Alleghany Corporation, together with its subsidiaries, provides property and casualty reinsurance and insurance products in the United States and internationally. The company operates through two segments, Reinsurance and Insurance. The Reinsurance segment offers property reinsurance products, including fire, allied lines, auto physical damage, and homeowners' multiple peril; and casualty and other reinsurance products, such as liability, medical malpractice, ocean marine and aviation, auto liability, accident and health, surety, and credit. It distributes its products and services through brokers, as well as directly to insurance and reinsurance companies. The Insurance segment underwrites specialty insurance coverages in the property, as well as umbrella/excess, general, directors' and officers', and professional liability lines; and surety products comprising commercial surety bonds and contract surety bonds, as well as workers' compensation insurance. This segment distributes its products through approximately independent wholesale insurance brokers, and retail and general insurance agents. The company also explores for and produces oil and gas; manufactures and remanufactures/retrofits precision machine tools and supplies of replacement parts; manufactures custom trailers and truck bodies for moving and storage industry, and other markets; and provides technical services for pharmaceutical and biotechnology industries, as well as toy and consumer electronics. In addition, it owns and manages improved and unimproved commercial land, as well as residential lots. As of December 31, 2016, the company owned approximately 314 acres of property. Alleghany Corporation was founded in 1929 and is based in New York, New York.
Business Analysis of Alleghany
The Insurance Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Alleghany compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Alleghany to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Alleghany with an interactive chart.
- Revenue Growth: Alleghany reported a revenue growth of 22.6% year-on-year during 2016. Property & Casualty Insurance Industry grew at 6.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Alleghany spent 74.6% of its total revenues on COGS. Property & Casualty Insurance industry average (COGS share of revenue) in the same period was 65.6%
- R&D share of Revenues: Alleghany R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Alleghany spent 13.2% of its total revenues on Sales, Marketing, and General Administration (SG&A). Property & Casualty Insurance industry average SG&A spending in the same period was 14.9%
- Inventory share of Revenues: Alleghany Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Alleghany invested 1.5% of its total revenues on Accounts Payable (A/P) Property & Casualty Insurance industry average Accounts Payable investment in the same period was 18.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, Alleghany invested 32.9% of its total revenues on Accounts Receivable (A/R). Property & Casualty Insurance industry average Accounts Receivable investment in the same period was 33.0%
- PP&E share of Revenues: As a percentage of revenue, Alleghany invested 1.8% of its total revenues on Property, Plants, and Equipments (PP&E). Property & Casualty Insurance industry average PPE investment in the same period was 30.9%
- Intangibles share of Revenues: As a percentage of revenue, Alleghany invested 10.8% of its total revenues on Intangibles. Property & Casualty Insurance industry average Intangibles investment in the same period was 29.7%
- Net Margins: Alleghany Net Margins in the year 2016 were 7.5%. Property & Casualty Insurance industry average Net Margins in the same period were 8.2%
Sector and Industry Association of Alleghany
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Alleghany is associated with Financials Sector Group, Insurance Sector, and Property & Casualty Insurance Industry.
Insurance sector is comprised of the following industries: Life Insurance; Property & Casualty Insurance; Surety & Title Insurance; Insurance Brokerage; Diversified Insurance. The definitions for each of the industries is as follows:
- Life Insurance industry includes companies engaged principally in life insurance.
- Property & Casualty Insurance industry includes companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of non-life insurance.
- Surety & Title Insurance industry includes companies providing title & surety insurance.
- Insurance Brokerage industry includes insurance brokers and agencies.
- Diversified Insurance industry includes companies with life, health, property & casualty, and reinsurance interests, none of which predominates.
Industry Ranking of Alleghany
With $6.1 billion revenues, Alleghany ranked number 14 of all the companies in the US Property & Casualty Insurance industry. There were a total of 66 public companies in the US Property & Casualty Insurance industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Property & Casualty Insurance industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.