	(49.9	)
	Change in allowance for credit losses on available for sale securities		(2.1	)		8.0
	Income taxes		14.0			8.8
Total reclassifications:	Net earnings	$	(52.5	)	$	(33.1	)

(1)For 2021, excludes: the 2021 Concord Remeasurement Gain. For 2020, excludes: (i) the 2020 Concord Settlement Gain; (ii) $76.0 million of impairment charge from a write-down of SORC oil field assets; (iii) the Wilbert Remeasurement Gain; (iv) a $7.1 million realized loss as a result of an early redemption of debt; and (v) a $5.0 million realized gain resulting from a reduction of certain PCT contingent consideration liabilities. See Note 4(e) for additional information.

(c) Regulations and Dividend Restrictions

As of December 31, 2021, approximately $7.3 billion of Alleghany’s total equity of $9.2 billion was unavailable for dividends or advances to Alleghany from its subsidiaries. The remaining $1.9 billion was available for dividends or advances to Alleghany from its subsidiaries, or was retained at the Alleghany parent company-level and, as such, was available to pay dividends to Alleghany’s stockholders as of December 31, 2021.

The ability of Alleghany’s reinsurance and insurance subsidiaries to pay dividends or other distributions is subject to the laws and regulations applicable to each subsidiary, as well as each subsidiary’s need to maintain capital requirements adequate to maintain its operations and financial strength ratings issued by independent rating agencies.

In the U.S., Alleghany’s reinsurance and insurance subsidiaries are subject to insurance laws and regulations that restrict the amount and timing of dividends they may pay without the prior approval of regulatory authorities. Under the insurance holding company laws and regulations, Alleghany’s reinsurance and insurance subsidiaries may not pay an “extraordinary” dividend or distribution without the approval of state insurance regulators. In general, an “extraordinary” dividend or distribution is defined as a dividend or distribution that, together with other dividends and distributions made within the preceding 12 months, exceeds the lesser (or, in some jurisdictions, the greater) of (i) 10 percent of the statutory surplus of the reinsurer or insurer as of the end of the prior calendar year (or, in certain states, as of the end of the prior quarter) and (ii) the net income during the prior calendar year (or, in certain states, the adjusted statutory net investment income). In addition, certain states where Alleghany’s reinsurance and insurance subsidiaries are domiciled prohibit a domestic insurance company from paying dividends except out of earned surplus.

TransRe’s operations are also regulated in various foreign jurisdictions with respect to currency, amount and type of security deposits, amount and type of reserves and amount and type of local investment. Regulations governing constitution of technical reserves and remittance balances in some countries may hinder remittance of profits and repatriation of assets. International operations and assets held abroad may also be adversely affected by political and other developments in foreign countries, including possible tax changes, nationalization and changes in regulatory policy, as well as by consequences of hostilities and unrest. The risks of such occurrences and their overall effect upon TransRe vary from country to country and cannot easily be predicted.

The following table presents the dividends paid to Alleghany by its reinsurance and insurance subsidiaries in 2021, 2020 and 2019:

	Year Ended December 31,
	2021		2020		2019(1)
	($ in millions)
TransRe(2)	$	280.0	$	210.0	$	301.0
RSUI		150.0		225.0		100.0
Total	$	430.0	$	435.0	$	401.0

(1)Includes $101.0 million representing the July 1, 2019 carrying value of TransRe’s ownership interest in CapSpecialty, which was transferred to Alleghany.

(2)In 2021, 2020 and 2019, TRC paid cash dividends of $290.0 million, $245.0 million and $220.0 million, respectively, to the TransRe holding company. In addition, in 2019, TRC transferred its ownership interest in CapSpecialty to the TransRe holding company, and consequently, the TransRe holding company recorded a dividend from TRC in the amount of $101.0 million.

As of December 31, 2021, a maximum amount of $108.6 million was available for dividends by TRC without prior approval of the applicable regulatory authorities. Aside from Alleghany’s reinsurance and insurance subsidiaries, dividends are regularly paid to Alleghany from the subsidiaries of Alleghany Capital, where there are generally no regulatory restrictions on dividends being paid from retained earnings.

The statutory net income of Alleghany’s reinsurance and insurance subsidiaries was $681.4 million and $274.8 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the combined statutory capital and surplus of Alleghany’s reinsurance and insurance subsidiaries was $7.2 billion and $6.8 billion, respectively. As of December 31, 2021, the amount of statutory capital and surplus necessary to satisfy regulatory requirements was not significant in relation to the actual statutory capital and surplus of Alleghany’s reinsurance and insurance companies in the U.S.

Aside from Alleghany’s reinsurance and insurance subsidiaries, Alleghany Capital’s subsidiaries pay dividends to Alleghany Capital based primarily on each subsidiary’s need to maintain its operations. The following table presents the dividends paid to Alleghany Capital by its subsidiaries in 2021, 2020 and 2019:

	Year Ended December 31,
	2021		2020		2019
	($ in millions)
Alleghany Capital Subsidiaries(1)	$	133.3	$	60.9	$	82.4

(1)Federal income taxes for most Alleghany Capital subsidiaries are incurred at the Alleghany Capital corporate level. As such, these dividends were arrived at after deducting a provision for estimated income taxes to be paid at the Alleghany Capital-level, as applicable. Income tax provisions are finalized when tax returns are filed in future periods.

(d) Special Dividends

In February 2020, the Alleghany Board of Directors declared a special dividend of $15.00 per share for stockholders of record on March 5, 2020. On March 16, 2020 Alleghany paid dividends to stockholders totaling $215.0 million.