EX-99.1

NEW YORK, NY, May 3, 2018 – Alleghany Corporation (NYSE-Y) announced today its financial results for the first quarter of 2018. Highlights are below.

Weston Hicks, President and chief executive officer of Alleghany, stated, “Our first quarter results reflect solid underwriting performance at TransRe, lower underwriting profits at RSUI due to higher non-catastrophe property losses, a non-recurring gain related to the conversion of our Ares partnership interest to publicly-traded partnership units, significantly lower corporate administration expenses due to a reduction in long-term incentive accruals, and a lower effective tax rate.”

Mr. Hicks continued, “Our growth in book value per common share, including the $10 per share special dividend, was 0.3% in the first quarter of 2018. Book value per common share was primarily impacted by a decline in the carrying value of our fixed income investment portfolio due to rising interest rates. Investment results also include the impact of the conversion of the majority of our investment in Ares from a private limited partnership interest to publicly-traded partnership units, which resulted in a $46 million pre-tax gain and a $13 million increase in net investment income.”

Mr. Hicks concluded, “We are pleased with Alleghany Capital’s overall performance in the first quarter. Operating earnings before tax were up 22% to $3.3 million in the first quarter of 2018, compared with the 2017 first quarter. Improved results at Kentucky Trailer and Bourn & Koch and the addition of W&W|AFCO Steel and Wilbert Funeral Services more than offset reductions in operating earnings at Jazwares and IPS, and increased

transaction expenses related to a large acquisition by W&W|AFCO Steel. Despite strong year-over-year sales growth, Jazwares’ expenses increased due to an increased staff count to support its growth and the liquidation filing of Toys “R” Us, Inc., which increased insurance costs. These items had a magnified impact on operating earnings during the typically slowest quarter of the year.”

“During the first quarter, W&W|AFCO Steel completed its acquisition of Hirschfeld Industries, a leading fabricator of steel bridges and structural steel for stadiums, airports and other large commercial and industrial projects, for an equity purchase price of $111.3 million. The combination of these two excellent companies results in a leading structural steel fabricator and erector with meaningful capabilities and a strong backlog. The acquisition also highlights the continued importance of Alleghany Capital to our overall strategy, and beginning this quarter, we have classified Alleghany Capital as a segment in our financial results.”

The following table summarizes results for the three months ended March 31, 2018 and 2017:

The following table summarizes the reinsurance and insurance segment results for the three months ended March 31, 2018 and 2017:

Net premiums written increased in the first quarter of 2018 from the first quarter of 2017 primarily due to the impact of changes in foreign currency exchange rates and increased writings in U.S. casualty lines, partially offset by a decrease in premiums written related to a large whole-account quota share treaty (the “Quota Share Treaty”). Premiums related to the Quota Share Treaty were $184.0 million and $190.2 million in the first quarter of 2018 and 2017, respectively. Despite increased pricing in certain lines of business, TransRe did not see sufficient improvement in rates to warrant meaningful growth in premium writings.

TransRe’s 2018 first quarter combined ratio was 89.7%, compared with 94.3% for the 2017 first quarter. TransRe’s higher underwriting profit and improved combined ratio for the 2018 first quarter primarily reflects an increase in favorable prior accident year loss reserve development. TransRe’s combined ratio in the first quarter of 2017 reflected $24.4 million of unfavorable prior accident year loss reserve development arising from the U.K. Ministry of Justice’s decision to reduce the discount rate, referred to as the Ogden rate, used to calculate lump-sum bodily injury payouts in personal injury insurance claims in the U.K.

The decrease in net premiums written in the first quarter of 2018 from the first quarter of 2017 reflects the sale of PacificComp in the fourth quarter of 2017, partially offset by growth at CapSpecialty and RSUI. Excluding PacificComp from the first quarter of 2017, net premiums written increased by 5.2% in the first quarter of 2018. For the first quarter of 2018, CapSpecialty’s net premiums written increased by 13.6%, and RSUI’s net premiums written increased by 2.4%. CapSpecialty’s net premium growth is attributable to increased writings in all of its lines of business and the additional premium written in connection with its recently completed renewal rights transaction for a book of environmental business. The increase at RSUI is across most lines of business and reflects an increase in business opportunities due to improved general market conditions and pricing increases in the property lines of business.

