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BERMUDA
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98-0501001
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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June 30,
2016 |
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December 31,
2015 |
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(unaudited)
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Assets
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Fixed maturities trading, at fair value (amortized cost: 2016—$5,524,027; 2015—$5,556,900)
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$
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5,551,586
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$
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5,510,331
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Short-term investments trading, at fair value (amortized cost: 2016—$2,369,704; 2015—$1,941,615)
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2,369,654
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1,941,635
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Other investments, at fair value (cost: 2016—$338,669; 2015—$315,963)
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359,526
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336,856
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Cash and cash equivalents
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568,798
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723,109
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Restricted cash
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96,022
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73,270
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Total investments and cash
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8,945,586
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8,585,201
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Investments in affiliates, equity method (cost: 2016—$86,101; 2015—$70,186)
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99,278
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88,065
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Premiums receivable
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1,372,000
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658,682
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Deferred acquisition costs
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283,213
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181,002
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Prepaid reinsurance premiums
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145,567
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77,992
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Securities lending collateral
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10,224
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4,863
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Loss reserves recoverable
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442,987
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350,586
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Paid losses recoverable
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27,648
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23,071
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Income taxes recoverable
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8,526
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16,228
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Deferred tax asset
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23,745
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21,661
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Receivable for investments sold
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13,736
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39,766
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Intangible assets
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118,426
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121,258
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Goodwill
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196,758
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196,758
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Accrued investment income
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24,925
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23,897
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Other assets
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105,625
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126,782
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Total assets
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$
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11,818,244
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$
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10,515,812
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Liabilities
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Reserve for losses and loss expenses
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$
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3,122,717
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$
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2,996,567
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Unearned premiums
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1,621,563
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966,210
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Reinsurance balances payable
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92,488
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75,380
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Securities lending payable
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10,690
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5,329
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Deferred tax liability
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3,552
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3,847
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Payable for investments purchased
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52,718
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77,475
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Accounts payable and accrued expenses
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149,593
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627,331
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Notes payable to AlphaCat investors
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370,982
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75,493
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Senior notes payable
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245,261
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245,161
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Debentures payable
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537,987
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537,668
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Total liabilities
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$
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6,207,551
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$
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5,610,461
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Commitments and contingent liabilities
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Redeemable noncontrolling interest
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1,532,283
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1,111,714
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Shareholders’ equity
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Preferred shares (Issued and Outstanding: 2016—6,000; 2015—nil)
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$
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150,000
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$
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—
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Common shares (Issued: 2016—161,252,871; 2015—160,570,772; Outstanding: 2016—80,772,238; 2015—82,900,617)
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28,219
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28,100
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Treasury shares (2016—80,480,633; 2015—77,670,155)
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(14,084
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)
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(13,592
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Additional paid-in capital
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883,701
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1,002,980
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Accumulated other comprehensive loss
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(18,182
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(12,569
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Retained earnings
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2,836,602
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2,634,056
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Total shareholders’ equity available to Validus
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3,866,256
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3,638,975
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Noncontrolling interest
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212,154
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154,662
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Total shareholders’ equity
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$
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4,078,410
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$
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3,793,637
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Total liabilities, noncontrolling interests and shareholders’ equity
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$
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11,818,244
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$
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10,515,812
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Six Months Ended June 30,
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2016
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2015
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(unaudited)
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(unaudited)
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Preferred shares
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Balance - beginning of period
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$
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—
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$
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—
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Preferred shares issued
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150,000
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—
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Balance - end of period
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$
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150,000
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$
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—
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Common shares
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Balance - beginning of period
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$
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28,100
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$
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27,222
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Common shares issued, net
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119
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494
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Balance - end of period
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$
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28,219
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$
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27,716
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Treasury shares
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Balance - beginning of period
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$
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(13,592
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$
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(12,545
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Repurchase of common shares
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(492
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(595
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Balance - end of period
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$
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(14,084
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$
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(13,140
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Additional paid-in capital
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Balance - beginning of period
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$
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1,002,980
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$
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1,207,493
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Offering expenses on preferred shares
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(5,148
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—
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Common shares issued, net
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(7,504
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14,366
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Repurchase of common shares
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(128,591
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(142,628
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Share compensation expenses
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21,964
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18,296
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Balance - end of period
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$
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883,701
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$
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1,097,527
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Accumulated other comprehensive loss
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Balance - beginning of period
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$
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(12,569
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)
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$
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(8,556
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)
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Other comprehensive loss
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(5,613
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)
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(510
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)
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Balance - end of period
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$
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(18,182
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)
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$
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(9,066
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)
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Retained earnings
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Balance - beginning of period
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$
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2,634,056
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$
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2,372,972
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Dividends on preferred shares
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—
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—
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Dividends on common shares
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(59,227
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)
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(57,874
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)
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Net income
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320,497
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279,940
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Net (income) attributable to noncontrolling interest
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(58,724
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(40,739
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Balance - end of period
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$
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2,836,602
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$
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2,554,299
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Total shareholders’ equity available to Validus
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$
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3,866,256
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$
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3,657,336
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Noncontrolling interest
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$
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212,154
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$
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153,523
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Total shareholders’ equity
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$
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4,078,410
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$
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3,810,859
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Six Months Ended June 30,
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2016
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2015
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(unaudited)
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(unaudited)
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Cash flows provided by operating activities
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Net income
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$
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320,497
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$
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279,940
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Adjustments to reconcile net income to cash provided by operating activities:
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Share compensation expenses
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21,964
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18,296
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Amortization of discount on senior notes
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54
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54
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Loss (income) from investment affiliate
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4,702
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(3,060
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)
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Net realized gains on investments
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(2,140
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)
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(6,413
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)
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Change in net unrealized (gains) losses on investments
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(78,872
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)
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1,449
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Amortization of intangible assets
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2,832
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2,832
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Loss (income) from operating affiliates
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23
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(5,722
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)
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Foreign exchange (gains) losses included in net income
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(6,289
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)
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7,729
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Amortization of premium on fixed maturity investments
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8,710
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12,395
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Change in:
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Premiums receivable
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(719,070
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)
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(566,100
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)
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Deferred acquisition costs
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(102,211
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)
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(92,020
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)
|
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Prepaid reinsurance premiums
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(67,575
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)
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(79,304
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)
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Loss reserves recoverable
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(95,429
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)
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|
644
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Paid losses recoverable
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(4,571
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)
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(2,253
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)
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Income taxes recoverable
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7,423
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(13,931
|
)
|
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Deferred tax asset
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(2,529
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)
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|
908
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Accrued investment income
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(1,183
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)
|
|
984
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|
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Other assets
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(5,272
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)
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|
90,625
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Reserve for losses and loss expenses
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147,305
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|
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(50,240
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)
|
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Unearned premiums
|
655,353
|
|
|
529,374
|
|
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Reinsurance balances payable
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18,610
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|
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(34,472
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)
|
||
Deferred tax liability
|
(308
|
)
|
|
2,329
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|
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Accounts payable and accrued expenses
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(32,581
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)
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(61,570
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)
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Net cash provided by operating activities
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69,443
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32,474
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Cash flows used in investing activities
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Proceeds on sales of fixed maturity investments
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1,376,077
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2,237,966
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Proceeds on maturities of fixed maturity investments
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184,413
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|
186,594
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Purchases of fixed maturity investments
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(1,537,608
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)
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(2,337,990
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)
|
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Purchases of short-term investments, net
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(428,040
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)
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|
(154,804
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)
|
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(Purchases) sales of other investments, net
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(19,796
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)
|
|
4,101
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|
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Increase in securities lending collateral
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(5,361
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)
|
|
(6,551
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)
|
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Redemption from operating affiliates
|
369
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|
|
—
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Investment in investment affiliates, net
|
(16,305
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)
|
|
(23,115
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)
|
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(Increase) decrease in restricted cash
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(22,752
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)
|
|
32,984
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|
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Net cash used in investing activities
|
(469,003
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)
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|
(60,815
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)
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|
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Cash flows provided by (used in) financing activities
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Net proceeds on issuance of notes payable to AlphaCat investors
|
294,748
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|
|
—
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Net proceeds on issuance of preferred shares
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144,852
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|
—
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|
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Issuance of common shares, net
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(7,385
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)
|
|
14,860
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|
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Purchases of common shares under share repurchase program
|
(129,083
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)
|
|
(143,223
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)
|
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Dividends paid on preferred shares
|
—
|
|
|
—
|
|
||
Dividends paid on common shares
|
(59,961
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)
|
|
(58,718
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)
|
||
Increase in securities lending payable
|
5,361
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|
|
6,551
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|
||
Third party investment in redeemable noncontrolling interest
|
381,250
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|
|
452,700
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|
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Third party redemption of redeemable noncontrolling interest
|
(10,800
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)
|
|
(80,433
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)
|
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Third party investment in noncontrolling interest
|
171,674
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|
|
9,600
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|
||
Third party distributions of noncontrolling interest
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(127,103
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)
|
|
(158,175
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)
|
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Third party subscriptions deployed on AlphaCat Funds and Sidecars
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(411,336
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)
|
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(117,400
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)
|
||
Net cash provided by (used in) financing activities
|
252,217
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|
|
(74,238
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)
|
||
|
|
|
|
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Effect of foreign currency rate changes on cash and cash equivalents
|
(6,968
|
)
|
|
(8,730
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)
|
||
Net decrease in cash and cash equivalents
|
(154,311
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)
|
|
(111,309
|
)
|
||
Cash and cash equivalents - beginning of period
|
723,109
|
|
|
550,401
|
|
||
Cash and cash equivalents - end of period
|
$
|
568,798
|
|
|
$
|
439,092
|
|
Taxes paid during the period
|
$
|
3,837
|
|
|
$
|
14,192
|
|
Interest paid during the period
|
$
|
27,552
|
|
|
$
|
27,248
|
|
|
Three Months Ended June 30, 2015
|
||||||||||
|
As previously reported
|
|
Adjustment for adoption of new consolidation guidance
|
|
Revised
|
||||||
Total revenues
|
$
|
591,492
|
|
|
$
|
(19,912
|
)
|
|
$
|
571,580
|
|
Total expenses
|
480,511
|
|
|
1,907
|
|
|
482,418
|
|
|||
Net income
|
81,657
|
|
|
6,694
|
|
|
88,351
|
|
|||
Net (income) attributable to noncontrolling interest
|
(17,644
|
)
|
|
(4,917
|
)
|
|
(22,561
|
)
|
|||
Net income available to Validus
|
64,013
|
|
|
1,777
|
|
|
65,790
|
|
|||
Comprehensive income available to Validus
|
67,588
|
|
|
1,777
|
|
|
69,365
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share available to common shareholders
|
$
|
0.75
|
|
|
$
|
0.02
|
|
|
$
|
0.77
|
|
Earnings per diluted share available to common shareholders
|
$
|
0.73
|
|
|
$
|
0.02
|
|
|
$
|
0.75
|
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
As previously reported
|
|
Adjustment for adoption of new consolidation guidance
|
|
Revised
|
||||||
Total revenues
|
$
|
1,280,697
|
|
|
$
|
(65,351
|
)
|
|
$
|
1,215,346
|
|
Total expenses
|
934,010
|
|
|
2,004
|
|
|
936,014
|
|
|||
Net income
|
294,045
|
|
|
(14,105
|
)
|
|
279,940
|
|
|||
Net (income) attributable to noncontrolling interest
|
(56,621
|
)
|
|
15,882
|
|
|
(40,739
|
)
|
|||
Net income available to Validus
|
237,424
|
|
|
1,777
|
|
|
239,201
|
|
|||
Comprehensive income available to Validus
|
236,914
|
|
|
1,777
|
|
|
238,691
|
|
|||
|
|
|
|
|
|
|
|||||
Basic earnings per share available to common shareholders
|
$
|
2.81
|
|
|
$
|
0.02
|
|
|
$
|
2.83
|
|
Earnings per diluted share available to common shareholders
|
$
|
2.72
|
|
|
$
|
0.02
|
|
|
$
|
2.74
|
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
As previously reported
|
|
Adjustment for adoption of new consolidation guidance
|
|
Revised
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(228,841
|
)
|
|
$
|
261,315
|
|
|
$
|
32,474
|
|
Net cash used in investing activities
|
(290,517
|
)
|
|
229,702
|
|
|
(60,815
|
)
|
|||
Net cash provided by (used in) financing activities
|
389,593
|
|
|
(463,831
|
)
|
|
(74,238
|
)
|
|||
Effect of foreign currency rate changes on cash and cash equivalents
|
(13,765
|
)
|
|
5,035
|
|
|
(8,730
|
)
|
|||
Net decrease in cash
|
(143,530
|
)
|
|
32,221
|
|
|
(111,309
|
)
|
|||
Cash and cash equivalents - beginning of period
|
577,240
|
|
|
(26,839
|
)
|
|
550,401
|
|
|||
Cash and cash equivalents - end of period
|
433,710
|
|
|
5,382
|
|
|
439,092
|
|
|
Amortized Cost (or Cost)
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Managed investments
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
924,350
|
|
|
$
|
7,536
|
|
|
$
|
(83
|
)
|
|
$
|
931,803
|
|
Non-U.S. government and government agency
|
217,796
|
|
|
2,146
|
|
|
(4,692
|
)
|
|
215,250
|
|
||||
U.S. states, municipalities, political subdivisions
|
278,756
|
|
|
7,049
|
|
|
(393
|
)
|
|
285,412
|
|
||||
Agency residential mortgage-backed securities
|
662,468
|
|
|
14,713
|
|
|
(398
|
)
|
|
676,783
|
|
||||
Non-agency residential mortgage-backed securities
|
23,858
|
|
|
271
|
|
|
(740
|
)
|
|
23,389
|
|
||||
U.S. corporate
|
1,539,711
|
|
|
20,350
|
|
|
(4,014
|
)
|
|
1,556,047
|
|
||||
Non-U.S. corporate
|
367,473
|
|
|
3,264
|
|
|
(6,331
|
)
|
|
364,406
|
|
||||
Bank loans
|
613,414
|
|
|
574
|
|
|
(16,926
|
)
|
|
597,062
|
|
||||
Asset-backed securities
|
429,890
|
|
|
2,352
|
|
|
(2,902
|
)
|
|
429,340
|
|
||||
Commercial mortgage-backed securities
|
308,712
|
|
|
6,048
|
|
|
(727
|
)
|
|
314,033
|
|
||||
Total fixed maturities
|
5,366,428
|
|
|
64,303
|
|
|
(37,206
|
)
|
|
5,393,525
|
|
||||
Short-term investments
|
189,678
|
|
|
—
|
|
|
(50
|
)
|
|
189,628
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Fund of hedge funds
|
1,457
|
|
|
—
|
|
|
(498
|
)
|
|
959
|
|
||||
Hedge funds
|
12,463
|
|
|
6,162
|
|
|
—
|
|
|
18,625
|
|
||||
Private equity investments
|
62,119
|
|
|
14,457
|
|
|
(3,270
|
)
|
|
73,306
|
|
||||
Investment funds
|
203,128
|
|
|
743
|
|
|
—
|
|
|
203,871
|
|
||||
Overseas deposits
|
55,301
|
|
|
—
|
|
|
—
|
|
|
55,301
|
|
||||
Mutual funds
|
4,201
|
|
|
3,263
|
|
|
—
|
|
|
7,464
|
|
||||
Total other investments
|
338,669
|
|
|
24,625
|
|
|
(3,768
|
)
|
|
359,526
|
|
||||
Total managed investments
|
$
|
5,894,775
|
|
|
$
|
88,928
|
|
|
$
|
(41,024
|
)
|
|
$
|
5,942,679
|
|
Non-managed investments
|
|
|
|
|
|
|
|
||||||||
Catastrophe bonds
|
$
|
157,599
|
|
|
$
|
2,114
|
|
|
$
|
(1,652
|
)
|
|
$
|
158,061
|
|
Short-term investments
|
2,180,026
|
|
|
—
|
|
|
—
|
|
|
2,180,026
|
|
||||
Total non-managed investments
|
2,337,625
|
|
|
2,114
|
|
|
(1,652
|
)
|
|
2,338,087
|
|
||||
Total investments
|
$
|
8,232,400
|
|
|
$
|
91,042
|
|
|
$
|
(42,676
|
)
|
|
$
|
8,280,766
|
|
|
Amortized Cost (or Cost)
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Managed investments
|
|
|
|
|
|
|
|
||||||||
U.S. government and government agency
|
$
|
940,428
|
|
|
$
|
333
|
|
|
$
|
(3,559
|
)
|
|
$
|
937,202
|
|
Non-U.S. government and government agency
|
241,549
|
|
|
257
|
|
|
(3,838
|
)
|
|
237,968
|
|
||||
U.S. states, municipalities, political subdivisions
|
299,929
|
|
|
2,322
|
|
|
(962
|
)
|
|
301,289
|
|
||||
Agency residential mortgage-backed securities
|
606,676
|
|
|
6,361
|
|
|
(2,455
|
)
|
|
610,582
|
|
||||
Non-agency residential mortgage-backed securities
|
27,025
|
|
|
310
|
|
|
(415
|
)
|
|
26,920
|
|
||||
U.S. corporate
|
1,503,614
|
|
|
1,594
|
|
|
(15,257
|
)
|
|
1,489,951
|
|
||||
Non-U.S. corporate
|
453,178
|
|
|
797
|
|
|
(7,405
|
)
|
|
446,570
|
|
||||
Bank loans
|
592,981
|
|
|
275
|
|
|
(17,045
|
)
|
|
576,211
|
|
||||
Asset-backed securities
|
440,363
|
|
|
344
|
|
|
(3,583
|
)
|
|
437,124
|
|
||||
Commercial mortgage-backed securities
|
263,310
|
|
|
131
|
|
|
(3,306
|
)
|
|
260,135
|
|
||||
Total fixed maturities
|
5,369,053
|
|
|
12,724
|
|
|
(57,825
|
)
|
|
5,323,952
|
|
||||
Short-term investments
|
237,349
|
|
|
20
|
|
|
—
|
|
|
237,369
|
|
||||
Other investments
|
|
|
|
|
|
|
|
||||||||
Fund of hedge funds
|
1,457
|
|
|
—
|
|
|
(40
|
)
|
|
1,417
|
|
||||
Hedge funds
|
14,018
|
|
|
6,962
|
|
|
—
|
|
|
20,980
|
|
||||
Private equity investments
|
53,489
|
|
|
12,751
|
|
|
(2,469
|
)
|
|
63,771
|
|
||||
Investment funds
|
188,121
|
|
|
600
|
|
|
—
|
|
|
188,721
|
|
||||
Overseas deposits
|
54,484
|
|
|
—
|
|
|
—
|
|
|
54,484
|
|
||||
Mutual funds
|
4,394
|
|
|
3,089
|
|
|
—
|
|
|
7,483
|
|
||||
Total other investments
|
315,963
|
|
|
23,402
|
|
|
(2,509
|
)
|
|
336,856
|
|
||||
Total managed investments
|
$
|
5,922,365
|
|
|
$
|
36,146
|
|
|
$
|
(60,334
|
)
|
|
$
|
5,898,177
|
|
Non-managed investments
|
|
|
|
|
|
|
|
||||||||
Catastrophe bonds
|
$
|
187,847
|
|
|
$
|
635
|
|
|
$
|
(2,103
|
)
|
|
$
|
186,379
|
|
Short-term investments
|
1,704,266
|
|
|
—
|
|
|
—
|
|
|
1,704,266
|
|
||||
Total non-managed investments
|
1,892,113
|
|
|
635
|
|
|
(2,103
|
)
|
|
1,890,645
|
|
||||
Total investments
|
$
|
7,814,478
|
|
|
$
|
36,781
|
|
|
$
|
(62,437
|
)
|
|
$
|
7,788,822
|
|
(a)
|
Fixed maturity investments
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
Managed fixed maturities
|
|
|
|
|
|
|
|
||||||
AAA
|
$
|
2,446,839
|
|
|
44.1
|
%
|
|
$
|
2,367,642
|
|
|
43.0
|
%
|
AA
|
508,086
|
|
|
9.2
|
%
|
|
569,386
|
|
|
10.3
|
%
|
||
A
|
1,045,965
|
|
|
18.8
|
%
|
|
1,031,326
|
|
|
18.7
|
%
|
||
BBB
|
741,800
|
|
|
13.4
|
%
|
|
691,538
|
|
|
12.6
|
%
|
||
Total investment grade managed fixed maturities
|
4,742,690
|
|
|
85.5
|
%
|
|
4,659,892
|
|
|
84.6
|
%
|
||
|
|
|
|
|
|
|
|
||||||
BB
|
227,436
|
|
|
4.0
|
%
|
|
235,724
|
|
|
4.3
|
%
|
||
B
|
183,127
|
|
|
3.3
|
%
|
|
179,069
|
|
|
3.2
|
%
|
||
CCC
|
8,331
|
|
|
0.2
|
%
|
|
5,706
|
|
|
0.1
|
%
|
||
CC
|
113
|
|
|
0.0
|
%
|
|
1,015
|
|
|
0.0
|
%
|
||
NR
|
231,828
|
|
|
4.2
|
%
|
|
242,546
|
|
|
4.4
|
%
|
||
Total non-investment grade managed fixed maturities
|
650,835
|
|
|
11.7
|
%
|
|
664,060
|
|
|
12.0
|
%
|
||
Total managed fixed maturities
|
$
|
5,393,525
|
|
|
97.2
|
%
|
|
$
|
5,323,952
|
|
|
96.6
|
%
|
|
|
|
|
|
|
|
|
||||||
Non-managed catastrophe bonds
|
|
|
|
|
|
|
|
||||||
BBB
|
$
|
—
|
|
|
0.0
|
%
|
|
$
|
1,911
|
|
|
0.0
|
%
|
Total investment grade non-managed catastrophe bonds
|
—
|
|
|
0.0
|
%
|
|
1,911
|
|
|
0.0
|
%
|
||
|
|
|
|
|
|
|
|
||||||
BB
|
41,412
|
|
|
0.7
|
%
|
|
70,962
|
|
|
1.3
|
%
|
||
B
|
6,161
|
|
|
0.1
|
%
|
|
30,698
|
|
|
0.6
|
%
|
||
NR
|
110,488
|
|
|
2.0
|
%
|
|
82,808
|
|
|
1.5
|
%
|
||
Total non-investment grade non-managed catastrophe bonds
|
158,061
|
|
|
2.8
|
%
|
|
184,468
|
|
|
3.4
|
%
|
||
Total non-managed fixed maturities
|
158,061
|
|
|
2.8
|
%
|
|
186,379
|
|
|
3.4
|
%
|
||
Total fixed maturities
|
$
|
5,551,586
|
|
|
100.0
|
%
|
|
$
|
5,510,331
|
|
|
100.0
|
%
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Managed investments
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
349,115
|
|
|
$
|
348,137
|
|
|
$
|
367,132
|
|
|
$
|
366,019
|
|
Due after one year through five years
|
2,990,421
|
|
|
2,996,295
|
|
|
2,965,920
|
|
|
2,936,053
|
|
||||
Due after five years through ten years
|
485,899
|
|
|
492,101
|
|
|
548,183
|
|
|
539,083
|
|
||||
Due after ten years
|
116,065
|
|
|
113,447
|
|
|
150,444
|
|
|
148,036
|
|
||||
|
3,941,500
|
|
|
3,949,980
|
|
|
4,031,679
|
|
|
3,989,191
|
|
||||
Asset-backed and mortgage-backed securities
|
1,424,928
|
|
|
1,443,545
|
|
|
1,337,374
|
|
|
1,334,761
|
|
||||
Total managed fixed maturities
|
$
|
5,366,428
|
|
|
$
|
5,393,525
|
|
|
$
|
5,369,053
|
|
|
$
|
5,323,952
|
|
|
|
|
|
|
|
|
|
||||||||
Non-managed catastrophe bonds
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
28,445
|
|
|
$
|
29,328
|
|
|
$
|
7,504
|
|
|
$
|
7,544
|
|
Due after one year through five years
|
128,614
|
|
|
128,185
|
|
|
165,093
|
|
|
163,575
|
|
||||
Due after five years through ten years
|
540
|
|
|
548
|
|
|
15,250
|
|
|
15,260
|
|
||||
Due after ten years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total non-managed fixed maturities
|
157,599
|
|
|
158,061
|
|
|
187,847
|
|
|
186,379
|
|
||||
Total fixed maturities
|
$
|
5,524,027
|
|
|
$
|
5,551,586
|
|
|
$
|
5,556,900
|
|
|
$
|
5,510,331
|
|
(b)
|
Other investments
|
Other investments
|
|
Fair Value as at June 30, 2016
|
|
Investments with redemption restrictions
|
|
Investments without redemption restrictions
|
|
Redemption frequency (a)
|
|
Redemption notice period (a)
|
||||||
Fund of hedge funds
|
|
$
|
959
|
|
|
$
|
959
|
|
|
$
|
—
|
|
|
|
|
|
Hedge funds
|
|
18,625
|
|
|
18,625
|
|
|
—
|
|
|
|
|
|
|||
Private equity investments
|
|
73,306
|
|
|
73,306
|
|
|
—
|
|
|
|
|
|
|||
Investment funds
|
|
203,871
|
|
|
181,536
|
|
|
22,335
|
|
|
Daily
|
|
2 days
|
|||
Overseas deposits
|
|
55,301
|
|
|
55,301
|
|
|
—
|
|
|
|
|
|
|||
Mutual funds
|
|
7,464
|
|
|
—
|
|
|
7,464
|
|
|
Daily
|
|
Daily
|
|||
Total other investments
|
|
$
|
359,526
|
|
|
$
|
329,727
|
|
|
$
|
29,799
|
|
|
|
|
|
(a)
|
The redemption frequency and notice periods only apply to investments without redemption restrictions.
