8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 5, 2014

ALLEGHANY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-9371	51-0283071
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

7 Times Square Tower, 17th Floor, New York, New York	10036
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 752-1356

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On May 5, 2014, Alleghany Corporation (the “Company”) issued a press release on the subject of its financial results for the three months ended March 31, 2014. On May 5, 2014, the Company also posted on its web site at www.alleghany.com the Financial Supplement relating to its financial results for the three months ended March 31, 2014. A copy of such release and financial supplement are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively. The information hereunder shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1	2014 First Quarter Earnings Release, dated May 5, 2014
99.2	2014 First Quarter Financial Supplement

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALLEGHANY CORPORATION
Date: May 5, 2014	By:	/s/ John L. Sennott, Jr.
		Name:	John L. Sennott, Jr.
		Title:	Senior Vice President and chief financial officer

3

INDEX TO EXHIBITS

Exhibit Number	Description
99.1	2014 First Quarter Earnings Release, dated May 5, 2014
99.2	2014 First Quarter Financial Supplement

4

EX-99.1

Exhibit 99.1

ALLEGHANY CORPORATION

7 Times Square Tower, 17^th Floor

New York, NY 10036

ALLEGHANY CORPORATION REPORTS 2014 FIRST QUARTER RESULTS

NEW YORK, NY, May 5, 2014 – Alleghany Corporation (NYSE-Y) today announced its financial results for the three months ended March 31, 2014. Book value per common share¹ grew to $431.07 as of March 31, 2014, an increase of 4.4% from book value per common share of $412.96 at 2013 year-end. Total stockholders’ equity² increased to $7.1 billion as of March 31, 2014 from approximately $6.9 billion as of December 31, 2013.

Alleghany reported net earnings³ of $204.9 million, or $12.28 per diluted share for the 2014 first quarter, compared with net earnings³ of $196.3 million, or $11.67 per diluted share for the first quarter of last year.

Concurrent with the issuance of today’s earnings press release, Alleghany has posted a financial supplement to its website, www.alleghany.com, containing a number of schedules that provide additional detail pertaining to Alleghany’s financial results.

Weston M. Hicks, President and chief executive officer, commented, “Alleghany generated solid returns in the first quarter of 2014, growing book value per share by 4.4%. Our results were driven by strong underwriting performance both at TransRe and RSUI, resulting in an 88.8% combined ratio for the quarter, as well as an increase in the value of our bond portfolio.”

“TransRe, our global reinsurance business, continued its record of strong underwriting results with a combined ratio for the first quarter of 88.7%. TransRe continues to differentiate itself in terms of both treaty signings and profitability in an increasingly competitive environment for reinsurance. TransRe’s results benefitted from a lack of property catastrophe losses and favorable prior year loss reserve development, although non-catastrophe property losses were higher compared with the year-ago first quarter. TransRe’s gross premiums written in the first quarter were up by approximately 3.7% over the first quarter of 2013, primarily reflecting the impact of some expanded treaty participations with existing long-term clients.”

“Our insurance operations recorded a combined ratio of 89.0% for the first quarter of 2014, driven by favorable results at RSUI which reported an 81.9% combined ratio. In addition, RSUI was able to grow its gross premiums written by 5.8% in the quarter, driven by new business and increases in rates in the directors’ and officers’ liability and binding authority product lines, partially offset by declines in the property line of business due to an increase in competition. RSUI’s strong returns continue to contribute meaningfully to our results. Underwriting profits at RSUI were somewhat offset by losses at Capitol and PacificComp; however, we believe that both of these businesses are beginning to respond to new leadership and strategic initiatives focused on expanding the premium base at Capitol and improving distribution, pricing and scale at PacificComp. The favorable impact of these efforts in both gross premium writings and expense ratio improvement in the first quarter are encouraging.”

Mr. Hicks continued, “Our investment strategy remains focused on balancing interest rate risk through the combination of an intermediate duration fixed income portfolio and a common equity securities portfolio – a prudent position relative to our loss reserves. In the first quarter, net unrealized gains increased by $192.3 million before taxes in our debt securities portfolio. Our long-dated U.S. Treasury Strip debt securities performed particularly well in the quarter, as a drop in long-term interest rates resulted in a net change in value of $43.8 million or 11% in the first quarter. We subsequently sold these U.S. Treasury Strips in April, and we will record a pre-tax gain of approximately $34 million in our second quarter results. For the first three months of 2014, performance in our equity portfolio was flat compared with an increase in the S&P 500 of 1.8%.”

¹  Stockholders’ equity attributable to Alleghany stockholders divided by common stock outstanding.

²  Stockholders’ equity attributable to Alleghany stockholders.

³  Net earnings attributable to Alleghany stockholders.

Mr. Hicks concluded, “On April 2, 2014, A.M. Best Company, Inc. upgraded the financial strength rating to A+ (Superior) from A (Excellent) for RSUI’s wholly-owned subsidiaries, RSUI Indemnity Company, Landmark American Insurance Company and Covington Specialty Insurance Company, with Landmark and Covington being rated on a reinsured basis. In addition, TransRe and its insurance subsidiaries were placed upon positive outlook by A. M. Best. We are pleased with A.M. Best’s acknowledgment of the strength of these two franchises.”

During the first three months of 2014, Alleghany repurchased an aggregate of 242,608 shares of its common stock in the open market for $94.6 million, at an average price per share of $390.10. Following this activity, Alleghany had $147.3 million remaining on its currently effective $300 million share repurchase authorization. As of March 31, 2014, we had 16,535,591 shares of our common stock outstanding, compared with 16,766,192 shares of our common stock outstanding as of December 31, 2013.

2014 First Quarter Underwriting Results

Alleghany’s underwriting profit for the first quarter of 2014 was $118.6 million, compared with $181.4 million for the first quarter of 2013. The underwriting results for the 2014 first quarter reflect a $90.0 million underwriting profit for the reinsurance segment (TransRe), compared with $131.4 million for the 2013 first quarter, as well as an underwriting profit of $28.6 million for the insurance segment compared with $50.0 million for the 2013 first quarter.

TransRe’s underwriting results in the first quarter of 2014 as compared with the first quarter of 2013 primarily reflect higher non-catastrophe property losses, the lack of favorable impact arising from the acquisition method of accounting, which was present in the first quarter of 2013, and a $17.0 million loss incurred upon commutation of an international accident & health treaty in the first quarter of 2014. In addition, TransRe recorded $45.3 million of prior year favorable loss reserve development in the first quarter of 2014 compared with $59.3 million of favorable prior year loss reserve development in the first quarter of last year (a portion of which was retained by the cedants, resulting in an offsetting increase in profit commission expense incurred in the first quarter of 2013). Both quarters benefitted from the absence of major catastrophe losses.

Underwriting results of the insurance segment in the first quarter of 2014 as compared with the first quarter of 2013 primarily reflect less favorable prior accident year development on loss reserves, and higher catastrophe and non-catastrophe property losses incurred at RSUI due to the severe winter weather and large fire losses in the United States.

Total net premiums written for the 2014 first quarter were $1,134.0 million, compared with $1,093.9 million for the first quarter of 2013, an increase of 3.7%. TransRe’s net premiums written increased by 1.6% in the 2014 first quarter from the 2013 first quarter. The growth in TransRe’s net premiums written was primarily due to an increase in its participation in the reinsurance programs of a few long-term clients. Net premiums written in the insurance segment in the 2014 first quarter increased by 11.5%, from the first quarter of last year. Each of Alleghany’s insurance subsidiaries contributed to this growth. RSUI’s net premiums written increased by 7.8%, Capitol’s net premiums written increased by 14.6% and PacificComp’s net premiums written increased by 74.2% in the 2014 first quarter.

2

Alleghany’s combined ratio for the 2014 first quarter was 88.8%, compared with 83.1% for the 2013 first quarter. TransRe’s combined ratio for the 2014 first quarter was 88.7%, compared with 84.6% for the 2013 first quarter, and the insurance segment’s combined ratio for the 2014 first quarter was 89.0%, compared with 77.4% for the 2013 first quarter. The combined ratios of Alleghany’s insurance and reinsurance segments increased in the current quarter compared with the 2013 first quarter primarily due to a lower amount of favorable prior year reserve development.

Investment Performance

Alleghany’s net investment income for the quarter ended March 31, 2014 was $110.6 million. Excluding the impact of Homesite, net investment income increased 13.6% in the 2014 first quarter, reflecting an increased allocation of the debt securities portfolio to higher yielding securities, as well as more favorable reinvestment rates. On a reported basis, net investment income decreased by 6.9% over the corresponding 2013 period primarily reflecting the absence of gains from Alleghany’s investment in Homesite, which were $21.4 million in the 2013 first quarter. Homesite was sold on December 31, 2013.

Additional Information

Additional information regarding Alleghany’s 2014 first quarter financial results, including management’s discussion and analysis of Alleghany’s financial condition and results of operations, is contained in Alleghany’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 (the “Form 10-Q”), to be filed with the U.S. Securities and Exchange Commission (the “SEC”) on or about the date hereof. In addition, comparative supplemental financial information is available in the 2014 first quarter financial supplement (the “Financial Supplement”). The Form 10-Q and the Financial Supplement will be available on Alleghany’s website at www.alleghany.com and on the SEC’s website at www.sec.gov. Readers are urged to review the Form 10-Q for a more complete discussion of Alleghany’s financial performance.

About Alleghany Corporation

Alleghany Corporation (NYSE-Y) creates value through owning and managing operating subsidiaries and investments, anchored by a core position in property and casualty reinsurance and insurance. Alleghany’s property and casualty subsidiaries include: Transatlantic Holdings, Inc. (referred to herein as “TransRe”), a leading global reinsurer; RSUI Group, Inc. (referred to herein as “RSUI”), a national underwriter of property and liability specialty insurance coverages; Capitol Transamerica Corporation (referred to herein as “Capitol”), an underwriter of small commercial property, casualty and surety insurance coverages; and Pacific Compensation Corporation (referred to herein as “PacificComp”), an underwriter of workers’ compensation insurance primarily in California.

