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


	Reinsurance Segment						Insurance Segment
Three Months Ended September 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	$	324.8	$	597.9	$	922.7	$	282.0	$	52.8		$	19.4		$	354.2	$	1,276.9		$	(7.6	)	$	1,269.3
Net premiums written		286.1		580.6		866.7		193.4		48.2			19.2			260.8		1,127.5			—			1,127.5

Net premiums earned		278.2		581.0		859.2		210.9		48.0			18.1			277.0		1,136.2			—			1,136.2
Net loss and LAE		113.4		361.0		474.4		106.9		25.8			16.0			148.7		623.1			—			623.1
Commissions, brokerage and other underwriting expenses		87.5		197.1		284.6		56.5		23.0			8.2			87.7		372.3			—			372.3

Underwriting profit (loss)⁽⁴⁾	$	77.3	$	22.9	$	100.2	$	47.5	$	(0.8	)	$	(6.1	)	$	40.6		140.8			—			140.8

Net investment income																		113.0			5.3			118.3
Net realized capital gains																		56.3			3.1			59.4
Other than temporary impairment losses																		(0.7	)		—			(0.7	)
Other income																		0.9			37.9			38.8
Other operating expenses																		18.4			41.2			59.6
Corporate administration																		0.1			9.4			9.5
Amortization of intangible assets																		(1.2	)		0.1			(1.1	)
Interest expense																		12.2			10.5			22.7

Earnings (losses) before income taxes																	$	280.8		$	(14.9	)	$	265.9


	Reinsurance Segment							Insurance Segment
Three Months Ended September 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	$	288.7	$	550.1		$	838.8	$	281.0	$	49.0		$	11.5		$	341.5	$	1,180.3		$	(6.2	)	$	1,174.1
Net premiums written		248.6		541.5			790.1		185.9		46.3			11.1			243.3		1,033.4			—			1,033.4

Net premiums earned		246.1		546.7			792.8		197.2		39.9			10.0			247.1		1,039.9			—			1,039.9
Net loss and LAE		77.8		409.1			486.9		121.6		21.5			14.5			157.6		644.5			—			644.5
Commissions, brokerage and other underwriting expenses		82.3		167.6			249.9		55.4		20.0			8.3			83.7		333.6			—			333.6

Underwriting profit (loss)⁽⁴⁾	$	86.0	$	(30.0	)	$	56.0	$	20.2	$	(1.6	)	$	(12.8	)	$	5.8		61.8			—			61.8

Net investment income																			106.1			9.2			115.3
Net realized capital gains																			30.8			(13.0	)		17.8
Other than temporary impairment losses																			(0.7	)		—			(0.7	)
Other income																			2.1			15.1			17.2
Other operating expenses																			19.0			20.0			39.0
Corporate administration																			—			3.7			3.7
Amortization of intangible assets																			(0.8	)		—			(0.8	)
Interest expense																			12.4			9.1			21.5

Earnings (losses) before income taxes																		$	169.5		$	(21.5	)	$	148.0


	Reinsurance Segment						Insurance Segment
Nine Months Ended September 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	$	933.7	$	1,877.4	$	2,811.1	$	961.7	$	158.8		$	50.9		$	1,171.4	$	3,982.5		$	(20.1	)	$	3,962.4
Net premiums written		808.0		1,828.5		2,636.5		641.3		143.0			50.2			834.5		3,471.0			—			3,471.0

Net premiums earned		771.4		1,713.1		2,484.5		620.5		136.1			48.1			804.7		3,289.2			—			3,289.2
Net loss and LAE		296.5		1,124.5		1,421.0		324.4		79.5			38.7			442.6		1,863.6			—			1,863.6
Commissions, brokerage and other underwriting expenses		233.6		564.9		798.5		165.8		68.1			23.7			257.6		1,056.1			—			1,056.1

Underwriting profit (loss)⁽⁴⁾	$	241.3	$	23.7	$	265.0	$	130.3	$	(11.5	)	$	(14.3	)	$	104.5		369.5			—			369.5

Net investment income																		334.7			8.3			343.0
Net realized capital gains																		173.2			24.5			197.7
Other than temporary impairment losses																		(6.9	)		—			(6.9	)
Other income																		2.8			104.0			106.8
Other operating expenses																		63.6			115.6			179.2
Corporate administration																		0.4			31.4			31.8
Amortization of intangible assets																		(4.2	)		0.3			(3.9	)
Interest expense																		36.7			29.7			66.4

Earnings (losses) before income taxes																	$	776.8		$	(40.2	)	$	736.6


	Reinsurance Segment							Insurance Segment
Nine Months Ended September 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	$	873.3	$	1,769.6		$	2,642.9	$	962.1	$	134.6		$	30.0		$	1,126.7	$	3,769.6		$	(17.5	)	$	3,752.1
Net premiums written		756.3		1,743.1			2,499.4		630.8		126.4			29.3			786.5		3,285.9			—			3,285.9

Net premiums earned		748.1		1,733.3			2,481.4		560.3		114.4			27.1			701.8		3,183.2			—			3,183.2
Net loss and LAE		232.4		1,240.9			1,473.3		302.2		57.2			29.7			389.1		1,862.4			—			1,862.4
Commissions, brokerage and other underwriting expenses		220.7		539.5			760.2		155.1		60.9			22.6			238.6		998.8			—			998.8

Underwriting profit (loss)⁽⁴⁾	$	295.0	$	(47.1	)	$	247.9	$	103.0	$	(3.7	)	$	(25.2	)	$	74.1		322.0			—			322.0

Net investment income																			295.5			39.0			334.5
Net realized capital gains																			109.5			(13.9	)		95.6
Other than temporary impairment losses																			(41.9	)		—			(41.9	)
Other income																			3.9			33.9			37.8
Other operating expenses																			57.0			40.0			97.0
Corporate administration																			—			26.0			26.0
Amortization of intangible assets																			11.6			—			11.6
Interest expense																			37.1			27.9			65.0

Earnings (losses) before income taxes																		$	583.3		$	(34.9	)	$	548.4

(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.