8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2007

VALIDUS HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

Bermuda	001-33606	Not applicable
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

19 Par-La-Ville Road, Hamilton, HM 11 Bermuda
(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 278-9000

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1: PRESS RELEASE

EX-99.2: TRANSCRIPT OF THIRD QUARTER EARNINGS CALL

EX-99.3: INVESTOR FINANCIAL SUPPLEMENT

Item 2.02  Results of Operations and Financial Condition.

     On November 5, 2007, Validus Holdings, Ltd. (the “Registrant”) issued a press release reporting its earnings for the three month period ended September 30, 2007.  A copy of this press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

     On November 6, 2007, the Registrant held its third quarter 2007 earnings conference call, broadcast live by webcast. A transcript of the call is attached to this Current Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.

     In addition, a copy of the Validus Holdings, Ltd. Investor Financial Supplement for the quarter ended September 30, 2007 is attached to this Current Report on Form 8-K as Exhibit 99.3 and is incorporated herein by reference.

     The information in this Current Report on Form 8-K, including the information set forth in Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing

 Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

Exhibit No.	Description
99.1	Press Release dated November 5, 2007 announcing the earnings of Validus Holdings, Ltd. for the three month period ended September 30, 2007
99.2	Transcript of Validus Holdings, Ltd. third quarter earnings call.
99.3	Investor Financial Supplement for the quarter ended September 30, 2007.

SIGNATURES
 

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 9, 2007

VALIDUS HOLDINGS, LTD.     (Registrant)
By:	/s/ Joseph E. (Jeff) Consolino
	Name:	Joseph E. (Jeff) Consolino
	Title:	Executive Vice President & Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Investor Contact	Media Contacts
Jon Levenson	David Haggie/Juliet Tilley
Validus Holdings Limited	Haggie Financial
info@validusre.bm	david@haggie.co.uk
(441) 278-9037	44 207 417 8989

VALIDUS ANNOUNCES THIRD QUARTER NET INCOME OF $136.5 MILLION
AND ANNUALIZED RETURN ON AVERAGE EQUITY OF 35.1%

Second Earnings Report Since Initial Public Offering;
First Quarter With Consolidation of Talbot

Hamilton, Bermuda, November 5, 2007 — Validus Holdings Limited (“Validus”) (NYSE: VR) today reported net income for the quarter ended September 30, 2007 of $136.5 million, or $1.90 per diluted common share, compared with $69.7 million, or $1.19 per diluted common share, for the quarter ended September 30, 2006.  Net income for the nine months ended September 30, 2007 was $264.0 million, or $4.11 per diluted share, compared with $114.0 million, or $1.95 per diluted share, for the corresponding period in 2006.

Net operating income for the third quarter of 2007 was $127.9 million, or $1.78 per diluted share, compared with $69.5 million, or $1.18 per diluted common share, for the quarter ended September 30, 2006.  Net operating income for the nine months ended September 30, 2007 was $256.8 million, or $4.00 per diluted share, compared with $114.0 million, or $1.94 per diluted common share, for the nine months ended September 30, 2006. 

Net operating income, a non-GAAP financial measure, is defined as net income excluding net realized and unrealized gains or losses on investments, foreign exchange gains and losses and non-recurring items. In the third quarter of 2007, Validus incurred a $3.0 million non-recurring expense to terminate an advisory agreement with its founding investor in conjunction with its IPO. In the third quarter of 2007, Validus further incurred a $2.9 million non-recurring expense arising from the issuance of additional warrants pursuant to the anti-dilution provisions of the warrants triggered by the Talbot Holdings Ltd. (“Talbot”) acquisition. Reconciliations of this measure to net income, the most directly comparable GAAP measure, are presented at the end of this release.

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. The Company has determined that it operates in and will separately report results of two segments: Validus Re and Talbot.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

1

Third quarter 2007 results

Consolidated operating highlights for the third quarter include the following:

• Gross premiums written increased by 110.5% to $245.3 million from $116.5 million, due primarily to the addition of Talbot which added $143.0 million of gross premiums written;

• Net premiums written increased by 205.8% to $237.4 million from $77.6 million, due primarily to the addition of Talbot which added $142.4 million of net premiums written;

• Net premiums earned increased by 219.5% to $295.5 million from $92.5 million, due primarily to the addition of Talbot which added $143.5 million of net premiums earned;

• Combined ratio of 63.0%, which included $20.9 million in incurred losses relating to the July UK floods (representing 7.1 percentage points of the consolidated 29.5% loss ratio);

• Investment income increased by 124.7% to $36.6 million from $16.3 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot;

• Annualized return on average equity of 35.1% and annualized net operating return on average equity of 32.9%; and

• Net income increased by 95.9% to $136.5 million from $69.7 million, due partly to the addition of Talbot which added $43.1 million of net income;

Consolidated operating highlights for the nine months ended September 30, 2007 included the following:

• Gross premiums written increased by 67.8% to $797.6 million from $475.3 million, due partly to the addition of Talbot which added $143.0 million of gross premiums written premium;

• Net premiums written increased by 78.0% to $732.0 million from $411.2 million, due partly to the addition of Talbot which added $142.4 million of net premiums written;

• Net premiums earned increased by 168.2% to $540.0 million from $201.4 million, due partly to the addition of Talbot which added $143.5 million of net premiums earned;

• Combined ratio of 61.4%, which included $30.9 million in incurred losses relating to the June and July UK floods (representing 5.7 percentage points of the consolidated 32.7% loss ratio);

• Investment income increased by 85.3% to $74.8 million from $40.4 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot;

• Annualized return on average equity of 25.3% and annualized net operating return on average equity of 24.6%; and

• Net income increased by 131.5% to $264.0 million from $114.0 million, due partly to the addition of Talbot which added $43.1 million of net income;

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

2

Commenting on the third quarter of 2007 results, Ed Noonan, Chairman and Chief Executive Officer of Validus, stated: “We are pleased to report an annualized net operating return on average equity in the quarter of 32.9%. Our results in the quarter reflect strong underwriting results across almost all lines of business in both Bermuda and London. Our results also reflect the benefits of improved capital utilization through our acquisition of Talbot, with the exposure and earnings diversification that it brings to the Validus group.”

Validus Re Segment Results

Gross premiums written during the third quarter of 2007 were $102.2 million compared to $116.5 million in the third quarter of 2006, a decrease of 12.3%, or $14.3 million.  The decrease in gross premiums written was primarily driven by a $20.1 million decrease in the marine lines where a lower proportion of business was renewed in the three months ended September 30, 2007 compared to 2006 when uncertainty in the market following the windstorms of 2005 led to many renewals occurring later in the year. The shift in timing meant a portion of the premiums written in the second and third quarters of 2006 were renewed in the first quarter of 2007. The decrease in marine lines was partially offset by the property lines which accounted for an increase of $6.5 million in gross premiums written. In the three months ended September 30, 2007 Validus Re wrote additional premium in both U.S. and international property lines as compared to the same period in the prior year as a result of continued attractive pricing.

Net premiums earned for the third quarter of 2007 were $152.0 million compared to $92.5 million for the third quarter of 2006, an increase of $59.5 million or 64.3%. The increase in net premiums earned reflects the increased premiums written in the period and the benefit of earning premiums written in 2006. As the Company did not write premium prior to January 1, 2006, the third quarter of 2006 benefited to a lesser extent from the earning of premiums written in prior periods.

The combined ratio increased to 44.1% from 32.1% in the third quarter of 2006. This increase was primarily due to an increase in the Company’s loss ratios for the period. The loss ratio of 25.1% increased partly as a result of losses from flooding in parts of northern England. Validus Re recorded loss expense of $10.0 million in the third quarter of 2007 relating to the UK floods in July, representing 6.6 percentage points on the loss ratio.

Gross premiums written for the nine months ended September 30, 2007 were $654.6 million compared to $475.3 million in the same period of 2006, an increase of $179.3 million, or 37.7%.  The increase in gross premiums written was primarily driven by the property and marine lines which accounted for $153.0 million and $20.7 million of the increase, respectively. In the nine months ended September 30, 2007 the Company wrote additional U.S. regional and European property premium as compared to the same period in the prior year as a result of being operational for the entire 2006 fiscal year.

The combined ratio decreased to 50.8% in the nine months ended September 30, 2007 from 52.8% in the same period of 2006. This 2.0 percentage point decrease was primarily due to a 1.2 percentage point decrease in the Company’s loss ratios for the period. The loss ratios declined as a result of the low level of catastrophic events in the nine months ended September 30, 2007, partially offset by losses from windstorm Kyrill, the Australian windstorms and flooding in parts of northern England. In addition, the combined ratio was affected by a decrease in the general and administrative expense ratio. This decrease reflects the absence in 2007 of certain start up costs incurred in 2006 and the higher level of earned premiums in the nine months ended September 30, 2007.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

3

Talbot Segment Results

Operating results of Talbot have been included in the consolidated financial statements from the acquisition date of July 2, 2007.

Gross premiums written during the third quarter of 2007 was $143.0 million, comprised of $28.6 million of property premiums, $55.0 million of marine premiums and $59.5 million of specialty premiums. Net premiums earned for the third quarter of 2007 was $143.5 million. The combined ratio was 75.2%, composed of a loss ratio of 34.2%, a policy acquisition ratio of 22.8% and a general and administrative expense ratio of 18.1%. Talbot recorded loss expense of $10.9 million in the third quarter of 2007 relating to the UK floods in July, representing 7.6 percentage points on the loss ratio.

Corporate Segment Results

Corporate results are comprised of executive and board expenses, internal and external audit expenses, interest and costs from the junior subordinated deferrable debentures, fair value of warrants issued, and other costs relating to the Company as a whole. General and administrative expenses for the three months ended September 30, 2007 were $7.0 million compared to $4.7 million for the three months ended September 30, 2006. Stock compensation expenses for the three months ended September 30, 2007 were $4.1 million compared to $1.4 million for the three months ended September 30, 2006, which reflects the added cost from the Employee Seller shares issued to Talbot employees as part of the acquisition. Corporate costs for the three months ended September 30, 2007 also included $2.9 million resulting from the fair value of warrants issued and $3.0 million to terminate an advisory agreement with its founding investor in conjunction with its IPO.

General and administrative expenses for the nine months ended September 30, 2007 were $15.3 million compared to $12.3 million for the nine months ended September 30, 2006. Stock compensation expenses for the nine months ended September 30, 2007 were $6.5 million compared to $4.1 million for the nine months ended September 30, 2006, which reflects the added cost from the Employee Seller shares issued to Talbot employees as part of the acquisition. Corporate costs for the nine months ended September 30, 2007 also included $2.9 million resulting from the fair value of warrants issued and $3.0 million to terminate an advisory agreement with its founding investor in conjunction with its IPO.

Investments

Net investment income increased in the third quarter and first nine months of 2007 due to higher investment balances resulting from the addition of Talbot and from funds generated from operations.

Investment income was $36.6 million in the third quarter of 2007 compared to $16.3 million in the third quarter of 2006, an increase of 124.7%, or $20.3 million. Net realized gains on investments were $1.0 million, compared to $0.2 million of net realized losses in the third quarter of 2006. Net unrealized gains were $7.7 million in the third quarter of 2007.

Investment income for the nine months ended September 30, 2007 was $74.8 million compared to $40.4 million in the nine months ended September 30, 2006, an increase of 85.3%, or $34.4 million. The Company experienced $0.8 million of net realized gains, compared to $0.9 million of net realized losses for the nine months ended September 30, 2006. Net unrealized gains were $3.1 million in the nine months ended September 30, 2007.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

4

Prior to January 1, 2007, the Company’s investments in fixed maturities were classified as available-for-sale and carried at fair value, with related net unrealized gains or losses excluded from earnings and included in shareholders’ equity as a component of accumulated other comprehensive income. Beginning on January 1, 2007, the Company’s investments in fixed maturities were classified as trading and carried at fair value, with related net unrealized gains or losses included in earnings as a result of the adoption of new accounting guidance. The Company believes that accounting for its investment portfolio as trading more closely reflects its investment guidelines. The fair value of investments is based upon quoted market values. The Company recorded $7.7 million and $3.1 million of unrealized gains in the three months and nine months ended September 30, 2007 respectively, which was included in earnings. The Company recorded $7.5 million and $1.1 million of unrealized gains in the three months and nine months ended September 30, 2006 respectively, which was included in shareholders’ equity as a component of accumulated other comprehensive income.

At September 30, 2007, the Company held $33.3 million of securities with exposures to the sub-prime mortgage market with an estimated weighted average life of 0.8 years. All of these securities are currently rated AAA and are carried at fair value.

Finance Expenses

Finance expenses for the quarter and nine months ended September 30, 2007 was $17.9 million and $26.3 million respectively, increasing from $3.5 million and $5.1 million in the respective prior periods.  Finance expenses consists of interest due on outstanding debt, the amortization of debt offering expenses and offering discounts and fees relating to the Company’s credit facility. The increase relates primarily to the issuance of junior subordinated debt in both the second quarter of 2006 and second quarter of 2007. In addition, the increase in finance expenses is attributable to the inclusion of Talbot in the consolidated financial statements effective with the beginning of the third quarter of 2007. The Company records third-party capital costs in financing expenses.

Capitalization and Shareholders’ Equity

Total capitalization at September 30, 2007 was $2.1 billion, including $350 million of junior subordinated deferrable debentures. Total capitalization at December 31, 2006 was $1.3 billion.  The increase was primarily due to net income through the first nine months of 2007, the issuance in the second quarter of the 8.480% junior subordinated deferrable debentures, and the consummation of the initial public offering in the third quarter.

At September 30, 2007, diluted book value per common share was $22.37 and book value per common share was $24.12, compared to $19.73 and $20.39 respectively, from December 31, 2006. Diluted book value per share is a non-GAAP financial measure.  A reconciliation of this measure to shareholders’ equity is presented at the end of this release.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

5

Conference Call

We will host a conference call on Tuesday November 6, 2007 at 9:00 AM (Eastern) to discuss the third quarter financial results and related matters. The conference call can be accessed via telephone by dialing (877) 407-8031 (toll-free U.S.) or (201) 689-8031 (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 November 20, 2007 by dialing (877) 660-6853 (toll-free U.S.) or (201) 612-7415 (international) and entering account number 286 and pass code 257065.

The public may access a live broadcast of the conference call at the “Investors” section of Validus’ website.

This presentation will be available through an audio webcast accessible through the Investor Information section of our website at www.validusre.bm. In addition, a financial supplement relating to our financial results for the quarter ended September 30, 2007 is available in the Investor Information section of our website.

About Validus

Validus Holdings, Ltd. is a provider of reinsurance and insurance, with shareholders’ equity at September 30, 2007 of $1.8 billion.  Validus conduct its operations worldwide through two wholly-owned subsidiaries, Validus Reinsurance, Ltd. and Talbot Holdings Ltd. 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.