Non-GAAP Financial Measures

Throughout this press release, Alleghany’s results of operations have been presented in the way that Alleghany believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use financial information in evaluating the performance of Alleghany. This presentation includes the use of underwriting profit, which is a “non-GAAP financial measure,” as such term is defined in Regulation G promulgated by the SEC.

Underwriting profit represents net premiums earned less net loss and loss adjustment expense and commissions, brokerage and other underwriting expenses, all as determined in accordance with accounting

3

principles generally accepted in the United States of America (“U.S. GAAP”), and does not include net investment income, net realized capital gains, other than temporary impairment losses, other income, other operating expenses, amortization of intangible assets or interest expense. Alleghany consistently uses underwriting profit as a supplement to earnings before income taxes, the most comparable U.S. GAAP financial measure, to evaluate the performance of its segments and believes that underwriting profit provides useful additional information to investors because it highlights net earnings attributable to a segment’s underwriting performance. Earnings before income taxes may show a profit despite an underlying underwriting loss, and when underwriting losses persist over extended periods, a reinsurance or an insurance company’s ability to continue as an ongoing concern may be at risk.

This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for measures of operating performance prepared in accordance with U.S. GAAP. Reconciliation of underwriting profit to earnings before income taxes is presented in Alleghany’s Form 10-Q as well as its Financial Supplement.

#   #   #

4

Forward-looking Statements

This release contains disclosures which are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are based upon Alleghany’s current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and Alleghany’s future financial condition and results. These statements are not guarantees of future performance, and Alleghany has no specific intention to update these statements. The uncertainties and risks include, but are not limited to,

• significant weather-related or other natural or man-made catastrophes and disasters;

• the cyclical nature of the property and casualty reinsurance and insurance industries;

• changes in market prices of Alleghany’s significant equity investments and changes in value of Alleghany’s debt securities portfolio;

• adverse loss development for events insured by Alleghany’s reinsurance and insurance subsidiaries in either the current year or prior years;

• the long-tail and potentially volatile nature of certain casualty lines of business written by Alleghany’s reinsurance and insurance subsidiaries;

• the cost and availability of reinsurance;

• the reliance by Alleghany’s reinsurance operating subsidiaries on a limited number of brokers;

• increases in the levels of risk retention by Alleghany’s reinsurance and insurance subsidiaries;

• exposure to terrorist acts and acts of war;

• the willingness and ability of Alleghany’s reinsurance and insurance subsidiaries’ reinsurers to pay reinsurance recoverables owed to Alleghany’s reinsurance and insurance subsidiaries;

• changes in the ratings assigned to Alleghany’s reinsurance and insurance subsidiaries;

• claims development and the process of estimating reserves;

• legal, political, judicial and regulatory changes, including the federal financial regulatory reform of the insurance industry by the Dodd-Frank Wall Street Reform and Consumer Protection Act;

• the uncertain nature of damage theories and loss amounts;

• the loss of key personnel of Alleghany’s reinsurance or insurance operating subsidiaries;

• fluctuation in foreign currency exchange rates;

• the failure to comply with the restrictive covenants contained in the agreements governing Alleghany’s indebtedness;

• the ability to make payments on, or repay or refinance, Alleghany’s debt;

• risks inherent in international operations; and

• difficult and volatile conditions in the global market.

Additional risks and uncertainties include general economic and political conditions, including the effects of a prolonged U.S. or global economic downturn or recession; changes in costs; variations in political, economic or other factors; risks relating to conducting operations in a competitive environment; effects of acquisition and disposition activities, inflation rates, or recessionary or expansive trends; changes in interest rates; extended labor disruptions, civil unrest, or other external factors over which Alleghany has no control; and changes in Alleghany’s plans, strategies, objectives, expectations, or intentions, which may happen at any time at its discretion. As a consequence, current plans, anticipated actions, and future financial condition and results may differ from those expressed in any forward-looking statements made by Alleghany or on its behalf.

5

For more information, please contact:

Kerry Jacobs

212-508-8141

6

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	March 31, 2014			December 31, 2013
	(unaudited)
	(in thousands, except share amounts)
Assets
Investments:
Available-for-sale securities at fair value:
Equity securities (cost: 2014 – $2,265,027; 2013 – $1,804,698)	$	2,637,802		$	2,229,453
Debt securities (amortized cost: 2014 – $14,682,684; 2013 – $14,875,750)		14,802,122			14,802,890
Short-term investments		926,674			1,317,895
		18,366,598			18,350,238
Other invested assets		619,674			641,924
Total investments		18,986,272			18,992,162
Cash		481,414			498,315
Accrued investment income		141,820			146,381
Premium balances receivable		788,260			675,255
Reinsurance recoverables		1,354,229			1,363,707
Ceded unearned premiums		185,159			173,148
Deferred acquisition costs		358,398			334,740
Property and equipment at cost, net of accumulated depreciation and amortization		67,777			58,974
Goodwill		99,747			99,747
Intangible assets, net of amortization		129,145			127,284
Current taxes receivable		25,644			13,049
Net deferred tax assets		412,697			469,787
Other assets		463,774			408,539
Total assets	$	23,494,336		$	23,361,088
Liabilities and Stockholders’ Equity
Loss and loss adjustment expenses	$	11,864,719		$	11,952,541
Unearned premiums		1,857,948			1,765,550
Senior Notes		1,790,041			1,794,407
Reinsurance payable		107,402			90,562
Other liabilities		736,147			810,507
Total liabilities		16,356,257			16,413,567
Common stock (shares authorized: 2014 and 2013 – 22,000,000; shares issued: 2014 – 17,459,961; 2013 – 17,459,961)		17,460			17,460
Contributed capital		3,611,300			3,613,151
Accumulated other comprehensive income		279,049			186,930
Treasury stock, at cost (2014 – 924,370 shares; 2013 – 693,769 shares)		(304,760	)		(213,911	)
Retained earnings		3,525,007			3,320,127
Total stockholders’ equity attributable to Alleghany stockholders		7,128,056			6,923,757
Noncontrolling interest		10,023			23,764
Total stockholders’ equity		7,138,079			6,947,521
Total liabilities and stockholders’ equity	$	23,494,336		$	23,361,088

7

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings and Comprehensive Income

(unaudited)

	Three Months Ended March 31,
	2014			2013
	(in thousands, except per share amounts)
Revenues
Net premiums earned	$	1,053,997		$	1,075,013
Net investment income		110,583			118,811
Net realized capital gains		96,836			50,902
Other than temporary impairment losses		(5,220	)		(32,312	)
Other income		30,446			11,141
Total revenues		1,286,642			1,223,555
Costs and Expenses
Net loss and loss adjustment expenses		611,159			567,413
Commissions, brokerage and other underwriting expenses		324,236			326,227
Other operating expenses		53,342			30,738
Corporate administration		9,632			12,422
Amortization of intangible assets		(1,861	)		11,630
Interest expense		21,811			21,736
Total costs and expenses		1,018,319			970,166
Earnings before income taxes		268,323			253,389
Income taxes		63,682			57,095
Net earnings		204,641			196,294
Net losses attributable to noncontrolling interest		(239	)		—
Net earnings attributable to Alleghany stockholders	$	204,880		$	196,294
Net earnings	$	204,641		$	196,294
Other comprehensive income:
Change in unrealized gains, net of deferred taxes of $81,364 and $45,877 for 2014 and 2013, respectively		151,104			85,200
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of ($32,066) and ($6,507) for 2014 and 2013, respectively		(59,550	)		(12,084	)
Change in unrealized currency translation adjustment, net of deferred taxes of $233 and ($5,366) for 2014 and 2013, respectively		432			(9,966	)
Retirement plans		133			(154	)
Comprehensive income		296,760			259,290
Comprehensive loss attributable to noncontrolling interest		(239	)		—
Comprehensive income attributable to Alleghany stockholders	$	296,999		$	259,290
Basic earnings per share attributable to Alleghany stockholders	$	12.28		$	11.67
Diluted earnings per share attributable to Alleghany stockholders		12.28			11.67

8

EX-99.2

Exhibit 99.2

Alleghany

ALLEGHANY CORPORATION AND SUBSIDIARIES

FINANCIAL SUPPLEMENT

Three Months Ended

March 31, 2014

(Unaudited)

Investor Contact:		This report is for informational purposes only. It should be read in conjunction with documents filed by Alleghany Corporation with the U.S. Securities and Exchange Commission, including the company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
Kerry Jacobs
Phone:	(212)508-8141

Definitions

References in this financial supplement for the quarter ended March 31, 2014 (the “Financial Supplement”) to the “Company,” “Alleghany,” “we,” “us,” and “our” refer to Alleghany Corporation and its consolidated subsidiaries unless the context otherwise requires. In addition, unless the context otherwise requires, references to

• “TransRe” are to Alleghany’s reinsurance holding company subsidiary Transatlantic Holdings, Inc. and its subsidiaries,

• “AIHL” are to Alleghany’s insurance holding company subsidiary Alleghany Insurance Holdings LLC,

• “RSUI” are to Alleghany’s subsidiary RSUI Group, Inc. and its subsidiaries,

• “Capitol” are to Alleghany’s subsidiary Capitol Transamerica Corporation and its subsidiaries, and

• “PCC” are to Alleghany’s subsidiary Pacific Compensation Corporation and its subsidiaries.

