BERMUDA | 001-33606 | 98-0501001 |
(State or other jurisdiction | (Commission | (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. The following exhibits are filed herewith: |
VALIDUS HOLDINGS, LTD. (Registrant) | ||
By: | /s/ Jeffrey D. Sangster | |
Name: | Jeffrey D. Sangster | |
Title: | Executive Vice President and Chief Financial Officer |
Three Months Ended March 31, | |||||||
(Expressed in millions of U.S. dollars, except per share information) | 2018 | 2017 | |||||
Reinsurance segment - Underwriting income | $ | 41.4 | $ | 84.6 | |||
Insurance segment - Underwriting (loss) | (12.8 | ) | (16.4 | ) | |||
Asset Management segment income | 7.3 | 6.1 | |||||
Total segmental income | 35.9 | 74.3 | |||||
Total managed investment return (a) | (2.8 | ) | 52.8 | ||||
Corporate expenses | (29.4 | ) | (33.9 | ) | |||
Other items | (7.8 | ) | 1.4 | ||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4.1 | ) | $ | 94.6 | ||
Net (loss) income per diluted share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | 1.17 | ||
Net operating income available to Validus common shareholders (b) | $ | 42.6 | $ | 76.8 | |||
Net operating income per diluted share available to Validus common shareholders(b) | $ | 0.53 | $ | 0.95 |
(a) | Total managed investment return includes returns generated on managed assets governed by the Company’s investment policy statement (“IPS”) and excludes returns on non-managed assets held in support of consolidated AlphaCat variable interest entities which are not governed by the Company’s IPS. |
(b) | Net operating income available to Validus common shareholders is presented after tax and is considered a non-GAAP financial measure. A reconciliation of net (loss) income (attributable) available to Validus common shareholders, the most comparable GAAP measure, to net operating income available to Validus common shareholders is presented at the end of this release. |
• | Gross premiums written for the three months ended March 31, 2018 were $1,832.5 million compared to $1,190.9 million for the three months ended March 31, 2017, an increase of $641.6 million, or 53.9% driven by increases in all segments. |
• | Reinsurance premiums ceded for the three months ended March 31, 2018 were $376.3 million compared to $200.1 million for the three months ended March 31, 2017, an increase of $176.2 million, or 88.0%. The increase was primarily driven by increases in the Insurance and Reinsurance segments. |
• | Net premiums earned for the three months ended March 31, 2018 were $618.9 million compared to $575.4 million for the three months ended March 31, 2017, an increase of $43.6 million, or 7.6%. The increase was primarily driven by an increase in the Asset Management and Insurance segments and was partially offset by a decrease in the Reinsurance segment. |
• | Loss ratio for the three months ended March 31, 2018 and 2017 was 52.0% and 46.9%, respectively, and included the following: |
◦ | Non-notable losses of $nil during the three months ended March 31, 2018 compared to $19.8 million, or 3.4 percentage points of the loss ratio during the three months ended March 31, 2017; |
◦ | Favorable loss reserve development on prior accident years of $7.6 million during the three months ended March 31, 2018, which benefited the loss ratio by 1.2 percentage points compared to favorable development of $61.2 million during the three months ended March 31, 2017, which benefited the loss ratio by 10.6 percentage points. Excluding the Asset Management segment, which includes losses attributable to AlphaCat’s third party investors and noncontrolling interests, favorable development during the three months ended March 31, 2018 was $33.4 million; and |
◦ | Attritional losses of $329.1 million, or 53.2 percentage points of the loss ratio during the three months ended March 31, 2018 compared to $311.1 million, or 54.1 percentage points of the loss ratio during the three months ended March 31, 2017. |
• | Combined ratio for the three months ended March 31, 2018 and 2017 was 90.9% and 83.2%, respectively, an increase of 7.7 percentage points. |
• | Total managed investment return from our managed investment portfolio for the three months ended March 31, 2018 was $(2.8) million compared to $52.8 million for the three months ended March 31, 2017. |
• | Annualized return on average equity for the three months ended March 31, 2018 of (0.5)%, compared to 10.2% for the three months ended March 31, 2017. |
• | Annualized net operating return on average equity for the three months ended March 31, 2018 of 4.9%, compared to 8.3% for the three months ended March 31, 2017. |
• | Gross premiums written for the three months ended March 31, 2018 were $765.6 million compared to $643.1 million for the three months ended March 31, 2017, an increase of $122.4 million, or 19.0% and included the following: |
◦ | Property premiums of $274.0 million during the three months ended March 31, 2018, compared to $216.7 million during the three months ended March 31, 2017, an increase of $57.3 million, or 26.5%, primarily driven by increased participation on a number of catastrophe excess of loss programs and new proportional business written; |
◦ | Specialty - short-tail premiums of $352.1 million during the three months ended March 31, 2018, compared to $376.9 million during the three months ended March 31, 2017, a decrease of $24.8 million, or 6.6%. The decrease was primarily driven by the non-renewal of one significant agriculture contract and was partially offset by new composite business written; and |
◦ | Specialty - other premiums of $139.5 million during the three months ended March 31, 2018, compared to $49.6 million during the three months ended March 31, 2017, an increase of $89.9 million, or 181.2%, primarily driven by new casualty business written and the timing of renewals. |
• | Reinsurance premiums ceded for the three months ended March 31, 2018 were $190.2 million compared to $114.4 million for the three months ended March 31, 2017, an increase of $75.7 million, or 66.2%. The increase was primarily driven by an increase in the property lines of $48.0 million as a result of new aggregate and proportional covers purchased and an increase in the specialty - other lines of $20.7 million as a result of a new casualty retrocession cover. |
• | Net premiums earned for the three months ended March 31, 2018 were $224.8 million compared to $231.7 million for the three months ended March 31, 2017, a decrease of $6.9 million, or 3.0%. |
• | Loss ratio for the three months ended March 31, 2018 and 2017 was 46.0% and 34.9%, respectively, and included the following: |
◦ | Non-notable losses of $nil during the three months ended March 31, 2018, compared to $5.1 million, or 2.2 percentage points during the three months ended March 31, 2017; |
◦ | Favorable loss reserve development on prior accident years of $17.8 million during the three months ended March 31, 2018, which benefited the loss ratio by 7.9 percentage points compared to favorable development of $31.1 million during the three months ended March 31, 2017, which benefited the loss ratio by 13.4 percentage points. The favorable development of $17.8 million during the three months ended March 31, 2018 was primarily driven by favorable development on attritional losses; and |
◦ | Attritional losses of $121.3 million, or 53.9 percentage points of the loss ratio during the three months ended March 31, 2018 compared to $106.9 million, or 46.1 percentage points of the loss ratio during the three months ended March 31, 2017. The increase in the attritional loss ratio was primarily due to $10.0 million of losses from Winter Storm Friederike which did not meet the non-notable loss threshold and the earned impact of higher retrocession purchases as noted above. |
• | Policy acquisition cost ratio for the three months ended March 31, 2018 was 21.5% compared to 18.8% for the three months ended March 31, 2017, an increase of 2.7 percentage points. The increase was primarily driven by the earned impact of higher retrocession purchases as noted above and a change in business mix in the specialty classes. |
• | General and administrative expenses for the three months ended March 31, 2018 were $28.9 million compared to $20.0 million for the three months ended March 31, 2017, an increase of $8.9 million or 44.8%. The increase was primarily driven by an increase in the performance bonus accrual and a higher allocation of costs to the segment. |
• | Combined ratio for the three months ended March 31, 2018 and 2017 was 81.6% and 63.5%, respectively, an increase of 18.1 percentage points. |
• | Underwriting income for the three months ended March 31, 2018 was $41.4 million compared to $84.6 million for the three months ended March 31, 2017, a decrease of $43.3 million or 51.1%. |
• | Gross premiums written for the three months ended March 31, 2018 were $785.8 million compared to $382.8 million for the three months ended March 31, 2017, an increase of $403.0 million, or 105.3% and included the following: |
◦ | Property premiums of $92.0 million during the three months ended March 31, 2018, compared to $81.5 million during the three months ended March 31, 2017, an increase of $10.4 million, or 12.8%; |
◦ | Specialty - short-tail premiums of $538.3 million during the three months ended March 31, 2018, compared to $179.2 million during the three months ended March 31, 2017, an increase of $359.1 million, or 200.4%. The increase was primarily driven by new agriculture business written through CRS; and |
◦ | Specialty - other premiums of $155.5 million during the three months ended March 31, 2018, compared to $122.0 million during the three months ended March 31, 2017, an increase of $33.5 million, or 27.4%, primarily driven by increased participation on renewals and the build out of product offerings in U.S. liability lines. |
• | Reinsurance premiums ceded for the three months ended March 31, 2018 were $191.6 million compared to $79.0 million for the three months ended March 31, 2017, an increase of $112.6 million, or 142.6%. The increase was primarily driven by an increase in the specialty - short-tail lines of $78.7 million driven by ceded agriculture premiums relating to new business written through CRS and an increase in the specialty - other lines of $20.1 million as a result of the continued build out of U.S. liability lines as noted above. |
• | Net premiums earned for the three months ended March 31, 2018 were $299.5 million compared to $279.1 million for the three months ended March 31, 2017, an increase of $20.4 million, or 7.3%. The increase was primarily due to agriculture net premiums earned relating to new business written through CRS. |
• | Loss ratio for the three months ended March 31, 2018 and 2017 was 61.2% and 66.9%, respectively, and included the following: |
◦ | Non-notable losses of $nil during the three months ended March 31, 2018 compared to $14.7 million, or 5.3 percentage points of the loss ratio during the three months ended March 31, 2017; |
◦ | Favorable loss reserve development on prior accident years of $15.5 million during the three months ended March 31, 2018, which benefited the loss ratio by 5.2 percentage points compared to favorable development of $26.7 million during the three months ended March 31, 2017, which benefited the loss ratio by 9.6 percentage points. The favorable development of $15.5 million during the three months ended March 31, 2018 was primarily driven by favorable development on attritional losses; and |
◦ | Attritional losses of $198.9 million, or 66.4 percentage points of the loss ratio during the three months ended March 31, 2018 compared to $198.6 million, or 71.2 percentage points of the loss ratio during the three months ended March 31, 2017. |
• | Policy acquisition cost ratio for the three months ended March 31, 2018 was 20.0% compared to 21.9% for the three months ended March 31, 2017, a decrease of 1.9 percentage points. |
• | General and administrative expenses for the three months ended March 31, 2018 were $68.1 million compared to $45.3 million for the three months ended March 31, 2017, an increase of $22.8 million or 50.3%. General and administrative expenses for the three months ended March 31, 2018 included $12.0 million of CRS expenses, of which $1.7 million related to the amortization of intangible assets acquired. The remaining increase was primarily driven by an increase in the performance bonus accrual and a higher allocation of costs to the segment. |
• | Combined ratio for the three months ended March 31, 2018 and 2017 was 104.9% and 106.2%, respectively, a decrease of 1.3 percentage points. |
• | Underwriting (loss) for the three months ended March 31, 2018 was $(12.8) million compared to $(16.4) million for the three months ended March 31, 2017, a decrease of $3.6 million or 21.9%. |
• | Assets under management were $3.7 billion as at April 1, 2018, compared to $3.4 billion as at January 1, 2018, of which third party assets under management were $3.5 billion as at April 1, 2018, compared to $3.2 billion as at January 1, 2018. During the three months ended April 1, 2018, a total of $200.4 million of capital was raised, of which $198.1 million was raised from third parties. During the three months ended April 1, 2018, $4.3 million was returned to investors, of which $3.4 million was returned to third party investors. |
• | Fee revenues earned for the three months ended March 31, 2018 were $6.7 million compared to $5.3 million during the three months ended March 31, 2017, an increase of $1.4 million or 26.1%. Third party fee revenues earned during the three months ended March 31, 2018 were $6.2 million compared to $4.6 million during the three months ended March 31, 2017, an increase of $1.6 million or 33.7%. The increase in third party fee revenues was primarily driven by an increase in management fees as a result of an increase in assets under management over the last twelve months. |
• | Total expenses for the three months ended March 31, 2018 were $4.7 million compared to $4.0 million during the three months ended March 31, 2017, an increase of $0.7 million, or 17.8%. The increase was driven by a higher allocation of costs to the segment. |
• | Validus’ share of investment income from AlphaCat Funds and Sidecars for the three months ended March 31, 2018 was $5.3 million compared to $4.8 million during the three months ended March 31, 2017, an increase of $0.5 million, or 9.6%. |
• | Asset Management segment income for the three months ended March 31, 2018 was $7.3 million compared to $6.1 million during the three months ended March 31, 2017, an increase of $1.1 million, or 18.5%. |
• | Managed net investment income for the three months ended March 31, 2018 was $39.8 million compared to $36.2 million for the three months ended March 31, 2017, an increase of $3.6 million, or 9.9%. |
• | Annualized effective yield on managed investments for the three months ended March 31, 2018 was 2.33%, compared to 2.27% for the three months ended March 31, 2017, an increase of 6 basis points. |
• | Net realized gains on managed investments for the three months ended March 31, 2018 were $1.1 million compared to (losses) of $(2.9) million for the three months ended March 31, 2017. |
• | Change in net unrealized (losses) on managed investments for the three months ended March 31, 2018 of $(56.8) million compared to gains $14.3 million for the three months ended March 31, 2017. Changes in unrealized (losses) on managed investments during the three months ended March 31, 2018 were primarily driven by the impact of interest rate increases on the Company’s managed fixed maturity portfolio. |
• | Income from investment affiliates for the three months ended March 31, 2018 was $13.1 million compared to $5.2 million for the three months ended March 31, 2017, an increase of $7.9 million, or 151.9%. The income from investment affiliates represents equity earnings on investments in funds managed by Aquiline Capital Partners LLC. |
• | General and administrative expenses for the three months ended March 31, 2018 were $12.3 million compared to $18.0 million for the three months ended March 31, 2017, a decrease of $5.7 million, or 31.5%. The decrease was primarily driven by a higher allocation of costs to reporting segments during the three months ended March 31, 2018. |
• | Share compensation expenses for the three months ended March 31, 2018 were $4.0 million compared to $3.4 million for the three months ended March 31, 2017, an increase of $0.6 million, or 18.3%. |
• | Finance expenses for the three months ended March 31, 2018 were $14.1 million compared to $13.9 million for the three months ended March 31, 2017, an increase of $0.2 million, or 1.6%. |
• | Dividends on preferred shares for the three months ended March 31, 2018 were $5.8 million compared to $2.2 million for the three months ended March 31, 2017, an increase of $3.6 million, or 164.5% due to $250.0 million of new preferred shares issued during the second quarter of 2017. |
• | Tax (benefit) for the three months ended March 31, 2018 was $(6.8) million compared to $(3.5) million for the three months ended March 31, 2017. The tax (benefit) during the three months ended March 31, 2018 mainly related to operating losses in the Insurance segment and unrealized losses on the Company’s investment portfolio. |
• | Foreign exchange (losses) for the three months ended March 31, 2018 were $nil compared to gains of $1.1 million for the three months ended March 31, 2017. |
• | Transaction expenses for the three months ended March 31, 2018 were $7.8 million compared to $nil for the three months ended March 31, 2017 and were primarily composed of legal and financial advisory services in relation to the Company’s Merger with AIG. |
