<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1998
COMMISSION FILE NUMBER 1-9371
ALLEGHANY CORPORATION
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
DELAWARE
STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION
51-0283071
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER
375 PARK AVENUE, NEW YORK, NEW YORK 10152
ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE
212 / 752-1356
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
NOT APPLICABLE
FORMER NAME, FORMER ADDRESS, AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT
THE REGISTRANT WAS REQUIRED TO FILE
YES X NO___
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS
OF COMMON STOCK, AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT:
7,178,621
(AS OF JUNE 30, 1998)
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED
JUNE 30, 1998 AND 1997
(dollars in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
1998 1997
--------------------------
<S> <C> <C>
REVENUES
Trust fees $ 30,745 $ 17,760
Net property and casualty premiums earned 104,054 87,351
Interest, dividend and other income 43,880 38,676
Net mineral and filtration sales 50,979 52,963
Net gain (loss) on investment transactions 2,510 (442)
--------------------------
Total revenues 232,168 196,308
--------------------------
COSTS AND EXPENSES
Commissions and brokerage expenses 25,105 21,562
Salaries, administrative and other operating expenses 63,866 45,593
Property and casualty losses and loss adjustment expenses 72,852 57,499
Cost of mineral and filtration sales 27,150 34,339
Interest expense 8,094 7,821
Corporate administration 9,414 5,432
--------------------------
Total costs and expenses 206,481 172,246
--------------------------
Earnings from continuing operations, before income taxes 25,687 24,062
Income taxes 8,459 6,960
--------------------------
Earnings from continuing operations 17,228 17,102
Earnings from discontinued operations, net of tax 11,484 16,837
--------------------------
Net earnings $ 28,712 $ 33,939
==========================
Basic earnings per share of common stock:
Continuing operations $ 2.38 $ 2.36
Discontinued operations 1.59 2.33
--------------------------
Basic net earnings per share $ 3.97 $ 4.69
==========================
Diluted earnings per share of common stock:
Continuing operations $ 2.34 $ 2.35
Discontinued operations 1.56 2.32
--------------------------
Diluted earnings per share $ 3.90 $ 4.67
==========================
Dividends per share of common stock ** *
==========================
Average number of outstanding shares of common stock 7,228,737 7,258,269
==========================
</TABLE>
* In March 1997, Alleghany declared a dividend consisting of one share of
Alleghany common stock for every fifty shares outstanding.
** In the second quarter of 1998, Alleghany spun-off its subsidiary, Chicago
Title and Trust, to its shareholders. No dividend has been declared for 1998.
2
<PAGE> 3
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE SIX MONTHS ENDED
JUNE 30, 1998 AND 1997
(dollars in thousands, except share and per share amounts)
(unaudited)
<TABLE>
<CAPTION>
1998 1997
--------------------------
<S> <C> <C>
REVENUES
Trust fees $ 55,793 $ 33,785
Net property and casualty premiums earned 198,104 184,542
Interest, dividend and other income 83,910 73,433
Net mineral and filtration sales 98,667 100,228
Net gain (loss) on investment transactions 2,486 (1,333)
--------------------------
Total revenues 438,960 390,655
--------------------------
COSTS AND EXPENSES
Commissions and brokerage expenses 50,215 44,842
Salaries, administrative and other operating expenses 115,778 88,811
Property and casualty losses and loss adjustment expenses 138,057 130,136
Cost of mineral and filtration sales 59,698 67,462
Interest expense 15,424 15,657
Corporate administration 16,253 9,698
--------------------------
Total costs and expenses 395,425 356,606
--------------------------
Earnings from continuing operations, before income taxes 43,535 34,049
Income taxes 13,348 9,967
--------------------------
Earnings from continuing operations 30,187 24,082
Earnings from discontinued operations, net of tax 32,725 22,765
--------------------------
Net earnings $ 62,912 $ 46,847
==========================
Basic earnings per share of common stock:
Continuing operations $ 4.14 $ 3.31
Discontinued operations 4.49 3.13
--------------------------
Basic net earnings per share $ 8.63 $ 6.44
==========================
Diluted earnings per share of common stock:
Continuing operations $ 4.07 $ 3.31
Discontinued operations 4.41 3.12
--------------------------
Diluted earnings per share of common stock $ 8.48 $ 6.43
==========================
Dividends per share of common stock ** *
==========================
Average number of outstanding shares of common stock 7,289,724 7,272,552
==========================
</TABLE>
* In March 1997, Alleghany declared a dividend consisting of one share of
Alleghany common stock for every fifty shares outstanding.
