[January 29, 2015] |
|
Validus Announces 2014 Full Year Net Income of $481.3 Million
Validus Holdings, Ltd. ("Validus" or the "Company") (NYSE:VR) today
reported net income available to Validus of $125.9 million, or $1.38 per
diluted common share, for the three months ended December 31, 2014,
compared to $95.3 million, or $0.93 per diluted common share, for the
three months ended December 31, 2013. Net income available to Validus
was $481.3 million, or $5.08 per diluted common share, for the year
ended December 31, 2014, compared to $532.7 million, or $4.94 per
diluted common share, for the year ended December 31, 2013.
Net operating income available to Validus was $129.0 million, or $1.42
per diluted common share, for the three months ended December 31, 2014,
compared to $100.1 million, or $0.97 per diluted common share, for the
three months ended December 31, 2013. Net operating income available to
Validus was $486.5 million, or $5.14 per diluted common share, for the
year ended December 31, 2014, compared to $589.4 million, or $5.48 per
diluted common share, for the year ended December 31, 2013.
Book value per diluted common share stands at $39.66, reflecting
quarterly growth of 3.3% inclusive of dividends.
Commenting on the financial results for the full year ended December 31,
2014, Validus' Chairman and CEO Ed Noonan stated:
"During 2014, Validus delivered an impressive 13.2% operating return on
average equity and 12.8% growth in book value per diluted share
inclusive of dividends. We also completed an important strategic
objective by acquiring Western World Insurance Group, a leading
specialty lines insurance company. The addition of Western World
provides Validus with a top notch underwriting and distribution platform
in the United States, the world's largest insurance market, to
complement our Bermuda, London and other global operations."
On October 2, 2014, the Company acquired all of the outstanding capital
stock of Western World Insurance Group, Inc. ("Western World"), a
specialty lines insurance company. The three month results of Western
World have been included in the Company's results for the first time and
are disclosed as a separate segment.
Net income and net operating income available to Validus, net earnings
and net operating earnings per diluted common share available to
Validus, by segment for the three months ended December 31, 2014 were as
follows:
|
|
|
|
Net Income Available to Validus
|
|
Net Operating Income Available to Validus
|
|
|
|
(Expressed in millions of U.S. dollars, except per share information)
|
Validus Re
|
|
|
$
|
140.2
|
|
|
$
|
132.1
|
|
Talbot
|
|
|
14.1
|
|
|
11.3
|
|
PaCRe, Ltd.
|
|
|
(7.1
|
)
|
|
0.1
|
|
Other AlphaCat Companies
|
|
|
9.3
|
|
|
8.8
|
|
AlphaCat subtotal
|
|
|
2.2
|
|
|
8.9
|
|
Western World
|
|
|
11.4
|
|
|
10.9
|
|
Corporate & Eliminations
|
|
|
(42.0
|
)
|
|
(34.2
|
)
|
Total
|
|
|
$
|
125.9
|
|
|
$
|
129.0
|
|
Net earnings per diluted common share available to Validus
|
|
|
$
|
1.38
|
|
|
|
|
Net operating earnings per diluted common share available to
Validus
|
|
|
|
|
|
$
|
1.42
|
|
|
Net operating income (loss), a non-GAAP financial measure, is defined as
net income (loss) excluding net realized and change in net unrealized
gains (losses) on investments, income (loss) from investment affiliate,
foreign exchange gains (losses), other income (loss) and non-recurring
items. Net operating income (loss) available (attributable) to Validus
is defined as above, but excludes income (loss) available (attributable)
to noncontrolling interest. Reconciliations of these measures to net
income (loss) and net income (loss) available (attributable) to Validus,
the most directly comparable GAAP measures, are presented at the end of
this release.
January 2015 Reinsurance Renewals - Validus Re and AlphaCat segments
During the January 2015 renewal season, the Validus Re and AlphaCat
segments underwrote $540.9 million in gross premiums written, a decrease
of 6.0% from the prior year renewal period. This renewal data does not
include: (i) Talbot and Western World's operations as the business of
each of these segments is distributed relatively evenly throughout the
year and (ii) U.S. agriculture premiums.
Below is a table outlining the Validus Re and AlphaCat combined January
2015 renewals split by Catastrophe XOL, Per Risk and Proportional.
|
January 2015 Gross Premiums Written
|
|
|
|
|
|
|
|
Validus Re segment and AlphaCat segment premium (a)
|
|
|
|
Catastrophe XOL
|
|
|
Per Risk
|
|
|
Proportional
|
|
|
Total
|
|
|
|
(Expressed in millions of U.S. dollars)
|
2015
|
|
|
$
|
317.2
|
|
|
|
$
|
58.4
|
|
|
|
$
|
165.3
|
|
|
|
$
|
540.9
|
|
2014
|
|
|
$
|
355.2
|
|
|
|
$
|
72.2
|
|
|
|
$
|
147.8
|
|
|
|
$
|
575.2
|
|
(Decrease) Increase
|
|
|
(10.7
|
)%
|
|
|
(19.1
|
)%
|
|
|
11.8
|
%
|
|
|
(6.0
|
)%
|
|
(a)
|
|
The renewal data above does not include intercompany eliminations
between Validus Re and Talbot.
|
|
|
|
Below is a table outlining the Validus Re and AlphaCat segments' January
2015 reinsurance renewals split by line of business.
|
Validus Re segment premium (a)
|
|
|
|
U.S.
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
Property
|
|
|
Marine
|
|
|
Specialty
|
|
|
Total
|
|
|
|
(Expressed in millions of U.S. dollars)
|
2015
|
|
|
$
|
90.0
|
|
|
|
$
|
113.1
|
|
|
|
$
|
126.0
|
|
|
|
$
|
110.9
|
|
|
|
$
|
440.0
|
|
2014
|
|
|
$
|
109.6
|
|
|
|
$
|
137.4
|
|
|
|
$
|
138.1
|
|
|
|
$
|
104.1
|
|
|
|
$
|
489.2
|
|
(Decrease) Increase
|
|
|
(17.9
|
)%
|
|
|
(17.7
|
)%
|
|
|
(8.8
|
)%
|
|
|
6.5
|
%
|
|
|
(10.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AlphaCat segment premium (b)
|
|
|
|
U.S.
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
Property
|
|
|
Marine
|
|
|
Specialty
|
|
|
Total
|
|
|
|
(Expressed in millions of U.S. dollars)
|
2015
|
|
|
$
|
53.0
|
|
|
|
$
|
47.9
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
100.9
|
|
2014
|
|
|
$
|
44.6
|
|
|
|
$
|
41.4
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
86.0
|
|
Increase
|
|
|
18.8
|
%
|
|
|
15.7
|
%
|
|
|
-
|
%
|
|
|
-
|
%
|
|
|
17.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Validus Re segment and AlphaCat segment premium (a)
|
|
|
|
U.S.
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
|
|
Property
|
|
|
Marine
|
|
|
Specialty
|
|
|
Total
|
|
|
|
(Expressed in millions of U.S. dollars)
|
2015 (c)
|
|
|
$
|
143.0
|
|
|
|
$
|
161.0
|
|
|
|
$
|
126.0
|
|
|
|
$
|
110.9
|
|
|
|
$
|
540.9
|
|
2014 (c)
|
|
|
$
|
154.2
|
|
|
|
$
|
178.8
|
|
|
|
$
|
138.1
|
|
|
|
$
|
104.1
|
|
|
|
$
|
575.2
|
|
(Decrease) Increase
|
|
|
(7.3
|
)%
|
|
|
(10.0
|
)%
|
|
|
(8.8
|
)%
|
|
|
6.5
|
%
|
|
|
(6.0
|
)%
|
|
(a)
|
|
The renewal data above does not include intercompany eliminations
between Validus Re and Talbot.
|
|
|
|
(b)
|
|
The renewal of AlphaCat premium in January 2015 is written through
AlphaCat Reinsurance, Ltd. ("AlphaCat Re"), which is fully
consolidated. AlphaCat Re writes business on behalf of AlphaCat
2014, Ltd., AlphaCat 2015, Ltd. and the AlphaCat ILS funds. Gross
premiums written for PaCRe, Ltd. are also included.
|
|
|
|
Fourth Quarter 2014 Results
Highlights for the fourth quarter, including the three month results of
Western World, include the following:
-
Gross premiums written for the three months ended December 31, 2014
were $336.6 million compared to $237.3 million for the three months
ended December 31, 2013, an increase of $99.4 million, or 41.9%.
-
Net premiums earned for the three months ended December 31, 2014 were
$558.7 million compared to $492.2 million for the three months ended
December 31, 2013, an increase of $66.5 million, or 13.5%.
-
Underwriting income for the three months ended December 31, 2014 was
$135.7 million compared to $110.4 million for the three months ended
December 31, 2013, an increase of $25.3 million, or 22.9%.
-
Combined ratio for the three months ended December 31, 2014 was 75.7%
which included $84.6 million of favorable loss reserve development on
prior accident years, benefiting the loss ratio by 15.1 percentage
points compared to a combined ratio for the three months ended
December 31, 2013 of 77.6% which included $33.6 million of favorable
loss reserve development on prior accident years, benefiting the loss
ratio by 6.8 percentage points. The favorable loss reserve development
was primarily due to lower than expected development on attritional
losses.
