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):      August 4, 2015

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 August 4, 2015, Alleghany Corporation (“Alleghany”) issued a press release on the subject of its financial results for the quarter ended June 30, 2015. A copy of such release is furnished herewith as Exhibit 99.1. 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 2015 Second Quarter Earnings Release, dated August 4, 2015

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:  August 4, 2015	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	2015 Second Quarter Earnings Release, dated August 4, 2015

4

EX-99.1

Exhibit 99.1

ALLEGHANY CORPORATION

7 Times Square Tower, 17^th Floor

New York, NY 10036

ALLEGHANY CORPORATION REPORTS 2015 SECOND QUARTER RESULTS

NEW YORK, NY, August 4, 2015 – Alleghany Corporation (NYSE-Y) announced today its financial results for the three and six months ended June 30, 2015. Book value per common share¹ grew to $478.35 as of June 30, 2015, an increase of 2.8% from book value per common share as of December 31, 2014, and an increase of 0.3% from book value per common share as of March 31, 2015. Alleghany reported net earnings² of $182.5 million, or $11.40 per diluted share for the 2015 second quarter, compared with $149.0 million, or $9.06 per diluted share for the 2014 second quarter. For the first six months of 2015, Alleghany reported net earnings² of $307.7 million, or $19.22 per diluted share, compared with $353.9 million, or $21.36 per diluted share for the first six months of 2014. Operating earnings per diluted share were $8.19 in the 2015 second quarter, compared with $7.46 for the 2014 second quarter. Operating earnings per diluted share were $16.39 in the first six months of 2015, compared with $16.17 for the first six months of 2014.

Weston Hicks, President and chief executive officer of Alleghany stated, “Strong underwriting results at TransRe and RSUI led to solid operating performance for Alleghany in the second quarter. Book value per common share was up 0.3% in the second quarter despite a rise in interest rates, as the strong underwriting results offset an interest rate driven drop in the market value of Alleghany’s fixed income portfolio. Both RSUI and TransRe remained disciplined in their underwriting in a price competitive market rather than sacrifice profitability for top-line growth. In addition, modest catastrophe losses in the quarter and continued favorable prior year loss reserve development led to an improved combined ratio of 89.3% in the current quarter compared with 90.0% in the second quarter of 2014.”

Mr. Hicks continued, “CapSpecialty and PacificComp continue to make progress in their organizations, and both companies are successfully expanding their niche product offerings. PacificComp saw its combined ratio improve to 116.3%, compared with 123.7% for the 2014 second quarter due to a lower expense ratio. CapSpecialty’s expense ratio improved in the quarter but its results were impacted by unfavorable prior accident year development on loss reserves and higher surety losses in the current accident year.”

The following table summarizes the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,				Percent		Six Months Ended June 30,				Percent
	2015		2014		Change		2015		2014		Change
	(in millions)						(in millions)
Net premiums written	$	1,146.0	$	1,209.4		(5.2%)	$	2,237.1	$	2,343.4		(4.5%)
Earnings before income taxes		245.1		202.4		21.1%		410.6		470.7		(12.8%)
Underwriting profit		115.3		110.1		4.7%		242.0		228.7		5.8%
Net investment income		103.1		114.1		(9.6%)		216.5		224.7		(3.6%)
Net earnings attributable to Alleghany stockholders		182.5		149.0		22.5%		307.7		353.9		(13.1%)

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

² Earnings attributable to Alleghany stockholders.

SEGMENT RESULTS

The following table summarizes the segment results for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended June 30,						Percent			Six Months Ended June 30,						Percent
	2015			2014			Change			2015			2014			Change
	(in millions)									(in millions)
Net premiums written:
Reinsurance Segment		$	830.6		$	890.0		(6.7	%)		$	1,659.3		$	1,769.8		(6.2	%)
Insurance Segment			315.4			319.4		(1.3	%)			577.8			573.6		0.7	%
		$	1,146.0		$	1,209.4		(5.2	%)		$	2,237.1		$	2,343.4		(4.5	%)
Underwriting profit:
Reinsurance Segment		$	93.0		$	74.8		24.3	%		$	176.8		$	164.7		7.3	%
Insurance Segment			22.3			35.3		(36.8	%)			65.2			64.0		1.9	%
		$	115.3		$	110.1		4.7	%		$	242.0		$	228.7		5.8	%

Reinsurance Segment

The decrease in TransRe’s net premiums written in the second quarter and first six months of 2015 from the corresponding 2014 periods primarily reflects the impact of changes in foreign exchange rates and, to a lesser extent, higher ceded premium written due to an increase in reinsurance coverage purchased by TransRe in 2015.