Total shares repurchased under publicly announced repurchase program | |||||||||||||||
(Dollars in thousands, except share and per share amounts) | Total number of shares repurchased | Aggregate Purchase Price (a) | Average Price per Share (a) | Approximate dollar value of shares that may yet be purchased under the Program | |||||||||||
Cumulative inception-to-date to April 30, 2018 | 81,035,969 | $ | 2,730,975 | $ | 33.70 | $ | 293,426 |
(a) | Share transactions are on a trade date basis through April 30, 2018 and are inclusive of commissions. Average share price is rounded to two decimal places. |
Investors: | Media: |
Validus Holdings, Ltd. | Brunswick Group |
Investor.Relations@validusholdings.com | Mustafa Riffat / Charlotte Connerton |
+1-441-278-9000 | +1-212-333-3810 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Fixed maturity investments trading, at fair value (amortized cost: 2018—$5,874,140; 2017—$5,876,261) | $ | 5,803,022 | $ | 5,858,348 | |||
Short-term investments trading, at fair value (amortized cost: 2018—$3,638,995; 2017—$3,381,714) | 3,638,940 | 3,381,757 | |||||
Other investments, at fair value (cost: 2018—$331,950; 2017—$330,416) | 357,246 | 355,218 | |||||
Investments in investment affiliates, equity method (cost: 2018—$75,302; 2017—$61,944) | 113,471 | 100,137 | |||||
Cash and cash equivalents | 672,173 | 754,990 | |||||
Restricted cash | 302,277 | 394,663 | |||||
Total investments and cash | 10,887,129 | 10,845,113 | |||||
Premiums receivable | 1,865,460 | 939,487 | |||||
Deferred acquisition costs | 309,825 | 213,816 | |||||
Prepaid reinsurance premiums | 390,900 | 132,938 | |||||
Securities lending collateral | 4,210 | 2,717 | |||||
Loss reserves recoverable | 979,944 | 1,233,997 | |||||
Paid losses recoverable | 59,892 | 46,873 | |||||
Income taxes recoverable | 7,705 | 9,044 | |||||
Deferred tax asset | 56,739 | 52,467 | |||||
Receivable for investments sold | 31,512 | 12,182 | |||||
Intangible assets | 169,168 | 171,411 | |||||
Goodwill | 229,573 | 229,573 | |||||
Accrued investment income | 29,621 | 29,096 | |||||
Other assets | 578,964 | 508,165 | |||||
Total assets | $ | 15,600,642 | $ | 14,426,879 | |||
Liabilities | |||||||
Reserve for losses and loss expenses | $ | 4,632,629 | $ | 4,831,390 | |||
Unearned premiums | 2,242,368 | 1,147,186 | |||||
Reinsurance balances payable | 398,861 | 331,645 | |||||
Securities lending payable | 4,210 | 2,717 | |||||
Deferred tax liability | 3,633 | 4,600 | |||||
Payable for investments purchased | 85,946 | 74,496 | |||||
Accounts payable and accrued expenses | 520,916 | 1,225,875 | |||||
Notes payable to AlphaCat investors | 1,268,194 | 1,108,364 | |||||
Senior notes payable | 245,614 | 245,564 | |||||
Debentures payable | 539,572 | 539,158 | |||||
Total liabilities | 9,941,943 | 9,510,995 | |||||
Commitments and contingent liabilities | |||||||
Redeemable noncontrolling interests | 1,423,110 | 1,004,094 | |||||
Shareholders’ equity | |||||||
Preferred shares (Issued and Outstanding: 2018—16,000; 2017—16,000) | 400,000 | 400,000 | |||||
Common shares (Issued: 2018—162,003,969; 2017—161,994,491; Outstanding: 2018—79,329,028; 2017—79,319,550) | 28,351 | 28,349 | |||||
Treasury shares (2018—82,674,941; 2017—82,674,941) | (14,468 | ) | (14,468 | ) | |||
Additional paid-in capital | 824,356 | 814,641 | |||||
Accumulated other comprehensive income (loss) | 9,405 | (22,192 | ) | ||||
Retained earnings | 2,653,588 | 2,688,742 | |||||
Total shareholders’ equity available to Validus | 3,901,232 | 3,895,072 | |||||
Noncontrolling interests | 334,357 | 16,718 | |||||
Total shareholders’ equity | 4,235,589 | 3,911,790 | |||||
Total liabilities, noncontrolling interests and shareholders’ equity | $ | 15,600,642 | $ | 14,426,879 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Revenues | ||||||||
Gross premiums written | $ | 1,832,456 | $ | 1,190,857 | ||||
Reinsurance premiums ceded | (376,294 | ) | (200,106 | ) | ||||
Net premiums written | 1,456,162 | 990,751 | ||||||
Change in unearned premiums | (837,220 | ) | (415,375 | ) | ||||
Net premiums earned | 618,942 | 575,376 | ||||||
Net investment income | 52,072 | 40,214 | ||||||
Net realized gains (losses) on investments | 2,200 | (1,164 | ) | |||||
Change in net unrealized (losses) gains on investments | (57,381 | ) | 13,348 | |||||
Income from investment affiliates | 13,068 | 5,188 | ||||||
Other insurance related income and other income | 25,540 | 1,330 | ||||||
Foreign exchange gains | 525 | 1,569 | ||||||
Total revenues | 654,966 | 635,861 | ||||||
Expenses | ||||||||
Losses and loss expenses | 321,545 | 269,585 | ||||||
Policy acquisition costs | 116,456 | 111,628 | ||||||
General and administrative expenses | 114,726 | 87,924 | ||||||
Share compensation expenses | 9,729 | 9,491 | ||||||
Finance expenses | 14,263 | 13,943 | ||||||
Transaction expenses | 7,756 | — | ||||||
Total expenses | 584,475 | 492,571 | ||||||
Income before taxes and (income) attributable to AlphaCat investors | 70,491 | 143,290 | ||||||
Tax benefit | 6,833 | 3,549 | ||||||
(Income) attributable to AlphaCat investors | (10,862 | ) | (7,503 | ) | ||||
Net income | 66,462 | 139,336 | ||||||
Net (income) attributable to noncontrolling interests | (64,712 | ) | (42,572 | ) | ||||
Net income available to Validus | 1,750 | 96,764 | ||||||
Dividends on preferred shares | (5,828 | ) | (2,203 | ) | ||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | 94,561 | |||
Selected ratios: | ||||||||
Ratio of net to gross premiums written | 79.5 | % | 83.2 | % | ||||
Losses and loss expense ratio | 52.0 | % | 46.9 | % | ||||
Policy acquisition cost ratio | 18.8 | % | 19.4 | % | ||||
General and administrative expense ratio | 20.1 | % | 16.9 | % | ||||
Expense ratio | 38.9 | % | 36.3 | % | ||||
Combined ratio | 90.9 | % | 83.2 | % |
Reinsurance Segment | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Underwriting revenues | ||||||||
Gross premiums written | $ | 765,573 | $ | 643,141 | ||||
Reinsurance premiums ceded | (190,194 | ) | (114,446 | ) | ||||
Net premiums written | 575,379 | 528,695 | ||||||
Change in unearned premiums | (350,627 | ) | (297,040 | ) | ||||
Net premiums earned | 224,752 | 231,655 | ||||||
Other insurance related income | 2 | 2 | ||||||
Total underwriting revenues | 224,754 | 231,657 | ||||||
Underwriting deductions | ||||||||
Losses and loss expenses | 103,473 | 80,881 | ||||||
Policy acquisition costs | 48,340 | 43,535 | ||||||
General and administrative expenses | 28,915 | 19,969 | ||||||
Share compensation expenses | 2,663 | 2,623 | ||||||
Total underwriting deductions | 183,391 | 147,008 | ||||||
Underwriting income | $ | 41,363 | $ | 84,649 |
Insurance Segment | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Underwriting revenues | ||||||||
Gross premiums written | $ | 785,795 | $ | 382,790 | ||||
Reinsurance premiums ceded | (191,637 | ) | (79,000 | ) | ||||
Net premiums written | 594,158 | 303,790 | ||||||
Change in unearned premiums | (294,620 | ) | (24,696 | ) | ||||
Net premiums earned | 299,538 | 279,094 | ||||||
Other insurance related income | 2,170 | 996 | ||||||
Total underwriting revenues | 301,708 | 280,090 | ||||||
Underwriting deductions | ||||||||
Losses and loss expenses | 183,389 | 186,610 | ||||||
Policy acquisition costs | 60,057 | 61,192 | ||||||
General and administrative expenses | 68,050 | 45,276 | ||||||
Share compensation expenses | 2,989 | 3,373 | ||||||
Total underwriting deductions | 314,485 | 296,451 | ||||||
Underwriting (loss) | $ | (12,777 | ) | $ | (16,361 | ) |
Asset Management Segment | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Fee revenues | ||||||||
Third party | $ | 6,209 | $ | 4,644 | ||||
Related party | 443 | 631 | ||||||
Total fee revenues | 6,652 | 5,275 | ||||||
Expenses | ||||||||
General and administrative expenses | 4,547 | 3,844 | ||||||
Share compensation expenses | 41 | 82 | ||||||
Finance expenses | 78 | 31 | ||||||
Tax (benefit) | (7 | ) | (1 | ) | ||||
Foreign exchange losses (gains) | 1 | (1 | ) | |||||
Total expenses | 4,660 | 3,955 | ||||||
Income before investment income from funds and sidecars | 1,992 | 1,320 | ||||||
Investment income from funds and sidecars (a) | ||||||||
AlphaCat Sidecars | 32 | (112 | ) | |||||
AlphaCat ILS Funds - Lower Risk (b) | 1,234 | 2,189 | ||||||
AlphaCat ILS Funds - Higher Risk (b) | 3,820 | 2,367 | ||||||
BetaCat ILS Funds | 186 | 368 | ||||||
Validus' share of investment income from funds and sidecars | 5,272 | 4,812 | ||||||
Asset Management segment income | $ | 7,264 | $ | 6,132 |
(a) | The investment income from funds and sidecars is based on equity accounting. |
(b) | Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of 7% or greater. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit. |
Corporate and Investments | Three Months Ended March 31, | |||||||
2018 | 2017 | |||||||
Managed investments | ||||||||
Managed net investment income (a) | $ | 39,791 | $ | 36,192 | ||||
Net realized gains (losses) on managed investments (a) | 1,142 | (2,892 | ) | |||||
Change in net unrealized (losses) gains on managed investments (a) | (56,777 | ) | 14,349 | |||||
Income from investment affiliates | 13,068 | 5,188 | ||||||
Total managed investment return | (2,776 | ) | 52,837 | |||||
Corporate expenses | ||||||||
General and administrative expenses | 12,309 | 17,961 | ||||||
Share compensation expenses | 4,036 | 3,413 | ||||||
Finance expenses (a) | 14,090 | 13,864 | ||||||
Dividends on preferred shares | 5,828 | 2,203 | ||||||
Tax (benefit) (a) | (6,826 | ) | (3,548 | ) | ||||
Total Corporate expenses | 29,437 | 33,893 | ||||||
Other items | ||||||||
Foreign exchange (losses) gains (a) | (3 | ) | 1,103 | |||||
Other income | 44 | 94 | ||||||
Transaction expenses | (7,756 | ) | — | |||||
Total other items | (7,715 | ) | 1,197 | |||||
Total Corporate and Investments | $ | (39,928 | ) | $ | 20,141 |
(a) | These items exclude the components which are included in the Asset Management segment income and amounts which are consolidated from variable interest entities. |
Three Months Ended March 31, 2018 | |||||||||||||||||||||||
Reinsurance Segment | Insurance Segment | Asset Management Segment and Consolidated VIEs | Corporate & Investments | Eliminations | Total | ||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||
Gross premiums written | $ | 765,573 | $ | 785,795 | $ | 286,625 | $ | — | $ | (5,537 | ) | $ | 1,832,456 | ||||||||||
Reinsurance premiums ceded | (190,194 | ) | (191,637 | ) | — | — | 5,537 | (376,294 | ) | ||||||||||||||
Net premiums written | 575,379 | 594,158 | 286,625 | — | — | 1,456,162 | |||||||||||||||||
Change in unearned premiums | (350,627 | ) | (294,620 | ) | (191,973 | ) | — | — | (837,220 | ) | |||||||||||||
Net premiums earned | 224,752 | 299,538 | 94,652 | — | — | 618,942 | |||||||||||||||||
Other insurance related income | 2 | 2,170 | 28,080 | — | (4,756 | ) | 25,496 | ||||||||||||||||
Total underwriting revenues | 224,754 | 301,708 | 122,732 | — | (4,756 | ) | 644,438 | ||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||
Losses and loss expenses | 103,473 | 183,389 | 34,683 | — | — | 321,545 | |||||||||||||||||
Policy acquisition costs | 48,340 | 60,057 | 8,059 | — | — | 116,456 | |||||||||||||||||
General and administrative expenses | 28,915 | 68,050 | 10,208 | 12,309 | (4,756 | ) | 114,726 | ||||||||||||||||
Share compensation expenses | 2,663 | 2,989 | 41 | 4,036 | — | 9,729 | |||||||||||||||||
Total underwriting deductions | 183,391 | 314,485 | 52,991 | 16,345 | (4,756 | ) | 562,456 | ||||||||||||||||
Underwriting income (loss) | $ | 41,363 | $ | (12,777 | ) | $ | 69,741 | $ | (16,345 | ) | $ | — | $ | 81,982 | |||||||||
Net investment return (a) | — | — | 12,735 | (2,776 | ) | — | 9,959 | ||||||||||||||||
Other items (b) | — | — | 362 | (20,807 | ) | — | (20,445 | ) | |||||||||||||||
(Income) attributable to AlphaCat investors | — | — | (10,862 | ) | — | — | (10,862 | ) | |||||||||||||||
Net (income) attributable to noncontrolling interests | — | — | (64,712 | ) | — | — | (64,712 | ) | |||||||||||||||
Net income (loss) available (attributable) to Validus common shareholders | $ | 41,363 | $ | (12,777 | ) | $ | 7,264 | $ | (39,928 | ) | $ | — | $ | (4,078 | ) |
Three Months Ended March 31, 2017 | |||||||||||||||||||||||
Reinsurance Segment | Insurance Segment | Asset Management Segment and Consolidated VIEs | Corporate & Investments | Eliminations | Total | ||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||
Gross premiums written | $ | 643,141 | $ | 382,790 | $ | 164,926 | $ | — | $ | — | $ | 1,190,857 | |||||||||||
Reinsurance premiums ceded | (114,446 | ) | (79,000 | ) | (6,660 | ) | — | — | (200,106 | ) | |||||||||||||
Net premiums written | 528,695 | 303,790 | 158,266 | — | — | 990,751 | |||||||||||||||||
Change in unearned premiums | (297,040 | ) | (24,696 | ) | (93,639 | ) | — | — | (415,375 | ) | |||||||||||||
Net premiums earned | 231,655 | 279,094 | 64,627 | — | — | 575,376 | |||||||||||||||||
Other insurance related income | 2 | 996 | 5,161 | — | (4,923 | ) | 1,236 | ||||||||||||||||
Total underwriting revenues | 231,657 | 280,090 | 69,788 | — | (4,923 | ) | 576,612 | ||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||
Losses and loss expenses | 80,881 | 186,610 | 2,094 | — | — | 269,585 | |||||||||||||||||
Policy acquisition costs | 43,535 | 61,192 | 6,901 | — | — | 111,628 | |||||||||||||||||
General and administrative expenses | 19,969 | 45,276 | 9,641 | 17,961 | (4,923 | ) | 87,924 | ||||||||||||||||
Share compensation expenses | 2,623 | 3,373 | 82 | 3,413 | — | 9,491 | |||||||||||||||||
Total underwriting deductions | 147,008 | 296,451 | 18,718 | 21,374 | (4,923 | ) | 478,628 | ||||||||||||||||
Underwriting income (loss) | $ | 84,649 | $ | (16,361 | ) | $ | 51,070 | $ | (21,374 | ) | $ | — | $ | 97,984 | |||||||||
Net investment return (a) | — | — | 4,749 | 52,837 | — | 57,586 | |||||||||||||||||
Other items (b) | — | — | 388 | (11,322 | ) | — | (10,934 | ) | |||||||||||||||
(Income) attributable to AlphaCat investors | — | — | (7,503 | ) | — | — | (7,503 | ) | |||||||||||||||
Net (income) attributable to noncontrolling interests | — | — | (42,572 | ) | — | — | (42,572 | ) | |||||||||||||||
Net income (loss) available (attributable) to Validus common shareholders | $ | 84,649 | $ | (16,361 | ) | $ | 6,132 | $ | 20,141 | $ | — | $ | 94,561 |
(a) | Net investment return includes net investment income, net realized and change in net unrealized gains (losses) on investments and income from investment affiliates. |
(b) | Other items includes finance expenses, transaction expenses, dividends on preferred shares, tax benefit, foreign exchange gains (losses) and other income (loss). |
March 31, 2018 | ||||||||||
Equity Amount | Common Shares | Per Share Amount (a) | ||||||||
Book value per common share (b) | $ | 3,501,232 | 79,329,028 | $ | 44.14 | |||||
Non-GAAP Adjustments: | ||||||||||
Unvested restricted shares | — | 2,489,888 | ||||||||
Book value per diluted common share (c) | 3,501,232 | 81,818,916 | $ | 42.79 | ||||||
Goodwill | (229,573 | ) | — | |||||||
Intangible assets | (169,168 | ) | — | |||||||
Tangible book value per diluted common share (c) | $ | 3,102,491 | 81,818,916 | $ | 37.92 | |||||
Book value per diluted common share (c) | $ | 42.79 | ||||||||
Accumulated dividends | 13.46 | |||||||||
Book value per diluted common share plus accumulated dividends (c) | $ | 56.25 |
December 31, 2017 | ||||||||||
Equity Amount | Common Shares | Per Share Amount (a) | ||||||||
Book value per common share (b) | $ | 3,495,072 | 79,319,550 | $ | 44.06 | |||||
Non-GAAP Adjustments: | ||||||||||
Unvested restricted shares | — | 2,503,859 | ||||||||
Book value per diluted common share (c) | 3,495,072 | 81,823,409 | $ | 42.71 | ||||||
Goodwill | (229,573 | ) | — | |||||||
Intangible assets | (171,411 | ) | — | |||||||
Tangible book value per diluted common share (c) | $ | 3,094,088 | 81,823,409 | $ | 37.81 | |||||
Book value per diluted common share (c) | $ | 42.71 | ||||||||
Accumulated dividends | 13.08 | |||||||||
Book value per diluted common share plus accumulated dividends (c) | $ | 55.79 |
(a) | Per share amounts are calculated by dividing the equity amount by the common shares. |
(b) | The equity amount used in the calculation of book value per common share represents total shareholders' equity available to Validus excluding the liquidation value of the preferred shares. |
(c) | Non-GAAP financial measure. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | 94,561 | ||
Non-GAAP Adjustments: | |||||||
Net realized (gains) losses on investments | (2,200 | ) | 1,164 | ||||
Change in net unrealized losses (gains) on investments | 57,381 | (13,348 | ) | ||||
(Income) from investment affiliates | (13,068 | ) | (5,188 | ) | |||
Foreign exchange (gains) | (525 | ) | (1,569 | ) | |||
Other (income) | (44 | ) | (94 | ) | |||
Transaction expenses | 7,756 | — | |||||
Net income attributable to noncontrolling interests | 429 | 728 | |||||
Tax (benefit) expense (a) | (3,094 | ) | 580 | ||||
Net operating income available to Validus common shareholders (b) | $ | 42,557 | $ | 76,834 | |||
Weighted average number of diluted common shares outstanding | 79,325,688 | 80,739,142 | |||||
(Loss) earnings per diluted share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | 1.17 | ||
Non-GAAP Adjustments: | |||||||
Net realized (gains) losses on investments | (0.03 | ) | 0.01 | ||||
Change in net unrealized losses (gains) on investments | 0.72 | (0.17 | ) | ||||
(Income) from investment affiliates | (0.17 | ) | (0.06 | ) | |||
Foreign exchange (gains) | (0.01 | ) | (0.02 | ) | |||
Other (income) | — | — | |||||
Transaction expenses | 0.10 | — | |||||
Net income attributable to noncontrolling interests | 0.01 | 0.01 | |||||
Tax (benefit) expense (a) | (0.04 | ) | 0.01 | ||||