Validus Re has been assigned a rating of “A-” (“Excellent”) by A.M. Best.  For more information about Validus, visit our website at www.validusre.bm.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

6

Validus Holdings, Ltd.
Interim Consolidated Balance Sheets
As at September 30, 2007 (unaudited) and December 31, 2006
(expressed in thousands of U.S. dollars, except share amounts)

	September 30,			December 31,
	2007			2006
	(unaudited)
Assets
Fixed maturities, at fair value	$	1,772,121		$	844,857
Short-term investments, at fair value		580,765			531,530
Cash and cash equivalents		651,428			63,643
Total cash and investments		3,004,314			1,440,030
Premiums receivables		505,001			142,408
Deferred acquisition costs		122,572			28,203
Prepaid reinsurance premiums		59,623			8,245
Securities lending collateral		60,018			12,327
Loss reserves recoverable		165,115			—
Paid losses recoverable		8,174			—
Taxes recoverable		6,283			—
Goodwill and other intangible assets		152,812			—
Accrued investment income		15,476			6,456
Other assets		27,214			8,754
Total assets	$	4,126,602		$	1,646,423
Liabilities
Reserve for losses and loss expenses	$	924,531		$	77,363
Unearned premiums		727,293			178,824
Reinsurance balances payables		56,553			7,438
Securities lending payable		60,018			12,327
Deferred taxation		20,260			—
Net payable for investments purchased		88,072			12,850
Accounts payable and accrued expenses		110,515			15,098
Debentures payable		350,000			150,000
Total liabilities		2,337,242			453,900
Commitments and contingent liabilities
Shareholders’ equity
Ordinary shares		12,985			10,234
Additional paid-in capital		1,378,724			1,048,025
Accumulated other comprehensive (loss) income		(640	)		875
Retained earnings		398,291			133,389
Total shareholders’ equity		1,789,360			1,192,523
Total liabilities and shareholder’ equity	$	4,126,602		$	1,646,423

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

7

Validus Holdings, Ltd.
Interim Consolidated Statements of Operations and Comprehensive Income
For the three months and nine months ended September 30, 2007 and 2006
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended						Nine months ended
	September			September			September 30,			September
	30, 2007			30, 2006			2007			30, 2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues
Gross premiums written	$	245,271		$	116,505		$	797,641		$	475,284
Reinsurance premiums ceded		(7,906	)		(38,892	)		(65,644	)		(64,051	)
Net premiums written		237,365			77,613			731,997			411,233
Change in unearned premiums		58,161			14,885			(191,949	)		(209,872	)
Net premiums earned		295,526			92,498			540,048			201,361
Net investment income		36,560			16,272			74,799			40,370
Net realized gains (losses) on investments		1,010			(154	)		823			(894	)
Net unrealized gains on investments		7,681			—			3,136			—
Other income		1,330			—			1,330			—
Foreign exchange gains		5,818			369			9,210			1,061
Total revenues		347,925			108,985			629,346			241,898
Expenses
Losses and loss expense		87,263			11,577			176,426			67,058
Policy acquisition costs		50,945			10,638			81,000			24,575
General and administrative expenses		44,793			11,736			67,088			25,350
Share compensation expense		6,132			1,905			10,054			5,657
Finance expenses		17,886			3,453			26,331			5,136
Fair value of warrants issued		2,893			—			2,893			77
Total expenses		209,912			39,309			363,792			127,853
Net income before taxes		138,013			69,676			265,554			114,045
Taxes		1,488			—			1,527			—
Net income	$	136,525		$	69,676		$	264,027		$	114,045
Comprehensive income
Unrealized investment gains arising during the period		—			7,353			—			190
Foreign currency translation adjustments		(640	)		—			(640	)		—
Adjustment for reclassification of investment losses realized in income		—			154			—			894
Comprehensive income	$	135,885		$	77,183		$	263,387		$	115,129
Earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic		69,107,336			58,482,601			62,024,179			58,475,306
Diluted		71,868,835			58,651,163			64,243,860			58,584,161
Basic earnings per share	$	1.98		$	1.19		$	4.26		$	1.95
Diluted earnings per share	$	1.90		$	1.19		$	4.11		$	1.95

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

8

Validus Holdings, Ltd.
Interim Consolidated Statements of Operations
For the three months ended September 30, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended September 30, 2007
	Validus Re			Talbot			Corporate			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Gross premiums written	$	102,229		$	143,042		$	—		$	245,271
Reinsurance premiums ceded		(7,291	)		(615	)		—			(7,906	)
Net premiums written		94,938			142,427			—			237,365
Change in unearned premiums		57,055			1,106			—			58,161
Net premiums earned		151,993			143,533			—			295,526
Losses and loss expense		38,131			49,132			—			87,263
Policy acquisition costs		18,161			32,784			—			50,945
General and administrative expenses		9,527			25,258			7,008			41,793
Stock compensation expenses		1,281			731			4,120			6,132
Underwriting income (loss)	$	84,893		$	35,628		$	(11,128	)	$	109,393
Net investment income		22,706			13,360			494			36,560
Other income		—			1,330			—			1,330
Finance expenses		(174	)		(8,858	)		(8,854	)		(17,886	)
Operating income (loss) before taxes		107,425			41,460			(19,488	)		129,397
Taxes		8			1,480			—			1,488
Net operating income	$	107,417		$	39,980		$	(19,488	)	$	127,909
Net realized gains (losses) on investments		1,122			(112	)		—			1,010
Net unrealized gains on investments		5,881			1,800			—			7,681
Foreign exchange gains		4,372			1,446			—			5,818
Fair value of warrants		—			—			(2,893	)		(2,893	)
Aquiline termination fee		—			—			(3,000	)		(3,000	)
Net income	$	118,792		$	43,114		$	(25,381	)	$	136,525
Loss and loss expense ratio		25.1	%		34.2	%					29.5	%
Policy acquisition cost ratio		11.9	%		22.8	%					17.2	%
General and administrative expense ratio		7.1	%		18.1	%					16.2	%
Combined ratio		44.1	%		75.2	%					63.0	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

9

Validus Holdings, Ltd.
Interim Consolidated Statements of Operations
For the three months ended September 30, 2006
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended September 30, 2006
	Validus Re			Talbot			Corporate			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Gross premiums written	$	116,505		$	—		$	—		$	116,505
Reinsurance premiums ceded		(38,892	)		—			—			(38,892	)
Net premiums written		77,613			—			—			77,613
Change in unearned premiums		14,885			—			—			14,885
Net premiums earned		92,498			—			—			92,498
Losses and loss expense		11,577			—			—			11,577
Policy acquisition costs		10,638			—			—			10,638
General and administrative expenses		6,987			—			4,749			11,736
Stock compensation expenses		526			—			1,379			1,905
Underwriting income (loss)	$	62,770		$	—		$	(6,128	)	$	56,642
Net investment income		16,271			—			1			16,272
Other income		—			—			—			—
Finance expenses		(8	)		—			(3,445	)		(3,453	)
Operating income (loss) before taxes		79,033			—			(9,572	)		69,461
Taxes		—			—			—			—
Net operating income	$	79,033		$	—		$	(9,572	)	$	69,461
Net realized gains (losses) on investments		(154	)		—			—			(154	)
Net unrealized gains (losses) on investments		—			—			—			—
Foreign exchange gains		369			—			—			369
Fair value of warrants		—			—			—			—
Net income	$	79,248		$	—		$	(9,572	)	$	69,676
Loss and loss expense ratio		12.5	%		0.0	%					12.5	%
Policy acquisition cost ratio		11.5	%		0.0	%					11.5	%
General and administrative expense ratio		8.1	%		0.0	%					14.7	%
Combined ratio		32.1	%		0.0	%					38.8	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

10

Validus Holdings, Ltd.
Interim Consolidated Statements of Operations
For the nine months ended September 30, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Nine months ended September 30, 2007
	Validus Re			Talbot			Corporate			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Gross premiums written	$	654,599		$	143,042		$	—		$	797,641
Reinsurance premiums ceded		(65,029	)		(615	)		—			(65,644	)
Net premiums written		589,570			142,427			—			731,997
Change in unearned premiums		(193,055	)		1,106			—			(191,949	)
Net premiums earned		396,515			143,533			—			540,048
Losses and loss expense		127,294			49,132			—			176,426
Policy acquisition costs		48,216			32,784			—			81,000
General and administrative expenses		23,553			25,258			15,277			64,088
Stock compensation expenses		2,824			731			6,499			10,054
Underwriting income (loss)	$	194,628		$	35,628		$	(21,776	)	$	208,480
Net investment income		60,942			13,360			497			74,799
Other income		—			1,330			—			1,330
Finance expenses		(1,143	)		(8,858	)		(16,330	)		(26,331	)
Operating income (loss) before taxes		254,427			41,460			(37,609	)		258,278
Taxes		47			1,480			—			1,527
Net operating income	$	254,380		$	39,980		$	(37,609	)	$	256,751
Net realized gains (losses) on investments		935			(112	)		—			823
Net unrealized gains (losses) on investments		1,336			1,800						3,136
Foreign exchange gains		7,764			1,446			—			9,210
Fair value of warrants		—			—			(2,893	)		(2,893	)
Aquiline termination fee		—			—			(3,000	)		(3,000	)
Net income	$	264,415		$	43,114		$	(43,502	)	$	264,027
Loss and loss expense ratio		32.1	%		34.2	%					32.7	%
Policy acquisition cost ratio		12.2	%		22.8	%					15.0	%
General and administrative expense ratio		6.6	%		18.1	%					13.7	%
Combined ratio		50.8	%		75.2	%					61.4	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

11

Validus Holdings, Ltd.
Interim Consolidated Statements of Operations
For the nine months ended September 30, 2006
(expressed in thousands of U.S. dollars, except share amounts)

	Nine months ended September 30, 2006
	Validus Re			Talbot			Corporate			Total
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Gross premiums written	$	475,284		$	—		$	—		$	475,284
Reinsurance premiums ceded		(64,051	)		—			—			(64,051	)
Net premiums written		411,233			—			—			411,233
Change in unearned premiums		(209,872	)		—			—			(209,872	)
Net premiums earned		201,361			—			—			201,361
Losses and loss expense		67,058			—			—			67,058
Policy acquisition costs		24,575			—			—			24,575
General and administrative expenses		13,092			—			12,258			25,350
Stock compensation expenses		1,561			—			4,096			5,657
Underwriting income (loss)	$	95,075		$	—		$	(16,354	)	$	78,721
Net investment income		40,345			—			25			40,370
Other income		—			—			—			—
Finance expenses		(11	)		—			(5,125	)		(5,136	)
Operating income (loss) before taxes		135,409			—			(21,454	)		113,955
Taxes		—			—			—			—
Net operating income	$	135,409		$	—		$	(21,454	)	$	113,955
Net realized losses on investments		(894	)		—			—			(894	)
Net unrealized gains on investments		—			—			—			—
Foreign exchange gains		1,061			—			—			1,061
Fair value of warrants		—			—			(77	)		(77	)
Net income	$	135,576		$	—		$	(21,531	)	$	114,045
Loss and loss expense ratio		33.3	%		0.0	%					33.3	%
Policy acquisition cost ratio		12.2	%		0.0	%					12.2	%
General and administrative expense ratio		7.3	%		0.0	%					15.4	%
Combined ratio		52.8	%		0.0	%					60.9	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

12

Cautionary Note Regarding 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. This report 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” and similar statements of a future or forward-looking nature identify forward-looking 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 our risk management and loss limitation methods;4) cyclicality of demand and pricing in the reinsurance market; 5) our limited operating history; 6) adequacy of our loss reserves; 7) continued availability of capital and financing; 8) retention of key personnel; 9) competition; 10) potential loss of business from one or more major reinsurance brokers; 11) our 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; 12) general economic and market conditions (including inflation, interest rates and foreign currency exchange rates); 13) the integration of Talbot or other businesses we may acquire; 14) acts of terrorism or outbreak of war; and 15) availability of retrocessional coverage.

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 or elsewhere, including the Risk Factors beginning on page 16 of our Prospectus on Form 424B4 (the “Prospectus”). Any forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. We undertake 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), annualized net operating return on average equity and diluted book value per share 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 to net income, the most comparable U.S. GAAP financial measure, is presented in the section below entitled “Net Operating Income and Annualized Net Operating Return on Average Equity”. Annualized net operating return on average equity is presented in the section below entitled “Net Operating Income and Annualized Net Operating Return on Average Equity”. A reconciliation of diluted book value per share to book value per share, the most comparable U.S. GAAP financial measure, is presented in the section below entitled “Diluted Book Value Per Share”. Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses) on investments, gains (losses) arising from translation of non-US$ denominated balances 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.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

13

Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Net Operating Income and Annualized Net Operating Return on Average Equity
For the three months and nine months ended September 30, 2007 and 2006
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended						Nine months ended
	September			September			September			September
	30, 2007			30, 2006			30, 2007			30, 2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income	$	136,525		$	69,676		$	264,027		$	114,045
Adjustment for net realized (gains) losses on investments		(1,010	)		154			(823	)		894
Adjustment for net unrealized gains on investments		(7,681	)		—			(3,136	)		—
Fair value of warrants issued		2,893			—			2,893			77
Aquiline termination fee		3,000			—			3,000			—
Adjustment for foreign exchange gains		(5,818	)		(369	)		(9,210	)		(1,061	)
Net operating income	$	127,909		$	69,461		$	256,751		$	113,955
Net income per share — diluted	$	1.90		$	1.19		$	4.11		$	1.95
Adjustment for net realized (gains) losses on investments		(0.01	)		—			(0.01	)		0.02
Adjustment for net unrealized gains on investments		(0.11	)		—			(0.05	)		—
Fair value of warrants issued		0.04			—			0.04			—
Aquiline termination fee		0.04			—			0.05			—
Adjustment for foreign exchange gains		(0.08	)		(0.01	)		(0.14	)		(0.02	)
Net operating income per share — diluted	$	1.78		$	1.18		$	4.00		$	1.95
Weighted average number of common shares and common share equivalents — diluted		71,868,835			58,651,163			64,243,860			58,584,161
Net operating income	$	127,909		$	69,461		$	256,751		$	113,955
Average shareholders’ equity		1,556,654			1,082,164			1,389,262			1,044,512
Annualized net operating return on average equity		32.9	%		25.7	%		24.6	%		14.5	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

14

Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Diluted Book Value Per Share
As at September 30, 2007 and December 31, 2006
(expressed in thousands of U.S. dollars, except share amounts)

	At September 30, 2007
	Equity				Exercise		Book value
	amount		Shares		Price		per share
Book value per common share
Total shareholders’ equity	$	1,789,360		74,199,837			$	24.12
Diluted book value per common share
Total shareholders’ equity	$	1,789,360		74,199,837
Assumed exercise of outstanding warrants		152,868		8,711,729	$	17.55
Assumed exercise of outstanding options		49,196		2,761,176	$	17.82
Unvested restricted shares		—		3,367,961
Diluted book value per common share	$	1,991,424		89,040,703			$	22.37

	At December 31, 2006
	Equity				Exercise		Book value
	amount		Shares		Price		per share
Book value per common share
Total shareholders’ equity	$	1,192,523		58,482,601			$	20.39
Diluted book value per common share
Total shareholders’ equity	$	1,192,523		58,482,601
Assumed exercise of outstanding warrants		147,968		8,455,320	$	17.50
Assumed exercise of outstanding options		45,046		2,568,894	$	17.54
Unvested restricted shares		—		733,964
Diluted book value per common share	$	1,385,537		70,240,779			$	19.73

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

15

EX-99.2

Exhibit 99.2

Transcript of Validus Holdings, Ltd. Third Quarter 2007 Earnings Conference Call Held on November 6, 2007

▬MANAGEMENT DISCUSSION SECTION

Operator: Greetings, and welcome to the Validus Holdings Limited Third Quarter 2007 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Jon Levenson, Senior Vice President.

Jon Levenson, Investor Contact

Good morning. This is Jon Levenson, Senior Vice President of Validus Re. I’m pleased to welcome you to the Validus Holdings, Ltd. conference call for the quarter ended September 30th, 2007.

After the market closed yesterday, we issued an earnings press release and financial supplement, both of which are available on our website, ValidusRe.bm.

Today’s call is being webcast and will be available for replay. That link can also be found on our website. Present on today’s call are Ed Noonan, Chairman and CEO, and Jeff Consolino, Executive Vice President and CFO. Ed and Jeff will deliver prepared remarks before we open the call to questions.

I’m obliged to remind everyone that certain statements made during this call may be deemed forward-looking within the meaning of US securities laws. Such statements reflect the Company’s current view of future events and financial performance and incorporate our perspective on risks and uncertainties. More detail on this topic and also the use of non-GAAP financial measures can be found in our IPO prospectus as filed with the SEC. With that, I will turn the call over to Ed Noonan.

Edward J. Noonan, Chairman and Chief Executive Officer

Thanks, Jon, and good morning and thank you to all of you for taking the time to join us today.

Before Jeff talks about our financials, I would like to take just a few minutes to provide some color on our results. This is a very gratifying quarter for us on a number of different levels. Our financial results are excellent as we generated an annualized return on equity of 35.1% on net income of $136.5 million. We grew book value by 7.1% in the quarter on a pro forma basis and 19.5% over the last 12 months even after the dilution arising from our IPO in the Talbot acquisition.

Our results were strong in both London and Bermuda with Talbot included in our results for the first time this quarter.

This was also a rewarding quarter for us in that it shows the benefit of the broadly diversified short-tail portfolio we have created. Our results were, of course, greatly assisted by the absence of any major catastrophes, but also by strong performance in our marine, energy, war risk and terrorism accounts. We continue to operate in the best price segments of the global market.

Validus Re has now gone through two full renewal cycles and our portfolio fully reflects the benefits of geographic diversification in our cat book. Our catastrophe reinsurance portfolio is extremely well-balanced with a maximum zonal aggregate from all classes of risks of $1.083 billion or 50.3% of capital.

1

Our one in 100-year PML is $423 million or 19.7% of capital and our California earthquake PML, at one in 250 years, is $375 million or 17.5% of capital. These risk leverage statistics are conservative relative to our peer group and the clear message is that we are generating excellent results by leveraging our capital in non-core letting lines and not by excessive risk-taking. Our property cat portfolio is only about a third of our total business today, and property in total is only 51% of our book.

The Talbot acquisition is going extremely well. If you recall, this was a minimal integration deal, and we’ve already incorporated Talbot into our VCAPs pricing and risk management system.