TransRe’s 2015 second quarter combined ratio was 88.3%, compared with a 91.0% combined ratio for the 2014 second quarter, and TransRe’s combined ratio was 88.6% for the first six months of 2015, compared with an 89.9% combined ratio for the first six months of 2014. TransRe’s lower combined ratio and higher underwriting profit for the second quarter and first six months of 2015 primarily reflect a lack of catastrophe losses in the first six months of 2015 compared with the first six months of 2014.

Insurance Segment

The decrease in insurance segment net premiums written in the second quarter and modest increase in the first six months of 2015 from the corresponding 2014 periods primarily reflects declines at RSUI being offset by continued strong growth at PacificComp and CapSpecialty. For the second quarter and first six months of 2015, PacificComp’s net premiums written increased by 53.5% and 45.2%, respectively, CapSpecialty’s net premiums written increased by 12.4% and 14.5%, respectively, and RSUI’s net premiums written decreased by 7.4% and 5.2%, respectively.

The insurance segment’s combined ratio was 91.9% for the 2015 second quarter, compared with an 86.8% combined ratio for the 2014 second quarter, and 88.0% for the first six months of 2015 compared with 87.9% for the first six months of 2014. The higher combined ratio and lower underwriting profit for the second quarter of 2015 primarily reflect the impact of higher current year losses, primarily at RSUI, and less favorable prior year loss reserve development overall, partially offset by lower catastrophe losses. The slightly lower combined ratio and higher underwriting profit for the first six months of 2015 primarily reflect lower catastrophe losses, largely offset by the impact of higher current year losses and less favorable prior year loss reserve development overall.

INVESTMENT PERFORMANCE

Alleghany reported net investment income for the second quarter and first six months of 2015 of $103.1 million and $216.5 million, respectively, a decrease of 9.6% and 3.6% from the corresponding 2014 periods. The decreases in net investment income in the second quarter of 2015 and first six months of 2015 from the corresponding 2014 periods primarily reflect lower dividend income due to equity portfolio reallocation during the quarter and lower interest income from lower reinvestment rates and, to a lesser extent, the impact of changes in foreign exchange rates. Financial statement total return on investments was (0.3) % in the 2015 second quarter, compared with +2.3% for the 2014 second quarter.

After-tax net unrealized gains on investment securities decreased by $160.6 million and $93.1 million for the second quarter and first six months of 2015, respectively, reflecting a decrease in unrealized appreciation on Alleghany’s fixed income portfolio due to a modest increase in longer-term interest rates that occurred in the first half of 2015.

OTHER FINANCIAL INFORMATION

During the first six months of 2015, Alleghany repurchased an aggregate of 88,183 shares of its common stock in the open market for $40.5 million, at an average price per share of $459.80, of which 29,233 shares of its common stock were purchased in the 2015 second quarter for $13.9 million, at an average price per share of $475.97. As of June 30, 2015, Alleghany had 15,975,165 shares of its common stock outstanding, compared with 16,054,323 shares of its common stock outstanding as of December 31, 2014 and 16,380,336 shares as of June 30, 2014.

Additional Information

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.

Additional information regarding Alleghany’s 2015 second quarter and first six months 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 June 30, 2015 (the “Form 10-Q”), to be filed with the U.S. Securities and Exchange Commission (the “SEC”) on or about the date hereof. The Form 10-Q and the financial supplement will be available on Alleghany’s website at www.alleghany.com. The Form 10-Q will also be available 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; CapSpecialty, Inc. (referred to herein as “CapSpecialty”), an underwriter of 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 and operating earnings per diluted share, which are “non-GAAP financial measures,” as such term is defined in Regulation G promulgated by the SEC.