The insurance segment’s 2018 first quarter combined ratio was 87.0%, compared with 83.0% for the 2017 first quarter. The higher combined ratio and lower underwriting profit for the 2018 first quarter primarily reflect several large non-catastrophe property losses incurred by RSUI in the first three months of 2018, partially offset by an increase in favorable prior accident year loss reserve development.

The following table summarizes earnings (losses) before income taxes and operating earnings (losses) before income taxes for the Alleghany Capital segment for the three months ended March 31, 2018 and 2017:

Alleghany Capital’s earnings (losses) before income taxes improved to $(1.4) million in the first quarter of 2018 compared with $(1.7) million in the first quarter of last year. Operating earnings (losses) before income taxes were higher in the first quarter of 2018 due to the increased operating earnings in the industrial businesses and reduced corporate expenses, partially offset by lower operating earnings in the non-industrial business. The industrial businesses’ operating earnings (losses) before taxes increased from the 2017 first quarter due to improved results at Kentucky Trailer and Bourn & Koch, and the inclusion of a 45% interest in Wilbert Funeral Services in 2018 results. These factors offset increased transaction expenses related to W&W|AFCO Steel’s acquisition of Hirschfeld Industries. The reduction in non-industrial operating earnings (losses) before income taxes in the first quarter of 2018 was driven by Jazwares, where expense growth exceeded sales growth in the seasonally slow first quarter, and IPS, where the delay in commencement of several large projects in backlog and increased expenses on a project in Brazil impacted the quarter.

Alleghany reported net investment income for the first quarter of 2018 of $124.1 million, an increase of 7.4% from the first quarter of 2017. The increase in net investment income in the first quarter of 2018 primarily reflects higher dividend income arising from an increase in the size of the equity portfolio and higher interest income, partially offset by higher performance-based investment fees from Alleghany’s outside investment advisors. The increase in interest income primarily reflects higher yields on short-term investments and floating-rate debt securities and higher income from funds withheld, partially offset by the impact of the sale of PacificComp as of December 31, 2017. In addition, net investment income reflects higher partnership income at AIHL, partially offset by lower partnership income at TransRe and RSUI.

During the first quarter of 2018, Alleghany converted the majority of its investment in Ares from limited partnership interests to publicly-traded partnership units. Until this conversion in March 2018, Alleghany’s Ares holdings were classified as other invested assets and accounted for under the equity method. Upon conversion of the majority of Alleghany’s investment, these limited partnership interests were reclassified to publicly-traded partnership units and Alleghany recognized a pre-tax gain of approximately $46 million. As of March 31, 2018, approximately $59 million of Ares LP interests remain in other invested assets. These limited partnership interests were also adjusted to market value, resulting in a $12.9 million increase to other investment income. See Note 3(g) to Notes to Unaudited Consolidated Financial Statements set forth in Part I, Item 1, “Financial Statements” of this Form 10-Q for additional information.

In the first quarter of 2018, Alleghany adopted new accounting guidance, which required the changes in the fair value of equity securities, except those accounted for under the equity method, be recognized in net income. See Note 1(c) to Notes to Unaudited Consolidated Financial Statements set forth in Part I, Item 1, “Financial Statements” of Alleghany’s Form 10-Q for additional information regarding the adoption of this new investment accounting guidance.

Financial statement total return³ on investments was (0.3%) for the first quarter of 2018, compared with 1.7% for the first quarter of 2017.

As of March 31, 2018, Alleghany had 15,362,141 shares of its common stock outstanding, compared with 15,390,500 shares of its common stock outstanding as of December 31, 2017. During the first quarter of 2018, Alleghany had repurchased 35,072 shares of its common stock in the open market for $21.3 million, at an average price per share of $606.40. As of March 31, 2018, Alleghany had $341.9 million remaining under its share repurchase authorization.

In February 2018, the Alleghany Board of Directors declared a special dividend of $10 per share for stockholders of record on March 5, 2018. On March 15, 2018, Alleghany paid dividends to stockholders totaling $154.0 million.

