Alleghany 2021 Full Year Performance Highlights
Non-GAAP Financial Measures (continued)
Underwriting Profit
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: (i) net investment income; (ii)
change in the fair value of equity securities; (iii) net realized capital gains; (iv) change in allowance for credit losses on
available for sale securities; (v) product and service revenues; (vi) other operating expenses; (vii) corporate
administration; (viii) amortization of intangible assets; and (ix) interest expense. Alleghany uses underwriting profit as a
supplement to earnings before income taxes, the most comparable GAAP financial measure, to evaluate the performance
of its reinsurance and insurance segments and believes that underwriting profit provides useful additional information to
investors because it highlights net earnings attributable to Alleghany's reinsurance and insurance 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
within "Earnings by Segment" on page 11 through 12 of the Q4 2021 Financial Supplement.
Book Value Per Share Excluding Accumulated Other Comprehensive Income ("BVPS ex-AOCI")
BVPS ex-AOCI is calculated by dividing: (i) stockholders' equity attributable to Alleghany stockholders less AOCI, all as
determined in accordance with GAAP, by (ii) shares outstanding. Alleghany uses BVPS ex-AOCI as a supplement to BVPS,
the most comparable GAAP financial measure, in order to better disclose its per share performance by excluding the
effects of AOCI, which include the effect of changes in interest rates and credit spreads on its debt securities portfolio,
among others. A reconciliation of BVPS to BVPS ex-AOCI is presented within "Book Value Per Share" on page 39 of the Q4
2021 Financial Supplement.
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