We’re spending a good deal of time with our London colleagues working on project to leverage our combined platforms. We’ve already entered the Asian market by setting up Talbot Singapore, and we re in the process of building a Latin American team on behalf of both Talbot and Validus. We continue to see opportunities to expand our franchise, particularly in those markets that no longer bring their business to London or Bermuda.

Our VCAP system continues to develop as well. In addition to being an outstanding risk management tool, it is rapidly becoming a competitive differentiator for us. V-Cap allows us to underwrite in real-time and makes us more responsive to brokers. Increasingly, we’re using our analytics to help seeking companies understand their risk concentrations and peer group position. As a result, we are receiving preferential signings and in one case, differential pricing.

Validus Re is a quoting market and we’ve been offered — rather we’ve been afforded positions on the pricing panels with some of the largest global companies. Consequently, we see the trend towards non concurrent placements as playing to our strength.

In terms of competition, we did see some easing of rates at July 1st. That having been said, our price loss ratios were virtually unchanged as a result of selection and broader geographic diversification. Our catastrophe loss ratios continue to be 12 to 14 points better than the long-term average.

We also saw competition across most lines at 7/1 with rate changes running in the mid to high single digits. Given the starting point, we still find pricing attractive in most lines. The classes we worry about are US ENS property business and the marine market. We expect to reduce our US ENS exposures as rates are coming down very quickly. In the marine account, we’re watching carefully and are prepared to shrink our portfolio, particularly in London, if rates continue to soften.

We don’t provide guidance, but our expectation for January 1st is for very disciplined competition. We see the Bermuda market acting with strong discipline and don’t expect excessive price cutting from this market. And finally, in terms of the loss activity in the quarter, we’reserved the July UK floods at $20.9 million for both Talbot and Validus combined and that’s broadly consistent with our reserve for the June flooding event.

So with that, I would like to turn the call over to Jeff Consolino to talk you through our financial results.

Joseph E. Consolino, Executive Vice President and Chief Financial Officer

Good morning, everyone. As Ed stated, our third-quarter results were very satisfactory, producing an annualized operating return on average shareholder’s equity of 32.9% for the quarter, bringing our nine-month statistic to 24.6%.

Our third-quarter results released is our first with Talbot’s financial results consolidated. At the segment level, we’ve determined that we will report Validus Re and Talbot as two distinct operating

2

segments, whereas before the Talbot closing, we reported as a single segment company. Because of the requirements of purchase accounting, our published financial statements will transition from Validus Re only in 2006 and the first two quarters of 2007 to Validus Re plus Talbot in the third quarter of 2007 and beyond.

As a reminder, we provided in our second-quarter financial supplement pro forma figures for the first and second quarters of 2007 as well as for the full year 2006. We think we provided a pretty useful time series to a reader that which give a better sequential picture of the Company. On this call and also in our September 30th Form 10-Q MD&A, we will give you here arrear comparatives for both segments.

In addition to Talbot, we completed another important corporate milestone in third quarter, our IPO. In our August 9 press release, we provided book value per share as of June 30th as if the Talbot transaction and the IPO had occurred as of that date. However, the 15.2 million share IPO was completed on July 30th. And we had a partial exercise of our green shoe for 453,933 shares on August 27. This has an impact on the quarter’s basic and diluted shares outstanding for EPS purposes, and I want to make sure to address this later in my comments.

With that as backdrop, I’d now like to provide detail on Validus’s third-quarter results. Net income for the third quarter of 2007 was $136.5 million compared to $69.7 million for the third quarter of’06. This is an increase of $66.8 million or 95.8%.

Net operating income for the third quarter of 07 was $127.9 million compared to $69.5 million for the third quarter of’06. This is an increase of $58.4 million or 84.1%. I want to give you the components of the $58.4 million increase — four positives and three offsets.

The positive factors driving the $58.4 million increase in net operating income in the quarter were the inclusion of Talbot in the 2007 third quarter. This added $35.6 million of underwriting income, for which there was no prior period contribution. The Validus Re’s underwriting income rose in the third quarter and year over year by $22.1 million. Our net investment income year over year in the quarter grew by $20.3 million.

This is a result of the growth in the investment portfolio from Validus Re cash flows, IPO proceeds and the consolidation of Talbot’s net investment income. And then, other income increased by $1.3 million, sourced from Talbot’s underwriting risk service limited unit, for which there was no prior-period comparison. These four positive factors total $79.3 million of an increase.

Partially offsetting this and bringing us to a total increase of $58.4 million in the quarter in net operating income were an increase in corporate expense, booked as a component of underwriting income equal to $5.0 million; increased finance expenses in the order year-over-year of $14.4 million; and tax expense of $1.5 million. Prior to this quarter Validus Re on a consolidated basis has not had a material tax expense.

The increase in the corporate is primarily the amortization expense of the value of shares granted to Talbot’s selling shareholders. The increase in the finance expense in the quarter results from $4.6 million of finance expense on our new 8.48% junior subordinated deferral debentures, which we issued in June as part of our acquisition financing; $1 million in acquisition-related bank debt, which was outstanding for only one month to bridge the period between the Talbot closing and the IPO closing; and $8.9 million of expense related to Talbot’s [indiscernible] arrangements.

Those of you who studied our IPO prospectus will recognize that Talbot had previously recorded their fund expenses either as reinsurance ceded or as G&A expense. Going forward, we’ve determined to record this in finance expense.

3

In addition to change in net income during the quarter, was also driven by an increase in foreign exchange gains of $5.4 million, increased realized and unrealized investment gains of $8.8 million and two nonrecurring items, a $3.0 million expense recorded due to the early termination of our advisory agreement that we had in place with our founding investor, this was terminated at the date of the IPO; and $2.9 million of warrant expense relating to the fair value of warrants issued under the anti-dilution provisions of our existing warrants, triggered by the Talbot transaction.

Please note two factors. One is this has no net effect on equity as the reduction as flows through the income statement is recorded as an increment to the paid-in capital; and also that this particular anti-dilution provision has been extinguished at the time of the IPO.

Drilling down into the two segments, Validus Re’s underwriting income in the third quarter was $84.9 million, an increase of $22.1 million or 35.2% over the prior year’s quarter. Gross premiums written fell by $14.3 million in the quarter for Validus Re or by 12.3% to $102.3 million.

More than 100% of this amount, a $20.1 million decrease, came from Validus Re’s marine line. In 2006, the turmoil in the offshore energy markets led many renewals to be extended well into the year the second and the third quarters. In 2007, much of this business was written at January 1st.

Validus Re’s net premiums earned rose by $59.5 million or 64.3% to $152 million in the quarter. This reflects the fact that in 2006, we only had a partial year of earned premium due to our startup year, whereas in 2007, we had the benefit of carryover on our premium reserve.

Validus Re’s loss and loss expense ratio in the quarter was 25.1. Validus Re recorded a $10 million expense related to the July UK flooding. This represents 6.6 percentage points on Validus Re’s loss ratio. Validus Re also recorded favorable loss reserve development of $3.5 million in the quarter, representing 2.3 loss ratio points. Finally, Validus Re’s expense ratio in the quarter was 19.1%.

For our Talbot segment, underwriting income in the third quarter was $35.6 million. Net premiums earned rose by $16.4 million or 12.9% to $143.5 million. Talbot’s loss and loss expense ratio was 34.2% in the quarter. Talbot recorded a $10.9 million expense for the July UK flooding. This represents 7.6 percentage points of loss ratio. Talbot also recorded favorable loss reserve development of $20.9 million, worth 14.6 loss ratio points. Talbot’s expense ratio in the quarter was 40.9%.

On a consolidating basis, looking at our underwriting results, consolidated underwriting income in the third quarter of 2007 was $109.4 million. There are $11.1 million of expenses which sit outside of the Validus Re and Talbot’segments which we reflect in consolidated underwriting income and the consolidated expense ratio.

Having given you our underwriting ratios and other data and segmental pieces, on a consolidated basis, our consolidated loss and loss expense ratio was 29.5% in the quarter. Adding the expense that we recorded for the July UK flooding between the two segments, this $20.9 million represents 7.1 percentage points on our consolidated loss ratio.

This $20.9 million compares to $18.9 million that Talbot and Validus Re recorded separately in the second quarter for the June UK flooding. Total favorable loss reserve development between the two segments was $24.5 million equivalent to 8.3 loss ratio points. Our consolidated expense ratio for the quarter was 33.5%. And
I’d like to point out that we do not exclude either corporate expenses or FAS 123R share compensation expenses from our consolidated expense ratio. Adding our loss ratio and our expense ratio yields a consolidated combined ratio in the quarter of 63.0%.

Turning to the balance sheet, the combined investment portfolio was $3.0 billion at September 30th. We have a very conservative investment strategy, which we continue to follow that

4

emphasizes liquidity and the preservation of invested assets. Our portfolio has an average credit quality of AA+, no exposure to alternatives, and a duration of one year.

We continue to have de minimus exposure to sub-prime and no exposure to any CEO or CLO securities. Our asset-backed securities at sub-prime exposure at the end of the quarter totaled $33.3 million, all AAA rated, all the senior-most priority and carrying a weighted average life of 0.8 years. This represents only 1.1% of quarter-end cash and invested assets and so we continue to be very comfortable with the composition of our investment portfolio.

Our diluted book value per share as of September 30th is $22.37. We reported in our August 9th press release diluted book value per share of $21.59. As the Talbot acquisition and the IPO had closed by then, we presented a pro forma diluted book value per share as of June 30th of $20.89 as a more realistic starting point.

Based on this $20.89 pro forma starting point, we grew diluted book value in the quarter by 7.1%. Our shareholders equity at September 30th is $1.79 billion. Total GAAP capitalization is $2.14 billion. Our financial leverage, all of which is in the form of hybrid securities, is 16.4% at the end of the quarter.

Loss reserves — our growth loss reserves for loss and loss expenses were $924.5 million at the end of the quarter with IBNR representing 51.3% in total reserves.

I want to point out the impact of the timing of our IPO had on two key measures — diluted operating EPS and our operating return average equity. For diluted EPS calculations, our weighted average diluted shares outstanding for the quarter were a little bit shy of 71.9 million. Our IPO closed on July 30th, which means that the 15.2 million shares we issued in the IPO were outstanding for approximately two-thirds of the quarter. Going forward, the full 15.2 million shares become included in weighted average diluted shares, increasing the diluted share count by approximately 5.1 million shares.

As the IPO concluded on the first day of the quarter, the additional weighted average shares would have reduced our diluted EPS by approximately $0.10. Our IPO proceeds were $31.9 million. If the full proceeds were outstanding through the entirety of the quarter rather than the average proceeds, and this is reflected in the denominator of our operating return on average equity calculation, our annualized operating return on average equity would be 30.1% rather than 32.9%, which we reported.

Finally, I want to leave you with some bigger picture observations regarding the combination benefits to Talbot. Our ratio of invested assets to shareholder’s equity has risen in the quarter from 1.22 times at June 30th to 1.68 times currently. Our ratio of trailing 12-month gross written premium to shareholder’s equity is now 80%. After market we’re seeing the financial benefits of the Talbot transactions, and I think these measures will convey how we are making more effective use of our equity capital together than Validus could have alone.

With that, I’d like to return the call to Ed Noonan.

Edward J. Noonan, Chairman and Chief Executive Officer

Thank you, Jeff. At this point, we’ll be happy to take any questions that you may have.

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▬QUESTION AND ANSWER SECTION

Operator: [Operator Instructions] Our first question is coming from Tom Cholnoky of The Goldman Sachs Group.

<Q – Tom Cholnoky>: Hi. Good morning, everyone. A couple of quick questions. I guess Ed, given your comments about the market and I guess the marine business and some of the ENS property business — and I know you are not providing guidance per se — but just directionally, given your view of the market, how reasonable is it to expect that either Talbot or Validus Re will report top-line growth in 2008?

<A – Edward Noonan>: Tom, it is a bit of a tricky question to answer without stepping over the line into guidance, but I ll do the best I can for you. As we contemplate 2008 in the Validus Re portfolio, if you recall from — I think we covered it in last quarter s call, we had written a few opportunistic quota share treaties on US ENS property business. And it s our expectation that we will reduce those positions going forward. We also do continue to see good opportunities to deploy our capital and catastrophe aggregate in the US market. And so I don t know that there is necessarily a offset of one or the other, but our expectation is that when we reduce those participations in the US ENS market, it will free up aggregate that we can put to work in the US market as well. I just, at this point, wouldn t be comfortable trying to give you a relativity of how much premium we replace with how much we might reduce. As far as the marine market, you know the whole market has had a bad year. Fortunately, Talbot has had a very strong year in the marine market. But the whole market isn t doing well. There's been a number of very, very large partial losses and with the utilization of the global capacity in the whole market today, I guess our concern is that we re likely to see continued increases in frequency. We don t think that the crews are as well trained as they would otherwise be and frankly I think we are stretching the limits of the global fleet. And so the marine market is beginning to show some signs of strain from that. And I think that we are at a point in time where more than discipline is required. It's probably a point where we have to contemplate that we've reached the bottom of how far prices can go and it s time to start to see them rise again. Having said that, the marine market in London isn't behaving greatly. It s not like the aviation insurance market. I think there's pretty good discipline. And certainly Rupert Atkin and his team at Talbot are using excellent discipline. So I don t know that we will necessarily be up or down in the marine market yet, Tom. I think it will take a little bit of time as we get closer to 1/1 to get a better sense of how discipline will play out in the market.

<A – Jeff Consolino>: Tom, this is Jeff Consolino. If we can digress from gross written top line, I don t think we ve ever been reluctant to say that looking forward to 2008, we would anticipate keeping more net relative to the syndicate level reinsurance that Talbot has purchased historically. And so whereas...

<Q – Tom Cholnoky>: That kind of goes onto my next question, which relates to the interest expense. And once again, I guess I'm asking for a bit of guidance perhaps on this. But the $17.9 million that you reported in the quarter, is that a reasonable run rate going forward? And is that also one of the impacts of the higher net retentions since you are not reporting that as a reduction in gross to net?

<A – Jeff Consolino>: The change we made in this quarter was to record the Talbot funds at Lloyd s financing arrangements within our financing expense rather than within G&A and ceded reinsurance premium. So when we publish the Q, you will see in our MD&A, some portion of financing expense is quite static, representing the interest payments on our junior subordinated deferrable debentures and other bank charges. But the cost for the funds at Lloyd s arrangements for Talbot is variable based on the profitability of the Talbot syndicate. I think in this quarter, the number which I cited is elevated by the fact that Talbot was quite profitable in the quarter. And so we continue to believe essentially that the third-party funds that Lloyd s arrangements take

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approximately 30% of the economics of the underwriting at Talbot and will until they run off in respect to each of the underwriting years they were in place for.

<Q – Tom Cholnoky>: How should we then think about interest expenses on a go-forward basis?

<A – Jeff Consolino>: I would model the fixed expenses as fixed expenses and whatever you're projecting for the results of Talbot I would apply the variable component to it.

<Q – Tom Cholnoky>: Okay. Thank you.

Operator: Thank you. Our next question is coming from Blaine Marder of Loeb Partners.

<Q – Blaine Marder>: Hi. Thanks. How are you? A question on the Talbot side. Remind us what your stamp capacity is for 2007.

<A – Jeff Consolino>: Approximately $650 million.

<Q – Blaine Marder>: You expect you ll be on that number?

<A – Jeff Consolino>: For 2007?

<Q – Blaine Marder>: Yes.

<A – Jeff Consolino>: I suggest you check back with us at the end of the fourth quarter.

<Q – Blaine Marder>: Okay. Then that implies that premiums drop here a descent bit from the third to the fourth quarter. That s all.

<A – Edward Noonan>: I guess, Lane, without providing guidance, we're not expecting to see premiums drop between the third and the fourth quarter, certainly not to any significant extent.

<Q – Blaine Marder>: Okay, very good. And then on the loss ratio at Talbot s, I mean if I back out the UK and back out the favorable adjustments in the quarter, your loss ratio at Talbot s seems a lot lower than it has been historically. How should I think about this?

<A – Jeff Consolino>: From absolute low levels of insured losses in the global markets. So I don't think at this point we're prepared to say anything other than this was a quarter that was better than the long-term expected averages.

<A – Edward Noonan>: There's been no reserve philosophy changes or changes in methodology or that, Blaine, so it's just purely a function of the quality underlying business at this point in time.

<Q – Blaine Marder>: Okay, good. And finally, Ed, are you still looking for strategic type acquisitions to diversify your book even further? Where are you looking? What type of lines interest you at this point? Thanks a lot.