|
Other investments
|
|
Fair value as at December 31, 2015
|
|
Investments with redemption restrictions
|
|
Investments without redemption restrictions
|
|
Redemption frequency (a)
|
|
Redemption notice period (a)
|
||||||
Fund of hedge funds
|
|
$
|
1,417
|
|
|
$
|
1,417
|
|
|
$
|
—
|
|
|
|
|
|
Hedge funds
|
|
20,980
|
|
|
20,980
|
|
|
—
|
|
|
|
|
|
|||
Private equity investments
|
|
63,771
|
|
|
63,771
|
|
|
—
|
|
|
|
|
|
|||
Investment funds
|
|
188,721
|
|
|
167,910
|
|
|
20,811
|
|
|
Daily
|
|
2 days
|
|||
Overseas deposits
|
|
54,484
|
|
|
54,484
|
|
|
—
|
|
|
|
|
|
|||
Mutual funds
|
|
7,483
|
|
|
—
|
|
|
7,483
|
|
|
Daily
|
|
Daily
|
|||
Total other investments
|
|
$
|
336,856
|
|
|
$
|
308,562
|
|
|
$
|
28,294
|
|
|
|
|
|
(a)
|
The redemption frequency and notice periods only apply to investments without redemption restrictions.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Managed investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities and short-term investments
|
$
|
30,621
|
|
|
$
|
29,433
|
|
|
$
|
58,638
|
|
|
$
|
57,106
|
|
Other investments
|
8,026
|
|
|
4,014
|
|
|
8,898
|
|
|
7,202
|
|
||||
Restricted cash, cash and cash equivalents
|
380
|
|
|
427
|
|
|
1,245
|
|
|
843
|
|
||||
Securities lending income
|
12
|
|
|
6
|
|
|
17
|
|
|
9
|
|
||||
Total gross investment income
|
39,039
|
|
|
33,880
|
|
|
68,798
|
|
|
65,160
|
|
||||
Investment expenses
|
(2,190
|
)
|
|
(2,026
|
)
|
|
(4,026
|
)
|
|
(3,870
|
)
|
||||
Total managed net investment income
|
$
|
36,849
|
|
|
$
|
31,854
|
|
|
$
|
64,772
|
|
|
$
|
61,290
|
|
Non managed investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities and short-term investments
|
$
|
1,977
|
|
|
$
|
1,733
|
|
|
$
|
3,272
|
|
|
$
|
3,307
|
|
Restricted cash, cash and cash equivalents
|
431
|
|
|
24
|
|
|
674
|
|
|
43
|
|
||||
Total non-managed net investment income
|
2,408
|
|
|
1,757
|
|
|
3,946
|
|
|
3,350
|
|
||||
Total net investment income
|
$
|
39,257
|
|
|
$
|
33,611
|
|
|
$
|
68,718
|
|
|
$
|
64,640
|
|
(d)
|
Net realized gains and change in net unrealized gains (losses) on investments
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Managed fixed maturities, short-term and other investments
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
$
|
3,306
|
|
|
$
|
6,140
|
|
|
$
|
6,523
|
|
|
$
|
12,449
|
|
Gross realized (losses)
|
(786
|
)
|
|
(4,036
|
)
|
|
(5,089
|
)
|
|
(6,165
|
)
|
||||
Net realized gains on investments
|
2,520
|
|
|
2,104
|
|
|
1,434
|
|
|
6,284
|
|
||||
Change in net unrealized gains (losses) on investments
|
30,052
|
|
|
(33,926
|
)
|
|
77,130
|
|
|
743
|
|
||||
Total net realized and change in net unrealized gains (losses) on managed investments
|
$
|
32,572
|
|
|
$
|
(31,822
|
)
|
|
$
|
78,564
|
|
|
$
|
7,027
|
|
Non-managed fixed maturities, short-term and other investments
|
|
|
|
|
|
|
|
||||||||
Gross realized gains
|
$
|
204
|
|
|
$
|
140
|
|
|
$
|
715
|
|
|
$
|
140
|
|
Gross realized (losses)
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(11
|
)
|
||||
Net realized gains on investments
|
204
|
|
|
140
|
|
|
706
|
|
|
129
|
|
||||
Change in net unrealized (losses) on investments
|
1,376
|
|
|
(750
|
)
|
|
1,742
|
|
|
(2,192
|
)
|
||||
Total net realized and change in net unrealized (losses) on non-managed investments
|
1,580
|
|
|
(610
|
)
|
|
2,448
|
|
|
(2,063
|
)
|
||||
Total net realized and change in net unrealized gains (losses) on total investments
|
$
|
34,152
|
|
|
$
|
(32,432
|
)
|
|
$
|
81,012
|
|
|
$
|
4,964
|
|
(e)
|
Pledged investments
|
|
|
June 30, 2016
|
||||||||||
Description
|
|
Commitment
|
|
Issued and Outstanding
|
|
Investments and cash pledged as collateral
|
||||||
$85,000 syndicated unsecured letter of credit facility
|
|
$
|
85,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$300,000 syndicated secured letter of credit facility
|
|
300,000
|
|
|
105,575
|
|
|
151,166
|
|
|||
$24,000 secured bi-lateral letter of credit facility
|
|
24,000
|
|
|
11,805
|
|
|
48,380
|
|
|||
AlphaCat Re secured letter of credit facility
|
|
20,000
|
|
|
20,000
|
|
|
30,191
|
|
|||
IPC bi-lateral facility
|
|
25,000
|
|
|
5,666
|
|
|
—
|
|
|||
$236,000 Flagstone bi-lateral facility
|
|
236,000
|
|
|
195,622
|
|
|
322,520
|
|
|||
Total
|
|
$
|
690,000
|
|
|
$
|
338,668
|
|
|
$
|
552,257
|
|
|
|
December 31, 2015
|
||||||||||
Description
|
|
Commitment
|
|
Issued and Outstanding
|
|
Investments and cash pledged as collateral
|
||||||
$85,000 syndicated unsecured letter of credit facility
|
|
$
|
85,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$300,000 syndicated secured letter of credit facility
|
|
300,000
|
|
|
235,540
|
|
|
370,909
|
|
|||
$24,000 secured bi-lateral letter of credit facility
|
|
24,000
|
|
|
10,543
|
|
|
47,607
|
|
|||
AlphaCat Re secured letter of credit facility
|
|
30,000
|
|
|
30,000
|
|
|
30,153
|
|
|||
IPC bi-lateral facility
|
|
25,000
|
|
|
9,241
|
|
|
—
|
|
|||
$236,000 Flagstone bi-lateral facility
|
|
236,000
|
|
|
193,764
|
|
|
377,866
|
|
|||
Total
|
|
$
|
700,000
|
|
|
$
|
479,088
|
|
|
$
|
826,535
|
|
(a)
|
Classification within the fair value hierarchy
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair value based on NAV practical expedient
|
|
Total
|
||||||||||
Managed investments
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
$
|
—
|
|
|
$
|
931,803
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
931,803
|
|
Non-U.S. government and government agency
|
—
|
|
|
215,250
|
|
|
—
|
|
|
—
|
|
|
215,250
|
|
|||||
U.S. states, municipalities and political subdivisions
|
—
|
|
|
285,412
|
|
|
—
|
|
|
—
|
|
|
285,412
|
|
|||||
Agency residential mortgage-backed securities
|
—
|
|
|
676,783
|
|
|
—
|
|
|
—
|
|
|
676,783
|
|
|||||
Non-agency residential mortgage-backed securities
|
—
|
|
|
23,389
|
|
|
—
|
|
|
—
|
|
|
23,389
|
|
|||||
U.S. corporate
|
—
|
|
|
1,556,047
|
|
|
—
|
|
|
—
|
|
|
1,556,047
|
|
|||||
Non-U.S. corporate
|
—
|
|
|
364,406
|
|
|
—
|
|
|
—
|
|
|
364,406
|
|
|||||
Bank loans
|
—
|
|
|
353,914
|
|
|
243,148
|
|
|
—
|
|
|
597,062
|
|
|||||
Asset-backed securities
|
—
|
|
|
416,957
|
|
|
12,383
|
|
|
—
|
|
|
429,340
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
314,033
|
|
|
—
|
|
|
—
|
|
|
314,033
|
|
|||||
Total fixed maturities
|
—
|
|
|
5,137,994
|
|
|
255,531
|
|
|
—
|
|
|
5,393,525
|
|
|||||
Short-term investments
|
186,276
|
|
|
3,352
|
|
|
—
|
|
|
—
|
|
|
189,628
|
|
|||||
Other investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Fund of hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
959
|
|
|
959
|
|
|||||
Hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
18,625
|
|
|
18,625
|
|
|||||
Private equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
73,306
|
|
|
73,306
|
|
|||||
Investment funds
|
—
|
|
|
22,335
|
|
|
—
|
|
|
181,536
|
|
|
203,871
|
|
|||||
Overseas deposits
|
—
|
|
|
—
|
|
|
—
|
|
|
55,301
|
|
|
55,301
|
|
|||||
Mutual funds
|
—
|
|
|
7,464
|
|
|
—
|
|
|
—
|
|
|
7,464
|
|
|||||
Total other investments
|
—
|
|
|
29,799
|
|
|
—
|
|
|
329,727
|
|
|
359,526
|
|
|||||
Total managed investments
|
$
|
186,276
|
|
|
$
|
5,171,145
|
|
|
$
|
255,531
|
|
|
$
|
329,727
|
|
|
$
|
5,942,679
|
|
Non-managed investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Catastrophe bonds
|
$
|
—
|
|
|
$
|
120,543
|
|
|
$
|
37,518
|
|
|
$
|
—
|
|
|
$
|
158,061
|
|
Short-term investments
|
2,180,026
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,180,026
|
|
|||||
Total non-managed investments
|
2,180,026
|
|
|
120,543
|
|
|
37,518
|
|
|
—
|
|
|
2,338,087
|
|
|||||
Total investments
|
$
|
2,366,302
|
|
|
$
|
5,291,688
|
|
|
$
|
293,049
|
|
|
$
|
329,727
|
|
|
$
|
8,280,766
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair value based on NAV practical expedient
|
|
Total
|
||||||||||
Managed investments
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and government agency
|
$
|
—
|
|
|
$
|
937,202
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
937,202
|
|
Non-U.S. government and government agency
|
—
|
|
|
237,968
|
|
|
—
|
|
|
—
|
|
|
237,968
|
|
|||||
U.S. states, municipalities and political subdivisions
|
—
|
|
|
301,289
|
|
|
—
|
|
|
—
|
|
|
301,289
|
|
|||||
Agency residential mortgage-backed securities
|
—
|
|
|
610,582
|
|
|
—
|
|
|
—
|
|
|
610,582
|
|
|||||
Non-agency residential mortgage-backed securities
|
—
|
|
|
26,920
|
|
|
—
|
|
|
—
|
|
|
26,920
|
|
|||||
U.S. corporate
|
—
|
|
|
1,489,951
|
|
|
—
|
|
|
—
|
|
|
1,489,951
|
|
|||||
Non-U.S. corporate
|
—
|
|
|
446,570
|
|
|
—
|
|
|
—
|
|
|
446,570
|
|
|||||
Bank loans
|
—
|
|
|
343,874
|
|
|
232,337
|
|
|
—
|
|
|
576,211
|
|
|||||
Asset-backed securities
|
—
|
|
|
437,124
|
|
|
—
|
|
|
—
|
|
|
437,124
|
|
|||||
Commercial mortgage-backed securities
|
—
|
|
|
260,135
|
|
|
—
|
|
|
—
|
|
|
260,135
|
|
|||||
Total fixed maturities
|
—
|
|
|
5,091,615
|
|
|
232,337
|
|
|
—
|
|
|
5,323,952
|
|
|||||
Short-term investments
|
222,678
|
|
|
14,691
|
|
|
—
|
|
|
—
|
|
|
237,369
|
|
|||||
Other investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Fund of hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
1,417
|
|
|
1,417
|
|
|||||
Hedge funds
|
—
|
|
|
—
|
|
|
—
|
|
|
20,980
|
|
|
20,980
|
|
|||||
Private equity investments
|
—
|
|
|
—
|
|
|
—
|
|
|
63,771
|
|
|
63,771
|
|
|||||
Investment funds
|
—
|
|
|
20,811
|
|
|
—
|
|
|
167,910
|
|
|
188,721
|
|
|||||
Overseas deposits
|
—
|
|
|
—
|
|
|
—
|
|
|
54,484
|
|
|
54,484
|
|
|||||
Mutual funds
|
—
|
|
|
7,483
|
|
|
—
|
|
|
—
|
|
|
7,483
|
|
|||||
Total other investments
|
—
|
|
|
28,294
|
|
|
—
|
|
|
308,562
|
|
|
336,856
|
|
|||||
Total managed investments
|
$
|
222,678
|
|
|
$
|
5,134,600
|
|
|
$
|
232,337
|
|
|
$
|
308,562
|
|
|
$
|
5,898,177
|
|
Non-managed investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Catastrophe bonds
|
$
|
—
|
|
|
$
|
172,879
|
|
|
$
|
13,500
|
|
|
$
|
—
|
|
|
$
|
186,379
|
|
Short-term investments
|
1,704,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,704,266
|
|
|||||
Total non-managed investments
|
1,704,266
|
|
|
172,879
|
|
|
13,500
|
|
|
—
|
|
|
1,890,645
|
|
|||||
Total investments
|
$
|
1,926,944
|
|
|
$
|
5,307,479
|
|
|
$
|
245,837
|
|
|
$
|
308,562
|
|
|
$
|
7,788,822
|
|
(b)
|
Valuation techniques
|
(c)
|
Level 3 investments
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
Bank Loans
|
|
Catastrophe Bonds
|
|
Asset Backed Securities
|
|
Total
|
||||||||
Level 3 investments—beginning of period
|
$
|
255,011
|
|
|
$
|
37,105
|
|
|
$
|
—
|
|
|
$
|
292,116
|
|
Purchases
|
8,885
|
|
|
—
|
|
|
12,383
|
|
|
21,268
|
|
||||
Settlements
|
(17,784
|
)
|
|
—
|
|
|
—
|
|
|
(17,784
|
)
|
||||
Change in net unrealized (losses) gains
|
(2,964
|
)
|
|
413
|
|
|
—
|
|
|
(2,551
|
)
|
||||
Transfers into Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Level 3 investments—end of period
|
$
|
243,148
|
|
|
$
|
37,518
|
|
|
$
|
12,383
|
|
|
$
|
293,049
|
|
|
Three Months Ended June 30, 2015
|
||||||||||
|
Bank Loans
|
|
Catastrophe Bonds
|
|
Total
|
||||||
Level 3 investments—beginning of period
|
$
|
86,533
|
|
|
$
|
15,500
|
|
|
$
|
102,033
|
|
Purchases
|
43,791
|
|
|
—
|
|
|
43,791
|
|
|||
Sales
|
(929
|
)
|
|
(2,000
|
)
|
|
(2,929
|
)
|
|||
Settlements
|
(4,203
|
)
|
|
—
|
|
|
(4,203
|
)
|
|||
Change in net unrealized losses
|
(210
|
)
|
|
—
|
|
|
(210
|
)
|
|||
Transfers into Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Level 3 investments—end of period
|
$
|
124,982
|
|
|
$
|
13,500
|
|
|
$
|
138,482
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
Bank Loans
|
|
Catastrophe Bonds
|
|
Asset Backed Securities
|
|
Total
|
||||||||
Level 3 investments—beginning of period
|
$
|
232,337
|
|
|
$
|
13,500
|
|
|
$
|
—
|
|
|
$
|
245,837
|
|
Purchases
|
50,988
|
|
|
23,272
|
|
|
12,383
|
|
|
86,643
|
|
||||
Sales
|
(2,389
|
)
|
|
—
|
|
|
—
|
|
|
(2,389
|
)
|
||||
Settlements
|
(34,033
|
)
|
|
(125
|
)
|
|
—
|
|
|
(34,158
|
)
|
||||
Change in net unrealized (losses) gains
|
(3,755
|
)
|
|
871
|
|
|
—
|
|
|
(2,884
|
)
|
||||
Transfers into Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Level 3 investments—end of period
|
$
|
243,148
|
|
|
$
|
37,518
|
|
|
$
|
12,383
|
|
|
$
|
293,049
|
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
Bank Loans
|
|
Catastrophe Bonds
|
|
Total
|
||||||
Level 3 investments—beginning of period
|
$
|
32,748
|
|
|
$
|
17,500
|
|
|
$
|
50,248
|
|
Purchases
|
101,966
|
|
|
—
|
|
|
101,966
|
|
|||
Sales
|
(929
|
)
|
|
(3,989
|
)
|
|
(4,918
|
)
|
|||
Settlements
|
(8,198
|
)
|
|
—
|
|
|
(8,198
|
)
|
|||
Net realized losses
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||
Change in net unrealized losses
|
(605
|
)
|
|
—
|
|
|
(605
|
)
|
|||
Transfers into Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3 during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Level 3 investments—end of period
|
$
|
124,982
|
|
|
$
|
13,500
|
|
|
$
|
138,482
|
|
(a)
|
Consolidated VIEs
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Total Assets
|
|
Total Liabilities
|
|
Total Assets
|
|
Total Liabilities
|
||||||||
AlphaCat sidecars
|
$
|
47,693
|
|
|
$
|
10,468
|
|
|
$
|
206,581
|
|
|
$
|
14,804
|
|
AlphaCat ILS funds - Lower Risk (a)
|
1,544,346
|
|
|
129,842
|
|
|
1,268,070
|
|
|
143,371
|
|
||||
AlphaCat ILS funds - Higher Risk (a)
|
701,348
|
|
|
147,466
|
|
|
522,867
|
|
|
300,122
|
|
||||
AlphaCat Re and AlphaCat Master Fund
|
2,431,907
|
|
|
2,431,737
|
|
|
1,615,779
|
|
|
1,615,609
|
|
||||
BetaCat ILS funds
|
63,947
|
|
|
493
|
|
|
64,221
|
|
|
2,472
|
|
(a)
|
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 greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.
|
(b)
|
Non-Consolidated VIEs
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Investment affiliate
|
$
|
99,278
|
|
|
$
|
87,673
|
|
Operating affiliate
|
—
|
|
|
392
|
|
||
Investments in affiliates
|
$
|
99,278
|
|
|
$
|
88,065
|
|
(a)
|
Investment affiliate
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Investment affiliate, beginning of period
|
$
|
84,135
|
|
|
$
|
85,982
|
|
|
$
|
87,673
|
|
|
$
|
63,506
|
|
Capital contributions
|
15,732
|
|
|
3,415
|
|
|
16,307
|
|
|
23,115
|
|
||||
(Loss) income from investment affiliate
|
(589
|
)
|
|
284
|
|
|
(4,702
|
)
|
|
3,060
|
|
||||
Investment affiliate, end of period
|
$
|
99,278
|
|
|
$
|
89,681
|
|
|
$
|
99,278
|
|
|
$
|
89,681
|
|
|
Investment at cost
|
|
Voting ownership %
|
|
Equity ownership %
|
|
Carrying value
|
||||||
Aquiline Financial Services Fund II L.P.
|
$
|
56,479
|
|
|
—
|
%
|
|
8.0
|
%
|
|
$
|
71,178
|
|
Aquiline Financial Services Fund III L.P.
|
$
|
29,622
|
|
|
—
|
%
|
|
10.5
|
%
|
|
$
|
28,100
|
|
Total
|
$
|
86,101
|
|
|
|
|
|
|
$
|
99,278
|
|
|
Investment at cost
|
|
Voting ownership %
|
|
Equity ownership %
|
|
Carrying value
|
||||||
Aquiline Financial Services Fund II L.P.
|
$
|
55,904
|
|
|
—
|
%
|
|
8.1
|
%
|
|
$
|
73,880
|
|
Aquiline Financial Services Fund III L.P.