Forward-Looking Statements

This Financial Supplement may contain disclosures which are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are based upon Alleghany’s current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and Alleghany’s future financial condition and results. These statements are not guarantees of future performance, and Alleghany has no specific intention to update these statements. The uncertainties and risks include, but are not limited to,

• significant weather-related or other natural or man-made catastrophes and disasters;

• the cyclical nature of the property and casualty reinsurance and insurance industries;

• changes in market prices of Alleghany’s significant equity investments and changes in value of Alleghany’s debt securities portfolio;

• adverse loss development for events insured by Alleghany’s reinsurance and insurance subsidiaries in either the current year or prior years;

• the long-tail and potentially volatile nature of certain casualty lines of business written by Alleghany’s reinsurance and insurance subsidiaries;

• the cost and availability of reinsurance;

• the reliance by Alleghany’s reinsurance operating subsidiaries on a limited number of brokers;

• increases in the levels of risk retention by Alleghany’s reinsurance and insurance subsidiaries;

• exposure to terrorist acts and acts of war;

• the willingness and ability of Alleghany’s reinsurance and insurance subsidiaries’ reinsurers to pay reinsurance recoverables owed to Alleghany’s reinsurance and insurance subsidiaries;

• changes in the ratings assigned to Alleghany’s reinsurance and insurance subsidiaries;

• claims development and the process of estimating reserves;

• legal, political, judicial and regulatory changes, including the federal financial regulatory reform of the insurance industry by the Dodd-Frank Wall Street Reform and Consumer Protection Act;

• the uncertain nature of damage theories and loss amounts;

• the loss of key personnel of Alleghany’s reinsurance or insurance operating subsidiaries;

• fluctuation in foreign currency exchange rates;

• the failure to comply with the restrictive covenants contained in the agreements governing Alleghany’s indebtedness;

• the ability to make payments on, or repay or refinance, Alleghany’s debt;

• risks inherent in international operations; and

• difficult and volatile conditions in the global market.

Additional risks and uncertainties include general economic and political conditions, including the effects of a prolonged U.S. or global economic downturn or recession; changes in costs; variations in political, economic or other factors; risks relating to conducting operations in a competitive environment; effects of acquisition and disposition activities, inflation rates, or recessionary or expansive trends; changes in interest rates; extended labor disruptions, civil unrest, or other external factors over which Alleghany has no control; and changes in Alleghany’s plans, strategies, objectives, expectations, or intentions, which may happen at any time at its discretion. As a consequence, current plans, anticipated actions, and future financial condition and results may differ from those expressed in any forward-looking statements made by Alleghany or on its behalf.

PAGE 2

ALLEGHANY CORPORATION AND SUBSIDIARIES

FINANCIAL SUPPLEMENT TABLE OF CONTENTS

		Page
I.	Financial Summary
	10 Year Financial Summary		5
	Consolidated Financial Highlights		6
II.	Consolidated Results
	Consolidated Statements of Earnings - Consecutive Quarters		7
	Premiums Written		8
III.	Segment Results
	Consolidated Underwriting Results - Current Quarter		9
	Consolidated Underwriting Results - Prior Year Quarter		10
IV.	Balance Sheet Details
	Condensed Consolidated Balance Sheets		11
	Consolidated Total Investment Portfolio		12
	Debt Securities Portfolio Credit Quality		13
	Net Investment Income		14
	Financial Statement Portfolio Return		15
	Annualized Investment Book Yield		16
	Loss and Loss Adjustment Expenses (LAE)		17
	Capital Structure and Leverage Ratios		18
V.	Other
	Share Repurchase Detail		19
	Basic and Diluted Earnings per Share Information - Consecutive Quarters		20
	Return on Average Stockholders’ Equity - Consecutive Quarters		21
	Book Value per Share		22
	Catastrophe Exposure		23
	Non-GAAP Financial Measures		24
	Operating Income Reconciliation		25

PAGE 3

ALLEGHANY CORPORATION AND SUBSIDIARIES

BASIS OF PRESENTATION

Presentation

All financial information contained herein is unaudited. Certain amounts may not reconcile exactly due to rounding differences. Unless otherwise noted, all data is in millions of U.S. dollars, except for share, per share, percentage and ratio information.

PAGE 4

ALLEGHANY CORPORATION AND SUBSIDIARIES

10 YEAR FINANCIAL SUMMARY*

(in millions, except per share data)

	As of and for the Year Ended December 31,																														As of and for the three months ended
	2004			2005			2006			2007			2008			2009			2010			2011			2012			2013			March 31, 2014
Cash and invested assets	$	2,415.4		$	2,867.6		$	3,699.4		$	4,308.9		$	4,294.3		$	4,447.2		$	4,881.9		$	4,911.6		$	18,976.4		$	19,490.5		$	19,467.7
Net loss & LAE reserves		639.0			952.9			1,127.5			1,412.9			1,570.3			1,573.3			1,481.3			1,481.2			10,933.9			10,650.4			10,569.3
Preferred stock and debt		80.0			80.0			379.5			299.5			299.4			—			298.9			299.0			1,811.5			1,794.4			1,790.0
Common Stockholders’ Equity (“CSE”) attributable to Alleghany stockholders		1,799.5			1,894.4			2,146.4			2,484.8			2,347.3			2,717.5			2,908.9			2,925.7			6,403.8			6,923.8			7,128.1
Common shares outstanding		8.82			8.90			8.79			8.83			8.78			9.22			8.94			8.55			16.89			16.77			16.54
Net invested assets per share	$	264.86		$	313.14		$	377.79		$	453.98		$	455.05		$	482.43		$	512.53		$	539.38		$	1,016.24		$	1,055.46		$	1,069.07
% increase (decrease)		29.8	%		18.2	%		20.6	%		20.2	%		0.2	%		6.0	%		6.2	%		5.2	%		88.4	%		3.9	%		1.3	%
Book value per common share	$	204.08		$	212.80		$	244.25		$	281.36		$	267.37		$	294.79		$	325.31		$	342.12		$	379.13		$	412.96		$	431.07
% increase (decrease)		12.0	%		4.3	%		14.8	%		15.2	%		(5.0	%)		10.3	%		10.4	%		5.2	%		10.8	%		8.9	%		4.4	%
Net premiums written	$	786.7		$	802.7		$	916.2		$	962.5		$	898.2		$	830.8		$	736.2		$	774.7		$	3,723.9		$	4,287.4		$	1,134.0
Change in unearned premiums		(27.4	)		16.8			(38.4	)		11.8			50.5			14.2			31.9			(27.1	)		9.1			(48.2	)		(80.0	)
Net premiums earned	$	759.3		$	819.5		$	877.8		$	974.3		$	948.7		$	845.0		$	768.1		$	747.6		$	3,733.0		$	4,239.2		$	1,054.0
Underwriting profit (loss)	$	74.3		$	(117.4	)	$	252.0		$	268.1		$	92.1		$	129.2		$	130.9		$	49.5		$	220.3		$	420.7		$	118.6
Net investment income		62.3			78.1			127.9			146.1			130.2			101.9			125.0			108.9			313.0			465.7			110.6
Net realized capital gains, net of OTTI		86.9			148.6			28.2			92.8			(92.2	)		234.5			85.0			123.5			155.0			188.1			91.6
Total investment results	$	149.2		$	226.7		$	156.1		$	238.9		$	38.0		$	336.4		$	210.0		$	232.4		$	468.0		$	653.8		$	202.2
Net earnings attributable to Alleghany stockholders		117.7			52.3			238.9			281.8			130.8			264.8			198.5			143.3			702.2			628.4			204.9
Other changes in CSE		82.1			42.6			13.2			56.6			(268.4	)		105.5			(7.2	)		(126.5	)		2,775.9			(108.4	)		(0.6	)
Increase (decrease) in CSE	$	199.8		$	94.9		$	252.1		$	338.4		$	(137.6	)	$	370.3		$	191.3		$	16.8		$	3,478.1		$	520.0		$	204.3
Combined Ratio		90.2	%		114.3	%		71.3	%		72.5	%		90.3	%		84.7	%		83.0	%		93.4	%		94.1	%		90.1	%		88.8	%

* Amounts have been adjusted for subsequent common stock dividends. The historical results of all subsidiaries that have been sold are reclassified as discontinued operations.

PAGE 5

ALLEGHANY CORPORATION & SUBSIDIARIES

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except share and per share data)

		As of			As of
		March 31, 2014			December 31, 2013			Change
HIGHLIGHTS	Total investments and cash	$	19,467.7		$	19,490.5			(0.1	%)
	Total assets		23,494.3			23,361.1			0.6	%
	Total stockholders’ equity attributable to Alleghany stockholders		7,128.1			6,923.8			3.0	%
	Book value per share	$	431.07		$	412.96			4.4	%
		Three Months Ended March 31,
		2014			2013			Change
	Gross premiums written	$	1,301.1		$	1,237.5			5.1	%
	Net premiums written		1,134.0			1,093.9			3.7	%
	Net premiums earned		1,054.0			1,075.0			(2.0	%)
	Net investment income		110.6			118.8			(6.9	%)
	Net earnings attributable to Alleghany stockholders		204.9			196.3			4.4	%
	Operating income		145.4			184.2			(21.1	%)
PER SHARE AND SHARE DATA	Weighted average common shares outstanding:
	Basic		16,683,864			16,822,056			(0.8	%)
	Diluted		16,683,864			16,822,056			(0.8	%)
	Earnings per share attributable to Alleghany stockholders:
	Basic	$	12.28		$	11.67			5.2	%
	Diluted	$	12.28		$	11.67			5.2	%
	Operating earnings per share data:
	Basic	$	8.71		$	10.95			(20.4	%)
	Diluted	$	8.71		$	10.95			(20.4	%)
FINANCIAL RATIOS	Annualized return on average stockholders’ equity		11.7	%		12.1	%
	Loss and loss expense ratio		58.0	%		52.8	%		5.2
	Expense ratio		30.8	%		30.3	%		0.5
	Combined ratio		88.8	%		83.1	%		5.7