-
Net operating income available to Validus for the three months ended
December 31, 2014 was $129.0 million compared to $100.1 million for
the three months ended December 31, 2013, an increase of $29.0
million, or 29.0%.
-
Net income available to Validus for the three months ended
December 31, 2014 was $125.9 million compared to $95.3 million for the
three months ended December 31, 2013, an increase of $30.6 million, or
32.1%.
-
Annualized return on average equity of 13.8% and annualized net
operating return on average equity of 14.2% for the three months ended
December 31, 2014 compared to 10.2% and 10.7%, respectively, for the
three months ended December 31, 2013.
Highlights for the full year ended December 31, 2014 include the
following:
-
Gross premiums written for the year ended December 31, 2014 were
$2,363.3 million compared to $2,401.1 million for the year ended
December 31, 2013, a decrease of $37.8 million, or 1.6%.
-
Net premiums earned for the year ended December 31, 2014 were $2,002.4
million compared to $2,102.0 million for the year ended December 31,
2013, a decrease of $99.6 million, or 4.7%.
-
Underwriting income for the year ended December 31, 2014 was $526.9
million compared to $604.9 million for the year ended December 31,
2013, a decrease of $78.0 million, or 12.9%.
-
Combined ratio for the year ended December 31, 2014 was 73.7% which
included $252.2 million of favorable loss reserve development on prior
accident years, benefiting the loss ratio by 12.6 percentage points
compared to a combined ratio for the year ended December 31, 2013 of
71.2% which included $205.4 million of favorable loss reserve
development on prior accident years, benefiting the loss ratio by 9.8
percentage points.
-
Net operating income available to Validus for the year ended
December 31, 2014 was $486.5 million compared to $589.4 million for
the year ended December 31, 2013, a decrease of $103.0 million, or
17.5%.
-
Net income available to Validus for the year ended December 31, 2014
was $481.3 million compared to $532.7 million for the year ended
December 31, 2013, a decrease of $51.3 million, or 9.6%.
-
Return on average equity of 13.1% and net operating return on average
equity of 13.2% for the year ended December 31, 2014 compared to 14.0%
and 15.5%, respectively, for the year ended December 31, 2013.
Notable Loss Events
During the three months ended December 31, 2014 and 2013, the Company
did not incur any notable loss events, defined as consolidated losses
which aggregate to a threshold greater than or equal to $30.0 million,
however there was development on a previous quarter non-notable loss
event, Tripoli airport, of $6.8 million during the three months ended
December 31, 2014. The fourth quarter development caused this event to
exceed the $30.0 million threshold and become a notable loss as a result.
|
|
|
|
|
|
|
Three Months Ended December 31, 2014
|
|
|
|
|
|
|
(Dollars in thousands)
|
Loss event (a) (b)
|
|
|
Validus Re
|
|
|
AlphaCat
|
|
|
Talbot
|
|
|
Western World
|
|
|
Total
|
Period
|
|
|
Description
|
|
|
Net Losses and Loss Expenses (c)
|
|
|
% of NPE (d)
|
|
|
Net Losses and Loss Expenses (c)
|
|
|
% of NPE (d)
|
|
|
Net Losses and Loss Expenses (c)
|
|
|
% of NPE (d)
|
|
|
Net Losses and Loss Expenses (c)
|
|
|
% of NPE (d)
|
|
|
Net Losses and Loss Expenses (c)
|
|
|
% of NPE (d)
|
Q3
|
|
|
Tripoli airport
|
|
|
$
|
15,659
|
|
|
|
6.9
|
%
|
|
|
$
|
-
|
|
|
|
-
|
%
|
|
|
$
|
12,475
|
|
|
|
5.4
|
%
|
|
|
$
|
-
|
|
|
|
-
|
%
|
|
|
$
|
28,134
|
|
|
|
5.7
|
%
|
Q4
|
|
|
Tripoli airport
|
|
|
$
|
6,810
|
|
|
|
3.0
|
%
|
|
|
$
|
-
|
|
|
|
-
|
%
|
|
|
$
|
-
|
|
|
|
-
|
%
|
|
|
$
|
-
|
|
|
|
-
|
%
|
|
|
$
|
6,810
|
|
|
|
1.2
|
%
|
Total
|
|
|
|
|
|
$
|
22,469
|
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
$
|
12,475
|
|
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
$
|
34,944
|
|
|
|
|
|
|
(a)
|
|
For disclosure purposes, only those loss events which aggregate to
over $30.0 million on a consolidated basis ("notable loss events")
are disclosed separately in the Company's analysis of loss ratios
and also included in the reserve for notable loss events and reserve
for development on notable loss events table in the Company's Annual
Report on Form 10-K. In addition, only those loss events which
aggregate to over $15.0 million but less than $30.0 million on a
consolidated basis ("non-notable loss events") are included in the
Company's analysis of loss ratios.
|
|
|
|
(b)
|
|
The notable loss event amount was based on management's estimates
following a review of the company's potential exposure and
discussions with clients and brokers. Given the magnitude of this
event, and other uncertainties inherent in loss estimation,
meaningful uncertainty remains regarding losses from this event and
the Company's actual ultimate net losses from this event may vary
materially from this estimate.
|
|
|
|
(c)
|
|
Net of reinsurance but not net of reinstatement premiums. Total
reinstatement premiums were $0.9 million for the three months ended
December 31, 2014.
|
|
|
|
(d)
|
|
NPE = Net premiums earned.
|
|
|
|
The Company's loss ratio, excluding prior year development, notable loss
events, and non-notable loss events for the three months ended
December 31, 2014 and 2013 was 52.7% and 49.1%, respectively.
Validus Re Segment - Fourth Quarter 2014 Results
Highlights for the fourth quarter include the following:
-
Gross premiums written for the three months ended December 31, 2014
were $32.7 million compared to $10.3 million for the three months
ended December 31, 2013, an increase of $22.5 million, or 219.4%.
Gross premiums written for the three months ended December 31, 2014
included $14.0 million of property premiums, $15.3 million of marine
premiums and $3.5 million of specialty premiums, compared to $17.2
million of property premiums and $nil of marine premiums, offset by
$(6.9) million of specialty premiums for the three months ended
December 31, 2013.
-
Net premiums earned for the three months ended December 31, 2014 were
$230.5 million compared to $250.3 million for the three months ended
December 31, 2013, a decrease of $19.8 million, or 7.9%.
-
The combined ratio for the three months ended December 31, 2014 was
51.3% compared to 69.1% for the three months ended December 31, 2013,
a decrease of 17.8 percentage points.
-
The loss ratio for the three months ended December 31, 2014 was 25.8%
compared to 44.2% for the three months ended December 31, 2013, a
decrease of 18.4 percentage points. The loss ratio for the three
months ended December 31, 2014 included favorable loss reserve
development on prior accident years of $30.8 million, benefiting the
loss ratio by 13.3 percentage points. The favorable loss reserve
development was primarily due to lower than expected development on
attritional losses. The loss ratio for the three months ended December
31, 2013 included unfavorable loss reserve development on prior
accident years of $3.4 million, increasing the loss ratio by 1.3
percentage points.
-
Net operating income available to Validus Re for the three months
ended December 31, 2014 was $132.1 million compared to $92.1 million,
for the three months ended December 31, 2013, an increase of $40.0
million, or 43.4%.
-
General and administrative expenses for the three months ended
December 31, 2014 were $21.0 million compared to $21.6 million for the
three months ended December 31, 2013, a decrease of $0.6 million, or
2.9%.
Highlights for the full year ended December 31, 2014 include the
following:
-
Gross premiums written for the year ended December 31, 2014 were
$1,136.9 million compared to $1,242.5 million for the year ended
December 31, 2013, a decrease of $105.6 million, or 8.5%. Gross
premiums written for the year ended December 31, 2014 included $631.0
million of property premiums, $191.0 million of marine premiums and
$314.9 million of specialty premiums, compared to $744.6 million of
property premiums, $194.0 million of marine premiums and $303.9
million of specialty premiums for the year ended December 31, 2013.
-
Net premiums earned for the year ended December 31, 2014 were $917.3
million compared to $1,133.9 million for the year ended December 31,
2013, a decrease of $216.7 million, or 19.1%.
-
The combined ratio for the year ended December 31, 2014 was 58.2%
compared to 62.6% for the year ended December 31, 2013, a decrease of
4.4 percentage points.
-
The loss ratio for the year ended December 31, 2014 was 33.5% compared
to 37.9% for the year ended December 31, 2013, a decrease of 4.4
percentage points. The loss ratio for the year ended December 31, 2014
included favorable loss reserve development on prior accident years of
$87.6 million, benefiting the loss ratio by 9.5 percentage points. The
loss ratio for the year ended December 31, 2013 included favorable
loss reserve development on prior accident years of $59.3 million,
benefiting the loss ratio by 5.2 percentage points.
-
Net operating income available to Validus Re for the year ended
December 31, 2014 was $452.4 million compared to $508.9 million, for
the year ended December 31, 2013, a decrease of $56.5 million, or
11.1%.
-
General and administrative expenses for the year ended December 31,
2014 were $74.7 million compared to $91.3 million for the year ended
December 31, 2013, a decrease of $16.5 million, or 18.1%.