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

Additional information regarding Alleghany’s 2018 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, 2018 (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.

Alleghany Corporation (NYSE-Y) owns and manages 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; and CapSpecialty, Inc. (referred to herein as “CapSpecialty”), an underwriter of commercial property, casualty and surety insurance coverages.

Alleghany’s subsidiary Alleghany Capital Corporation (referred to herein as “Alleghany Capital”) engages in and oversees strategic investments and acquisitions. Alleghany Capital’s investments are categorized as either industrial businesses or non-industrial businesses. The industrial businesses are: (i) Bourn & Koch, Inc., a manufacturer/remanufacturer of specialty machine tools and supplier of replacement parts, accessories and services for a variety of cutting technologies; (ii) R.C. Tway Company, LLC (dba and referred to herein as Kentucky Trailer), a manufacturer of custom trailers and truck bodies for the moving and storage industry and other markets; (iii) WWSC Holdings, LLC, a structural steel fabricator and erector; and (iv) Wilbert Funeral Services, a leading provider of products and services for the funeral and cemetery industries and precast concrete markets. The non-industrial businesses are (i) IPS-Integrated Project Services, LLC, a technical engineering-focused service provider focused on the global pharmaceutical and biotechnology industries, and (ii) Jazwares, LLC, a global toy, entertainment and musical instrument company. For additional information about Alleghany Capital Corporation, please visit www.alleghanycc.com.

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, operating earnings, operating earnings per diluted share and operating earnings before income taxes, which are “non-GAAP financial measures.” The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Also, note that these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. A discussion of Alleghany’s calculation and use of these financial measures is provided below.

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 U.S. GAAP and does not include net investment income, change in the fair value of equity securities, net realized capital gains, other than temporary impairment losses, noninsurance revenue, other operating expenses, corporate administration,

amortization of intangible assets and 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.

A reconciliation of underwriting profit to earnings before income taxes is presented below.

Operating earnings and operating earnings per diluted share represent net earnings attributable to Alleghany stockholders and earnings per diluted share, respectively, excluding (on an after-tax basis) change in the fair value of equity securities, net realized capital gains, other than temporary impairment losses and amortization of intangible assets, all as determined in accordance with U.S. GAAP. Alleghany uses operating earnings and operating earnings per diluted share as supplements to net earnings attributable to Alleghany stockholders and diluted earnings per share, respectively, the most comparable U.S. GAAP financial measures, to provide useful additional information to investors by highlighting earnings and earnings per diluted share attributable to its performance exclusive of changes in the fair value of equity securities, realized capital gains or losses, impairments and amortization of intangible assets. Reconciliations of operating earnings and operating earnings per diluted share to net earnings attributable to Alleghany stockholders and diluted earnings per share, respectively, are presented below.

Operating earnings before income taxes is a non-GAAP financial measure for our non-insurance operating subsidiaries and investments in the Alleghany Capital segment. Operating earnings before income taxes represents noninsurance revenue less all operating expenses, and does not include: (i) amortization of intangible assets; (ii) change in the fair value of equity securities; (iii) net realized capital gains; (iv) OTTI losses; and (v) income taxes. Because operating earnings before tax excludes income taxes, change in the fair value of equity securities, net realized capital gains, OTTI losses, and amortization of intangible assets, it provides an indication of economic performance that is not affected by investment activity, levels of effective tax rates or levels of amortization resulting from acquisition accounting. Alleghany uses operating earnings before income taxes as a supplement to earnings before income taxes, the most comparable GAAP financial measure, to evaluate the performance of certain of its non-insurance operating subsidiaries and investments. A reconciliation of operating earnings before income taxes to earnings before income taxes is presented above in “Segment Results-Alleghany Capital.”

In prior filings, Alleghany used adjusted EBITDA as a non-GAAP financial measure for our non-insurance operating subsidiaries and investments held by Alleghany Capital. Alleghany believes that operating earnings before income taxes is a more useful non-GAAP financial measure, as it reflects: (i) ongoing capital expenditures through the inclusion of depreciation expense (a component of other operating expenses); and (ii) ongoing levels of debt through the inclusion of interest expenses.