|
13,890
|
|
|
—
|
%
|
|
13.7
|
%
|
|
13,793
|
|
||
Total
|
$
|
69,794
|
|
|
|
|
|
|
$
|
87,673
|
|
(b)
|
Operating affiliate
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Operating affiliate, beginning of period
|
$
|
369
|
|
|
$
|
54,928
|
|
|
$
|
392
|
|
|
$
|
50,944
|
|
Return of investment
|
(369
|
)
|
|
—
|
|
|
(369
|
)
|
|
—
|
|
||||
(Loss) income from operating affiliate
|
—
|
|
|
1,738
|
|
|
(23
|
)
|
|
5,722
|
|
||||
Operating affiliate, end of period
|
$
|
—
|
|
|
$
|
56,666
|
|
|
$
|
—
|
|
|
$
|
56,666
|
|
|
Investment at cost
|
|
Voting ownership %
|
|
Equity ownership %
|
|
Carrying value
|
||||||
Investment in PaCRe
|
$
|
—
|
|
|
100.0
|
%
|
|
10.0
|
%
|
|
$
|
—
|
|
|
Investment at cost
|
|
Voting ownership %
|
|
Equity ownership %
|
|
Carrying value
|
||||||
Investment in PaCRe
|
$
|
392
|
|
|
100.0
|
%
|
|
10.0
|
%
|
|
$
|
392
|
|
|
Three Months Ended June 30, 2016
|
||||||||||
|
Redeemable noncontrolling interest
|
|
Noncontrolling interest
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,409,037
|
|
|
$
|
157,223
|
|
|
$
|
1,566,260
|
|
Issuance of shares
|
112,500
|
|
|
59,349
|
|
|
171,849
|
|
|||
Income attributable to noncontrolling interest
|
17,230
|
|
|
3,963
|
|
|
21,193
|
|
|||
Redemptions payable
|
(6,484
|
)
|
|
—
|
|
|
(6,484
|
)
|
|||
Distributions
|
—
|
|
|
(8,381
|
)
|
|
(8,381
|
)
|
|||
Balance, end of period
|
$
|
1,532,283
|
|
|
$
|
212,154
|
|
|
$
|
1,744,437
|
|
|
Three Months Ended June 30, 2015
|
||||||||||
|
Redeemable noncontrolling interest
|
|
Noncontrolling interest
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
834,644
|
|
|
$
|
151,583
|
|
|
$
|
986,227
|
|
Issuance of shares
|
249,300
|
|
|
9,600
|
|
|
258,900
|
|
|||
Income attributable to noncontrolling interest
|
17,462
|
|
|
5,099
|
|
|
22,561
|
|
|||
Redemption of shares
|
(59,395
|
)
|
|
—
|
|
|
(59,395
|
)
|
|||
Redemptions payable
|
(6,500
|
)
|
|
—
|
|
|
(6,500
|
)
|
|||
Distributions
|
—
|
|
|
(12,759
|
)
|
|
(12,759
|
)
|
|||
Balance, end of period
|
$
|
1,035,511
|
|
|
$
|
153,523
|
|
|
$
|
1,189,034
|
|
|
Six Months Ended June 30, 2016
|
||||||||||
|
Redeemable noncontrolling interest
|
|
Noncontrolling interest
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,111,714
|
|
|
$
|
154,662
|
|
|
$
|
1,266,376
|
|
Issuance of shares
|
381,250
|
|
|
171,674
|
|
|
552,924
|
|
|||
Income attributable to noncontrolling interest
|
45,803
|
|
|
12,921
|
|
|
58,724
|
|
|||
Redemptions payable
|
(6,484
|
)
|
|
—
|
|
|
(6,484
|
)
|
|||
Distributions
|
—
|
|
|
(127,103
|
)
|
|
(127,103
|
)
|
|||
Balance, end of period
|
$
|
1,532,283
|
|
|
$
|
212,154
|
|
|
$
|
1,744,437
|
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
Redeemable noncontrolling interest
|
|
Noncontrolling interest
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
617,791
|
|
|
$
|
292,274
|
|
|
$
|
910,065
|
|
Issuance of shares
|
452,700
|
|
|
9,600
|
|
|
462,300
|
|
|||
Income attributable to noncontrolling interest
|
30,915
|
|
|
9,824
|
|
|
40,739
|
|
|||
Redemption of shares
|
(59,395
|
)
|
|
—
|
|
|
(59,395
|
)
|
|||
Redemptions payable
|
(6,500
|
)
|
|
—
|
|
|
(6,500
|
)
|
|||
Distributions
|
—
|
|
|
(158,175
|
)
|
|
(158,175
|
)
|
|||
Balance, end of period
|
$
|
1,035,511
|
|
|
$
|
153,523
|
|
|
$
|
1,189,034
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Derivatives not designated as hedging instruments:
|
|
Notional Exposure
|
|
Asset Derivative at Fair Value (a)
|
|
Liability Derivative at Fair Value (a)
|
|
Notional Exposure
|
|
Asset Derivative at Fair Value (a)
|
|
Liability Derivative at Fair Value (a)
|
||||||||||||
Foreign currency forward contracts
|
|
$
|
297,275
|
|
|
$
|
4,230
|
|
|
$
|
4,746
|
|
|
$
|
255,840
|
|
|
$
|
2,601
|
|
|
$
|
3,211
|
|
(a)
|
Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses, respectively, on the Consolidated Balance Sheets. The net impact on earnings, recognized in income within foreign exchange gains (losses) relating to the foreign currency forward contracts that were not designated as hedging instruments during the
three and six months ended
June 30, 2016
was
$896
and
($1,117)
, respectively (
2015
:
$nil
and
$nil
, respectively). The net impact on earnings, recognized in income within other income (loss) relating to the foreign currency forward contracts that were not designated as hedging instruments during the
three and six months ended
June 30, 2016
were
$84
and
$120
, respectively (
2015
:
($128)
and
($127)
, respectively).
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Derivatives designated as hedging instruments:
|
|
Notional Exposure
|
|
Asset Derivative at Fair Value (a)
|
|
Liability Derivative at Fair Value (a)
|
|
Notional Exposure
|
|
Asset Derivative at Fair Value (a)
|
|
Liability Derivative at Fair Value (a)
|
||||||||||||
Interest rate swap contracts
|
|
$
|
552,263
|
|
|
$
|
20
|
|
|
$
|
2,529
|
|
|
$
|
552,263
|
|
|
$
|
21
|
|
|
$
|
1,942
|
|
(a)
|
Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses, respectively, on the Consolidated Balance Sheets.
|
(a)
|
Classification within the fair value hierarchy
|
(b)
|
Derivative instruments designated as a fair value hedge
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Foreign currency forward contracts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amount of loss recognized in income on derivative
|
|
$
|
—
|
|
|
$
|
(8,954
|
)
|
|
$
|
—
|
|
|
$
|
(15,156
|
)
|
Amount of gain on hedged item recognized in income attributable to risk being hedged
|
|
$
|
—
|
|
|
$
|
8,954
|
|
|
$
|
—
|
|
|
$
|
15,156
|
|
Amount of gain recognized in income on derivative (ineffective portion)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(c)
|
Derivative instruments designated as a cash flow hedge
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Interest rate swap contracts
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amount of effective portion recognized in other comprehensive income
|
|
$
|
2,694
|
|
|
$
|
2,846
|
|
|
$
|
6,350
|
|
|
$
|
6,886
|
|
Amount of effective portion subsequently reclassified to earnings
|
|
$
|
(2,758
|
)
|
|
$
|
(3,236
|
)
|
|
$
|
(5,656
|
)
|
|
$
|
(6,475
|
)
|
Amount of ineffective portion excluded from effectiveness testing
|
|
$
|
64
|
|
|
$
|
390
|
|
|
$
|
(694
|
)
|
|
$
|
(411
|
)
|
(d)
|
Balance sheet offsetting
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Reserve for losses and loss expenses, beginning of period
|
$
|
2,980,300
|
|
|
$
|
3,207,885
|
|
|
$
|
2,996,567
|
|
|
$
|
3,243,147
|
|
Loss reserves recoverable
|
(370,689
|
)
|
|
(375,882
|
)
|
|
(350,586
|
)
|
|
(377,466
|
)
|
||||
Net reserves for losses and loss expenses, beginning of period
|
2,609,611
|
|
|
2,832,003
|
|
|
2,645,981
|
|
|
2,865,681
|
|
||||
Increase (decrease) in net reserves for losses and loss expenses in respect of losses occurring in:
|
|
|
|
|
|
|
|
||||||||
Current year
|
369,911
|
|
|
336,864
|
|
|
648,097
|
|
|
661,352
|
|
||||
Prior years (a)
|
(62,781
|
)
|
|
(70,718
|
)
|
|
(116,520
|
)
|
|
(154,277
|
)
|
||||
Total incurred losses and loss expenses (a)
|
307,130
|
|
|
266,146
|
|
|
531,577
|
|
|
507,075
|
|
||||
Less net losses and loss expenses paid in respect of losses occurring in:
|
|
|
|
|
|
|
|
||||||||
Current year
|
(45,882
|
)
|
|
(28,965
|
)
|
|
(61,655
|
)
|
|
(42,065
|
)
|
||||
Prior years
|
(176,775
|
)
|
|
(260,027
|
)
|
|
(430,079
|
)
|
|
(496,260
|
)
|
||||
Total net paid losses
|
(222,657
|
)
|
|
(288,992
|
)
|
|
(491,734
|
)
|
|
(538,325
|
)
|
||||
Foreign exchange (gain) loss
|
(14,354
|
)
|
|
6,841
|
|
|
(6,094
|
)
|
|
(18,433
|
)
|
||||
Net reserve for losses and loss expenses, end of period
|
2,679,730
|
|
|
2,815,998
|
|
|
2,679,730
|
|
|
2,815,998
|
|
||||
Loss reserves recoverable
|
442,987
|
|
|
376,665
|
|
|
442,987
|
|
|
376,665
|
|
||||
Reserve for losses and loss expenses, end of period
|
$
|
3,122,717
|
|
|
$
|
3,192,663
|
|
|
$
|
3,122,717
|
|
|
$
|
3,192,663
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Gross losses and loss expenses (a)
|
$
|
397,863
|
|
|
$
|
303,771
|
|
|
$
|
667,716
|
|
|
$
|
568,567
|
|
Reinsurance recoverable
|
(90,733
|
)
|
|
(37,625
|
)
|
|
(136,139
|
)
|
|
(61,492
|
)
|
||||
Net incurred losses and loss expenses (a)
|
$
|
307,130
|
|
|
$
|
266,146
|
|
|
$
|
531,577
|
|
|
$
|
507,075
|
|
(a)
|
Upon closing the acquisition of Western World, an adjustment of
$15,586
was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of
$2,892
and
$6,115
, respectively, during the
three and six months ended
June 30, 2015
, benefiting the loss ratio by
4.4
and
4.6
percentage points, respectively. The remaining fair value adjustment of
$4,864
was fully amortized during 2015.
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Property
|
|
Marine
|
|
Specialty
|
|
Liability
|
|
Total
|
||||||||||
Validus Re
|
$
|
(9,468
|
)
|
|
$
|
(10,018
|
)
|
|
$
|
(11,391
|
)
|
|
$
|
—
|
|
|
$
|
(30,877
|
)
|
Talbot
|
(10,094
|
)
|
|
(8,928
|
)
|
|
(9,306
|
)
|
|
—
|
|
|
(28,328
|
)
|
|||||
Western World
|
(1,582
|
)
|
|
—
|
|
|
—
|
|
|
(1,576
|
)
|
|
(3,158
|
)
|
|||||
AlphaCat
|
(296
|
)
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
(418
|
)
|
|||||
Net favorable development
|
$
|
(21,440
|
)
|
|
$
|
(18,946
|
)
|
|
$
|
(20,819
|
)
|
|
$
|
(1,576
|
)
|
|
$
|
(62,781
|
)
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||
|
Property
|
|
Marine
|
|
Specialty
|
|
Liability
|
|
Total
|
||||||||||
Validus Re
|
$
|
(15,928
|
)
|
|
$
|
(11,099
|
)
|
|
$
|
(3,852
|
)
|
|
$
|
—
|
|
|
$
|
(30,879
|
)
|
Talbot
|
(16,683
|
)
|
|
(13,810
|
)
|
|
(5,093
|
)
|
|
—
|
|
|
(35,586
|
)
|
|||||
Western World (a)
|
(866
|
)
|
|
—
|
|
|
—
|
|
|
(3,387
|
)
|
|
(4,253
|
)
|
|||||
Net favorable development (a)
|
$
|
(33,477
|
)
|
|
$
|
(24,909
|
)
|
|
$
|
(8,945
|
)
|
|
$
|
(3,387
|
)
|
|
$
|
(70,718
|
)
|
(a)
|
Upon closing the acquisition of Western World, an adjustment of
$15,586
was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of
$2,892
during the three months ended
June 30, 2015
, benefiting the loss ratio by
4.4
percentage points. The remaining fair value adjustment of
$4,864
was fully amortized during 2015.
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Property
|
|
Marine
|
|
Specialty
|
|
Liability
|
|
Total
|
||||||||||
Validus Re
|
$
|
(32,300
|
)
|
|
$
|
(6,463
|
)
|
|
$
|
(17,798
|
)
|
|
$
|
—
|
|
|
$
|
(56,561
|
)
|
Talbot
|
(28,540
|
)
|
|
(5,964
|
)
|
|
(16,544
|
)
|
|
—
|
|
|
(51,048
|
)
|
|||||
Western World
|
(2,023
|
)
|
|
—
|
|
|
—
|
|
|
(5,561
|
)
|
|
(7,584
|
)
|
|||||
AlphaCat
|
(477
|
)
|
|
—
|
|
|
(850
|
)
|
|
—
|
|
|
(1,327
|
)
|
|||||
Net favorable development
|
$
|
(63,340
|
)
|
|
$
|
(12,427
|
)
|
|
$
|
(35,192
|
)
|
|
$
|
(5,561
|
)
|
|
$
|
(116,520
|
)
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
|
Property
|
|
Marine
|
|
Specialty
|
|
Liability
|
|
Total
|
||||||||||
Validus Re
|
$
|
(30,824
|
)
|
|
$
|
(15,669
|
)
|
|
$
|
(9,082
|
)
|
|
$
|
—
|
|
|
$
|
(55,575
|
)
|
Talbot
|
(37,435
|
)
|
|
(36,324
|
)
|
|
(13,514
|
)
|
|
—
|
|
|
(87,273
|
)
|
|||||
Western World (a)
|
(3,594
|
)
|
|
—
|
|
|
—
|
|
|
(6,991
|
)
|
|
(10,585
|
)
|
|||||
AlphaCat
|
(844
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(844
|
)
|
|||||
Net favorable development (a)
|
$
|
(72,697
|
)
|
|
$
|
(51,993
|
)
|
|
$
|
(22,596
|
)
|
|
$
|
(6,991
|
)
|
|
$
|
(154,277
|
)
|
(a)
|
Upon closing the acquisition of Western World, an adjustment of
$15,586
was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of
$6,115
during the six months ended
June 30, 2015
, benefiting the loss ratio by
4.6
percentage points. The remaining fair value adjustment of
$4,864
was fully amortized during 2015.
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Reinsurance Recoverable
|
|
% of Total
|
|
Reinsurance Recoverable
|
|
% of Total
|
||||||
Top 10 reinsurers
|
$
|
391,076
|
|
|
83.1
|
%
|
|
$
|
303,108
|
|
|
81.1
|
%
|
Other reinsurers’ balances > $1 million
|
70,763
|
|
|
15.0
|
%
|
|
61,222
|
|
|
16.4
|
%
|
||
Other reinsurers’ balances < $1 million
|
8,796
|
|
|
1.9
|
%
|
|
9,327
|
|
|
2.5
|
%
|
||
Total
|
$
|
470,635
|
|
|
100.0
|
%
|
|
$
|
373,657
|
|
|
100.0
|
%
|
|
|
June 30, 2016
|
|||||||
Top 10 Reinsurers
|
|
Rating
|
|
Reinsurance Recoverable
|
|
% of Total
|
|||
Fully collateralized reinsurers
|
|
NR
|
|
$
|
80,829
|
|
|
17.2
|
%
|
Swiss Re
|
|
AA-
|
|
80,604
|
|
|
17.1
|
%
|
|
Lloyd's Syndicates
|
|
A+
|
|
79,508
|
|
|
16.9
|
%
|
|
Hannover Re
|
|
AA-
|
|
47,686
|
|
|
10.1
|
%
|
|
Everest Re
|
|
A+
|
|
42,506
|
|
|
9.0
|
%
|
|
Munich Re
|
|
AA-
|
|
18,161
|
|
|
3.9
|
%
|
|
Transatlantic Re
|
|
A+
|
|
11,719
|
|
|
2.5
|
%
|
|
Hamilton Re
|
|
A-
|
|
11,623
|
|
|
2.5
|
%
|
|
National Indemnity Company
|
|
AA+
|
|
9,565
|
|
|
2.0
|
%
|
|
Toa Re
|
|
A+
|
|
8,875
|
|
|
1.9
|
%
|
|
Total
|
|
|
|
$
|
391,076
|
|
|
83.1
|
%
|
|
|
December 31, 2015
|
|||||||
Top 10 Reinsurers
|
|
Rating
|
|
Reinsurance Recoverable
|
|
% of Total
|
|||
Swiss Re
|
|
AA-
|
|
$
|
83,048
|
|
|
22.2
|
%
|
Lloyd's Syndicates
|
|
A+
|
|
66,356
|
|
|
17.8
|
%
|
|
Hannover Re
|
|
AA-
|
|
43,765
|
|
|
11.7
|
%
|
|
Everest Re
|
|
A+
|
|
43,060
|
|
|
11.5
|
%
|
|
Munich Re
|
|
AA-
|
|
18,707
|
|
|
5.0
|
%
|
|
Transatlantic Re
|
|
A+
|
|
11,923
|
|
|
3.2
|
%
|
|
Hamilton Re
|
|
A-
|
|
10,898
|
|
|
2.9
|
%
|
|
National Indemnity Company
|
|
AA+
|
|
10,293
|
|
|
2.8
|
%
|
|
XL Re
|
|
A+
|
|
8,728
|
|
|
2.3
|
%
|
|
Toa Re
|
|
A+
|
|
6,330
|
|
|
1.7
|
%
|
|
Total
|
|
|
|
$
|
303,108
|
|
|
81.1
|
%
|
(a)
|
Preferred shares
|
|
Preferred Shares
|
|
Preferred shares issued and outstanding, December 31, 2015
|
—
|
|
Preferred shares issued
|
6,000
|
|
Preferred shares issued and outstanding, June 30, 2016
|
6,000
|
|
(b)
|
Common Shares
|
|
Common Shares
|
|
Common shares issued, December 31, 2015
|
160,570,772
|
|
Restricted share awards vested, net of shares withheld
|
601,890
|
|
Restricted share units vested, net of shares withheld
|
18,486
|
|
Options exercised
|
13,635
|
|
Performance share awards vested, net of shares withheld
|
48,088
|
|
Common shares issued, June 30, 2016
|
161,252,871
|
|
Treasury shares, June 30, 2016
|
(80,480,633
|
)
|
Common shares outstanding, June 30, 2016
|
80,772,238
|
|
|
Common Shares
|
|
Common shares issued, December 31, 2014
|
155,554,224
|
|
Restricted share awards vested, net of shares withheld
|
609,654
|
|
Restricted share units vested, net of shares withheld
|
13,260
|
|
Options exercised
|
728,489
|
|
Warrants exercised
|
1,461,715
|
|
Direct issuance of common stock
|
639
|
|
Performance share awards vested, net of shares withheld
|
11,524
|
|
Common shares issued, June 30, 2015
|
158,379,505
|
|
Treasury shares, June 30, 2015
|
(75,083,710
|
)
|
Common shares outstanding, June 30, 2015
|
83,295,795
|
|
(c)
|
Dividends
|
(a)
|
Long Term Incentive Plan
|
i.
|
Options
|
|
Options
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Grant Date Exercise Price
|
|||||
Options outstanding, December 31, 2015
|
65,401
|
|
|
$
|
7.74
|
|
|
$
|
20.17
|
|
Options exercised
|
(14,044
|
)
|
|
7.69
|
|
|
17.02
|
|
||
Options outstanding, June 30, 2016
|
51,357
|
|
|
$
|
7.75
|
|
|
$
|
21.03
|
|
|
Options
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Grant Date Exercise Price
|
|||||
Options outstanding, December 31, 2014
|
1,160,057
|
|
|
$
|
7.12
|
|
|
$
|
17.74
|
|
Options exercised
|
(1,040,680
|
)
|
|
7.26
|
|
|
16.86
|
|
||
Options outstanding, June 30, 2015
|
119,377
|
|
|
$
|
5.94
|
|
|
$
|
25.46
|
|
ii.
|
Restricted share awards
|
|
Restricted Share Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Restricted share awards outstanding, December 31, 2015
|
2,739,446
|
|
|
$
|
38.25
|
|
Restricted share awards granted
|
534,905
|
|
|
48.69
|
|
|
Restricted share awards vested
|
(783,523
|
)
|
|
37.32
|
|
|
Restricted share awards forfeited
|
(8,317
|
)
|
|
37.94
|
|
|
Restricted share awards outstanding, June 30, 2016
|
2,482,511
|
|
|
$
|
40.79
|
|
|
Restricted Share Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Restricted share awards outstanding, December 31, 2014
|
2,858,711
|
|
|
$
|
35.81
|
|
Restricted share awards granted
|
670,432
|
|
|
43.55
|
|
|
Restricted share awards vested
|
(781,704
|
)
|
|
34.42
|
|
|
Restricted share awards forfeited
|
(51,818
|
)
|
|
38.04
|
|
|
Restricted share awards outstanding, June 30, 2015
|
2,695,621
|
|
|
$
|
38.09
|
|
iii.
|
Restricted share units
|
|
Restricted Share Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Restricted share units outstanding, December 31, 2015
|
114,337
|
|
|
$
|
38.47
|
|
Restricted share units granted
|
20,129
|
|
|
48.69
|
|
|
Restricted share units vested
|
(23,982
|
)
|
|
38.18
|
|
|
Restricted share units issued in lieu of cash dividends
|
1,629
|
|
|
38.47
|
|
|
Restricted share units outstanding, June 30, 2016
|
112,113
|
|
|
$
|
40.37
|
|
|
Restricted
Share Units
|
|
Weighted Average Grant Date Fair Value
|
|||
Restricted share units outstanding, December 31, 2014
|
103,484
|
|
|
$
|
36.54
|
|
Restricted share units granted
|
28,057
|
|
|
42.91
|
|
|
Restricted share units vested
|
(19,455
|
)
|
|
34.58
|
|
|
Restricted share units issued in lieu of cash dividends
|
1,517
|
|
|
36.53
|
|
|
Restricted share units forfeited
|
(892
|
)
|
|
35.42
|
|
|
Restricted share units outstanding, June 30, 2015
|
112,711
|
|
|
$
|
38.47
|
|
iv.
