Segment results for Alleghany’s two reportable segments and for corporate activities for the three and six months ended June 30, 2014 and 2013 are shown in the tables below:


	Reinsurance Segment						Insurance Segment
Three Months Ended June 30, 2014	Property		Casualty & Other⁽¹⁾		Total		RSUI		Cap Specialty			Pacific Comp⁽²⁾			Total		Total Segments			Corporate Activities⁽³⁾			Consolidated
	(in millions)
Gross premiums written	$	310.3	$	636.8	$	947.1	$	377.4	$	56.9		$	15.7		$	450.0	$	1,397.1		$	(5.1	)	$	1,392.0
Net premiums written		271.3		618.7		890.0		252.4		51.5			15.5			319.4		1,209.4			—			1,209.4
Net premiums earned		258.7		573.2		831.9		205.6		45.8			15.6			267.0		1,098.9			—			1,098.9
Net loss and LAE		121.8		360.9		482.7		105.0		29.7			11.8			146.5		629.2			—			629.2
Commissions, brokerage and other underwriting expenses		80.8		193.6		274.4		54.6		23.1			7.5			85.2		359.6			—			359.6

Underwriting profit (loss)⁽⁴⁾	$	56.1	$	18.7	$	74.8	$	46.0	$	(7.0	)	$	(3.7	)	$	35.3		110.1			—			110.1

Net investment income																		112.4			1.7			114.1
Net realized capital gains																		41.8			(0.3	)		41.5
Other than temporary impairment losses																		(0.9	)		—			(0.9	)
Other income																		(1.5	)		39.1			37.6
Other operating expenses																		23.9			42.4			66.3
Corporate administration																		0.1			12.6			12.7
Amortization of intangible assets																		(0.9	)		—			(0.9	)
Interest expense																		12.2			9.7			21.9

Earnings (losses) before income taxes																	$	226.6		$	(24.2	)	$	202.4


	Reinsurance Segment							Insurance Segment
Three Months Ended June 30, 2013	Property		Casualty & Other⁽¹⁾			Total		RSUI		Cap Specialty			Pacific Comp⁽²⁾			Total		Total Segments			Corporate Activities⁽³⁾			Consolidated
	(in millions)
Gross premiums written	$	314.5	$	581.8		$	896.3	$	395.4	$	45.5		$	9.4		$	450.3	$	1,346.6		$	(6.1	)	$	1,340.5
Net premiums written		271.0		572.3			843.3		263.7		42.3			9.2			315.2		1,158.5			—			1,158.5
Net premiums earned		251.8		582.8			834.6		187.5		37.2			9.0			233.7		1,068.3			—			1,068.3
Net loss and LAE		98.3		416.8			515.1		110.1		17.7			7.6			135.4		650.5			—			650.5
Commissions, brokerage and other underwriting expenses		76.0		183.0			259.0		51.4		21.3			7.3			80.0		339.0			—			339.0

Underwriting profit (loss)⁽⁴⁾	$	77.5	$	(17.0	)	$	60.5	$	26.0	$	(1.8	)	$	(5.9	)	$	18.3		78.8			—			78.8

Net investment income																			96.1			4.3			100.4
Net realized capital gains																			29.5			(2.5	)		27.0
Other than temporary impairment losses																			(8.9	)		—			(8.9	)
Other income																			1.1			8.3			9.4
Other operating expenses																			17.5			9.7			27.2
Corporate administration																			—			9.9			9.9
Amortization of intangible assets																			0.8			—			0.8
Interest expense																			12.4			9.4			21.8

Earnings (losses) before income taxes																		$	165.9		$	(18.9	)	$	147.0


	Reinsurance Segment						Insurance Segment
Six Months Ended June 30, 2014	Property		Casualty & Other⁽¹⁾		Total		RSUI		Cap Specialty			Pacific Comp⁽²⁾			Total		Total Segments			Corporate Activities⁽³⁾			Consolidated
	(in millions)
Gross premiums written	$	608.9	$	1,279.5	$	1,888.4	$	679.7	$	106.0		$	31.5		$	817.2	$	2,705.6		$	(12.5	)	$	2,693.1
Net premiums written		521.9		1,247.9		1,769.8		447.8		94.8			31.0			573.6		2,343.4			—			2,343.4
Net premiums earned		493.2		1,132.0		1,625.2		409.6		88.1			30.0			527.7		2,152.9			—			2,152.9
Net loss and LAE		183.1		763.5		946.6		217.5		53.6			22.7			293.8		1,240.4			—			1,240.4
Commissions, brokerage and other underwriting expenses		146.1		367.8		513.9		109.3		45.1			15.5			169.9		683.8			—			683.8

Underwriting profit (loss)⁽⁴⁾	$	164.0	$	0.7	$	164.7	$	82.8	$	(10.6	)	$	(8.2	)	$	64.0		228.7			—			228.7

Net investment income																		221.6			3.1			224.7
Net realized capital gains																		116.9			21.5			138.4
Other than temporary impairment losses																		(6.2	)		—			(6.2	)
Other income																		1.9			66.1			68.0
Other operating expenses																		45.2			74.4			119.6
Corporate administration																		0.2			22.1			22.3
Amortization of intangible assets																		(3.0	)		0.3			(2.7	)
Interest expense																		24.5			19.2			43.7

Earnings (losses) before income taxes																	$	496.0		$	(25.3	)	$	470.7


	Reinsurance Segment							Insurance Segment
Six Months Ended June 30, 2013	Property		Casualty & Other⁽¹⁾			Total		RSUI		Cap Specialty			Pacific Comp⁽²⁾			Total		Total Segments			Corporate Activities⁽³⁾			Consolidated
	(in millions)
Gross premiums written	$	584.6	$	1,219.4		$	1,804.0	$	681.2	$	85.6		$	18.6		$	785.4	$	2,589.4		$	(11.3	)	$	2,578.1
Net premiums written		507.7		1,201.6			1,709.3		445.0		80.1			18.1			543.2		2,252.5			—			2,252.5
Net premiums earned		502.0		1,186.6			1,688.6		363.1		74.5			17.1			454.7		2,143.3			—			2,143.3
Net loss and LAE		154.6		831.8			986.4		180.6		35.7			15.2			231.5		1,217.9			—			1,217.9
Commissions, brokerage and other underwriting expenses		138.4		371.9			510.3		99.7		40.9			14.3			154.9		665.2			—			665.2

Underwriting profit (loss)⁽⁴⁾	$	209.0	$	(17.1	)	$	191.9	$	82.8	$	(2.1	)	$	(12.4	)	$	68.3		260.2			—			260.2

Net investment income																			189.4			29.8			219.2
Net realized capital gains																			78.8			(0.9	)		77.9
Other than temporary impairment losses																			(41.2	)		—			(41.2	)
Other income																			1.7			18.8			20.5
Other operating expenses																			37.9			20.1			58.0
Corporate administration																			—			22.3			22.3
Amortization of intangible assets																			12.4			—			12.4
Interest expense																			24.7			18.8			43.5

Earnings (losses) before income taxes																		$	413.9		$	(13.5	)	$	400.4

(1)	Primarily consists of the following assumed reinsurance lines of business: directors’ and officers’ liability; errors and omissions liability; general liability; medical malpractice; ocean marine and aviation; auto liability; accident and health; surety; and credit.

(2)	Includes underwriting results of AIHL Re.

(3)	Includes elimination of minor reinsurance activity between segments.

(4)

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, corporate administration, 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 an 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.