More Earnings Reports: Validus Holdings, Montpelier Re

July 27, 2012

Selected earnings highlights from Bermuda-based Validus Holdings Ltd. for the second quarter and the first six months of 2012 are as follows:
Q2 2012 Q2 2011
Gross premiums written ———— $627.089 mn $605.387 mn
Net premiums written ————— $508.037 mn $473.041 mn
Net premiums earned ———– $447.627 mn $425.640 mn
Net income —————————- $122.262 mn $110.478 mn
Operating income after tax ——- $170.732 mn $82.391 mn
Net investment income ————- $25.885 mn $26.494 mn

Q2 combined ratio – 66.6 percent (83.2 percent in Q2 2011)

1st Half 2012 1st Half 2011
Gross premiums written ———— $1.4644 bn $1.4553 bn
Net premiums written ————— $1.2383 bn $1.2131 bn
Net premiums earned ———– $898.826 mn $855.173 mn
Net income (loss) after tax ——- $246.496 mn ($61.886 mn)
Operating income (loss) after tax — $263.597 mn ($83.057 mn)
Net investment income ————- $53.645 mn $56.469 mn
1st half combined ratio – 75.7 percent (113.2 percent in 1st half 2011)

Chairman and CEO Ed Noonan commented: “I am pleased to report record second quarter net operating income for Validus in the amount of $171.2 million which equates to an annualized operating return on average equity of 19.5 percent. These results and growth in diluted book value per share of 4.3 percent inclusive of dividends reflect the strength of the Validus franchise in our core short tail classes of reinsurance and insurance and our active capital management. All three of our segments – Validus Re, Talbot and AlphaCat – are firing on all cylinders.”

He also indicated that the current quarter results are the “first to include details of both PaCRe and AlphaCat Re 2012, two new ventures sponsored by Validus and other investors which were announced earlier this year. We are gratified by the reception to both AlphaCat Re 2012 and PaCRe from clients and intermediaries who have welcomed the deployment of additional managed property catastrophe capacity accessible through Validus.”

Source: Validus Holdings Ltd.

Selected earnings highlights from the Bermuda-based Montpelier Re for the second quarter and the first half of 2012 are as follows:
Q2 2012 Q2 2011
Gross premiums written* ————– $253.5 mn $217.2 mn
Net premiums written* —————- $210.8 mn $194.3 mn
Net premiums earned* ————- $146.4 mn $152.4 mn
Net income —————————– $65.5 mn $23.6 mn
Underwriting income (loss)———– $34.6 mn ($3.8 mn)
Net investment income —————- $17.2 mn $17.1 mn
Q2 combined ratio – 76.5 percent (102.6 percent in Q2 2011)

1st Half 2012 1st Half 2011
Gross premiums written* ————– $513.2 mn $471.3 mn
Net premiums written* —————- $430.8 mn $420.8 mn
Net premiums earned* —————- $306.9 mn $318.5 mn
Net income (loss)———————– $175.9 mn ($80.7 mn)
Underwriting income (loss) ———– $100.6 mn ($134.8 mn)
Net investment income ————– $34.8 mn $34.6 mn
1st half combined ratio – 67.2 percent (142.3 percent in 1st half 2011)
*insurance and reinsurance

President and CEO Christopher Harris commented: “I am pleased with our first half underwriting and investment results, which have yielded 12.6 percent growth in our fully converted book value per share. In response to improved market conditions, we have increased our exposure in property catastrophe lines, positioning us well for the remainder of the year and into 2013.”

The earnings bulletin also noted that “during the second quarter the Company repurchased 2,399,601 common shares at an average price of $20.14 per share ($48 million). Thus far in the third quarter (through July 25, 2012), the Company has repurchased a further 582,735 common shares at an average price of $21.28 per share ($12 million).

“As of June 30, 2012, shareholders’ equity was $1.62 billion and total capital was $1.95 billion. The Company also noted that during the quarter A.M. Best upgraded the financial strength rating of Montpelier Reinsurance Ltd., its largest operating subsidiary, to “A” (Excellent).”

Source: Montpelier Re

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