|
Performance share awards
|
|
Performance Share Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Performance share awards outstanding, December 31, 2015
|
172,594
|
|
|
$
|
40.70
|
|
Performance share awards granted
|
121,844
|
|
|
48.69
|
|
|
Performance share awards vested
|
(57,581
|
)
|
|
36.11
|
|
|
Performance share awards conversion adjustment
|
45,517
|
|
|
36.82
|
|
|
Performance share awards outstanding, June 30, 2016
|
282,374
|
|
|
$
|
44.46
|
|
|
Performance Share Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Performance share awards outstanding, December 31, 2014
|
106,369
|
|
|
$
|
36.03
|
|
Performance share awards granted
|
81,569
|
|
|
45.03
|
|
|
Performance share awards vested
|
(15,344
|
)
|
|
31.38
|
|
|
Performance share awards outstanding, June 30, 2015
|
172,594
|
|
|
$
|
40.70
|
|
(b)
|
Total share compensation expenses
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Restricted share awards
|
$
|
9,517
|
|
|
$
|
8,653
|
|
|
$
|
18,646
|
|
|
$
|
17,132
|
|
Restricted share units
|
377
|
|
|
279
|
|
|
688
|
|
|
541
|
|
||||
Performance share awards
|
833
|
|
|
310
|
|
|
2,630
|
|
|
623
|
|
||||
Total
|
$
|
10,727
|
|
|
$
|
9,242
|
|
|
$
|
21,964
|
|
|
$
|
18,296
|
|
(a)
|
Financing structure
|
|
Commitment
|
|
Issued and outstanding (a)
|
|
Drawn
|
||||||
2006 Junior Subordinated Deferrable Debentures
|
$
|
150,000
|
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
2007 Junior Subordinated Deferrable Debentures
|
200,000
|
|
|
139,800
|
|
|
139,800
|
|
|||
Flagstone 2006 Junior Subordinated Deferrable Debentures
|
134,437
|
|
|
134,437
|
|
|
134,437
|
|
|||
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
113,750
|
|
|
113,750
|
|
|
113,750
|
|
|||
Total debentures payable
|
598,187
|
|
|
537,987
|
|
|
537,987
|
|
|||
2010 Senior Notes due 2040
|
250,000
|
|
|
250,000
|
|
|
245,261
|
|
|||
Total debentures and senior notes payable
|
848,187
|
|
|
787,987
|
|
|
783,248
|
|
|||
$85,000 syndicated unsecured letter of credit facility
|
85,000
|
|
|
—
|
|
|
—
|
|
|||
$300,000 syndicated secured letter of credit facility
|
300,000
|
|
|
105,575
|
|
|
—
|
|
|||
$24,000 secured bi-lateral letter of credit facility
|
24,000
|
|
|
11,805
|
|
|
—
|
|
|||
$20,000 AlphaCat Re secured letter of credit facility
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|||
$25,000 IPC bi-lateral facility
|
25,000
|
|
|
5,666
|
|
|
—
|
|
|||
$236,000 Flagstone bi-lateral facility
|
236,000
|
|
|
195,622
|
|
|
—
|
|
|||
Total credit and other facilities
|
690,000
|
|
|
338,668
|
|
|
—
|
|
|||
Total debt and financing arrangements
|
$
|
1,538,187
|
|
|
$
|
1,126,655
|
|
|
$
|
783,248
|
|
|
Commitment
|
|
Issued and outstanding (a)
|
|
Drawn
|
||||||
2006 Junior Subordinated Deferrable Debentures
|
$
|
150,000
|
|
|
$
|
150,000
|
|
|
$
|
150,000
|
|
2007 Junior Subordinated Deferrable Debentures
|
200,000
|
|
|
139,800
|
|
|
139,800
|
|
|||
Flagstone 2006 Junior Subordinated Deferrable Debentures
|
134,118
|
|
|
134,118
|
|
|
134,118
|
|
|||
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
113,750
|
|
|
113,750
|
|
|
113,750
|
|
|||
Total debentures payable
|
597,868
|
|
|
537,668
|
|
|
537,668
|
|
|||
2010 Senior Notes due 2040
|
250,000
|
|
|
250,000
|
|
|
245,161
|
|
|||
Total debentures and senior notes payable
|
847,868
|
|
|
787,668
|
|
|
782,829
|
|
|||
$85,000 syndicated unsecured letter of credit facility
|
85,000
|
|
|
—
|
|
|
—
|
|
|||
$300,000 syndicated secured letter of credit facility
|
300,000
|
|
|
235,540
|
|
|
—
|
|
|||
$24,000 secured bi-lateral letter of credit facility
|
24,000
|
|
|
10,543
|
|
|
—
|
|
|||
$20,000 AlphaCat Re secured letter of credit facility
|
30,000
|
|
|
30,000
|
|
|
—
|
|
|||
$25,000 IPC bi-lateral facility
|
25,000
|
|
|
9,241
|
|
|
—
|
|
|||
$236,000 Flagstone bi-lateral facility
|
236,000
|
|
|
193,764
|
|
|
—
|
|
|||
Total credit and other facilities
|
700,000
|
|
|
479,088
|
|
|
—
|
|
|||
Total debt and financing arrangements
|
$
|
1,547,868
|
|
|
$
|
1,266,756
|
|
|
$
|
782,829
|
|
(a)
|
Indicates utilization of commitment amount, not necessarily drawn borrowings.
|
(b)
|
Senior notes and junior subordinated deferrable debentures
|
Description
|
|
Issuance date
|
|
Commitment
|
|
Maturity date
|
|
Interest Rate as at
|
|
Interest payments due
|
||||||||
|
Issuance Date
|
|
June 30, 2016
|
|
||||||||||||||
2006 Junior Subordinated Deferrable Debentures
|
|
June 15, 2006
|
|
$
|
150,000
|
|
|
June 15, 2036
|
|
9.069
|
%
|
(a)
|
|
5.831
|
%
|
(e)
|
|
Quarterly
|
Flagstone 2006 Junior Subordinated Deferrable Debentures
|
|
August 23, 2006
|
|
$
|
134,437
|
|
|
September 15, 2036
|
|
3.540
|
%
|
(b)
|
|
6.463
|
%
|
(e)
|
|
Quarterly
|
2007 Junior Subordinated Deferrable Debentures
|
|
June 21, 2007
|
|
$
|
200,000
|
|
|
June 15, 2037
|
|
8.480
|
%
|
(c)
|
|
5.180
|
%
|
(e)
|
|
Quarterly
|
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
|
June 8, 2007
|
|
$
|
88,750
|
|
|
July 30, 2037
|
|
3.000
|
%
|
(b)
|
|
5.900
|
%
|
(e)
|
|
Quarterly
|
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
|
September 20, 2007
|
|
$
|
25,000
|
|
|
September 15, 2037
|
|
3.100
|
%
|
(b)
|
|
5.983
|
%
|
(e)
|
|
Quarterly
|
2010 Senior Notes due 2040
|
|
January 26, 2010
|
|
$
|
250,000
|
|
|
January 26, 2040
|
|
8.875
|
%
|
(d)
|
|
8.875
|
%
|
(d)
|
|
Semi-annually in arrears
|
(a)
|
Fixed interest rate for
5 years
, floating interest rate of three-month LIBOR plus
3.550%
thereafter, reset quarterly.
|
(b)
|
Floating interest rate of three-month LIBOR plus amount stated, reset quarterly.
|
(c)
|
Fixed interest rate for
5 years
, floating interest rate of three-month LIBOR plus
2.950%
thereafter, reset quarterly.
|
(d)
|
Fixed interest rate.
|
(e)
|
Fixed interest rate as a result of interest rate swap contracts entered into by the Company.
|
(c)
|
Credit facilities
|
i.
|
$85,000
syndicated unsecured letter of credit facility and
$300,000
syndicated secured letter of credit facility
|
ii.
|
$25,000
IPC bi-lateral facility
|
iii.
|
$24,000
secured bi-lateral letter of credit facility
|
v.
|
$236,000
Flagstone bi-lateral facility
|
(d)
|
Finance expenses
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
2006 Junior Subordinated Deferrable Debentures
|
$
|
2,211
|
|
|
$
|
2,211
|
|
|
$
|
4,422
|
|
|
$
|
4,398
|
|
2007 Junior Subordinated Deferrable Debentures
|
1,830
|
|
|
1,835
|
|
|
3,661
|
|
|
3,644
|
|
||||
Flagstone 2006 Junior Subordinated Deferrable Debentures
|
2,244
|
|
|
2,243
|
|
|
4,489
|
|
|
4,461
|
|
||||
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
1,766
|
|
|
1,770
|
|
|
3,533
|
|
|
3,528
|
|
||||
2010 Senior Notes due 2040
|
5,597
|
|
|
5,597
|
|
|
11,194
|
|
|
11,194
|
|
||||
Credit facilities
|
235
|
|
|
1,193
|
|
|
896
|
|
|
2,900
|
|
||||
Bank charges, Talbot FAL facility and other charges (a)
|
206
|
|
|
1,252
|
|
|
213
|
|
|
2,459
|
|
||||
AlphaCat fees (b)
|
77
|
|
|
2,581
|
|
|
961
|
|
|
7,065
|
|
||||
Total finance expenses
|
$
|
14,166
|
|
|
$
|
18,682
|
|
|
$
|
29,369
|
|
|
$
|
39,649
|
|
(a)
|
On November 30, 2015, the Company terminated its Funds-at-Lloyd’s Standby Letter of Credit Facility (the “Talbot FAL Facility”) provided and arranged by Lloyds Bank plc and ING Bank N.V., London Branch.
|
(b)
|
Includes finance expenses incurred by AlphaCat Managers Ltd. in relation to fund raising for the AlphaCat sidecars, the AlphaCat ILS funds and AlphaCat direct.
|
Three Months Ended June 30, 2016
|
Foreign currency translation adjustment
|
|
Minimum pension liability
|
|
Cash flow hedge
|
|
Total
|
||||||||
Balance beginning of period, net of tax
|
$
|
(13,862
|
)
|
|
$
|
251
|
|
|
$
|
(1,827
|
)
|
|
$
|
(15,438
|
)
|
Net current period other comprehensive loss, net of tax
|
(3,287
|
)
|
|
479
|
|
|
64
|
|
|
(2,744
|
)
|
||||
Balance end of period, net of tax
|
$
|
(17,149
|
)
|
|
$
|
730
|
|
|
$
|
(1,763
|
)
|
|
$
|
(18,182
|
)
|
Three Months Ended June 30, 2015
|
Foreign currency translation adjustment
|
|
Minimum pension liability
|
|
Cash flow hedge
|
|
Total
|
||||||||
Balance beginning of period, net of tax
|
$
|
(11,137
|
)
|
|
$
|
(475
|
)
|
|
$
|
(1,029
|
)
|
|
$
|
(12,641
|
)
|
Net current period other comprehensive loss, net of tax
|
2,763
|
|
|
422
|
|
|
390
|
|
|
3,575
|
|
||||
Balance end of period, net of tax
|
$
|
(8,374
|
)
|
|
$
|
(53
|
)
|
|
$
|
(639
|
)
|
|
$
|
(9,066
|
)
|
Six Months Ended June 30, 2016
|
Foreign currency translation adjustment
|
|
Minimum pension liability
|
|
Cash flow hedge
|
|
Total
|
||||||||
Balance beginning of period, net of tax
|
$
|
(11,834
|
)
|
|
$
|
334
|
|
|
$
|
(1,069
|
)
|
|
$
|
(12,569
|
)
|
Net current period other comprehensive loss, net of tax
|
(5,315
|
)
|
|
396
|
|
|
(694
|
)
|
|
(5,613
|
)
|
||||
Balance end of period, net of tax
|
$
|
(17,149
|
)
|
|
$
|
730
|
|
|
$
|
(1,763
|
)
|
|
$
|
(18,182
|
)
|
Six Months Ended June 30, 2015
|
Foreign currency translation adjustment
|
|
Minimum pension liability
|
|
Cash flow hedge
|
|
Total
|
||||||||
Balance beginning of period, net of tax
|
$
|
(8,118
|
)
|
|
$
|
(210
|
)
|
|
$
|
(228
|
)
|
|
$
|
(8,556
|
)
|
Net current period other comprehensive loss, net of tax
|
(256
|
)
|
|
157
|
|
|
(411
|
)
|
|
(510
|
)
|
||||
Balance end of period, net of tax
|
$
|
(8,374
|
)
|
|
$
|
(53
|
)
|
|
$
|
(639
|
)
|
|
$
|
(9,066
|
)
|
(a)
|
Funds at Lloyd's
|
(b)
|
Lloyd's Central Fund
|
(c)
|
Investment affiliate commitments
|
(d)
|
AlphaCat commitments
|
(e)
|
Fixed maturity commitments
|
(f)
|
Other investment commitments
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
||||||
Net income available to Validus common shareholders
|
94,963
|
|
|
65,790
|
|
|
261,773
|
|
|
239,201
|
|
||||
Less: Dividends on outstanding warrants
|
—
|
|
|
(1,081
|
)
|
|
—
|
|
|
(2,486
|
)
|
||||
Net income allocated to Validus common shareholders
|
$
|
94,963
|
|
|
$
|
64,709
|
|
|
$
|
261,773
|
|
|
$
|
236,715
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
81,950,833
|
|
|
84,003,549
|
|
|
82,386,047
|
|
|
83,627,396
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share available to Validus common shareholders
|
$
|
1.16
|
|
|
$
|
0.77
|
|
|
$
|
3.18
|
|
|
$
|
2.83
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per diluted share
|
|
|
|
|
|
|
|
|
|
||||||
Net income available to Validus common shareholders
|
94,963
|
|
|
65,790
|
|
|
261,773
|
|
|
239,201
|
|
||||
Less: Dividends on outstanding warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income allocated to Validus common shareholders
|
$
|
94,963
|
|
|
$
|
65,790
|
|
|
$
|
261,773
|
|
|
$
|
239,201
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
81,950,833
|
|
|
84,003,549
|
|
|
82,386,047
|
|
|
83,627,396
|
|
||||
Share equivalents:
|
|
|
|
|
|
|
|
||||||||
Warrants
|
—
|
|
|
2,073,231
|
|
|
—
|
|
|
2,409,149
|
|
||||
Stock options
|
33,796
|
|
|
50,160
|
|
|
34,837
|
|
|
261,792
|
|
||||
Unvested restricted shares
|
1,388,374
|
|
|
1,186,214
|
|
|
1,364,775
|
|
|
1,149,805
|
|
||||
Weighted average number of diluted common shares outstanding
|
83,373,003
|
|
|
87,313,154
|
|
|
83,785,659
|
|
|
87,448,142
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per diluted share available to Validus common shareholders
|
$
|
1.14
|
|
|
$
|
0.75
|
|
|
$
|
3.12
|
|
|
$
|
2.74
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Validus Re Segment Information
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
285,810
|
|
|
$
|
297,420
|
|
|
$
|
977,478
|
|
|
$
|
1,009,113
|
|
Reinsurance premiums ceded
|
|
(3,196
|
)
|
|
(19,378
|
)
|
|
(95,691
|
)
|
|
(133,155
|
)
|
||||
Net premiums written
|
|
282,614
|
|
|
278,042
|
|
|
881,787
|
|
|
875,958
|
|
||||
Change in unearned premiums
|
|
(35,492
|
)
|
|
(13,492
|
)
|
|
(390,834
|
)
|
|
(358,320
|
)
|
||||
Net premiums earned
|
|
247,122
|
|
|
264,550
|
|
|
490,953
|
|
|
517,638
|
|
||||
Other insurance related income (loss)
|
|
150
|
|
|
434
|
|
|
(165
|
)
|
|
749
|
|
||||
Total underwriting revenues
|
|
247,272
|
|
|
264,984
|
|
|
490,788
|
|
|
518,387
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
132,139
|
|
|
123,405
|
|
|
215,007
|
|
|
236,533
|
|
||||
Policy acquisition costs
|
|
42,564
|
|
|
43,826
|
|
|
84,823
|
|
|
85,920
|
|
||||
General and administrative expenses
|
|
17,872
|
|
|
18,781
|
|
|
35,051
|
|
|
38,290
|
|
||||
Share compensation expenses
|
|
2,775
|
|
|
2,396
|
|
|
5,676
|
|
|
4,974
|
|
||||
Total underwriting deductions
|
|
195,350
|
|
|
188,408
|
|
|
340,557
|
|
|
365,717
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income
|
|
$
|
51,922
|
|
|
$
|
76,576
|
|
|
$
|
150,231
|
|
|
$
|
152,670
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selected ratios:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written / Gross premiums written
|
|
98.9
|
%
|
|
93.5
|
%
|
|
90.2
|
%
|
|
86.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
53.5
|
%
|
|
46.6
|
%
|
|
43.8
|
%
|
|
45.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policy acquisition costs
|
|
17.2
|
%
|
|
16.6
|
%
|
|
17.3
|
%
|
|
16.6
|
%
|
||||
General and administrative expenses (a)
|
|
8.4
|
%
|
|
8.0
|
%
|
|
8.3
|
%
|
|
8.4
|
%
|
||||
Expense ratio
|
|
25.6
|
%
|
|
24.6
|
%
|
|
25.6
|
%
|
|
25.0
|
%
|
||||
Combined ratio
|
|
79.1
|
%
|
|
71.2
|
%
|
|
69.4
|
%
|
|
70.7
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Talbot Segment Information
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
296,067
|
|
|
$
|
293,046
|
|
|
$
|
562,384
|
|
|
$
|
563,123
|
|
Reinsurance premiums ceded
|
|
(27,161
|
)
|
|
(37,246
|
)
|
|
(114,619
|
)
|
|
(128,321
|
)
|
||||
Net premiums written
|
|
268,906
|
|
|
255,800
|
|
|
447,765
|
|
|
434,802
|
|
||||
Change in unearned premiums
|
|
(67,357
|
)
|
|
(50,362
|
)
|
|
(39,424
|
)
|
|
(6,775
|
)
|
||||
Net premiums earned
|
|
201,549
|
|
|
205,438
|
|
|
408,341
|
|
|
428,027
|
|
||||
Other insurance related income
|
|
279
|
|
|
40
|
|
|
290
|
|
|
94
|
|
||||
Total underwriting revenues
|
|
201,828
|
|
|
205,478
|
|
|
408,631
|
|
|
428,121
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
109,310
|
|
|
95,970
|
|
|
209,411
|
|
|
174,098
|
|
||||
Policy acquisition costs
|
|
43,613
|
|
|
47,659
|
|
|
87,956
|
|
|
96,763
|
|
||||
General and administrative expenses
|
|
39,061
|
|
|
35,555
|
|
|
77,596
|
|
|
72,049
|
|
||||
Share compensation expenses
|
|
3,270
|
|
|
3,024
|
|
|
6,792
|
|
|
5,981
|
|
||||
Total underwriting deductions
|
|
195,254
|
|
|
182,208
|
|
|
381,755
|
|
|
348,891
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting income
|
|
$
|
6,574
|
|
|
$
|
23,270
|
|
|
$
|
26,876
|
|
|
$
|
79,230
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selected ratios:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written / Gross premiums written
|
|
90.8
|
%
|
|
87.3
|
%
|
|
79.6
|
%
|
|
77.2
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
54.2
|
%
|
|
46.7
|
%
|
|
51.3
|
%
|
|
40.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policy acquisition costs
|
|
21.6
|
%
|
|
23.2
|
%
|
|
21.5
|
%
|
|
22.6
|
%
|
||||
General and administrative expenses (a)
|
|
21.1
|
%
|
|
18.8
|
%
|
|
20.7
|
%
|
|
18.2
|
%
|
||||
Expense ratio
|
|
42.7
|
%
|
|
42.0
|
%
|
|
42.2
|
%
|
|
40.8
|
%
|
||||
Combined ratio
|
|
96.9
|
%
|
|
88.7
|
%
|
|
93.5
|
%
|
|
81.5
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Western World Segment Information
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
$
|
86,971
|
|
|
$
|
79,554
|
|
|
$
|
150,930
|
|
|
$
|
136,501
|
|
Reinsurance premiums ceded
|
|
(5,006
|
)
|
|
(5,441
|
)
|
|
(9,145
|
)
|
|
(8,674
|
)
|
||||
Net premiums written
|
|
81,965
|
|
|
74,113
|
|
|
141,785
|
|
|
127,827
|
|
||||
Change in unearned premiums
|
|
(16,309
|
)
|
|
(8,995
|
)
|
|
(14,630
|
)
|
|
5,173
|
|
||||
Net premiums earned
|
|
65,656
|
|
|
65,118
|
|
|
127,155
|
|
|
133,000
|
|
||||
Other insurance related income
|
|
189
|
|
|
276
|
|
|
477
|
|
|
539
|
|
||||
Total underwriting revenues
|
|
65,845
|
|
|
65,394
|
|
|
127,632
|
|
|
133,539
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
44,229
|
|
|
46,771
|
|
|
83,875
|
|
|
97,288
|
|
||||
Policy acquisition costs
|
|
15,410
|
|
|
9,617
|
|
|
29,610
|
|
|
13,896
|
|
||||
General and administrative expenses
|
|
11,458
|
|
|
8,923
|
|
|
23,533
|
|
|
19,550
|
|
||||
Share compensation expenses
|
|
542
|
|
|
494
|
|
|
1,123
|
|
|
971
|
|
||||
Total underwriting deductions
|
|
71,639
|
|
|
65,805
|
|
|
138,141
|
|
|
131,705
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Underwriting (loss) income
|
|
$
|
(5,794
|
)
|
|
$
|
(411
|
)
|
|
$
|
(10,509
|
)
|
|
$
|
1,834
|
|
|
|
|
|
|
|
|
|
|
||||||||
Selected ratios:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums written / Gross premiums written
|
|
94.2
|
%
|
|
93.2
|
%
|
|
93.9
|
%
|
|
93.6
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss expenses
|
|
67.4
|
%
|
|
71.8
|
%
|
|
66.0
|
%
|
|
73.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Policy acquisition costs
|
|
23.5
|
%
|
|
14.8
|
%
|
|
23.3
|
%
|
|
10.5
|
%
|
||||
General and administrative expenses (a)
|
|
18.2
|
%
|
|
14.5
|
%
|
|
19.3
|
%
|
|
15.4
|
%
|
||||
Expense ratio
|
|
41.7
|
%
|
|
29.3
|
%
|
|
42.6
|
%
|
|
25.9
|
%
|
||||
Combined ratio
|
|
109.1
|
%
|
|
101.1
|
%
|
|
108.6
|
%
|
|
99.0
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
AlphaCat Segment Information (a)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Third party
|
|
$
|
3,091
|
|
|
$
|
4,323
|
|
|
$
|
7,818
|
|
|
$
|
8,860
|
|
Related party
|
|
328
|
|
|
1,134
|
|
|
1,219
|
|
|
2,320
|
|
||||
Total revenues
|
|
3,419
|
|
|
5,457
|
|
|
9,037
|
|
|
11,180
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Expenses
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
|
2,751
|
|
|
2,330
|
|
|
4,233
|
|
|
4,759
|
|
||||
Share compensation expenses
|
|
133
|
|
|
150
|
|
|
274
|
|
|
299
|
|
||||
Finance expenses
|
|
75
|
|
|
2,534
|
|
|
883
|
|
|
6,962
|
|
||||
Foreign exchange losses
|
|
4
|
|
|
15
|
|
|
12
|
|
|
2
|
|
||||
Total expenses
|
|
2,963
|
|
|
5,029
|
|
|
5,402
|
|
|
12,022
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before investments from AlphaCat Funds and Sidecars
|
|
456
|
|
|
428
|
|
|
3,635
|
|
|
(842
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investment income (loss) from AlphaCat Funds and Sidecars (b)
|
|
|
|
|
|
|
|
|
||||||||
AlphaCat Sidecars
|
|
541
|
|
|
1,273
|
|
|
665
|
|
|
2,441
|
|
||||
AlphaCat ILS Funds - Lower Risk (c)
|
|
2,075
|
|
|
1,894
|
|
|
4,582
|
|
|
3,180
|
|
||||
AlphaCat ILS Funds - Higher Risk (c)
|
|
692
|
|
|
2,376
|
|
|
3,128
|
|
|
4,801
|
|
||||
BetaCat ILS Funds
|
|
1,113
|
|
|
60
|
|
|
1,676
|
|
|
234
|
|
||||
PaCRe
|
|
—
|
|
|
1,738
|
|
|
(23
|
)
|
|
5,722
|
|
||||
Total investment income from AlphaCat Funds and Sidecars
|
|
4,421
|
|
|
7,341
|
|
|
10,028
|
|
|
16,378
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Validus' share of AlphaCat income
|
|
$
|
4,877
|
|
|
$
|
7,769
|
|
|
$
|
13,663
|
|
|
$
|
15,536
|
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental information:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written
|
|
|
|
|
|
|
|
|
||||||||
AlphaCat Sidecars
|
|
$
|
(14
|
)
|
|
$
|
3,241
|
|
|
$
|
(66
|
)
|
|
$
|
43,347
|
|
AlphaCat ILS Funds - Lower Risk (c)
|
|
50,234
|
|
|
45,687
|
|
|
110,192
|
|
|
88,435
|
|
||||
AlphaCat ILS Funds - Higher Risk (c)
|
|
42,010
|
|
|
13,867
|
|
|
138,330
|
|
|
32,818
|
|
||||
AlphaCat Direct (d)
|
|
6,675
|
|
|
—
|
|
|
17,797
|
|
|
—
|
|
||||
Total gross premiums written
|
|
$
|
98,905
|
|
|
$
|
62,795
|
|
|
$
|
266,253
|
|
|
$
|
164,600
|
|
(a)
|
The results of AlphaCat are presented on an asset manager basis, which is non-GAAP. A reconciliation of segmental income to net income available to Validus is included in the tables below.