** In the second quarter of 1998, Alleghany spun-off its subsidiary, Chicago
Title and Trust, to its shareholders. No dividend has been declared for 1998.
3
<PAGE> 4
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(dollars in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
June 30,
1998 December 31,
(Unaudited) 1997
------------------------
<S> <C> <C>
ASSETS
Available for sale securities:
Fixed maturities:
U.S. Government, government agency and
municipal obligations (amortized cost* $742,772) $ 758,023 $ 702,846
Certificates of deposit and commercial paper (amortized cost* $18,339) 18,339 49,007
Bonds, notes and other (amortized cost* $595,397) 603,612 525,713
Equity securities (cost* $345,205) 835,183 783,433
------------------------
2,215,157 2,060,999
Cash 30,777 45,772
Cash pledged to secure trust and escrow deposits 24,592 1,336
Notes receivable 100,536 91,536
Funds held, accounts and other receivables 300,160 255,802
Property and equipment - at cost, less accumulated depreciation and amortization 197,195 193,304
Reinsurance receivable 405,324 387,609
Other assets 288,079 278,567
Net assets of discontinued operations -- 385,451
------------------------
$3,561,820 $3,700,376
========================
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Property and casualty losses and loss adjustment expenses $1,227,841 $1,159,070
Other liabilities 518,399 443,259
Long-term debt of parent 89,500 16,000
Long-term debt of subsidiaries 363,555 373,641
Net deferred tax liability 150,689 133,241
Trust and escrow deposits secured by pledged assets 25,836 4,230
------------------------
Total liabilities 2,375,820 2,129,441
Common stockholders' equity 1,186,000 1,570,935
------------------------
$3,561,820 $3,700,376
========================
Shares of common stock outstanding 7,178,621 7,367,551
========================
Common stockholders' equity per share $ 165.21 $ 213.22
========================
</TABLE>
* Figures are as of June 30, 1998.
4
<PAGE> 5
ALLEGHANY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED
JUNE 30, 1998 AND 1997
(dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
1998 1997
-----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings from continuing operations $ 30,187 $ 24,082
Adjustments to reconcile net earnings to cash
provided by (used in) operations:
Depreciation and amortization 12,437 12,078
Net (gain) loss on investment transactions (2,486) 1,333
Other charges, net 1,708 4,157
Increase in funds held, accounts and other receivables (44,358) (24,454)
Increase in reinsurance receivable (17,715) (5,509)
Increase in property and casualty losses and loss adjustment expenses 68,771 23,515
Decrease in other assets (12,855) (3,098)
Increase in other liabilities 75,140 56,401
Increase in cash pledged to secure trust and escrow deposits (23,256) 15,103
Increase in trust and escrow deposits 21,606 (15,329)
-----------------------
Net adjustments 78,992 64,197
-----------------------
Cash provided by operations 109,179 88,279
-----------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (141,200) (182,696)
Maturities of investments 36,338 37,407
Sales of investments 114,494 55,012
Purchases of property and equipment (12,821) (7,637)
Other, net (114,750) 32,198
-----------------------
Net cash used in investing activities (117,939) (65,716)
-----------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (24,500) (18,000)
Proceeds of long-term debt 88,000 25,408
Treasury stock acquisitions (71,787) (31,864)
Net cash provided to discontinued operations (5,097) (1,099)
Other, net 7,149 4,922
-----------------------
Net cash used in financing activities (6,235) (20,633)
-----------------------
Net (decrease) increase in cash (14,995) 1,930
Cash at beginning of period 45,772 36,882
-----------------------
Cash at end of period $ 30,777 $ 38,812
=======================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 15,284 $ 15,321
Income taxes $ 38,713 $ 4,340
Non-cash item:
Book value of spin-off of Chicago Title and Trust Company $ 413,767 --
</TABLE>
5
<PAGE> 6
Notes to the Consolidated Financial Statements
This report should be read in conjunction with the Annual Report on
Form 10-K for the year ended December 31, 1997, and the Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 of Alleghany Corporation (the
"Company").
The information included in this report is unaudited but reflects all
adjustments which, in the opinion of management, are necessary to a fair
statement of the results of the interim periods covered thereby. All adjustments
are of a normal and recurring nature except as described herein.