<A – Edward Noonan>: We're not really in the acquisition business per se. But just as Talbot was a good strategic fit for us and complementary to our strategy, to the extent that other acquisitions might come along that would allow us to continue to broaden our base in the lines that we find most attractive, we certainly would consider them. But that s not an active strategy at this point in time for us.

Operator: Thank you. The next question is coming from Dan Johnson of Citadel Investment Group.

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<Q – Dan Johnson>: Great. Thank you very much. Would you mind going into a little more detail than you did on the Talbot reserve releases and can we talk a little bit more about the time periods and where they would be on a year-to-date basis in terms of reserve releases as well? Thank you very much.

<A – Jeff Consolino>: The reserve release for Talbot is entirely related to the 2005 and prior year's account. And so it doesn't reflect anything for 2006. In terms of where the M&A is from, you can see in our supplement, they're spread pretty well. The $20.9 million is about $6 million from their property classes; about $6.8 million from their marine classes; and about $8.2 million from their specialty classes. In terms of where this brings it year to date, obviously we didn't consolidate Talbot for the first two quarters of this year as still reflected in our financial statements and thus far it's only the $20.9 million. But there were no reserve releases for Talbot pre-acquisition, either Q1 or Q2. So if you had a Talbot stand-alone for the full nine-month period, the 20.9 would apply not only to the quarter but for the full year.

<Q – Dan Johnson>: Great. Thank you very much.

Operator: Thank you. Our next question is coming from Jay Cohen of Merrill Lynch.

<Q – Jay Cohen>: Good morning, guys. Three questions. The first is, how did your loss estimates for the June flooding events hold up in the third quarter?

<A – Jeff Consolino>: Jay, we didn't have any reserve changes for the second-quarter loss events in the third quarter. I think that it’s still early days in terms of reports, and so we're not prepared to make any change in our initial estimate. But we do feel quite good and comfortable with the actions we took in the second quarter.

<A – Edward Noonan>: Typically the renewal information when it comes in, in the fourth quarter will have better updates on what the June floods look like. And so our approach was to just hold the reserves as they are and wait and see what ceding companies begin reporting as they put together their renewal information.

<Q – Jay Cohen>: That s good. Second question, you mentioned that you have now applied the Validus risk management system to the Talbot business. And I'm wondering when you did that if any insights emerged, any weaknesses or strengths or key differences between how they were managing risk and you were managing risk. Or anything that was different than what you expected when you did due diligence on the deal.

<A – Edward Noonan>: So let me work backwards on that one, Jay. Because we had spent so much time on diligence, we haven't found any surprises in risk management or otherwise at Talbot at this point. I think the Talbot team had an interesting approach. They used RNS prior to the acquisition and used it well. But they also used an interesting absolute aggregate analysis, where they divided the US coastline into 24 wind gates, if you would, sketching from New England all the way down to Texas, and they actually controlled their aggregates within each wind gate and had the wind gates overlap so that you couldn't have cross-zonal overexposures. That isn't that far off of our thinking about aggregate. It's hard to do that under the insurance context because the amount of policy limits add up so quickly. But the Talbot people were actually very, very disciplined about that. And so what we ve found is that when we bring Talbot onto the V-Cap system, we're not adding very, very significant exposures. I think the number is about a 6% increase in our peak US wind risk coming out of the Talbot portfolio. So while they added about 42% to our property premium globally, they add very little to our US aggregate in total.

<Q – Jay Cohen>: Great, thank you. And the last question, the interest expense associated with funds at Lloyd's, I assume there's going to be some material seasonality in that number given that you used to — so first quarter that number will look a lot higher. Is that fair?

8

<A – Jeff Consolino>: I’m sorry, Jay, I’d just rather not discuss what the first quarter is going to look like. That’s kind of a slippery slope.

<Q – Jay Cohen>: Well let me take it a different way then. That number essentially would to some extent, mirror the premiums that Talbot had ceded; it used to be recorded as ceded premiums to third-party capital. That’s correct, right?

<A – Jeff Consolino>: For a component of it. There was another component in the general and admin line, depending on whether the counterparty was a reinsurer or a financial institution.

<Q – Jay Cohen>: Fair. But that the ceded component certainly would have gone up in the first quarter just because the first-quarter premiums are that much larger historically?

<A – Edward Noonan>: For the SAL arrangements, they are generally calculated based on the profitability in the period of the year of the cat they are attached to. And so depending — there was seasonality in the past largely related to the profitability of Talbot, which tended to be over the last couple of years, more seasonally profitable in the back half of the year as they took a closer look at loss reserves and released redundancies.

<Q – Jay Cohen>: Okay, so it’s more related to the earnings rather than the written premiums, is what you’re saying?

<A – Edward Noonan>: Yes, it’s absolutely related to the earnings in the Europe account.

<Q – Jay Cohen>: Okay. So that would be less seasonality than I would have expected then. Okay. That’s great. I appreciate that, Jeff.

Operator: Thank you. Our next question is coming from Matt Heimermann of JPMorgan.

<Q – Matt Heimermann>: Hi. Good morning. A couple of follow-up questions. First, just dovetailing on Jay’s question, is the ratio of that interest expense to the earnings this quarter a decent one to consider prospectively?

<A – Jeff Consolino>: I think, Matt, it’s easiest on a steady-state basis where you had this participation in the capital at Lloyd s by third parties for each of the year s account. In that case, it s a pretty good assumption to look at the third party cost is 30% of the overall profitability of the syndicate. What we said is going forward, we’re truncating that participation; effective at the end of this year we will use capital resources from Validus to provide 100% of funds at Lloyd s. That means there won t be any 2008 year of account sharing of profitability with third-party capital providers. But you’d have to assess the profitability of the 2007 and 2006 years of accounts and how profitable they will be in ‘08 and 09’ to get to a number for what the profit participation is for third parties.

<A – Edward Noonan>: Unfortunately, Matt, I’m not sure there’s a ratio we could give you at this point in time. As Jeff said earlier, if you look at the interest on our junior subordinated debentures, that’s probably something that’s easily predictable. But the prior-year profitability of Talbot, which factors into this in the sharing with prior third-party capital providers is just really based a lot on actuarial estimation of prior-year results and that will tend to change over time, quarter to quarter.

<Q – Matt Heimermann>: No, that’s fair. And I can make my own assumption about how the existing book runs off. The other question I had was on the loss ratio, it doesn’t — you said — you implied that there was no change to the current year loss ratio pick. So in your answer, were you basically just saying you had low reported claims in the quarter that drove that? Or is there some other component that drove it in the loss ratio?

9

<A – Jeff Consolino>: No, I think, Matt, that you have it exactly right. The activity in the third quarter was fairly light relative to what you would expect based on pricing, based on long-term historical averages or any such measure.

<A – Edward Noonan>: And Matt, that was true across most of the lines we write, not just the catastrophe portfolio. It’s just that we’re right now in a period where in the short-tail risk classes it’s very low attritional loss activity.

<Q – Matt Heimermann>: Okay. And then just from a reserving philosophy perspective on that, I mean are you more likely to believe the low reported losses the later we are in the calendar year? Or is that consistent across quarters?

<A – Edward Noonan>: So I think what I would probably say is that we are — in the fourth quarter, we will do a fairly comprehensive actuarial overview, actually a very comprehensive actuarial review. And at that point, we will probably start to assess whether — how good we feel about the reported claims activity for the year and what impact that has on results in the current year loss ratio. But typically, within the current year, we’ve largely just set up the pick loss ratio for each line of business based on how we price the product and we let it sit until we complete that actuarial study.

<Q – Matt Heimermann>: And then last just a follow-up question, Jeff, could you identify what the intangible amortization expense was in the quarter and whether you’re going to break that out prospectively?

<A – Jeff Consolino>: It will be in our MD&A. It’s a little bit more than a million — it’s 1.040 million.

<Q – Matt Heimermann>: Perfect. Thank you.

<A – Jeff Consolino>: And we tried in our IPO prospectus to give a schedule of that going forward for the ten years.

<Q – Matt Heimermann>: Yes, no, I have that; I just was in the quarter — unless I missed it I didn’t see it broken out so I made a guess, so I just wanted to make sure I was close.

Operator: Thank you. Our next question is coming from Brian Meredith of UBS.

<Q – Brian Meredith>: Yes, good morning. A couple quick questions here. First, what impact, if any was Petrel Re on top line and profitability in the quarter?

<A – Edward Noonan>: [indiscernible] of Petrel. And just as a reminder, Petrel is recorded as an offset to our acquisition costs both for the originations we receive and the profit commission. If you were to give me a moment, I can cite for you the ceded premium. So why don t I come back to you in a moment with that.

<Q – Brian Meredith>: Great. And then as a follow-up, Ed, given you’re generating some pretty attractive profitability here and given the prospects of what’s going on with pricing in various markets here, any thoughts of possibly keeping some of that Petrel Re business net here going forward as your capital base continues to grow here?

<A – Edward Noonan>: We certainly look at every option we have to grow our business on both a gross and a net basis. We are in discussions with Petrel Re now as to whether we want to renew that or not and we’ll probably complete those discussions in the next week or ten days. Yes, I certainly think that we have more room in our balance sheet to take on some of that risk. But candidly, as I mentioned in my comments, there is a fine line that we’re trying to walk. We try and

10

be very conservative in our risk-taking and we tend to think the Gulf of Mexico is 100% correlated with Florida, with the Gulf states of Texas. And so adding in the Petrel Re exposure would start to push our aggregates up. And while we have room to do that, I’m not sure that at this moment in time from a risk appetite standpoint, that that’s the best idea we have. We still think that we can grow our US aggregates a bit during 2008. So that’s probably better a question for another point down the road. But as I say, we will reach our conclusion with the Petrel Re folks over the next week or so.

<A – Jeff Consolino>: Brian, the ceded premium to Petrel in the quarter was approximately $7.3 million.

<Q – Brian Meredith>: $7.3 million.

<A – Jeff Consolino>: And the earned premium to Petrel during the quarter was $14.6 million.

<Q – Brian Meredith>: $14.6 million, great. And then last question, any exposure through I guess either Talbot or Validus Re to the California wildfires?

<A – Edward Noonan>: We certainly do. Talbot has a US property portfolio and Validus writes some business there. We don’t actually see much exposure at this point in time. It’s a bit early to start to come up with estimates. We do reinsure some of the local California companies. And we think in the reinsurance market, that’s a place where you might pick up some exposure. In general, what we’ve seen so far, we’ve gone contract by contract in the reinsurance portfolio and we’ve looked at all of the individual risk that Talbot writes. Our best sense at this point is that this will be well within our normal expected losses for any given quarter.

<A – Jeff Consolino>: Brian, I might add that we’re preparing to file our Form 10-Q and as part of that, we need to make a formal assessment as to whether there are any material subsequent events. And we will not be reporting the California wildfires as a material subsequent event.

<Q – Brian Meredith>: Great. Thank you.

Operator: Thank you. Our next question is coming from Brian Rohman [ph] of Weiss Peck & Grear.

<Q>: Good morning. You mentioned the softest areas or ENS and marine. How big are those in terms of your total gross written?

<A – Jeff Consolino>: In the quarter, Brian, or before the...

<Q>: In the quarter since the companies are combined.

<A – Edward Noonan>: Yes, Brian, I think it’s a little difficult for us to break it out specifically because we pick up US ENS business through a few treaties in Bermuda. We write some of that business on a direct and facultative basis out of London. And of course, it gets swept into lots of other property treaties we have. I think in total our exposure to the US ENS property market is probably somewhere in the 80 to $110 million range at Validus Re and perhaps something of similar or smaller magnitude coming out of Talbot.

<Q>: That’s not a quarterly number. That’s a annualized number?

<A – Edward Noonan>: Right. That’s kind of an annualized number. Yes, I apologize.

<A – Jeff Consolino>: In the quarter, the cumulative written premium in property no matter whether it’s ENS or cat XMO or the like, combined is $115 million and marine is 63.4 million.

11

<Q>: Okay. Next question, what was the share count at the end of the quarter? I missed that number — the absolute number?

<A – Jeff Consolino>: We had 71,869,000, let’s call it, diluted shares for EPS purposes. If you look in the press release, kind of getting to an absolute count of diluted shares is probably best to look at the calculation of diluted book value. So you can see that we have — at the end of the quarter, call it 74.2 million common shares outstanding. And then with the impact of stock warrants, restricted stock and stock options, we have 89.0 million total shares outstanding. The weighted average exercise price for the warrants and the options, was let s call it, 17.75. And so the treasury method will obviously put a damper on us. We wouldn’t expect our EPS diluted shares to approach the 89.1 million. But based on the time of the IPO I think very clearly, you would see it go up by about 5 million.

<Q>: 5 million above the 74?

<A – Jeff Consolino>: I’m sorry, 5 million above the 71.9.

<Q>: Right. Okay. Last — is there another comment?

<A – Jeff Consolino>: No.

<Q>: I have a couple of other quick questions. Question already asked about fourth-quarter catastrophes; somebody asked about the fires. Is there anything else rattling around out there that sometimes falls under the radar screen?

<A – Edward Noonan>: Nothing that comes to mind. Excuse me one second while I touch wood, but...

<Q>: There you go. I’ll do the same. I did the same. Last question. If you keep going at this rate, the capital is going to build pretty quickly. Thoughts on repurchasing stock or paying a dividend?

<A – Edward Noonan>: Yes. From the day we started the company, we’re optimistic in projecting that we would reach a point where we would in fact develop excess capital. We are not there today. Actually, we are utilizing our capital quite fully. But if we assumed kind of a normal year next year, late in the year we might be at a point where we would start to develop excess capital and think about ways to deal with that. I think we’ve said in the past and we believe this firmly, that when we have excess capital, we are not going to hold onto it. We’re not going to reach and try and do things in the business that don’t make sense. We will return it to the shareholders in whatever way makes the most sense. And our view is that people who are disciplined and companies that do that well always have access to the capital markets and they tend to significantly outperform companies who hold onto capital that they don’t need. So we’re not at a point in time where that’s an issue for us. But it is — if we look at longer-term capital management that is something that we are spending some time thinking about.

<Q>: If I read between the lines, it sounds as if you want to get through next year’s hurricane season.

<A – Jeff Consolino>: I wouldn’t expect to see any kind of capital management from us until the wind season expires next year at the earliest. And of course that’s also subject to — our first preference is to use our capital underwriting the portfolio of low-priced business. And so market conditions evolve as well.

<Q>: Thank you very much.

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Operator: [Operator Instructions] You have a follow-up question coming from Tom Cholnoky of Goldman Sachs.

<Q – Tom Cholnoky>: Sorry. I don’t mean to beat the interest question to death, but I think you — Jeff, you mentioned that the 30% kind as if we take that as a percentage in the quarter, might be a decent run rate. But my sense is that’s a decent run rate for the fourth quarter, but if you decide to do away with these capital — the Lloyd’s capital vehicle, that percentage should actually decline pretty rapidly during ‘08 and ‘09 as more of the current business — profitability of the current business overweighs or outweighs the profitability of prior-year business. Am I correct?

<A – Jeff Consolino>: So we talked about in the last year, about $32 million of third-party capital costs incurred by Talbot. And we’ve said that that will grade off to zero when we close out the last year for which there is a participation by third-party capital. I would say that the 2008 calendar year, we will see a pretty modest contribution to profitability from the business written in 2008 and so the lion’s share of the profitability that is driven in the 2008 calendar year from Talbot will be attributable to the 2007 year of account, and that will have a participation by third-party capital providers. And so I really think that the downward slope of this cost will accelerate once we get past 2008.

<Q – Tom Cholnoky>: I think I probably should follow this up off-line. Thank you.

<A – Jeff Consolino>: Thank you.

Operator: There are no further questions at this time. I would like to hand the floor back over to management for any closing comments.

Edward Noonan, Chairman and Chief Executive Officer

Thank you very much, and thank all of you for your interest in the Company and what I think was a very lively and positive call for us. So thank you. We’ll look forward to updating you again at the end of the fourth quarter. Bye now.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

Disclaimer

The information herein has been provided by a third party source that we believe is reliable but it does not purport to be a complete or error-free statement or summary of the available data. As such, we do not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of the information. You must evaluate, and bear all risks associated with, the use of any information provided hereunder, including any reliance on the accuracy, completeness, safety or usefulness of such information. This information is not intended to be used as the primary basis of investment decisions. It should not be construed as advice designed to meet the particular investment needs of any investor. This report is published solely for information purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an offer to buy any security in any state where such an offer or solicitation would be illegal. Any information expressed herein on this date is subject to change without notice.