Net operating income per diluted share available to Validus common shareholders (b) | $ | 0.53 | $ | 0.95 | |||
Average shareholders' equity available to Validus common shareholders (c) | $ | 3,498,152 | $ | 3,725,084 | |||
Annualized return on average equity | (0.5 | %) | 10.2 | % | |||
Annualized net operating return on average equity (b) | 4.9 | % | 8.3 | % |
(a) | Represents the tax expense or benefit associated with the specific country to which the pre-tax adjustment relates to. The tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the ability to utilize tax losses carried forward. |
(b) | Non-GAAP financial measure. |
(c) | Average shareholders’ equity for the three months ended is the average of the beginning and ending quarter end shareholders’ equity balances, excluding the liquidation value of the preferred shares. |
Validus Holdings, Ltd. | ||
Investor Financial Supplement – First Quarter 2018 | ||
May 1, 2018 | ||
29 Richmond Road | ||
Pembroke, HM 08 Bermuda | ||
Telephone: (441) 278-9000 | ||
Facsimile: (441) 278-9090 | ||
Website: www.validusholdings.com | ||
Mailing address: Suite 1790 48 Par-la-Ville Road | ||
Hamilton, HM 11 Bermuda |
Section | Page | |
Explanatory Notes | ||
Consolidated Financial Highlights | ||
Summary Consolidated Balance Sheets | ||
Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share | ||
Consolidated Statements of Cash Flows | ||
Consolidated Statements of (Loss) Income and Comprehensive Income (Loss) | ||
Consolidated Statements of Operations - Underwriting Income Format | ||
Computation of Earnings per Share | ||
Underwriting Income Statement - Reinsurance Segment | ||
Underwriting Results by Class of Business - Three Months Ended - Reinsurance Segment | ||
Underwriting Income Statement - Insurance Segment | ||
Underwriting Results by Class of Business - Three Months Ended - Insurance Segment | ||
Asset Management Segment Information | ||
Assets Under Management | ||
Corporate and Investments | ||
Segment Reconciliation - Three Months Ended | ||
Non-GAAP Financial Measure Reconciliation | ||
Gross Premiums Written by Segment by Class of Business | ||
Consolidated Analysis of Reserves for Losses and Loss Expenses | ||
Consolidated Losses and Loss Ratios by Segment | ||
Losses and Loss Ratios by Class of Business - Reinsurance Segment | ||
Losses and Loss Ratios by Class of Business - Insurance Segment | ||
Analysis of Loss Ratios by Segment | ||
Consolidated Reinsurance Recoverable Analysis | ||
Consolidated Investment Portfolio Composition and Net Investment Income | ||
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile | ||
Top Ten Exposures to Fixed Income Corporate Issuers | ||
Capitalization | ||
Estimated Exposures to Peak Zone Property Catastrophe Losses - As of April 1, 2018 | ||
Estimated Exposures to Specified Loss Scenarios - As of January 1, 2018 |
• | This document should be read in conjunction with other documents filed by Validus Holdings, Ltd. (“Validus” or the “Company”) with the U.S. Securities and Exchange Commission pursuant to the Exchange Act of 1934, as amended. |
• | All financial information contained herein is unaudited; however, certain information contained herein relating to the years ended December 31, 2017 and 2016 is derived from or agrees to audited financial statements. Unless otherwise noted, dollar amounts are in thousands of U.S. dollars, except for share and per share amounts. |
• | The general and administrative expense ratio includes share compensation expenses. |
• | On May 1, 2017, the Company acquired all of the outstanding capital stock of Crop Risk Services, Inc. ("CRS"), a primary crop insurance managing general agent. For segmental reporting purposes, the results of CRS have been included in the results of the Insurance segment as of the date of acquisition. Transaction expenses incurred during the year ended December 31, 2017 were in relation to the acquisition of CRS and are primarily composed of legal, financial advisory and audit related services. |
• | On January 21, 2018, the Company entered into a definitive agreement and plan of merger (the “Merger Agreement”) with American International Group, Inc. (“AIG”). The Merger Agreement provides that, subject to the satisfaction or waiver of certain conditions set forth therein, the Company and its related subsidiaries will merge with an existing AIG subsidiary in accordance with the Bermuda Companies Act (the “Merger”), with the Company surviving the Merger as a wholly–owned subsidiary of AIG. The Merger is expected to close in mid-2018, subject to regulatory approvals and other customary closing conditions. Transaction expenses incurred during the three months ended March 31, 2018 were in relation to the Merger and are primarily composed of legal and financial advisory services. |
• | In presenting the Company’s results, management has included and discussed certain non-GAAP financial measures. The Company believes that these non-GAAP measures, which may be defined and calculated differently by other companies, better explain and enhance the understanding of the Company’s results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. |
• | In addition to presenting book value per common share determined in accordance with U.S. GAAP, the Company believes that the following non-GAAP book value financial measures are key financial indicators for evaluating performance and measuring overall growth: book value per diluted common share, book value per diluted common share plus accumulated dividends and tangible book value per diluted common share. A reconciliation of book value per common share, a GAAP financial measure, to the non-GAAP book value financial measures has been included on page 6. |
• | In addition to presenting net (loss) income (attributable) available to Validus common shareholders determined in accordance with U.S. GAAP, the Company believes that showing net operating income (loss) available (attributable) to Validus common shareholders, a non-GAAP financial measure, provides investors with a valuable measure of profitability and enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results in a manner similar to how management analyzes the Company’s underlying business performance. |
• | Net operating income (loss) available (attributable) to Validus common shareholders, a non-GAAP financial measure, is calculated by the addition or subtraction of certain Consolidated Statement of (Loss) Income line items from net (loss) income (attributable) available to Validus common shareholders, the most directly comparable GAAP financial measure, and measures the performance of the Company’s operations without the influence of gains or losses on investments and foreign currencies and other items as noted in the reconciliation on page 19. The Company excludes these items from its calculation of net operating income (loss) available (attributable) to Validus common shareholders because the amount of these gains and losses is heavily influenced by, and fluctuates in part, according to availability of investment market opportunities and other factors. The Company believes these amounts are largely independent of its core underwriting activities and including them distorts the analysis of trends in its operations. The Company believes the reporting of net operating income (loss) available (attributable) to Validus common shareholders enhances the understanding of results by highlighting the underlying profitability of the Company’s core (re)insurance operations. This profitability is influenced significantly by earned premium growth, adequacy of the Company’s pricing, as well as loss frequency and severity. Over time it is also influenced by the Company’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance and its ability to manage its expense ratio, which it accomplishes through its management of acquisition costs and other underwriting expenses. |
• | Annualized return on average equity, a GAAP financial measure, and annualized net operating return on average equity, a non-GAAP financial measure, represents the returns generated on common shareholders’ equity during the year and are presented on page 19. |
• | The Company also considers underwriting income (loss) to be a measure of profitability that takes into account net premiums earned and other insurance related income as revenue and losses and loss expenses, acquisition costs and underwriting related general and administrative and share compensation expenses as expenses. Underwriting income (loss) is the difference between these revenue and expense items. A reconciliation of underwriting income (loss) to net (loss) income (attributable) available to Validus common shareholders, the most comparable U.S. GAAP financial measure, is presented on page 9. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Highlights | Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | (8,693 | ) | $ | (250,446 | ) | $ | 101,095 | $ | 94,561 | $ | (63,483 | ) | $ | 359,384 | |||||||||
Net operating income (loss) available (attributable) to Validus common shareholders (a) | 42,557 | 4,153 | (254,459 | ) | 88,466 | 76,834 | (85,006 | ) | 320,885 | |||||||||||||||||||
Gross premiums written | 1,832,456 | 443,323 | 523,856 | 792,902 | 1,190,857 | 2,950,938 | 2,648,705 | |||||||||||||||||||||
Net premiums earned | 618,942 | 651,477 | 723,208 | 631,027 | 575,376 | 2,581,088 | 2,249,165 | |||||||||||||||||||||
Total assets | 15,600,642 | 14,426,879 | 14,601,240 | 13,951,146 | 12,137,121 | 14,426,879 | 11,349,755 | |||||||||||||||||||||
Total shareholders' equity available to Validus common shareholders | 3,501,232 | 3,495,072 | 3,536,287 | 3,811,431 | 3,761,876 | 3,495,072 | 3,688,291 | |||||||||||||||||||||
Total shareholders' equity available to Validus | 3,901,232 | 3,895,072 | 3,936,287 | 4,211,431 | 3,911,876 | 3,895,072 | 3,838,291 | |||||||||||||||||||||
Per share | (Loss) earnings per basic common share | |||||||||||||||||||||||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | (0.11 | ) | $ | (3.17 | ) | $ | 1.28 | $ | 1.19 | $ | (0.80 | ) | $ | 4.43 | ||||||||||
Net operating income (loss) available (attributable) to Validus common shareholders (a) | 0.54 | 0.05 | (3.22 | ) | 1.12 | 0.97 | (1.07 | ) | 3.96 | |||||||||||||||||||
(Loss) earnings per diluted common share | ||||||||||||||||||||||||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | (0.11 | ) | $ | (3.17 | ) | $ | 1.25 | $ | 1.17 | $ | (0.80 | ) | $ | 4.36 | ||||||||||
Net operating income (loss) available (attributable) to Validus common shareholders (a) | 0.53 | 0.05 | (3.22 | ) | 1.09 | 0.95 | (1.07 | ) | 3.90 | |||||||||||||||||||
Book value per common share | $ | 44.14 | $ | 44.06 | $ | 44.51 | $ | 47.93 | $ | 47.54 | $ | 44.06 | $ | 46.61 | ||||||||||||||
Book value per diluted common share (a) | $ | 42.79 | $ | 42.71 | $ | 43.13 | $ | 46.45 | $ | 45.88 | $ | 42.71 | $ | 44.97 | ||||||||||||||
Change in book value per diluted common share inclusive of dividends (a) | 1.1 | % | (0.1 | )% | (6.3 | )% | 2.1 | % | 2.9 | % | (1.6 | )% | 9.5 | % | ||||||||||||||
Book value per diluted common share plus accumulated dividends (a) | $ | 56.25 | $ | 55.79 | $ | 55.83 | $ | 58.77 | $ | 57.82 | $ | 55.79 | $ | 56.53 | ||||||||||||||
Ratios | Losses and loss expense ratio | 52.0 | % | 73.7 | % | 173.5 | % | 46.9 | % | 46.9 | % | 89.1 | % | 47.4 | % | |||||||||||||
Policy acquisition cost ratio | 18.8 | % | 19.5 | % | 16.0 | % | 18.6 | % | 19.4 | % | 18.3 | % | 20.0 | % | ||||||||||||||
General and administration expense ratio | 20.1 | % | 16.5 | % | 11.0 | % | 17.0 | % | 16.9 | % | 15.2 | % | 16.8 | % | ||||||||||||||
Expense ratio | 38.9 | % | 36.0 | % | 27.0 | % | 35.6 | % | 36.3 | % | 33.5 | % | 36.8 | % | ||||||||||||||
Combined ratio | 90.9 | % | 109.7 | % | 200.5 | % | 82.5 | % | 83.2 | % | 122.6 | % | 84.2 | % | ||||||||||||||
Annualized return on average equity | (0.5 | )% | (1.0 | )% | (27.3 | )% | 10.7 | % | 10.2 | % | (1.7 | )% | 9.7 | % | ||||||||||||||
Annualized net operating return on average equity (a) | 4.9 | % | 0.5 | % | (27.7 | )% | 9.3 | % | 8.3 | % | (2.3 | )% | 8.7 | % |
(a) | Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information. |
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Fixed maturity investments trading, at fair value | $ | 5,803,022 | $ | 5,858,348 | $ | 5,419,966 | $ | 5,418,643 | $ | 5,365,216 | $ | 5,543,030 | $ | 5,576,341 | $ | 5,551,586 | $ | 5,481,304 | ||||||||||||||||||
Short-term investments trading, at fair value | 3,638,940 | 3,381,757 | 2,993,246 | 2,871,353 | 2,785,226 | 2,796,170 | 2,481,406 | 2,369,654 | 2,108,199 | |||||||||||||||||||||||||||
Other investments, at fair value | 357,246 | 355,218 | 471,300 | 448,618 | 443,004 | 405,712 | 394,695 | 359,526 | 344,151 | |||||||||||||||||||||||||||
Investments in investment affiliates, equity method | 113,471 | 100,137 | 92,079 | 103,377 | 94,697 | 100,431 | 99,731 | 99,278 | 84,135 | |||||||||||||||||||||||||||
Cash and cash equivalents | 672,173 | 754,990 | 965,630 | 800,405 | 623,937 | 419,976 | 443,992 | 568,798 | 569,774 | |||||||||||||||||||||||||||
Restricted cash | 302,277 | 394,663 | 89,403 | 195,039 | 92,547 | 70,956 | 113,048 | 96,022 | 108,395 | |||||||||||||||||||||||||||
Total investments and cash | 10,887,129 | 10,845,113 | 10,031,624 | 9,837,435 | 9,404,627 | 9,336,275 | 9,109,213 | 9,044,864 | 8,695,958 | |||||||||||||||||||||||||||
Investments in operating affiliate, equity method | — | — | — | — | — | — | — | — | 369 | |||||||||||||||||||||||||||
Premiums receivable | 1,865,460 | 939,487 | 1,569,374 | 1,940,637 | 1,214,745 | 725,390 | 939,127 | 1,372,000 | 1,176,684 | |||||||||||||||||||||||||||
Deferred acquisition costs | 309,825 | 213,816 | 258,078 | 302,857 | 292,180 | 209,227 | 249,922 | 283,213 | 262,675 | |||||||||||||||||||||||||||
Prepaid reinsurance premiums | 390,900 | 132,938 | 207,618 | 335,837 | 199,046 | 77,996 | 119,805 | 145,567 | 181,255 | |||||||||||||||||||||||||||
Securities lending collateral | 4,210 | 2,717 | 2,115 | 2,514 | 10,386 | 9,779 | 10,629 | 10,224 | 9,721 | |||||||||||||||||||||||||||
Loss reserves recoverable | 979,944 | 1,233,997 | 1,335,016 | 600,207 | 451,856 | 430,421 | 444,609 | 442,987 | 370,689 | |||||||||||||||||||||||||||
Paid losses recoverable | 59,892 | 46,873 | 77,730 | 35,675 | 37,837 | 35,247 | 36,069 | 27,648 | 25,001 | |||||||||||||||||||||||||||
Income taxes recoverable | 7,705 | 9,044 | 9,704 | 4,763 | 6,757 | 4,870 | 6,879 | 8,526 | 7,146 | |||||||||||||||||||||||||||
Deferred tax asset | 56,739 | 52,467 | 52,228 | 52,655 | 45,995 | 43,529 | 26,015 | 23,745 | 27,771 | |||||||||||||||||||||||||||
Receivable for investments sold | 31,512 | 12,182 | 37,493 | 20,519 | 9,302 | 3,901 | 21,854 | 13,736 | 16,278 | |||||||||||||||||||||||||||
Intangible assets | 169,168 | 171,411 | 173,398 | 175,518 | 114,176 | 115,592 | 117,010 | 118,426 | 119,842 | |||||||||||||||||||||||||||
Goodwill | 229,573 | 229,573 | 227,701 | 227,701 | 196,758 | 196,758 | 196,758 | 196,758 | 196,758 | |||||||||||||||||||||||||||
Accrued investment income | 29,621 | 29,096 | 27,976 | 26,968 | 25,962 | 26,488 | 24,906 | 24,925 | 22,298 | |||||||||||||||||||||||||||
Other assets | 578,964 | 508,165 | 591,185 | 387,860 | 127,494 | 134,282 | 183,357 | 105,625 | 92,076 | |||||||||||||||||||||||||||
Total assets | $ | 15,600,642 | $ | 14,426,879 | $ | 14,601,240 | $ | 13,951,146 | $ | 12,137,121 | $ | 11,349,755 | $ | 11,486,153 | $ | 11,818,244 | $ | 11,204,521 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Reserve for losses and loss expenses | $ | 4,632,629 | $ | 4,831,390 | $ | 4,935,637 | $ | 3,305,191 | $ | 3,052,745 | $ | 2,995,195 | $ | 3,035,987 | $ | 3,122,717 | $ | 2,980,300 | ||||||||||||||||||
Unearned premiums | 2,242,368 | 1,147,186 | 1,526,465 | 1,970,896 | 1,612,474 | 1,076,049 | 1,359,438 | 1,621,563 | 1,503,161 | |||||||||||||||||||||||||||
Reinsurance balances payable | 398,861 | 331,645 | 527,881 | 461,261 | 118,119 | 54,781 | 76,429 | 92,488 | 96,685 | |||||||||||||||||||||||||||
Securities lending payable | 4,210 | 2,717 | 2,581 | 2,980 | 10,852 | 10,245 | 11,095 | 10,690 | 10,187 | |||||||||||||||||||||||||||
Deferred tax liability | 3,633 | 4,600 | 4,198 | 4,012 | 3,818 | 3,331 | 3,278 | 3,552 | 3,618 | |||||||||||||||||||||||||||
Payable for investments purchased | 85,946 | 74,496 | 84,431 | 92,077 | 38,486 | 29,447 | 49,435 | 52,718 | 76,116 | |||||||||||||||||||||||||||
Accounts payable and accrued expenses | 520,916 | 1,225,875 | 478,892 | 385,958 | 171,134 | 587,648 | 144,086 | 149,593 | 136,712 | |||||||||||||||||||||||||||
Notes payable to AlphaCat investors | 1,268,194 | 1,108,364 | 1,107,618 | 1,066,159 | 446,576 | 278,202 | 372,730 | 370,982 | 323,510 | |||||||||||||||||||||||||||
Senior notes payable | 245,614 | 245,564 | 245,513 | 245,463 | 245,412 | 245,362 | 245,311 | 245,261 | 245,211 | |||||||||||||||||||||||||||
Debentures payable | 539,572 | 539,158 | 538,910 | 538,400 | 537,402 | 537,226 | 538,168 | 537,987 | 538,335 | |||||||||||||||||||||||||||
Total liabilities | 9,941,943 | 9,510,995 | 9,452,126 | 8,072,397 | 6,237,018 | 5,817,486 | 5,835,957 | 6,207,551 | 5,913,835 | |||||||||||||||||||||||||||
Redeemable noncontrolling interests | 1,423,110 | 1,004,094 | 1,133,880 | 1,251,660 | 1,657,630 | 1,528,001 | 1,559,580 | 1,532,283 | 1,409,037 | |||||||||||||||||||||||||||
Shareholders' equity | ||||||||||||||||||||||||||||||||||||
Preferred shares | $ | 400,000 | $ | 400,000 | $ | 400,000 | $ | 400,000 | $ | 150,000 | $ | 150,000 | $ | 150,000 | $ | 150,000 | $ | — | ||||||||||||||||||
Common shares | 28,351 | 28,349 | 28,342 | 28,339 | 28,225 | 28,224 | 28,223 | 28,219 | 28,102 | |||||||||||||||||||||||||||
Treasury shares | (14,468 | ) | (14,468 | ) | (14,437 | ) | (14,423 | ) | (14,376 | ) | (14,376 | ) | (14,320 | ) | (14,084 | ) | (13,830 | ) | ||||||||||||||||||