|
(b)
|
The investment income from the AlphaCat funds and sidecars is based on equity accounting.
|
(c)
|
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 greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.
|
(d)
|
AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Corporate and Investment Information
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Investment income
|
|
|
|
|
|
|
|
|
||||||||
Net investment income (a)
|
|
$
|
36,849
|
|
|
$
|
31,854
|
|
|
$
|
64,772
|
|
|
$
|
61,290
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
|
17,872
|
|
|
17,092
|
|
|
34,055
|
|
|
32,698
|
|
||||
Share compensation expenses
|
|
4,007
|
|
|
3,178
|
|
|
8,099
|
|
|
6,071
|
|
||||
Finance expenses (a)
|
|
13,979
|
|
|
15,144
|
|
|
28,320
|
|
|
30,480
|
|
||||
Dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tax expense (benefit)
|
|
1,706
|
|
|
2,549
|
|
|
(412
|
)
|
|
5,114
|
|
||||
Total operating expenses
|
|
37,564
|
|
|
37,963
|
|
|
70,062
|
|
|
74,363
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other items
|
|
|
|
|
|
|
|
|
||||||||
Net realized gains on investments (a)
|
|
2,520
|
|
|
2,104
|
|
|
1,434
|
|
|
6,284
|
|
||||
Change in net unrealized gains (losses) on investments (a)
|
|
30,052
|
|
|
(33,926
|
)
|
|
77,130
|
|
|
743
|
|
||||
(Loss) income from investment affiliate
|
|
(589
|
)
|
|
284
|
|
|
(4,702
|
)
|
|
3,060
|
|
||||
Foreign exchange gains (losses) (a)
|
|
6,621
|
|
|
(3,237
|
)
|
|
12,695
|
|
|
(6,693
|
)
|
||||
Other income (loss)
|
|
79
|
|
|
(608
|
)
|
|
756
|
|
|
(608
|
)
|
||||
Total other items
|
|
38,683
|
|
|
(35,383
|
)
|
|
87,313
|
|
|
2,786
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Corporate and Investment Information
|
|
$
|
37,968
|
|
|
$
|
(41,492
|
)
|
|
$
|
82,023
|
|
|
$
|
(10,287
|
)
|
(a)
|
These items exclude the components which are included in Validus' share of AlphaCat and amounts which are consolidated from VIEs.
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||||||
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World Segment
|
|
AlphaCat & Consolidated Variable Interest Entities
|
|
Corporate & Investments
|
|
Eliminations
|
|
Total
|
||||||||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross premiums written
|
$
|
285,810
|
|
|
$
|
296,067
|
|
|
$
|
86,971
|
|
|
$
|
98,905
|
|
|
|
|
$
|
(3,711
|
)
|
|
$
|
764,042
|
|
||
Reinsurance premiums ceded
|
(3,196
|
)
|
|
(27,161
|
)
|
|
(5,006
|
)
|
|
(4,577
|
)
|
|
|
|
3,711
|
|
|
(36,229
|
)
|
||||||||
Net premiums written
|
282,614
|
|
|
268,906
|
|
|
81,965
|
|
|
94,328
|
|
|
|
|
—
|
|
|
727,813
|
|
||||||||
Change in unearned premiums
|
(35,492
|
)
|
|
(67,357
|
)
|
|
(16,309
|
)
|
|
(34,932
|
)
|
|
|
|
—
|
|
|
(154,090
|
)
|
||||||||
Net premiums earned
|
247,122
|
|
|
201,549
|
|
|
65,656
|
|
|
59,396
|
|
|
|
|
—
|
|
|
573,723
|
|
||||||||
Other insurance related income (loss)
|
150
|
|
|
279
|
|
|
189
|
|
|
3,401
|
|
|
|
|
(3,274
|
)
|
|
745
|
|
||||||||
Total underwriting revenues
|
247,272
|
|
|
201,828
|
|
|
65,845
|
|
|
62,797
|
|
|
|
|
(3,274
|
)
|
|
574,468
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Losses and loss expenses
|
132,139
|
|
|
109,310
|
|
|
44,229
|
|
|
21,452
|
|
|
|
|
—
|
|
|
307,130
|
|
||||||||
Policy acquisition costs
|
42,564
|
|
|
43,613
|
|
|
15,410
|
|
|
6,530
|
|
|
|
|
(151
|
)
|
|
107,966
|
|
||||||||
General and administrative expenses
|
17,872
|
|
|
39,061
|
|
|
11,458
|
|
|
6,561
|
|
|
17,872
|
|
|
(3,136
|
)
|
|
89,688
|
|
|||||||
Share compensation expenses
|
2,775
|
|
|
3,270
|
|
|
542
|
|
|
133
|
|
|
4,007
|
|
|
—
|
|
|
10,727
|
|
|||||||
Total underwriting deductions
|
195,350
|
|
|
195,254
|
|
|
71,639
|
|
|
34,676
|
|
|
21,879
|
|
|
(3,287
|
)
|
|
515,511
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting income (loss)
|
$
|
51,922
|
|
|
$
|
6,574
|
|
|
$
|
(5,794
|
)
|
|
$
|
28,121
|
|
|
$
|
(21,879
|
)
|
|
$
|
13
|
|
|
$
|
58,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other items (a)
|
|
|
|
|
|
|
1,058
|
|
|
22,998
|
|
|
|
|
24,056
|
|
|||||||||||
Dividends on preferred shares
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Net investment income
|
|
|
|
|
|
|
3,005
|
|
|
36,849
|
|
|
(597
|
)
|
|
39,257
|
|
||||||||||
(Income) attributable to AlphaCat investors
|
|
|
|
|
|
|
(6,114
|
)
|
|
—
|
|
|
|
|
(6,114
|
)
|
|||||||||||
Net (income) attributable to noncontrolling interest
|
|
|
|
|
|
|
(21,193
|
)
|
|
—
|
|
|
|
|
(21,193
|
)
|
|||||||||||
Segmental income (loss)
|
$
|
51,922
|
|
|
$
|
6,574
|
|
|
$
|
(5,794
|
)
|
|
$
|
4,877
|
|
|
$
|
37,968
|
|
|
$
|
(584
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income available to Validus common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
94,963
|
|
(a)
|
Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||||||||||
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World Segment
|
|
AlphaCat & Consolidated Variable Interest Entities
|
|
Corporate & Investments
|
|
Eliminations
|
|
Total
|
||||||||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross premiums written
|
$
|
297,420
|
|
|
$
|
293,046
|
|
|
$
|
79,554
|
|
|
$
|
62,795
|
|
|
|
|
$
|
(6,647
|
)
|
|
$
|
726,168
|
|
||
Reinsurance premiums ceded
|
(19,378
|
)
|
|
(37,246
|
)
|
|
(5,441
|
)
|
|
—
|
|
|
|
|
6,647
|
|
|
(55,418
|
)
|
||||||||
Net premiums written
|
278,042
|
|
|
255,800
|
|
|
74,113
|
|
|
62,795
|
|
|
|
|
—
|
|
|
670,750
|
|
||||||||
Change in unearned premiums
|
(13,492
|
)
|
|
(50,362
|
)
|
|
(8,995
|
)
|
|
(25,213
|
)
|
|
|
|
—
|
|
|
(98,062
|
)
|
||||||||
Net premiums earned
|
264,550
|
|
|
205,438
|
|
|
65,118
|
|
|
37,582
|
|
|
|
|
—
|
|
|
572,688
|
|
||||||||
Other insurance related income (loss)
|
434
|
|
|
40
|
|
|
276
|
|
|
5,532
|
|
|
|
|
(5,574
|
)
|
|
708
|
|
||||||||
Total underwriting revenues
|
264,984
|
|
|
205,478
|
|
|
65,394
|
|
|
43,114
|
|
|
|
|
(5,574
|
)
|
|
573,396
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Losses and loss expenses
|
123,405
|
|
|
95,970
|
|
|
46,771
|
|
|
—
|
|
|
|
|
—
|
|
|
266,146
|
|
||||||||
Policy acquisition costs
|
43,826
|
|
|
47,659
|
|
|
9,617
|
|
|
3,742
|
|
|
|
|
(521
|
)
|
|
104,323
|
|
||||||||
General and administrative expenses
|
18,781
|
|
|
35,555
|
|
|
8,923
|
|
|
8,805
|
|
|
17,092
|
|
|
(5,131
|
)
|
|
84,025
|
|
|||||||
Share compensation expenses
|
2,396
|
|
|
3,024
|
|
|
494
|
|
|
150
|
|
|
3,178
|
|
|
—
|
|
|
9,242
|
|
|||||||
Total underwriting deductions
|
188,408
|
|
|
182,208
|
|
|
65,805
|
|
|
12,697
|
|
|
20,270
|
|
|
(5,652
|
)
|
|
463,736
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting income (loss)
|
$
|
76,576
|
|
|
$
|
23,270
|
|
|
$
|
(411
|
)
|
|
$
|
30,417
|
|
|
$
|
(20,270
|
)
|
|
$
|
78
|
|
|
$
|
109,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other items (a)
|
|
|
|
|
|
|
(1,844
|
)
|
|
(53,076
|
)
|
|
|
|
(54,920
|
)
|
|||||||||||
Dividends on preferred shares
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Net investment income
|
|
|
|
|
|
|
1,757
|
|
|
31,854
|
|
|
|
|
33,611
|
|
|||||||||||
(Income) attributable to AlphaCat investors
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||
Net (income) attributable to noncontrolling interest
|
|
|
|
|
|
|
(22,561
|
)
|
|
—
|
|
|
|
|
(22,561
|
)
|
|||||||||||
Segmental income (loss)
|
$
|
76,576
|
|
|
$
|
23,270
|
|
|
$
|
(411
|
)
|
|
$
|
7,769
|
|
|
$
|
(41,492
|
)
|
|
$
|
78
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income available to Validus common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
65,790
|
|
(a)
|
Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||||||
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World Segment
|
|
AlphaCat & Consolidated Variable Interest Entities
|
|
Corporate & Investments
|
|
Eliminations
|
|
Total
|
||||||||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross premiums written
|
$
|
977,478
|
|
|
$
|
562,384
|
|
|
$
|
150,930
|
|
|
$
|
266,253
|
|
|
|
|
$
|
(20,212
|
)
|
|
$
|
1,936,833
|
|
||
Reinsurance premiums ceded
|
(95,691
|
)
|
|
(114,619
|
)
|
|
(9,145
|
)
|
|
(4,821
|
)
|
|
|
|
20,212
|
|
|
(204,064
|
)
|
||||||||
Net premiums written
|
881,787
|
|
|
447,765
|
|
|
141,785
|
|
|
261,432
|
|
|
|
|
—
|
|
|
1,732,769
|
|
||||||||
Change in unearned premiums
|
(390,834
|
)
|
|
(39,424
|
)
|
|
(14,630
|
)
|
|
(142,890
|
)
|
|
|
|
—
|
|
|
(587,778
|
)
|
||||||||
Net premiums earned
|
490,953
|
|
|
408,341
|
|
|
127,155
|
|
|
118,542
|
|
|
|
|
—
|
|
|
1,144,991
|
|
||||||||
Other insurance related (loss)
income
|
(165
|
)
|
|
290
|
|
|
477
|
|
|
9,066
|
|
|
|
|
(8,187
|
)
|
|
1,481
|
|
||||||||
Total underwriting revenues
|
490,788
|
|
|
408,631
|
|
|
127,632
|
|
|
127,608
|
|
|
|
|
(8,187
|
)
|
|
1,146,472
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Losses and loss expenses
|
215,007
|
|
|
209,411
|
|
|
83,875
|
|
|
23,284
|
|
|
|
|
—
|
|
|
531,577
|
|
||||||||
Policy acquisition costs
|
84,823
|
|
|
87,956
|
|
|
29,610
|
|
|
12,687
|
|
|
|
|
83
|
|
|
215,159
|
|
||||||||
General and administrative expenses
|
35,051
|
|
|
77,596
|
|
|
23,533
|
|
|
14,017
|
|
|
34,055
|
|
|
(8,356
|
)
|
|
175,896
|
|
|||||||
Share compensation expenses
|
5,676
|
|
|
6,792
|
|
|
1,123
|
|
|
274
|
|
|
8,099
|
|
|
—
|
|
|
21,964
|
|
|||||||
Total underwriting deductions
|
340,557
|
|
|
381,755
|
|
|
138,141
|
|
|
50,262
|
|
|
42,154
|
|
|
(8,273
|
)
|
|
944,596
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting income (loss)
|
$
|
150,231
|
|
|
$
|
26,876
|
|
|
$
|
(10,509
|
)
|
|
$
|
77,346
|
|
|
$
|
(42,154
|
)
|
|
$
|
86
|
|
|
$
|
201,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other items (a)
|
|
|
|
|
|
|
1,212
|
|
|
59,405
|
|
|
|
|
60,617
|
|
|||||||||||
Dividends on preferred shares
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Net investment income
|
|
|
|
|
|
|
4,543
|
|
|
64,772
|
|
|
(597
|
)
|
|
68,718
|
|
||||||||||
(Income) attributable to AlphaCat investors
|
|
|
|
|
|
|
(10,714
|
)
|
|
—
|
|
|
|
|
(10,714
|
)
|
|||||||||||
Net (income) attributable to noncontrolling interest
|
|
|
|
|
|
|
(58,724
|
)
|
|
—
|
|
|
|
|
(58,724
|
)
|
|||||||||||
Segmental income (loss)
|
$
|
150,231
|
|
|
$
|
26,876
|
|
|
$
|
(10,509
|
)
|
|
$
|
13,663
|
|
|
$
|
82,023
|
|
|
$
|
(511
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income available to Validus common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
261,773
|
|
(a)
|
Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||||||||
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World Segment
|
|
AlphaCat & Consolidated Variable Interest Entities
|
|
Corporate & Investments
|
|
Eliminations
|
|
Total
|
||||||||||||||
Underwriting revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross premiums written
|
$
|
1,009,113
|
|
|
$
|
563,123
|
|
|
$
|
136,501
|
|
|
$
|
164,600
|
|
|
|
|
$
|
(27,945
|
)
|
|
$
|
1,845,392
|
|
||
Reinsurance premiums ceded
|
(133,155
|
)
|
|
(128,321
|
)
|
|
(8,674
|
)
|
|
(4,538
|
)
|
|
|
|
27,945
|
|
|
(246,743
|
)
|
||||||||
Net premiums written
|
875,958
|
|
|
434,802
|
|
|
127,827
|
|
|
160,062
|
|
|
|
|
—
|
|
|
1,598,649
|
|
||||||||
Change in unearned premiums
|
(358,320
|
)
|
|
(6,775
|
)
|
|
5,173
|
|
|
(90,149
|
)
|
|
|
|
—
|
|
|
(450,071
|
)
|
||||||||
Net premiums earned
|
517,638
|
|
|
428,027
|
|
|
133,000
|
|
|
69,913
|
|
|
|
|
—
|
|
|
1,148,578
|
|
||||||||
Other insurance related income (loss)
|
749
|
|
|
94
|
|
|
539
|
|
|
11,456
|
|
|
|
|
(11,190
|
)
|
|
1,648
|
|
||||||||
Total underwriting revenues
|
518,387
|
|
|
428,121
|
|
|
133,539
|
|
|
81,369
|
|
|
|
|
(11,190
|
)
|
|
1,150,226
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting deductions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Losses and loss expenses
|
236,533
|
|
|
174,098
|
|
|
97,288
|
|
|
(844
|
)
|
|
|
|
—
|
|
|
507,075
|
|
||||||||
Policy acquisition costs
|
85,920
|
|
|
96,763
|
|
|
13,896
|
|
|
7,177
|
|
|
|
|
(1,022
|
)
|
|
202,734
|
|
||||||||
General and administrative expenses
|
38,290
|
|
|
72,049
|
|
|
19,550
|
|
|
16,059
|
|
|
32,698
|
|
|
(10,386
|
)
|
|
168,260
|
|
|||||||
Share compensation expenses
|
4,974
|
|
|
5,981
|
|
|
971
|
|
|
299
|
|
|
6,071
|
|
|
—
|
|
|
18,296
|
|
|||||||
Total underwriting deductions
|
365,717
|
|
|
348,891
|
|
|
131,705
|
|
|
22,691
|
|
|
38,769
|
|
|
(11,408
|
)
|
|
896,365
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Underwriting income (loss)
|
$
|
152,670
|
|
|
$
|
79,230
|
|
|
$
|
1,834
|
|
|
$
|
58,678
|
|
|
$
|
(38,769
|
)
|
|
$
|
218
|
|
|
$
|
253,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other items (a)
|
|
|
|
|
|
|
(5,753
|
)
|
|
(32,808
|
)
|
|
|
|
(38,561
|
)
|
|||||||||||
Dividends on preferred shares
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Net investment income
|
|
|
|
|
|
|
3,350
|
|
|
61,290
|
|
|
|
|
64,640
|
|
|||||||||||
(Income) attributable to AlphaCat investors
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||
Net (income) attributable to noncontrolling interest
|
|
|
|
|
|
|
(40,739
|
)
|
|
—
|
|
|
|
|
(40,739
|
)
|
|||||||||||
Segmental income (loss)
|
$
|
152,670
|
|
|
$
|
79,230
|
|
|
$
|
1,834
|
|
|
$
|
15,536
|
|
|
$
|
(10,287
|
)
|
|
$
|
218
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income available to Validus
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
239,201
|
|
(a)
|
Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).
|
|
Gross Premiums Written
|
|||||||||||||||||||||||||
|
Three Months Ended June 30, 2016
|
|||||||||||||||||||||||||
|
Validus Re
|
|
Talbot
|
|
Western World
|
|
AlphaCat
|
|
Eliminations
|
|
Total
|
|
%
|
|||||||||||||
United States
|
$
|
129,087
|
|
|
$
|
39,135
|
|
|
$
|
86,971
|
|
|
$
|
37,338
|
|
|
$
|
(417
|
)
|
|
$
|
292,114
|
|
|
38.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Worldwide excluding United States (a)
|
16,975
|
|
|
30,028
|
|
|
—
|
|
|
6,496
|
|
|
(136
|
)
|
|
53,363
|
|
|
7.0
|
%
|
||||||
Australia and New Zealand
|
1,926
|
|
|
2,063
|
|
|
—
|
|
|
867
|
|
|
21
|
|
|
4,877
|
|
|
0.6
|
%
|
||||||
Europe
|
3,267
|
|
|
6,855
|
|
|
—
|
|
|
(145
|
)
|
|
216
|
|
|
10,193
|
|
|
1.3
|
%
|
||||||
Latin America and Caribbean
|
5,992
|
|
|
27,597
|
|
|
—
|
|
|
—
|
|
|
(2,511
|
)
|
|
31,078
|
|
|
4.1
|
%
|
||||||
Japan
|
39,053
|
|
|
3,965
|
|
|
—
|
|
|
1,721
|
|
|
(7
|
)
|
|
44,732
|
|
|
5.9
|
%
|
||||||
Canada
|
1,821
|
|
|
2,470
|
|
|
—
|
|
|
223
|
|
|
(36
|
)
|
|
4,478
|
|
|
0.6
|
%
|
||||||
Rest of the world (b)
|
3,259
|
|
|
29,806
|
|
|
—
|
|
|
—
|
|
|
(457
|
)
|
|
32,608
|
|
|
4.3
|
%
|
||||||
Sub-total, non United States
|
72,293
|
|
|
102,784
|
|
|
—
|
|
|
9,162
|
|
|
(2,910
|
)
|
|
181,329
|
|
|
23.8
|
%
|
||||||
Worldwide including United States (a)
|
35,561
|
|
|
34,198
|
|
|
—
|
|
|
52,394
|
|
|
(380
|
)
|
|
121,773
|
|
|
15.9
|
%
|
||||||
Other locations non-specific (c)
|
48,869
|
|
|
119,950
|
|
|
—
|
|
|
11
|
|
|
(4
|
)
|
|
168,826
|
|
|
22.1
|
%
|
||||||
Total
|
$
|
285,810
|
|
|
$
|
296,067
|
|
|
$
|
86,971
|
|
|
$
|
98,905
|
|
|
$
|
(3,711
|
)
|
|
$
|
764,042
|
|
|
100.0
|
%
|
|
Gross Premiums Written
|
|||||||||||||||||||||||||
|
Three Months Ended June 30, 2015
|
|||||||||||||||||||||||||
|
Validus Re
|
|
Talbot
|
|
Western World
|
|
AlphaCat
|
|
Eliminations
|
|
Total
|
|
%
|
|||||||||||||
United States
|
$
|
171,006
|
|
|
$
|
40,036
|
|
|
$
|
79,554
|
|
|
$
|
23,800
|
|
|
$
|
(428
|
)
|
|
$
|
313,968
|
|
|
43.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Worldwide excluding United States (a)
|
12,322
|
|
|
30,231
|
|
|
—
|
|
|
2,173
|
|
|
69
|
|
|
44,795
|
|
|
6.2
|
%
|
||||||
Australia and New Zealand
|
1,643
|
|
|
1,173
|
|
|
—
|
|
|
624
|
|
|
25
|
|
|
3,465
|
|
|
0.5
|
%
|
||||||
Europe
|
16,282
|
|
|
10,584
|
|
|
—
|
|
|
1,073
|
|
|
(84
|
)
|
|
27,855
|
|
|
3.8
|
%
|
||||||
Latin America and Caribbean
|
7,684
|
|
|
28,693
|
|
|
—
|
|
|
—
|
|
|
(3,919
|
)
|
|
32,458
|
|
|
4.5
|
%
|
||||||
Japan
|
37,800
|
|
|
2,843
|
|
|
—
|
|
|
1,671
|
|
|
(45
|
)
|
|
42,269
|
|
|
5.8
|
%
|
||||||
Canada
|
597
|
|
|
2,299
|
|
|
—
|
|
|
294
|
|
|
(48
|
)
|
|
3,142
|
|
|
0.4
|
%
|
||||||
Rest of the world (b)
|
3,026
|
|
|
24,982
|
|
|
—
|
|
|
—
|
|
|
(294
|
)
|
|
27,714
|
|
|
3.8
|
%
|
||||||
Sub-total, non United States
|
79,354
|
|
|
100,805
|
|
|
—
|
|
|
5,835
|
|
|
(4,296
|
)
|
|
181,698
|
|
|
25.0
|
%
|
||||||
Worldwide including United States (a)
|
37,967
|
|
|
32,704
|
|
|
—
|
|
|
32,410
|
|
|
(2,021
|
)
|
|
101,060
|
|
|
13.9
|
%
|
||||||
Other locations non-specific (c)
|
9,093
|
|
|
119,501
|
|
|
—
|
|
|
750
|
|
|
98
|
|
|
129,442
|
|
|
17.8
|
%
|
||||||
Total
|
$
|
297,420
|
|
|
$
|
293,046
|
|
|
$
|
79,554
|
|
|
$
|
62,795
|
|
|
$
|
(6,647
|
)
|
|
$
|
726,168
|
|
|
100.0
|
%
|
(a)
|
Represents risks in two or more geographic zones.