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

Underwriting profit 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 below.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Earnings before income taxes		$	245.1		$	202.4		$	410.6		$	470.7
Adjustments to earnings before income taxes:
Net investment income			103.1			114.1			216.5			224.7
Net realized capital gains			86.2			41.5			129.3			138.4
Other than temporary impairment charges			(7.3)			(0.9)			(59.6)			(6.2)
Other income			43.8			37.6			79.9			68.0
Other operating expenses			(63.8)			(66.3)			(131.2)			(119.6)
Corporate administration			(9.8)			(12.7)			(22.5)			(22.3)
Amortization of intangible assets			1.0			0.9			2.7			2.7
Interest expense			(23.4)			(21.9)			(46.5)			(43.7)
			129.8			92.3			168.6			242.0
Underwriting profit		$	115.3		$	110.1		$	242.0		$	228.7

Operating earnings per diluted share represents earnings per diluted share excluding (on an after-tax basis): net realized capital gains; and other than temporary impairment losses, all as determined in accordance with U.S. GAAP. Alleghany uses operating earnings per diluted share as a supplement to diluted earnings per share, the most comparable U.S. GAAP financial measure, to provide useful additional information to investors by highlighting earnings per diluted share attributable to its performance exclusive of realized capital gains or losses and impairments. A reconciliation of operating earnings per diluted share to diluted earnings per share is presented below.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(dollars in millions)
Net earnings attributable to Alleghany stockholders		$    182.5		$    149.0		$    307.7		$    353.9
Adjustments to net earnings (after tax):
Net realized capital gains		56.0		27.0		84.0		89.9
Other than temporary impairment charges		(4.7)		(0.6)		(38.7)		(4.0)
		51.3		26.4		45.3		85.9
Operating income		$    131.2		$    122.6		$    262.4		$    268.0
Weighted average diluted common shares outstanding		16,003,023		16,442,566		16,004,596		16,567,155
Diluted earnings per share		$    11.40		$      9.06		$    19.22		$    21.36
Diluted operating earnings per share		$      8.19		$      7.46		$    16.39		$    16.17

#  #  #

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” 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.

For more information, please contact:

Kerry Jacobs

Alleghany Corporation

212-508-8141

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	June 30, 2015		December 31, 2014
	(unaudited) (in thousands, except share amounts)
Assets
Investments:
Available-for-sale securities at fair value:
Equity securities (cost: 2015 – $2,701,247; 2014 – $2,366,035)	$	3,143,572	$	2,815,484
Debt securities (amortized cost: 2015 – $14,465,377; 2014 – $14,364,430)		14,564,927		14,598,641
Short-term investments		601,456		715,553
		18,309,955		18,129,678
Other invested assets		741,602		705,665
Total investments		19,051,557		18,835,343
Cash		647,901		605,259
Accrued investment income		124,034		136,511
Premium balances receivable		843,043		683,848
Reinsurance recoverables		1,395,146		1,361,083
Ceded unearned premiums		199,137		184,435
Deferred acquisition costs		385,384		353,169
Property and equipment at cost, net of accumulated depreciation and amortization		96,889		88,910
Goodwill		111,904		111,904
Intangible assets, net of amortization		136,089		133,378
Current taxes receivable		80,788		91,202
Net deferred tax assets		385,534		389,597
Other assets		470,882		514,797
Total assets	$	23,928,288	$	23,489,436
Liabilities and Stockholders’ Equity
Loss and loss adjustment expenses	$	11,463,561	$	11,597,216
Unearned premiums		1,979,323		1,834,184
Senior Notes		1,762,069		1,767,125
Reinsurance payable		84,691		79,100
Other liabilities		988,261		729,767
Total liabilities		16,277,905		16,007,392
Common stock (shares authorized: 2015 and 2014 – 22,000,000; shares issued: 2015 and 2014 – 17,459,961)		17,460		17,460
Contributed capital		3,609,918		3,610,717
Accumulated other comprehensive income		252,234		353,584
Treasury stock, at cost (2015 – 1,484,796 shares; 2014 – 1,405,638 shares)		(544,960)		(507,699)
Retained earnings		4,307,053		3,999,366
Total stockholders’ equity attributable to Alleghany stockholders		7,641,705		7,473,428
Noncontrolling interest		8,678		8,616
Total stockholders’ equity		7,650,383		7,482,044
Total liabilities and stockholders’ equity	$	23,928,288	$	23,489,436

