Validus Q3 Net Almost $500 Million; $731.6 for 9-Months

November 9, 2009

Bermuda-based Validus Holdings reported net income of $499.2 million, or $5.21 per diluted common share for the three months ended September 30, 2009, compared with a net (loss) of ($126.3) million, or ($1.71) per diluted common share, for the three months ended September 30, 2008.

Net income for the nine months ended September 30, 2009 was $731.6 million, or $8.65 per diluted share, compared with $16.1 million, or $0.14 per diluted share, for the nine months ended September 30, 2008.

Third quarter net operating income, which excludes investment gains/losses, was $145.6 million, or $1.52 per diluted share, compared with a net operating (loss) of ($53.1) million, or ($0.73) per diluted common share in Q3 2008. Net operating income for the first nine months was $356.4 million, or $4.21 per diluted share, compared with net operating income of $124.1 million, or $1.53 per diluted common share, for the nine months ended September 30, 2008.

Validus listed the following highlights for the third quarter:
— Gross premiums written for the period were $331.0 million compared to $269.2 million for Q3 2008, an increase of $61.8 million, or 23.0 percent.
— Net premiums earned for the three months were $374.7 million compared to $339.3 million for Q3 2008, an increase of $35.4 million, or 10.4 percent.
— Combined ratio of 66.7 percent which included $32.0 million of favorable prior year loss reserve development, benefiting the loss ratio by 8.5 percentage points.
— Annualized return on average equity of 65.3 percent and annualized operating return on average equity of 19.0 percent.
Highlights for the nine months ended September 30, 2009 included the following:
— Gross premiums written for were $1.366 billion, compared to $1.1707 billion for the same period in 2008, an increase of $195.2 million, or 16.7 percent.
— Net premiums earned for the nine months were $1.0217 billion compared to $940.5 million for the nine months of 2008, an increase of $81.2 million, or 8.6 percent.
— Combined ratio of 70.9 percent which included $53.3 million of favorable prior year loss reserve development, benefiting the loss ratio by 5.2 percentage points.
— Annualized return on average equity of 38.7 percent and annualized operating return on average equity of 18.9 percent.

Chairman and CEO Ed Noonan commented: “We completed the IPC amalgamation on September 4, 2009. As a consequence of the acquisition and of strong underlying financial results for our Validus Re and Talbot segments, we closed the quarter with total shareholders’ equity of $3.97 billion, total assets of $7.18 billion and total investments and cash of $5.71 billion.

“Diluted book value per share rose to $28.61 at September 30, 2009, which when combined with our $0.20 quarterly dividend resulted in an increase in diluted book value per share plus dividends of 10.5 percent in the quarter.

“Looking toward 2010, we approach the January renewal season with $4.3 billion of capital and the ability and intent to support our clients with our expanded resources.”

The full report, additional information and details on accessing the earnings conference call, held Nov. 6, may be obtained on the Company’s web site at: www.validusre.bm.

Source: Validus Holdings

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