|
(b)
|
Represents risks in one geographic zone.
|
(c)
|
The Other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable since these exposures can span multiple geographic areas and, in some instances, are not fixed locations.
|
|
Gross Premiums Written
|
|||||||||||||||||||||||||
|
Six Months Ended June 30, 2016
|
|||||||||||||||||||||||||
|
Validus Re
|
|
Talbot
|
|
Western World
|
|
AlphaCat
|
|
Eliminations
|
|
Total
|
|
%
|
|||||||||||||
United States
|
$
|
424,481
|
|
|
$
|
65,245
|
|
|
$
|
150,930
|
|
|
$
|
62,729
|
|
|
$
|
(1,555
|
)
|
|
$
|
701,830
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Worldwide excluding United States (a)
|
47,239
|
|
|
65,532
|
|
|
—
|
|
|
22,507
|
|
|
(611
|
)
|
|
134,667
|
|
|
7.0
|
%
|
||||||
Australia and New Zealand
|
6,849
|
|
|
4,375
|
|
|
—
|
|
|
4,949
|
|
|
(113
|
)
|
|
16,060
|
|
|
0.8
|
%
|
||||||
Europe
|
25,734
|
|
|
20,716
|
|
|
—
|
|
|
3,306
|
|
|
(708
|
)
|
|
49,048
|
|
|
2.5
|
%
|
||||||
Latin America and Caribbean
|
19,574
|
|
|
51,404
|
|
|
—
|
|
|
—
|
|
|
(5,537
|
)
|
|
65,441
|
|
|
3.4
|
%
|
||||||
Japan
|
39,925
|
|
|
4,582
|
|
|
—
|
|
|
3,221
|
|
|
(31
|
)
|
|
47,697
|
|
|
2.5
|
%
|
||||||
Canada
|
3,497
|
|
|
3,562
|
|
|
—
|
|
|
223
|
|
|
(87
|
)
|
|
7,195
|
|
|
0.4
|
%
|
||||||
Rest of the world (b)
|
19,947
|
|
|
57,290
|
|
|
—
|
|
|
—
|
|
|
(2,342
|
)
|
|
74,895
|
|
|
3.9
|
%
|
||||||
Sub-total, non United States
|
162,765
|
|
|
207,461
|
|
|
—
|
|
|
34,206
|
|
|
(9,429
|
)
|
|
395,003
|
|
|
20.5
|
%
|
||||||
Worldwide including United States (a)
|
147,338
|
|
|
62,652
|
|
|
—
|
|
|
167,767
|
|
|
(9,214
|
)
|
|
368,543
|
|
|
19.0
|
%
|
||||||
Other locations non-specific (c)
|
242,894
|
|
|
227,026
|
|
|
—
|
|
|
1,551
|
|
|
(14
|
)
|
|
471,457
|
|
|
24.3
|
%
|
||||||
Total
|
$
|
977,478
|
|
|
$
|
562,384
|
|
|
$
|
150,930
|
|
|
$
|
266,253
|
|
|
$
|
(20,212
|
)
|
|
$
|
1,936,833
|
|
|
100.0
|
%
|
|
Gross Premiums Written
|
|||||||||||||||||||||||||
|
Six Months Ended June 30, 2015
|
|||||||||||||||||||||||||
|
Validus Re
|
|
Talbot
|
|
Western World
|
|
AlphaCat
|
|
Eliminations
|
|
Total
|
|
%
|
|||||||||||||
United States
|
$
|
510,020
|
|
|
$
|
68,094
|
|
|
$
|
136,501
|
|
|
$
|
36,945
|
|
|
$
|
(1,882
|
)
|
|
$
|
749,678
|
|
|
40.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Worldwide excluding United States (a)
|
47,288
|
|
|
65,173
|
|
|
—
|
|
|
8,006
|
|
|
(933
|
)
|
|
119,534
|
|
|
6.5
|
%
|
||||||
Australia and New Zealand
|
11,507
|
|
|
3,049
|
|
|
—
|
|
|
624
|
|
|
(126
|
)
|
|
15,054
|
|
|
0.8
|
%
|
||||||
Europe
|
41,017
|
|
|
23,798
|
|
|
—
|
|
|
2,512
|
|
|
(904
|
)
|
|
66,423
|
|
|
3.6
|
%
|
||||||
Latin America and Caribbean
|
16,932
|
|
|
51,385
|
|
|
—
|
|
|
—
|
|
|
(7,813
|
)
|
|
60,504
|
|
|
3.3
|
%
|
||||||
Japan
|
39,184
|
|
|
3,597
|
|
|
—
|
|
|
1,671
|
|
|
(58
|
)
|
|
44,394
|
|
|
2.4
|
%
|
||||||
Canada
|
2,782
|
|
|
3,997
|
|
|
—
|
|
|
488
|
|
|
(124
|
)
|
|
7,143
|
|
|
0.4
|
%
|
||||||
Rest of the world (b)
|
21,680
|
|
|
47,988
|
|
|
—
|
|
|
—
|
|
|
(2,542
|
)
|
|
67,126
|
|
|
3.6
|
%
|
||||||
Sub-total, non United States
|
180,390
|
|
|
198,987
|
|
|
—
|
|
|
13,301
|
|
|
(12,500
|
)
|
|
380,178
|
|
|
20.6
|
%
|
||||||
Worldwide including United States (a)
|
122,811
|
|
|
54,498
|
|
|
—
|
|
|
110,304
|
|
|
(13,659
|
)
|
|
273,954
|
|
|
14.8
|
%
|
||||||
Other locations non-specific (c)
|
195,892
|
|
|
241,544
|
|
|
—
|
|
|
4,050
|
|
|
96
|
|
|
441,582
|
|
|
23.9
|
%
|
||||||
Total
|
$
|
1,009,113
|
|
|
$
|
563,123
|
|
|
$
|
136,501
|
|
|
$
|
164,600
|
|
|
$
|
(27,945
|
)
|
|
$
|
1,845,392
|
|
|
100.0
|
%
|
(a)
|
Represents risks in two or more geographic zones.
|
(b)
|
Represents risks in one geographic zone.
|
(c)
|
The Other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable since these exposures can span multiple geographic areas and, in some instances, are not fixed locations.
|
|
June 30, 2016
|
|
December 31, 2015
|
Book value per diluted common share plus accumulated dividends
|
$55.27
|
|
$52.49
|
Book value per diluted common share
|
$44.41
|
|
$42.33
|
Tangible book value per diluted common share
|
$40.65
|
|
$38.63
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Underwriting income
|
|
$58,957
|
|
$109,660
|
|
$201,876
|
|
$253,861
|
Net operating income available to Validus common shareholders
|
|
$54,900
|
|
$101,717
|
|
$172,278
|
|
$238,591
|
Annualized return on average equity
|
|
10.2%
|
|
7.2%
|
|
14.2%
|
|
13.1%
|
Annualized net operating return on average equity
|
|
5.9%
|
|
11.1%
|
|
9.3%
|
|
13.1%
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
764,042
|
|
|
$
|
37,874
|
|
|
$
|
726,168
|
|
Reinsurance premiums ceded
|
|
(36,229
|
)
|
|
19,189
|
|
|
(55,418
|
)
|
|||
Net premiums written
|
|
727,813
|
|
|
57,063
|
|
|
670,750
|
|
|||
Change in unearned premiums
|
|
(154,090
|
)
|
|
(56,028
|
)
|
|
(98,062
|
)
|
|||
Net premiums earned
|
|
573,723
|
|
|
1,035
|
|
|
572,688
|
|
|||
Other insurance related income
|
|
745
|
|
|
37
|
|
|
708
|
|
|||
Total underwriting revenues
|
|
574,468
|
|
|
1,072
|
|
|
573,396
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
307,130
|
|
|
40,984
|
|
|
266,146
|
|
|||
Policy acquisition costs
|
|
107,966
|
|
|
3,643
|
|
|
104,323
|
|
|||
General and administrative expenses
|
|
89,688
|
|
|
5,663
|
|
|
84,025
|
|
|||
Share compensation expenses
|
|
10,727
|
|
|
1,485
|
|
|
9,242
|
|
|||
Total underwriting deductions
|
|
515,511
|
|
|
51,775
|
|
|
463,736
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting income (a)
|
|
$
|
58,957
|
|
|
$
|
(50,703
|
)
|
|
$
|
109,660
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
|
39,257
|
|
|
5,646
|
|
|
33,611
|
|
|||
Finance expenses
|
|
(14,166
|
)
|
|
4,516
|
|
|
(18,682
|
)
|
|||
Dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Tax expense
|
|
(1,706
|
)
|
|
843
|
|
|
(2,549
|
)
|
|||
Income from operating affiliates
|
|
—
|
|
|
(1,738
|
)
|
|
1,738
|
|
|||
(Income) attributable to AlphaCat investors
|
|
(6,114
|
)
|
|
(6,114
|
)
|
|
—
|
|
|||
Net (income) attributable to noncontrolling interest
|
|
(21,328
|
)
|
|
733
|
|
|
(22,061
|
)
|
|||
Net operating income available to Validus common shareholders (a)
|
|
$
|
54,900
|
|
|
$
|
(46,817
|
)
|
|
$
|
101,717
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
284,704
|
|
|
$
|
(19,086
|
)
|
|
$
|
303,790
|
|
Current period—notable loss events
|
|
36,915
|
|
|
(11,159
|
)
|
|
48,074
|
|
|||
Current period—non-notable loss events
|
|
48,292
|
|
|
63,292
|
|
|
(15,000
|
)
|
|||
Change in prior accident years
|
|
(62,781
|
)
|
|
7,937
|
|
|
(70,718
|
)
|
|||
Total losses and loss expenses
|
|
$
|
307,130
|
|
|
$
|
40,984
|
|
|
$
|
266,146
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
95.3
|
%
|
|
2.9
|
|
|
92.4
|
%
|
|||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
49.6
|
%
|
|
(3.4
|
)
|
|
53.0
|
%
|
|||
Current period—notable loss events
|
|
6.4
|
%
|
|
(2.0
|
)
|
|
8.4
|
%
|
|||
Current period—non-notable loss events
|
|
8.4
|
%
|
|
11.0
|
|
|
(2.6
|
)%
|
|||
Change in prior accident years
|
|
(10.9
|
)%
|
|
1.4
|
|
|
(12.3
|
)%
|
|||
Losses and loss expenses
|
|
53.5
|
%
|
|
7.0
|
|
|
46.5
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
18.8
|
%
|
|
0.6
|
|
|
18.2
|
%
|
|||
General and administrative expenses (b)
|
|
17.6
|
%
|
|
1.3
|
|
|
16.3
|
%
|
|||
Expense ratio
|
|
36.4
|
%
|
|
1.9
|
|
|
34.5
|
%
|
|||
Combined ratio
|
|
89.9
|
%
|
|
8.9
|
|
|
81.0
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
•
|
Gross premiums written for the
three months ended
June 30, 2016
were
$764.0 million
compared to
$726.2 million
for the
three months ended
June 30, 2015
,
an increase
of
$37.9 million
, or
5.2%
. The increase was primarily driven by an increase in the AlphaCat, Western World and Talbot segments, partially offset by a decrease in the Validus Re segment discussed further as follows:
|
◦
|
Gross premiums written in the AlphaCat segment, on behalf of the Company's variable interest entities ("VIEs"), were
$98.9 million
for the
three months ended
June 30, 2016
, compared to
$62.8 million
for the
three months ended
June 30, 2015
,
an increase
of
$36.1 million
or
57.5%
, primarily due to an increase in the capital base of the AlphaCat ILS Funds.
|
◦
|
Gross premiums written for the
three months ended
June 30, 2016
in the Western World segment were
$87.0 million
compared to
$79.6 million
for the
three months ended
June 30, 2015
,
an increase
of
$7.4 million
or
9.3%
, primarily driven by an increase in the property lines as a result of continued enhancements to the underwriting platform.
|
◦
|
Gross premiums written for the
three months ended
June 30, 2016
in the Talbot segment were
$296.1 million
compared to
$293.0 million
for the
three months ended
June 30, 2015
,
an increase
of
$3.0 million
or
1.0%
.
|
◦
|
Gross premiums written for the
three months ended
June 30, 2016
in the Validus Re segment were
$285.8 million
compared to
$297.4 million
for the
three months ended
June 30, 2015
,
a decrease
of
$11.6 million
or
3.9%
. The decrease was primarily driven by a decrease in the property lines due to the timing of renewals, current market conditions and increased cessions to AlphaCat, partially offset by an
increase
in the specialty lines.
|
•
|
Underwriting revenues for the
three months ended
June 30, 2016
were
$574.5 million
compared to
$573.4 million
for the
three months ended
June 30, 2015
,
an increase
of
$1.1 million
or
0.2%
.
|
•
|
Losses and loss expenses for the
three months ended
June 30, 2016
were
$307.1 million
compared to
$266.1 million
for the
three months ended
June 30, 2015
,
an increase
of
$41.0 million
or
15.4%
, primarily as a result of increased non-notable loss events incurred during the
three months ended
June 30, 2016
.
|
•
|
Gross losses and loss expenses from the Canadian Wildfires notable loss event, defined as consolidated net losses which aggregate to a threshold greater than or equal to $30.0 million, were $73.5 million for the
three months ended
June 30, 2016
. Net of reinsurance recoveries of $36.6 million, the Company's share of net losses and loss expenses from the loss event was
$36.9 million
, or
6.4
percentage points of the loss ratio during the
three months ended
June 30, 2016
. Net of losses of $6.4 million attributable to AlphaCat investors and noncontrolling interest and reinstatement premiums of $3.6 million, the net loss attributable to the Company was $26.9 million. During the
three months ended
June 30, 2015
, the Company incurred a single notable loss event, Pemex, which resulted in an estimated net loss attributable to the Company of
$48.1 million
, or
8.4
percentage points of the loss ratio. Including reinstatement premiums of $0.4 million, the net loss attributable to the Company was $48.5 million.
|
•
|
Gross losses and loss expenses from the Texas Hailstorms, Kumamoto Earthquake and Jubilee Oil non-notable loss events, defined as consolidated net losses which aggregate to a threshold greater than or equal to $15.0 million but less than $30.0 million, were $92.5 million for the
three months ended
June 30, 2016
. Net of reinsurance recoveries of $44.2 million, the Company's aggregate share of net losses and loss expenses from non-notable loss events was
$48.3 million
, or
8.4
percentage points of the loss ratio. Net of losses of $5.5 million attributable to AlphaCat investors and noncontrolling interest and reinstatement premiums of $9.7 million, the net loss attributable to the Company was $33.1 million. Losses and loss expenses from non-notable loss events for the
three months ended
June 30, 2015
were
$(15.0) million
, or
(2.6)
percentage points of the loss ratio which represented a reserve release on the first quarter 2015 non-notable loss event, Windstorm Niklas.
|
•
|
Loss ratios by line of business were as follows:
|
•
|
The loss ratio for the
three months ended
June 30, 2016
was
53.5%
which included
$62.8 million
of
favorable
loss reserve development on prior accident years, benefiting the loss ratio by
10.9
percentage points compared to a loss ratio for the
three months ended
June 30, 2015
of
46.5%
which included
$70.7 million
of
favorable
loss reserve development on prior accident years, benefiting the loss ratio by
12.3
percentage points. The
favorable
development of
$62.8 million
for the
three months ended
June 30, 2016
was primarily due to favorable development on non-event reserves of $56.3 million and favorable development on prior years from events of $6.5 million. The term events refers to aggregate notable and non-notable losses incurred.
|
•
|
The combined ratio for the
three months ended
June 30, 2016
was
89.9%
compared to
81.0%
for the
three months ended
June 30, 2015
.
|
•
|
Policy acquisition costs for the
three months ended
June 30, 2016
were
$108.0 million
compared to
$104.3 million
for the
three months ended
June 30, 2015
,
an increase
of
$3.6 million
or
3.5%
, primarily driven by an increase in the Western World segment due to the impact of the acquisition fair value adjustments during the
three months ended
June 30, 2015
.
|
•
|
Underwriting income for the
three months ended
June 30, 2016
was
$59.0 million
compared to
$109.7 million
for the
three months ended
June 30, 2015
,
a decrease
of
$50.7 million
or
46.2%
primarily as a result of the changes in underwriting revenues and deductions described above.
|
•
|
Net operating income available to Validus common shareholders for the
three months ended
June 30, 2016
was
$54.9 million
compared to
$101.7 million
for the
three months ended
June 30, 2015
,
a decrease
of
$46.8 million
, or
46.0%
.
|
•
|
Net income available to Validus common shareholders for the
three months ended
June 30, 2016
was
$95.0 million
compared to
$65.8 million
for the
three months ended
June 30, 2015
,
an increase
of
$29.2 million
, or
44.3%
.
|
•
|
Annualized return on average equity was
10.2%
and annualized net operating return on average equity was
5.9%
for the
three months ended
June 30, 2016
compared to
7.2%
and
11.1%
, respectively, for the
three months ended
June 30, 2015
.