This release contains disclosures, which may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may 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. Forward-looking statements do not relate solely to historical or current facts; rather, they are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time. These statements are not guarantees of future performance. These forward-looking statements are based upon Alleghany’s current 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. Factors that could cause these forward-looking statements to differ, possibly materially, from that currently contemplated include:

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 we have no control; changes in our plans, strategies, objectives, expectations, or intentions, which may happen at any time at our discretion; and other factors discussed in Alleghany’s 2017 Form 10-K. All forward-looking statements speak only as of the date they are made and are based on information available at that time. Alleghany does not undertake any obligation to update or revise any forward-looking statements to reflect subsequent circumstances or events.

ALLEGHANY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets


	March 31, 2018		December 31, 2017
	(unaudited)
	($ in thousands, except share amounts)
Assets
Investments:
Securities at fair value:
Equity securities (cost: 2018 – $3,721,932; 2017 – $3,170,673)	$	4,545,899	$	4,099,467
Debt securities (amortized cost: 2018 – $12,065,159; 2017 – $12,536,772)		12,066,223		12,721,399
Short-term investments		611,655		578,054

		17,223,777		17,398,920
Commercial mortgage loans		663,933		658,364
Other invested assets		601,555		743,358

Total investments		18,489,265		18,800,642
Cash		711,040		838,375
Accrued investment income		97,998		105,877
Premium balances receivable		856,078		797,346
Reinsurance recoverables		1,653,758		1,746,488
Ceded unearned premiums		204,640		190,252
Deferred acquisition costs		467,524		453,346
Property and equipment at cost, net of accumulated depreciation and amortization		198,707		125,337
Goodwill		345,306		334,905
Intangible assets, net of amortization		467,475		459,037
Current taxes receivable		63,568		31,085
Net deferred tax assets		123,944		136,489
Funds held under reinsurance agreements		705,433		706,042
Other assets		712,520		659,096

Total assets	$	25,097,256	$	25,384,317


Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
Loss and loss adjustment expenses	$	11,714,269	$	11,871,250
Unearned premiums		2,251,593		2,182,294
Senior Notes and other debt		1,540,865		1,484,897
Reinsurance payable		160,228		156,376
Other liabilities		919,270		1,068,907

Total liabilities		16,586,225		16,763,724


Redeemable noncontrolling interests		137,631		106,530

Common stock (shares authorized: 2018 and 2017 – 22,000,000; shares issued: 2018 and 2017 – 17,459,961)		17,460		17,460
Contributed capital		3,613,630		3,612,109
Accumulated other comprehensive (loss) income		(123,620)		618,118
Treasury stock, at cost (2018 – 2,097,820 shares; 2017 – 2,069,461 shares)		(843,497)		(824,906)
Retained earnings		5,709,427		5,091,282

Total stockholders’ equity attributable to Alleghany stockholders		8,373,400		8,514,063

Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	25,097,256	$	25,384,317


	Three Months Ended March 31,				Percent
	2018		2017		Change
	(in millions)
Total revenues	$	1,585.0	$	1,532.4		3.4%
Net premiums written		1,253.3		1,233.1		1.6%
Noninsurance revenue		251.6		151.3		66.3%
Earnings before income taxes		208.6		207.9		0.3%
Underwriting profit		130.9		101.4		29.1%
Net investment income		124.1		115.5		7.4%
Net earnings attributable to Alleghany stockholders		171.6		149.2		15.0%
Operating earnings		174.6		115.0		51.8%


	Three Months Ended March 31,				Percent
	2018		2017		Change
	(in millions)
Net premiums written:
Reinsurance Segment	$	997.0	$	949.4		5.0%
Insurance Segment		256.3		283.7		(9.7%)

	$	1,253.3	$	1,233.1		1.6%

Underwriting profit:
Reinsurance Segment	$	98.8	$	53.4		85.0%
Insurance Segment		32.1		48.0		(33.1%)

	$	130.9	$	101.4		29.1%


	Three Months Ended March 31,
	2018								2017
	Industrial		Non-Industrial		Corp. & other		Total		Industrial		Non-Industrial		Corp. & other		Total
	($ in millions)
Earnings (losses) before income taxes	$	2.1	$	(1.9)	$	(1.6)	$	(1.4)	$	2.1	$	(0.5)	$	(3.3)	$	(1.7)