Talbot Segment - Fourth Quarter 2014 Results
Highlights for the fourth quarter include the following:
-
Gross premiums written for the three months ended December 31, 2014
were $247.4 million compared to $236.4 million for the three months
ended December 31, 2013, an increase of $11.1 million, or 4.7%. Gross
premiums written for the three months ended December 31, 2014 included
$76.1 million of property premiums, $72.9 million of marine premiums
and $98.4 million of specialty premiums compared to $60.9 million of
property premiums, $75.1 million of marine premiums and $100.4 million
of specialty premiums for the three months ended December 31, 2013.
-
Net premiums earned for the three months ended December 31, 2014 were
$221.2 million compared to $204.3 million for the three months ended
December 31, 2013, an increase of $16.9 million, or 8.3%.
-
The combined ratio for the three months ended December 31, 2014 was
96.8% compared to 86.8% for the three months ended December 31, 2013,
an increase of 10.0 percentage points.
-
The loss ratio for the three months ended December 31, 2014 was 53.6%
compared to 46.4% for the three months ended December 31, 2013, an
increase of 7.2 percentage points. The loss ratio for the three months
ended December 31, 2014 included favorable loss reserve development on
prior accident years of $42.0 million, benefiting the loss ratio by
19.0 percentage points. The favorable loss reserve development was
primarily due to lower than expected development on attritional
losses. The loss ratio for the three months ended December 31, 2013
included favorable loss reserve development on prior accident years of
$37.0 million, benefiting the loss ratio by 18.1 percentage points.
-
Net operating income available to Talbot for the three months ended
December 31, 2014 was $11.3 million compared to $33.4 million, for the
three months ended December 31, 2013, a decrease of $22.1 million, or
66.1%.
-
General and administrative expenses for the three months ended
December 31, 2014 were $43.8 million compared to $36.0 million for the
three months ended December 31, 2013, an increase of $7.8 million, or
21.8%.
Highlights for the full year ended December 31, 2014 include the
following:
-
Gross premiums written for the year ended December 31, 2014 were
$1,101.8 million compared to $1,091.9 million for the year ended
December 31, 2013, an increase of $9.9 million, or 0.9%. Gross
premiums written for the year ended December 31, 2014 included $337.2
million of property premiums, $392.7 million of marine premiums and
$371.9 million of specialty premiums compared to $345.8 million of
property premiums, $381.2 million of marine premiums and $364.8
million of specialty premiums for the year ended December 31, 2013.
-
Net premiums earned for the year ended December 31, 2014 were $879.8
million compared to $830.7 million for the year ended December 31,
2013, an increase of $49.1 million, or 5.9%.
-
The combined ratio for the year ended December 31, 2014 was 87.8%
compared to 79.8% for the year ended December 31, 2013, an increase of
8.0 percentage points.
-
The loss ratio for the year ended December 31, 2014 was 48.1% compared
to 41.7% for the year ended December 31, 2013, an increase of 6.4
percentage points. The loss ratio for the year ended December 31, 2014
included favorable loss reserve development on prior accident years of
$141.2 million, benefiting the loss ratio by 16.1 percentage points.
The loss ratio for the year ended December 31, 2013 included favorable
loss reserve development on prior accident years of $146.2 million,
benefiting the loss ratio by 17.6 percentage points.
-
Net operating income available to Talbot for the year ended
December 31, 2014 was $125.0 million compared to $186.5 million for
the year ended December 31, 2013, a decrease of $61.5 million, or
32.9%.
-
General and administrative expenses for the year ended December 31,
2014 were $150.8 million compared to $136.5 million for the year ended
December 31, 2013, an increase of $14.4 million, or 10.5%.
AlphaCat Segment - Fourth Quarter 2014 Results
Highlights for the fourth quarter include the following:
-
Gross premiums written, including PaCRe, for the three months ended
December 31, 2014 were $0.1 million compared to $0.3 million for the
three months ended December 31, 2013, a decrease of $0.1 million, or
57.1%.
-
Net premiums earned for the three months ended December 31, 2014 were
$34.1 million compared to $37.6 million for the three months ended
December 31, 2013, a decrease of $3.6 million, or 9.5%.
-
Other insurance related income, consisting primarily of management fee
income, for the three months ended December 31, 2014 was $5.6 million
compared to $9.0 million for the three months ended December 31, 2013,
a decrease of $3.3 million, or 37.2%.
-
Income available to AlphaCat from non-consolidated operating
affiliates for the three months ended December 31, 2014 was $4.1
million compared to $5.5 million for the three months ended
December 31, 2013, a decrease of $1.4 million, or 24.8%.
-
Income attributable to operating affiliate investors for the three
months ended December 31, 2014 was $26.6 million compared to $26.6
million for the three months ended December 31, 2013.
-
The combined ratio for the three months ended December 31, 2014 was
14.3% compared to 25.6% for the three months ended December 31, 2013,
a decrease of 11.3 percentage points.
-
The loss ratio for the three months ended December 31, 2014 was (7.4)%
compared to 1.7% for the three months ended December 31, 2013, a
decrease of 9.1 percentage points. The loss ratio for the three months
ended December 31, 2014 included favorable loss reserve development on
prior accident years of $0.6 million, benefiting the loss ratio by 1.7
percentage points. The loss ratios for the three months ended
December 31, 2013 did not include any loss reserve development on
prior accident years.
-
Net operating income available to AlphaCat for the three months ended
December 31, 2014 was $8.9 million compared to $11.8 million for the
three months ended December 31, 2013, a decrease of $2.9 million, or
24.5%.
Highlights for the full year ended December 31, 2014 include the
following:
-
Gross premiums written, including PaCRe, for the year ended
December 31, 2014 were $135.2 million compared to $147.0 million for
the year ended December 31, 2013, a decrease of $11.8 million, or 8.0%.
-
Net premiums earned for the year ended December 31, 2014 were $132.4
million compared to $137.4 million for the year ended December 31,
2013, a decrease of $5.1 million, or 3.7%.
-
Other insurance related income, consisting primarily of management fee
income, for the year ended December 31, 2014 was $27.1 million
compared to $26.4 million for the year ended December 31, 2013, an
increase of $0.7 million, or 2.6%.
-
Income available to AlphaCat from non-consolidated operating
affiliates for the year ended December 31, 2014 was $17.7 million
compared to $14.3 million for the year ended December 31, 2013, an
increase of $3.4 million, or 24.0%.
-
Income attributable to operating affiliate investors for the year
ended December 31, 2014 was $109.4 million compared to $68.8 million
for the year ended December 31, 2013, a change of $40.6 million, or
59.1%.
-
The combined ratio for the year ended December 31, 2014 was 17.5%
compared to 36.9% for the year ended December 31, 2013, a decrease of
19.4 percentage points.
-
The loss ratio for the year ended December 31, 2014 was (7.3)%
compared to 12.8% for the year ended December 31, 2013, a decrease of
20.1 percentage points. The loss ratio for the year ended December 31,
2014 included favorable loss reserve development on prior accident
years of $12.2 million, benefiting the loss ratio by 9.2 percentage
points. The loss ratio for the year ended December 31, 2013 did not
include any loss reserve development on prior accident years.
-
Net operating income available to AlphaCat for the year ended
December 31, 2014 was $38.6 million compared to $45.2 million, for the
year ended December 31, 2013, a decrease of $6.6 million, or 14.7%.
Western World Segment - Fourth Quarter 2014
Results
On October 2, 2014, the Company acquired all of the outstanding capital
stock of Western World. The three month results of Western World have
been included in the Company's results for the first time, and are
disclosed as a separate segment. For additional details on the purchase
GAAP adjustments, refer to the Company's Current Report on Form 8-K
furnished with the SEC on January 26, 2015.
Highlights for the fourth quarter include the following:
-
Gross premiums written for the three months ended December 31, 2014
were $65.2 million. Gross premiums written for the three months ended
December 31, 2014 included $10.0 million of property premiums and
$55.3 million of liability premiums.
-
Net premiums earned for the three months ended December 31, 2014 were
$73.0 million.
-
The combined ratio for the three months ended December 31, 2014 was
89.7%.
-
The loss ratio for the three months ended December 31, 2014 was 69.9%.
The loss ratio for the three months ended December 31, 2014 included
favorable loss reserve development on prior accident years of $11.2
million, benefiting the loss ratio by 15.4 percentage points.
-
Net operating income available to Western World for the three months
ended December 31, 2014 was $10.9 million.
-
General and administrative expenses for the three months ended
December 31, 2014 were $11.1 million.
Corporate Results
Corporate results include executive and board expenses, internal and
external audit expenses, interest and costs incurred in connection with
the Company's senior notes and junior subordinated deferrable debentures
and other costs relating to the Company as a whole.
General and administrative expenses for the three months ended December
31, 2014, net of operating segment eliminations, were $18.3 million
compared to $20.4 million for the three months ended December 31, 2013,
a decrease of $2.0 million or 10.0%. Share compensation expenses for the
three months ended December 31, 2014, net of operating segment
eliminations were $3.0 million compared to $2.9 million for the three
months ended December 31, 2013, an increase of $0.1 million or 3.6%. In
addition to the general and administrative expenses noted above, there
were $4.7 million of non-recurring costs relating to the acquisition of
Western World for the three months ended December 31, 2014.