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
285,810
|
|
|
$
|
(11,610
|
)
|
|
$
|
297,420
|
|
Reinsurance premiums ceded
|
|
(3,196
|
)
|
|
16,182
|
|
|
(19,378
|
)
|
|||
Net premiums written
|
|
282,614
|
|
|
4,572
|
|
|
278,042
|
|
|||
Change in unearned premiums
|
|
(35,492
|
)
|
|
(22,000
|
)
|
|
(13,492
|
)
|
|||
Net premiums earned
|
|
247,122
|
|
|
(17,428
|
)
|
|
264,550
|
|
|||
Other insurance related income
|
|
150
|
|
|
(284
|
)
|
|
434
|
|
|||
Total underwriting revenues
|
|
247,272
|
|
|
(17,712
|
)
|
|
264,984
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
132,139
|
|
|
8,734
|
|
|
123,405
|
|
|||
Policy acquisition costs
|
|
42,564
|
|
|
(1,262
|
)
|
|
43,826
|
|
|||
General and administrative expenses
|
|
17,872
|
|
|
(909
|
)
|
|
18,781
|
|
|||
Share compensation expenses
|
|
2,775
|
|
|
379
|
|
|
2,396
|
|
|||
Total underwriting deductions
|
|
195,350
|
|
|
6,942
|
|
|
188,408
|
|
|||
Underwriting income (a)
|
|
$
|
51,922
|
|
|
$
|
(24,654
|
)
|
|
$
|
76,576
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
112,676
|
|
|
$
|
(21,419
|
)
|
|
$
|
134,095
|
|
Current period—notable loss events
|
|
17,884
|
|
|
(17,305
|
)
|
|
35,189
|
|
|||
Current period—non-notable loss events
|
|
32,456
|
|
|
47,456
|
|
|
(15,000
|
)
|
|||
Change in prior accident years
|
|
(30,877
|
)
|
|
2
|
|
|
(30,879
|
)
|
|||
Total losses and loss expenses
|
|
$
|
132,139
|
|
|
$
|
8,734
|
|
|
$
|
123,405
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
98.9
|
%
|
|
5.4
|
|
|
93.5
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
45.7
|
%
|
|
(5.0
|
)
|
|
50.7
|
%
|
|||
Current period—notable loss events
|
|
7.2
|
%
|
|
(6.1
|
)
|
|
13.3
|
%
|
|||
Current period—non-notable loss events
|
|
13.1
|
%
|
|
18.8
|
|
|
(5.7
|
)%
|
|||
Change in prior accident years
|
|
(12.5
|
)%
|
|
(0.8
|
)
|
|
(11.7
|
)%
|
|||
Losses and loss expenses
|
|
53.5
|
%
|
|
6.9
|
|
|
46.6
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
17.2
|
%
|
|
0.6
|
|
|
16.6
|
%
|
|||
General and administrative expenses (b)
|
|
8.4
|
%
|
|
0.4
|
|
|
8.0
|
%
|
|||
Expense ratio
|
|
25.6
|
%
|
|
1.0
|
|
|
24.6
|
%
|
|||
Combined ratio
|
|
79.1
|
%
|
|
7.9
|
|
|
71.2
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
216,034
|
|
|
75.6
|
%
|
|
$
|
(30,591
|
)
|
|
(7.3
|
)
|
|
$
|
246,625
|
|
|
82.9
|
%
|
Marine
|
|
7,806
|
|
|
2.7
|
%
|
|
1,261
|
|
|
0.5
|
|
|
6,545
|
|
|
2.2
|
%
|
|||
Specialty
|
|
61,970
|
|
|
21.7
|
%
|
|
17,720
|
|
|
6.8
|
|
|
44,250
|
|
|
14.9
|
%
|
|||
Total
|
|
$
|
285,810
|
|
|
100.0
|
%
|
|
$
|
(11,610
|
)
|
|
|
|
|
$
|
297,420
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
8,892
|
|
|
$
|
(8,730
|
)
|
|
$
|
17,622
|
|
Marine
|
|
(868
|
)
|
|
(2,349
|
)
|
|
1,481
|
|
|||
Specialty
|
|
(4,828
|
)
|
|
(5,103
|
)
|
|
275
|
|
|||
Total
|
|
$
|
3,196
|
|
|
$
|
(16,182
|
)
|
|
$
|
19,378
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
||||||||
Property
|
|
$
|
207,142
|
|
|
95.9
|
%
|
|
$
|
(21,861
|
)
|
|
3.0
|
|
$
|
229,003
|
|
|
92.9
|
%
|
Marine
|
|
8,674
|
|
|
111.1
|
%
|
|
3,610
|
|
|
33.7
|
|
5,064
|
|
|
77.4
|
%
|
|||
Specialty
|
|
66,798
|
|
|
107.8
|
%
|
|
22,823
|
|
|
8.4
|
|
43,975
|
|
|
99.4
|
%
|
|||
Total
|
|
$
|
282,614
|
|
|
98.9
|
%
|
|
$
|
4,572
|
|
|
5.4
|
|
$
|
278,042
|
|
|
93.5
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
105,228
|
|
|
$
|
(1,965
|
)
|
|
$
|
107,193
|
|
Marine
|
|
31,097
|
|
|
(13,319
|
)
|
|
44,416
|
|
|||
Specialty
|
|
110,797
|
|
|
(2,144
|
)
|
|
112,941
|
|
|||
Total
|
|
$
|
247,122
|
|
|
$
|
(17,428
|
)
|
|
$
|
264,550
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
45.7
|
%
|
|
(5.0
|
)
|
|
50.7
|
%
|
All lines—current period—notable loss events
|
7.2
|
%
|
|
(6.1
|
)
|
|
13.3
|
%
|
All lines—current period—non-notable loss events
|
13.1
|
%
|
|
18.8
|
|
|
(5.7)
|
%
|
All lines—change in prior accident years
|
(12.5
|
)%
|
|
(0.8
|
)
|
|
(11.7
|
)%
|
All lines—loss ratio
|
53.5
|
%
|
|
6.9
|
|
|
46.6
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
112,676
|
|
|
$
|
(21,419
|
)
|
|
$
|
134,095
|
|
All lines—current period—notable loss events
|
|
17,884
|
|
|
(17,305
|
)
|
|
35,189
|
|
|||
All lines—current period—non-notable loss events
|
|
32,456
|
|
|
47,456
|
|
|
(15,000
|
)
|
|||
All lines—change in prior accident years
|
|
(30,877
|
)
|
|
2
|
|
|
(30,879
|
)
|
|||
All lines—losses and loss expenses
|
|
$
|
132,139
|
|
|
$
|
8,734
|
|
|
$
|
123,405
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Property—current period excluding items below
|
20.3
|
%
|
|
(8.3
|
)
|
|
28.6
|
%
|
Property—current period—notable loss events
|
17.0
|
%
|
|
17.0
|
|
|
0.0
|
%
|
Property—current period—non-notable loss events
|
21.0
|
%
|
|
35.0
|
|
|
(14.0)
|
%
|
Property—change in prior accident years
|
(9.0)
|
%
|
|
5.9
|
|
|
(14.9)
|
%
|
Property—loss ratio
|
49.3
|
%
|
|
49.6
|
|
|
(0.3
|
)%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
21,361
|
|
|
$
|
(9,251
|
)
|
|
$
|
30,612
|
|
Property—current period—notable loss events
|
|
17,884
|
|
|
17,884
|
|
|
—
|
|
|||
Property—current period—non-notable loss events
|
|
22,079
|
|
|
37,079
|
|
|
(15,000
|
)
|
|||
Property—change in prior accident years
|
|
(9,468
|
)
|
|
6,460
|
|
|
(15,928
|
)
|
|||
Property—losses and loss expenses
|
|
$
|
51,856
|
|
|
$
|
52,172
|
|
|
$
|
(316
|
)
|
|
Losses and Loss Expense Ratio - Marine Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Marine—current period excluding items below
|
52.3
|
%
|
|
9.6
|
|
|
42.7
|
%
|
Marine—current period—notable loss events
|
0.0
|
%
|
|
(75.5
|
)
|
|
75.5
|
%
|
Marine—current period—non-notable loss events
|
2.2
|
%
|
|
2.2
|
|
|
0.0
|
%
|
Marine—change in prior accident years
|
(32.2
|
)%
|
|
(7.2
|
)
|
|
(25.0
|
)%
|
Marine—loss ratio
|
22.3
|
%
|
|
(70.9
|
)
|
|
93.2
|
%
|
|
|
Losses and Loss Expenses - Marine Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Marine—current period excluding items below
|
|
$
|
16,269
|
|
|
$
|
(2,702
|
)
|
|
$
|
18,971
|
|
Marine—current period—notable loss events
|
|
—
|
|
|
(33,524
|
)
|
|
33,524
|
|
|||
Marine—current period—non-notable loss events
|
|
670
|
|
|
670
|
|
|
—
|
|
|||
Marine—change in prior accident years
|
|
(10,018
|
)
|
|
1,081
|
|
|
(11,099
|
)
|
|||
Marine—losses and loss expenses
|
|
$
|
6,921
|
|
|
$
|
(34,475
|
)
|
|
$
|
41,396
|
|
|
Losses and Loss Expense Ratio - Specialty Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Specialty—current period excluding items below
|
67.7
|
%
|
|
(7.1
|
)
|
|
74.8
|
%
|
Specialty—current period—notable loss events
|
0.0
|
%
|
|
(1.5
|
)
|
|
1.5
|
%
|
Specialty—current period—non-notable loss events
|
8.8
|
%
|
|
8.8
|
|
|
0.0
|
%
|
Specialty—change in prior accident years
|
(10.3
|
)%
|
|
(6.9
|
)
|
|
(3.4
|
)%
|
Specialty—loss ratio
|
66.2
|
%
|
|
(6.7
|
)
|
|
72.9
|
%
|
|
|
Losses and Loss Expenses - Specialty Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Specialty—current period excluding items below
|
|
$
|
75,046
|
|
|
$
|
(9,466
|
)
|
|
$
|
84,512
|
|
Specialty—current period—notable loss events
|
|
—
|
|
|
(1,665
|
)
|
|
1,665
|
|
|||
Specialty—current period—non-notable loss events
|
|
9,707
|
|
|
9,707
|
|
|
—
|
|
|||
Specialty—change in prior accident years
|
|
(11,391
|
)
|
|
(7,539
|
)
|
|
(3,852
|
)
|
|||
Specialty—losses and loss expenses
|
|
$
|
73,362
|
|
|
$
|
(8,963
|
)
|
|
$
|
82,325
|
|
|
|
Policy Acquisition Costs
|
|||||||||||||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|||||||||
Property
|
|
$
|
18,269
|
|
|
17.4
|
%
|
|
$
|
(172
|
)
|
|
0.2
|
|
|
$
|
18,441
|
|
|
17.2
|
%
|
Marine
|
|
5,281
|
|
|
17.0
|
%
|
|
(2,497
|
)
|
|
(0.5
|
)
|
|
7,778
|
|
|
17.5
|
%
|
|||
Specialty
|
|
19,014
|
|
|
17.2
|
%
|
|
1,407
|
|
|
1.6
|
|
|
17,607
|
|
|
15.6
|
%
|
|||
Total
|
|
$
|
42,564
|
|
|
17.2
|
%
|
|
$
|
(1,262
|
)
|
|
0.6
|
|
|
$
|
43,826
|
|
|
16.6
|
%
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
35,103
|
|
|
$
|
(53,965
|
)
|
|
$
|
89,068
|
|
Marine
|
|
18,895
|
|
|
23,653
|
|
|
(4,758
|
)
|
|||
Specialty
|
|
18,421
|
|
|
5,412
|
|
|
13,009
|
|
|||
Other insurance related income
|
|
150
|
|
|
(284
|
)
|
|
434
|
|
|||
Total
|
|
$
|
72,569
|
|
|
$
|
(25,184
|
)
|
|
$
|
97,753
|
|
|
|
General and Administrative and Share Compensation Expenses
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
||||||||
General and administrative expenses
|
|
$
|
17,872
|
|
|
7.2
|
%
|
|
$
|
(909
|
)
|
|
0.1
|
|
$
|
18,781
|
|
|
7.1
|
%
|
Share compensation expenses
|
|
2,775
|
|
|
1.2
|
%
|
|
379
|
|
|
0.3
|
|
2,396
|
|
|
0.9
|
%
|
|||
Total
|
|
$
|
20,647
|
|
|
8.4
|
%
|
|
$
|
(530
|
)
|
|
0.4
|
|
$
|
21,177
|
|
|
8.0
|
%
|
|
Three Months Ended June 30,
|
||||||
|
2016
|
|
Change
|
|
2015
|
||
Losses and loss expense ratio
|
53.5
|
%
|
|
6.9
|
|
46.6
|
%
|
Policy acquisition cost ratio
|
17.2
|
%
|
|
0.6
|
|
16.6
|
%
|
General and administrative expense ratio (a)
|
8.4
|
%
|
|
0.4
|
|
8.0
|
%
|
Expense ratio
|
25.6
|
%
|
|
1.0
|
|
24.6
|
%
|
Combined ratio
|
79.1
|
%
|
|
7.9
|
|
71.2
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
296,067
|
|
|
$
|
3,021
|
|
|
$
|
293,046
|
|
Reinsurance premiums ceded
|
|
(27,161
|
)
|
|
10,085
|
|
|
(37,246
|
)
|
|||
Net premiums written
|
|
268,906
|
|
|
13,106
|
|
|
255,800
|
|
|||
Change in unearned premiums
|
|
(67,357
|
)
|
|
(16,995
|
)
|
|
(50,362
|
)
|
|||
Net premiums earned
|
|
201,549
|
|
|
(3,889
|
)
|
|
205,438
|
|
|||
Other insurance related income
|
|
279
|
|
|
239
|
|
|
40
|
|
|||
Total underwriting revenues
|
|
201,828
|
|
|
(3,650
|
)
|
|
205,478
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
109,310
|
|
|
13,340
|
|
|
95,970
|
|
|||
Policy acquisition costs
|
|
43,613
|
|
|
(4,046
|
)
|
|
47,659
|
|
|||
General and administrative expenses
|
|
39,061
|
|
|
3,506
|
|
|
35,555
|
|
|||
Share compensation expenses
|
|
3,270
|
|
|
246
|
|
|
3,024
|
|
|||
Total underwriting deductions
|
|
195,254
|
|
|
13,046
|
|
|
182,208
|
|
|||
Underwriting income (a)
|
|
$
|
6,574
|
|
|
$
|
(16,696
|
)
|
|
$
|
23,270
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
116,824
|
|
|
$
|
(1,847
|
)
|
|
$
|
118,671
|
|
Current period—notable loss events
|
|
11,703
|
|
|
(1,182
|
)
|
|
12,885
|
|
|||
Current period—non-notable loss events
|
|
9,111
|
|
|
9,111
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(28,328
|
)
|
|
7,258
|
|
|
(35,586
|
)
|
|||
Total losses and loss expenses
|
|
$
|
109,310
|
|
|
$
|
13,340
|
|
|
$
|
95,970
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
90.8
|
%
|
|
3.5
|
|
|
87.3
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
58.0
|
%
|
|
0.3
|
|
|
57.7
|
%
|
|||
Current period—notable loss events
|
|
5.8
|
%
|
|
(0.5
|
)
|
|
6.3
|
%
|
|||
Current period—non-notable loss events
|
|
4.5
|
%
|
|
4.5
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(14.1
|
)%
|
|
3.2
|
|
|
(17.3
|
)%
|
|||
Losses and loss expenses
|
|
54.2
|
%
|
|
7.5
|
|
|
46.7
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
21.6
|
%
|
|
(1.6
|
)
|
|
23.2
|
%
|
|||
General and administrative expenses (b)
|
|
21.1
|
%
|
|
2.3
|
|
|
18.8
|
%
|
|||
Expense ratio
|
|
42.7
|
%
|
|
0.7
|
|
|
42.0
|
%
|
|||
Combined ratio
|
|
96.9
|
%
|
|
8.2
|
|
|
88.7
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
111,646
|
|
|
37.8
|
%
|
|
$
|
2,828
|
|
|
0.7
|
|
|
$
|
108,818
|
|
|
37.1
|
%
|
Marine
|
|
85,992
|
|
|
29.0
|
%
|
|
(3,717
|
)
|
|
(1.6
|
)
|
|
89,709
|
|
|
30.6
|
%
|
|||
Specialty
|
|
98,429
|
|
|
33.2
|
%
|
|
3,910
|
|
|
0.9
|
|
|
94,519
|
|
|
32.3
|
%
|
|||
Total
|
|
$
|
296,067
|
|
|
100.0
|
%
|
|
$
|
3,021
|
|
|
|
|
|
$
|
293,046
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
19,733
|
|
|
$
|
(2,589
|
)
|
|
$
|
22,322
|
|
Marine
|
|
4,729
|
|
|
(6,120
|
)
|
|
10,849
|
|
|||
Specialty
|
|
2,699
|
|
|
(1,376
|
)
|
|
4,075
|
|
|||
Total
|
|
$
|
27,161
|
|
|
$
|
(10,085
|
)
|
|
$
|
37,246
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
||||||||
Property
|
|
$
|
91,913
|
|
|
82.3
|
%
|
|
$
|
5,417
|
|
|
2.8
|
|
$
|
86,496
|
|
|
79.5
|
%
|
Marine
|
|
81,263
|
|
|
94.5
|
%
|
|
2,403
|
|
|
6.6
|
|
78,860
|
|
|
87.9
|
%
|
|||
Specialty
|
|
95,730
|
|
|
97.3
|
%
|
|
5,286
|
|
|
1.6
|
|
90,444
|
|
|
95.7
|
%
|
|||
Total
|
|
$
|
268,906
|
|
|
90.8
|
%
|
|
$
|
13,106
|
|
|
3.5
|
|
$
|
255,800
|
|
|
87.3
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
54,859
|
|
|
$
|
(1,080
|
)
|
|
$
|
55,939
|
|
Marine
|
|
73,922
|
|
|
(3,874
|
)
|
|
77,796
|
|
|||
Specialty
|
|
72,768
|
|
|
1,065
|
|
|
71,703
|
|
|||
Total
|
|
$
|
201,549
|
|
|
$
|
(3,889
|
)
|
|
$
|
205,438
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
58.0
|
%
|
|
0.3
|
|
|
57.7
|
%
|
All lines—current period—notable loss events
|
5.8
|
%
|
|
(0.5
|
)
|
|
6.3
|
%
|
All lines—current period—non-notable loss events
|
4.5
|
%
|
|
4.5
|
|
|
0.0
|
%
|
All lines—change in prior accident years
|
(14.1)
|
%
|
|
3.2
|
|
|
(17.3)
|
%
|
All lines—loss ratio
|
54.2
|
%
|
|
7.5
|
|
|
46.7
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
116,824
|
|
|
$
|
(1,847
|
)
|
|
$
|
118,671
|
|
All lines—current period—notable loss events
|
|
11,703
|
|
|
(1,182
|
)
|
|
12,885
|
|
|||
All lines—current period—non-notable loss events
|
|
9,111
|
|
|
9,111
|
|
|
—
|
|
|||
All lines—change in prior accident years
|
|
(28,328
|
)
|
|
7,258
|
|
|
(35,586
|
)
|
|||
All lines - losses and loss expenses
|
|
$
|
109,310
|
|
|
$
|
13,340
|
|
|
$
|
95,970
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
||||||
|
Three Months Ended June 30,
|
||||||
|
2016
|
|
Change
|
|
2015
|
||
Property—current period excluding items below
|
63.8
|
%
|
|
5.2
|
|
58.6
|
%
|
Property—current period—notable loss events
|
21.3
|
%
|
|
20.5
|
|
0.8
|
%
|
Property—current period—non-notable loss events
|
7.8
|
%
|
|
7.8
|
|
0.0
|
%
|
Property—change in prior accident years
|
(18.4)
|
%
|
|
11.4
|
|
(29.8)
|
%
|
Property—loss ratio
|
74.5
|
%
|
|
44.9
|
|
29.6
|
%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
34,973
|
|
|
$
|
2,165
|
|
|
$
|
32,808
|
|
Property—current period—notable loss events
|
|
11,703
|
|
|
11,277
|
|
|
426
|
|
|||
Property—current period—non-notable loss events
|
|
4,274
|
|
|
4,274
|
|
|
—
|
|
|||
Property—change in prior accident years
|
|
(10,094
|
)
|
|
6,589
|
|
|
(16,683
|
)
|
|||
Property—losses and loss expenses
|
|
$
|
40,856
|
|
|
$
|
24,305
|
|
|
$
|
16,551
|
|
|
Losses and Loss Expense Ratio - Marine Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Marine—current period excluding items below
|
46.1
|
%
|
|
(4.2
|
)
|
|
50.3
|
%
|
Marine—current period—notable loss events
|
0.0
|
%
|
|
(16.0
|
)
|
|
16.0
|
%
|
Marine—current period—non-notable loss events
|
6.5
|
%
|
|
6.5
|
|
|
0.0
|
%
|
Marine—change in prior accident years
|
(12.1
|
)%
|
|
5.7
|
|
|
(17.8
|
)%
|
Marine—loss ratio
|
40.5
|
%
|
|
(8.0
|
)
|
|
48.5
|
%
|
|
|
Losses and Loss Expenses - Marine Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Marine—current period excluding items below
|
|
$
|
34,013
|
|
|
$
|
(5,097
|
)
|
|
$
|
39,110
|
|
Marine—current period—notable loss events
|
|
—
|
|
|
(12,459
|
)
|
|
12,459
|
|
|||
Marine—current period—non-notable loss events
|
|
4,837
|
|
|
4,837
|
|
|
—
|
|
|||
Marine—change in prior accident years
|
|
(8,928
|
)
|
|
4,882
|
|
|
(13,810
|
)
|
|||
Marine—losses and loss expenses
|
|
$
|
29,922
|
|
|
$
|
(7,837
|
)
|
|
$
|
37,759
|
|
|
Losses and Loss Expense Ratio - Specialty Lines
|
|||||||
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Specialty—current period excluding items below
|
65.8
|
%
|
|
0.6
|
|
|
65.2
|
%
|
Specialty—current period—notable loss events
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Specialty—current period—non-notable loss events
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Specialty—change in prior accident years
|
(12.8
|
)%
|
|
(5.7
|
)
|
|
(7.1)
|
%
|
Specialty—loss ratio
|
53.0
|
%
|
|
(5.1
|
)
|
|
58.1
|
%
|
|
|
Losses and Loss Expenses - Specialty Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Specialty—current period excluding items below
|
|
$
|
47,838
|
|
|
$
|
1,085
|
|
|
$
|
46,753
|
|
Specialty—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Specialty—current period—non-notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Specialty—change in prior accident years
|
|
(9,306
|
)
|
|
(4,213
|
)
|
|
(5,093
|
)
|
|||
Specialty—losses and loss expenses
|
|
$
|
38,532
|
|
|
$
|
(3,128
|
)
|
|
$
|
41,660
|
|
|
|
Policy Acquisition Costs
|
|||||||||||||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|||||||||
Property
|
|
$
|
9,057
|
|
|
16.5
|
%
|
|
$
|
836
|
|
|
1.8
|
|
|
$
|
8,221
|
|
|
14.7
|
%
|
Marine
|
|
17,582
|
|
|
23.8
|
%
|
|
(4,555
|
)
|
|
(4.7
|
)
|
|
22,137
|
|
|
28.5
|
%
|
|||
Specialty
|
|
16,974
|
|
|
23.3
|
%
|
|
(327
|
)
|
|
(0.8
|
)
|
|
17,301
|
|
|
24.1
|
%
|
|||
Total
|
|
$
|
43,613
|
|
|
21.6
|
%
|
|
$
|
(4,046
|
)
|
|
(1.6
|
)
|
|
$
|
47,659
|
|
|
23.2
|
%
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
4,946
|
|
|
$
|
(26,221
|
)
|
|
$
|
31,167
|
|
Marine
|
|
26,418
|
|
|
8,518
|
|
|
17,900
|
|
|||
Specialty
|
|
17,262
|
|
|
4,520
|
|
|
12,742
|
|
|||
Other insurance related income
|
|
279
|
|
|
239
|
|
|
40
|
|
|||
Total
|
|
$
|
48,905
|
|
|
$
|
(12,944
|
)
|
|
$
|
61,849
|
|
|
|
General and Administrative and Share Compensation Expenses
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
||||||||
General and administrative expenses
|
|
$
|
39,061
|
|
|
19.5
|
%
|
|
$
|
3,506
|
|
|
2.2
|
|
$
|
35,555
|
|
|
17.3
|
%
|
Share compensation expenses
|
|
3,270
|
|
|
1.6
|
%
|
|
246
|
|
|
0.1
|
|
3,024
|
|
|
1.5
|
%
|
|||
Total
|
|
$
|
42,331
|
|
|
21.1
|
%
|
|
$
|
3,752
|
|
|
2.3
|
|
$
|
38,579
|
|
|
18.8
|
%
|
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Losses and loss expense ratio
|
54.2
|
%
|
|
7.5
|
|
|
46.7
|
%
|
Policy acquisition cost ratio
|
21.6
|
%
|
|
(1.6
|
)
|
|
23.2
|
%
|
General and administrative expense ratio (a)
|
21.1
|
%
|
|
2.3
|
|
|
18.8
|
%
|
Expense ratio
|
42.7
|
%
|
|
0.7
|
|
|
42.0
|
%
|
Combined ratio
|
96.9
|
%
|
|
8.2
|
|
|
88.7
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
86,971
|
|
|
$
|
7,417
|
|
|
$
|
79,554
|
|
Reinsurance premiums ceded
|
|
(5,006
|
)
|
|
435
|
|
|
(5,441
|
)
|
|||
Net premiums written
|
|
81,965
|
|
|
7,852
|
|
|
74,113
|
|
|||
Change in unearned premiums
|
|
(16,309
|
)
|
|
(7,314
|
)
|
|
(8,995
|
)
|
|||
Net premiums earned
|
|
65,656
|
|
|
538
|
|
|
65,118
|
|
|||
Other insurance related income
|
|
189
|
|
|
(87
|
)
|
|
276
|
|
|||
Total underwriting revenues
|
|
65,845
|
|
|
451
|
|
|
65,394
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
44,229
|
|
|
(2,542
|
)
|
|
46,771
|
|
|||
Policy acquisition costs
|
|
15,410
|
|
|
5,793
|
|
|
9,617
|
|
|||
General and administrative expenses
|
|
11,458
|
|
|
2,535
|
|
|
8,923
|
|
|||
Share compensation expenses
|
|
542
|
|
|
48
|
|
|
494
|
|
|||
Total underwriting deductions
|
|
71,639
|
|
|
5,834
|
|
|
65,805
|
|
|||
Underwriting loss (a)
|
|
$
|
(5,794
|
)
|
|
$
|
(5,383
|
)
|
|
$
|
(411
|
)
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
46,762
|
|
|
$
|
(4,262
|
)
|
|
$
|
51,024
|
|
Current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(3,158
|
)
|
|
1,095
|
|
|
(4,253
|
)
|
|||
Total losses and loss expenses
|
|
$
|
44,229
|
|
|
$
|
(2,542
|
)
|
|
$
|
46,771
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
94.2
|
%
|
|
1.0
|
|
|
93.2
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
71.2
|
%
|
|
(7.1
|
)
|
|
78.3
|
%
|
|||
Current period—notable loss events
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Current period—non-notable loss events
|
|
1.0
|
%
|
|
1.0
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(4.8
|
)%
|
|
1.7
|
|
|
(6.5
|
)%
|
|||
Losses and loss expenses
|
|
67.4
|
%
|
|
(4.4
|
)
|
|
71.8
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
23.5
|
%
|
|
8.7
|
|
|
14.8
|
%
|
|||
General and administrative expenses (b)
|
|
18.2
|
%
|
|
3.7
|
|
|
14.5
|
%
|
|||
Expense ratio
|
|
41.7
|
%
|
|
12.4
|
|
|
29.3
|
%
|
|||
Combined ratio
|
|
109.1
|
%
|
|
8.0
|
|
|
101.1
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Three Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross
Premiums
Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross
Premiums
Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
26,218
|
|
|
30.1
|
%
|
|
$
|
10,332
|
|
|
10.1
|
|
|
$
|
15,886
|
|
|
20.0
|
%
|
Liability
|
|
60,753
|
|
|
69.9
|
%
|
|
(2,915
|
)
|
|
(10.1
|
)
|
|
63,668
|
|
|
80.0
|
%
|
|||
Total
|
|
$
|
86,971
|
|
|
100.0
|
%
|
|
$
|
7,417
|
|
|
|
|
$
|
79,554
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
2,153
|
|
|
$
|
782
|
|
|
$
|
1,371
|
|
Liability
|
|
2,853
|
|
|
(1,217
|
)
|
|
4,070
|
|
|||
Total
|
|
$
|
5,006
|
|
|
$
|
(435
|
)
|
|
$
|
5,441
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
||||||||
Property
|
|
$
|
24,065
|
|
|
91.8
|
%
|
|
$
|
9,550
|
|
|
0.4
|
|
$
|
14,515
|
|
|
91.4
|
%
|
Liability
|
|
57,900
|
|
|
95.3
|
%
|
|
(1,698
|
)
|
|
1.7
|
|
59,598
|
|
|
93.6
|
%
|
|||
Total
|
|
$
|
81,965
|
|
|
94.2
|
%
|
|
$
|
7,852
|
|
|
1.0
|
|
$
|
74,113
|
|
|
93.2
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
14,177
|
|
|
$
|
3,450
|
|
|
$
|
10,727
|
|
Liability
|
|
51,479
|
|
|
(2,912
|
)
|
|
54,391
|
|
|||
Total
|
|
$
|
65,656
|
|
|
$
|
538
|
|
|
$
|
65,118
|
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
|
Three Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
|
71.2
|
%
|
|
(7.1
|
)
|
|
78.3
|
%
|
All lines—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
All lines—current period—non-notable loss events
|
|
1.0
|
%
|
|
1.0
|
|
|
0.0
|
%
|
All lines—change in prior accident years (a)
|
|
(4.8
|
)%
|
|
1.7
|
|
|
(6.5
|
)%
|
All lines—loss ratio (a)
|
|
67.4
|
%
|
|
(4.4
|
)
|
|
71.8
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
46,762
|
|
|
$
|
(4,262
|
)
|
|
$
|
51,024
|
|
All lines—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
All lines—current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
All lines—change in prior accident years (a)
|
|
(3,158
|
)
|
|
1,095
|
|
|
(4,253
|
)
|
|||
All lines
—
losses and loss expenses (a)
|
|
$
|
44,229
|
|
|
$
|
(2,542
|
)
|
|
$
|
46,771
|
|
(a)
|
Upon closing the acquisition, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of
$2,892
during the
three months ended
June 30, 2015
, benefiting the loss ratio by
4.4
percentage points. The remaining fair value adjustment of $4,864 was fully amortized during the year ended December 31, 2015.