PAGE 6

ALLEGHANY CORPORATION & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS - CONSECUTIVE QUARTERS

(in millions, except per share data)

	Three Months Ended
	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Revenues
Net premiums earned	$	1,054.0		$	1,056.0		$	1,039.9		$	1,068.3		$	1,075.0		$	1,110.1		$	1,092.8		$	1,095.9		$	434.2
Net investment income		110.6			131.2			115.3			100.4			118.8			78.4			90.5			90.9			53.2
Net realized investment gains		96.8			136.5			17.8			27.0			50.9			38.0			12.4			39.4			68.0
Other than temporary impairment losses		(5.2	)		(2.1	)		(0.7	)		(8.9	)		(32.3	)		—			—			(1.1	)		(1.8	)
Other income		30.4			40.9			17.2			9.4			11.2			13.9			33.8			9.3			0.3
Total revenues		1,286.6			1,362.5			1,189.5			1,196.2			1,223.6			1,240.4			1,229.5			1,234.4			1,048.8
Costs and Expenses
Net loss and loss expenses incurred		611.2			616.9			644.5			650.5			567.4			1,042.4			673.0			680.9			233.9
Commissions, brokerage and other underwriting expenses		324.2			340.4			333.6			339.0			326.2			289.7			253.8			239.1			99.9
Other operating expenses		53.3			67.8			39.0			27.2			30.8			25.8			47.4			34.8			15.7
Corporate administration		9.6			10.1			3.7			9.9			12.4			8.1			9.3			11.1			47.3
Amortization of intangible assets		(1.8	)		(1.4	)		(0.8	)		0.8			11.6			39.9			73.3			108.1			31.9
Interest expense		21.8			21.8			21.5			21.8			21.8			21.8			21.8			15.8			9.1
Total costs and expenses		1,018.3			1,055.6			1,041.5			1,049.2			970.2			1,427.7			1,078.6			1,089.8			437.8
Earnings (losses) before income taxes		268.3			306.9			148.0			147.0			253.4			(187.3	)		150.9			144.6			611.0
Income taxes		63.7			100.9			34.6			33.3			57.1			(94.7	)		25.5			35.3			50.9
Net earnings (losses)		204.6			206.0			113.4			113.7			196.3			(92.6	)		125.4			109.3			560.1
Net earnings attributable to noncontrolling interest		(0.3	)		0.7			0.2			—			—			—			—			—			—
Net earnings (losses) attributable to Alleghany stockholders	$	204.9		$	205.3		$	113.2		$	113.7		$	196.3		$	(92.6	)	$	125.4		$	109.3		$	560.1
Basic earnings per share attributable to Alleghany stockholders	$	12.28		$	12.24		$	6.75		$	6.78		$	11.67		$	(5.47	)	$	7.41		$	6.46		$	51.17
Diluted earnings per share attributable to Alleghany stockholders		12.28			12.24			6.75			6.78			11.67			(5.47	)		7.41			6.45			51.06
Basic operating earnings per share	$	8.71		$	7.03		$	6.09		$	6.07		$	10.95		$	(6.93	)	$	6.93		$	4.99		$	47.24
Diluted operating earnings per share		8.71			7.03			6.09			6.07			10.95			(6.93	)		6.93			4.98			47.13
SUPPLEMENTAL INFORMATION:
Premiums written:
Gross premiums written	$	1,301.1		$	1,134.2		$	1,174.1		$	1,340.5		$	1,237.5		$	1,144.1		$	1,176.4		$	1,369.0		$	533.4
Net premiums written		1,134.0			1,001.5			1,033.4			1,158.5			1,093.9			1,023.6			1,042.5			1,223.7			434.2
Net loss and loss expenses incurred:
Current year		662.8			638.6			692.3			713.2			638.3			1,047.9			679.1			666.2			249.3
Prior years		(51.6	)		(21.7	)		(47.8	)		(62.7	)		(70.9	)		(5.5	)		(6.1	)		14.7			(15.4	)
	$	611.2		$	616.9		$	644.5		$	650.5		$	567.4		$	1,042.4		$	673.0		$	680.9		$	233.9
Loss and loss expense ratio		58.0	%		58.4	%		62.0	%		60.9	%		52.8	%		93.9	%		61.6	%		62.1	%		53.9	%
Expense ratio		30.8	%		32.2	%		32.1	%		31.7	%		30.3	%		26.1	%		23.2	%		21.8	%		23.0	%
Combined ratio		88.8	%		90.6	%		94.1	%		92.6	%		83.1	%		120.0	%		84.8	%		83.9	%		76.9	%

PAGE 7

ALLEGHANY CORPORATION AND SUBSIDIARIES

PREMIUMS WRITTEN

(in millions)

	Three Months Ended March 31,
	Gross Premiums Written												Net Premiums Written
	2014			2013			Change			% Change			2014		2013		Change			% Change
Reinsurance segment:
Property	$	298.6		$	270.1		$	28.5			10.6	%	$	250.6	$	236.7	$	13.9			5.9	%
Casualty and Other		642.7			637.6			5.1			0.8	%		629.2		629.3		(0.1	)		0.0	%
		941.3			907.7			33.6			3.7	%		879.8		866.0		13.8			1.6	%
Insurance segment:
RSUI		302.3			285.8			16.5			5.8	%		195.4		181.2		14.2			7.8	%
Capitol		49.1			40.2			8.9			22.1	%		43.3		37.8		5.5			14.6	%
PCC		15.8			9.1			6.7			73.6	%		15.5		8.9		6.6			74.2	%
		367.2			335.1			32.1			9.6	%		254.2		227.9		26.3			11.5	%
Intercompany elimination		(7.4	)		(5.3	)		(2.1	)		39.6	%		—		—		—			—
Total	$	1,301.1		$	1,237.5		$	63.6			5.1	%	$	1,134.0	$	1,093.9	$	40.1			3.7	%

PAGE 8

ALLEGHANY CORPORATION AND SUBSIDIARIES

CONSOLIDATED UNDERWRITING RESULTS - CURRENT QUARTER

For the Three Months Ended March 31, 2014

(dollars in millions)

	Reinsurance Segment									Insurance Segment
	Property			Casualty & Other			Total			RSUI			Capitol			PCC			Total			Total Segments			Corporate Activities			Consolidated
Premiums written:
Gross	$	298.6		$	642.7		$	941.3		$	302.3		$	49.1		$	15.8		$	367.2		$	1,308.5		$	(7.4	)	$	1,301.1
Net		250.6			629.2			879.8			195.4			43.3			15.5			254.2			1,134.0			—			1,134.0
Net premiums earned	$	234.5		$	558.8		$	793.3		$	204.0		$	42.3		$	14.4		$	260.7		$	1,054.0		$	—		$	1,054.0
Net loss and LAE:
Current year (ex-catastrophes)		100.6			408.6			509.2			108.7			25.0			10.3			144.0			653.2			—			653.2
Current year catastrophe losses		—			—			—			9.6			—			—			9.6			9.6			—			9.6
Prior years		(39.3	)		(6.0	)		(45.3	)		(5.9	)		(1.0	)		0.6			(6.3	)		(51.6	)		—			(51.6	)
		61.3			402.6			463.9			112.4			24.0			10.9			147.3			611.2			—			611.2
Commissions, brokerage and other underwriting expenses		65.3			174.1			239.4			54.8			22.0			8.0			84.8			324.2			—			324.2
Underwriting profit (loss)	$	107.9		$	(17.9	)	$	90.0		$	36.8		$	(3.7	)	$	(4.5	)	$	28.6			118.6			—			118.6
Net investment income																							109.2			1.4			110.6
Net realized capital gains																							75.1			21.7			96.8
OTTI losses																							(5.2	)		—			(5.2	)
Other income																							3.4			27.0			30.4
Other operating expenses																							21.3			32.0			53.3
Corporate administration																							—			9.6			9.6
Amortization of intangible assets																							(1.9	)		0.1			(1.8	)
Interest expense																							12.3			9.5			21.8
Earnings before income taxes																						$	269.4		$	(1.1	)	$	268.3
Ratios:
Net loss and LAE
Current year (ex-catastrophes)		42.9	%		73.1	%		64.2	%		53.3	%		59.0	%		71.5	%		55.2	%		62.0	%
Current year catastrophe losses		0.0	%		0.0	%		0.0	%		4.7	%		0.0	%		0.0	%		3.7	%		0.9	%
Prior years		–16.8	%		–1.1	%		–5.7	%		–2.9	%		–2.4	%		4.2	%		–2.4	%		–4.9	%
		26.1	%		72.0	%		58.5	%		55.1	%		56.6	%		75.7	%		56.5	%		58.0	%
Expense		27.8	%		31.2	%		30.2	%		26.8	%		52.0	%		55.5	%		32.5	%		30.8	%
Combined		53.9	%		103.2	%		88.7	%		81.9	%		108.6	%		131.2	%		89.0	%		88.8	%

PAGE 9

ALLEGHANY CORPORATION AND SUBSIDIARIES

CONSOLIDATED UNDERWRITING RESULTS - PRIOR YEAR QUARTER

For the Three Months Ended March 31, 2013

(dollars in millions)