Additional paid-in capital | 824,356 | 814,641 | 812,266 | 807,321 | 830,346 | 821,023 | 827,256 | 883,701 | 954,485 | |||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | 9,405 | (22,192 | ) | (18,430 | ) | (19,924 | ) | (22,453 | ) | (23,216 | ) | (21,092 | ) | (18,182 | ) | (15,438 | ) | |||||||||||||||||||
Retained earnings | 2,653,588 | 2,688,742 | 2,728,546 | 3,010,118 | 2,940,134 | 2,876,636 | 2,897,553 | 2,836,602 | 2,771,107 | |||||||||||||||||||||||||||
Total shareholders' equity available to Validus | 3,901,232 | 3,895,072 | 3,936,287 | 4,211,431 | 3,911,876 | 3,838,291 | 3,867,620 | 3,866,256 | 3,724,426 | |||||||||||||||||||||||||||
Noncontrolling interests | 334,357 | 16,718 | 78,947 | 415,658 | 330,597 | 165,977 | 222,996 | 212,154 | 157,223 | |||||||||||||||||||||||||||
Total shareholders' equity | 4,235,589 | 3,911,790 | 4,015,234 | 4,627,089 | 4,242,473 | 4,004,268 | 4,090,616 | 4,078,410 | 3,881,649 | |||||||||||||||||||||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 15,600,642 | $ | 14,426,879 | $ | 14,601,240 | $ | 13,951,146 | $ | 12,137,121 | $ | 11,349,755 | $ | 11,486,153 | $ | 11,818,244 | $ | 11,204,521 | ||||||||||||||||||
Book value per common share | $ | 44.14 | $ | 44.06 | $ | 44.51 | $ | 47.93 | $ | 47.54 | $ | 46.61 | $ | 46.80 | $ | 46.01 | $ | 45.67 | ||||||||||||||||||
Book value per diluted common share (a) | $ | 42.79 | $ | 42.71 | $ | 43.13 | $ | 46.45 | $ | 45.88 | $ | 44.97 | $ | 45.16 | $ | 44.41 | $ | 44.00 | ||||||||||||||||||
Book value per diluted common share plus accumulated dividends (a) | $ | 56.25 | $ | 55.79 | $ | 55.83 | $ | 58.77 | $ | 57.82 | $ | 56.53 | $ | 56.37 | $ | 55.27 | $ | 54.51 |
(a) | Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information. |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||
Equity Amount | Common Shares | Per Share Amount (a) | Equity Amount | Common Shares | Per Share Amount (a) | ||||||||||||||||
Book value per common share (b) | $ | 3,501,232 | 79,329,028 | $ | 44.14 | $ | 3,495,072 | 79,319,550 | $ | 44.06 | |||||||||||
Non-GAAP Adjustments: | |||||||||||||||||||||
Unvested restricted shares | — | 2,489,888 | — | 2,503,859 | |||||||||||||||||
Book value per diluted common share (c) | 3,501,232 | 81,818,916 | $ | 42.79 | 3,495,072 | 81,823,409 | $ | 42.71 | |||||||||||||
Goodwill | (229,573 | ) | — | (229,573 | ) | — | |||||||||||||||
Intangible assets | (169,168 | ) | — | (171,411 | ) | — | |||||||||||||||
Tangible book value per diluted common share (c) | $ | 3,102,491 | 81,818,916 | $ | 37.92 | $ | 3,094,088 | 81,823,409 | $ | 37.81 | |||||||||||
Book value per diluted common share (c) | $ | 42.79 | $ | 42.71 | |||||||||||||||||
Accumulated dividends | 13.46 | 13.08 | |||||||||||||||||||
Book value per diluted common share plus accumulated dividends (c) | $ | 56.25 | $ | 55.79 |
(a) | Per share amounts are calculated by dividing the equity amount by the common shares. |
(b) | The equity amount used in the calculation of book value per common share represents total shareholders' equity available to Validus excluding the liquidation value of the preferred shares. |
(c) | Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Cash flows provided by (used in) operating activities | ||||||||||||||||||||||||||||
Net income (loss) | $ | 66,462 | $ | (70,001 | ) | $ | (621,185 | ) | $ | 146,948 | $ | 139,336 | $ | (404,902 | ) | $ | 487,202 | |||||||||||
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||||||||||||||||||||||
Share compensation expenses | 9,729 | 10,031 | 9,443 | 11,146 | 9,491 | 40,111 | 42,907 | |||||||||||||||||||||
Loss on redemption of AlphaCat ILS fund | — | — | — | 402 | — | 402 | — | |||||||||||||||||||||
Amortization of discount on senior notes | 27 | 27 | 27 | 27 | 27 | 108 | 108 | |||||||||||||||||||||
(Income) loss from investment and operating affiliates | (13,068 | ) | (6,345 | ) | (1,011 | ) | (9,466 | ) | (5,188 | ) | (22,010 | ) | 2,106 | |||||||||||||||
Net realized and change in net unrealized losses (gains) on investments | 55,181 | 15,650 | 4,291 | (18,595 | ) | (12,184 | ) | (10,838 | ) | (32,628 | ) | |||||||||||||||||
Amortization of intangible assets | 2,243 | 2,146 | 2,120 | 2,579 | 1,416 | 8,261 | 5,666 | |||||||||||||||||||||
Foreign exchange (gains) losses included in net income | (9,885 | ) | (540 | ) | (4,493 | ) | (4,748 | ) | (4,938 | ) | (14,719 | ) | 3,043 | |||||||||||||||
Amortization of premium on fixed maturity investments | 3,899 | 4,732 | 4,166 | 3,476 | 3,536 | 15,910 | 17,961 | |||||||||||||||||||||
Change in operational balance sheet items, net | (68,646 | ) | 130,152 | 857,839 | (96,883 | ) | (113,697 | ) | 777,411 | (116,162 | ) | |||||||||||||||||
Net cash provided by operating activities | $ | 45,942 | $ | 85,852 | $ | 251,197 | $ | 34,886 | $ | 17,799 | $ | 389,734 | $ | 410,203 | ||||||||||||||
Cash flows provided by (used in) investing activities | ||||||||||||||||||||||||||||
(Purchases) sales of investments | $ | (270,028 | ) | $ | (717,157 | ) | $ | (174,373 | ) | $ | (92,623 | ) | $ | 167,286 | $ | (816,867 | ) | $ | (974,719 | ) | ||||||||
(Increase) decrease in securities lending collateral | (1,493 | ) | (602 | ) | 399 | 7,872 | (607 | ) | 7,062 | (4,916 | ) | |||||||||||||||||
(Investments in) distributions from investment & operating affiliates, net | (266 | ) | (1,713 | ) | 12,309 | 786 | 10,922 | 22,304 | (14,472 | ) | ||||||||||||||||||
Purchase of subsidiary, net of cash acquired | — | — | — | (183,923 | ) | — | (183,923 | ) | — | |||||||||||||||||||
Net cash (used in) provided by investing activities | $ | (271,787 | ) | $ | (719,472 | ) | $ | (161,665 | ) | $ | (267,888 | ) | $ | 177,601 | $ | (971,424 | ) | $ | (994,107 | ) | ||||||||
Cash flows provided by (used in) financing activities | ||||||||||||||||||||||||||||
Net proceeds on issuance of notes payable to AlphaCat investors | $ | 155,966 | $ | 506 | $ | 40,903 | $ | 196,597 | $ | 73,048 | $ | 311,054 | $ | 296,325 | ||||||||||||||
Proceeds drawn on credit facilities | — | 206,000 | — | — | — | 206,000 | — | |||||||||||||||||||||
Net proceeds on issuance of preferred shares | — | — | — | 241,686 | — | 241,686 | 144,852 | |||||||||||||||||||||
(Redemption) issuance of common shares, net | (12 | ) | 545 | (162 | ) | (11,794 | ) | (167 | ) | (11,578 | ) | (7,701 | ) | |||||||||||||||
Purchases of common shares under share repurchase program | — | (8,225 | ) | (4,347 | ) | (13,996 | ) | — | (26,568 | ) | (212,675 | ) | ||||||||||||||||
Dividends paid on common and preferred shares | (36,860 | ) | (36,072 | ) | (35,956 | ) | (35,397 | ) | (32,295 | ) | (139,720 | ) | (120,080 | ) | ||||||||||||||
Increase (decrease) in securities lending payable | 1,493 | 136 | (399 | ) | (7,872 | ) | 607 | (7,528 | ) | 4,916 | ||||||||||||||||||
Third party investments in (redemptions of) redeemable noncontrolling interest, net | 211,314 | 58,665 | (51,201 | ) | 95,463 | 35,403 | 138,330 | 376,165 | ||||||||||||||||||||
Third party investments in (redemptions of) noncontrolling interest, net | 281,300 | (3,440 | ) | (101,125 | ) | 69,965 | 92,210 | 57,610 | 44,571 | |||||||||||||||||||
Third party subscriptions (deployed) received on funds and sidecars, net | (578,666 | ) | 516,333 | 114,500 | (27,500 | ) | (144,452 | ) | 458,881 | (225,284 | ) | |||||||||||||||||
Net cash provided by (used in) financing activities | $ | 34,535 | $ | 734,448 | $ | (37,787 | ) | $ | 507,152 | $ | 24,354 | $ | 1,228,167 | $ | 301,089 | |||||||||||||
Effect of foreign currency rate changes on cash and cash equivalents and restricted cash | 16,107 | (6,208 | ) | 7,844 | 4,810 | 5,798 | 12,244 | (22,632 | ) | |||||||||||||||||||
Net (decrease) increase in cash and cash equivalents and restricted cash | (175,203 | ) | 94,620 | 59,589 | 278,960 | 225,552 | 658,721 | (305,447 | ) | |||||||||||||||||||
Cash and cash equivalents and restricted cash - beginning of period | 1,149,653 | 1,055,033 | 995,444 | 716,484 | 490,932 | 490,932 | 796,379 | |||||||||||||||||||||
Cash and cash equivalents and restricted cash - end of period | $ | 974,450 | $ | 1,149,653 | $ | 1,055,033 | $ | 995,444 | $ | 716,484 | $ | 1,149,653 | $ | 490,932 | ||||||||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Taxes paid during the period | $ | 460 | $ | 1,511 | $ | 2,242 | $ | 552 | $ | 16 | $ | 4,321 | $ | 6,034 | ||||||||||||||
Interest paid during the period | $ | 19,068 | $ | 8,045 | $ | 19,202 | $ | 8,113 | $ | 19,073 | $ | 54,433 | $ | 54,638 | ||||||||||||||
Losses paid during the period | $ | 281,880 | $ | 485,913 | $ | 372,706 | $ | 236,023 | $ | 245,787 | $ | 1,340,429 | $ | 1,114,402 |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Gross premiums written | $ | 1,832,456 | $ | 443,323 | $ | 523,856 | $ | 792,902 | $ | 1,190,857 | $ | 2,950,938 | $ | 2,648,705 | ||||||||||||||
Reinsurance premiums ceded | (376,294 | ) | (96,445 | ) | (116,860 | ) | (56,222 | ) | (200,106 | ) | (469,633 | ) | (289,705 | ) | ||||||||||||||
Net premiums written | 1,456,162 | 346,878 | 406,996 | 736,680 | 990,751 | 2,481,305 | 2,359,000 | |||||||||||||||||||||
Change in unearned premiums | (837,220 | ) | 304,599 | 316,212 | (105,653 | ) | (415,375 | ) | 99,783 | (109,835 | ) | |||||||||||||||||
Net premiums earned | 618,942 | 651,477 | 723,208 | 631,027 | 575,376 | 2,581,088 | 2,249,165 | |||||||||||||||||||||
Net investment income | 52,072 | 48,960 | 44,458 | 44,241 | 40,214 | 177,873 | 150,385 | |||||||||||||||||||||
Net realized gains (losses) on investments | 2,200 | 5,607 | 906 | 2,274 | (1,164 | ) | 7,623 | 15,757 | ||||||||||||||||||||
Change in net unrealized (losses) gains on investments | (57,381 | ) | (21,257 | ) | (5,197 | ) | 16,321 | 13,348 | 3,215 | 16,871 | ||||||||||||||||||
Income (loss) from investment affiliates | 13,068 | 6,345 | 1,011 | 9,466 | 5,188 | 22,010 | (2,083 | ) | ||||||||||||||||||||
Other insurance related income and other income | 25,540 | 6,939 | 3,571 | 1,339 | 1,330 | 13,179 | 2,195 | |||||||||||||||||||||
Foreign exchange gains (losses) | 525 | (283 | ) | (1,404 | ) | (7,329 | ) | 1,569 | (7,447 | ) | 10,864 | |||||||||||||||||
Total revenues | 654,966 | 697,788 | 766,553 | 697,339 | 635,861 | 2,797,541 | 2,443,154 | |||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
Losses and loss expenses | 321,545 | 479,842 | 1,254,602 | 296,149 | 269,585 | 2,300,178 | 1,065,097 | |||||||||||||||||||||
Policy acquisition costs | 116,456 | 127,067 | 115,590 | 117,268 | 111,628 | 471,553 | 449,482 | |||||||||||||||||||||
General and administrative expenses | 114,726 | 97,522 | 70,342 | 96,349 | 87,924 | 352,137 | 336,294 | |||||||||||||||||||||
Share compensation expenses | 9,729 | 10,031 | 9,443 | 11,146 | 9,491 | 40,111 | 42,907 | |||||||||||||||||||||
Finance expenses | 14,263 | 15,871 | 14,523 | 14,209 | 13,943 | 58,546 | 58,520 | |||||||||||||||||||||
Transaction expenses | 7,756 | — | — | 4,427 | — | 4,427 | — | |||||||||||||||||||||
Total expenses | 584,475 | 730,333 | 1,464,500 | 539,548 | 492,571 | 3,226,952 | 1,952,300 | |||||||||||||||||||||
Income (loss) before taxes, (loss) from operating affiliate and (income) loss attributable to AlphaCat investors | 70,491 | (32,545 | ) | (697,947 | ) | 157,791 | 143,290 | (429,411 | ) | 490,854 | ||||||||||||||||||
Tax benefit | 6,833 | 412 | 2,632 | 987 | 3,549 | 7,580 | 19,729 | |||||||||||||||||||||
(Loss) from operating affiliate | — | — | — | — | — | — | (23 | ) | ||||||||||||||||||||
(Income) loss attributable to AlphaCat investors | (10,862 | ) | (37,868 | ) | 74,130 | (11,830 | ) | (7,503 | ) | 16,929 | (23,358 | ) | ||||||||||||||||
Net income (loss) | 66,462 | (70,001 | ) | (621,185 | ) | 146,948 | 139,336 | (404,902 | ) | 487,202 | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (64,712 | ) | 67,136 | 376,366 | (43,650 | ) | (42,572 | ) | 357,280 | (123,363 | ) | |||||||||||||||||
Net income (loss) available (attributable) to Validus | 1,750 | (2,865 | ) | (244,819 | ) | 103,298 | 96,764 | (47,622 | ) | 363,839 | ||||||||||||||||||
Dividends on preferred shares | (5,828 | ) | (5,828 | ) | (5,627 | ) | (2,203 | ) | (2,203 | ) | (15,861 | ) | (4,455 | ) | ||||||||||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | (8,693 | ) | $ | (250,446 | ) | $ | 101,095 | $ | 94,561 | $ | (63,483 | ) | $ | 359,384 | ||||||||||
Comprehensive income (loss) | ||||||||||||||||||||||||||||
Net income (loss) | $ | 66,462 | $ | (70,001 | ) | $ | (621,185 | ) | $ | 146,948 | $ | 139,336 | $ | (404,902 | ) | $ | 487,202 | |||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||
Change in foreign currency translation adjustments | 1,837 | 490 | 1,481 | 1,489 | 597 | 4,057 | (10,440 | ) | ||||||||||||||||||||
Change in minimum pension liability | (38 | ) | 1,617 | — | 1,184 | 68 | 2,869 | (484 | ) | |||||||||||||||||||
Change in fair value of cash flow hedges | 28,763 | (6,319 | ) | 13 | (144 | ) | 98 | (6,352 | ) | 277 | ||||||||||||||||||
Other comprehensive income (loss), net of tax | $ | 30,562 | $ | (4,212 | ) | $ | 1,494 | $ | 2,529 | $ | 763 | $ | 574 | $ | (10,647 | ) | ||||||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (64,712 | ) | 67,136 | 376,366 | (43,650 | ) | (42,572 | ) | 357,280 | (123,363 | ) | |||||||||||||||||
Comprehensive income (loss) available (attributable) to Validus | $ | 32,312 | $ | (7,077 | ) | $ | (243,325 | ) | $ | 105,827 | $ | 97,527 | $ | (47,048 | ) | $ | 353,192 | |||||||||||
(Loss) earnings per share | ||||||||||||||||||||||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||||||||||||||||||||||
Basic | 79,325,688 | 78,966,938 | 78,994,335 | 79,270,561 | 79,133,671 | 79,091,376 | 81,041,974 | |||||||||||||||||||||
Diluted | 79,325,688 | 78,966,938 | 78,994,335 | 80,872,451 | 80,739,142 | 79,091,376 | 82,359,460 | |||||||||||||||||||||
Basic (loss) earnings per share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | (0.11 | ) | $ | (3.17 | ) | $ | 1.28 | $ | 1.19 | $ | (0.80 | ) | $ | 4.43 | ||||||||||
(Loss) earnings per diluted share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | (0.11 | ) | $ | (3.17 | ) | $ | 1.25 | $ | 1.17 | $ | (0.80 | ) | $ | 4.36 | ||||||||||
Cash dividends declared per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 1.52 | $ | 1.40 |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Underwriting revenues | ||||||||||||||||||||||||||||
Gross premiums written | $ | 1,832,456 | $ | 443,323 | $ | 523,856 | $ | 792,902 | $ | 1,190,857 | $ | 2,950,938 | $ | 2,648,705 | ||||||||||||||
Reinsurance premiums ceded | (376,294 | ) | (96,445 | ) | (116,860 | ) | (56,222 | ) | (200,106 | ) | (469,633 | ) | (289,705 | ) | ||||||||||||||
Net premiums written | 1,456,162 | 346,878 | 406,996 | 736,680 | 990,751 | 2,481,305 | 2,359,000 | |||||||||||||||||||||
Change in unearned premiums | (837,220 | ) | 304,599 | 316,212 | (105,653 | ) | (415,375 | ) | 99,783 | (109,835 | ) | |||||||||||||||||
Net premiums earned | 618,942 | 651,477 | 723,208 | 631,027 | 575,376 | 2,581,088 | 2,249,165 | |||||||||||||||||||||
Other insurance related income | 25,496 | 6,939 | 3,536 | 1,165 | 1,236 | 12,876 | 2,961 | |||||||||||||||||||||
Total underwriting revenues | 644,438 | 658,416 | 726,744 | 632,192 | 576,612 | 2,593,964 | 2,252,126 | |||||||||||||||||||||
Underwriting deductions | ||||||||||||||||||||||||||||
Losses and loss expenses | 321,545 | 479,842 | 1,254,602 | 296,149 | 269,585 | 2,300,178 | 1,065,097 | |||||||||||||||||||||
Policy acquisition costs | 116,456 | 127,067 | 115,590 | 117,268 | 111,628 | 471,553 | 449,482 | |||||||||||||||||||||
General and administrative expenses | 114,726 | 97,522 | 70,342 | 96,349 | 87,924 | 352,137 | 336,294 | |||||||||||||||||||||
Share compensation expenses | 9,729 | 10,031 | 9,443 | 11,146 | 9,491 | 40,111 | 42,907 | |||||||||||||||||||||
Total underwriting deductions | 562,456 | 714,462 | 1,449,977 | 520,912 | 478,628 | 3,163,979 | 1,893,780 | |||||||||||||||||||||
Underwriting income (loss) (a) | $ | 81,982 | $ | (56,046 | ) | $ | (723,233 | ) | $ | 111,280 | $ | 97,984 | $ | (570,015 | ) | $ | 358,346 | |||||||||||
Net investment income | 52,072 | 48,960 | 44,458 | 44,241 | 40,214 | 177,873 | 150,385 | |||||||||||||||||||||
Finance expenses | (14,263 | ) | (15,871 | ) | (14,523 | ) | (14,209 | ) | (13,943 | ) | (58,546 | ) | (58,520 | ) | ||||||||||||||
Dividends on preferred shares | (5,828 | ) | (5,828 | ) | (5,627 | ) | (2,203 | ) | (2,203 | ) | (15,861 | ) | (4,455 | ) | ||||||||||||||
Tax benefit (expense) | 3,739 | (927 | ) | 2,164 | 2,735 | 4,129 | 8,101 | 21,416 | ||||||||||||||||||||
(Loss) from operating affiliate | — | — | — | — | — | — | (23 | ) | ||||||||||||||||||||
(Income) loss attributable to AlphaCat investors | (10,862 | ) | (37,868 | ) | 74,130 | (11,830 | ) | (7,503 | ) | 16,929 | (23,358 | ) | ||||||||||||||||
Net operating (income) loss attributable to noncontrolling interests | (64,283 | ) | 71,733 | 368,172 | (41,548 | ) | (41,844 | ) | 356,513 | (122,906 | ) | |||||||||||||||||
Net operating income (loss) available (attributable) to Validus common shareholders (a) | $ | 42,557 | $ | 4,153 | $ | (254,459 | ) | $ | 88,466 | $ | 76,834 | $ | (85,006 | ) | $ | 320,885 | ||||||||||||
Net realized gains (losses) on investments | 2,200 | 5,607 | 906 | 2,274 | (1,164 | ) | 7,623 | 15,757 | ||||||||||||||||||||
Change in net unrealized (losses) gains on investments | (57,381 | ) | (21,257 | ) | (5,197 | ) | 16,321 | 13,348 | 3,215 | 16,871 | ||||||||||||||||||
Income (loss) from investment affiliates | 13,068 | 6,345 | 1,011 | 9,466 | 5,188 | 22,010 | (2,083 | ) | ||||||||||||||||||||
Foreign exchange gains (losses) | 525 | (283 | ) | (1,404 | ) | (7,329 | ) | 1,569 | (7,447 | ) | 10,864 | |||||||||||||||||
Other income (loss) | 44 | — | 35 | 174 | 94 | 303 | (766 | ) | ||||||||||||||||||||
