Segment results for Alleghany’s two reportable segments and for corporate activities for the three and nine months ended September 30, 2012 (which include Transatlantic from the Acquisition Date through September 30, 2012) and September 30, 2011 are shown in the tables below:


	Reinsurance Segment						Insurance Segment
Three Months Ended September 30, 2012	Property		Casualty & Other⁽¹⁾		Total		RSUI		CATA			PCC			Total		Total Segments		Corporate Activities⁽²⁾			Consolidated
	(in millions)
Gross premiums written	$	281.9	$	604.6	$	886.5	$	248.9	$	40.6		$	6.3		$	295.8	$	1,182.3	$	(5.9	)	$	1,176.4
Net premiums written		248.0		594.9		842.9		155.1		38.4			6.1			199.6		1,042.5		—			1,042.5

Net premiums earned	$	264.7	$	616.4	$	881.1	$	169.8	$	37.0		$	4.9		$	211.7	$	1,092.8	$	—		$	1,092.8
Net loss and LAE		103.7		458.8		562.5		82.9		23.1			4.5			110.5		673.0		—			673.0
Commissions, brokerage and other underwriting expenses		55.4		125.7		181.1		46.1		19.7			6.9			72.7		253.8		—			253.8

Underwriting profit (loss)⁽³⁾	$	105.6	$	31.9	$	137.5	$	40.8	$	(5.8	)	$	(6.5	)	$	28.5		166.0		—			166.0

Net investment income																		90.1		0.4			90.5
Net realized capital gains																		12.4		—			12.4
OTTI losses																		—		—			—
Gain on bargain purchase																		—		—			—
Other income																		24.2		9.6			33.8
Other operating expenses																		36.3		11.1			47.4
Corporate administration																		—		9.3			9.3

Amortization of intangible assets																		73.3		—			73.3
Interest expense																		12.5		9.3			21.8

Earnings before income taxes																	$	170.6	$	(19.7	)	$	150.9


	Reinsurance Segment						Insurance Segment
Three Months Ended September 30, 2011	Property		Casualty & Other⁽¹⁾		Total		RSUI		CATA		PCC			Total		Total Segments			Corporate Activities			Consolidated
	(in millions)
Gross premiums written	$	—	$	—	$	—	$	230.2	$	38.8	$	1.4		$	270.4	$	270.4		$	—		$	270.4
Net premiums written		—		—		—		151.8		36.6		1.5			189.9		189.9			—			189.9

Net premiums earned	$	—	$	—	$	—	$	152.2	$	36.7	$	1.3		$	190.2	$	190.2		$	—		$	190.2
Net loss and LAE		—		—		—		101.0		19.0		1.8			121.8		121.8			—			121.8
Commissions, brokerage and other underwriting expenses		—		—		—		44.1		17.6		6.5			68.2		68.2			—			68.2

Underwriting profit (loss)⁽³⁾	$	—	$	—	$	—	$	7.1	$	0.1	$	(7.0	)	$	0.2		0.2			—			0.2

Net investment income																	29.7			(7.6	)		22.1
Net realized capital gains																	22.1			0.6			22.7
OTTI losses																	(2.8	)		—			(2.8	)
Gain on bargain purchase																	—			—			—
Other income																	0.3			—			0.3
Other operating expenses																	0.7			1.1			1.8
Corporate administration																	—			2.7			2.7

Amortization of intangible assets																	0.8			—			0.8
Interest expense																	—			4.3			4.3

Earnings before income taxes																$	48.0		$	(15.1	)	$	32.9


	Reinsurance Segment						Insurance Segment
Nine Months Ended September 30, 2012	Property		Casualty & Other⁽¹⁾		Total		RSUI		CATA			PCC			Total		Total Segments			Corporate Activities⁽²⁾			Consolidated
	(in millions)
Gross premiums written	$	660.8	$	1,436.1	$	2,096.9	$	861.4	$	120.8		$	12.6		$	994.8	$	3,091.7		$	(12.9	)	$	3,078.8
Net premiums written		608.6		1,413.5		2,022.1		551.7		114.1			12.5			678.3		2,700.4			—			2,700.4

Net premiums earned	$	603.6	$	1,413.9	$	2,017.5	$	487.6	$	107.3		$	10.5		$	605.4	$	2,622.9		$	—		$	2,622.9
Net loss and LAE		215.5		1,055.5		1,271.0		239.8		67.0			10.0			316.8		1,587.8			—			1,587.8
Commissions, brokerage and other underwriting expenses		121.1		256.2		377.3		136.7		58.5			20.3			215.5		592.8			—			592.8

Underwriting profit (loss)⁽³⁾	$	267.0	$	102.2	$	369.2	$	111.1	$	(18.2	)	$	(19.8	)	$	73.1		442.3			—			442.3

Net investment income																		226.0			8.6			234.6
Net realized capital gains																		81.2			38.6			119.8
OTTI losses																		(2.9	)		—			(2.9	)
Gain on bargain purchase																		—			494.9			494.9
Other income																		25.2			18.2			43.4
Other operating expenses																		73.9			24.0			97.9
Corporate administration																		—			67.7			67.7

Amortization of intangible assets																		213.4			—			213.4
Interest expense																		28.2			18.3			46.5

Earnings before income taxes																	$	456.3		$	450.3		$	906.6


	Reinsurance Segment						Insurance Segment
Nine Months Ended September 30, 2011	Property		Casualty & Other⁽¹⁾		Total		RSUI		CATA			PCC			Total		Total Segments			Corporate Activities			Consolidated
	(in millions)
Gross premiums written	$	—	$	—	$	—	$	763.1	$	115.0		$	2.5		$	880.6	$	880.6		$	—		$	880.6
Net premiums written		—		—		—		489.2		108.3			3.6			601.1		601.1			—			601.1

Net premiums earned	$	—	$	—	$	—	$	438.2	$	113.9		$	3.0		$	555.1	$	555.1		$	—		$	555.1
Net loss and LAE		—		—		—		236.3		60.6			18.5			315.4		315.4			—			315.4
Commissions, brokerage and other underwriting expenses		—		—		—		126.3		54.2			18.4			198.9		198.9			—			198.9

Underwriting profit (loss)⁽³⁾	$	—	$	—	$	—	$	75.6	$	(0.9	)	$	(33.9	)	$	40.8		40.8			—			40.8

Net investment income																		90.9			(8.7	)		82.2
Net realized capital gains																		63.3			0.6			63.9
OTTI losses																		(2.8	)		—			(2.8	)
Gain on bargain purchase																		—			—			—
Other income																		0.6			0.9			1.5
Other operating expenses																		16.1			2.9			19.0
Corporate administration																		—			14.1			14.1

Amortization of intangible assets																		2.5			—			2.5
Interest expense																		0.1			13.0			13.1

Earnings before income taxes																	$	174.1		$	(37.2	)	$	136.9

(1)	Casualty & other primarily consists of assumed: D&O 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)

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, net realized capital gains, OTTI losses, other income, other operating expenses, 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 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 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.