General and administrative expenses for the year ended December 31,
2014, net of operating segment eliminations, were $73.5 million compared
to $68.8 million for the year ended December 31, 2013, an increase of
$4.7 million, or 6.9%. Share compensation expenses for the year ended
December 31, 2014, net of operating segment eliminations, were $11.4
million compared to $9.9 million for the year ended December 31, 2013,
an increase of $1.5 million, or 14.9%. In addition to the general and
administrative expenses noted above, there were $8.1 million of
non-recurring costs relating to the acquisition of Western World for the
year ended December 31, 2014.
Investments
Net investment income for the three months ended December 31, 2014 was
$30.2 million compared to $24.2 million for the three months ended
December 31, 2013, an increase of $6.0 million, or 24.6%.
Net realized gains on investments for the three months ended
December 31, 2014 were $6.9 million compared to $4.4 million for the
three months ended December 31, 2013, an increase of $2.5 million, or
55.2%.
The change in net unrealized losses on investments for the three months
ended December 31, 2014 was $(74.1) million compared to the change in
net unrealized gains of $20.1 million for the three months ended
December 31, 2013, a decrease of $94.3 million, or 468.1%. The change in
net unrealized losses on investments for the three months ended
December 31, 2014 was driven by ($72.1) million in unrealized losses
relating to PaCRe. The amount of PaCRe's net unrealized losses
attributable to noncontrolling interest was $64.9 million for the three
months ended December 31, 2014, leaving a net impact to the Company of
($7.2) million.
The change in net unrealized gains on investments for the three months
ended December 31, 2013 was driven by $26.6 million in unrealized gains
relating to PaCRe. The amount of PaCRe's net unrealized gains
attributable to noncontrolling interest was ($23.9) million for the
three months ended December 31, 2013, leaving a net impact to the
Company of $2.7 million.
Net investment income for the year ended December 31, 2014 was $100.1
million compared to $96.1 million for the year ended December 31, 2013,
an increase of $4.0 million, or 4.2%.
Net realized gains on investments for the year ended December 31, 2014
were $23.1 million compared to $3.3 million for the year ended
December 31, 2013, an increase of $19.8 million, or 608.9%.
The change in net unrealized losses on investments for the year ended
December 31, 2014 was ($58.0) million compared to ($58.5) million for
the year ended December 31, 2013, an increase of $0.5 million, or 0.9%.
The change in net unrealized losses on investments for the year ended
December 31, 2014 was driven by ($55.1) million in unrealized losses
relating to PaCRe. The amount of PaCRe's net unrealized losses
attributable to noncontrolling interest was $49.6 million for the year
ended December 31, 2014, leaving a net impact to the Company of ($5.5)
million.
The change in net unrealized losses on investments for the year ended
December 31, 2013 was driven by ($6.1) million in unrealized losses
relating to PaCRe. The amount of PaCRe's net unrealized losses
attributable to noncontrolling interest was $5.5 million for the year
ended December 31, 2013, leaving a net impact to the Company of ($0.6)
million.
Finance Expenses
Finance expenses for the three months ended December 31, 2014 were $16.5
million compared to $16.9 million for the three months ended
December 31, 2013, a decrease of $0.5 million, or 2.7%.
Finance expenses for the year ended December 31, 2014 were $63.9 million
compared to $64.2 million for the year ended December 31, 2013, a
decrease of $0.3 million, or 0.5%.
Shareholders' Equity and Capitalization
As at December 31, 2014, total shareholders' equity was $4.0 billion
including $458.6 million of noncontrolling interest. Shareholders'
equity available to Validus was $3.6 billion as at December 31, 2014.
Book value per diluted common share was $39.66 at December 31, 2014,
compared to $38.70 at September 30, 2014. Book value per diluted common
share is a non-GAAP financial measure. A reconciliation of this measure
to book value per common share is presented at the end of this release.
Total capitalization at December 31, 2014 was $4.9 billion, including
$539.3 million of junior subordinated deferrable debentures, $247.3
million of senior notes and $80.0 million of redeemable noncontrolling
interest. Total capitalization available to Validus at December 31, 2014
was $4.4 billion, excluding $458.6 million of noncontrolling interest
and $80.0 million of redeemable noncontrolling interest.
Share Repurchases
For the three months ended December 31, 2014, the number of shares
repurchased by the Company was 5.5 million. A summary of the share
repurchases made to date under the Company's previously announced share
repurchase program is as follows:
|
|
|
Share Repurchase Activity (Expressed in thousands
of U.S. dollars except for share and per share information)
|
|
|
As at September 30, 2014
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
|
Effect of share repurchases:
|
|
(cumulative)
|
|
October
|
|
November
|
|
December
|
|
December 31, 2014
|
Aggregate purchase price (a)
|
|
$
|
2,006,875
|
|
|
$
|
65,633
|
|
|
$
|
73,454
|
|
|
$
|
85,339
|
|
|
$
|
224,426
|
Shares repurchased
|
|
64,502,410
|
|
|
1,663,577
|
|
|
1,815,805
|
|
|
2,063,712
|
|
|
5,543,094
|
Average price (a)
|
|
$
|
31.11
|
|
|
$
|
39.45
|
|
|
$
|
40.45
|
|
|
$
|
41.35
|
|
|
$
|
40.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated cumulative net accretive (dilutive) impact on:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per diluted common share (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
3.35
|
Earnings per diluted share - Quarter (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
0.53
|
|
|
|
|
Share Repurchase Activity (Expressed in thousands
of U.S. dollars except for share and per share information)
|
Effect of share repurchases:
|
|
As at December 31, 2014
|
|
January
|
|
As at January 28, 2015
|
|
Cumulative to Date Effect
|
Aggregate purchase price (a)
|
|
$
|
2,231,301
|
|
|
$
|
43,100
|
|
|
$
|
43,100
|
|
|
$
|
2,274,401
|
Shares repurchased
|
|
70,045,504
|
|
|
1,072,462
|
|
|
1,072,462
|
|
|
71,117,966
|
Average price (a)
|
|
$
|
31.86
|
|
|
$
|
40.19
|
|
|
$
|
40.19
|
|
|
$
|
31.98
|
|
(a)
|
|
Share transactions are on a trade date basis through January 28,
2015 and are inclusive of commissions. Average share price is
rounded to two decimal places.
|
|
|
|
(b)
|
|
As the average price per share repurchased during certain periods
between 2009 and 2015 was lower than the book value per common
share, the repurchase of shares increased the Company's period
ending book value per share.
|
|
|
|
(c)
|
|
The estimated impact on earnings per diluted share was calculated by
comparing reported results versus i) net income per share plus an
estimate of lost net investment income on the cumulative share
repurchases divided by ii) weighted average diluted shares
outstanding excluding the weighted average impact of cumulative
share repurchases. The impact of cumulative share repurchases was
accretive to earnings per diluted share.
|
|
|
|
Conference Call
The Company will host a conference call for analysts and investors on
January 30, 2015 at 10:00 AM (Eastern) to discuss the fourth quarter
2014 financial results and related matters. The conference call may be
accessed by dialing 1-800-708-4540 (toll-free U.S.) or 1-847-619-6397
(international) and entering the passcode 3847 5579. 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 13, 2015, by dialing
1-888-843-7419 (toll-free U.S.) or 1-630-652-3042 (international) and
entering the passcode 3847 5579.
This conference call will also be available through a live audio webcast
accessible through the Investor Relations section of the Company's
website located at www.validusholdings.com.
A replay of the webcast will be available at the Investor Relations
section of the Company's website through February 13, 2015. In addition,
a financial supplement relating to the Company's financial results for
the three months and year ended December 31, 2014 is available in the
Investor Relations section of the Company's website.
About Validus Holdings, Ltd.
Validus Holdings, Ltd. is a holding company for reinsurance and
insurance operating companies and investment advisors including Validus
Reinsurance, Ltd. ("Validus Re"), Talbot Holdings Ltd. ("Talbot"),
Western World Insurance Group, Inc. ("Western World") and AlphaCat
Managers, Ltd. ("AlphaCat").
The results of Western World are consolidated from the October 2, 2014
date of acquisition.
Validus Re is a Bermuda based reinsurer focused on short-tail lines of
reinsurance. Talbot is the Bermuda parent of the specialty insurance
group primarily operating within the Lloyd's insurance market through
Syndicate 1183. Western World is a U.S. specialty lines insurance
company focused on excess and surplus lines. AlphaCat is a Bermuda based
investment adviser managing capital for third parties and the Group in
insurance linked securities and other property catastrophe reinsurance
investments.