13

EX-99.3

Exhibit 99.3

Validus Holdings, Ltd.
Investor Financial Supplement — Third Quarter 2007

November 5, 2007

Validus Reinsurance, Ltd.
19 Par-la-ville Road
Hamilton, HM 11 Bermuda
Telephone: (441) 278-9000
Facsimile: (441) 278-9090
Website: www.validusre.bm
Mailing Address: Suite 1790 48 Par-la-ville Road
Hamilton, HM 11 Bermuda

Page 1

Validus Holdings, Ltd.
Table of Contents

Section	Page
Table of Contents		2
Explanatory Notes		3
Consolidated Financial Highlights		4
Summary Consolidated Balance Sheets		5
Computation of Book Value per Common Share and Diluted Book Value per Common Share		6
Consolidated Statements of Operations and Comprehensive Income (Loss)		7
Consolidated Statements of Operations — Underwriting Income Format		8
Computation of Earnings Per Share Data		9
Dilutive Shares for Earnings Per Share Calculation		10
Consolidated Segment Income Data for Quarter		11
Consolidated Segment Income Data for Year to Date		12
Underwriting Results by Class of Business — Three months ended September 30 - Validus Re		13
Underwriting Results by Class of Business — Three Months Ended September 30, 2007 - Talbot		14
Underwriting Results by Class of Business — Nine months ended September 30 - Validus Re		15
Underwriting Results by Class of Business — Nine months ended September 30, 2007 - Talbot		16
Line of Business Treaty Type Detail (Gross Premium Written) — Validus Re		17
Consolidated Line of Business Policy Type Detail (Gross Premium Written)		18
Consolidated Analysis of Reserves for Losses and Loss Expenses		19
Consolidated Losses and Loss Ratios by Segment		20
Losses and Loss Ratios by Class — Validus Re		21
Losses and Loss Ratios by Class — Talbot		22
Consolidated Reinsurance Recoverable Analysis		23
Consolidated Investment Portfolio Composition and Net Investment Income		24
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile		25
Capitalization		26

Page 2

Validus Holdings, Ltd.
Explanatory Notes

Basis of Presentation

• All financial information contained herein is unaudited, however, certain information contained herein relating to the years ended December 31, 2006 and 2005 is derived from or agrees to audited financial information.

• Unless otherwise noted, dollar amounts are in thousands of US dollars, except for share and per share amounts and ratio information.

• Certain amounts in prior periods have been reclassified to conform to current period presentation. These reclassifications include the inclusion of share based compensation expense in general and administrative expenses and the corresponding expense ratios, and the combination of fees relating to our credit facility (previously included in general and administrative expenses) with interest expense to comprise finance fees. In addition, Aerospace, Life and A&H, Terrorism, Workers’ Compensation lines of business have been combined into one reporting line, ‘Specialty’.

• A reverse stock split of the outstanding shares of Validus Holdings, Ltd., was approved by a vote by the shareholders, effective immediately following resolution at the Company’s Annual General Meeting on March 1, 2007, whereby each 1.75 outstanding shares was consolidated into 1 share, and the par value of the Company’s shares was increased to US $0.175 per share. This share consolidation has been reflected retroactively in this financial supplement.

• On July 30, 2007, Validus completed its initial public offering. The net proceeds to the Company from this Offering were approximately $319,935, after deducting the underwriters’ discount and fees and expenses of the Offering.

• The Company entered into an advisory agreement on December 7, 2005 with Aquiline for the provision of advisory and consulting services in relation to the affairs of the Company. Under the terms of this agreement, the Company pays an annual advisory fee of $1,000 payable in advance for a period of five years from the date of initial funding until the termination date. As outlined in the agreement, the Advisory Agreement was terminated with the first public offering and the Company paid in full to Aquiline the remaining unpaid advisory fees of $3,000.

• “NA” = Not applicable

• “NM” = Not meaningful

• On July 2, 2007, Validus announced it completed its acquisition of Talbot Holdings Ltd. (“Talbot”). Operating results of Talbot have been included in the consolidated financial statements from the acquisition date of July 2, 2007. The Validus data for 2006 and first six months of 2007 refer only to the company prior to its acquisition of Talbot.

Financial Measures

In presenting our results, we include certain financial measures which are important for an understanding of our overall results of operations. We believe that these measures are important to investors and other interested parties, and that such persons benefit from having a consistent basis for comparison with other companies within the industry. However, these measures may not be comparable to similarly titled measures used by companies either inside or outside of the insurance industry.

• Diluted book value per share is calculated based on total shareholders’ equity plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of shares, options, warrants and share equivalents outstanding (assuming their exercise).

• Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses) on investments, gains (losses) arising from translation of non-US$ denominated balances and non-recurring items. Net operating income is the most directly comparable GAAP measure as it focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies and non-recurring items. In the third quarter of 2007, Validus incurred a $3,000 non-recurring expense to terminate an advisory agreement with its founding investor in conjunction with its IPO. In the third quarter of 2007, Validus further incurred a $2,893 non-recurring expense arising from the issuance of additional warrants pursuant to the anti-dilution provisions of the warrants triggered by the Talbot acquisition. Realized gains (losses) from the sale of investments are driven by the timing of the disposition of investments, not by our operating performance. Gains (losses) arising from translation of non-US$ denominated balances are unrelated to our underlying business.

• Underwriting income (loss) is a measure of profitability that takes into account net premiums earned and other insurance related income as revenue and net loss and loss expenses, acquisition costs and underwriting related general and administrative expenses as expenses. Underwriting income (loss) is the difference between revenues and expense items.

• Annualized effective investment yield is calculated by dividing the investment income generated from invested assets and other investments by the average balance of the assets managed by our portfolio managers and our other investments.

Page 3

Validus Holdings, Ltd.
Consolidated Financial Highlights
(US Dollars in thousands, except share and per share information)

		At or for the															At or for the						At or for the
		three months ended															nine months ended						year ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,			December 31,
		2007			2007			2007			2006			2006			2007			2006			2006
Highlights	Net income	$	136,525		$	70,754		$	56,748		$	69,052		$	69,676		$	264,027		$	114,045		$	183,097
	Net operating income (a)		127,909			75,172			53,670			68,164			69,461			256,751			113,955			182,119
	Gross premiums written		245,271			174,300			378,070			65,505			116,505			797,641			475,284			540,789
	Net premiums earned		295,526			133,030			111,492			105,153			92,498			540,048			201,361			306,514
	Total assets		4,126,602			2,364,911			2,012,485			1,646,423			1,624,890			4,126,602			1,624,890			1,646,423
	Total shareholders’ equity		1,789,360			1,323,947			1,251,216			1,192,523			1,121,707			1,789,360			1,121,707			1,192,523
Per share data	Earnings per basic share
	Net income (loss)	$	1.98		$	1.21		$	0.97		$	1.18		$	1.19		$	4.26		$	1.95		$	3.13
	Net operating income (loss)		1.85			1.29			0.92			1.17			1.19			4.14			1.95			3.11
	Earnings per diluted share
	Net income (loss)	$	1.90		$	1.17		$	0.94		$	1.16		$	1.19		$	4.11		$	1.95		$	3.11
	Net operating income (loss)		1.78			1.24			0.89			1.14			1.18			4.00			1.95			3.09
	Book value per share
	Reported	$	24.12		$	22.64		$	21.39		$	20.39		$	19.18		$	24.12		$	19.18		$	20.39
	With investments at amortized cost		24.06			22.70			21.35			20.38			19.16			24.06			19.16			20.38
	Diluted book value per share (b)
	Reported	$	22.37		$	21.59		$	20.56		$	19.73		$	18.72		$	22.37		$	18.72		$	19.73
	With investments at amortized cost		22.32			21.64			20.52			19.71			18.70		$	22.32		$	18.70			19.71
Financial ratios	Losses and loss expenses ratio		29.5	%		32.1	%		41.7	%		23.1	%		12.5	%		32.7	%		33.3	%		29.8	%
	Policy acquisition costs ratio		17.2	%		13.4	%		11.0	%		10.9	%		11.5	%		15.0	%		12.2	%		11.8	%
	General and administrative expenses ratio		16.2	%		9.8	%		11.8	%		14.5	%		14.7	%		13.7	%		15.4	%		15.1	%
	Expense ratio		33.4	%		23.2	%		22.8	%		25.4	%		26.2	%		28.7	%		27.6	%		26.9	%
	Combined ratio		63.0	%		55.3	%		64.5	%		48.5	%		38.8	%		61.4	%		60.9	%		56.7	%
	Annualized return on average equity (c)		35.1	%		22.0	%		18.6	%		23.9	%		25.8	%		25.3	%		14.6	%		17.0	%
	Annualized operating return on average equity (d)		32.9	%		23.4	%		17.6	%		23.6	%		25.7	%		24.6	%		14.5	%		17.0	%

Notes:

(a)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances and excluding the fair value of warrants issued and the termination fee paid to Aquiline under the Advisory Agreement. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(b)	Diluted book value per share is calculated based on total shareholders’ equity plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of shares, options, warrants and share equivalents outstanding (assuming their exercise).
(c)	Annualized return on average equity is calculated by dividing the net income for the period by the average shareholders’ equity during the period. Average shareholders’ equity is the average of the beginning, ending and intervening quarter end shareholders’ equity balances.
(d)	Annualized operating return on average equity is calculated by dividing the operating income for the period by the average shareholders’ equity during the period. Average shareholders’ equity is the average of the beginning, ending and intervening quarter end shareholders’ equity balances.

Page 4

Validus Holdings, Ltd.
Summary Consolidated Balance Sheets
(US Dollars in thousands, except share and per share information)

	September 30,			June 30,		March 31,		December 31,		September 30,
	2007			2007		2007		2006		2006
Assets
Fixed maturities, at fair value	$	1,772,121		$	1,127,591	$	1,089,167	$	844,857	$	831,730
Short-term investments, at fair value		580,765			371,767		350,136		531,530		447,884
Cash and cash equivalents		651,428			314,955		88,317		63,643		87,457
Total investments and cash		3,004,314			1,814,313		1,527,620		1,440,030		1,367,071
Premiums receivable		505,001			376,814		356,294		142,408		177,634
Deferred acquisition costs		122,572			72,518		66,694		28,203		30,611
Prepaid reinsurance premiums		59,623			40,747		27,064		8,245		34,300
Securities lending collateral		60,018			35,194		16,258		12,327		—
Loss reserves recoverable		165,115			158		450		—		1,936
Recoverables on paid losses		8,174			—		—		—		—
Net receivable for investments sold		—			1,862		—		—		—
Taxes recoverable		6,283			—		—		—		—
Goodwill and other intangible assets		152,812			—		—		—		—
Accrued investment income		15,476			9,355		7,683		6,456		5,572
Other assets		27,214			13,950		10,422		8,754		7,766
Total assets	$	4,126,602		$	2,364,911	$	2,012,485	$	1,646,423	$	1,624,890
Liabilities
Reserve for losses and loss expense	$	924,531		$	138,132	$	111,555	$	77,363	$	63,211
Unearned premiums		727,293			461,437		433,263		178,824		244,172
Reinsurance balances payable		56,553			45,927		25,708		7,438		22,298
Securities lending payable		60,018			35,194		16,258		12,327		—
Deferred taxation		20,260			—		—		—		—
Net payable for investments purchased		88,072			—		17,209		12,850		12,944
Accounts payable and accrued expenses		110,515			10,274		7,276		15,098		10,558
Debentures payable		350,000			350,000		150,000		150,000		150,000
Total liabilities		2,337,242			1,040,964		761,269		453,900		503,183
Shareholders’ equity
Ordinary shares	$	12,985		$	10,234	$	10,234	$	10,234	$	10,234
Additional paid-in capital		1,378,724			1,051,947		1,049,970		1,048,025		1,045,947
Accumulated other comprehensive (loss) income		(640	)		—		—		875		1,189
Retained earnings		398,291			261,766		191,012		133,389		64,337
Total shareholders’ equity		1,789,360			1,323,947		1,251,216		1,192,523		1,121,707
Total liabilities and shareholders’ equity	$	4,126,602		$	2,364,911	$	2,012,485	$	1,646,423	$	1,624,890
Book value per common share	$	24.12		$	22.64	$	21.39	$	20.39	$	19.18
Diluted book value per common share	$	22.37		$	21.59	$	20.56	$	19.73	$	18.72

Page 5

Validus Holdings, Ltd.
Computation of Book Value per Common Share and Diluted Book Value per Common Share
(US Dollars in thousands, except share and per share information)

	At September 30, 2007									At December 31, 2006
								Book									Book
	Equity					Exercise		Value per		Equity					Exercise		Value per
	Amount			Shares		Price (a)		Share		Amount			Shares		Price (a)		Share
Book Value per Common Share, Reported
Book Value per Common Share
Total shareholders’ equity	$	1,789,360			74,199,837			$	24.12	$	1,192,523			58,482,601			$	20.39
Diluted Book Value per Common Share
Total shareholders’ equity	$	1,789,360			74,199,837		—			$	1,192,523			58,482,601		—
Assumed exercise of outstanding warrants (b)		152,868			8,711,729	$	17.55				147,968			8,455,320	$	17.50
Assumed exercise of outstanding stock options (b)		49,196			2,761,176	$	17.82				45,046			2,568,894	$	17.54
Unvested restricted shares		—			3,367,961		—				—			733,964		—
Diluted book value per common share	$	1,991,424			89,040,703			$	22.37	$	1,385,537			70,240,779			$	19.73
Book Value per Common Share, with Investments at Amortized Cost
Book Value per Common Share
Total shareholders’ equity	$	1,789,360								$	1,192,523
Unrealized (gain) loss on investments		(4,011	)								(875	)
Total shareholders’ equity, as adjusted	$	1,785,349			74,199,837			$	24.06	$	1,191,648			58,482,601			$	20.38
Diluted Book Value per Common Share
Total shareholders’ equity	$	1,785,349			74,199,837		—			$	1,191,648			58,482,601		—
Assumed exercise of outstanding warrants (b)		152,868			8,711,729	$	17.55				147,968			8,455,320	$	17.50
Assumed exercise of outstanding stock options (b)		49,196			2,761,176	$	17.82				45,046			2,568,894	$	17.54
Unvested restricted shares		—			3,367,961		—				—			733,964		—
Diluted book value per common share, as adjusted	$	1,987,413			89,040,703			$	22.32	$	1,384,662			70,240,779			$	19.71

Notes:

(a)	Weighted average exercise price for those warrants and stock options which have exercise price lower than book value per share.
(b)	Using the “as-if-converted” method, assuming all proceeds received upon exercise of warrants and stock options will be retained by the Company and the resulting common shares from exercise remain outstanding.