	Reinsurance Segment									Insurance Segment
	Property			Casualty & Other			Total			RSUI			Capitol			PCC			Total			Total Segments			Corporate Activities			Consolidated
Premiums written:
Gross	$	270.1		$	637.6		$	907.7		$	285.8		$	40.2		$	9.1		$	335.1		$	1,242.8		$	(5.3	)	$	1,237.5
Net		236.7			629.3			866.0			181.2			37.8			8.9			227.9			1,093.9			—			1,093.9
Net premiums earned	$	250.1		$	603.8		$	853.9		$	175.7		$	37.3		$	8.1		$	221.1		$	1,075.0		$	—		$	1,075.0
Net loss and LAE:
Current year (ex-catastrophes)		92.8			437.7			530.5			83.3			17.1			6.8			107.2			637.7			—			637.7
Current year catastrophe losses		—			—			—			0.6			—			—			0.6			0.6			—			0.6
Prior years		(36.6	)		(22.7	)		(59.3	)		(13.5	)		1.0			0.9			(11.6	)		(70.9	)		—			(70.9	)
		56.2			415.0			471.2			70.4			18.1			7.7			96.2			567.4			—			567.4
Commissions, brokerage and other underwriting expenses		62.4			188.9			251.3			48.4			19.5			7.0			74.9			326.2			—			326.2
Underwriting profit (loss)	$	131.5		$	(0.1	)	$	131.4		$	56.9		$	(0.3	)	$	(6.6	)	$	50.0			181.4			—			181.4
Net investment income																							93.3			25.5			118.8
Net realized capital gains																							49.3			1.6			50.9
OTTI losses																							(32.3	)		—			(32.3	)
Other income																							0.7			10.5			11.2
Other operating expenses																							20.4			10.4			30.8
Corporate administration																							—			12.4			12.4
Amortization of intangible assets																							11.6			—			11.6
Interest expense																							12.4			9.4			21.8
Earnings before income taxes																						$	248.0		$	5.4		$	253.4
Ratios:
Net loss and LAE
Current year (ex-catastrophes)		37.1	%		72.5	%		62.1	%		47.5	%		45.8	%		83.5	%		48.5	%		59.3	%
Current year catastrophe losses		0.0	%		0.0	%		0.0	%		0.3	%		0.0	%		0.0	%		0.3	%		0.1	%
Prior years		–14.6	%		–3.8	%		–6.9	%		–7.7	%		2.7	%		11.1	%		–5.3	%		–6.6	%
		22.5	%		68.7	%		55.2	%		40.1	%		48.5	%		94.6	%		43.5	%		52.8	%
Expense		25.0	%		31.3	%		29.4	%		27.5	%		52.4	%		86.7	%		33.9	%		30.3	%
Combined		47.5	%		100.0	%		84.6	%		67.6	%		100.9	%		181.3	%		77.4	%		83.1	%

PAGE 10

ALLEGHANY CORPORATION & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2014		December 31, 2013
	(in thousands)
Assets
Investments:
Available-for-sale securities at fair value:
Equity securities	$	2,637,802	$	2,229,453
Debt securities		14,802,122		14,802,890
Short-term investments		926,674		1,317,895
		18,366,598		18,350,238
Other invested assets		619,674		641,924
Total investments		18,986,272		18,992,162
Cash		481,414		498,315
Reinsurance recoverables		1,354,229		1,363,707
Goodwill and intangible assets		228,892		227,031
All other assets		2,443,529		2,279,873
Total assets	$	23,494,336	$	23,361,088
Liabilities and Stockholders’ Equity
Loss and loss adjustment expenses	$	11,864,719	$	11,952,541
Unearned premiums		1,857,948		1,765,550
Senior Notes		1,790,041		1,794,407
All other liabilities		843,549		901,069
Total liabilities		16,356,257		16,413,567
Total stockholders’ equity attributable to Alleghany stockholders		7,128,056		6,923,757
Noncontrolling interest		10,023		23,764
Total stockholders’ equity		7,138,079		6,947,521
Total liabilities and stockholders’ equity	$	23,494,336	$	23,361,088

PAGE 11

ALLEGHANY CORPORATION AND SUBSIDIARIES

CONSOLIDATED TOTAL INVESTMENT PORTFOLIO

(dollars in millions)

	March 31, 2014				December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012				September 30, 2012				June 30, 2012				March 31, 2012
CARRYING VALUE
Equity securities	$	2,637.8	13.9	%	$	2,229.4	11.7	%	$	2,035.2	10.8	%	$	1,827.5	10.0	%	$	2,004.9	10.8	%	$	1,424.0	7.8	%	$	1,504.6	8.2	%	$	1,047.1	5.8	%	$	773.9	4.4	%
Debt securities		14,802.1	77.9	%		14,802.9	77.9	%		15,041.1	80.0	%		14,944.1	81.7	%		15,110.5	81.6	%		15,999.5	87.3	%		16,336.5	88.5	%		15,596.8	86.2	%		15,733.9	89.8	%
Short term investments		926.7	4.9	%		1,317.9	6.9	%		949.3	5.1	%		884.4	4.8	%		757.1	4.1	%		366.0	2.0	%		235.1	1.2	%		1,023.1	5.6	%		571.7	3.3	%
Other invested assets		619.6	3.3	%		641.9	3.5	%		771.7	4.1	%		645.9	3.5	%		643.1	3.5	%		537.4	2.9	%		383.7	2.1	%		433.9	2.4	%		434.9	2.5	%
Total	$	18,986.2	100.0	%	$	18,992.1	100.0	%	$	18,797.3	100.0	%	$	18,301.9	100.0	%	$	18,515.6	100.0	%	$	18,326.9	100.0	%	$	18,459.9	100.0	%	$	18,100.9	100.0	%	$	17,514.4	100.0	%
INVESTMENT ALLOCATION BY CARRYING VALUE
Equity securities:
Common stock	$	2,637.8	13.9	%	$	2,229.4	11.7	%	$	2,035.2	10.8	%	$	1,827.5	10.0	%	$	2,004.9	10.8	%	$	1,424.0	7.8	%	$	1,504.6	8.2	%	$	1,047.1	5.8	%	$	773.9	4.4	%
Preferred stock		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%		—	0.0	%
		2,637.8	13.9	%		2,229.4	11.7	%		2,035.2	10.8	%		1,827.5	10.0	%		2,004.9	10.8	%		1,424.0	7.8	%		1,504.6	8.2	%		1,047.1	5.8	%		773.9	4.4	%
Debt securities:
U.S. government obligations		826.0	4.3	%		955.0	5.0	%		1,000.5	5.3	%		441.9	2.4	%		522.1	2.8	%		522.9	2.9	%		486.2	2.6	%		528.6	2.9	%		545.8	3.1	%
Municipal bonds		5,610.9	29.6	%		5,590.1	29.4	%		5,974.9	31.8	%		6,364.2	34.8	%		6,321.8	34.1	%		6,304.1	34.4	%		6,563.9	35.6	%		6,602.3	36.5	%		6,774.2	38.7	%
Foreign government obligations		948.4	5.0	%		975.4	5.1	%		1,062.8	5.7	%		836.6	4.6	%		821.1	4.4	%		816.0	4.5	%		838.4	4.5	%		824.2	4.6	%		869.7	5.0	%
U.S. corporate bonds		2,392.2	12.6	%		2,312.9	12.2	%		2,173.5	11.6	%		2,691.1	14.7	%		2,842.5	15.4	%		3,515.7	19.2	%		3,516.8	19.1	%		3,040.9	16.8	%		2,944.5	16.8	%
Foreign corporate bonds		1,732.2	9.1	%		1,831.7	9.6	%		1,777.3	9.5	%		1,886.2	10.3	%		1,950.1	10.6	%		2,198.5	12.0	%		2,203.7	11.9	%		1,944.9	10.7	%		2,076.6	11.9	%
Mortgage and asset-backed securities:
Residential mortgage-backed securities (“RMBS”)		1,352.7	7.1	%		1,547.8	8.1	%		1,591.7	8.5	%		1,458.7	8.0	%		1,611.2	8.7	%		1,662.5	9.1	%		1,975.9	10.7	%		1,978.7	10.9	%		1,823.7	10.4	%
Commercial mortgage-backed securities (“CMBS”)		981.9	5.2	%		885.6	4.7	%		858.5	4.6	%		829.8	4.5	%		627.6	3.3	%		510.1	2.8	%		493.9	2.7	%		427.8	2.4	%		394.1	2.3	%
Asset-backed securities		957.8	5.0	%		704.4	3.7	%		601.9	3.2	%		435.6	2.4	%		414.1	2.1	%		469.7	2.6	%		257.7	1.4	%		249.4	1.4	%		305.3	1.7	%
		14,802.1	77.9	%		14,802.9	77.9	%		15,041.1	80.0	%		14,944.1	81.7	%		15,110.5	81.6	%		15,999.5	87.3	%		16,336.5	88.5	%		15,596.8	86.2	%		15,733.9	89.8	%
Short term investments		926.7	4.9	%		1,317.9	6.9	%		949.3	5.1	%		884.4	4.8	%		757.1	4.1	%		366.0	2.0	%		235.1	1.2	%		1,023.1	5.6	%		571.7	3.3	%
Other invested assets:
Equity method investments		88.3	0.5	%		87.4	0.6	%		219.1	1.2	%		218.2	1.2	%		213.6	1.2	%		191.9	1.0	%		195.7	1.1	%		196.6	1.1	%		201.1	1.1	%
Partnership investments		274.3	1.4	%		282.4	1.5	%		268.7	1.4	%		288.6	1.6	%		291.4	1.6	%		311.9	1.7	%		155.5	0.8	%		206.7	1.1	%		205.8	1.2	%
Other		257.0	1.4	%		272.1	1.4	%		283.9	1.5	%		139.1	0.8	%		138.1	0.7	%		33.6	0.2	%		32.5	0.2	%		30.6	0.2	%		28.0	0.2	%
		619.6	3.3	%		641.9	3.5	%		771.7	4.1	%		645.9	3.5	%		643.1	3.5	%		537.4	2.9	%		383.7	2.1	%		433.9	2.4	%		434.9	2.5	%
Total	$	18,986.2	100.0	%	$	18,992.1	100.0	%	$	18,797.3	100.0	%	$	18,301.9	100.0	%	$	18,515.6	100.0	%	$	18,326.9	100.0	%	$	18,459.9	100.0	%	$	18,100.9	100.0	%	$	17,514.4	100.0	%
RATINGS* OF DEBT SECURITIES PORTFOLIO, BY CARRYING VALUE
AAA/Aaa	$	2,550.2	17.2	%	$	2,559.2	17.3	%	$	2,613.7	17.4	%	$	2,431.4	16.3	%	$	2,359.5	15.6	%	$	2,636.4	16.5	%	$	2,551.1	15.6	%	$	2,442.5	15.7	%	$	2,526.5	16.1	%
AA/Aa		6,905.0	46.7	%		7,295.9	49.3	%		7,801.9	51.9	%		7,327.7	49.0	%		7,542.2	49.9	%		7,606.0	47.5	%		8,077.3	49.4	%		7,942.4	50.9	%		8,123.3	51.6	%
A/A		2,914.4	19.7	%		2,984.0	20.2	%		3,247.8	21.6	%		3,508.5	23.5	%		3,660.2	24.2	%		4,031.8	25.2	%		4,042.2	24.7	%		3,948.4	25.3	%		4,044.9	25.7	%
BBB/Baa		1,839.6	12.4	%		1,633.9	11.0	%		1,253.0	8.3	%		1,387.0	9.3	%		1,285.2	8.5	%		1,456.7	9.1	%		1,430.4	8.8	%		1,108.7	7.1	%		892.5	5.7	%
BB / Ba		111.7	0.8	%		56.9	0.4	%		24.3	0.2	%		55.1	0.4	%		62.0	0.4	%		59.7	0.4	%		68.3	0.4	%		33.5	0.2	%		15.3	0.1	%
B		290.4	1.9	%		132.5	0.9	%		16.3	0.1	%		81.6	0.5	%		52.8	0.3	%		55.2	0.3	%		42.4	0.3	%		4.8	0.0	%		5.1	0.0	%
CCC		112.5	0.8	%		79.5	0.5	%		46.3	0.3	%		47.9	0.3	%		49.4	0.4	%		45.8	0.3	%		43.5	0.3	%		40.6	0.3	%		40.4	0.3	%
CC		26.0	0.2	%		26.7	0.2	%		26.7	0.2	%		27.1	0.2	%		28.3	0.2	%		27.9	0.2	%		19.3	0.1	%		17.7	0.1	%		19.4	0.1	%
Below CC		12.8	0.1	%		5.0	0.0	%		4.8	0.0	%		5.1	0.0	%		5.4	0.0	%		5.3	0.0	%		15.0	0.1	%		13.3	0.1	%		13.8	0.1	%
Not rated		39.5	0.3	%		29.3	0.2	%		6.3	0.0	%		72.7	0.5	%		65.5	0.5	%		74.7	0.5	%		47.0	0.3	%		44.9	0.3	%		52.7	0.3	%
	$	14,802.1	100.0	%	$	14,802.9	100.0	%	$	15,041.1	100.0	%	$	14,944.1	100.0	%	$	15,110.5	100.0	%	$	15,999.5	100.0	%	$	16,336.5	100.0	%	$	15,596.8	100.0	%	$	15,733.9	100.0	%
Duration of debt securities portfolio		4.2 years				4.5 years				4.3 years				4.2 years				3.8 years				3.7 years				3.7 years				3.7 years				4.0 years
Average credit quality**		AA-				AA-				AA-				AA-				AA-				AA-				AA-				AA-				AA-