|
Validus Holdings, Ltd. Consolidated Balance Sheets As
at December 31, 2014 and December 31, 2013 (Expressed
in thousands of U.S. dollars, except share and per share
information)
|
|
|
|
|
|
December 31, 2014
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value (amortized cost: 2014-$5,534,494;
2013-$5,522,853)
|
|
|
$
|
5,532,731
|
|
|
$
|
5,542,258
|
|
Short-term investments, at fair value (amortized cost:
2014-$1,065,285; 2013-$751,734)
|
|
|
|
1,065,137
|
|
|
|
751,778
|
|
Other investments, at fair value (cost: 2014-$879,176; 2013-$723,498)
|
|
|
|
813,011
|
|
|
|
704,086
|
|
Cash and cash equivalents
|
|
|
|
407,705
|
|
|
|
527,377
|
|
Restricted cash
|
|
|
|
328,475
|
|
|
|
443,199
|
|
Total investments and cash
|
|
|
|
8,147,059
|
|
|
|
7,968,698
|
|
Investments in affiliates
|
|
|
|
261,483
|
|
|
|
141,243
|
|
Premiums receivable
|
|
|
|
707,647
|
|
|
|
697,233
|
|
Deferred acquisition costs
|
|
|
|
161,295
|
|
|
|
134,269
|
|
Prepaid reinsurance premiums
|
|
|
|
81,983
|
|
|
|
103,251
|
|
Securities lending collateral
|
|
|
|
470
|
|
|
|
3,392
|
|
Loss reserves recoverable
|
|
|
|
377,466
|
|
|
|
370,154
|
|
Paid losses recoverable
|
|
|
|
38,078
|
|
|
|
80,080
|
|
Deferred tax asset
|
|
|
|
18,280
|
|
|
|
-
|
|
Intangible assets
|
|
|
|
126,924
|
|
|
|
106,407
|
|
Goodwill
|
|
|
|
195,897
|
|
|
|
20,393
|
|
Accrued investment income
|
|
|
|
24,865
|
|
|
|
18,876
|
|
Other assets
|
|
|
|
164,633
|
|
|
|
202,436
|
|
Total assets
|
|
|
$
|
10,306,080
|
|
|
$
|
9,846,432
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Reserve for losses and loss expenses
|
|
|
$
|
3,234,394
|
|
|
$
|
3,030,399
|
|
Unearned premiums
|
|
|
|
990,564
|
|
|
|
824,496
|
|
Reinsurance balances payable
|
|
|
|
127,128
|
|
|
|
154,874
|
|
Securities lending payable
|
|
|
|
936
|
|
|
|
3,858
|
|
Deferred income taxes
|
|
|
|
-
|
|
|
|
19,086
|
|
Net payable for investments purchased
|
|
|
|
50,256
|
|
|
|
19,383
|
|
Accounts payable and accrued expenses
|
|
|
|
318,245
|
|
|
|
278,187
|
|
Notes payable to operating affiliates
|
|
|
|
671,465
|
|
|
|
439,272
|
|
Senior notes payable
|
|
|
|
247,306
|
|
|
|
247,198
|
|
Debentures payable
|
|
|
|
539,277
|
|
|
|
541,416
|
|
Total liabilities
|
|
|
|
6,179,571
|
|
|
|
5,558,169
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
|
|
79,956
|
|
|
|
86,512
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
Common shares, 571,428,571 authorized, par value $0.175 (Issued:
2014-155,554,224;
|
|
|
|
|
|
|
|
|
|
2013-154,488,497; Outstanding: 2014-83,869,845; 2013-96,044,312)
|
|
|
|
27,222
|
|
|
|
27,036
|
|
Treasury shares (2014-71,684,379; 2013-58,444,185)
|
|
|
|
(12,545
|
)
|
|
|
(10,228
|
)
|
Additional paid-in-capital
|
|
|
|
1,207,493
|
|
|
|
1,677,894
|
|
Accumulated other comprehensive (loss)
|
|
|
|
(8,556
|
)
|
|
|
(617
|
)
|
Retained earnings
|
|
|
|
2,374,344
|
|
|
|
2,010,009
|
|
Total shareholders' equity available to Validus
|
|
|
|
3,587,958
|
|
|
|
3,704,094
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
|
458,595
|
|
|
|
497,657
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
4,046,553
|
|
|
|
4,201,751
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, noncontrolling interests and shareholders'
equity
|
|
|
$
|
10,306,080
|
|
|
$
|
9,846,432
|
|
|
|
Validus Holdings, Ltd. Consolidated Statements of
Operations For the three months and
year ended December 31, 2014 and 2013 (Expressed
in thousands of U.S. dollars, except share and per share
information)
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Underwriting income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
|
$
|
336,647
|
|
|
$
|
237,273
|
|
|
$
|
2,363,286
|
|
|
$
|
2,401,106
|
|
Reinsurance premiums ceded
|
|
|
|
(33,623
|
)
|
|
|
(24,558
|
)
|
|
|
(309,233
|
)
|
|
|
(372,585
|
)
|
Net premiums written
|
|
|
|
303,024
|
|
|
|
212,715
|
|
|
|
2,054,053
|
|
|
|
2,028,521
|
|
Change in unearned premiums
|
|
|
|
255,724
|
|
|
|
279,523
|
|
|
|
(51,649
|
)
|
|
|
73,524
|
|
Net premiums earned
|
|
|
|
558,748
|
|
|
|
492,238
|
|
|
|
2,002,404
|
|
|
|
2,102,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss expenses
|
|
|
|
226,508
|
|
|
|
206,152
|
|
|
|
772,049
|
|
|
|
793,932
|
|
Policy acquisition costs
|
|
|
|
89,550
|
|
|
|
84,647
|
|
|
|
340,556
|
|
|
|
360,310
|
|
General and administrative expenses
|
|
|
|
98,186
|
|
|
|
82,930
|
|
|
|
329,792
|
|
|
|
315,265
|
|
Share compensation expenses
|
|
|
|
8,821
|
|
|
|
8,147
|
|
|
|
33,073
|
|
|
|
27,630
|
|
Total underwriting deductions
|
|
|
|
423,065
|
|
|
|
381,876
|
|
|
|
1,475,470
|
|
|
|
1,497,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income
|
|
|
$
|
135,683
|
|
|
$
|
110,362
|
|
|
$
|
526,934
|
|
|
$
|
604,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
30,167
|
|
|
|
24,204
|
|
|
|
100,076
|
|
|
|
96,072
|
|
Other insurance related income
|
|
|
|
5,524
|
|
|
|
7,743
|
|
|
|
21,982
|
|
|
|
19,120
|
|
Finance expenses
|
|
|
|
(16,474
|
)
|
|
|
(16,925
|
)
|
|
|
(63,854
|
)
|
|
|
(64,177
|
)
|
Operating income before taxes, income from operating affiliates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and (income) attributable to operating affiliate investors
|
|
|
$
|
154,900
|
|
|
$
|
125,384
|
|
|
$
|
585,138
|
|
|
$
|
655,923
|
|
Tax benefit (expense)
|
|
|
|
243
|
|
|
|
(603
|
)
|
|
|
(155
|
)
|
|
|
(383
|
)
|
Income from operating affiliates
|
|
|
|
4,143
|
|
|
|
5,510
|
|
|
|
17,723
|
|
|
|
14,289
|
|
(Income) attributable to operating affiliate investors
|
|
|
|
(26,566
|
)
|
|
|
(26,607
|
)
|
|
|
(109,399
|
)
|
|
|
(68,763
|
)
|
Net operating income
|
|
|
$
|
132,720
|
|
|
$
|
103,684
|
|
|
$
|
493,307
|
|
|
$
|
601,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains on investments
|
|
|
|
6,902
|
|
|
|
4,448
|
|
|
|
23,095
|
|
|
|
3,258
|
|
Change in net unrealized (losses) gains on investments
|
|
|
|
(74,119
|
)
|
|
|
20,137
|
|
|
|
(57,973
|
)
|
|
|
(58,481
|
)
|
Income from investment affiliate
|
|
|
|
530
|
|
|
|
516
|
|
|
|
8,411
|
|
|
|
4,790
|
|
Foreign exchange gains (losses)
|
|
|
|
4,131
|
|
|
|
(2,230
|
)
|
|
|
(10,630
|
)
|
|
|
2,505
|
|
Other (loss)
|
|
|
|
(770
|
)
|
|
|
(3,697
|
)
|
|
|
(2,243
|
)
|
|
|
(10,777
|
)
|
Transaction expenses (a)
|
|
|
|
(4,695
|
)
|
|
|
-
|
|
|
|
(8,096
|
)
|
|
|
-
|
|
Net income
|
|
|
$
|
64,699
|
|
|
$
|
122,858
|
|
|
$
|
445,871
|
|
|
$
|
542,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling interest
|
|
|
|
61,209
|
|
|
|
(27,526
|
)
|
|
|
35,464
|
|
|
|
(9,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to Validus
|
|
|
$
|
125,908
|
|
|
$
|
95,332
|
|
|
$
|
481,335
|
|
|
$
|
532,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written / Gross premiums written
|
|
|
|
90.0
|
%
|
|
|
89.6
|
%
|
|
|
86.9
|
%
|
|
|
84.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss expenses
|
|
|
|
40.5
|
%
|
|
|
41.9
|
%
|
|
|
38.6
|
%
|
|
|
37.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy acquisition costs
|
|
|
|
16.0
|
%
|
|
|
17.2
|
%
|
|
|
17.0
|
%
|
|
|
17.1
|
%
|
General and administrative expenses (b)
|
|
|
|
19.2
|
%
|
|
|
18.5
|
%
|
|
|
18.1
|
%
|
|
|
16.3
|
%
|
Expense ratio
|
|
|
|
35.2
|
%
|
|
|
35.7
|
%
|
|
|
35.1
|
%
|
|
|
33.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio
|
|
|
|
75.7
|
%
|
|
|
77.6
|
%
|
|
|
73.7
|
%
|
|
|
71.2
|
%
|
|
(a) The transaction expenses relate to costs incurred in connection with
the acquisition of Western World Insurance Group, Inc. ("Western
World"), which was completed on October 2, 2014. The results of Western
World are consolidated from the October 2, 2014 date of acquisition.
Transaction expenses are primarily comprised of legal, financial
advisory and audit related services.