Page 6

Validus Holdings, Ltd.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(US Dollars in thousands, except share and per share information)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2007			2007			2007			2006			2006			2007			2006
Revenues
Gross premiums written	$	245,271		$	174,300		$	378,070		$	65,505		$	116,505		$	797,641		$	475,284
Reinsurance premiums ceded		(7,906	)		(26,780	)		(30,958	)		355			(38,892	)		(65,644	)		(64,051	)
Net premiums written		237,365			147,520			347,112			65,860			77,613			731,997			411,233
Change in unearned premiums		58,161			(14,490	)		(235,620	)		39,293			14,885			(191,949	)		(209,872	)
Net premiums earned		295,526			133,030			111,492			105,153			92,498			540,048			201,361
Net investment income		36,560			19,742			18,497			17,652			16,272			74,799			40,370
Net realized (losses) gains on investments		1,010			(232	)		46			(208	)		(154	)		823			(894	)
Net unrealized gains on investments		7,681			(6,189	)		1,643			—			—			3,136			—
Other income		1,330			—			—			—			—			1,330			—
Foreign exchange gains		5,818			2,003			1,389			1,096			369			9,210			1,061
Total revenues		347,925			148,354			133,067			123,693			108,985			629,346			241,898
Expenses
Losses and loss expense		87,263			42,675			46,487			24,265			11,577			176,426			67,058
Policy acquisition costs		50,945			17,837			12,219			11,498			10,638			81,000			24,575
General and administrative expenses		44,793			11,107			11,227			13,002			11,736			67,088			25,350
Share compensation expense		6,132			1,978			1,945			2,223			1,905			10,054			5,657
Finance expenses		17,886			4,003			4,441			3,653			3,453			26,331			5,136
Fair value of warrants issued		2,893			—			—			—			—			2,893			77
Total expenses		209,912			77,600			76,319			54,641			39,309			363,792			127,853
Net income before taxes		138,013			70,754			56,748			69,052			69,676			265,554			114,045
Taxes		1,488			—			—			—			—			1,527			—
Net income	$	136,525		$	70,754		$	56,748		$	69,052		$	69,676		$	264,027		$	114,045
Comprehensive income
Unrealized gains (losses) arising during period		—			—			—			(522	)		7,353			—			190
Foreign currency translation adjustments		(640	)		—			—						—			(640	)		—
Adjustment for reclassification of (losses) realized in income		—			—			—			208			154			—			894
Comprehensive income	$	135,885		$	70,754		$	56,748		$	68,738		$	77,183		$	263,387		$	115,129
Earnings per share
Weighted average number of common shares and share equivalents outstanding:
Basic		69,107,336			58,482,600			58,482,601			58,482,601			58,482,601			62,024,179			58,475,306
Diluted		71,868,835			60,647,354			60,215,392			59,745,784			58,651,163			64,243,860			58,584,161
Basic earnings per share	$	1.98		$	1.21		$	0.97		$	1.18		$	1.19		$	4.26		$	1.95
Diluted earnings per share	$	1.90		$	1.17		$	0.94		$	1.16		$	1.19		$	4.11		$	1.95

Page 7

Validus Holdings, Ltd.
Consolidated Statements of Operations — Underwriting Income Format
(US Dollars in thousands, except share and per share information)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2007			2007			2007			2006			2006			2007			2006
Gross premiums written	$	245,271		$	174,300		$	378,070		$	65,505		$	116,505		$	797,641		$	475,284
Reinsurance premiums ceded		(7,906	)		(26,780	)		(30,958	)		355			(38,892	)		(65,644	)		(64,051	)
Net premiums written		237,365			147,520			347,112			65,860			77,613			731,997			411,233
Change in unearned premiums		58,161			(14,490	)		(235,620	)		39,293			14,885			(191,949	)		(209,872	)
Net premiums earned		295,526			133,030			111,492			105,153			92,498			540,048			201,361
Losses and loss expenses		87,263			42,675			46,487			24,265			11,577			176,426			67,058
Policy acquisition costs		50,945			17,837			12,219			11,498			10,638			81,000			24,575
General and administrative expenses		41,793			11,107			11,227			13,002			11,736			64,088			25,350
Share compensation expense		6,132			1,978			1,945			2,223			1,905			10,054			5,657
Total underwriting deductions		186,133			73,597			71,878			50,988			35,856			331,568			122,640
Underwriting income		109,393			59,433			39,614			54,165			56,642			208,480			78,721
Net investment income		36,560			19,742			18,497			17,652			16,272			74,799			40,370
Other income		1,330			—			—			—			—			1,330			—
Finance expenses		(17,886	)		(4,003	)		(4,441	)		(3,653	)		(3,453	)		(26,331	)		(5,136	)
Operating income before tax		129,397			75,172			53,670			68,164			69,461			258,278			113,955
Taxes		1,488			—			—			—			—			1,527			—
Net operating income	$	127,909		$	75,172		$	53,670		$	68,164		$	69,461		$	256,751		$	113,955
Net realized (losses) gains on investments		1,010			(232	)		46			(208	)		(154	)		823			(894	)
Net unrealized gains (losses) on investments		7,681			(6,189	)		1,643			—			—			3,136			—
Foreign exchange gains		5,818			2,003			1,389			1,096			369			9,210			1,061
Fair value of warrants issued		(2,893	)		—			—			—			—			(2,893	)		(77	)
Aquiline termination fee		(3,000	)		—			—			—			—			(3,000	)		—
Net income	$	136,525		$	70,754		$	56,748		$	69,052		$	69,676		$	264,027		$	114,045
Selected Ratios
Net premiums written/Gross premiums written		96.8	%		84.6	%		91.8	%		100.5	%		66.6	%		91.8	%		86.5	%
Losses and loss expenses		29.5	%		32.1	%		41.7	%		23.1	%		12.5	%		32.7	%		33.3	%
Policy acquisition costs		17.2	%		13.4	%		11.0	%		10.9	%		11.5	%		15.0	%		12.2	%
General and administrative expenses		16.2	%		9.8	%		11.8	%		14.5	%		14.7	%		13.7	%		15.4	%
Expense ratio		33.4	%		23.2	%		22.8	%		25.4	%		26.2	%		28.7	%		27.6	%
Combined ratio		63.0	%		55.3	%		64.5	%		48.5	%		38.8	%		61.4	%		60.9	%

Notes:

(a)

Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balance the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.

Page 8

Validus Holdings, Ltd.
Computation of Earnings Per Share Data
(US Dollars in thousands, except share and per share information)

	Three Months Ended
	September 30, 2007						September 30, 2006
	Net operating		Net		Comprehensive		Net operating		Net		Comprehensive
	income		income		income		income		income		income
Numerator	$	127,909	$	136,525	$	135,885	$	69,461	$	69,676	$	77,183
Basic EPS calculation:
Weighted average number of common shares outstanding:		69,107,336		69,107,336		69,107,336		58,482,601		58,482,601		58,482,601
Basic earnings per share	$	1.85	$	1.98	$	1.97	$	1.19	$	1.19	$	1.32
Diluted EPS calculation:
Weighted average number of common shares outstanding:		69,107,336		69,107,336		69,107,336		58,482,601		58,482,601		58,482,601
Share equivalents:
Warrants		2,058,548		2,058,548		2,058,548		—		—		—
Stock options		33,865		33,865		33,865		—		—		—
Unvested restricted shares		669,086		669,086		669,086		168,562		168,562		168,562
Weighted average number of diluted common shares outstanding:		71,868,835		71,868,835		71,868,835		58,651,163		58,651,163		58,651,163
Diluted earnings per share	$	1.78	$	1.90	$	1.89	$	1.18	$	1.19	$	1.32

	Nine Months Ended
	September 30, 2007						September 30, 2006
	Net operating		Net		Comprehensive		Net operating		Net		Comprehensive
	income		income		income		income		income		income
Numerator	$	256,751	$	264,027	$	263,387	$	113,955	$	114,045	$	115,129
Basic EPS calculation:
Weighted average number of common shares outstanding:		62,024,179		62,024,179		62,024,179		58,475,306		58,475,306		58,475,306
Basic earnings per share	$	4.14	$	4.26	$	4.25	$	1.95	$	1.95	$	1.97
Diluted EPS calculation:
Weighted average number of common shares outstanding:		62,024,179		62,024,179		62,024,179		58,475,306		58,475,306		58,475,306
Share equivalents:
Warrants		1,720,334		1,720,334		1,720,334		—		—		—
Stock options		11,288		11,288		11,288		—		—		—
Unvested restricted shares		488,059		488,059		488,059		108,855		108,855		108,855
Weighted average number of diluted common shares outstanding:		64,243,860		64,243,860		64,243,860		58,584,161		58,584,161		58,584,161
Diluted earnings per share	$	4.00	$	4.11	$	4.10	$	1.95	$	1.95	$	1.97

Notes:

SFAS No. 123 requires that any unrecognized stock based compensation expense that will be recorded in future periods be included as proceeds for purposes of treasury stock repurchases, which is applied against the unvested restricted shares balance

Page 9

Validus Holdings, Ltd.
Dilutive Shares for Earnings Per Share Calculation
(US Dollars in thousands, except share and per share information)

	Three months ended						Nine months ended
	September 30, 2007			September 30, 2006			September 30, 2007			September 30, 2006
Average fair value per share	$	23.01		$	17.50		$	21.97		$	17.50
Basic weighted average common shares outstanding		69,107,336			58,482,601			62,024,179			58,475,306
Add: weighted average unvested restricted shares		3,170,831			713,723			1,552,760			686,677
Proceeds from unrecognized restricted share expense	$	57,565		$	9,540		$	23,391		$	10,111,885
Less: restricted shares bought back via treasury method		(2,501,745	)		(545,161	)		(1,064,701	)		(577,822	)
Add: weighted average dilutive warrants outstanding		8,647,626			8,455,320			8,519,422			8,452,169
Weighted average exercise price per share	$	17.53		$	17.50		$	17.53		$	17.50
Less: warrants bought back via treasury method		(6,589,078	)		(8,455,320	)		(6,799,088	)		(8,452,169	)
Add: weighted average dilutive options outstanding		2,775,358			2,498,572			2,680,234			2,428,585
Weighted average exercise price per share	$	17.82		$	17.50		$	17.68		$	17.50
Proceeds from unrecognized option expense	$	15,515		$	15,889		$	14,697		$	15,554
Less: options bought back via treasury method		(2,741,493	)		(2,498,572	)		(2,668,946	)		(2,428,585	)
Weighted average dilutive shares outstanding		71,868,835			58,651,163			64,243,860			58,584,161

Page 10

Validus Holdings, Ltd.
Consolidated Segment Income Data for Quarter
(US Dollars in thousands, except share and per share information)

	Three Months Ended September 30, 2007												Three Months Ended September 30, 2006
	Validus Re			Talbot			Corporate			Total			Validus Re			Talbot			Corporate			Total
Gross premiums written	$	102,229		$	143,042		$	—		$	245,271		$	116,505		$	—		$	—		$	116,505
Reinsurance premiums ceded		(7,291	)		(615	)		—			(7,906	)		(38,892	)		—			—			(38,892	)
Net premiums written		94,938			142,427			—			237,365			77,613			—			—			77,613
Change in unearned premiums		57,055			1,106			—			58,161			14,885			—			—			14,885
Net premiums earned		151,993			143,533			—			295,526			92,498			—			—			92,498
Losses and loss expenses		38,131			49,132			—			87,263			11,577			—			—			11,577
Policy acquisition costs		18,161			32,784			—			50,945			10,638			—			—			10,638
General and administrative expenses		9,527			25,258			7,008			41,793			6,987			—			4,749			11,736
Share compensation expense		1,281			731			4,120			6,132			526			—			1,379			1,905
Total underwriting deductions		67,100			107,905			11,128			186,133			29,728			—			6,128			35,856
Underwriting income (loss)	$	84,893		$	35,628		$	(11,128	)	$	109,393		$	62,770		$	—		$	(6,128	)	$	56,642
Net investment income		22,706			13,360			494			36,560			16,271			—			1			16,272
Other income		—			1,330			—			1,330			—			—			—			—
Finance expenses		(174	)		(8,858	)		(8,854	)		(17,886	)		(8	)		—			(3,445	)		(3,453	)
Operating income (loss) before tax		107,425			41,460			(19,488	)		129,397			79,033			—			(9,572	)		69,461
Taxes		8			1,480			—			1,488			—			—			—			—
Net operating income (loss)	$	107,417		$	39,980		$	(19,488	)	$	127,909		$	79,033		$	—		$	(9,572	)	$	69,461
Net realized gains (losses) on investments		1,122			(112	)		—			1,010			(154	)		—			—			(154	)
Net unrealized (losses) gains on investments		5,881			1,800			—			7,681			—			—			—			—
Foreign exchange gains (losses)		4,372			1,446			—			5,818			369			—			—			369
Fair value of warrants issued		—			—			(2,893	)		(2,893	)		—			—			—			—
Aquiline termination fee		—			—			(3,000	)		(3,000	)		—			—			—			—
Net income (loss)	$	118,792		$	43,114		$	(25,381	)	$	136,525		$	79,248		$	—		$	(9,572	)	$	69,676
Selected Ratios
Net premiums written/Gross premiums written		92.9	%		99.6	%					96.8	%		66.6	%		0.0	%					66.6	%
Losses and loss expenses		25.1	%		34.2	%					29.5	%		12.5	%		0.0	%					12.5	%
Policy acquisition costs		11.9	%		22.8	%					17.2	%		11.5	%		0.0	%					11.5	%
General and administrative expenses		7.1	%		18.1	%					16.2	%		8.1	%		0.0	%					14.7	%
Expense ratio		19.1	%		40.9	%					33.5	%		19.6	%		0.0	%					26.2	%
Combined ratio		44.1	%		75.2	%					63.0	%		32.1	%		0.0	%					38.8	%

Notes:
(a)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(b)	Operating results of Talbot have been included from July 2, 2007, the date of acquisition.

Page 11

Validus Holdings, Ltd.
Consolidated Segment Income Data for Year to Date
(US Dollars in thousands, except share and per share information)

	Nine Months Ended September 30, 2007												Nine Months Ended September 30, 2006
	Validus Re			Talbot			Corporate			Total			Validus Re			Talbot			Corporate			Total
Gross premiums written	$	654,599		$	143,042		$	—		$	797,641		$	475,284		$	—		$	—		$	475,284
Reinsurance premiums ceded		(65,029	)		(615	)		—			(65,644	)		(64,051	)		—			—			(64,051	)
Net premiums written		589,570			142,427			—			731,997			411,233			—			—			411,233
Change in unearned premiums		(193,055	)		1,106			—			(191,949	)		(209,872	)		—			—			(209,872	)
Net premiums earned		396,515			143,533			—			540,048			201,361			—			—			201,361
Losses and loss expenses		127,294			49,132			—			176,426			67,058			—			—			67,058
Policy acquisition costs		48,216			32,784			—			81,000			24,575			—			—			24,575
General and administrative expenses		23,553			25,258			15,277			64,088			13,092			—			12,258			25,350
Share compensation expense		2,824			731			6,499			10,054			1,561			—			4,096			5,657
Total underwriting deductions		201,887			107,905			21,776			331,568			106,286			—			16,354			122,640
Underwriting income (loss)	$	194,628		$	35,628		$	(21,776	)	$	208,480		$	95,075		$	—		$	(16,354	)	$	78,721
Net investment income		60,942			13,360			497			74,799			40,345			—			25			40,370
Other income		—			1,330			—			1,330			—			—			—			—
Finance expenses		(1,143	)		(8,858	)		(16,330	)		(26,331	)		(11	)		—			(5,125	)		(5,136	)
Operating income (loss) before tax	$	254,427		$	41,460		$	(37,609	)	$	258,278		$	135,409		$	—		$	(21,454	)	$	113,955
Taxes		47			1,480			—			1,527			—			—			—			—
Net operating income (loss)	$	254,380		$	39,980		$	(37,609	)	$	256,751		$	135,409		$	—		$	(21,454	)	$	113,955
Net realized gains (losses) on investments		935			(112	)		—			823			(894	)		—			—			(894	)
Net unrealized (losses) gains on investments		1,336			1,800			—			3,136			—			—			—			—
Foreign exchange gains (losses)		7,764			1,446			—			9,210			1,061			—			—			1,061
Fair value of warrants issued		—			—			(2,893	)		(2,893	)		—			—			(77	)		(77	)
Aquiline termination fee		—			—			(3,000	)		(3,000	)		—			—			—			—
Net income (loss)	$	264,415		$	43,114		$	(43,502	)	$	264,027		$	135,576		$	—		$	(21,531	)	$	114,045
Selected Ratios
Net premiums written/Gross premiums written		90.1	%		99.6	%					91.8	%		86.5	%		0.0	%					86.5	%
Losses and loss expenses		32.1	%		34.2	%					32.7	%		33.3	%		0.0	%					33.3	%
Policy acquisition costs		12.2	%		22.8	%					15.0	%		12.2	%		0.0	%					12.2	%
General and administrative expenses		6.6	%		18.1	%					13.7	%		7.3	%		0.0	%					15.4	%
Expense ratio		18.7	%		40.9	%					28.7	%		19.5	%		0.0	%					27.6	%
Combined ratio		50.8	%		75.2	%					61.4	%		52.8	%		0.0	%					60.9	%

Notes:
(a)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(b)	Operating results of Talbot have been included from July 2, 2007, the date of acquisition.

Page 12

Validus Holdings, Ltd.
Underwriting Results by Class of Business — Three months ended September 30 — Validus Re
(US Dollars in thousands, except share and per share information)

	Three Months Ended September 30, 2007												Three Months Ended September 30, 2006
Validus Re Segment	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Gross premiums written	$	86,623		$	8,345		$	7,261		$	102,229		$	80,078		$	28,463		$	7,964		$	116,505
Reinsurance premiums ceded		(7,282	)		(9	)		—			(7,291	)		(17,645	)		(21,247	)		—			(38,892	)
Net premiums written		79,341			8,336			7,261			94,938			62,433			7,216			7,964			77,613
Change in unearned premiums		37,644			12,039			7,372			57,055			3,141			9,420			2,324			14,885
Net premiums earned		116,985			20,375			14,633			151,993			65,574			16,636			10,288			92,498
Losses and loss expenses		26,921			7,345			3,865			38,131			8,962			1,084			1,531			11,577
Policy acquisition costs		14,799			1,306			2,056			18,161			8,777			515			1,346			10,638
Total underwriting deductions before G&A		41,720			8,651			5,921			56,292			17,739			1,599			2,877			22,215
Underwriting income before G&A		75,265			11,724			8,712			95,701			47,835			15,037			7,411			70,283
General and administrative expenses											9,527												6,987
Share compensation expense											1,281												526
Total underwriting deductions											67,100												29,728
Underwriting income											84,893												62,770
Net investment income											22,706												16,271
Finance expenses											(174	)											(8	)
Operating income before tax (a)											107,425												79,033
Taxes											8												—
Net operating income (a)										$	107,417											$	79,033
Net realized gains (losses) on investments											1,122												(154	)
Net unrealized gains on investments											5,881												—
Foreign exchange gains											4,372												369
Net income										$	118,792											$	79,248
Selected Ratios
Net premiums written/Gross premiums written		91.6	%		99.9	%		100.0	%		92.9	%		78.0	%		25.4	%		100.0	%		66.6	%
Losses and loss expenses		23.0	%		36.0	%		26.4	%		25.1	%		13.7	%		6.5	%		14.9	%		12.5	%
Policy acquisition costs		12.7	%		6.4	%		14.1	%		11.9	%		13.4	%		3.1	%		13.1	%		11.5	%
General and administrative expenses											7.1	%											8.1	%
Expense ratio											19.0	%											19.6	%
Combined ratio											44.1	%											32.1	%

Notes:
(a)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(b)	Specialty includes aviation, workers’ compensation, terrorism, life and A&H, and financial lines of business.

