[December 21, 2012] |
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Validus Holdings, Ltd. Provides Initial Estimate of Net Negative Financial Impact from Hurricane Sandy
PEMBROKE, Bermuda --(Business Wire)--
Validus Holdings, Ltd. ("Validus") (NYSE: VR) today provided an initial
estimate of the net negative financial impact from Hurricane Sandy.
Validus expects to record a net negative financial impact from this
event, net of reinstatement premiums and reinsurance, retrocessional and
other recoveries in the amount of $333.1 million. This amount is
apportioned between Validus' operating segments as $256.2 million to the
Validus Re segment and $76.9 million to the Talbot segment.
Validus' initial estimate is based on estimated insured industry losses
of approximately $25 billion.
Chairman and Chief Executive Officer Edward J. Noonan commented,
"Hurricane Sandy was a large, complex loss event impacting our business
across all of our operating segments and through multiple classes. As a
leader in both the property catastrophe and marine classes, we see this
event as being both unique and difficult for our clients to reserve. Our
estimate of the net negative financial impact from Hurricane Sandy
corresponds to an industry-wide insured market loss in excess of $25
billion, which appreciably exceeds industry loss estimates implied by
the aggregate losses reported to us to date by our ceding clients. We
have undertaken a thoughtful review of our property, marine and
specialty exposures in the affected region in arriving at our initial
estimate of the net negative financial impact from Hurricane Sandy, but
would caution as noted below that all estimates should be considered
preliminary at this point."
Separate from these figures is the estimate of net negative financial
impact from Hurricane Sandy to Flagstone Reinsurance Holdings, S.A.
("Flagstone") which on the same net basis as described above is $39.1
million. The net negative financial impact to Flagstone will not impact
Validus' results of operations in the fourth quarter 2012 as the loss
event took place prior to the date of Validus' acquisition of Flagstone
which was completed on November 30, 2012.
The above estimates are based n Validus' current evaluation of impacted
contracts and information provided by customers and intermediaries.
Validus' actual losses from this event may vary materially from this
estimate due to uncertainties inherent in this preliminary information.
About Validus Holdings, Ltd.
Validus Holdings, Ltd. is a provider of reinsurance and insurance,
conducting its operations worldwide through two wholly-owned
subsidiaries, Validus Reinsurance, Ltd. ("Validus Re") and Talbot
Holdings Ltd. ("Talbot"). 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.
Cautionary Note Regarding Forward-Looking Statements
This press release may include forward-looking statements, both with
respect to us and our 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," "could" 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. 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 on file with the Securities and Exchange
Commission. 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. Validus undertakes no obligation to update publicly or
revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
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