(b) The general and administrative expense ratio includes share
compensation expenses.
|
Validus Holdings, Ltd. Consolidated Segment Operating
Income (Loss) For the three months
ended December 31, 2014 and 2013 (Expressed
in thousands of U.S. dollars, except share and per share
information)
|
|
|
|
Three Months Ended December 31, 2014
|
|
Three Months Ended December 31, 2013
|
|
|
Validus Re
|
|
AlphaCat
|
|
Talbot
|
|
Western World (b)
|
|
Corporate and Eliminations
|
|
Total
|
|
Validus Re
|
|
AlphaCat
|
|
Talbot
|
|
Corporate and Eliminations
|
|
Total
|
Underwriting income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
32,741
|
|
|
108
|
|
|
247,446
|
|
|
65,235
|
|
|
(8,883
|
)
|
|
336,647
|
|
|
10,250
|
|
|
252
|
|
|
236,374
|
|
|
(9,603
|
)
|
|
237,273
|
|
Reinsurance premiums ceded
|
|
2,018
|
|
|
-
|
|
|
(38,096
|
)
|
|
(6,428
|
)
|
|
8,883
|
|
|
(33,623
|
)
|
|
28
|
|
|
-
|
|
|
(34,189
|
)
|
|
9,603
|
|
|
(24,558
|
)
|
Net premiums written
|
|
34,759
|
|
|
108
|
|
|
209,350
|
|
|
58,807
|
|
|
-
|
|
|
303,024
|
|
|
10,278
|
|
|
252
|
|
|
202,185
|
|
|
-
|
|
|
212,715
|
|
Change in unearned premiums
|
|
195,701
|
|
|
33,961
|
|
|
11,873
|
|
|
14,189
|
|
|
-
|
|
|
255,724
|
|
|
239,982
|
|
|
37,389
|
|
|
2,152
|
|
|
-
|
|
|
279,523
|
|
Net premiums earned
|
|
230,460
|
|
|
34,069
|
|
|
221,223
|
|
|
72,996
|
|
|
-
|
|
|
558,748
|
|
|
250,260
|
|
|
37,641
|
|
|
204,337
|
|
|
-
|
|
|
492,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss expenses
|
|
59,442
|
|
|
(2,515
|
)
|
|
118,546
|
|
|
51,035
|
|
|
-
|
|
|
226,508
|
|
|
110,728
|
|
|
641
|
|
|
94,783
|
|
|
-
|
|
|
206,152
|
|
Policy acquisition costs
|
|
35,123
|
|
|
3,259
|
|
|
48,779
|
|
|
3,169
|
|
|
(780
|
)
|
|
89,550
|
|
|
38,584
|
|
|
3,842
|
|
|
43,646
|
|
|
(1,425
|
)
|
|
84,647
|
|
General and administrative expenses
|
|
20,982
|
|
|
3,963
|
|
|
43,797
|
|
|
11,121
|
|
|
18,323
|
|
|
98,186
|
|
|
21,611
|
|
|
5,008
|
|
|
35,952
|
|
|
20,359
|
|
|
82,930
|
|
Share compensation expenses
|
|
2,613
|
|
|
171
|
|
|
2,912
|
|
|
135
|
|
|
2,990
|
|
|
8,821
|
|
|
2,247
|
|
|
154
|
|
|
2,859
|
|
|
2,887
|
|
|
8,147
|
|
Total underwriting deductions
|
|
118,160
|
|
|
4,878
|
|
|
214,034
|
|
|
65,460
|
|
|
20,533
|
|
|
423,065
|
|
|
173,170
|
|
|
9,645
|
|
|
177,240
|
|
|
21,821
|
|
|
381,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income (loss)
|
|
112,300
|
|
|
29,191
|
|
|
7,189
|
|
|
7,536
|
|
|
(20,533
|
)
|
|
135,683
|
|
|
77,090
|
|
|
27,996
|
|
|
27,097
|
|
|
(21,821
|
)
|
|
110,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
18,314
|
|
|
1,730
|
|
|
6,253
|
|
|
4,523
|
|
|
(653
|
)
|
|
30,167
|
|
|
19,576
|
|
|
1,044
|
|
|
4,565
|
|
|
(981
|
)
|
|
24,204
|
|
Other insurance related
income (loss)
|
|
774
|
|
|
5,640
|
|
|
711
|
|
|
264
|
|
|
(1,865
|
)
|
|
5,524
|
|
|
905
|
|
|
8,985
|
|
|
1,255
|
|
|
(3,402
|
)
|
|
7,743
|
|
Finance expenses
|
|
(3,596
|
)
|
|
(1,506
|
)
|
|
145
|
|
|
-
|
|
|
(11,517
|
)
|
|
(16,474
|
)
|
|
(3,978
|
)
|
|
(1,461
|
)
|
|
(3
|
)
|
|
(11,483
|
)
|
|
(16,925
|
)
|
Operating income (loss) before taxes, income from operating
affiliates and (income) attributable to operating affiliate investors
|
|
127,792
|
|
|
35,055
|
|
|
14,298
|
|
|
12,323
|
|
|
(34,568
|
)
|
|
154,900
|
|
|
93,593
|
|
|
36,564
|
|
|
32,914
|
|
|
(37,687
|
)
|
|
125,384
|
|
Tax benefit (expense)
|
|
4,336
|
|
|
-
|
|
|
(2,978
|
)
|
|
(1,422
|
)
|
|
307
|
|
|
243
|
|
|
(1,483
|
)
|
|
-
|
|
|
513
|
|
|
367
|
|
|
(603
|
)
|
Income from operating affiliates
|
|
-
|
|
|
4,143
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,143
|
|
|
-
|
|
|
5,510
|
|
|
-
|
|
|
-
|
|
|
5,510
|
|
(Income) attributable to operating affiliate investors
|
|
-
|
|
|
(26,566
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(26,566
|
)
|
|
-
|
|
|
(26,607
|
)
|
|
-
|
|
|
-
|
|
|
(26,607
|
)
|
Net operating income (loss) (a)
|
|
132,128
|
|
|
12,632
|
|
|
11,320
|
|
|
10,901
|
|
|
(34,261
|
)
|
|
132,720
|
|
|
92,110
|
|
|
15,467
|
|
|
33,427
|
|
|
(37,320
|
)
|
|
103,684
|
|
Net operating (income) attributable to noncontrolling interest
|
|
-
|
|
|
(3,683
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(3,683
|
)
|
|
-
|
|
|
(3,618
|
)
|
|
-
|
|
|
-
|
|
|
(3,618
|
)
|
Net operating income (loss) available (attributable) to Validus
|
|
132,128
|
|
|
8,949
|
|
|
11,320
|
|
|
10,901
|
|
|
(34,261
|
)
|
|
129,037
|
|
|
92,110
|
|
|
11,849
|
|
|
33,427
|
|
|
(37,320
|
)
|
|
100,066
|
|
|
Notes:
(a) Net operating income (loss), a non-GAAP financial measure, is
defined as net income (loss) excluding net realized and change in
unrealized gains (losses) on investments, foreign exchange gains
(losses), other income (loss), income (loss) from investment affiliate
and non-recurring items. This measure focuses on the underlying
fundamentals of our operations without the influence of gains (losses)
from the sale of investments, translation of non-U.S.$ currencies and
non-recurring items. Gains (losses) from the sale of investments are
driven by the timing of the disposition of investments, not by our
operating performance. Gains (losses) arising from translation of
non-U.S.$ denominated balances are unrelated to our underlying business.
Net operating income (loss) available (attributable) to Validus is
defined as above and includes income (loss) from noncontrolling
interests.
(b) The results of Western World are consolidated from the October 2,
2014 date of acquisition.