* The debt securities portfolio credit quality is measured using the lower of the Standard & Poor’s Ratings Services, Moody’s Investors Services Inc. or Fitch’s Ratings rating.

** The average debt securities portfolio credit quality is measured by weighting each individual security’s rating, which uses the lower of the Standard & Poor’s Ratings Services, Moody’s Investors Services Inc. or Fitch’s Ratings rating.

PAGE 12

ALLEGHANY CORPORATION & SUBSIDIARIES

DEBT SECURITIES PORTFOLIO CREDIT QUALITY*

March 31, 2014

(in millions)

	AAA / Aaa			AA / Aa			A			BBB / Baa			Below BBB / Baa or Not-Rated			Total Carrying Value
U.S. Government obligations	$	—		$	826.0		$	—		$	—		$	—		$	826.0
Municipal bonds		804.9			3,731.6			990.6			83.8			—			5,610.9
Foreign government obligations		469.9			245.1			218.2			15.2			—			948.4
U.S. corporate bonds		18.0			151.5			675.5			1,147.9			399.3			2,392.2
Foreign corporate bonds		218.8			445.7			753.4			239.0			75.3			1,732.2
Mortgage and asset-backed securities:
RMBS		32.6			1,183.3			39.0			15.8			82.0			1,352.7
CMBS		398.0			299.4			160.2			98.3			26.0			981.9
Other asset-backed securities		608.0			22.4			77.5			239.6			10.3			957.8
Total debt securities	$	2,550.2		$	6,905.0		$	2,914.4		$	1,839.6		$	592.9		$	14,802.1
Percentage of debt securities		17.2	%		46.7	%		19.7	%		12.4	%		4.0	%		100.0	%

* The debt securities portfolio credit quality is measured using the lowest of the Standard & Poor’s Ratings Services, Moody’s Investors Services Inc. or Fitch’s Ratings rating.

PAGE 13

ALLEGHANY CORPORATION AND SUBSIDIARIES

NET INVESTMENT INCOME

(in millions)

	Three Months Ended
	March 31,
	2014			2013
Interest income	$	95.3		$	83.5
Dividends		13.6			15.1
Equity in results of Pillar Capital Holdings Limited and related funds		3.9			1.6
Equity in results of Ares Management LLC		0.1			—
Equity in results of Homesite Group Incorporated (1)		—			21.4
Equity in results of ORX Exploration, Inc.		0.4			0.7
Other investment results		4.3			1.5
Total investment income		117.6			123.8
Investment expenses		(7.0	)		(5.0	)
Net investment income	$	110.6		$	118.8
Net investment income - after tax (2)	$	89.9		$	96.2

(1) Homesite Group Incorporated was sold on December 31, 2013.

(2) Reflects income tax at a 35.0 percent statutory rate, except for tax-exempt interest income and dividends subject to dividend-received deductions.

PAGE 14

ALLEGHANY CORPORATION AND SUBSIDIARIES

FINANCIAL STATEMENT PORTFOLIO RETURN

(dollars in millions)

	Three Months Ended
	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Investment income and realized gains*:
Net investment income	$	110.6		$	131.2		$	115.3		$	100.4		$	118.8		$	78.4		$	90.5		$	90.9		$	53.2
Net realized investment gains		96.8			136.5			17.8			27.0			50.9			38.0			12.4			39.5			68.0
Other than temporary impairment losses		(5.2	)		(2.1	)		(0.7	)		(8.9	)		(32.3	)		—			—			(1.1	)		(1.8	)
		202.2			265.6			132.4			118.5			137.4			116.4			102.9			129.3			119.4
Opening net unrealized gains on investment securities*:
Net unrealized gains on debt securities portfolio	$	(72.9	)	$	23.0		$	1.6		$	354.7		$	406.2		$	427.6		$	224.6		$	108.9		$	140.6
Net unrealized gains on equity securities portfolio		424.8			292.2			166.0			152.3			(12.5	)		46.8			0.8			114.7			95.3
		351.9			315.2			167.6			507.0			393.7			474.4			225.4			223.6			235.9
Closing net unrealized gains on investment securities*:
Net unrealized gains on debt securities portfolio	$	119.4		$	(72.9	)	$	23.0		$	1.6		$	354.7		$	406.2		$	427.6		$	224.6		$	108.9
Net unrealized gains on equity securities portfolio		372.8			424.8			292.2			166.0			152.3			(12.5	)		46.8			0.8			114.7
		492.2			351.9			315.2			167.6			507.0			393.7			474.4			225.4			223.6
Increase (decrease) in net unrealized gains on investment securities*:
Increase (decrease) on debt securities portfolio	$	192.3		$	(95.9	)	$	21.4		$	(353.1	)	$	(51.5	)	$	(21.4	)	$	203.0		$	115.7		$	(31.7	)
Increase (decrease) on equity securities portfolio		(52.0	)		132.6			126.2			13.7			164.8			(59.3	)		46.0			(113.9	)		19.4
		140.3			36.7			147.6			(339.4	)		113.3			(80.7	)		249.0			1.8			(12.3	)
Net investment income, realized gains and unrealized gains*	$	342.5		$	302.3		$	280.0		$	(220.9	)	$	250.7		$	35.7		$	351.9		$	131.1		$	107.1
Opening aggregate invested assets, at fair value	$	18,992.1		$	18,797.3		$	18,301.9		$	18,515.6		$	18,326.9		$	18,459.9		$	18,100.9		$	17,514.4		$	4,826.8
Closing aggregate invested assets, at fair value		18,986.2			18,992.1			18,797.3			18,301.9			18,515.6			18,326.9			18,459.9			18,100.9			17,514.4
Average invested assets	$	18,989.2		$	18,894.7		$	18,549.6		$	18,408.8		$	18,421.3		$	18,393.4		$	18,280.4		$	17,807.7		$	11,170.6
Financial statement portfolio return*		1.8	%		1.6	%		1.5	%		-1.2	%		1.4	%		0.2	%		1.9	%		0.7	%		1.0	%

* Before income tax.