Page 13

Validus Holdings, Ltd.
Underwriting Results by Class of Business — Three Months Ended September 30, 2007 — Talbot
(US Dollars in thousands, except share and per share information)

	Three Months Ended September 30, 2007 (a)												Three months ended September 30, 2006
Talbot Segment	Property			Marine			Specialty (c)			Total			Property			Marine			Specialty (c)			Total
Gross premiums written	$	28,550		$	55,016		$	59,476		$	143,042		$	—		$	—		$	—		$	—
Reinsurance premiums ceded		16			39			(670	)		(615	)		—			—			—			—
Net premiums written		28,566			55,055			58,806			142,427			—			—			—			—
Change in unearned premiums		3,743			(92	)		(2,545	)		1,106			—			—			—			—
Net premiums earned		32,309			54,963			56,261			143,533			—			—			—			—
Losses and loss expenses		14,880			24,538			9,714			49,132			—			—			—			—
Policy acquisition costs		6,704			12,043			14,037			32,784			—			—			—			—
Total underwriting deductions before G&A		21,584			36,581			23,751			81,916			—			—			—			—
Underwriting income before G&A		10,725			18,382			32,510			61,617			—			—			—			—
General and administrative expenses											25,258												—
Share compensation expense											731												—
Total underwriting deductions											107,905												—
Underwriting income											35,628												—
Net investment income											13,360												—
Other income											1,330												—
Finance expenses											(8,858	)											—
Operating income before tax (b)											41,460												—
Taxes											1,480												—
Net operating income (b)										$	39,980											$	—
Net realized (losses) gains on investments											(112	)											—
Net unrealized gains on investments											1,800												—
Foreign exchange gain											1,446												—
Net income										$	43,114											$	—
Selected Ratios
Net premiums written/Gross premiums written		100.1	%		100.1	%		98.9	%		99.6	%		0.0	%		0.0	%		0.0	%		0.0	%
Losses and loss expenses		46.1	%		44.6	%		17.3	%		34.2	%		0.0	%		0.0	%		0.0	%		0.0	%
Policy acquisition costs		20.7	%		21.9	%		24.9	%		22.8	%		0.0	%		0.0	%		0.0	%		0.0	%
General and administrative expenses											18.1	%											0.0	%
Expense ratio											40.9	%											0.0	%
Combined ratio											75.2	%											0.0	%

Notes:
(a)	Operating results of Talbot have been included from July 2, 2007, the date of acquisition.
(b)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(c)	Specialty class includes war, political violence and political risks, financial institutions, treaty and other classes.

Page 14

Validus Holdings, Ltd.
Underwriting Results by Class of Business — Nine months ended September 30 — Validus Re
(US Dollars in thousands, except share and per share information)

	Nine months ended September 30, 2007												Nine months ended September 30, 2006
Validus Re Segment	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Gross premiums written	$	482,093		$	118,643		$	53,863		$	654,599		$	329,043		$	97,980		$	48,261		$	475,284
Reinsurance premiums ceded		(31,396	)		(32,208	)		(1,425	)		(65,029	)		(33,190	)		(30,861	)		—			(64,051	)
Net premiums written		450,697			86,435			52,438			589,570			295,853			67,119			48,261			411,233
Change in unearned premiums		(151,239	)		(30,685	)		(11,131	)		(193,055	)		(156,324	)		(27,872	)		(25,676	)		(209,872	)
Net premiums earned		299,458			55,750			41,307			396,515			139,529			39,247			22,585			201,361
Losses and loss expenses		93,592			18,696			15,006			127,294			47,961			10,700			8,397			67,058
Policy acquisition costs		38,249			4,776			5,191			48,216			18,642			3,424			2,509			24,575
Total underwriting deductions before G&A		131,841			23,472			20,197			175,510			66,603			14,124			10,906			91,633
Underwriting income before G&A		167,617			32,278			21,110			221,005			72,926			25,123			11,679			109,728
General and administrative expenses											23,553												13,092
Share compensation expense											2,824												1,561
Total underwriting deductions											201,887												106,286
Underwriting income											194,628												95,075
Net investment income											60,942												40,345
Finance expenses											(1,143	)											(11	)
Operating income before tax											254,427												135,409
Taxes											47												—
Net operating income (a)										$	254,380											$	135,409
Net realized (losses) gains on investments											935												(894	)
Net unrealized gains on investments											1,336												—
Foreign exchange gain											7,764												1,061
Net income										$	264,415											$	135,576
Selected Ratios
Net premiums written/Gross premiums written		93.5	%		72.9	%		97.4	%		90.1	%		89.9	%		68.5	%		100.0	%		86.5	%
Losses and loss expenses		31.3	%		33.5	%		36.3	%		32.1	%		34.4	%		27.3	%		37.2	%		33.3	%
Policy acquisition costs		12.8	%		8.6	%		12.6	%		12.2	%		13.4	%		8.7	%		11.1	%		12.2	%
General and administrative expenses											6.6	%											7.3	%
Expense ratio											18.7	%											19.5	%
Combined ratio											50.8	%											52.8	%

Notes:
(a)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence of realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(b)	Specialty includes aviation, workers’ compensation, terrorism, life and A&H, and financial lines of business.

Page 15

Validus Holdings, Ltd.
Underwriting Results by Class of Business — Nine months ended September 30, 2007 — Talbot
(US Dollars in thousands, except share and per share information)

	Nine Months Ended September 30, 2007 (a)												Nine months ended September 30, 2006
Talbot Segment	Property			Marine			Specialty (c)			Total			Property			Marine			Specialty (c)			Total
Gross premiums written	$	28,550		$	55,016		$	59,476		$	143,042		$	—		$	—		$	—		$	—
Reinsurance premiums ceded		16			39			(670	)		(615	)		—			—			—			—
Net premiums written		28,566			55,055			58,806			142,427			—			—			—			—
Change in unearned premiums		3,743			(92	)		(2,545	)		1,106			—			—			—			—
Net premiums earned		32,309			54,963			56,261			143,533			—			—			—			—
Losses and loss expenses		14,880			24,538			9,714			49,132			—			—			—			—
Policy acquisition costs		6,704			12,043			14,037			32,784			—			—			—			—
Total underwriting deductions before G&A		21,584			36,581			23,751			81,916			—			—			—			—
Underwriting income before G&A		10,725			18,382			32,510			61,617			—			—			—			—
General and administrative expenses											25,258												—
Share compensation expense											731												—
Total underwriting deductions											107,905												—
Underwriting income											35,628												—
Net investment income											13,360												—
Other income											1,330												—
Finance expenses											(8,858	)											—
Operating income before tax (b)											41,460												—
Taxes											1,480												—
Net operating income (b)										$	39,980											$	—
Net realized (losses) gains on investments											(112	)											—
Net unrealized gains on investments											1,800												—
Foreign exchange gain											1,446												—
Net income										$	43,114											$	—
Selected Ratios
Net premiums written/Gross premiums written		100.1	%		100.1	%		98.9	%		99.6	%		0.0	%		0.0	%		0.0	%		0.0	%
Losses and loss expenses		46.1	%		44.6	%		17.3	%		34.2	%		0.0	%		0.0	%		0.0	%		0.0	%
Policy acquisition costs		20.7	%		21.9	%		24.9	%		22.8	%		0.0	%		0.0	%		0.0	%		0.0	%
General and administrative expenses											18.1	%											0.0	%
Expense ratio											40.9	%											0.0	%
Combined ratio											75.2	%											0.0	%

Notes:
(a)	Operating results of Talbot have been included from July 2, 2007, the date of acquisition.
(b)	Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses), gains (losses) arising from translation of non-US$ denominated balances, the fair value of warrants issued and excluding the Aquiline termination fee. This measure focuses on the underlying fundamentals of our operations without the influence realized gains (losses) from the sale of investments, translation of non-US$ currencies 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.
(c)	Specialty class includes war, political violence and political risks, financial institutions, treaty and other classes.

Page 16

Validus Holdings, Ltd.
Line of Business Treaty Type Detail (Gross Premium Written) — Validus Re
(US Dollars in thousands, except share and per share information)

Validus Re Segment

		Three Months Ended												Nine Months Ended
		September 30, 2007						September 30, 2006						September 30, 2007					September 30, 2006
Line of Business	Treaty Type	GPW			%			GPW			%			GPW		%			GPW		%
Property	Cat XOL (b)	$	63,515			62.1	%	$	55,191			47.4	%	$	350,257		53.5	%	$	230,211		48.4	%
	Per Risk XOL (c)		26,022			25.5	%		21,154			18.2	%		44,879		6.9	%		41,174		8.7	%
	Proportional (d)		(2,914	)		-2.9	%		3,733			3.2	%		86,958		13.3	%		57,658		12.1	%
			86,623			84.7	%		80,078			68.7	%		482,094		73.6	%		329,043		69.2	%
Marine	Cat XOL (b)		—			0.0	%		4,391			3.8	%		287		0.0	%		7,247		1.5	%
	Per Risk XOL (c)		3,659			3.6	%		27,947			23.9	%		91,024		13.9	%		82,253		17.3	%
	Proportional (d)		4,686			4.6	%		(3,875	)		-3.3	%		27,331		4.2	%		8,480		1.8	%
			8,345			8.2	%		28,463			24.3	%		118,642		18.1	%		97,980		20.6	%
Specialty (a)	Cat XOL (b)		2,896			2.8	%		2,294			2.0	%		27,014		4.1	%		20,823		4.4	%
	Per Risk XOL (c)		(6	)		0.0	%		1,435			1.2	%		694		0.1	%		6,094		1.3	%
	Proportional (d)		4,371			4.3	%		4,235			3.6	%		26,155		4.0	%		21,344		4.5	%
			7,261			7.1	%		7,964			6.8	%		53,863		8.2	%		48,261		10.2	%
Total		$	102,229			100.0	%	$	116,505			100.0	%	$	654,599		100.0	%	$	475,284		100.0	%

Notes:
(a)	Specialty includes Aviation, Workers’ Compensation, Terrorism, Life and A&H, and Financial lines of business.
(b)	Cat XOL is comprised of Catastrophe XOL, Aggregate XOL, RPP, Second Event and Third Event covers.
(c)	Per Risk XOL is comprised of Per Event XOL and Per Risk XOL.
(d)	Proportional is comprised of Quota Share and Surplus Share.

Page 17

Validus Holdings, Ltd.
Consolidated Line of Business Policy Type Detail (Gross Premium Written)
(US Dollars in thousands, except share and per share information)

		Three Months Ended										Nine Months Ended
		September 30, 2007					September 30, 2006					September 30, 2007					September 30, 2006
Line of business	Treaty Type	GPW		%			GPW		%			GPW		%			GPW		%
Property	Treaty Reinsurance	$	90,618		36.9	%	$	80,078		68.7	%	$	486,088		60.9	%	$	329,043		69.2	%
	Facultative Reinsurance		11,324		4.6	%		—		0.0	%		11,324		1.4	%		—		0.0	%
	Direct Insurance		13,231		5.4	%		—		0.0	%		13,231		1.7	%		—		0.0	%
			115,173		47.0	%		80,078		68.7	%		510,643		64.0	%		329,043		69.2	%
Marine	Treaty Reinsurance		9,977		4.1	%		28,463		24.4	%		120,275		15.1	%		97,980		20.6	%
	Facultative Reinsurance		14,819		6.0	%		—		0.0	%		14,819		1.9	%		—		0.0	%
	Direct Insurance		38,565		15.7	%		—		0.0	%		38,565		4.8	%		—		0.0	%
			63,361		25.8	%		28,463		24.4	%		173,659		21.8	%		97,980		20.6	%
Specialty	Treaty Reinsurance		14,726		6.0	%		7,964		6.8	%		61,328		7.7	%		48,261		10.2	%
	Facultative Reinsurance		13,525		5.5	%		—		0.0	%		13,525		1.7	%		—		0.0	%
	Direct Insurance		38,486		15.7	%		—		0.0	%		38,486		4.8	%		—		0.0	%
			66,737		27.2	%		7,964		6.8	%		113,339		14.2	%		48,261		10.2	%
Total	Treaty Reinsurance		115,321		47.0	%		116,505		100.0	%		667,691		83.7	%		475,284		100.0	%
	Facultative Reinsurance		39,668		16.2	%		—		0.0	%		39,668		5.0	%		—		0.0	%
	Direct Insurance		90,282		36.8	%		—		0.0	%		90,282		11.3	%		—		0.0	%
	Total	$	245,271		100.0	%	$	116,505		100.0	%	$	797,641		100.0	%	$	475,284		100.0	%

Notes:

Validus Re

Specialty includes aviation, workers’ compensation, terrorism, life and A&H, and financial lines of business.

Talbot

Operating results of Talbot have been included from July 2, 2007, the date of acquisition. Comparative figures do not include Talbot results. Specialty class includes war, political violence and political risks, financial institutions, treaty and other classes.

Page 18

Validus Holdings, Ltd.
Consolidated Analysis of Reserves for Losses and Loss Expenses
(US Dollars in thousands, except share and per share information)

	At September 30, 2007									At December 31, 2006
	Reserves for									Reserves for
	losses and loss			Loss reserves						losses and loss			Loss reserves
	expense			recoverable			Net			expense			recoverable			Net
Property	$	298,708		$	27,572		$	271,136		$	59,385		$	—		$	59,385
Marine		402,464			115,600			286,864			9,866			—			9,866
Specialty (a)		223,359			21,943			201,416			8,112			—			8,112
Total	$	924,531		$	165,115		$	759,416		$	77,363		$	—		$	77,363
	At September 30, 2007									At December 31, 2006
	Case Reserves			IBNR			Total Reserves			Case Reserves			IBNR			Total Reserves
Property	$	152,884		$	145,824		$	298,708		$	32,187		$	27,198		$	59,385
Marine		242,944			159,520			402,464			3,637			6,229			9,866
Specialty (a)		54,321			169,038			223,359			2,290			5,822			8,112
Total	$	450,149		$	474,382		$	924,531		$	38,114		$	39,249		$	77,363
Percentage of total		48.7	%		51.3	%		100.0	%		49.3	%		50.7	%		100.0	%

(a) Specialty includes aviation, workers’ compensation, terrorism, life and A&H, and financial lines of business for the Validus Re segment, and war, political violence and political risks, financial institutions, treaty and other classes for the Talbot segment.