Spin-off of Chicago Title Corporation
On June 17, 1998, the Company completed the spin-off of the title
insurance and real estate-related services business conducted by Chicago Title
and Trust Company ("CT&T"). The spin-off was effected by a distribution to the
Company's stockholders of shares of a newly formed holding company for CT&T
called Chicago Title Corporation ("Chicago Title"). The common stock of Chicago
Title is traded on the New York Stock Exchange under the symbol "CTZ." The
financial services business conducted through Alleghany Asset Management, Inc.
("Alleghany Asset Management") was not a part of the distribution and remains
with the Company.
The unaudited consolidated financial statements of the Company include
the accounts of the Company and its subsidiaries for all periods presented. In
light of the spin-off of Chicago Title, the spun-off operation is classified as
a "discontinued operation" through the date of the spin-off.
New Accounting Standard
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." SFAS
No. 130 establishes standards for reporting and display of comprehensive income
and its components in full set of general-purpose financial statements.
The Company's total comprehensive income (loss) for the three months
and six months ended June 30, 1998 and 1997 was $428 thousand and $91,052
thousand, and $125,110 thousand and $60,497 thousand, respectively.
Comprehensive income includes the Company's net earnings adjusted for changes in
unrealized appreciation of investments, which was $(28,408) thousand and $28,409
thousand, and $91,729 thousand and $16,180 thousand, and cumulative translation
adjustments, which was $124 thousand and $(269) thousand, and $(558) and
$(2,530) thousand, for the three months and six months ended June 30, 1998 and
1997, respectively.
6
<PAGE> 7
Contingencies
The Company"s subsidiaries and division are parties to pending claims
and litigation in the ordinary course of their businesses. Each such operating
unit makes provisions on its books in accordance with generally accepted
accounting principles for estimated losses to be incurred as a result of such
claims and litigation, including related legal costs. In the opinion of
management, such provisions are adequate as of June 30, 1998.
ITEM 2. MANAGEMENT"S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
The Company reported net earnings from continuing operations of $17.2
million on revenues of $232.2 million during the second quarter of 1998,
compared with net earnings from continuing operations of $17.1 million on
revenues of $196.3 million during the second quarter of 1997. Net earnings from
continuing operations contributed $30.2 million on revenues of $439.0 million
during the first six months of 1998, compared with net earnings from continuing
operations of $24.1 million on revenues of $390.7 million during the first six
months of 1997.
Net earnings, which include discontinued operations, were $28.7 million
in the second quarter of 1998, compared with $33.9 million in the second quarter
of 1997, and $62.9 million in the first six months of 1998, compared with $46.8
million in the first six months of 1997.
Net gains on investment transactions after taxes in the first half of
1998 totalled $2.5 million, compared with net losses of $1.3 million in the
first half of 1997.
Chicago Title, which, as described in the notes above, is classified as
a "discontinued operation," contributed net earnings of $11.5 million in the
1998 second quarter (through the date of the spin-off), compared with $16.8
million in the 1997 second quarter, and net earnings of $32.7 million in the
first six months of 1998 (through the date of the spin-off), compared with $22.8
million in the first six months of 1997. Chicago Title's 1998 contribution to
the Company's results reflect non-recurring spin-off related expenses of $15.8
million after tax, consisting primarily of compensation expense, which were
incurred in the second quarter. As an independent publicly-traded company, more
detailed information on Chicago Title's results will be reported in its
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998.
Underwriters Re Group, Inc. ("Underwriters Re Group") contributed
pre-tax earnings of $15.3 million on revenues of $127.3 million in the second
quarter of 1998, compared with $14.9 million on revenues of $107.2 million in
the second quarter of
7
<PAGE> 8
1997, and $25.0 million on revenues of $240.9 million in the first six months of
1998, compared with $21.9 million on revenues of $222.4 million in the first six
months of 1997.
The results of Underwriters Re Group for the second quarter and first
six months of 1998 reflect an increase in net written premiums and higher
investment income resulting from an increase in invested assets. Net written
premiums for the second quarter of 1998 were $123.8 million compared with $106.1
million in the prior year second quarter, and $234.8 million for the first six
months of 1998 compared with $211.4 million in the prior year first six months.
1998 second quarter results also reflect a pre-tax gain of $2.5 million on sales
of equity investments.
Alleghany Asset Management contributed pre-tax earnings of $9.2 million
on revenues of $31.3 million in the 1998 second quarter, compared with $5.1
million on revenues of $18.1 million in the 1997 second quarter, and $17.2
million on revenues of $56.7 million in the second half of 1998, compared with
$8.6 million on revenues of $34.5 million in the second half of 1997. The
improved results of Alleghany Asset Management are primarily due to an increase
in assets under management. As of June 30, 1998, Alleghany Asset Management
managed $31.7 billion in assets, as compared with $19.0 billion as of June 30,
1997.