Transaction expenses | (7,756 | ) | — | — | (4,427 | ) | — | (4,427 | ) | — | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | (429 | ) | (4,597 | ) | 8,194 | (2,102 | ) | (728 | ) | 767 | (457 | ) | ||||||||||||||||
Tax benefit (expense) | 3,094 | 1,339 | 468 | (1,748 | ) | (580 | ) | (521 | ) | (1,687 | ) | |||||||||||||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | (8,693 | ) | $ | (250,446 | ) | $ | 101,095 | $ | 94,561 | (63,483 | ) | 359,384 | ||||||||||||
Selected ratios: | ||||||||||||||||||||||||||||
Ratio of net to gross premiums written | 79.5 | % | 78.2 | % | 77.7 | % | 92.9 | % | 83.2 | % | 84.1 | % | 89.1 | % | ||||||||||||||
Losses and loss expense ratio | 52.0 | % | 73.7 | % | 173.5 | % | 46.9 | % | 46.9 | % | 89.1 | % | 47.4 | % | ||||||||||||||
Policy acquisition cost ratio | 18.8 | % | 19.5 | % | 16.0 | % | 18.6 | % | 19.4 | % | 18.3 | % | 20.0 | % | ||||||||||||||
General and administrative expense ratio | 20.1 | % | 16.5 | % | 11.0 | % | 17.0 | % | 16.9 | % | 15.2 | % | 16.8 | % | ||||||||||||||
Expense ratio | 38.9 | % | 36.0 | % | 27.0 | % | 35.6 | % | 36.3 | % | 33.5 | % | 36.8 | % | ||||||||||||||
Combined ratio | 90.9 | % | 109.7 | % | 200.5 | % | 82.5 | % | 83.2 | % | 122.6 | % | 84.2 | % |
(a) | Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information. |
Three Months Ended (a) | |||||||||||||||||||||||
March 31, 2018 | March 31, 2017 | ||||||||||||||||||||||
Net (Loss) | Net Operating Income | Comprehensive Income | Net Income | Net Operating Income | Comprehensive Income | ||||||||||||||||||
Basic (loss) earnings per share (b) | |||||||||||||||||||||||
(Loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | 42,557 | $ | 26,484 | $ | 94,561 | $ | 76,834 | $ | 95,324 | ||||||||||
Weighted average number of common shares outstanding | 79,325,688 | 79,325,688 | 79,325,688 | 79,133,671 | 79,133,671 | 79,133,671 | |||||||||||||||||
Basic (loss) earnings per share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | 0.54 | $ | 0.33 | $ | 1.19 | $ | 0.97 | $ | 1.20 | ||||||||||
(Loss) earnings per diluted share (c) | |||||||||||||||||||||||
(Loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | 42,557 | $ | 26,484 | $ | 94,561 | $ | 76,834 | $ | 95,324 | ||||||||||
Weighted average number of common shares outstanding | 79,325,688 | 79,325,688 | 79,325,688 | 79,133,671 | 79,133,671 | 79,133,671 | |||||||||||||||||
Share equivalents: | |||||||||||||||||||||||
Stock options | — | — | — | 15,379 | 15,379 | 15,379 | |||||||||||||||||
Unvested restricted shares | — | 1,650,434 | 1,650,434 | 1,590,092 | 1,590,092 | 1,590,092 | |||||||||||||||||
Weighted average number of diluted common shares outstanding | 79,325,688 | 80,976,122 | 80,976,122 | 80,739,142 | 80,739,142 | 80,739,142 | |||||||||||||||||
(Loss) earnings per diluted share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | 0.53 | $ | 0.33 | $ | 1.17 | $ | 0.95 | $ | 1.18 |
(a) | ASC 718 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. |
(b) | (Loss) earnings per basic common share is based on weighted average common shares and excludes any dilutive effects of options and restricted stock. |
(c) | (Loss) earnings per diluted common share assumes the exercise of all dilutive stock options and restricted stock grants. Due to the net (loss) incurred during the three months ended March 31, 2018 share equivalents were not included in the computation of (loss) per diluted common share due to their anti-dilutive effect. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Underwriting revenues | ||||||||||||||||||||||||||||
Gross premiums written | $ | 765,573 | $ | 51,960 | $ | 169,572 | $ | 330,534 | $ | 643,141 | $ | 1,195,207 | $ | 1,184,912 | ||||||||||||||
Reinsurance premiums ceded | (190,194 | ) | (40,716 | ) | (43,849 | ) | (10,278 | ) | (114,446 | ) | (209,289 | ) | (121,331 | ) | ||||||||||||||
Net premiums written | 575,379 | 11,244 | 125,723 | 320,256 | 528,695 | 985,918 | 1,063,581 | |||||||||||||||||||||
Change in unearned premiums | (350,627 | ) | 239,320 | 156,754 | (61,948 | ) | (297,040 | ) | 37,086 | (67,432 | ) | |||||||||||||||||
Net premiums earned | 224,752 | 250,564 | 282,477 | 258,308 | 231,655 | 1,023,004 | 996,149 | |||||||||||||||||||||
Other insurance related income | 2 | 15 | 49 | 1 | 2 | 67 | 25 | |||||||||||||||||||||
Total underwriting revenues | 224,754 | 250,579 | 282,526 | 258,309 | 231,657 | 1,023,071 | 996,174 | |||||||||||||||||||||
Underwriting deductions | ||||||||||||||||||||||||||||
Losses and loss expenses | 103,473 | 135,804 | 361,693 | 114,341 | 80,881 | 692,719 | 415,505 | |||||||||||||||||||||
Policy acquisition costs | 48,340 | 58,107 | 47,822 | 49,966 | 43,535 | 199,430 | 189,797 | |||||||||||||||||||||
General and administrative expenses | 28,915 | 23,604 | 14,400 | 22,204 | 19,969 | 80,177 | 85,000 | |||||||||||||||||||||
Share compensation expenses | 2,663 | 2,331 | 3,083 | 2,725 | 2,623 | 10,762 | 11,668 | |||||||||||||||||||||
Total underwriting deductions | 183,391 | 219,846 | 426,998 | 189,236 | 147,008 | 983,088 | 701,970 | |||||||||||||||||||||
Underwriting income (loss) | $ | 41,363 | $ | 30,733 | $ | (144,472 | ) | $ | 69,073 | $ | 84,649 | $ | 39,983 | $ | 294,204 | |||||||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Losses and loss expenses: | ||||||||||||||||||||||||||||
Current period excluding items below | $ | 121,311 | $ | 132,919 | $ | 123,095 | $ | 124,268 | $ | 106,932 | $ | 487,214 | $ | 459,249 | ||||||||||||||
Current period—notable loss events | — | 14,738 | 283,027 | — | — | 297,765 | 45,164 | |||||||||||||||||||||
Current period—non-notable loss events | — | 9,392 | 796 | 5,781 | 5,073 | 21,042 | 46,718 | |||||||||||||||||||||
Change in prior accident years | (17,838 | ) | (21,245 | ) | (45,225 | ) | (15,708 | ) | (31,124 | ) | (113,302 | ) | (135,626 | ) | ||||||||||||||
Total losses and loss expenses | $ | 103,473 | $ | 135,804 | $ | 361,693 | $ | 114,341 | $ | 80,881 | $ | 692,719 | $ | 415,505 | ||||||||||||||
Selected ratios: | ||||||||||||||||||||||||||||
Ratio of net to gross premiums written | 75.2 | % | 21.6 | % | 74.1 | % | 96.9 | % | 82.2 | % | 82.5 | % | 89.8 | % | ||||||||||||||
Losses and loss expense ratio: | ||||||||||||||||||||||||||||
Current period excluding items below | 53.9 | % | 53.1 | % | 43.5 | % | 48.2 | % | 46.1 | % | 47.6 | % | 46.1 | % | ||||||||||||||
Current period—notable loss events | — | % | 5.9 | % | 100.2 | % | — | % | — | % | 29.1 | % | 4.5 | % | ||||||||||||||
Current period—non-notable loss events | — | % | 3.7 | % | 0.3 | % | 2.2 | % | 2.2 | % | 2.1 | % | 4.7 | % | ||||||||||||||
Change in prior accident years | (7.9 | )% | (8.5 | )% | (16.0 | )% | (6.1 | )% | (13.4 | )% | (11.1 | )% | (13.6 | )% | ||||||||||||||
Losses and loss expense ratio | 46.0 | % | 54.2 | % | 128.0 | % | 44.3 | % | 34.9 | % | 67.7 | % | 41.7 | % | ||||||||||||||
Policy acquisition cost ratio | 21.5 | % | 23.2 | % | 16.9 | % | 19.3 | % | 18.8 | % | 19.5 | % | 19.1 | % | ||||||||||||||
General and administrative expense ratio | 14.1 | % | 10.4 | % | 6.2 | % | 9.7 | % | 9.8 | % | 8.9 | % | 9.7 | % | ||||||||||||||
Expense ratio | 35.6 | % | 33.6 | % | 23.1 | % | 29.0 | % | 28.6 | % | 28.4 | % | 28.8 | % | ||||||||||||||
Combined ratio | 81.6 | % | 87.8 | % | 151.1 | % | 73.3 | % | 63.5 | % | 96.1 | % | 70.5 | % |
Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||||
Property | Specialty - Short-tail | Specialty - Other | Total | Property | Specialty - Short-tail | Specialty - Other | Total | ||||||||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||||||||||
Gross premiums written | $ | 273,989 | $ | 352,110 | $ | 139,474 | $ | 765,573 | $ | 216,667 | $ | 376,878 | $ | 49,596 | $ | 643,141 | |||||||||||||||
Reinsurance premiums ceded | (136,390 | ) | (31,643 | ) | (22,161 | ) | (190,194 | ) | (88,417 | ) | (24,591 | ) | (1,438 | ) | (114,446 | ) | |||||||||||||||
Net premiums written | 137,599 | 320,467 | 117,313 | 575,379 | 128,250 | 352,287 | 48,158 | 528,695 | |||||||||||||||||||||||
Change in unearned premiums | (47,748 | ) | (223,413 | ) | (79,466 | ) | (350,627 | ) | (25,868 | ) | (247,936 | ) | (23,236 | ) | (297,040 | ) | |||||||||||||||
Net premiums earned | 89,851 | 97,054 | 37,847 | 224,752 | 102,382 | 104,351 | 24,922 | 231,655 | |||||||||||||||||||||||
Other insurance related income | 2 | 2 | |||||||||||||||||||||||||||||
Total underwriting revenues | 224,754 | 231,657 | |||||||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||||||
Losses and loss expenses | 29,122 | 50,907 | 23,444 | 103,473 | 17,437 | 49,450 | 13,994 | 80,881 | |||||||||||||||||||||||
Policy acquisition costs | 17,631 | 19,760 | 10,949 | 48,340 | 17,884 | 18,103 | 7,548 | 43,535 | |||||||||||||||||||||||
Total underwriting deductions before G&A | 46,753 | 70,667 | 34,393 | 151,813 | 35,321 | 67,553 | 21,542 | 124,416 | |||||||||||||||||||||||
Underwriting income before G&A | $ | 43,098 | $ | 26,387 | $ | 3,454 | $ | 72,941 | $ | 67,061 | $ | 36,798 | $ | 3,380 | $ | 107,241 | |||||||||||||||
General and administrative expenses | 28,915 | 19,969 | |||||||||||||||||||||||||||||
Share compensation expenses | 2,663 | 2,623 | |||||||||||||||||||||||||||||
Total underwriting deductions | 183,391 | 147,008 | |||||||||||||||||||||||||||||
Underwriting income | $ | 41,363 | $ | 84,649 | |||||||||||||||||||||||||||
Supplemental information: | |||||||||||||||||||||||||||||||
Losses and loss expenses: | |||||||||||||||||||||||||||||||
Current period excluding items below | $ | 33,944 | $ | 64,358 | $ | 23,009 | $ | 121,311 | $ | 21,144 | $ | 71,480 | $ | 14,308 | $ | 106,932 | |||||||||||||||
Current period—notable loss events | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Current period—non-notable loss events | — | — | — | — | 355 | 4,718 | — | 5,073 | |||||||||||||||||||||||
Change in prior accident years | (4,822 | ) | (13,451 | ) | 435 | (17,838 | ) | (4,062 | ) | (26,748 | ) | (314 | ) | (31,124 | ) | ||||||||||||||||
Total losses and loss expenses | $ | 29,122 | $ | 50,907 | $ | 23,444 | $ | 103,473 | $ | 17,437 | $ | 49,450 | $ | 13,994 | $ | 80,881 | |||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||||||
Ratio of net to gross premiums written | 50.2 | % | 91.0 | % | 84.1 | % | 75.2 | % | 59.2 | % | 93.5 | % | 97.1 | % | 82.2 | % | |||||||||||||||
Losses and loss expense ratio: | |||||||||||||||||||||||||||||||
Current period excluding items below | 37.8 | % | 66.3 | % | 60.8 | % | 53.9 | % | 20.7 | % | 68.5 | % | 57.5 | % | 46.1 | % | |||||||||||||||
Current period—notable loss events | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||
Current period—non-notable loss events | — | % | — | % | — | % | — | % | 0.3 | % | 4.5 | % | — | % | 2.2 | % | |||||||||||||||
Change in prior accident years | (5.4 | )% | (13.9 | )% | 1.1 | % | (7.9 | )% | (4.0 | )% | (25.6 | )% | (1.3 | )% | (13.4 | )% | |||||||||||||||
Losses and loss expense ratio | 32.4 | % | 52.4 | % | 61.9 | % | 46.0 | % | 17.0 | % | 47.4 | % | 56.2 | % | 34.9 | % | |||||||||||||||
Policy acquisition cost ratio | 19.6 | % | 20.4 | % | 28.9 | % | 21.5 | % | 17.5 | % | 17.3 | % | 30.3 | % | 18.8 | % | |||||||||||||||
General and administrative expense ratio | 14.1 | % | 9.8 | % | |||||||||||||||||||||||||||
Expense ratio | 35.6 | % | 28.6 | % | |||||||||||||||||||||||||||
Combined ratio | 81.6 | % | 63.5 | % |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Underwriting revenues | ||||||||||||||||||||||||||||
Gross premiums written | $ | 785,795 | $ | 377,014 | $ | 333,272 | $ | 360,057 | $ | 382,790 | $ | 1,453,133 | $ | 1,194,137 | ||||||||||||||
Reinsurance premiums ceded | (191,637 | ) | (56,378 | ) | (76,362 | ) | (49,315 | ) | (79,000 | ) | (261,055 | ) | (162,669 | ) | ||||||||||||||
Net premiums written | 594,158 | 320,636 | 256,910 | 310,742 | 303,790 | 1,192,078 | 1,031,468 | |||||||||||||||||||||
Change in unearned premiums | (294,620 | ) | 12,393 | 82,185 | (5,875 | ) | (24,696 | ) | 64,007 | (28,524 | ) | |||||||||||||||||
Net premiums earned | 299,538 | 333,029 | 339,095 | 304,867 | 279,094 | 1,256,085 | 1,002,944 | |||||||||||||||||||||
Other insurance related income | 2,170 | 3,957 | 1,354 | 728 | 996 | 7,035 | 1,367 | |||||||||||||||||||||
Total underwriting revenues | 301,708 | 336,986 | 340,449 | 305,595 | 280,090 | 1,263,120 | 1,004,311 | |||||||||||||||||||||
Underwriting deductions | ||||||||||||||||||||||||||||
Losses and loss expenses | 183,389 | 244,908 | 321,940 | 180,741 | 186,610 | 934,199 | 604,741 | |||||||||||||||||||||
Policy acquisition costs | 60,057 | 60,403 | 59,454 | 60,137 | 61,192 | 241,186 | 232,780 | |||||||||||||||||||||
General and administrative expenses | 68,050 | 64,945 | 43,369 | 53,596 | 45,276 | 207,186 | 165,529 | |||||||||||||||||||||
Share compensation expenses | 2,989 | 3,512 | 2,187 | 3,702 | 3,373 | 12,774 | 14,987 | |||||||||||||||||||||
Total underwriting deductions | 314,485 | 373,768 | 426,950 | 298,176 | 296,451 | 1,395,345 | 1,018,037 | |||||||||||||||||||||
Underwriting (loss) income | $ | (12,777 | ) | $ | (36,782 | ) | $ | (86,501 | ) | $ | 7,419 | $ | (16,361 | ) | $ | (132,225 | ) | $ | (13,726 | ) | ||||||||
Supplemental information: | ||||||||||||||||||||||||||||
Losses and loss expenses: | ||||||||||||||||||||||||||||
Current period excluding items below | $ | 198,937 | $ | 245,952 | $ | 255,425 | $ | 202,684 | $ | 198,610 | $ | 902,671 | $ | 644,512 | ||||||||||||||
Current period—notable loss events | — | 20,917 | 82,111 | — | — | 103,028 | 20,752 | |||||||||||||||||||||
Current period—non-notable loss events | — | (2,276 | ) | 10,992 | 1,787 | 14,689 | 25,192 | 17,306 | ||||||||||||||||||||
Change in prior accident years | (15,548 | ) | (19,685 | ) | (26,588 | ) | (23,730 | ) | (26,689 | ) | (96,692 | ) | (77,829 | ) | ||||||||||||||
Total losses and loss expenses | $ | 183,389 | $ | 244,908 | $ | 321,940 | $ | 180,741 | $ | 186,610 | $ | 934,199 | $ | 604,741 | ||||||||||||||
Selected ratios: | ||||||||||||||||||||||||||||
Ratio of net to gross premiums written | 75.6 | % | 85.0 | % | 77.1 | % | 86.3 | % | 79.4 | % | 82.0 | % | 86.4 | % | ||||||||||||||
Losses and loss expense ratio: | ||||||||||||||||||||||||||||
Current period excluding items below | 66.4 | % | 73.8 | % | 75.3 | % | 66.5 | % | 71.2 | % | 71.9 | % | 64.3 | % | ||||||||||||||
Current period—notable loss events | — | % | 6.3 | % | 24.2 | % | — | % | — | % | 8.2 | % | 2.1 | % | ||||||||||||||
Current period—non-notable loss events | — | % | (0.7 | )% | 3.2 | % | 0.6 | % | 5.3 | % | 2.0 | % | 1.7 | % | ||||||||||||||
Change in prior accident years | (5.2 | )% | (5.9 | )% | (7.8 | )% | (7.8 | )% | (9.6 | )% | (7.7 | )% | (7.8 | )% | ||||||||||||||
Losses and loss expense ratio | 61.2 | % | 73.5 | % | 94.9 | % | 59.3 | % | 66.9 | % | 74.4 | % | 60.3 | % | ||||||||||||||
Policy acquisition cost ratio | 20.0 | % | 18.1 | % | 17.5 | % | 19.7 | % | 21.9 | % | 19.2 | % | 23.2 | % | ||||||||||||||
General and administrative expense ratio | 23.7 | % | 20.6 | % | 13.4 | % | 18.8 | % | 17.4 | % | 17.5 | % | 18.0 | % | ||||||||||||||
Expense ratio | 43.7 | % | 38.7 | % | 30.9 | % | 38.5 | % | 39.3 | % | 36.7 | % | 41.2 | % | ||||||||||||||
Combined ratio | 104.9 | % | 112.2 | % | 125.8 | % | 97.8 | % | 106.2 | % | 111.1 | % | 101.5 | % |
Three Months Ended March 31, 2018 | Three Months Ended March 31, 2017 | ||||||||||||||||||||||||||||||
Property | Specialty - Short-tail | Specialty - Other | Total | Property | Specialty - Short-tail | Specialty - Other | Total | ||||||||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||||||||||
Gross premiums written | $ | 91,958 | $ | 538,322 | $ | 155,515 | $ | 785,795 | $ | 81,547 | $ | 179,221 | $ | 122,022 | $ | 382,790 | |||||||||||||||
Reinsurance premiums ceded | (47,055 | ) | (105,303 | ) | (39,279 | ) | (191,637 | ) | (33,263 | ) | (26,554 | ) | (19,183 | ) | (79,000 | ) | |||||||||||||||
Net premiums written | 44,903 | 433,019 | 116,236 | 594,158 | 48,284 | 152,667 | 102,839 | 303,790 | |||||||||||||||||||||||
Change in unearned premiums | 30,084 | (312,988 | ) | (11,716 | ) | (294,620 | ) | 19,990 | (40,070 | ) | (4,616 | ) | (24,696 | ) | |||||||||||||||||
Net premiums earned | 74,987 | 120,031 | 104,520 | 299,538 | 68,274 | 112,597 | 98,223 | 279,094 | |||||||||||||||||||||||
Other insurance related income | 2,170 | 996 | |||||||||||||||||||||||||||||
Total underwriting revenues | 301,708 | 280,090 | |||||||||||||||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||||||||||
Losses and loss expenses | 53,552 | 59,674 | 70,163 | 183,389 | 59,487 | 55,708 | 71,415 | 186,610 | |||||||||||||||||||||||
Policy acquisition costs | 16,556 | 21,481 | 22,020 | 60,057 | 13,823 | 26,618 | 20,751 | 61,192 | |||||||||||||||||||||||
Total underwriting deductions before G&A | 70,108 | 81,155 | 92,183 | 243,446 | 73,310 | 82,326 | 92,166 | 247,802 | |||||||||||||||||||||||
Underwriting income (loss) before G&A | $ | 4,879 | $ | 38,876 | $ | 12,337 | $ | 58,262 | $ | (5,036 | ) | $ | 30,271 | $ | 6,057 | $ | 32,288 | ||||||||||||||
General and administrative expenses | 68,050 | 45,276 | |||||||||||||||||||||||||||||
Share compensation expenses | 2,989 | 3,373 | |||||||||||||||||||||||||||||
Total underwriting deductions | 314,485 | 296,451 | |||||||||||||||||||||||||||||
Underwriting (loss) | $ | (12,777 | ) | $ | (16,361 | ) | |||||||||||||||||||||||||
Supplemental information: | |||||||||||||||||||||||||||||||
Losses and loss expenses: | |||||||||||||||||||||||||||||||
Current period excluding items below | $ | 49,484 | $ | 71,875 | $ | 77,578 | $ | 198,937 | $ | 53,464 | $ | 67,471 | $ | 77,675 | $ | 198,610 | |||||||||||||||
Current period—notable loss events | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Current period—non-notable loss events | — | — | — | — | 14,689 | — | — | 14,689 | |||||||||||||||||||||||