Operating earnings (losses) before income taxes	$	3.7	$	1.2	$	(1.6)	$	3.3	$	2.3	$	3.7	$	(3.3)	$	2.7
Add: net realized capital gains		0.4		0.3		-		0.7		-		(0.1)		-		(0.1)
Less: amortization of intangible assets		(2.0)		(3.4)		-		(5.4)		(0.2)		(4.1)		-		(4.3)

Earnings (losses) before income taxes	$	2.1	$	(1.9)	$	(1.6)	$	(1.4)	$	2.1	$	(0.5)	$	(3.3)	$	(1.7)


	Three Months Ended March 31,
	2018		2017
	(in millions)
Earnings before income taxes	$	208.6	$	207.9

Adjustments to earnings before income taxes:
Net investment income		124.1		115.5
Change in the fair value of equity securities		(42.5)		-
Net realized capital gains		44.5		59.6
Other than temporary impairment charges		(0.5)		(3.2)
Noninsurance revenue		251.6		151.3
Other operating expenses		(264.9)		(175.1)
Corporate administration		(7.8)		(16.9)
Amortization of intangible assets		(5.3)		(3.8)
Interest expense		(21.5)		(20.9)

		77.7		106.5

Underwriting profit	$	130.9	$	101.4


	Three Months Ended March 31,
	2018		2017
	($ in millions, except per share amounts)
Net earnings attributable to Alleghany stockholders⁽¹⁾	$	171.6	$	149.2


Adjustments to net earnings attributable to Alleghany stockholders:
Change in the fair value of equity securities		(42.5)		-
Net realized capital gains		44.5		59.6
Other than temporary impairment charges		(0.5)		(3.2)
Amortization of intangible assets		(5.3)		(3.8)
Income tax effect of adjustments		0.8		(18.4)

		(3.0)		34.2


Operating earnings	$	174.6	$	115.0


Weighted average diluted common shares outstanding		15,418,664		15,420,468

Operating earnings per diluted share	$	11.24	$	7.45


	Three Months Ended March 31,
	2018		2017
	($ in thousands, except per share amounts)
Revenues
Net premiums earned	$	1,207,856	$	1,209,188
Net investment income		124,126		115,538
Change in the fair value of equity securities		(42,649)		-
Net realized capital gains		44,505		59,651
Other than temporary impairment losses		(511)		(3,217)
Noninsurance revenue		251,627		151,292


Total revenues		1,584,954		1,532,452

Costs and Expenses
Net loss and loss adjustment expenses		670,578		699,305
Commissions, brokerage and other underwriting expenses		406,295		408,515
Other operating expenses		264,897		175,138
Corporate administration		7,785		16,885
Amortization of intangible assets		5,264		3,764
Interest expense		21,531		20,935


Total costs and expenses		1,376,350		1,324,542


Earnings before income taxes		208,604		207,910
Income taxes		37,422		58,550

Net earnings		171,182		149,360
Net earnings attributable to noncontrolling interest		(393)		184

Net earnings attributable to Alleghany stockholders	$	171,575	$	149,176

Net earnings	$	171,182	$	149,360
Other comprehensive income :
Change in unrealized gains (losses), net of deferred taxes of ($38,905) and $67,270 for 2018 and 2017, respectively		(146,358)		124,929
Less: reclassification for net realized capital gains and other than temporary impairment losses, net of taxes of $366 and ($19,752) for 2018 and 2017, respectively		1,379		(36,682)
Change in unrealized currency translation adjustment, net of deferred taxes of $1,356 and $2,719 for 2018 and 2017, respectively		5,100		5,049
Retirement plans		(1,322)		(395)

Comprehensive income		29,981		242,261
Comprehensive income attributable to noncontrolling interest		(393)		184

Comprehensive income attributable to Alleghany stockholders	$	30,374	$	242,077


Basic earnings per share attributable to Alleghany stockholders	$	11.15	$	9.68
Diluted earnings per share attributable to Alleghany stockholders		11.04		9.67