Bermuda- based Validus Holdings Limited reported net income for the quarter ended December 31, 2007 of $139.0 million, or $1.77 per diluted common share, compared with $69.1 million, or $1.16 per diluted common share, for the quarter ended December 31, 2006. Net income for the year ended December 31, 2007 was $403.0 million, or $5.95 per diluted share, compared with $183.1 million, or $3.11 per diluted share, for the corresponding period in 2006.
Net operating income, which excludes capital gains/losses, for the fourth quarter of 2007 was $131.5 million, or $1.68 per diluted share, compared with $68.2 million, or $1.14 per diluted common share, for the quarter ended December 31, 2006. Net operating income for the year ended December 31, 2007 was $388.2 million, or $5.73 per diluted share, compared with $182.1 million, or $3.09 per diluted common share, for the year ended December 31, 2006.
The bulletin noted that the “operating results of Talbot have been included in the consolidated financial statements from the acquisition date of July 2, 2007. The Validus data for the full year 2006 and first six months of 2007 refer only to the company prior to its acquisition of Talbot. Further, the Validus data gives effect to the initial public offering, which was consummated on July 30, 2007.”
Fourth quarter highlights included the following:
— Gross premiums written increased by 191.6 percent to $191.0 million from $65.5 million, due to the addition of Talbot which added $143.5 million of gross premiums written;
— Net premiums written increased by 183.1 percent to $186.4 million from $65.9 million, due to the addition of Talbot which added $142.7 million of net premiums written;
— Net premiums earned increased by 202.4 percent to $318.0 million from $105.2 million, due primarily to the addition of Talbot which added $155.5 million of net premiums earned;
— Combined ratio of 63.1 percent which included $10.0 million of incurred losses relating to the October California wildland fires (representing 3.1 percentage points of the consolidated 33.8 percent loss ratio), and $30.6 million of favorable prior year loss reserve development benefiting the loss ratio by 9.6 percentage points;
— Investment income increased by 112.6 percent to $37.5 million from $17.7 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot;
— Annualized return on average equity of 29.9 percent and annualized net operating return on average equity of 28.2 percent; and
— Net income increased by 101.3 percent to $139.0 million from $69.1 million, due to the addition of Talbot which added $38.7 million of net income and growth in the Validus Re segment which added $39.5 million.
Commenting on the fourth quarter of 2007 results, Chairman, and CEO Ed Noonan stated: “2007 was a milestone year for Validus. We successfully completed the acquisition of Talbot and our initial public offering, while continuing to grow our franchise at Validus Re. The enhanced operating leverage resulting from the Talbot acquisition allowed us to generate an annualized return on average equity of 29.9 percent in the fourth quarter and 26.9 percent for the year. In 2007 we grew diluted book value per share by 21.6 percent and leave 2007 with a strong balance sheet comprising of $3.1 billion total investments and cash and total capitalization of $2.3 billion.”
Validus will host a conference call for analysts and investors today, Wednesday February 13, 2008 at 9:00 AM (Eastern) to discuss the fourth quarter financial results and related matters. The conference call can be accessed via telephone by dialing (800) 860-2442 (toll-free U.S.) or (412) 373-6964 (international). Those who intend to participate in the conference call should register at least ten minutes in advance to ensure access to the call. A telephone replay of the conference call will be available through February 27, 2008 by dialing (877) 344-7529 and entering the pass code 414679.
The full earnings report, as well as the conference call, will be available through a live audio web cast accessible through the Investor Information section of the Company’s web site at: www.validusre.bm.
Source: Validus Holdings
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