Change in prior accident years | 4,068 | (12,201 | ) | (7,415 | ) | (15,548 | ) | (8,666 | ) | (11,763 | ) | (6,260 | ) | (26,689 | ) | ||||||||||||||||
Total losses and loss expenses | $ | 53,552 | $ | 59,674 | $ | 70,163 | $ | 183,389 | $ | 59,487 | $ | 55,708 | $ | 71,415 | $ | 186,610 | |||||||||||||||
Selected ratios: | |||||||||||||||||||||||||||||||
Ratio of net to gross premiums written | 48.8 | % | 80.4 | % | 74.7 | % | 75.6 | % | 59.2 | % | 85.2 | % | 84.3 | % | 79.4 | % | |||||||||||||||
Losses and loss expense ratio: | |||||||||||||||||||||||||||||||
Current period excluding items below | 66.0 | % | 59.9 | % | 74.2 | % | 66.4 | % | 78.3 | % | 59.9 | % | 79.1 | % | 71.2 | % | |||||||||||||||
Current period—notable loss events | — | % | — | % | — | % | — | % | — | % | — | % | — | % | — | % | |||||||||||||||
Current period—non-notable loss events | — | % | — | % | — | % | — | % | 21.5 | % | — | % | — | % | 5.3 | % | |||||||||||||||
Change in prior accident years | 5.4 | % | (10.2 | )% | (7.1 | )% | (5.2 | )% | (12.7 | )% | (10.4 | )% | (6.4 | )% | (9.6 | )% | |||||||||||||||
Losses and loss expense ratio | 71.4 | % | 49.7 | % | 67.1 | % | 61.2 | % | 87.1 | % | 49.5 | % | 72.7 | % | 66.9 | % | |||||||||||||||
Policy acquisition cost ratio | 22.1 | % | 17.9 | % | 21.1 | % | 20.0 | % | 20.2 | % | 23.6 | % | 21.1 | % | 21.9 | % | |||||||||||||||
General and administrative expense ratio | 23.7 | % | 17.4 | % | |||||||||||||||||||||||||||
Expense ratio | 43.7 | % | 39.3 | % | |||||||||||||||||||||||||||
Combined ratio | 104.9 | % | 106.2 | % |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Fee revenues | ||||||||||||||||||||||||||||
Third party | $ | 6,209 | $ | 5,061 | $ | 5,095 | $ | 5,549 | $ | 4,644 | $ | 20,349 | $ | 18,771 | ||||||||||||||
Related party | 443 | 418 | 457 | 644 | 631 | 2,150 | 3,329 | |||||||||||||||||||||
Total fee revenues | 6,652 | 5,479 | 5,552 | 6,193 | 5,275 | 22,499 | 22,100 | |||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||
General and administrative expenses | 4,547 | 2,582 | 2,929 | 3,549 | 3,844 | 12,904 | 10,233 | |||||||||||||||||||||
Share compensation expenses | 41 | 41 | 183 | 83 | 82 | 389 | 249 | |||||||||||||||||||||
Finance expenses | 78 | 30 | 32 | 44 | 31 | 137 | 947 | |||||||||||||||||||||
Tax (benefit) expense | (7 | ) | (61 | ) | (65 | ) | 135 | (1 | ) | 8 | 90 | |||||||||||||||||
Foreign exchange losses (gains) | 1 | — | 7 | 1 | (1 | ) | 7 | 19 | ||||||||||||||||||||
Total expenses | 4,660 | 2,592 | 3,086 | 3,812 | 3,955 | 13,445 | 11,538 | |||||||||||||||||||||
Income before investment income (loss) from funds and sidecars | 1,992 | 2,887 | 2,466 | 2,381 | 1,320 | 9,054 | 10,562 | |||||||||||||||||||||
Investment income (loss) from funds and sidecars (a) | ||||||||||||||||||||||||||||
AlphaCat Sidecars | 32 | 11 | 201 | (21 | ) | (112 | ) | 79 | 607 | |||||||||||||||||||
AlphaCat ILS Funds - Lower Risk (b) | 1,234 | 961 | (7,553 | ) | 1,301 | 2,189 | (3,102 | ) | 8,901 | |||||||||||||||||||
AlphaCat ILS Funds - Higher Risk (b) | 3,820 | (5,813 | ) | (21,816 | ) | 2,600 | 2,367 | (22,662 | ) | 7,471 | ||||||||||||||||||
BetaCat ILS Funds | 186 | 827 | (922 | ) | 263 | 368 | 536 | 3,623 | ||||||||||||||||||||
PaCRe | — | — | — | — | — | — | (23 | ) | ||||||||||||||||||||
Validus' share of investment income (loss) from funds and sidecars | 5,272 | (4,014 | ) | (30,090 | ) | 4,143 | 4,812 | (25,149 | ) | 20,579 | ||||||||||||||||||
Asset Management segment income (loss) | $ | 7,264 | $ | (1,127 | ) | $ | (27,624 | ) | $ | 6,524 | $ | 6,132 | $ | (16,095 | ) | $ | 31,141 | |||||||||||
Gross premiums written | ||||||||||||||||||||||||||||
AlphaCat Sidecars | $ | (143 | ) | $ | (247 | ) | $ | — | $ | — | $ | 66 | $ | (181 | ) | $ | (341 | ) | ||||||||||
AlphaCat ILS Funds - Lower Risk (b) | 109,950 | 10,776 | 10,979 | 53,632 | 52,908 | 128,295 | 112,222 | |||||||||||||||||||||
AlphaCat ILS Funds - Higher Risk (b) | 165,896 | 4,493 | 16,275 | 43,672 | 93,536 | 157,976 | 140,022 | |||||||||||||||||||||
AlphaCat Direct (c) | 10,922 | (24 | ) | (41 | ) | 8,378 | 18,416 | 26,729 | 18,499 | |||||||||||||||||||
Total | $ | 286,625 | $ | 14,998 | $ | 27,213 | $ | 105,682 | $ | 164,926 | $ | 312,819 | $ | 270,402 |
(a) | The investment income (loss) from funds and sidecars is based on equity accounting. |
(b) | Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of 7% or greater. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit. |
(c) | AlphaCat Direct includes direct investments from a third party investor in AlphaCat Reinsurance Ltd. |
As at | |||||||||||||||||||||
April 1, 2018 | January 1, 2018 | October 1, 2017 | July 1, 2017 | April 1, 2017 | |||||||||||||||||
Assets Under Management - Related Party (a) | |||||||||||||||||||||
AlphaCat Sidecars | $ | 4,777 | $ | 5,631 | $ | 5,608 | $ | 5,686 | $ | 5,656 | |||||||||||
AlphaCat ILS Funds - Lower Risk (b) | 75,283 | 75,898 | 75,492 | 79,808 | 125,098 | ||||||||||||||||
AlphaCat ILS Funds - Higher Risk (b) | 74,253 | 68,290 | 62,566 | 84,663 | 86,679 | ||||||||||||||||
AlphaCat Direct (c) | — | — | — | — | — | ||||||||||||||||
BetaCat ILS Funds | 25,104 | 24,914 | 24,084 | 25,000 | 27,062 | ||||||||||||||||
Total | $ | 179,417 | $ | 174,733 | $ | 167,750 | $ | 195,157 | $ | 244,495 | |||||||||||
Assets Under Management - Third Party (a) | |||||||||||||||||||||
AlphaCat Sidecars | $ | 17,120 | $ | 20,565 | $ | 20,459 | $ | 20,590 | $ | 20,422 | |||||||||||
AlphaCat ILS Funds - Lower Risk (b) | 1,741,804 | 1,663,606 | 1,317,417 | 1,309,377 | 1,302,337 | ||||||||||||||||
AlphaCat ILS Funds - Higher Risk (b) | 1,157,510 | 1,029,224 | 687,674 | 896,639 | 790,734 | ||||||||||||||||
AlphaCat Direct (c) | 490,716 | 443,730 | 546,226 | 534,555 | 457,744 | ||||||||||||||||
BetaCat ILS Funds | 77,547 | 67,046 | 120,391 | 118,493 | 87,375 | ||||||||||||||||
Total | $ | 3,484,697 | $ | 3,224,171 | $ | 2,692,167 | $ | 2,879,654 | $ | 2,658,612 | |||||||||||
Total Assets Under Management (a) | $ | 3,664,114 | $ | 3,398,904 | $ | 2,859,917 | $ | 3,074,811 | $ | 2,903,107 |
(a) | The Company’s assets under management are based on NAV and are represented by investments made by related parties and third parties in the feeder funds and on a direct basis. |
(b) | Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of 7% or greater. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit. |
(c) | AlphaCat Direct includes direct investments from a third party investor in AlphaCat Reinsurance Ltd. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Managed investments | ||||||||||||||||||||||||||||
Managed net investment income (a) | $ | 39,791 | $ | 41,609 | $ | 37,091 | $ | 38,063 | $ | 36,192 | $ | 152,955 | $ | 141,718 | ||||||||||||||
Net realized gains (losses) on managed investments (a) | 1,142 | 7,157 | 903 | 2,269 | (2,892 | ) | 7,437 | 14,680 | ||||||||||||||||||||
Change in net unrealized (losses) gains on managed investments (a) | (56,777 | ) | (24,861 | ) | 941 | 15,942 | 14,349 | 6,371 | 14,106 | |||||||||||||||||||
Income (loss) from investment affiliates | 13,068 | 6,345 | 1,011 | 9,466 | 5,188 | 22,010 | (2,083 | ) | ||||||||||||||||||||
Total managed investment return | (2,776 | ) | 30,250 | 39,946 | 65,740 | 52,837 | 188,773 | 168,421 | ||||||||||||||||||||
Corporate expenses | ||||||||||||||||||||||||||||
General and administrative expenses | 12,309 | 5,582 | 8,836 | 16,219 | 17,961 | 48,598 | 72,249 | |||||||||||||||||||||
Share compensation expenses | 4,036 | 4,147 | 3,990 | 4,636 | 3,413 | 16,186 | 16,003 | |||||||||||||||||||||
Finance expenses (a) | 14,090 | 15,732 | 14,449 | 14,149 | 13,864 | 58,194 | 57,183 | |||||||||||||||||||||
Dividends on preferred shares | 5,828 | 5,828 | 5,627 | 2,203 | 2,203 | 15,861 | 4,455 | |||||||||||||||||||||
Tax (benefit) (a) | (6,826 | ) | (351 | ) | (2,567 | ) | (1,122 | ) | (3,548 | ) | (7,588 | ) | (19,819 | ) | ||||||||||||||
Total Corporate expenses | 29,437 | 30,938 | 30,335 | 36,085 | 33,893 | 131,251 | 130,071 | |||||||||||||||||||||
Other items | ||||||||||||||||||||||||||||
Foreign exchange (losses) gains (a) | (3 | ) | (829 | ) | (1,495 | ) | (7,323 | ) | 1,103 | (8,544 | ) | 10,778 | ||||||||||||||||
Other income (loss) | 44 | — | 35 | 174 | 94 | 303 | (766 | ) | ||||||||||||||||||||
Transaction expenses | (7,756 | ) | — | — | (4,427 | ) | — | (4,427 | ) | — | ||||||||||||||||||
Total other items | (7,715 | ) | (829 | ) | (1,460 | ) | (11,576 | ) | 1,197 | (12,668 | ) | 10,012 | ||||||||||||||||
Total Corporate and Investments | $ | (39,928 | ) | $ | (1,517 | ) | $ | 8,151 | $ | 18,079 | $ | 20,141 | $ | 44,854 | $ | 48,362 |
(a) | These items exclude the components which are included in the Asset Management segment income (loss) and amounts which are consolidated from variable interest entities. |
Three Months Ended March 31, 2018 | |||||||||||||||||||||||
Reinsurance Segment | Insurance Segment | Asset Management Segment and Consolidated VIEs | Corporate & Investments | Eliminations | Total | ||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||
Gross premiums written | $ | 765,573 | $ | 785,795 | $ | 286,625 | $ | — | $ | (5,537 | ) | $ | 1,832,456 | ||||||||||
Reinsurance premiums ceded | (190,194 | ) | (191,637 | ) | — | — | 5,537 | (376,294 | ) | ||||||||||||||
Net premiums written | 575,379 | 594,158 | 286,625 | — | — | 1,456,162 | |||||||||||||||||
Change in unearned premiums | (350,627 | ) | (294,620 | ) | (191,973 | ) | — | — | (837,220 | ) | |||||||||||||
Net premiums earned | 224,752 | 299,538 | 94,652 | — | — | 618,942 | |||||||||||||||||
Other insurance related income | 2 | 2,170 | 28,080 | — | (4,756 | ) | 25,496 | ||||||||||||||||
Total underwriting revenues | 224,754 | 301,708 | 122,732 | — | (4,756 | ) | 644,438 | ||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||
Losses and loss expenses | 103,473 | 183,389 | 34,683 | — | — | 321,545 | |||||||||||||||||
Policy acquisition costs | 48,340 | 60,057 | 8,059 | — | — | 116,456 | |||||||||||||||||
General and administrative expenses | 28,915 | 68,050 | 10,208 | 12,309 | (4,756 | ) | 114,726 | ||||||||||||||||
Share compensation expenses | 2,663 | 2,989 | 41 | 4,036 | — | 9,729 | |||||||||||||||||
Total underwriting deductions | 183,391 | 314,485 | 52,991 | 16,345 | (4,756 | ) | 562,456 | ||||||||||||||||
Underwriting income (loss) | $ | 41,363 | $ | (12,777 | ) | $ | 69,741 | $ | (16,345 | ) | $ | — | $ | 81,982 | |||||||||
Net investment return (a) | — | — | 12,735 | (2,776 | ) | — | 9,959 | ||||||||||||||||
Other items (b) | — | — | 362 | (20,807 | ) | — | (20,445 | ) | |||||||||||||||
(Income) attributable to AlphaCat investors | — | — | (10,862 | ) | — | — | (10,862 | ) | |||||||||||||||
Net (income) attributable to noncontrolling interests | — | — | (64,712 | ) | — | — | (64,712 | ) | |||||||||||||||
Net income (loss) available (attributable) to Validus common shareholders | $ | 41,363 | $ | (12,777 | ) | $ | 7,264 | $ | (39,928 | ) | $ | — | $ | (4,078 | ) | ||||||||
Three Months Ended March 31, 2017 | |||||||||||||||||||||||
Reinsurance Segment | Insurance Segment | Asset Management Segment and Consolidated VIEs | Corporate & Investments | Eliminations | Total | ||||||||||||||||||
Underwriting revenues | |||||||||||||||||||||||
Gross premiums written | $ | 643,141 | $ | 382,790 | $ | 164,926 | $ | — | $ | — | $ | 1,190,857 | |||||||||||
Reinsurance premiums ceded | (114,446 | ) | (79,000 | ) | (6,660 | ) | — | — | (200,106 | ) | |||||||||||||
Net premiums written | 528,695 | 303,790 | 158,266 | — | — | 990,751 | |||||||||||||||||
Change in unearned premiums | (297,040 | ) | (24,696 | ) | (93,639 | ) | — | — | (415,375 | ) | |||||||||||||
Net premiums earned | 231,655 | 279,094 | 64,627 | — | — | 575,376 | |||||||||||||||||
Other insurance related income | 2 | 996 | 5,161 | — | (4,923 | ) | 1,236 | ||||||||||||||||
Total underwriting revenues | 231,657 | 280,090 | 69,788 | — | (4,923 | ) | 576,612 | ||||||||||||||||
Underwriting deductions | |||||||||||||||||||||||
Losses and loss expenses | 80,881 | 186,610 | 2,094 | — | — | 269,585 | |||||||||||||||||
Policy acquisition costs | 43,535 | 61,192 | 6,901 | — | — | 111,628 | |||||||||||||||||
General and administrative expenses | 19,969 | 45,276 | 9,641 | 17,961 | (4,923 | ) | 87,924 | ||||||||||||||||
Share compensation expenses | 2,623 | 3,373 | 82 | 3,413 | — | 9,491 | |||||||||||||||||
Total underwriting deductions | 147,008 | 296,451 | 18,718 | 21,374 | (4,923 | ) | 478,628 | ||||||||||||||||
Underwriting income (loss) | $ | 84,649 | $ | (16,361 | ) | $ | 51,070 | $ | (21,374 | ) | $ | — | $ | 97,984 | |||||||||
Net investment return (a) | — | — | 4,749 | 52,837 | — | 57,586 | |||||||||||||||||
Other items (b) | — | — | 388 | (11,322 | ) | — | (10,934 | ) | |||||||||||||||
(Income) attributable to AlphaCat investors | — | — | (7,503 | ) | — | — | (7,503 | ) | |||||||||||||||
Net (income) attributable to noncontrolling interests | — | — | (42,572 | ) | — | — | (42,572 | ) | |||||||||||||||
Net income (loss) available (attributable) to Validus common shareholders | $ | 84,649 | $ | (16,361 | ) | $ | 6,132 | $ | 20,141 | $ | — | $ | 94,561 |
(a) | Net investment return includes net investment income, net realized and change in net unrealized gains (losses) on investments and income (loss) from investment affiliates. |
(b) | Other items includes finance expenses, transaction expenses, dividends on preferred shares, tax benefit, foreign exchange gains (losses) and other income (loss). |
Three Months Ended | Years Ended | ||||||||||||||
March 31, 2018 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net (loss) income (attributable) available to Validus common shareholders | $ | (4,078 | ) | $ | 94,561 | $ | (63,483 | ) | $ | 359,384 | |||||
Non-GAAP Adjustments: | |||||||||||||||
Net realized (gains) losses on investments | (2,200 | ) | 1,164 | (7,623 | ) | (15,757 | ) | ||||||||
Change in net unrealized losses (gains) on investments | 57,381 | (13,348 | ) | (3,215 | ) | (16,871 | ) | ||||||||
(Income) loss from investment affiliates | (13,068 | ) | (5,188 | ) | (22,010 | ) | 2,083 | ||||||||
Foreign exchange (gains) losses | (525 | ) | (1,569 | ) | 7,447 | (10,864 | ) | ||||||||
Other (income) loss | (44 | ) | (94 | ) | (303 | ) | 766 | ||||||||
Transaction expenses | 7,756 | — | 4,427 | — | |||||||||||
Net income (loss) attributable to noncontrolling interests | 429 | 728 | (767 | ) | 457 | ||||||||||
Tax (benefit) expense (a) | (3,094 | ) | 580 | 521 | 1,687 | ||||||||||
Net operating income (loss) available (attributable) to Validus common shareholders (b) | $ | 42,557 | $ | 76,834 | $ | (85,006 | ) | $ | 320,885 | ||||||
Weighted average number of diluted common shares outstanding | 79,325,688 | 80,739,142 | 79,091,376 | 82,359,460 | |||||||||||
(Loss) earnings per diluted share (attributable) available to Validus common shareholders | $ | (0.05 | ) | $ | 1.17 | $ | (0.80 | ) | $ | 4.36 | |||||
Non-GAAP Adjustments: | |||||||||||||||
Net realized (gains) losses on investments | (0.03 | ) | 0.01 | (0.10 | ) | (0.19 | ) | ||||||||
Change in net unrealized losses (gains) on investments | 0.72 | (0.17 | ) | (0.04 | ) | (0.20 | ) | ||||||||
(Income) loss from investment affiliates | (0.17 | ) | (0.06 | ) | (0.28 | ) | 0.03 | ||||||||
Foreign exchange (gains) losses | (0.01 | ) | (0.02 | ) | 0.09 | (0.14 | ) | ||||||||
Other (income) loss | — | — | — | 0.01 | |||||||||||
Transaction expenses | 0.10 | — | 0.06 | — | |||||||||||
Net income (loss) attributable to noncontrolling interests | 0.01 | 0.01 | (0.01 | ) | 0.01 | ||||||||||
Tax (benefit) expense (a) | (0.04 | ) | 0.01 | 0.01 | 0.02 | ||||||||||
Net operating income (loss) per diluted share available (attributable) to Validus common shareholders (b) | $ | 0.53 | $ | 0.95 | $ | (1.07 | ) | $ | 3.90 | ||||||
Average shareholders' equity available to Validus common shareholders (c) | $ | 3,498,152 | $ | 3,725,084 | $ | 3,658,591 | $ | 3,697,114 | |||||||
Annualized return on average equity | (0.5 | %) | 10.2 | % | (1.7 | %) | 9.7 | % | |||||||
Annualized net operating return on average equity (b) | 4.9 | % | 8.3 | % | (2.3 | %) | 8.7 | % |
(a) | Represents the tax expense or benefit associated with the specific country to which the pre-tax adjustment relates to. The tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the ability to utilize tax losses carried forward. |
(b) | Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information. |
(c) | Average shareholders’ equity for the three months ended is the average of the beginning and ending quarter end shareholders’ equity balances, excluding the liquidation value of the preferred shares. Average shareholders’ equity for the year ended is the average of the beginning, ending and intervening quarter end shareholders’ equity balances, excluding the liquidation value of the preferred shares. |
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||
Reinsurance Segment | ||||||||||||||||||||||||||||
Property | Cat XOL (a) | $ | 204,633 | $ | 5,089 | $ | 108,717 | $ | 162,701 | $ | 155,977 | $ | 432,484 | $ | 374,242 | |||||||||||||
Per Risk XOL | 8,292 | 1,330 | 11,907 | 4,358 | 8,385 | 25,980 | 25,360 | |||||||||||||||||||||
Proportional (b) | 61,064 | 11,707 | 6,857 | 19,644 | 52,305 | 90,513 | 97,661 | |||||||||||||||||||||
Total Property | 273,989 | 18,126 | 127,481 | 186,703 | 216,667 | 548,977 | 497,263 | |||||||||||||||||||||
Specialty - Short-tail | Aerospace and Aviation | 18,473 | 886 | 4,751 | 25,308 | 21,334 | 52,279 | 62,071 | ||||||||||||||||||||
Agriculture | 93,214 | 5,168 | 449 | 22,061 | 152,447 | 180,125 | 243,180 | |||||||||||||||||||||
Composite | 54,422 | 4,209 | 7,170 | 17,349 | 34,090 | 62,818 | 59,244 | |||||||||||||||||||||
Marine | 100,311 | 1,224 | 2,559 | 16,324 | 103,162 | 123,269 | 117,614 | |||||||||||||||||||||
Other Specialty - Short-tail (c) | 22,283 | 365 | 1,410 | 3,507 | 10,837 | 16,119 | 8,359 | |||||||||||||||||||||