Page 19

Validus Holdings, Ltd.
Consolidated Losses and Loss Ratios by Segment
(US Dollars in thousands, except share and per share information)

	At or for the Three Months Ended
	September 30, 2007									September 30, 2006
Consolidated	Validus Re			Talbot (a)			Total			Validus Re			Talbot (a)			Total
Net reserves at period beginning	$	137,974		$	588,068		$	726,042		$	50,872		$	—		$	50,872
Incurred losses — current year		41,658			70,062			111,720			11,577			—			11,577
Change in prior accident years		(3,527	)		(20,930	)		(24,457	)		—			—			—
Incurred losses		38,131			49,132			87,263			11,577			—			11,577
Exchange rate effects		—			3,175			3,175			—			—			—
Paid losses		(12,715	)		(44,349	)		(57,064	)		(1,174	)		—			(1,174	)
Net reserves at period end		163,390			596,026			759,416			61,275			—			61,275
Losses recoverable		50			165,065			165,115			1,936			—			1,936
Gross reserves at period end	$	163,440		$	761,091		$	924,531		$	63,211		$	—		$	63,211
Net premiums earned	$	151,993		$	143,533		$	295,526		$	92,498		$	—		$	92,498
Current year loss ratio		27.4	%		48.8	%		37.8	%		12.5	%		0.0	%		12.5	%
Prior accident year adjustments		-2.3	%		-14.6	%		-8.3	%		0.0	%		0.0	%		0.0	%
Net loss ratio		25.1	%		34.2	%		29.5	%		12.5	%		0.0	%		12.5	%
Paid to incurred		33.3	%		90.3	%		65.4	%		10.1	%		0.0	%		10.1	%

	At or for the Nine Months Ended
	September 30, 2007									September 30, 2006
	Validus Re			Talbot (a)			Total			Validus Re			Talbot (a)			Total
Net reserves at period beginning	$	77,363		$	588,068		$	665,431		$	—		$	—		$	—
Incurred losses — current year		138,021			70,062			208,083			67,058			—			67,058
Change in prior accident years		(10,727	)		(20,930	)		(31,657	)		—			—			—
Incurred losses		127,294			49,132			176,426			67,058			—			67,058
Exchange rate effects		—			3,175			3,175			67,058			—			67,058
Paid losses		(41,267	)		(44,349	)		(85,616	)		(5,783	)		—			(5,783	)
Net reserves at period end		163,390			596,026			759,416			61,275			—			61,275
Losses recoverable		50			165,065			165,115			1,936			—			1,936
Gross reserves at period end	$	163,440		$	761,091		$	924,531		$	63,211		$	—		$	63,211
Net premiums earned	$	396,515		$	143,533		$	540,048		$	201,361		$	—		$	201,361
Current year loss ratio		34.8	%		48.8	%		38.5	%		33.3	%		0.0	%		33.3	%
Prior accident year adjustments		-2.7	%		-14.6	%		-5.9	%		0.0	%		0.0	%		0.0	%
Net loss ratio		32.1	%		34.2	%		32.7	%		33.3	%		0.0	%		33.3	%
Paid to incurred		32.4	%		90.3	%		48.5	%		8.6	%		0.0	%		8.6	%

Notes:

(a) Operating results of Talbot have been included from July 2, 2007, the date of acquisition.

Page 20

Validus Holdings, Ltd.
Losses and Loss Ratios by Class — Validus Re

(US Dollars in thousands, except share and per share information)

	At or for the Three Months Ended
	September 30, 2007												September 30, 2006
Validus Re Segment	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Net reserves at period beginning	$	104,416		$	20,783		$	12,775		$	137,974		$	38,270		$	9,496		$	3,106		$	50,872
Incurred losses — current year		29,716			7,688			4,254			41,658			8,962			1,084			1,531			11,577
Change in prior accident years		(2,795	)		(343	)		(389	)		(3,527	)		—			—			—			—
Incurred losses		26,921			7,345			3,865			38,131			8,962			1,084			1,531			11,577
Exchange rate effects		—			—			—			—			—			—			—			—
Paid losses		(8,559	)		(2,190	)		(1,966	)		(12,715	)		(1,067	)		(107	)		—			(1,174	)
Net reserves at period end		122,778			25,938			14,674			163,390			46,165			10,473			4,637			61,275
Losses recoverable		50			—			—			50			452			1,484			—			1,936
Gross reserves at period end	$	122,828		$	25,938		$	14,674		$	163,440		$	46,617		$	11,957		$	4,637		$	63,211
Net premiums earned	$	116,985		$	20,375		$	14,633		$	151,993		$	65,574		$	16,636		$	10,288		$	92,498
Current year loss ratio		25.4	%		37.7	%		29.1	%		27.4	%		13.7	%		6.5	%		14.9	%		12.5	%
Prior accident year adjustments		-2.4	%		-1.7	%		-2.7	%		-2.3	%		0.0	%		0.0	%		0.0	%		0.0	%
Net loss ratio		23.0	%		36.0	%		26.4	%		25.1	%		13.7	%		6.5	%		14.9	%		12.5	%
Paid to incurred		31.8	%		29.8	%		50.9	%		33.3	%		11.9	%		9.9	%		0.0	%		10.1	%

	At or for the Nine Months Ended
	September 30, 2007												September 30, 2006
	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Net reserves at period beginning	$	59,385		$	9,866		$	8,112		$	77,363		$	—		$	—		$	—		$	—
Incurred losses — current year		101,167			21,187			15,667			138,021			47,961			10,700			8,397			67,058
Change in prior accident years (a)		(7,575	)		(2,491	)		(661	)		(10,727	)		—			—			—			—
Incurred losses		93,592			18,696			15,006			127,294			47,961			10,700			8,397			67,058
Exchange rate effects		—			—			—			—			—			—			—			—
Paid losses		(30,199	)		(2,624	)		(8,444	)		(41,267	)		(1,796	)		(227	)		(3,760	)		(5,783	)
Net reserves at period end		122,778			25,938			14,674			163,390			46,165			10,473			4,637			61,275
Losses recoverable		50			—			—			50			452			1,484			—			1,936
Gross reserves at period end	$	122,828		$	25,938		$	14,674		$	163,440		$	46,617		$	11,957		$	4,637		$	63,211
Net premiums earned	$	299,458		$	55,750		$	41,307		$	396,515		$	139,529		$	39,247		$	22,585		$	201,361
Current year loss ratio		33.8	%		38.0	%		37.9	%		34.8	%		34.4	%		27.3	%		37.2	%		33.3	%
Prior accident year adjustments		-2.5	%		-4.5	%		-1.6	%		-2.7	%		0.0	%		0.0	%		0.0	%		0.0	%
Net loss ratio		31.3	%		33.5	%		36.3	%		32.1	%		34.4	%		27.3	%		37.2	%		33.3	%
Paid to incurred		32.3	%		14.0	%		56.3	%		32.4	%		3.7	%		2.1	%		44.8	%		8.6	%

Notes:
(a)	Unallocated Loss Adjustment Expense is apportioned to the Company’s lines of business. The allocation basis was refined in the first quarter of 2007, resulting in $1,327 of expense being reallocated to Property from Marine.
(b)	Specialty includes aviation, workers’ compensation, terrorism, life and A&H, and financial lines of business.

Page 21

Validus Holdings, Ltd.
Losses and Loss Ratios by Class — Talbot

(US Dollars in thousands, except share and per share information)

	At or for the Three Months Ended (a)
	September 30, 2007												September 30, 2006
Talbot Segment	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Net reserves at period beginning	$	143,331		$	262,935		$	181,802		$	588,068		$	—		$	—		$	—		$	—
Incurred losses — current year		20,843			31,322			17,897			70,062			—			—			—			—
Change in prior accident years		(5,963	)		(6,784	)		(8,183	)		(20,930	)		—			—			—			—
Incurred losses		14,880			24,538			9,714			49,132			—			—			—			—
Exchange rate effects		1,400			(2,652	)		4,427			3,175			—			—			—			—
Paid losses		(11,252	)		(23,894	)		(9,203	)		(44,349	)		—			—			—			—
Net reserves at period end		148,359			260,927			186,740			596,026			—			—			—			—
Losses recoverable		27,522			115,600			21,943			165,065			—			—			—			—
Gross reserves at period end	$	175,881		$	376,527		$	208,683		$	761,091		$	—		$	—		$	—		$	—
Net premiums earned	$	32,309		$	54,963		$	56,261		$	143,533		$	—		$	—		$	—		$	—
Current year loss ratio		64.5	%		57.0	%		31.8	%		48.8	%		0.0	%		0.0	%		0.0	%		0.0	%
Prior accident year adjustments		-18.5	%		-12.3	%		-14.5	%		-14.6	%		0.0	%		0.0	%		0.0	%		0.0	%
Net loss ratio		46.1	%		44.6	%		17.3	%		34.2	%		0.0	%		0.0	%		0.0	%		0.0	%
Paid to incurred		75.6	%		97.4	%		94.7	%		90.3	%		0.0	%		0.0	%		0.0	%		0.0	%

	At or for the Nine Months Ended (a)
	September 30, 2007												September 30, 2006
	Property			Marine			Specialty (b)			Total			Property			Marine			Specialty (b)			Total
Net reserves at period beginning	$	143,331		$	262,935		$	181,802		$	588,068		$	—		$	—		$	—		$	—
Incurred losses — current year		20,843			31,322			17,897			70,062			—			—			—			—
Change in prior accident years		(5,963	)		(6,784	)		(8,183	)		(20,930	)		—			—			—			—
Incurred losses		14,880			24,538			9,714			49,132			—			—			—			—
Exchange rate effects		1,400			(2,652	)		4,427			3,175			—			—			—			—
Paid losses		(11,252	)		(23,894	)		(9,203	)		(44,349	)		—			—			—			—
Net reserves at period end		148,359			260,927			186,740			596,026			—			—			—			—
Losses recoverable		27,522			115,600			21,943			165,065			—			—			—			—
Gross reserves at period end	$	175,881		$	376,527		$	208,683		$	761,091		$	—		$	—		$	—		$	—
Net premiums earned	$	32,309		$	54,963		$	56,261		$	143,533		$	—		$	—		$	—		$	—
Current year loss ratio		64.5	%		57.0	%		31.8	%		48.8	%		0.0	%		0.0	%		0.0	%		0.0	%
Prior accident year adjustments		-18.5	%		-12.3	%		-14.5	%		-14.6	%		0.0	%		0.0	%		0.0	%		0.0	%
Net loss ratio		46.1	%		44.6	%		17.3	%		34.2	%		0.0	%		0.0	%		0.0	%		0.0	%
Paid to incurred		75.6	%		97.4	%		94.7	%		90.3	%		0.0	%		0.0	%		0.0	%		0.0	%

Notes:
(a)	Operating results of Talbot have been included from July 2, 2007, the date of acqusition.
(b)	Specialty includes war, political violence and political risks, financial institutions, treaty and other classes.

Page 22

Validus Holdings, Ltd.
Consolidated Reinsurance Recoverable Analysis

(US Dollars in thousands, except share and per share information)

Consolidated Reinsurance Recoverable

	September 30, 2007					December 31, 2006
	Reinsurance					Reinsurance
Categories	recoverable		% of total			recoverable		% of total
Top 10 reinsurers	$	155,318		89.6	%			$	0.0	%
Other reinsurers balances > $2 million		8,956		5.2	%		—		0.0	%
Other reinsurers balances < $2 million		8,414		4.9	%		—		0.0	%
Other		600		0.3	%		—		0.0	%
Total	$	173,288		100.0	%		—		0.0	%

		September 30, 2007					December 31, 2006
		Reinsurance					Reinsurance
Top 10 Reinsurers	Rating (a)	recoverable		% of total			recoverable		% of total
Hannover Ruck — AG	AA-	$	35,409		20.4	%			$	0.0	%
Lloyds Syndicate	A+		33,095		19.1	%		—		0.0	%
Allianz	AA-		15,765		9.1	%		—		0.0	%
ERC Frankona Reinsurance Limited	A		14,691		8.5	%		—		0.0	%
Muenchener Ruckversicherungs	AA-		14,025		8.1	%		—		0.0	%
GE Frankona Reinsurance Limited	A		13,463		7.8	%		—		0.0	%
Axa Re	AA		12,051		7.0	%		—		0.0	%
National Indemnity Company	AAA		5,827		3.4	%		—		0.0	%
Max Re Ltd	A-		5,732		3.3	%		—		0.0	%
Aspen Insurance UK Limited	A		5,261		3.0	%		—		0.0	%
		$	155,318		89.6	%			$	0.0	%

Notes:
(a)	99.9% of reserves recoverable at September 30, 2007 were from reinsurers rated A- or better by internationally recognized rating agencies.
(b)	Reinsurance recoverable includes Loss Reserves Recoverable and Recoverables on Paid Losses

Page 23

Validus Holdings, Ltd.
Consolidated Investment Portfolio Composition and Net Investment Income
(US Dollars in thousands, except share and per share information)

	September 30, 2007					December 31, 2006
Total cash and investments	Fair Value ($)		(%)			Fair Value ($)		(%)
U.S. Government and Government Agency	$	375,617		12.5	%	$	119,731		8.3	%
Corporate		495,561		16.5	%		222,989		15.5	%
Non-U.S. Government and Government Agency		43,118		1.4	%		—		0.0	%
Asset-backed and mortgage-backed securities		857,825		28.6	%		502,137		34.9	%
Total fixed maturities		1,772,121		59.0	%		844,857		58.7	%
Total short-term investments		580,765		19.3	%		531,530		36.9	%
Total investments		2,352,886		78.3	%		1,376,387		95.6	%
Cash and cash equivalents		651,428		21.7	%		63,643		4.4	%
Total cash and investments	$	3,004,314		100.0	%	$	1,440,030		100.0	%

	Three months ended						Nine months ended
	September 30,			September 30,			September 30,			September 30,
Net investment income	2007			2006			2007			2006
Fixed maturities and short-term investments	$	24,135		$	8,885		$	54,655		$	27,173
Cash and cash equivalents		13,252			8,064			22,025			14,623
Total gross investment income		37,387			16,949			76,680			41,796
Investment expenses		(827	)		(677	)		(1,881	)		(1,426	)
Net investment income	$	36,560		$	16,272		$	74,799		$	40,370
Annualized effective investment yield (a)		5.13	%		4.96	%		5.12	%		4.53	%

Notes:
(a)	Annualized effective investment yield is calculated by dividing net investment income by the average balance of the assets managed by our portfolio managers and our other investments.

Page 24

Validus Holdings, Ltd.
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile
(US Dollars in thousands, except share and per share information)

	September 30, 2007					December 31, 2006
Total fixed maturities by ratings (a)	Fair Value ($)		(%)			Fair Value ($)		(%)
AAA	$	1,336,868		75.4	%	$	644,106		76.2	%
AA		182,216		10.3	%		69,087		8.2	%
A+		98,226		5.5	%		58,285		6.9	%
A		68,016		3.8	%		44,136		5.2	%
A-		69,919		3.9	%		22,759		2.7	%
BBB		16,876		1.0	%		6,484		0.8	%
	$	1,772,121		100.0	%	$	844,857		100.0	%

	September 30, 2007					December 31, 2006
Total fixed maturities by maturity	Fair Value ($)		(%)			Fair Value ($)		(%)
Due in one year or less	$	390,237		22.0	%	$	67,920		8.0	%
Due after one year through five years		506,700		28.6	%		255,739		30.3	%
Due after five years through ten years		14,716		0.8	%		5,207		0.6	%
Due after ten years		2,644		0.1	%		13,854		1.6	%
		914,297		51.6	%		342,720		40.6	%
Asset-backed and mortgage-backed securities		857,824		48.4	%		502,137		59.4	%
	$	1,772,121		100.0	%	$	844,857		100.0	%

Notes:
(a)	Ratings are lower of S&P or Moody’s, shown at S&P rating equivalent. For investments where Moody’s and S&P ratings are not available, Fitch ratings are used and presented in S&P’s equivalent rating.

Page 25

Validus Holdings, Ltd.
Capitalization
(US Dollars in thousands, except share and per share information)

Capitalization	September 30, 2007			June 30, 2007			March 31, 2007			December 31, 2006			September 30, 2006
Borrowings drawn under credit facility	$	—		$	—		$	—		$	—		$	—
Junior Subordinated Deferrable Debentures (a)		350,000			350,000			150,000			150,000			150,000
Total debt		350,000			350,000			150,000			150,000			150,000
Ordinary shares — capital and surplus		1,790,000			1,323,947			1,251,216			1,191,648			1,120,518
Accumulated other comprehensive income (loss)		(640	)		—			—			875			1,189
Total shareholders’ equity		1,789,360			1,323,947			1,251,216			1,192,523			1,121,707
Total capitalization (b)	$	2,139,360		$	1,673,947		$	1,401,216		$	1,342,523		$	1,271,707
Debt to total capitalization		16.4	%		20.9	%		10.7	%		11.2	%		11.8	%
Debt (excluding Junior Debentures) to total capitalization		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

Notes:
(a)	$150,000 of 9.069% Junior Subordinated Deferrable Debentures (“9.069% Junior Debentures”) were issued on June 15, 2006, mature on June 15, 2036, are redeemable at the Company’s option at p beginning June 15, 2011, and require quarterly interest payments at a rate of 9.069% per annum. $200,000 of 8.480% Junior Subordinated Deferrable Debentures (“8.480% Junior Debentures”) were issued on June 21, 2007, mature on June 15, 2037, are redeemable at the Company’s option at par beginning June 15, 2012, and require quarterly interest payments at a rate of 8.480% per annum.
(b)	Total capitalization equals total shareholders’ equity plus borrowings drawn under credit facility and Junior Subordinated Deferrable Debenture.

Page 26