|
Validus Holdings, Ltd. Consolidated Segment Operating
Income (Loss) For the year ended
December 31, 2014 and 2013 (Expressed in
thousands of U.S. dollars, except share and per share information)
|
|
|
|
Year Ended December 31, 2014
|
|
Year Ended December 31, 2013
|
|
|
Validus Re
|
|
AlphaCat
|
|
Talbot
|
|
Western World (b)
|
|
Corporate and Eliminations
|
|
Total
|
|
Validus Re
|
|
AlphaCat
|
|
Talbot
|
|
Corporate and Eliminations
|
|
Total
|
Underwriting income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
1,136,910
|
|
|
135,181
|
|
|
1,101,770
|
|
|
65,235
|
|
|
(75,810
|
)
|
|
2,363,286
|
|
|
1,242,522
|
|
|
147,009
|
|
|
1,091,890
|
|
|
(80,315
|
)
|
|
2,401,106
|
|
Reinsurance premiums ceded
|
|
(182,056
|
)
|
|
(4,348
|
)
|
|
(192,211
|
)
|
|
(6,428
|
)
|
|
75,810
|
|
|
(309,233
|
)
|
|
(226,264
|
)
|
|
(525
|
)
|
|
(226,111
|
)
|
|
80,315
|
|
|
(372,585
|
)
|
Net premiums written
|
|
954,854
|
|
|
130,833
|
|
|
909,559
|
|
|
58,807
|
|
|
-
|
|
|
2,054,053
|
|
|
1,016,258
|
|
|
146,484
|
|
|
865,779
|
|
|
-
|
|
|
2,028,521
|
|
Change in unearned premiums
|
|
(37,570
|
)
|
|
1,517
|
|
|
(29,785
|
)
|
|
14,189
|
|
|
-
|
|
|
(51,649
|
)
|
|
117,679
|
|
|
(9,070
|
)
|
|
(35,085
|
)
|
|
-
|
|
|
73,524
|
|
Net premiums earned
|
|
917,284
|
|
|
132,350
|
|
|
879,774
|
|
|
72,996
|
|
|
-
|
|
|
2,002,404
|
|
|
1,133,937
|
|
|
137,414
|
|
|
830,694
|
|
|
-
|
|
|
2,102,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss expenses
|
|
307,290
|
|
|
(9,670
|
)
|
|
423,394
|
|
|
51,035
|
|
|
-
|
|
|
772,049
|
|
|
430,026
|
|
|
17,569
|
|
|
346,337
|
|
|
-
|
|
|
793,932
|
|
Policy acquisition costs
|
|
141,670
|
|
|
12,673
|
|
|
187,162
|
|
|
3,169
|
|
|
(4,118
|
)
|
|
340,556
|
|
|
180,779
|
|
|
13,853
|
|
|
170,738
|
|
|
(5,060
|
)
|
|
360,310
|
|
General and administrative expenses
|
|
74,739
|
|
|
19,590
|
|
|
150,828
|
|
|
11,121
|
|
|
73,514
|
|
|
329,792
|
|
|
91,260
|
|
|
18,765
|
|
|
136,458
|
|
|
68,782
|
|
|
315,265
|
|
Share compensation expenses
|
|
9,739
|
|
|
501
|
|
|
11,346
|
|
|
135
|
|
|
11,352
|
|
|
33,073
|
|
|
7,668
|
|
|
468
|
|
|
9,613
|
|
|
9,881
|
|
|
27,630
|
|
Total underwriting deductions
|
|
533,438
|
|
|
23,094
|
|
|
772,730
|
|
|
65,460
|
|
|
80,748
|
|
|
1,475,470
|
|
|
709,733
|
|
|
50,655
|
|
|
663,146
|
|
|
73,603
|
|
|
1,497,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting income (loss)
|
|
383,846
|
|
|
109,256
|
|
|
107,044
|
|
|
7,536
|
|
|
(80,748
|
)
|
|
526,934
|
|
|
424,204
|
|
|
86,759
|
|
|
167,548
|
|
|
(73,603
|
)
|
|
604,908
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
74,599
|
|
|
4,276
|
|
|
20,575
|
|
|
4,523
|
|
|
(3,897
|
)
|
|
100,076
|
|
|
81,346
|
|
|
3,865
|
|
|
18,061
|
|
|
(7,200
|
)
|
|
96,072
|
|
Other insurance related
income (loss)
|
|
3,159
|
|
|
27,122
|
|
|
1,095
|
|
|
264
|
|
|
(9,658
|
)
|
|
21,982
|
|
|
19,222
|
|
|
26,424
|
|
|
1,819
|
|
|
(28,345
|
)
|
|
19,120
|
|
Finance expenses
|
|
(14,727
|
)
|
|
(3,545
|
)
|
|
213
|
|
|
-
|
|
|
(45,795
|
)
|
|
(63,854
|
)
|
|
(16,111
|
)
|
|
(5,734
|
)
|
|
(259
|
)
|
|
(42,073
|
)
|
|
(64,177
|
)
|
Operating income (loss) before taxes, income from operating
affiliates and (income) attributable to operating affiliate investors
|
|
446,877
|
|
|
137,109
|
|
|
128,927
|
|
|
12,323
|
|
|
(140,098
|
)
|
|
585,138
|
|
|
508,661
|
|
|
111,314
|
|
|
187,169
|
|
|
(151,221
|
)
|
|
655,923
|
|
Tax benefit (expense)
|
|
5,512
|
|
|
-
|
|
|
(3,880
|
)
|
|
(1,422
|
)
|
|
(365
|
)
|
|
(155
|
)
|
|
272
|
|
|
-
|
|
|
(671
|
)
|
|
16
|
|
|
(383
|
)
|
Income from operating affiliates
|
|
-
|
|
|
17,723
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
17,723
|
|
|
-
|
|
|
14,289
|
|
|
-
|
|
|
-
|
|
|
14,289
|
|
(Income) attributable to operating affiliate investors
|
|
-
|
|
|
(109,399
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(109,399
|
)
|
|
-
|
|
|
(68,763
|
)
|
|
-
|
|
|
-
|
|
|
(68,763
|
)
|
Net operating income (loss) (a)
|
|
452,389
|
|
|
45,433
|
|
|
125,047
|
|
|
10,901
|
|
|
(140,463
|
)
|
|
493,307
|
|
|
508,933
|
|
|
56,840
|
|
|
186,498
|
|
|
(151,205
|
)
|
|
601,066
|
|
Net operating (income) attributable to noncontrolling interest
|
|
-
|
|
|
(6,843
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(6,843
|
)
|
|
-
|
|
|
(11,617
|
)
|
|
-
|
|
|
-
|
|
|
(11,617
|
)
|
Net operating income (loss) available (attributable) to Validus
|
|
452,389
|
|
|
38,590
|
|
|
125,047
|
|
|
10,901
|
|
|
(140,463
|
)
|
|
486,464
|
|
|
508,933
|
|
|
45,223
|
|
|
186,498
|
|
|
(151,205
|
)
|
|
589,449
|
|
|
Notes:
(a) Net operating income (loss), a non-GAAP financial measure, is
defined as net income (loss) excluding net realized and change in
unrealized gains (losses) on investments, foreign exchange gains
(losses), other income (loss), income (loss) from investment affiliate
and non-recurring items. This measure focuses on the underlying
fundamentals of our operations without the influence of gains (losses)
from the sale of investments, translation of non-U.S.$ currencies, and
non-recurring items. Gains (losses) from the sale of investments are
driven by the timing of the disposition of investments, not by our
operating performance. Gains (losses) arising from translation of
non-U.S.$ denominated balances are unrelated to our underlying business.
Net operating income (loss) available (attributable) to Validus is
defined as above and includes income (loss) from noncontrolling
interests.
(b) The results of Western World are consolidated from the October 2,
2014 date of acquisition.
|
Validus Holdings, Ltd. Non-GAAP Financial Measures
Reconciliation Net Operating Income available to Validus, Net
Operating Income per share available to Validus and Annualized Net Operating
Return on Average Equity For the
three months and year ended December 31, 2014 and 2013 (Expressed
in thousands of U.S. dollars, except share and per share
information)
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to Validus
|
|
|
$
|
125,908
|
|
|
$
|
95,332
|
|
|
$
|
481,335
|
|
|
$
|
532,666
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized (gains) on investments
|
|
|
|
(6,902
|
)
|
|
|
(4,448
|
)
|
|
|
(23,095
|
)
|
|
|
(3,258
|
)
|
Change in net unrealized losses (gains) on investments
|
|
|
|
74,119
|
|
|
|
(20,137
|
)
|
|
|
57,973
|
|
|
|
58,481
|
|
(Income) from investment affiliate
|
|
|
|
(530
|
)
|
|
|
(516
|
)
|
|
|
(8,411
|
)
|
|
|
(4,790
|
)
|
Foreign exchange (gains) losses
|
|
|
|
(4,131
|
)
|
|
|
2,230
|
|
|
|
10,630
|
|
|
|
(2,505
|
)
|
Other loss
|
|
|
|
770
|
|
|
|
3,697
|
|
|
|
2,243
|
|
|
|
10,777
|
|
Transaction expenses (a)
|
|
|
|
4,695
|
|
|
|
-
|
|
|
|
8,096
|
|
|
|
-
|
|
Net (loss) income attributable to noncontrolling interest
|
|
|
|
(64,892
|
)
|
|
|
23,908
|
|
|
|
(42,307
|
)
|
|
|
(1,922
|
)
|
Net operating income available to Validus
|
|
|
|
129,037
|
|
|
|
100,066
|
|
|
|
486,464
|
|
|
|
589,449
|
|
Less: Dividends and distributions declared on outstanding warrants
|
|
|
|
(1,552
|
)
|
|
|
(1,552
|
)
|
|
|
(6,208
|
)
|
|
|
(19,214
|
)
|
Net operating income available to Validus, adjusted
|
|
|
$
|
127,485
|
|
|
$
|
98,514
|
|
|
$
|
480,256
|
|
|
$
|
570,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share available to Validus - diluted
|
|
|
$
|
1.38
|
|
|
$
|
0.93
|
|
|
$
|
5.08
|
|
|
$
|
4.94
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized (gains) on investments
|
|
|
|
(0.08
|
)
|
|
|
(0.04
|
)
|
|
|
(0.24
|
)
|
|
|
(0.03
|
)
|
Change in net unrealized losses (gains) on investments
|
|
|
|
0.82
|
|
|
|
(0.20
|
)
|
|
|
0.61
|
|
|
|
0.57
|
|
(Income) from investment affiliate
|
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.09
|
)
|
|
|
(0.06
|
)
|
Foreign exchange (gains) losses
|
|
|
|
(0.05
|
)
|
|
|
0.02
|
|
|
|
0.11
|
|
|
|
(0.02
|
)
|
Other loss
|
|
|
|
0.02
|
|
|
|
0.04
|
|
|
|
0.03
|
|
|
|
0.10
|
|
Transaction expenses (a)
|
|
|
|
0.05
|
|
|
|
-
|
|
|
|
0.09
|
|
|
|
-
|
|
Net (loss) income attributable to noncontrolling interest
|
|
|
|
(0.71
|
)
|
|
|
0.23
|
|
|
|
(0.45
|
)
|
|
|
(0.02
|
)
|
Net operating income per share available to Validus - diluted
|
|
|
$
|
1.42
|
|
|
$
|
0.97
|
|
|
$
|
5.14
|
|
|
$
|
5.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares and common share
equivalents
|
|
|
|
90,948,156
|
|
|
|
102,928,482
|
|
|
|
94,690,271
|
|
|
|
103,970,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shareholders' equity available to Validus
|
|
|
$
|
3,645,184
|
|
|
$
|
3,744,128
|
|
|
$
|
3,684,126
|
|
|
$
|
3,806,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net operating return on average equity
|
|
|
|
14.2
|
%
|
|
|
10.7
|
%
|
|
|
13.2
|
%
|
|
|
15.5
|
%
|
|
(a) The transaction expenses relate to costs incurred in connection with
the acquisition of Western World Insurance Group, Inc. ("Western
World"), which was completed on October 2, 2014. The results of Western
World are consolidated from the October 2, 2014 date of acquisition.