Technical Lines | 5,547 | 110 | 3,207 | 4,959 | 4,182 | 12,458 | 12,534 | |||||||||||||||||||||
Terrorism | 6,082 | 529 | 1,010 | (154 | ) | 5,039 | 6,424 | 6,159 | ||||||||||||||||||||
Trade Credit | 48,824 | (89 | ) | (8 | ) | 50 | 44,154 | 44,107 | 38,279 | |||||||||||||||||||
Workers' Compensation | 2,954 | 595 | 3,084 | 2,200 | 1,633 | 7,512 | 8,064 | |||||||||||||||||||||
Total Specialty - Short Tail | 352,110 | 12,997 | 23,632 | 91,604 | 376,878 | 505,111 | 555,504 | |||||||||||||||||||||
Specialty - Other | Casualty | 102,431 | 12,023 | 8,890 | 39,126 | 24,510 | 84,549 | 86,107 | ||||||||||||||||||||
Financial | 37,043 | 8,814 | 9,569 | 13,101 | 25,086 | 56,570 | 46,038 | |||||||||||||||||||||
Total Specialty - Other | 139,474 | 20,837 | 18,459 | 52,227 | 49,596 | 141,119 | 132,145 | |||||||||||||||||||||
Total Reinsurance Segment | $ | 765,573 | $ | 51,960 | $ | 169,572 | $ | 330,534 | $ | 643,141 | 1,195,207 | 1,184,912 | ||||||||||||||||
Insurance Segment | ||||||||||||||||||||||||||||
Property | Direct | $ | 73,329 | $ | 78,639 | $ | 76,868 | $ | 86,113 | $ | 67,878 | $ | 309,498 | $ | 277,024 | |||||||||||||
Downstream Energy and Power | 18,629 | 26,366 | 17,994 | 29,765 | 13,669 | 87,794 | 94,197 | |||||||||||||||||||||
Total Property | 91,958 | 105,005 | 94,862 | 115,878 | 81,547 | 397,292 | 371,221 | |||||||||||||||||||||
Specialty - Short-tail | Accident and Health | 3,248 | 4,560 | 4,411 | 5,176 | 5,910 | 20,057 | 29,326 | ||||||||||||||||||||
Agriculture | 444,203 | 65,737 | 51,800 | 23,939 | 84,299 | 225,775 | — | |||||||||||||||||||||
Aviation | 4,842 | 9,119 | 5,587 | 4,417 | 5,159 | 24,282 | 27,290 | |||||||||||||||||||||
Contingency | 9,637 | 11,754 | 3,615 | 6,988 | 3,964 | 26,321 | 35,412 | |||||||||||||||||||||
Marine | 46,046 | 34,761 | 29,735 | 59,409 | 47,364 | 171,269 | 192,526 | |||||||||||||||||||||
Political Lines (d) | 30,346 | 29,302 | 23,167 | 28,254 | 32,525 | 113,248 | 113,048 | |||||||||||||||||||||
Total Specialty - Short Tail | 538,322 | 155,233 | 118,315 | 128,183 | 179,221 | 580,952 | 397,602 | |||||||||||||||||||||
Specialty - Other | Financial | 24,439 | 22,281 | 19,530 | 13,980 | 13,738 | 69,529 | 53,484 | ||||||||||||||||||||
Liability (e) | 68,437 | 60,874 | 65,906 | 67,393 | 58,637 | 252,810 | 225,776 | |||||||||||||||||||||
Marine and Energy Liability | 25,640 | 10,428 | 8,034 | 12,900 | 24,172 | 55,534 | 53,515 | |||||||||||||||||||||
Political Risk | 26,229 | 21,394 | 20,231 | 18,545 | 22,136 | 82,306 | 78,598 | |||||||||||||||||||||
Products and Airports | 10,770 | 1,799 | 6,394 | 3,178 | 3,339 | 14,710 | 13,941 | |||||||||||||||||||||
Total Specialty - Other | 155,515 | 116,776 | 120,095 | 115,996 | 122,022 | 474,889 | 425,314 | |||||||||||||||||||||
Total Insurance Segment | $ | 785,795 | $ | 377,014 | $ | 333,272 | $ | 360,057 | $ | 382,790 | 1,453,133 | 1,194,137 | ||||||||||||||||
Asset Management Segment | ||||||||||||||||||||||||||||
Property | Cat XOL | $ | 282,491 | $ | 13,278 | $ | 22,013 | $ | 99,318 | $ | 159,765 | $ | 294,374 | $ | 260,786 | |||||||||||||
Total Property | 282,491 | 13,278 | 22,013 | 99,318 | 159,765 | 294,374 | 260,786 | |||||||||||||||||||||
Specialty - Short-tail | Agriculture | — | (1,391 | ) | 1,936 | 4,020 | (35 | ) | 4,530 | 2,879 | ||||||||||||||||||
Composite | 3,697 | 3,111 | 2,872 | 2,362 | 4,788 | 13,133 | 5,518 | |||||||||||||||||||||
Workers' Compensation | 437 | — | 392 | (18 | ) | 408 | 782 | 1,219 | ||||||||||||||||||||
Total Specialty - Short Tail | 4,134 | 1,720 | 5,200 | 6,364 | 5,161 | 18,445 | 9,616 | |||||||||||||||||||||
Total Asset Management Segment | $ | 286,625 | $ | 14,998 | $ | 27,213 | $ | 105,682 | $ | 164,926 | 312,819 | 270,402 | ||||||||||||||||
Intersegment Revenue | Property | (5,537 | ) | (649 | ) | (6,248 | ) | (725 | ) | — | (7,622 | ) | (746 | ) | ||||||||||||||
Specialty - Short-tail | — | — | 47 | (2,646 | ) | — | (2,599 | ) | — | |||||||||||||||||||
Specialty - Other | — | — | — | — | — | — | — | |||||||||||||||||||||
Total Intersegment Revenue | $ | (5,537 | ) | $ | (649 | ) | $ | (6,201 | ) | $ | (3,371 | ) | $ | — | $ | (10,221 | ) | $ | (746 | ) | ||||||||
Total Gross Premiums Written | $ | 1,832,456 | $ | 443,323 | $ | 523,856 | $ | 792,902 | $ | 1,190,857 | $ | 2,950,938 | $ | 2,648,705 |
(a) | Property Cat XOL is composed of Catastrophe XOL, Aggregate XOL, Reinstatement Premium Protection, Per Event XOL, Second Event and Third Event covers. |
(b) | Proportional is composed of Quota Share and Surplus Share covers. |
(c) | Other Specialty - Short-tail classes include Contingency, Crisis Management and Life and Accident & Health. |
(d) | Political Lines includes War and Political Violence. |
(e) | Liability includes General Liability, Professional Liability, Products Liability and Miscellaneous Malpractice. |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
Reserve for losses and loss expenses | Loss reserves recoverable | Net | Reserve for losses and loss expenses | Loss reserves recoverable | Net | ||||||||||||||||||
Property | $ | 2,212,591 | $ | 634,217 | $ | 1,578,374 | $ | 2,291,743 | $ | 739,153 | $ | 1,552,590 | |||||||||||
Specialty - Short-tail | 1,283,695 | 204,415 | 1,079,280 | 1,445,512 | 356,618 | 1,088,894 | |||||||||||||||||
Specialty - Other | 1,136,343 | 141,312 | 995,031 | 1,094,135 | 138,226 | 955,909 | |||||||||||||||||
Total | $ | 4,632,629 | $ | 979,944 | $ | 3,652,685 | $ | 4,831,390 | $ | 1,233,997 | $ | 3,597,393 | |||||||||||
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
Case Reserves | IBNR Reserves | Reserve for losses and loss expenses | Case Reserves | IBNR Reserves | Reserve for losses and loss expenses | ||||||||||||||||||
Property | $ | 898,512 | $ | 1,314,079 | $ | 2,212,591 | $ | 893,180 | $ | 1,398,563 | $ | 2,291,743 | |||||||||||
Specialty - Short-tail | 537,548 | 746,147 | 1,283,695 | 515,450 | 930,062 | 1,445,512 | |||||||||||||||||
Specialty - Other | 334,218 | 802,125 | 1,136,343 | 345,214 | 748,921 | 1,094,135 | |||||||||||||||||
Total | $ | 1,770,278 | $ | 2,862,351 | $ | 4,632,629 | $ | 1,753,844 | $ | 3,077,546 | $ | 4,831,390 | |||||||||||
% of Total | 38.2 | % | 61.8 | % | 100.0 | % | 36.3 | % | 63.7 | % | 100.0 | % |
At or for the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | March 31, 2017 | |||||||||||||||||||||||||||||||
Reinsurance Segment | Insurance Segment | Asset Management Segment | Total | Reinsurance Segment | Insurance Segment | Asset Management Segment | Total | |||||||||||||||||||||||||
Gross reserves, beginning of period | $ | 1,816,654 | $ | 2,300,437 | $ | 714,299 | $ | 4,831,390 | $ | 1,193,497 | $ | 1,753,164 | $ | 48,534 | $ | 2,995,195 | ||||||||||||||||
Loss reserves recoverable | (548,131 | ) | (640,866 | ) | (45,000 | ) | (1,233,997 | ) | (108,528 | ) | (321,893 | ) | — | (430,421 | ) | |||||||||||||||||
Net reserves, beginning of period | 1,268,523 | 1,659,571 | 669,299 | 3,597,393 | 1,084,969 | 1,431,271 | 48,534 | 2,564,774 | ||||||||||||||||||||||||
Incurred losses - current year | 121,311 | 198,937 | 8,867 | 329,115 | 112,005 | 213,299 | 5,512 | 330,816 | ||||||||||||||||||||||||
Change in prior accident years | (17,838 | ) | (15,548 | ) | 25,816 | (7,570 | ) | (31,124 | ) | (26,689 | ) | (3,418 | ) | (61,231 | ) | |||||||||||||||||
Total net incurred losses and loss expenses | 103,473 | 183,389 | 34,683 | 321,545 | 80,881 | 186,610 | 2,094 | 269,585 | ||||||||||||||||||||||||
Foreign exchange loss | 8,683 | 6,803 | 141 | 15,627 | 8,996 | 3,173 | 148 | 12,317 | ||||||||||||||||||||||||
Paid losses - current year | (3,081 | ) | (16,654 | ) | — | (19,735 | ) | (2,346 | ) | (5,352 | ) | — | (7,698 | ) | ||||||||||||||||||
Paid losses - prior years | (93,307 | ) | (192,024 | ) | 23,186 | (262,145 | ) | (95,130 | ) | (137,988 | ) | (4,971 | ) | (238,089 | ) | |||||||||||||||||
Total net paid losses | (96,388 | ) | (208,678 | ) | 23,186 | (281,880 | ) | (97,476 | ) | (143,340 | ) | (4,971 | ) | (245,787 | ) | |||||||||||||||||
Net reserves, end of period | 1,284,291 | 1,641,085 | 727,309 | 3,652,685 | 1,077,370 | 1,477,714 | 45,805 | 2,600,889 | ||||||||||||||||||||||||
Loss reserves recoverable | 529,574 | 450,370 | — | 979,944 | 99,504 | 352,352 | — | 451,856 | ||||||||||||||||||||||||
Gross reserves, end of period | $ | 1,813,865 | $ | 2,091,455 | $ | 727,309 | $ | 4,632,629 | $ | 1,176,874 | $ | 1,830,066 | $ | 45,805 | $ | 3,052,745 | ||||||||||||||||
Net premiums earned | $ | 224,752 | $ | 299,538 | $ | 94,652 | $ | 618,942 | $ | 231,655 | $ | 279,094 | $ | 64,627 | $ | 575,376 | ||||||||||||||||
Current year loss ratio | 53.9 | % | 66.4 | % | 9.3 | % | 53.2 | % | 48.3 | % | 76.5 | % | 8.5 | % | 57.5 | % | ||||||||||||||||
Change in prior accident years loss ratio | (7.9 | )% | (5.2 | )% | 27.3 | % | (1.2 | )% | (13.4 | )% | (9.6 | )% | (5.3 | )% | (10.6 | )% | ||||||||||||||||
Net loss ratio | 46.0 | % | 61.2 | % | 36.6 | % | 52.0 | % | 34.9 | % | 66.9 | % | 3.2 | % | 46.9 | % | ||||||||||||||||
Paid to incurred ratio | 93.2 | % | 113.8 | % | (66.9 | )% | 87.7 | % | 120.5 | % | 76.8 | % | 237.4 | % | 91.2 | % |
At or for the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | March 31, 2017 | |||||||||||||||||||||||||||||||
Property | Specialty - Short-tail | Specialty - Other | Total | Property | Specialty - Short-tail | Specialty - Other | Total | |||||||||||||||||||||||||
Gross reserves, beginning of period | $ | 974,797 | $ | 724,954 | $ | 116,903 | $ | 1,816,654 | $ | 476,908 | $ | 672,512 | $ | 44,077 | $ | 1,193,497 | ||||||||||||||||
Loss reserves recoverable | (412,592 | ) | (131,287 | ) | (4,252 | ) | (548,131 | ) | (41,892 | ) | (66,423 | ) | (213 | ) | (108,528 | ) | ||||||||||||||||
Net reserves, beginning of period | 562,205 | 593,667 | 112,651 | 1,268,523 | 435,016 | 606,089 | 43,864 | 1,084,969 | ||||||||||||||||||||||||
Incurred losses - current year | 33,944 | 64,358 | 23,009 | 121,311 | 21,499 | 76,198 | 14,308 | 112,005 | ||||||||||||||||||||||||
Change in prior accident years | (4,822 | ) | (13,451 | ) | 435 | (17,838 | ) | (4,062 | ) | (26,748 | ) | (314 | ) | (31,124 | ) | |||||||||||||||||
Total net incurred losses and loss expenses | 29,122 | 50,907 | 23,444 | 103,473 | 17,437 | 49,450 | 13,994 | 80,881 | ||||||||||||||||||||||||
Foreign exchange loss | 5,979 | 2,615 | 89 | 8,683 | 8,286 | 400 | 310 | 8,996 | ||||||||||||||||||||||||
Paid losses - current year | 183 | (3,144 | ) | (120 | ) | (3,081 | ) | (286 | ) | (1,991 | ) | (69 | ) | (2,346 | ) | |||||||||||||||||
Paid losses - prior years | (64,267 | ) | (28,139 | ) | (901 | ) | (93,307 | ) | (37,138 | ) | (57,817 | ) | (175 | ) | (95,130 | ) | ||||||||||||||||
Total net paid losses | (64,084 | ) | (31,283 | ) | (1,021 | ) | (96,388 | ) | (37,424 | ) | (59,808 | ) | (244 | ) | (97,476 | ) | ||||||||||||||||
Net reserves, end of period | 533,222 | 615,906 | 135,163 | 1,284,291 | 423,315 | 596,131 | 57,924 | 1,077,370 | ||||||||||||||||||||||||
Loss reserves recoverable | 399,788 | 123,038 | 6,748 | 529,574 | 36,452 | 62,456 | 596 | 99,504 | ||||||||||||||||||||||||
Gross reserves, end of period | $ | 933,010 | $ | 738,944 | $ | 141,911 | $ | 1,813,865 | $ | 459,767 | $ | 658,587 | $ | 58,520 | $ | 1,176,874 | ||||||||||||||||
Net premiums earned | $ | 89,851 | $ | 97,054 | $ | 37,847 | $ | 224,752 | $ | 102,382 | $ | 104,351 | $ | 24,922 | $ | 231,655 | ||||||||||||||||
Current year loss ratio | 37.8 | % | 66.3 | % | 60.8 | % | 53.9 | % | 21.0 | % | 73.0 | % | 57.5 | % | 48.3 | % | ||||||||||||||||
Change in prior accident years loss ratio | (5.4 | )% | (13.9 | )% | 1.1 | % | (7.9 | )% | (4.0 | )% | (25.6 | )% | (1.3 | )% | (13.4 | )% | ||||||||||||||||
Net loss ratio | 32.4 | % | 52.4 | % | 61.9 | % | 46.0 | % | 17.0 | % | 47.4 | % | 56.2 | % | 34.9 | % | ||||||||||||||||
Paid to incurred ratio | 220.1 | % | 61.5 | % | 4.4 | % | 93.2 | % | 214.6 | % | 120.9 | % | 1.7 | % | 120.5 | % |
At or for the Three Months Ended | ||||||||||||||||||||||||||||||||
March 31, 2018 | March 31, 2017 | |||||||||||||||||||||||||||||||
Property | Specialty - Short-tail | Specialty - Other | Total | Property | Specialty - Short-tail | Specialty - Other | Total | |||||||||||||||||||||||||
Gross reserves, beginning of period | $ | 627,892 | $ | 695,313 | $ | 977,232 | $ | 2,300,437 | $ | 312,418 | $ | 505,954 | $ | 934,792 | $ | 1,753,164 | ||||||||||||||||
Loss reserves recoverable | (281,561 | ) | (225,331 | ) | (133,974 | ) | (640,866 | ) | (65,681 | ) | (120,394 | ) | (135,818 | ) | (321,893 | ) | ||||||||||||||||
Net reserves, beginning of period | 346,331 | 469,982 | 843,258 | 1,659,571 | 246,737 | 385,560 | 798,974 | 1,431,271 | ||||||||||||||||||||||||
Incurred losses - current year | 49,484 | 71,875 | 77,578 | 198,937 | 68,153 | 67,471 | 77,675 | 213,299 | ||||||||||||||||||||||||
Change in prior accident years | 4,068 | (12,201 | ) | (7,415 | ) | (15,548 | ) | (8,666 | ) | (11,763 | ) | (6,260 | ) | (26,689 | ) | |||||||||||||||||
Total net incurred losses and loss expenses | 53,552 | 59,674 | 70,163 | 183,389 | 59,487 | 55,708 | 71,415 | 186,610 | ||||||||||||||||||||||||
Foreign exchange loss | 1,201 | 2,267 | 3,335 | 6,803 | 621 | 1,035 | 1,517 | 3,173 | ||||||||||||||||||||||||
Paid losses - current year | (5,533 | ) | (10,478 | ) | (643 | ) | (16,654 | ) | (4,125 | ) | (393 | ) | (834 | ) | (5,352 | ) | ||||||||||||||||
Paid losses - prior years | (51,218 | ) | (84,561 | ) | (56,245 | ) | (192,024 | ) | (36,858 | ) | (50,235 | ) | (50,895 | ) | (137,988 | ) | ||||||||||||||||
Total net paid losses | (56,751 | ) | (95,039 | ) | (56,888 | ) | (208,678 | ) | (40,983 | ) | (50,628 | ) | (51,729 | ) | (143,340 | ) | ||||||||||||||||
Net reserves, end of period | 344,333 | 436,884 | 859,868 | 1,641,085 | 265,862 | 391,675 | 820,177 | 1,477,714 | ||||||||||||||||||||||||
Loss reserves recoverable | 234,429 | 81,377 | 134,564 | 450,370 | 109,385 | 96,451 | 146,516 | 352,352 | ||||||||||||||||||||||||
Gross reserves, end of period | $ | 578,762 | $ | 518,261 | $ | 994,432 | $ | 2,091,455 | $ | 375,247 | $ | 488,126 | $ | 966,693 | $ | 1,830,066 | ||||||||||||||||
Net premiums earned | $ | 74,987 | $ | 120,031 | $ | 104,520 | $ | 299,538 | $ | 68,274 | $ | 112,597 | $ | 98,223 | $ | 279,094 | ||||||||||||||||
Current year loss ratio | 66.0 | % | 59.9 | % | 74.2 | % | 66.4 | % | 99.8 | % | 59.9 | % | 79.1 | % | 76.5 | % | ||||||||||||||||
Change in prior accident years loss ratio | 5.4 | % | (10.2 | )% | (7.1 | )% | (5.2 | )% | (12.7 | )% | (10.4 | )% | (6.4 | )% | (9.6 | )% | ||||||||||||||||
Net loss ratio | 71.4 | % | 49.7 | % | 67.1 | % | 61.2 | % | 87.1 | % | 49.5 | % | 72.7 | % | 66.9 | % | ||||||||||||||||
Paid to incurred ratio | 106.0 | % | 159.3 | % | 81.1 | % | 113.8 | % | 68.9 | % | 90.9 | % | 72.4 | % | 76.8 | % |
Three Months Ended | Years Ended | |||||||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||
Reinsurance Segment | ||||||||||||||||||||
Current period - excluding items below | 53.9 | % | 53.1 | % | 43.5 | % | 48.2 | % | 46.1 | % | 47.6 | % | 46.1 | % | ||||||
Current period - notable loss events (a) | — | % | 5.9 | % | 100.2 | % | — | % | — | % | 29.1 | % | 4.5 | % | ||||||
Current period - non-notable loss events (b) | — | % | 3.7 | % | 0.3 | % | 2.2 | % | 2.2 | % | 2.1 | % | 4.7 | % | ||||||
Change in prior accident years | (7.9 | )% | (8.5 | )% | (16.0 | )% | (6.1 | )% | (13.4 | )% | (11.1 | )% | (13.6 | )% | ||||||
Net loss ratio | 46.0 | % | 54.2 | % | 128.0 | % | 44.3 | % | 34.9 | % | 67.7 | % | 41.7 | % | ||||||
Insurance Segment | ||||||||||||||||||||
Current period - excluding items below | 66.4 | % | 73.8 | % | 75.3 | % | 66.5 | % | 71.2 | % | 71.9 | % | 64.3 | % | ||||||
Current period - notable loss events (a) | — | % | 6.3 | % | 24.2 | % | — | % | — | % | 8.2 | % | 2.1 | % | ||||||
Current period - non-notable loss events (b) | — | % | (0.7 | )% | 3.2 | % | 0.6 | % | 5.3 | % | 2.0 | % | 1.7 | % | ||||||
Change in prior accident years | (5.2 | )% | (5.9 | )% | (7.8 | )% | (7.8 | )% | (9.6 | )% | (7.7 | )% | (7.8 | )% | ||||||
Net loss ratio | 61.2 | % | 73.5 | % | 94.9 | % | 59.3 | % | 66.9 | % | 74.4 | % | 60.3 | % | ||||||
Asset Management Segment | ||||||||||||||||||||
Current period - excluding items below | 9.3 | % | 19.7 | % | 11.3 | % | 7.3 | % | 8.5 | % | 11.7 | % | 6.8 | % | ||||||
Current period - notable loss events (a) | — | % | 125.4 | % | 552.0 | % | — | % | — | % | 214.0 | % | 9.7 | % | ||||||
Current period - non-notable loss events (b) | — | % | 3.9 | % | 1.7 | % | — | % | — | % | 1.4 | % | 2.5 | % | ||||||
Change in prior accident years | 27.3 | % | (3.0 | )% | (3.2 | )% | (5.7 | )% | (5.3 | )% | (4.2 | )% | (1.1 | )% | ||||||
Net loss ratio | 36.6 | % | 146.0 | % | 561.8 | % | 1.6 | % | 3.2 | % | 222.9 | % | 17.9 | % | ||||||
Consolidated | ||||||||||||||||||||
Current period - excluding items below | 53.2 | % | 60.3 | % | 53.9 | % | 52.6 | % | 54.1 | % | 55.1 | % | 49.9 | % | ||||||
Current period - notable loss events (a) | — | % | 18.5 | % | 128.1 | % | — | % | — | % | 40.6 | % | 4.0 | % | ||||||
Current period - non-notable loss events (b) | — | % | 1.5 | % | 1.9 | % | 1.2 | % | 3.4 | % | 2.0 | % | 3.1 | % | ||||||
Change in prior accident years | (1.2 | )% | (6.6 | )% | (10.4 | )% | (6.9 | )% | (10.6 | )% | (8.6 | )% | (9.6 | )% | ||||||
Net loss ratio | 52.0 | % | 73.7 | % | 173.5 | % | 46.9 | % | 46.9 | % | 89.1 | % | 47.4 | % |
(a) | The Company defines a notable loss event as an event whereby consolidated net losses and loss expenses aggregate to a threshold greater than or equal to $30.0 million. |
(b) | The Company defines a non-notable loss event as an event whereby consolidated net losses and loss expenses aggregate to a threshold greater than or equal to $15.0 million but less than $30.0 million. |
Consolidated Reinsurance Recoverable at March 31, 2018 | ||||||||||||||||||
