Stockholders' Equity

12 Months Ended

Dec. 31, 2013

Stockholders' Equity

10. Stockholders’ Equity

(a) Common Stock Repurchases

In October 2012, Alleghany’s Board of Directors authorized the repurchase of shares of Common Stock, at such times and at prices as management determines advisable, up to an aggregate of $300.0 million.

Pursuant to the Board authorizations, in 2013, Alleghany repurchased an aggregate of 113,160 shares of its Common Stock in the open market for $40.4 million, at an average price per share of $356.92. In 2012, Alleghany repurchased an aggregate of 53,346 shares of its Common Stock in the open market for $17.8 million, at an average price per share of $333.08. In 2011, Alleghany repurchased an aggregate of 399,568 shares of its Common Stock in the open market for $120.3 million, at an average price per share of $301.14.

(b) Accumulated Other Comprehensive Income

The following table presents a reconciliation of the changes during 2013 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, 2013	$	263.3		$	(13.4	)	$	0.6		$	250.5
Other comprehensive income, net of tax:
Other comprehensive income before reclassifications		70.2			(35.9	)		(2.8	)		31.5
Reclassifications from accumulated other comprehensive income		(95.1	)		—			—			(95.1	)
Total		(24.9	)		(35.9	)		(2.8	)		(63.6	)
Balance as of December 31, 2013	$	238.4		$	(49.3	)	$	(2.2	)	$	186.9

Reclassifications out of accumulated other comprehensive income attributable to Alleghany stockholders during 2013 were as follows:

Accumulated Other Comprehensive Income Component	Line in Consolidated Statement of Earnings	Year Ended December 31, 2013
		(in millions)
Unrealized appreciation of investments:	Net realized capital gains*	$	190.3
	Other than temporary impairment losses		(44.0	)
	Income taxes		(51.2	)
Total reclassifications:	Net earnings	$	95.1

* Excludes the following items not reclassified out of accumulated other comprehensive income: (i) a $46.8 million realized capital gain related to the sale of Homesite, and (ii) a $5.0 million realized capital loss relating to a non-cash impairment charge related to certain finite-lived intangible assets at Capitol.

(c) Regulations and Dividend Restrictions

As of December 31, 2013, approximately $6.2 billion of Alleghany’s total equity of $6.9 billion was unavailable for dividends or advances to Alleghany from its subsidiaries. The remaining $0.7 billion was available for dividends or advances to Alleghany from its subsidiaries, or was retained at the Alleghany parent-level, and as such, was available to pay dividends to Alleghany’s stockholders as of December 31, 2013.

Alleghany’s reinsurance and insurance subsidiaries are subject to various regulatory restrictions that limit the maximum amount of dividends available to be paid by them without prior approval of insurance regulatory authorities.

With respect to TransRe, its domestic operating subsidiaries could ordinarily pay dividends without regulatory approval based on statutory surplus. However, for a period of 24 months following the TransRe Acquisition Date, TransRe’s operating subsidiaries are prohibited from paying a dividend to TransRe in excess of $200.0 million in any given twelve month period without the prior approval of the New York State Department of Financial Services. In 2013, TRC paid dividends of $200.0 million to TransRe, of which $150.0 million was in turn paid to Alleghany.

TransRe’s operations are regulated in various 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 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.

With respect to AIHL, its operating subsidiaries could also pay additional dividends without regulatory approval based on statutory surplus. Of the aggregate total equity of Alleghany’s insurance operating subsidiaries as of December 31, 2013 of $2.0 billion, a maximum of $60.6 million was available for dividends without prior approval of the applicable insurance regulatory authorities.

Statutory net income of Alleghany’s reinsurance and insurance subsidiaries was $836.9 million and $448.8 million for the years ended December 31, 2013 and 2012, respectively. Combined statutory capital and surplus of Alleghany’s reinsurance and insurance subsidiaries was $6.5 billion and $5.8 billion as of December 31, 2013 and 2012, respectively. As of December 31, 2013, the amount of statutory capital and surplus necessary to satisfy regulatory requirements was not significant in relation to actual statutory capital and surplus.