PAGE 15

ALLEGHANY CORPORATION AND SUBSIDIARIES

ANNUALIZED INVESTMENT BOOK YIELD

(dollars in millions)

	Three Months Ended
	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Net investment income	$	110.6		$	131.2		$	115.3		$	100.4		$	118.8		$	78.4		$	90.5		$	90.9		$	53.2
Opening invested assets:
Debt securities portfolio, at amortized cost	$	14,875.8		$	15,018.1		$	14,942.5		$	14,755.8		$	15,593.3		$	15,908.9		$	15,372.2		$	15,625.0		$	2,538.9
Equity securities portfolio, at cost		1,804.7			1,743.0			1,661.5			1,852.6			1,436.5			1,457.8			1,046.3			659.2			775.7
Short term investments, at fair value (1)		1,317.9			949.3			884.4			757.1			366.0			235.1			1,023.1			571.7			1,096.5
Other invested assets, at carrying value (2)		641.9			771.7			645.9			643.1			537.4			383.7			433.9			434.9			179.8
		18,640.3			18,482.1			18,134.3			18,008.6			17,933.2			17,985.5			17,875.5			17,290.8			4,590.9
Ending invested assets:
Debt securities portfolio, at amortized cost	$	14,682.7		$	14,875.8		$	15,018.1		$	14,942.5		$	14,755.8		$	15,593.3		$	15,908.9		$	15,372.2		$	15,625.0
Equity securities portfolio, at cost		2,265.0			1,804.7			1,743.0			1,661.5			1,852.6			1,436.5			1,457.8			1,046.3			659.2
Short term investments, at fair value (1)		926.7			1,317.9			949.3			884.4			757.1			366.0			235.1			1,023.1			571.7
Other invested assets, at carrying value (2)		619.6			641.9			771.7			645.9			643.1			537.4			383.7			433.9			434.9
		18,494.0			18,640.3			18,482.1			18,134.3			18,008.6			17,933.2			17,985.5			17,875.5			17,290.8
Average invested assets	$	18,567.1		$	18,561.2		$	18,308.2		$	18,071.5		$	17,970.9		$	17,959.4		$	17,930.5		$	17,583.2		$	10,940.9
Investment book yield		0.6	%		0.7	%		0.6	%		0.6	%		0.7	%		0.4	%		0.5	%		0.5	%		0.5	%
Annualized investment book yield		2.4	%		2.8	%		2.5	%		2.2	%		2.6	%		1.7	%		2.0	%		2.1	%		1.9	%

(1) Fair value approximates amortized cost.

(2) Carrying value primarily reflects the equity method of accounting for certain private equity and partnerships, and to a lesser extent, fair value or cost for certain other investments.

PAGE 16

ALLEGHANY CORPORATION AND SUBSIDIARIES

LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)

(in millions)

	Three Months Ended March 31,
	2014			2013
Reserves, beginning of period	$	11,952.5		$	12,239.8
Less: reinsurance recoverables(1)		1,302.1			1,305.9
Net reserves, beginning of period		10,650.4			10,933.9
Incurred loss, net of reinsurance, related to:
Current year		662.8			638.3
Prior years		(51.6	)		(70.9	)
Total incurred loss and LAE, net of reinsurance		611.2			567.4
Paid loss, net of reinsurance, related to:
Current year		32.7			24.8
Prior years		672.7			623.5
Total paid loss and LAE, net of reinsurance		705.4			648.3
Foreign exchange effect		13.1			(71.3	)
Net reserves, end of period		10,569.3			10,781.7
Plus: reinsurance recoverables(1)		1,295.4			1,269.8
Reserves, end of period	$	11,864.7		$	12,051.5

(1) Reinsurance recoverables in this table include only ceded loss and LAE reserves.

PAGE 17

ALLEGHANY CORPORATION AND SUBSIDIARIES

CAPITAL STRUCTURE AND LEVERAGE RATIOS

(in millions)

	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Capital Structure
Senior Notes	$	1,790.0		$	1,794.4		$	1,798.7		$	1,803.0		$	1,807.3		$	1,811.5		$	1,815.7		$	1,819.8		$	1,423.9
Total stockholders’ equity attributable to Alleghany stockholders		7,128.1			6,923.8			6,716.5			6,498.4			6,625.3			6,403.8			6,581.1			6,280.1			6,183.1
Total capitalization	$	8,918.1		$	8,718.2		$	8,515.2		$	8,301.4		$	8,432.6		$	8,215.3		$	8,396.8		$	8,099.9		$	7,607.0
Leverage ratios
Debt to total capitalization		20.1	%		20.6	%		21.1	%		21.7	%		21.4	%		22.1	%		21.6	%		22.5	%		18.7	%
Closing stockholders’ equity attributable to Alleghany stockholders	$	7,128.1		$	6,923.8		$	6,716.5		$	6,498.4		$	6,625.3		$	6,403.8		$	6,581.1		$	6,280.1		$	6,183.1
Net premiums written (trailing 12 months)	$	4,327.4		$	4,287.4		$	4,309.4		$	4,318.5		$	4,383.7		$	3,723.9		$	2,874.0		$	2,021.4		$	1,042.3
Net premiums written (trailing 12 months) to stockholders’ equity		0.61			0.62			0.64			0.66			0.66			0.58			0.44			0.32			0.17
Total investments and cash	$	19,467.7		$	19,490.5		$	19,212.0		$	18,783.1		$	19,090.5		$	18,976.4		$	19,031.2		$	18,505.5		$	18,034.7
Total investments and cash to stockholders’ equity		2.73			2.82			2.86			2.89			2.88			2.96			2.89			2.95			2.92
Reserve for losses and loss expenses	$	11,864.7		$	11,952.5		$	12,030.3		$	12,029.8		$	12,051.5		$	12,239.8		$	11,830.8		$	11,720.9		$	11,870.3
Deduct: reinsurance recoverable on ceded losses		(1,295.4	)		(1,302.1	)		(1,310.5	)		(1,271.0	)		(1,269.8	)		(1,305.9	)		(1,232.3	)		(1,237.7	)		(1,256.4	)
Net reserve for losses and loss expenses		10,569.3			10,650.4			10,719.8			10,758.8			10,781.7			10,933.9			10,598.5			10,483.2			10,613.9
Net reserve for losses and loss expenses to stockholders’ equity		1.48			1.54			1.60			1.66			1.63			1.71			1.61			1.67			1.72

PAGE 18

ALLEGHANY CORPORATION AND SUBSIDIARIES

SHARE REPURCHASE DETAIL

Period	Total Number of Shares Repurchased		Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs*		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions)*
January 1 to January 31, 2014		18,592	$	376.43		18,592	$	234.9
February 1 to February 28, 2014		61,527		373.79		61,527		211.9
March 1 to March 31, 2014		162,489		397.84		162,489		147.3
Total		242,608		390.10		242,608
Quarter ended March 31, 2013		89,751	$	351.82		89,751	$	250.7
Quarter ended June 30, 2013		23,409		376.49		23,409		241.9
Quarter ended September 30, 2013		—		—		—		241.9
Quarter ended December 31, 2013		—		—		—		241.9
Total		113,160		356.92		113,160		241.9

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

PAGE 19

ALLEGHANY CORPORATION AND SUBSIDIARIES

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION - CONSECUTIVE QUARTERS

(in millions, except share and per share data)

	Three Months Ended
	March 31, 2014		December 31, 2013		September 30, 2013		June 30, 2013		March 31, 2013		December 31, 2012			September 30, 2012		June 30, 2012		March 31, 2012
Net earnings attributable to Alleghany stockholders	$	204.9	$	205.3	$	113.2	$	113.7	$	196.3	$	(92.6	)	$	125.4	$	109.3	$	560.1
Effect of dilutive securities		—		—		—		—		—		—			—		0.1		0.2
Income available to common stockholders for diluted earnings per share	$	204.9	$	205.3	$	113.2	$	113.7	$	196.3	$	(92.6	)	$	125.4	$	109.4	$	560.3
Weighted average common shares outstanding applicable to basic earnings per share		16,683,864		16,766,192		16,766,192		16,781,461		16,822,056		16,925,994			16,931,811		16,930,548		10,945,269
Effect of dilutive securities		—		—		—		—		—		—			—		19,789		28,160
Adjusted weighted average common shares outstanding applicable to diluted earnings per share		16,683,864		16,766,192		16,766,192		16,781,461		16,822,056		16,925,994			16,931,811		16,950,337		10,973,429
Basic earnings per share attributable to Alleghany stockholders	$	12.28	$	12.24	$	6.75	$	6.78	$	11.67	$	(5.47	)	$	7.41	$	6.46	$	51.17
Diluted earnings per share attributable to Alleghany stockholders		12.28		12.24		6.75		6.78		11.67		(5.47	)		7.41		6.45		51.06

PAGE 20

ALLEGHANY CORPORATION AND SUBSIDIARIES

RETURN ON AVERAGE STOCKHOLDERS’ EQUITY - CONSECUTIVE QUARTERS

(in millions)

	Three Months Ended
	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Opening stockholders’ equity attributable to Alleghany stockholders	$	6,923.8		$	6,716.5		$	6,498.4		$	6,625.3		$	6,403.8		$	6,581.1		$	6,280.1		$	6,183.1		$	2,925.7
Closing stockholders’ equity attributable to Alleghany stockholders		7,128.1			6,923.8			6,716.5			6,498.4			6,625.3			6,403.8			6,581.1			6,280.1			6,183.1
Average stockholders’ equity	$	7,025.9		$	6,820.1		$	6,607.5		$	6,561.9		$	6,514.6		$	6,492.5		$	6,430.6		$	6,231.6		$	4,554.4
Net earnings attributable to Alleghany stockholders	$	204.9		$	205.3		$	113.2		$	113.7		$	196.3		$	(92.6	)	$	125.4		$	109.3		$	560.1
Return on average stockholders’ equity		2.9	%		3.0	%		1.7	%		1.7	%		3.0	%		–1.4	%		2.0	%		1.8	%		12.3	%
Annualized return on average stockholders’ equity		11.7	%		12.0	%		6.9	%		6.9	%		12.1	%		–5.7	%		7.8	%		7.0	%		49.2	%