Transaction expenses are primarily comprised of legal, financial
advisory and audit related services.
|
Validus Holdings, Ltd. Non-GAAP Financial Measures
Reconciliation Book Value per Common Share, Book Value per
Diluted Common Share and Book Value per Diluted Common Share plus Accumulated
Dividends As at December 31, 2014
and December 31, 2013 (Expressed in thousands of
U.S. dollars, except share and per share information)
|
|
|
|
|
As at December 31, 2014
|
|
|
|
Equity Amount
|
|
Shares
|
|
Exercise Price
|
|
Book Value Per Share
|
Book value per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity available to Validus
|
|
|
$
|
3,587,958
|
|
|
|
83,869,845
|
|
|
|
|
|
|
$
|
42.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per diluted common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity available to Validus
|
|
|
|
3,587,958
|
|
|
|
83,869,845
|
|
|
|
|
|
|
|
|
Assumed exercise of outstanding warrants
|
|
|
|
90,950
|
|
|
|
5,174,114
|
|
|
$
|
17.58
|
|
|
|
|
Assumed exercise of outstanding stock options
|
|
|
|
20,581
|
|
|
|
1,160,057
|
|
|
$
|
17.74
|
|
|
|
|
Unvested restricted shares
|
|
|
|
-
|
|
|
|
3,068,564
|
|
|
|
|
|
|
|
|
Book value per diluted common share
|
|
|
$
|
3,699,489
|
|
|
|
93,272,580
|
|
|
|
|
|
|
$
|
39.66
|
Adjustment for accumulated dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.88
|
Book value per diluted common share plus accumulated dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
48.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per diluted common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31, 2013
|
|
|
|
Equity Amount
|
|
Shares
|
|
Exercise Price
|
|
Book Value Per Share
|
Book value per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity available to Validus
|
|
|
$
|
3,704,094
|
|
|
|
96,044,312
|
|
|
|
|
|
|
$
|
38.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per diluted common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity available to Validus
|
|
|
|
3,704,094
|
|
|
|
96,044,312
|
|
|
|
|
|
|
|
|
Assumed exercise of outstanding warrants
|
|
|
|
98,513
|
|
|
|
5,296,056
|
|
|
$
|
18.60
|
|
|
|
|
Assumed exercise of outstanding stock options
|
|
|
|
29,688
|
|
|
|
1,572,713
|
|
|
$
|
18.88
|
|
|
|
|
Unvested restricted shares
|
|
|
|
-
|
|
|
|
2,853,083
|
|
|
|
|
|
|
|
|
Book value per diluted common share
|
|
|
$
|
3,832,295
|
|
|
|
105,766,164
|
|
|
|
|
|
|
$
|
36.23
|
Adjustment for accumulated dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.68
|
Book value per diluted common share plus accumulated dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
43.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per diluted common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35.03
|
|
Cautionary Note Regarding Forward-Looking Statements
This press release may include forward-looking statements, both with
respect to the Company and its industry, that reflect our current views
with respect to future events and financial performance. Statements that
include the words "expect", "intend", "plan", "believe", "project",
"anticipate", "will", "may" and similar statements of a future or
forward-looking nature identify forward-looking statements. All
forward-looking statements address matters that involve risks and
uncertainties, many of which are beyond the Company's control.
Accordingly, there are or will be important factors that could cause
actual results to differ materially from those indicated in such
statements and, therefore, you should not place undue reliance on any
such statements. We believe that these factors include, but are not
limited to, the following: 1) unpredictability and severity of
catastrophic events; 2) rating agency actions; 3) adequacy of Validus'
risk management and loss limitation methods; 4) cyclicality of demand
and pricing in the insurance and reinsurance markets; 5) statutory or
regulatory developments including tax policy, reinsurance and other
regulatory matters; 6) Validus' ability to implement its business
strategy during "soft" as well as "hard" markets; 7) adequacy of
Validus' loss reserves; 8) continued availability of capital and
financing; 9) retention of key personnel; 10) competition; 11) potential
loss of business from one or more major insurance or reinsurance
brokers; 12) Validus' ability to implement, successfully and on a timely
basis, complex infrastructure, distribution capabilities, systems,
procedures and internal controls, and to develop accurate actuarial data
to support the business and regulatory and reporting requirements; 13)
general economic and market conditions (including inflation, volatility
in the credit and capital markets, interest rates and foreign currency
exchange rates); 14) the integration of businesses Validus may acquire
or new business ventures Validus may start; 15) the effect on Validus'
investment portfolios of changing financial market conditions including
inflation, interest rates, liquidity and other factors; 16) acts of
terrorism or outbreak of war; and 17) availability of reinsurance and
retrocessional coverage, as well as management's response to any of the
aforementioned factors.
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that are included herein and elsewhere, including the risk
factors included in Validus' most recent reports on Form 10-K and Form
10-Q and other documents of the Company on file with or furnished to the
U.S. Securities and Exchange Commission ("SEC"). Any forward-looking
statements made in this press release are qualified by these cautionary
statements, and there can be no assurance that the actual results or
developments anticipated by Validus will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, Validus or its business or operations. Except as
required by law, the Company undertakes no obligation to update publicly
or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
Non-GAAP Financial Measures
In presenting the Company's results, management has included and
discussed certain schedules containing net operating income (loss), net
operating income (loss) available (attributable) to Validus, net
operating income (loss) per share, underwriting income (loss),
annualized net operating return on average equity, book value per
diluted common share and book value per diluted common share plus
accumulated dividends that are not calculated under standards or rules
that comprise U.S. GAAP. Such measures are referred to as non-GAAP.
Non-GAAP measures may be defined or calculated differently by other
companies. These measures should not be viewed as a substitute for those
determined in accordance with U.S. GAAP. A reconciliation of net
operating income (loss) to net income (loss), the most comparable U.S.
GAAP financial measure, is presented in the section above entitled "Net
Operating Income available to Validus, Net Operating Income per share
available to Validus and Annualized Net Operating Return on Average
Equity". A reconciliation of underwriting income and operating income to
net income, the most comparable U.S. GAAP financial measure, is
presented in the "Consolidated Statements of Operations" above.
Underwriting income indicates the performance of the Company's core
underwriting function, excluding revenues and expenses such as net
investment income (loss), other insurance related income (loss), finance
expenses, net realized and change in unrealized gains (losses) on
investments, foreign exchange gains (losses), other income (loss) and
transaction expenses. The Company believes the reporting of underwriting
income enhances the understanding of our results by highlighting the
underlying profitability of the Company's core insurance and reinsurance
business. Underwriting profitability is influenced significantly by
earned premium growth, adequacy of the Company's pricing and loss
frequency and severity.
Underwriting profitability over time is also influenced by the Company's
underwriting discipline, which seeks to manage exposure to loss through
favorable risk selection and diversification, its management of claims,
its use of reinsurance and its ability to manage its expense ratio,
which it accomplishes through its management of acquisition costs and
other underwriting expenses. The Company believes that underwriting
income provides investors with a valuable measure of profitability
derived from underwriting activities.
Annualized net operating return on average equity is presented in the
section above entitled "Net Operating Income available to Validus, Net
Operating Income per share available to Validus and Annualized Net
Operating Return on Average Equity." A reconciliation of book value per
diluted common share and book value per diluted common share plus
accumulated dividends to book value per common share, the most
comparable U.S. GAAP financial measure, is presented in the section
above entitled "Book Value per Common Share, Book Value per Diluted
Common Share and Book Value per Diluted Common Share plus Accumulated
Dividends." Net operating income (loss) is calculated based on net
income (loss) excluding net realized gains (losses) on investments,
change in net unrealized gains (losses) on investments, foreign exchange
gains (losses), other income (loss), income (loss) from investment
affiliates and non-recurring items. Realized gains (losses) from the
sale of investments are driven by the timing of the disposition of
investments, not by our operating performance. Gains (losses) arising
from translation of non-US$ denominated balances are unrelated to our
underlying business. Net operating income (loss) available
(attributable) to Validus is defined as net operating income (loss) as
defined above, but excluding income (loss) available (attributable) to
noncontrolling interest.
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