Categories | Reinsurance Recoverable (a) | % | Top 10 Reinsurers | Rating (b) | Reinsurance Recoverable (a) | % | ||||||||||||
Top 10 reinsurers | $ | 878,685 | 84.5 | % | Fully collateralized reinsurers | NR | $ | 407,361 | 39.2 | % | ||||||||
Other reinsurers' balances > $1 million | 153,572 | 14.8 | % | Everest Re | A+ | 128,360 | 12.3 | % | ||||||||||
Other reinsurers' balances < $1 million | 7,579 | 0.7 | % | Lloyd's Syndicates | A+ | 69,885 | 6.7 | % | ||||||||||
Total | $ | 1,039,836 | 100.0 | % | Swiss Re | AA- | 56,892 | 5.5 | % | |||||||||
Munich Re | AA- | 50,097 | 4.8 | % | ||||||||||||||
Hannover Re | AA- | 49,501 | 4.8 | % | ||||||||||||||
Transatlantic Re | A+ | 38,446 | 3.7 | % | ||||||||||||||
Qatar Insurance Company | A | 30,981 | 3.0 | % | ||||||||||||||
Markel | A | 25,893 | 2.5 | % | ||||||||||||||
XL Catlin | A+ | 21,269 | 2.0 | % | ||||||||||||||
Total | $ | 878,685 | 84.5 | % | ||||||||||||||
Consolidated Reinsurance Recoverable at December 31, 2017 | ||||||||||||||||||
Categories | Reinsurance Recoverable (a) | % | Top 10 Reinsurers | Rating (b) | Reinsurance Recoverable (a) | % | ||||||||||||
Top 10 reinsurers | $ | 1,055,445 | 82.5 | % | Fully collateralized reinsurers | NR | $ | 459,339 | 35.9 | % | ||||||||
Other reinsurers' balances > $1 million | 218,226 | 17.0 | % | Everest Re | A+ | 128,206 | 10.0 | % | ||||||||||
Other reinsurers' balances < $1 million | 7,199 | 0.5 | % | Munich Re | AA- | 94,180 | 7.4 | % | ||||||||||
Total | $ | 1,280,870 | 100.0 | % | Lloyd's Syndicates | A+ | 74,277 | 5.8 | % | |||||||||
Federal Crop Insurance Corporation | (c) | 68,745 | 5.4 | % | ||||||||||||||
Swiss Re | AA- | 65,218 | 5.1 | % | ||||||||||||||
Hannover Re | AA- | 53,523 | 4.2 | % | ||||||||||||||
Qatar Insurance Company | A | 50,160 | 3.9 | % | ||||||||||||||
Transatlantic Re | A+ | 33,729 | 2.6 | % | ||||||||||||||
Markel | A | 28,068 | 2.2 | % | ||||||||||||||
Total | $ | 1,055,445 | 82.5 | % |
(a) | Reinsurance Recoverable includes Loss Reserves Recoverable and Paid Losses Recoverable. |
(b) | 99.0% of Reinsurance Recoverable at March 31, 2018 were from reinsurers rated A- or better by internationally recognized rating agencies or were fully collateralized. |
(c) | The Company participates in a crop reinsurance program sponsored by the U.S. federal government. The Company remains obligated for amounts ceded in the event that its reinsurers or retrocessionaires do not meet their obligations, except for amounts ceded to the U.S. federal government in the Insurance segment agriculture line of business. |
Investment portfolio | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||||||||||
Managed investments, cash and cash equivalents and restricted cash | ||||||||||||||||||||||||||||
U.S. Government and Government Agency | $ | 589,161 | $ | 727,397 | $ | 595,694 | $ | 646,436 | $ | 718,025 | ||||||||||||||||||
Non-U.S. Government and Government Agency | 318,345 | 312,239 | 290,538 | 292,504 | 258,463 | |||||||||||||||||||||||
States, municipalities, political subdivision | 184,964 | 201,303 | 206,667 | 227,949 | 229,129 | |||||||||||||||||||||||
Agency residential mortgage-backed securities | 968,258 | 978,049 | 828,400 | 783,006 | 653,395 | |||||||||||||||||||||||
Non-Agency residential mortgage-backed securities | 43,487 | 40,373 | 38,993 | 26,683 | 19,382 | |||||||||||||||||||||||
U.S. corporate | 1,534,805 | 1,533,395 | 1,466,739 | 1,386,484 | 1,486,882 | |||||||||||||||||||||||
Non-U.S. corporate | 415,156 | 422,249 | 392,242 | 379,480 | 397,989 | |||||||||||||||||||||||
Bank loans | 468,815 | 442,951 | 464,464 | 552,901 | 567,012 | |||||||||||||||||||||||
Asset-backed securities | 741,712 | 658,303 | 522,524 | 502,056 | 514,690 | |||||||||||||||||||||||
Commercial mortgage-backed securities | 318,392 | 312,395 | 314,221 | 316,190 | 318,288 | |||||||||||||||||||||||
Total fixed maturities | 5,583,095 | 5,628,654 | 5,120,482 | 5,113,689 | 5,163,255 | |||||||||||||||||||||||
Total short-term investments | 188,251 | 230,011 | 258,646 | 255,516 | 232,955 | |||||||||||||||||||||||
Total other investments | 357,246 | 355,218 | 471,300 | 448,618 | 443,004 | |||||||||||||||||||||||
Investment in investment affiliates | 113,471 | 100,137 | 92,079 | 103,377 | 94,697 | |||||||||||||||||||||||
Cash and cash equivalents | 666,527 | 691,687 | 961,539 | 796,476 | 619,810 | |||||||||||||||||||||||
Restricted cash | 70,968 | 62,848 | 51,585 | 48,101 | 36,099 | |||||||||||||||||||||||
Total managed investments, cash and cash equivalents and restricted cash (a) | 6,979,558 | 7,068,555 | 6,955,631 | 6,765,777 | 6,589,820 | |||||||||||||||||||||||
Non-managed investments, cash and cash equivalents and restricted cash | ||||||||||||||||||||||||||||
Catastrophe bonds | 219,927 | 229,694 | 299,484 | 304,954 | 201,961 | |||||||||||||||||||||||
Short-term investments | 3,450,689 | 3,151,746 | 2,734,600 | 2,615,837 | 2,552,271 | |||||||||||||||||||||||
Cash and cash equivalents | 5,646 | 63,303 | 4,091 | 3,929 | 4,127 | |||||||||||||||||||||||
Restricted cash | 231,309 | 331,815 | 37,818 | 146,938 | 56,448 | |||||||||||||||||||||||
Total non-managed investments, cash and cash equivalents and restricted cash (a) | 3,907,571 | 3,776,558 | 3,075,993 | 3,071,658 | 2,814,807 | |||||||||||||||||||||||
Total investments, cash and cash equivalents and restricted cash | $ | 10,887,129 | $ | 10,845,113 | $ | 10,031,624 | $ | 9,837,435 | $ | 9,404,627 | ||||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||||||||||
Net investment income | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2017 | December 31, 2016 | |||||||||||||||||||||
Managed investments (a) | ||||||||||||||||||||||||||||
Fixed maturities and short-term investments | $ | 37,769 | $ | 33,894 | $ | 30,823 | $ | 31,212 | $ | 31,671 | $ | 127,600 | $ | 119,085 | ||||||||||||||
Other investments | 4,223 | 8,098 | 7,391 | 7,571 | 6,870 | 29,930 | 27,860 | |||||||||||||||||||||
Cash and cash equivalents and restricted cash | 1,139 | 1,513 | 1,230 | 716 | 610 | 4,069 | 2,939 | |||||||||||||||||||||
Securities lending income | 3 | 2 | 3 | 7 | 13 | 25 | 55 | |||||||||||||||||||||
Total gross investment income | 43,134 | 43,507 | 39,447 | 39,506 | 39,164 | 161,624 | 149,939 | |||||||||||||||||||||
Investment expenses | (3,343 | ) | (1,898 | ) | (2,356 | ) | (1,443 | ) | (2,972 | ) | (8,669 | ) | (8,221 | ) | ||||||||||||||
Total managed net investment income | $ | 39,791 | $ | 41,609 | $ | 37,091 | $ | 38,063 | $ | 36,192 | $ | 152,955 | $ | 141,718 | ||||||||||||||
Annualized effective investment yield - managed investments (b) | 2.33 | % | 2.44 | % | 2.23 | % | 2.35 | % | 2.27 | % | 2.32 | % | 2.24 | % | ||||||||||||||
Non-managed investments | ||||||||||||||||||||||||||||
Fixed maturities and short-term investments | $ | 4,148 | $ | 3,332 | $ | 3,941 | $ | 4,500 | $ | 3,060 | $ | 14,833 | $ | 6,931 | ||||||||||||||
Cash and cash equivalents and restricted cash | 8,133 | 4,019 | 3,426 | 1,678 | 962 | 10,085 | 1,736 | |||||||||||||||||||||
Total non-managed net investment income | 12,281 | 7,351 | 7,367 | 6,178 | 4,022 | 24,918 | 8,667 | |||||||||||||||||||||
Total net investment income | $ | 52,072 | $ | 48,960 | $ | 44,458 | $ | 44,241 | $ | 40,214 | $ | 177,873 | $ | 150,385 |
(a) | Managed investments represent assets governed by the Company’s investment policy statement (“IPS”) whereas, non-managed investments represent assets held in support of consolidated AlphaCat variable interest entities which are not governed by the Company’s IPS. |
(b) | Annualized effective investment yield on managed investments is calculated by dividing managed net investment income by the average balance of the yield bearing assets managed by our portfolio managers (including funds of high grade structured products which are included in other investments, but excluding all other investments). Average assets for the three months ended is the average of the beginning and ending quarter end asset balances. Average assets for the year ended is the average of the beginning, ending and intervening quarter end asset balances. Percentages for the quarter periods are annualized. |
March 31, 2018 | December 31, 2017 | |||||||||||||
Fixed maturities - Credit Quality | Fair Value | % | Fair Value | % | ||||||||||
Managed fixed maturities | ||||||||||||||
AAA | $ | 2,648,321 | 45.7 | % | $ | 2,715,074 | 46.4 | % | ||||||
AA | 419,695 | 7.2 | % | 442,397 | 7.6 | % | ||||||||
A | 1,159,233 | 20.0 | % | 1,137,795 | 19.4 | % | ||||||||
BBB | 830,866 | 14.3 | % | 828,392 | 14.1 | % | ||||||||
Total investment grade managed fixed maturities | 5,058,115 | 87.2 | % | 5,123,658 | 87.5 | % | ||||||||
BB | 170,818 | 2.9 | % | 168,967 | 2.9 | % | ||||||||
B | 240,099 | 4.1 | % | 237,131 | 4.0 | % | ||||||||
CCC | 21,783 | 0.4 | % | 18,217 | 0.3 | % | ||||||||
NR | 92,280 | 1.6 | % | 80,681 | 1.4 | % | ||||||||
Total non-investment grade managed fixed maturities | 524,980 | 9.0 | % | 504,996 | 8.6 | % | ||||||||
Total managed fixed maturities | 5,583,095 | 96.2 | % | 5,628,654 | 96.1 | % | ||||||||
Non-managed catastrophe bonds | ||||||||||||||
BB | 21,607 | 0.4 | % | 22,110 | 0.3 | % | ||||||||
B | 2,379 | — | % | 3,265 | 0.1 | % | ||||||||
NR | 195,941 | 3.4 | % | 204,319 | 3.5 | % | ||||||||
Total non-investment grade non-managed catastrophe bonds | 219,927 | 3.8 | % | 229,694 | 3.9 | % | ||||||||
Total non-managed catastrophe bonds | 219,927 | 3.8 | % | 229,694 | 3.9 | % | ||||||||
Total fixed maturities | $ | 5,803,022 | 100.0 | % | $ | 5,858,348 | 100.0 | % | ||||||
March 31, 2018 | December 31, 2017 | |||||||||||||
Fixed maturities - Maturity Profile | Fair Value | % | Fair Value | % | ||||||||||
Managed fixed maturities | ||||||||||||||
Due in one year or less | $ | 344,749 | 5.9 | % | $ | 343,541 | 5.9 | % | ||||||
Due after one year through five years | 2,424,185 | 41.9 | % | 2,513,620 | 42.8 | % | ||||||||
Due after five years through ten years | 554,188 | 9.5 | % | 577,109 | 9.9 | % | ||||||||
Due after ten years | 188,124 | 3.2 | % | 205,264 | 3.5 | % | ||||||||
3,511,246 | 60.5 | % | 3,639,534 | 62.1 | % | |||||||||
Asset-backed and mortgage backed securities | 2,071,849 | 35.7 | % | 1,989,120 | 34.0 | % | ||||||||
Total managed fixed maturities | 5,583,095 | 96.2 | % | 5,628,654 | 96.1 | % | ||||||||
Non-managed catastrophe bonds | ||||||||||||||
Due in one year or less | 67,926 | 1.2 | % | 88,367 | 1.5 | % | ||||||||
Due after one year through five years | 146,238 | 2.5 | % | 138,844 | 2.4 | % | ||||||||
Due after five years through ten years | 5,763 | 0.1 | % | 2,483 | — | % | ||||||||
Total non-managed catastrophe bonds | 219,927 | 3.8 | % | 229,694 | 3.9 | % | ||||||||
Total fixed maturities | $ | 5,803,022 | 100.0 | % | $ | 5,858,348 | 100.0 | % |
March 31, 2018 | |||||||||
Issuer (a) | Fair Value (b) | Rating (c) | % of Managed Investments, Cash and Cash Equivalents and Restricted Cash | ||||||
JPMorgan Chase & Co. | $ | 62,897 | BBB+ | 0.9 | % | ||||
Morgan Stanley | 55,645 | BBB+ | 0.8 | % | |||||
Goldman Sachs Group | 55,316 | BBB+ | 0.8 | % | |||||
Citigroup Inc. | 49,566 | BBB+ | 0.7 | % | |||||
Bank of America Corp. | 48,184 | BBB+ | 0.7 | % | |||||
Wells Fargo & Company | 47,163 | A | 0.7 | % | |||||
HSBC Holdings plc | 34,960 | A | 0.5 | % | |||||
CVS Health Corp. | 33,611 | BBB | 0.5 | % | |||||
AT&T Inc. | 30,973 | BBB+ | 0.4 | % | |||||
International Business Machines Corp. | 30,303 | A+ | 0.4 | % | |||||
Total | $ | 448,618 | 6.4 | % |
(a) | Issuers exclude government-backed, government-sponsored enterprises and cash and cash equivalents. |
(b) | Credit exposures represent only direct exposure to fixed maturities and short-term investments of the parent issuer and its major subsidiaries. These exposures exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent. |
(c) | Investment ratings are the median of Moody's, Standard & Poor's and Fitch, presented in Standard & Poor's equivalent rating. For investments where three ratings are unavailable, the lower of the ratings shall apply, presented in Standard & Poor's equivalent rating. |
Capitalization | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||
Senior Notes (a) | $ | 245,614 | $ | 245,564 | $ | 245,513 | $ | 245,463 | $ | 245,412 | ||||||||||
Junior Subordinated Deferrable Debentures (JSDs) (a) | 289,800 | 289,800 | 289,800 | 289,800 | 289,800 | |||||||||||||||
Flagstone Junior Subordinated Deferrable Debentures (JSDs) (a) | 249,772 | 249,358 | 249,110 | 248,600 | 247,602 | |||||||||||||||
Total debt | 785,186 | 784,722 | 784,423 | 783,863 | 782,814 | |||||||||||||||
Redeemable noncontrolling interests | 1,423,110 | 1,004,094 | 1,133,880 | 1,251,660 | 1,657,630 | |||||||||||||||
Preferred shares, liquidation value (a) | 400,000 | 400,000 | 400,000 | 400,000 | 150,000 | |||||||||||||||
Ordinary shares, capital and surplus available to Validus common shareholders | 3,491,827 | 3,517,264 | 3,554,717 | 3,831,355 | 3,784,329 | |||||||||||||||
Accumulated other comprehensive income (loss) | 9,405 | (22,192 | ) | (18,430 | ) | (19,924 | ) | (22,453 | ) | |||||||||||
Noncontrolling interests | 334,357 | 16,718 | 78,947 | 415,658 | 330,597 | |||||||||||||||
Total shareholders' equity | $ | 4,235,589 | $ | 3,911,790 | $ | 4,015,234 | $ | 4,627,089 | $ | 4,242,473 | ||||||||||
Total capitalization (b) | $ | 6,443,885 | $ | 5,700,606 | $ | 5,933,537 | $ | 6,662,612 | $ | 6,682,917 | ||||||||||
Total capitalization available to Validus (c) | $ | 4,686,418 | $ | 4,679,794 | $ | 4,720,710 | $ | 4,995,294 | $ | 4,694,690 | ||||||||||
Debt to total capitalization | 12.2 | % | 13.8 | % | 13.2 | % | 11.8 | % | 11.7 | % | ||||||||||
Debt (excluding JSDs) to total capitalization | 3.8 | % | 4.3 | % | 4.1 | % | 3.7 | % | 3.7 | % | ||||||||||
Debt and preferred shares to total capitalization | 18.4 | % | 20.8 | % | 20.0 | % | 17.8 | % | 14.0 | % | ||||||||||
Debt to total capitalization available to Validus | 16.8 | % | 16.8 | % | 16.6 | % | 15.7 | % | 16.7 | % | ||||||||||
Debt (excluding JSDs) to total capitalization available to Validus | 5.2 | % | 5.2 | % | 5.2 | % | 4.9 | % | 5.2 | % | ||||||||||
Debt and preferred shares to total capitalization available to Validus | 25.3 | % | 25.3 | % | 25.1 | % | 23.7 | % | 19.9 | % |
(a) | For further information regarding the Company's debt and preferred shares, refer to the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. |
(b) | Total capitalization equals total shareholders' equity plus redeemable noncontrolling interests, Senior Notes and Junior Subordinated Deferrable Debentures. |
(c) | Total capitalization available to Validus equals total shareholders' equity less noncontrolling interests plus Senior Notes and Junior Subordinated Deferrable Debentures. |
Consolidated (Insurance and Reinsurance Segments) Estimated Net Loss (a) | ||||||||||||||||||||||
Zones | Perils | 20 year return period | 50 year return period | 100 year return period | 250 year return period | Reinsurance Segment Net Maximum Zonal Aggregate (a) | ||||||||||||||||
United States | Hurricane | $ | 261,449 | $ | 313,056 | $ | 358,264 | $ | 543,353 | $ | 1,739,376 | |||||||||||
California | Earthquake | 45,763 | 222,126 | 307,794 | 375,656 | 1,400,160 | ||||||||||||||||
Europe | Windstorm | 87,168 | 214,874 | 311,995 | 438,009 | 1,333,173 | ||||||||||||||||
Japan | Earthquake | 58,155 | 136,074 | 215,854 | 299,025 | 983,881 | ||||||||||||||||
Japan | Typhoon | 68,704 | 156,639 | 232,234 | 259,318 | 883,725 |
(a) | Net probable maximum losses and maximum zonal aggregates include Validus' share of the Asset Management segment limits. |
Type | Catastrophe Scenarios | Description | Estimated Consolidated Net Loss (in millions of U.S. dollars) | % of latest 12 Months Consolidated Net Premiums Earned | |||||||
Marine | Loss of major complex | Total loss to all platforms and bridge links of a major oil complex | $ | 200.1 | 7.6 | % | |||||
Marine | Major cruise vessel incident | U.S.-owned cruise vessel sunk or severely damaged | 143.7 | 5.5 | % | ||||||
Marine | Marine collision | Fully laden tanker collides with a cruise vessel in U.S. waters | 111.7 | 4.3 | % | ||||||
Political Risks | South East Asia | Chinese economy has a "hard landing" with sharp fall in growth rates; regional contagion | 214.4 | 8.2 | % | ||||||
Political Risks | Russia | The Russian corporate sector struggles to deal with the effects of crashing commodity and stock prices | 97.8 | 3.7 | % | ||||||
Political Risks | Turkey | Severe economic crisis in Turkey due to political upheaval | 72.1 | 2.7 | % | ||||||
Political Risks | Nigeria | Severe economic, political and social crisis in Nigeria leads to widespread civil unrest | 66.0 | 2.5 | % | ||||||
Political Risks | Middle East | U.S. and Iran escalate into military confrontation; regional contagion | 98.8 | 3.8 | % | ||||||
Aviation | Aviation collision | Collision of two aircraft over a major city | 46.7 | 1.8 | % | ||||||
Satellite | Solar flare | Large single or sequence of proton flares results in loss to all satellites in synchronous orbit | 42.0 | 1.6 | % | ||||||
Satellite | Generic defect | Undetected defect in a number of operational satellites causing major loss | 23.7 | 0.9 | % | ||||||
Terrorism | Rockefeller Center | Midtown Manhattan suffers a 2-tonne conventional bomb blast | 111.6 | 4.3 | % | ||||||
Terrorism | One World Trade Center | Lower Manhattan suffers a 2-tonne conventional bomb blast | 85.2 | 3.2 | % | ||||||
Liability | Professional lines | Failure or collapse of a major corporation | 39.1 | 1.5 | % | ||||||
Liability | Professional lines | U.K. pensions mis-selling | 22.1 | 0.8 | % | ||||||
Cyber | Major data security breach | Simultaneous cyber-attacks on organizations within one industrial sector; loss of customer data | 62.2 | 2.4 | % |
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