PAGE 21

ALLEGHANY CORPORATION AND SUBSIDIARIES

BOOK VALUE PER SHARE

(in millions, except share and per share data)

	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012			March 31, 2012
Total stockholders’ equity attributable to Alleghany stockholders	$	7,128.1		$	6,923.8		$	6,716.5		$	6,498.4		$	6,625.3		$	6,403.8		$	6,581.1		$	6,280.1		$	6,183.1
Shares outstanding		16,535,591			16,766,192			16,766,192			16,766,192			16,785,308			16,890,623			16,932,328			16,930,793			16,928,664
Book value per share	$	431.07		$	412.96		$	400.60		$	387.59		$	394.71		$	379.13		$	388.67		$	370.93		$	365.24
Quarter-over-Quarter growth		4.4	%		3.1	%		3.4	%		–1.8	%		4.1	%		–2.5	%		4.8	%		1.6	%		6.8	%

PAGE 22

ALLEGHANY CORPORATION AND SUBSIDIARIES

CATASTROPHE EXPOSURE

The business of our reinsurance and insurance subsidiaries exposes them to losses from various catastrophe events. In a catastrophe event, losses from many insureds across multiple lines of business may result directly or indirectly from such single occurrence. Our reinsurance and insurance subsidiaries take certain measures to mitigate the impact of catastrophe events through various means including considering catastrophe risks in their underwriting and pricing decisions, purchasing reinsurance, monitoring and modeling accumulated exposures, and managing exposure in key geographic zones and product lines that are prone to catastrophic events.

Natural disasters such as hurricanes, other windstorms, earthquakes and other catastrophes have the potential to materially and adversely affect our operating results. Other risks, such as an outbreak of a pandemic disease, a major terrorist event, the bankruptcy of a major company or a marine and/or aviation disaster, could also have a material adverse effect on our business and operating results.

We evaluate catastrophic events and assess the probability of occurrence and magnitude through the use of industry recognized models and other techniques. We supplement these models by judgmentally interpreting and adjusting when appropriate the modeled output and by periodically monitoring the exposure risks of our operations. There is no single standard methodology to project possible losses from catastrophe exposures. Further, there are no industry standard assumptions used in projecting these losses, and the form and quality of the data obtained, including data obtained from insureds and ceding companies, and used in these models are not uniformly compatible with the data requirements of all models. Therefore, the use of different methodologies and assumptions could materially change the projected losses. Finally, these modeled losses may not be comparable with estimates made by other companies.

Although the analytical tools used to estimate catastrophe exposure are useful in both pricing and monitoring catastrophe risk, the estimates derived by use of these techniques are inherently uncertain and do not reflect our maximum exposures to these events. Although the models are frequently updated, these projections are nevertheless inherently imprecise. It is highly likely that our losses will vary, perhaps materially, from these estimates.

Projections of potential catastrophe losses are typically expressed in terms of the probable maximum loss, or “PML.” We define PML as our anticipated maximum loss (taking into account contract limits) caused by a single catastrophic event at a specified estimated return period affecting a broad contiguous area. These modeled losses are estimated based upon contracts in force at January 1, 2014 for TransRe and December 1, 2013 for RSUI.

The following is an overview of such modeled PMLs from property, engineering, marine and energy exposures and the associated natural perils that we deem most significant. The estimated amount of these modeled losses are presented for both a 100 year return period (having a likelihood of being exceeded in any single year of 1.0 percent), and a 250 year return period (having a likelihood of being exceeded in any single year of 0.4 percent), and are presented in two ways: (i) gross catastrophe losses; and (ii) after-tax net catastrophe costs such as gross losses, net of reinsurance, net reinstatement premiums and taxes. The reduction for reinsurance assumes that all reinsurers fulfill their obligations in accordance with contract terms.

	100 Year Return Period				250 Year Return Period
	Gross Loss		Net Loss		Gross Loss		Net Loss
	(before tax)		(after tax)		(before tax)		(after tax)
	(in billions)
Florida, Wind	$	1.2	$	0.5	$	1.8	$	0.8
California, Earthquake		1.0		0.4		1.6		0.6
Northeast U.S., Wind		0.7		0.4		1.5		0.7
Gulf Coast, Wind		0.9		0.3		1.5		0.6
Europe, Wind		0.6		0.3		0.8		0.4
Japan, Earthquake		0.5		0.2		0.7		0.3
Japan, Wind		0.5		0.2		0.5		0.2

“Florida, Wind” has the highest modeled after-tax net catastrophe costs for both a 100 year and 250 year return periods. These costs would represent approximately 7 percent and 11 percent, respectively, of stockholders’ equity as of March 31, 2014. If multiple severe catastrophic events occur in any one year, or a single catastrophic event affects more than one geographic area, the potential economic cost to us could be materially higher than any one of the amounts shown above.

There is much uncertainty and imprecision in the compilation of these estimates at many stages in the process. Moreover, the makeup of our in-force business is constantly changing as new business is added and existing contracts terminate or expire, including contracts for reinsurance coverage purchased by us. In addition, these estimates take into account what we believe to be the most likely accumulation of territories, but there can be no assurance that we have captured every possible scenario in our analysis. As a result of these factors, among others, there can be no assurance that we will not experience after-tax net catastrophe costs from individual events that will exceed these estimates by a material amount. There also can be no assurance that we will not experience catastrophe events more frequently than the modeled probabilities would suggest. In any given year, catastrophe events could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

PAGE 23

ALLEGHANY CORPORATION AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

Throughout this Financial Supplement, Alleghany’s results of operations are presented in the way that Alleghany believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use financial information in evaluating Alleghany’s performance. This Financial Supplement includes various “non-GAAP financial measures” under U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for measures of operating performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). When such measures are disclosed, reconciliations to the most comparable GAAP measure are provided.

UNDERWRITING PROFIT

Underwriting profit 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. Alleghany consistently uses underwriting profit as a supplement to earnings before income taxes, the most comparable GAAP financial measure, to evaluate the performance of its segments and believes that underwriting profit provides useful additional information to investors because it highlights net earnings attributable to a segment’s underwriting performance. Earnings before income taxes may show a profit despite an underlying underwriting loss, and when underwriting losses persist over extended periods, a reinsurance or an insurance company’s ability to continue as an ongoing concern may be at risk. A reconciliation of underwriting profit to earnings before income taxes is presented within “Consolidated Underwriting Results” on pages 9 to 10 of the Financial Supplement.

OPERATING INCOME (AND OPERATING INCOME PER SHARE)

Operating income and operating income per share exclude on an after-tax basis: net realized capital gains; and other than temporary impairment losses, all as determined in accordance with GAAP. Alleghany uses operating income and operating income per share as a supplement to net earnings attributable to Alleghany stockholders and earnings per share, respectively, the most comparable GAAP financial measures, to provide useful additional information to investors by highlighting net earnings and earnings per share attributable to its performance exclusive of realized investment gains or losses and impairments. A reconciliation of operating income and operating income per share to net earnings attributable to Alleghany stockholders and earnings per share, respectively, is presented within “Operating Income Reconciliation” on page 25 of the Financial Supplement.

ANNUALIZED INVESTMENT BOOK YIELD

Annualized investment book yield is calculated by dividing net investment income by average aggregate invested assets at book value. In calculating annualized investment book yield, net investment income for the period, determined in accordance with GAAP, is multiplied by the number of such periods in a calendar year in order to arrive at annualized net investment income. Alleghany utilizes and presents annualized investment book yield in order to better disclose the performance of its investments.

PAGE 24

ALLEGHANY CORPORATION AND SUBSIDIARIES

OPERATING INCOME RECONCILIATION

(in millions, except share and per share amounts)

	Three Months Ended March 31,
	March 31, 2014			December 31, 2013			September 30, 2013			June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012		June 30, 2012			March 31, 2012
Net earnings attributable to Alleghany stockholders	$	204.9		$	205.3		$	113.2		$	113.7		$	196.3		$	(92.6	)	$	125.4	$	109.3		$	560.1
Adjustments to net earnings (after tax):
Net realized investment gains		62.9			88.7			11.6			17.6			33.1			24.7			8.1		25.6			44.2
Other than temporary impairment charges		(3.4	)		(1.3	)		(0.5	)		(5.8	)		(21.0	)		—			—		(0.7	)		(1.2	)
		59.5			87.4			11.1			11.8			12.1			24.7			8.1		24.9			43.0
Operating income	$	145.4		$	117.9		$	102.1		$	101.9		$	184.2		$	(117.3	)	$	117.3	$	84.4		$	517.1
Weighted average common shares outstanding:
Basic		16,683,864			16,766,192			16,766,192			16,781,461			16,822,056			16,925,994			16,931,811		16,930,548			10,945,269
Diluted		16,683,864			16,766,192			16,766,192			16,781,461			16,822,056			16,925,994			16,931,811		16,950,337			10,973,429
Earnings per share attributable to Alleghany stockholders:
Basic	$	12.28		$	12.24		$	6.75		$	6.78		$	11.67		$	(5.47	)	$	7.41	$	6.46		$	51.17
Diluted		12.28			12.24			6.75			6.78			11.67			(5.47	)		7.41		6.45			51.06
Operating earnings per share data:
Basic	$	8.71		$	7.03		$	6.09		$	6.07		$	10.95		$	(6.93	)	$	6.93	$	4.99		$	47.24
Diluted		8.71			7.03			6.09			6.07			10.95			(6.93	)		6.93		4.98			47.13

PAGE 25