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings and Comprehensive Income

(unaudited)

	Three Months Ended June 30,
	2015		2014
	(in thousands, except per share amounts)
Revenues
Net premiums earned	$	1,074,723	$	1,098,944
Net investment income		103,087		114,094
Net realized capital gains		86,160		41,524
Other than temporary impairment losses		(7,317)		(932)
Other income		43,785		37,586
Total revenues		1,300,438		1,291,216
Costs and Expenses
Net loss and loss adjustment expenses		595,455		629,213
Commissions, brokerage and other underwriting expenses		363,954		359,604
Other operating expenses		63,812		66,236
Corporate administration		9,841		12,687
Amortization of intangible assets		(1,051)		(876)
Interest expense		23,375		21,932
Total costs and expenses		1,055,386		1,088,796
Earnings before income taxes		245,052		202,420
Income taxes		61,905		53,186
Net earnings		183,147		149,234
Net earnings attributable to noncontrolling interest		669		254
Net earnings attributable to Alleghany stockholders	$	182,478	$	148,980
Net earnings	$	183,147	$	149,234
Other comprehensive income:
Change in unrealized gains, net of deferred taxes of ($58,871) and $110,976 for 2015 and 2014, respectively		(109,332)		206,098
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of ($27,595) and ($14,207) for 2015 and 2014, respectively		(51,248)		(26,385)
Change in unrealized currency translation adjustment, net of deferred taxes of $1,555 and $3,126 for 2015 and 2014, respectively		2,888		5,805
Retirement plans		137		(7)
Comprehensive income		25,592		334,745
Comprehensive income (losses) attributable to noncontrolling interest		669		254
Comprehensive income attributable to Alleghany stockholders	$	24,923	$	334,491
Basic earnings per share attributable to Alleghany stockholders	$	11.41	$	9.06
Diluted earnings per share attributable to Alleghany stockholders		11.40		9.06

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Earnings and Comprehensive Income

(unaudited)

	Six Months Ended June 30,
	2015		2014
	(in thousands, except per share amounts)
Revenues
Net premiums earned	$	2,091,894	$	2,152,941
Net investment income		216,469		224,677
Net realized capital gains		129,311		138,360
Other than temporary impairment losses		(59,598)		(6,152)
Other income		79,985		68,032
Total revenues		2,458,061		2,577,858
Costs and Expenses
Net loss and loss adjustment expenses		1,142,371		1,240,372
Commissions, brokerage and other underwriting expenses		707,563		683,840
Other operating expenses		131,217		119,578
Corporate administration		22,519		22,319
Amortization of intangible assets		(2,711)		(2,737)
Interest expense		46,467		43,743
Total costs and expenses		2,047,426		2,107,115
Earnings before income taxes		410,635		470,743
Income taxes		102,068		116,868
Net earnings		308,567		353,875
Net earnings attributable to noncontrolling interest		880		15
Net earnings attributable to Alleghany stockholders	$	307,687	$	353,860
Net earnings	$	308,567	$	353,875
Other comprehensive income:
Change in unrealized gains, net of deferred taxes of ($25,730) and $192,340 for 2015 and 2014, respectively		(47,785)		357,203
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of ($24,400) and ($46,273) for 2015 and 2014, respectively		(45,313)		(85,935)
Change in unrealized currency translation adjustment, net of deferred taxes of ($4,236) and $3,358 for 2015 and 2014, respectively		(7,867)		6,237
Retirement plans		(385)		126
Comprehensive income		207,217		631,506
Comprehensive income (losses) attributable to noncontrolling interest		880		15
Comprehensive income attributable to Alleghany stockholders	$	206,337	$	631,491
Basic earnings per share attributable to Alleghany stockholders	$	19.22	$	21.36
Diluted earnings per share attributable to Alleghany stockholders		19.22		21.36