World Minerals Inc. ("World Minerals") contributed pre-tax earnings of
$4.9 million on revenues of $50.6 million in the 1998 second quarter, compared
with $7.1 million on revenues of $52.7 million in the 1997 second quarter, and
$8.5 million on revenues of $98.3 million in the first six months of 1998,
compared with $10.0 million on revenues of $99.8 million in the first six months
of 1997.
The results of World Minerals for the 1998 second quarter and first six
months reflect the effects of severe El Nino storms and rail car shortages on
World Minerals' Lompoc, California diatomite operations, weakness of European
currencies as compared to the U.S. dollar and increased competitive pressure. In
addition, World Minerals' pre-tax earnings continued to be negatively affected
by high costs related to its Chinese joint ventures.
As of June 30, 1998, the Company beneficially owned approximately 7.43
million shares, or 4.7 percent, of the outstanding common stock of Burlington
Northern Santa Fe Corporation which had an aggregate market value on that date
of approximately $729.7 million, or $98.19 per share, compared with a market
value on December 31, 1997 of $690.7 million, or $92.24 per share. The aggregate
cost of such shares is approximately $253.7 million, or $34.15 per share.
8
<PAGE> 9
Alleghany common stockholders' equity per share as of June 30, 1998 was
$165.21, a 3 percent increase from common stockholders' equity per share of
$160.91 as of December 31, 1997, as adjusted for the spin-off of CT&T.
Many computer programs utilized by each of the Company and its
subsidiaries use only two digits to identify a year in the date. Failure to
correct this situation could result in a significant disruption to business
operations. Each of the Company and its subsidiaries has undertaken a four-phase
program to determine the extent of "Year 2000" compliance issues within each of
its significant information technology and non-information technology systems
(such as equipment which contain micro-processors) and to take appropriate
remedial action. The four phases of the program are assessment, planning,
execution and testing. After completing the assessment and planning phases
earlier this year, each of the Company and its subsidiaries is currently in the
implementation phase. Non-compliant systems are being reprogrammed or replaced,
which thereafter will be tested. It is anticipated that by year-end 1998 the
implementation phase and the testing phase will be largely completed. The cost
of remediation (including replacement software and hardware) and testing is
currently expected to total $4.7 million.
One of the greatest risks faced by each of the Company and its
subsidiaries is non-compliance of third parties with which it does business. In
this regard, each of the Company and its subsidiaries is communicating with such
third parties to coordinate action with respect to the Year 2000 issue and to
receive confirmations that plans are being developed to address Year 2000
compliance. Management believes that each of the Company and its subsidiaries
has communicated with its third party service providers whose failure to be Year
2000 compliant might materially affect the operations of the Company or such
subsidiary. To date, each of the Company and its subsidiaries has received
varying information from such third parties on the state of compliance or
expected compliance. The Company and its subsidiaries do not have contingency
plans in the event that any material third party providers are not compliant.
Contingency plans will be developed as appropriate by year-end 1998.
Management believes that the Year 2000 issue will not have a material
impact on the business, operations, or financial condition of the Company and
its subsidiaries.
In addition to their own computer systems and third-party
relationships, the insurance industry may also have claims asserted under
certain insurance and reinsurance policies for damages caused by the insureds'
failure to address their Year 2000 computer problems. Underwriters Re Group is
evaluating the potential insurance exposures arising from Year 2000 problems. A
quantification of the insurance industry's or Underwriters Re Group's potential
exposure to Year 2000 losses is not yet possible, as policy wordings vary and
legal interpretations of possible insurance coverage for losses are likely to
differ from jurisdiction to jurisdiction.
9
<PAGE> 10
This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains disclosures which are forward-looking
statements. 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" or
"continue." These forward-looking statements are based upon the Company's
current plans or expectations and are subject to a number of uncertainties and
risks that could significantly affect current plans and anticipated actions and
the Company's future financial condition and results. The uncertainties and
risks include, but are not limited to, those relating to conducting operations
in a competitive environment; acquisition activities; the complexity of
integrated computer systems; the success and expense of the remediation efforts
of the Company, its subsidiaries and third parties in achieving Year 2000
compliance and general economic conditions. 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 or on behalf of the
Company.
The Company's results in the first half of 1998 are not indicative of
operating results in future periods. The Company and its subsidiaries have
adequate internally generated funds and unused credit facilities to provide for
the currently foreseeable needs of its and their businesses.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(c) Recent Sales of Unregistered Securities.
