Segments of Business

12 Months Ended

Dec. 31, 2011

Segments of Business

15. Segments of Business

Information related to Alleghany’s reportable segment is shown in the table below. Property and casualty and surety insurance operations are conducted by AIHL through its insurance operating units RSUI, CATA and PCC. In addition, 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’s reportable segment is reported in a manner consistent with the way management evaluates the businesses. As such, insurance underwriting activities are evaluated separately from investment activities. Net realized capital gains and other-than-temporary impairment losses are not considered relevant in evaluating investment performance on an annual basis. Segment accounting policies are described in Note 1.

The primary components of “Corporate activities” are Alleghany Properties, Alleghany’s investments in Homesite and ORX and strategic investments and other activities at the parent level.

	2011			2010			2009
	(in millions)
Revenues:
AIHL insurance group:
Net premiums earned
RSUI (1)	$	593.8		$	593.6		$	633.4
CATA		149.3			164.3			166.7
PCC		4.5			10.2			44.9
		747.6			768.1			845.0
Net investment income		117.4			128.9			116.7
Net realized capital gains		79.7			92.9			119.8
Other than temporary impairment losses (2)		(3.6	)		(12.3	)		(85.9	)
Other income		0.7			0.6			1.3
Total insurance group		941.8			978.2			996.9
Corporate activities:
Net investment income (3)		(8.5	)		(3.9	)		(14.8	)
Net realized capital gains (4)		47.5			4.5			200.6
Other than temporary impairment losses		—			—			—
Other income (5)		1.0			6.6			1.7
Total	$	981.8		$	985.4		$	1,184.4
Earnings before income taxes:
AIHL insurance group:
Underwriting profit (loss) (6)
RSUI	$	107.8		$	159.9		$	189.8
CATA		(6.7	)		1.5			10.1
PCC		(51.6	)		(30.5	)		(70.7	)
		49.5			130.9			129.2
Net investment income		117.4			128.9			116.7
Net realized capital gains		79.7			92.9			119.8
Other than temporary impairment losses (2)		(3.6	)		(12.3	)		(85.9	)
Other income, less other expenses		(29.0	)		(33.8	)		(42.2	)
Total insurance group		214.0			306.6			237.6
Corporate activities:
Net investment income (3)		(8.5	)		(3.9	)		(14.8	)
Net realized capital gains (4)		47.5			4.5			200.6
Other than temporary impairment losses		—			—			—
Other income (5)		1.0			6.6			1.7
Corporate administration and other expenses		45.9			31.4			29.1
Interest expense		17.3			5.0			0.6
Total	$	190.8		$	277.4		$	395.4

(1) RSUI’s 2011 net premiums earned includes immaterial amounts arising from reinsurance assumed from insurance companies domiciled outside the U.S. (specifically, in France and the United Kingdom).

(2) Reflects impairment charges for unrealized losses related to AIHL’s investment portfolio that were deemed to be other than temporary. See Note 3.

(3) Includes $20.2 million, $3.2 million and $1.1 million of Alleghany’s equity in losses of Homesite for 2011, 2010 and 2009, respectively. Also includes $1.6 million, $2.0 million and $21.9 million of Alleghany’s equity in losses of ORX for 2011, 2010 and 2009, respectively. See Notes 4(b) and 4(c).

(4) For 2011, primarily reflects net realized capital gains from the sale of shares of common stock of Exxon Mobil Corporation. For 2009, primarily reflects net realized capital gains from the sale of shares of Burlington Northern common stock.

(5) Includes Alleghany Properties revenue.

(6) Represents net premiums earned less loss and LAE and commission, brokerage and other underwriting expenses, all as determined in accordance with GAAP, does not include net investment income, net realized capital gains, other-than-temporary impairment losses, other income or other expenses. Commissions, brokerage and other underwriting expenses represent commission and brokerage expenses and that portion of salaries, administration and other operating expenses attributable primarily to underwriting activities, whereas the remainder constitutes other expenses.

	2011		2010		2009
	(in millions)
Identifiable assets as of December 31
AIHL insurance group	$	5,706.3	$	5,546.7	$	5,659.2
Corporate activities		771.8		885.0		533.6
Total	$	6,478.1	$	6,431.7	$	6,192.8
Capital expenditures
AIHL insurance group	$	6.3	$	6.6	$	5.5
Corporate activities		0.1		—		—
Total	$	6.4	$	6.6	$	5.5
Depreciation and amortization
AIHL insurance group	$	26.0	$	29.8	$	30.5
Corporate activities		1.0		4.0		1.9
Total	$	27.0	$	33.8	$	32.4