On May 14, 1998, Alleghany issued an aggregate of 259 shares of
Alleghany common stock to seven non-employee directors of Alleghany pursuant to
the Alleghany Corporation Directors' Equity Compensation Plan representing
one-half of the value of each director's retainer for the following twelve
month's service as a director, exclusive of any per meeting fees, committee fees
or expense reimbursements. The sale of the common stock was exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to Section 4(2) thereof, as a transaction not involving a public
offering.
The above does not include unregistered issuances of the Company's
common stock that did not involve a sale, consisting of issuances of common
stock and other securities pursuant to employee incentive plans.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company"s 1998 Annual Meeting of Stockholders was held on April 24,
1998. At the Annual Meeting, three directors were elected to serve for
three-year terms on the Company"s Board of Directors, by the following votes:
<TABLE>
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C>
Three-Year Term:
Allan P. Kirby, Jr. 6,385,374 45,245
Thomas S. Johnson 6,417,438 13,181
James F. Will 6,419,355 11,264
</TABLE>
At the Annual Meeting, the selection of KPMG Peat Marwick LLP as
auditors for the Company for the year 1998 was ratified by a vote of 6,426,711
shares in favor and 1,857 shares opposed. A total of 2,051 shares abstained from
voting.
ITEM 5. OTHER INFORMATION.
The Company announced on July 30, 1998 that a wholly owned subsidiary
of Underwriters Re Group, Underwriters Reinsurance Company ("URC"), signed an
agreement to acquire Venton Holdings Ltd. ("Venton"), a Bermuda-based holding
company which conducts a global insurance and reinsurance business with
operations in London as well as Bermuda. At the closing, URC will pay cash
totalling $190 million to
11
<PAGE> 12
acquire all of the equity of Venton from the current owners, including Trident
Partnership, L.P., X.L. Insurance Company, Ltd., Risk Capital Reinsurance
Company and members of Venton management. URC also will assume about $123
million in letter of credit obligations which support the activities of Venton's
subsidiary Venton Underwriting Limited ("VUL") as an underwriting corporate
member of Lloyd's. The closing, which is subject to customary legal conditions
and to approval of the transaction by insurance regulatory authorities in New
Hampshire and Bermuda and to approval by the Council of Lloyd's, is expected to
take place by November of this year.
In addition to VUL, Venton owns Venton Underwriting Agencies Limited, a
Lloyd's managing agency ("VUA"). VUA was established by Jeremy Venton in 1988,
who is now in charge of Venton's Bermuda operations. The insurance and
reinsurance business underwritten by Venton is broad-based with a
well-diversified product mix of property, casualty, marine and other risks. Its
risks are located around the world, primarily in the United States, the United
Kingdom, Western Europe, Canada and Australia.
As reported under generally accepted accounting principles, Venton's
consolidated assets and shareholders' equity as of December 31, 1997 were $313.9
million and $61.1 million, respectively. As of December 31, 1997, Venton had
adjusted capital, including letters of credit supporting its underwriting
activities, of $184.1 million. For 1998, Venton through its subsidiaries is
managing about pound sterling 271.0 million in capacity, of which VUL and
another subsidiary provide approximately 62%.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the second quarter of 1998.
12
<PAGE> 13
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 thereunto duly authorized.
ALLEGHANY CORPORATION
Registrant
Date: August 11, 1998 /s/ David B. Cuming
------------------------------
David B. Cuming
Senior Vice President
(and principal financial officer)
13
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALLEGHANY
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AT JUNE 30, 1998 AND THE
CONSOLIDATED STATEMENT OF EARNINGS FOR THE 6 MONTHS THEN ENDED AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<DEBT-HELD-FOR-SALE> 1,379,974
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 835,183
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,215,157
<CASH> 55,369
<RECOVER-REINSURE> 405,324
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 3,561,820
<POLICY-LOSSES> 1,227,841
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 453,055
0
0
<COMMON> 0
<OTHER-SE> 1,186,000
<TOTAL-LIABILITY-AND-EQUITY> 3,561,820
198,104
<INVESTMENT-INCOME> 83,910
<INVESTMENT-GAINS> 2,486
<OTHER-INCOME> 98,667
<BENEFITS> 138,057
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 43,535
<INCOME-TAX> 13,348
<INCOME-CONTINUING> 30,187
<DISCONTINUED> 32,725
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,912
<EPS-PRIMARY> 8.63
<EPS-DILUTED> 8.48
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
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</TABLE>