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
|||||||
|
|
Three Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Property—current period excluding items below
|
|
78.6
|
%
|
|
(7.6
|
)
|
|
86.2
|
%
|
Property—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Property—current period—non-notable loss events
|
|
4.4
|
%
|
|
4.4
|
|
|
0.0
|
%
|
Property—change in prior accident years (a)
|
|
(11.2
|
)%
|
|
(3.1
|
)
|
|
(8.1
|
)%
|
Property—loss ratio (a)
|
|
71.8
|
%
|
|
(6.3
|
)
|
|
78.1
|
%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
11,133
|
|
|
$
|
1,890
|
|
|
$
|
9,243
|
|
Property—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Property—current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
Property—change in prior accident years (a)
|
|
(1,582
|
)
|
|
(716
|
)
|
|
(866
|
)
|
|||
Property—losses and loss expenses (a)
|
|
$
|
10,176
|
|
|
$
|
1,799
|
|
|
$
|
8,377
|
|
(a)
|
Upon closing the acquisition, an adjustment of $409 was made to decrease net reserves to reflect fair value. This adjustment was amortized to income through an increase in losses and loss expenses of
$76
during the
three months ended
June 30, 2015
, increasing the loss ratio by
0.7
percentage points. The remaining fair value adjustment of $127 was fully amortized during the year ended December 31, 2015.
|
|
|
Losses and Loss Expense Ratio - Liability Lines
|
|||||||
|
|
Three Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Liability—current period excluding items below
|
|
69.2
|
%
|
|
(7.6
|
)
|
|
76.8
|
%
|
Liability—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Liability—current period—non-notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Liability—change in prior accident years (a)
|
|
(3.1
|
)%
|
|
3.1
|
|
|
(6.2
|
)%
|
Liability—loss ratio (a)
|
|
66.1
|
%
|
|
(4.5
|
)
|
|
70.6
|
%
|
|
|
Losses and Loss Expenses - Liability Lines
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Liability—current period excluding items above
|
|
$
|
35,629
|
|
|
$
|
(6,152
|
)
|
|
$
|
41,781
|
|
Liability—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Liability—current period—non-notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Liability—change in prior accident years (a)
|
|
(1,576
|
)
|
|
1,811
|
|
|
(3,387
|
)
|
|||
Liability—losses and loss expenses (a)
|
|
$
|
34,053
|
|
|
$
|
(4,341
|
)
|
|
$
|
38,394
|
|
(a)
|
Upon closing the acquisition, an adjustment of $15,995 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of
$2,968
during the
three months ended
June 30, 2015
, benefiting the loss ratio by
5.5
percentage points. The remaining fair value adjustment of $4,991 was fully amortized during the year ended December 31, 2015.
|
|
|
Policy Acquisition Costs
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
||||||||
Property
|
|
$
|
3,381
|
|
|
23.8
|
%
|
|
$
|
2,656
|
|
|
17.0
|
|
$
|
725
|
|
|
6.8
|
%
|
Liability
|
|
12,029
|
|
|
23.4
|
%
|
|
3,137
|
|
|
7.1
|
|
8,892
|
|
|
16.3
|
%
|
|||
Total (a)
|
|
$
|
15,410
|
|
|
23.5
|
%
|
|
$
|
5,793
|
|
|
8.7
|
|
$
|
9,617
|
|
|
14.8
|
%
|
(a)
|
Upon closing the acquisition, an adjustment of $34,736 was made to reduce deferred acquisition costs to reflect fair value. These deferred acquisition costs would otherwise have been expensed in the amount of
$6,584
during the
three months ended
June 30, 2015
benefiting the policy acquisition cost ratio by
10.1
percentage points.
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
620
|
|
|
$
|
(1,005
|
)
|
|
$
|
1,625
|
|
Liability
|
|
5,397
|
|
|
(1,708
|
)
|
|
7,105
|
|
|||
Other insurance related income
|
|
189
|
|
|
(87
|
)
|
|
276
|
|
|||
Total
|
|
$
|
6,206
|
|
|
$
|
(2,800
|
)
|
|
$
|
9,006
|
|
|
|
General and Administrative and Share Compensation Expenses
|
||||||||||||||||||
|
|
Three Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
||||||||
General and administrative expenses
|
|
$
|
11,458
|
|
|
17.4
|
%
|
|
$
|
2,535
|
|
|
3.7
|
|
$
|
8,923
|
|
|
13.7
|
%
|
Share compensation expenses
|
|
542
|
|
|
0.8
|
%
|
|
48
|
|
|
—
|
|
494
|
|
|
0.8
|
%
|
|||
Total
|
|
$
|
12,000
|
|
|
18.2
|
%
|
|
$
|
2,583
|
|
|
3.7
|
|
$
|
9,417
|
|
|
14.5
|
%
|
|
Three Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Losses and loss expense ratio
|
67.4
|
%
|
|
(4.4
|
)
|
|
71.8
|
%
|
Policy acquisition cost ratio
|
23.5
|
%
|
|
8.7
|
|
|
14.8
|
%
|
General and administrative expense ratio (a)
|
18.2
|
%
|
|
3.7
|
|
|
14.5
|
%
|
Expense ratio
|
41.7
|
%
|
|
12.4
|
|
|
29.3
|
%
|
Combined ratio
|
109.1
|
%
|
|
8.0
|
|
|
101.1
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Third party
|
|
$
|
3,091
|
|
|
$
|
(1,232
|
)
|
|
$
|
4,323
|
|
Related party
|
|
328
|
|
|
(806
|
)
|
|
1,134
|
|
|||
Total revenues
|
|
3,419
|
|
|
(2,038
|
)
|
|
5,457
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
2,751
|
|
|
421
|
|
|
2,330
|
|
|||
Share compensation expenses
|
|
133
|
|
|
(17
|
)
|
|
150
|
|
|||
Finance expenses
|
|
75
|
|
|
(2,459
|
)
|
|
2,534
|
|
|||
Foreign exchange gains
|
|
4
|
|
|
(11
|
)
|
|
15
|
|
|||
Total expenses
|
|
2,963
|
|
|
(2,066
|
)
|
|
5,029
|
|
|||
|
|
|
|
|
|
|
||||||
Income before investments from AlphaCat Funds and Sidecars
|
|
$
|
456
|
|
|
$
|
28
|
|
|
$
|
428
|
|
|
|
|
|
|
|
|
||||||
Investment income from AlphaCat Funds and Sidecars (b)
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
541
|
|
|
(732
|
)
|
|
1,273
|
|
|||
AlphaCat ILS Funds - Lower Risk (c)
|
|
2,075
|
|
|
181
|
|
|
1,894
|
|
|||
AlphaCat ILS Funds - Higher Risk (c)
|
|
692
|
|
|
(1,684
|
)
|
|
2,376
|
|
|||
BetaCat ILS Funds
|
|
1,113
|
|
|
1,053
|
|
|
60
|
|
|||
PaCRe
|
|
—
|
|
|
(1,738
|
)
|
|
1,738
|
|
|||
Total investment income from AlphaCat Funds and Sidecars
|
|
4,421
|
|
|
(2,920
|
)
|
|
7,341
|
|
|||
|
|
|
|
|
|
|
||||||
Validus' share of AlphaCat income
|
|
$
|
4,877
|
|
|
$
|
(2,892
|
)
|
|
$
|
7,769
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
(14
|
)
|
|
$
|
(3,255
|
)
|
|
$
|
3,241
|
|
AlphaCat ILS Funds - Lower Risk (c)
|
|
50,234
|
|
|
4,547
|
|
|
45,687
|
|
|||
AlphaCat ILS Funds - Higher Risk (c)
|
|
42,010
|
|
|
28,143
|
|
|
13,867
|
|
|||
AlphaCat Direct (d)
|
|
6,675
|
|
|
6,675
|
|
|
—
|
|
|||
Total
|
|
$
|
98,905
|
|
|
$
|
36,110
|
|
|
$
|
62,795
|
|
(a)
|
In presenting the Company’s results, management has included and discussed the results of AlphaCat, which are presented on an asset manager basis. Validus' share of AlphaCat income is a non-GAAP measure and is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The investment income from the AlphaCat funds and sidecars is based on equity accounting.
|
(c)
|
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 greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.
|
(d)
|
AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.
|
|
|
Assets Under Management (a)
|
||||||||||
(Dollars in thousands)
|
|
July 1, 2016
|
|
Change
|
|
January 1, 2016
|
||||||
Assets Under Management - Related Party
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
8,045
|
|
|
$
|
(27,371
|
)
|
|
$
|
35,416
|
|
AlphaCat ILS Funds - Lower Risk (b)
|
|
175,832
|
|
|
11,818
|
|
|
164,014
|
|
|||
AlphaCat ILS Funds - Higher Risk (b)
|
|
76,287
|
|
|
10,823
|
|
|
65,464
|
|
|||
AlphaCat Direct (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
BetaCat ILS Funds
|
|
63,453
|
|
|
1,704
|
|
|
61,749
|
|
|||
Total
|
|
$
|
323,617
|
|
|
$
|
(3,026
|
)
|
|
$
|
326,643
|
|
|
|
|
|
|
|
|
||||||
Assets Under Management - Third Party
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
30,078
|
|
|
$
|
(124,308
|
)
|
|
$
|
154,386
|
|
AlphaCat ILS Funds - Lower Risk (b)
|
|
1,226,709
|
|
|
124,247
|
|
|
1,102,462
|
|
|||
AlphaCat ILS Funds - Higher Risk (b)
|
|
564,513
|
|
|
129,662
|
|
|
434,851
|
|
|||
AlphaCat Direct (c)
|
|
365,558
|
|
|
(2,262
|
)
|
|
367,820
|
|
|||
BetaCat ILS Funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
2,186,858
|
|
|
127,339
|
|
|
2,059,519
|
|
|||
Total Assets Under Management
|
|
$
|
2,510,475
|
|
|
$
|
124,313
|
|
|
$
|
2,386,162
|
|
(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 greater than 7%. 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 third party investors in AlphaCat Re.
|
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Investment income
|
|
|
|
|
|
|
||||||
Net investment income (a)
|
|
$
|
36,849
|
|
|
$
|
4,995
|
|
|
$
|
31,854
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
17,872
|
|
|
780
|
|
|
17,092
|
|
|||
Share compensation expenses
|
|
4,007
|
|
|
829
|
|
|
3,178
|
|
|||
Finance expenses (a)
|
|
13,979
|
|
|
(1,165
|
)
|
|
15,144
|
|
|||
Tax expense
|
|
1,706
|
|
|
(843
|
)
|
|
2,549
|
|
|||
Total operating expenses
|
|
37,564
|
|
|
(399
|
)
|
|
37,963
|
|
|||
|
|
|
|
|
|
|
||||||
Other items
|
|
|
|
|
|
|
||||||
Net realized gains on investments (a)
|
|
2,520
|
|
|
416
|
|
|
2,104
|
|
|||
Change in net unrealized gains (losses) on investments (a)
|
|
30,052
|
|
|
63,978
|
|
|
(33,926
|
)
|
|||
(Loss) income from investment affiliate
|
|
(589
|
)
|
|
(873
|
)
|
|
284
|
|
|||
Foreign exchange gains (losses) (a)
|
|
6,621
|
|
|
9,858
|
|
|
(3,237
|
)
|
|||
Other income (loss)
|
|
79
|
|
|
687
|
|
|
(608
|
)
|
|||
Total other items
|
|
38,683
|
|
|
74,066
|
|
|
(35,383
|
)
|
|||
|
|
|
|
|
|
|
||||||
Total corporate and investment information
|
|
$
|
37,968
|
|
|
$
|
79,460
|
|
|
$
|
(41,492
|
)
|
(a)
|
These items exclude the components which are included in the Company's share of AlphaCat and amounts which are consolidated from VIEs.
|
|
|
Net Investment Income
|
||||||||||
|
|
Three Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Managed investments
|
|
|
|
|
|
|
||||||
Fixed maturities and short-term investments
|
|
$
|
30,621
|
|
|
$
|
1,188
|
|
|
$
|
29,433
|
|
Other investments
|
|
8,026
|
|
|
4,012
|
|
|
4,014
|
|
|||
Cash and cash equivalents
|
|
380
|
|
|
(47
|
)
|
|
427
|
|
|||
Securities lending income
|
|
12
|
|
|
6
|
|
|
6
|
|
|||
Total gross investment income
|
|
39,039
|
|
|
5,159
|
|
|
33,880
|
|
|||
Investment expenses
|
|
(2,190
|
)
|
|
(164
|
)
|
|
(2,026
|
)
|
|||
Total managed net investment income
|
|
$
|
36,849
|
|
|
$
|
4,995
|
|
|
$
|
31,854
|
|
|
|
Three Months Ended June 30,
|
||||
U.S. dollar (weakened) strengthened against:
|
|
2016
|
|
2015
|
||
British Pound sterling
|
|
7.6
|
%
|
|
(5.3
|
)%
|
Euro
|
|
2.4
|
%
|
|
(3.2
|
)%
|
Canadian dollar
|
|
(0.3
|
)%
|
|
(1.3
|
)%
|
Swiss franc
|
|
1.5
|
%
|
|
(3.6
|
)%
|
Australian dollar
|
|
3.0
|
%
|
|
(0.9
|
)%
|
New Zealand dollar
|
|
(3.1
|
)%
|
|
10.3
|
%
|
Singapore dollar
|
|
(0.3
|
)%
|
|
(1.6
|
)%
|
Japanese yen
|
|
(8.2
|
)%
|
|
2.5
|
%
|
South African rand
|
|
—
|
%
|
|
0.5
|
%
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
1,936,833
|
|
|
$
|
91,441
|
|
|
$
|
1,845,392
|
|
Reinsurance premiums ceded
|
|
(204,064
|
)
|
|
42,679
|
|
|
(246,743
|
)
|
|||
Net premiums written
|
|
1,732,769
|
|
|
134,120
|
|
|
1,598,649
|
|
|||
Change in unearned premiums
|
|
(587,778
|
)
|
|
(137,707
|
)
|
|
(450,071
|
)
|
|||
Net premiums earned
|
|
1,144,991
|
|
|
(3,587
|
)
|
|
1,148,578
|
|
|||
Other insurance related income
|
|
1,481
|
|
|
(167
|
)
|
|
1,648
|
|
|||
Total underwriting revenues
|
|
1,146,472
|
|
|
(3,754
|
)
|
|
1,150,226
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
531,577
|
|
|
24,502
|
|
|
507,075
|
|
|||
Policy acquisition costs
|
|
215,159
|
|
|
12,425
|
|
|
202,734
|
|
|||
General and administrative expenses
|
|
175,896
|
|
|
7,636
|
|
|
168,260
|
|
|||
Share compensation expenses
|
|
21,964
|
|
|
3,668
|
|
|
18,296
|
|
|||
Total underwriting deductions
|
|
944,596
|
|
|
48,231
|
|
|
896,365
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting income (a)
|
|
$
|
201,876
|
|
|
$
|
(51,985
|
)
|
|
$
|
253,861
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
|
68,718
|
|
|
4,078
|
|
|
64,640
|
|
|||
Finance expenses
|
|
(29,369
|
)
|
|
10,280
|
|
|
(39,649
|
)
|
|||
Dividends on preferred shares
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Tax benefit (expense)
|
|
412
|
|
|
5,526
|
|
|
(5,114
|
)
|
|||
(Loss) income from operating affiliates
|
|
(23
|
)
|
|
(5,745
|
)
|
|
5,722
|
|
|||
(Income) attributable to AlphaCat investors
|
|
(10,714
|
)
|
|
(10,714
|
)
|
|
—
|
|
|||
Net (income) attributable to noncontrolling interest
|
|
(58,622
|
)
|
|
(17,753
|
)
|
|
(40,869
|
)
|
|||
Net operating income available to Validus common shareholders (a)
|
|
$
|
172,278
|
|
|
$
|
(66,313
|
)
|
|
$
|
238,591
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
562,890
|
|
|
$
|
(50,388
|
)
|
|
$
|
613,278
|
|
Current period—notable loss events
|
|
36,915
|
|
|
(11,159
|
)
|
|
48,074
|
|
|||
Current period—non-notable loss events
|
|
48,292
|
|
|
48,292
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(116,520
|
)
|
|
37,757
|
|
|
(154,277
|
)
|
|||
Total losses and loss expenses
|
|
$
|
531,577
|
|
|
$
|
24,502
|
|
|
$
|
507,075
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
89.5
|
%
|
|
2.9
|
|
|
86.6
|
%
|
|||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
49.2
|
%
|
|
(4.1
|
)
|
|
53.3
|
%
|
|||
Current period—notable loss events
|
|
3.2
|
%
|
|
(1.0
|
)
|
|
4.2
|
%
|
|||
Current period—non-notable loss events
|
|
4.2
|
%
|
|
4.2
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(10.2
|
)%
|
|
3.2
|
|
|
(13.4
|
)%
|
|||
Losses and loss expenses
|
|
46.4
|
%
|
|
2.3
|
|
|
44.1
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
18.8
|
%
|
|
1.1
|
|
|
17.7
|
%
|
|||
General and administrative expenses (b)
|
|
17.3
|
%
|
|
1.1
|
|
|
16.2
|
%
|
|||
Expense ratio
|
|
36.1
|
%
|
|
2.2
|
|
|
33.9
|
%
|
|||
Combined ratio
|
|
82.5
|
%
|
|
4.5
|
|
|
78.0
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
•
|
Gross premiums written for the
six months ended
June 30, 2016
were
$1,936.8 million
compared to
$1,845.4 million
for the
six months ended
June 30, 2015
,
an increase
of
$91.4 million
, or
5.0%
. The increase was primarily driven by an increase in the AlphaCat and Western World segments, partially offset by decreases in the Talbot and Validus Re segments discussed further as follows:
|
◦
|
Gross premiums written for the
six months ended
June 30, 2016
in the AlphaCat segment, on behalf of the Company's VIEs, were
$266.3 million
, compared to
$164.6 million
for the
six months ended
June 30, 2015
,
an increase
of
$101.7 million
or
61.8%
, primarily due to an increase in the capital base of the AlphaCat ILS Funds.
|
◦
|
Gross premiums written for the
six months ended
June 30, 2016
in the Western World segment were
$150.9 million
compared to
$136.5 million
for the
six months ended
June 30, 2015
,
an increase
of
$14.4 million
or
10.6%
, primarily driven by an increase in the property lines.
|
◦
|
Gross premiums written for the
six months ended
June 30, 2016
in the Validus Re segment were
$977.5 million
compared to
$1,009.1 million
for the
six months ended
June 30, 2015
,
a decrease
of
$31.6 million
or
3.1%
. The decrease was primarily attributable to decreases in the property and marine lines as a result of current market conditions and increased cessions to AlphaCat, partially offset by increased specialty business.
|
◦
|
Gross premiums written for the
six months ended
June 30, 2016
in the Talbot segment were
$562.4 million
compared to
$563.1 million
for the
six months ended
June 30, 2015
,
a decrease
of
$0.7 million
or
0.1%
.
|
•
|
Underwriting revenues for the
six months ended
June 30, 2016
were
$1,146.5 million
compared to
$1,150.2 million
for the
six months ended
June 30, 2015
,
a decrease
of
$3.8 million
or
0.3%
.
|
•
|
Losses and loss expenses for the
six months ended
June 30, 2016
were
$531.6 million
compared to
$507.1 million
for the
six months ended
June 30, 2015
,
an increase
of
$24.5 million
or
4.8%
, primarily as a result of non-notable loss events occurring during the
six months ended
June 30, 2016
.
|
•
|
Gross losses and loss expenses from the Canadian Wildfires notable loss event were $73.5 million for the
six months ended
June 30, 2016
. Net of reinsurance recoveries of $36.6 million, the Company's share of net losses and loss expenses from this event were
$36.9 million
, or
3.2
percentage points of the loss ratio during the
six months ended
June 30, 2016
. Net of losses of $6.4 million attributable to AlphaCat investors and noncontrolling interest and reinstatement premiums of $3.6 million, the net loss attributable to the Company was $26.9 million. During the
six months ended
June 30, 2015
, the Company incurred a single notable loss event, Pemex, which resulted in an estimated net loss attributable to the Company of
$48.1 million
, or
4.2
percentage points of the loss ratio. Including reinstatement premiums of $0.4 million, the net loss attributable to the Company was $48.5 million.
|
•
|
Gross losses and loss expenses from the Texas Hailstorms, Kumamoto Earthquake and Jubilee Oil non-notable loss events were $92.5 million for the
six months ended
June 30, 2016
. Net of reinsurance recoveries of $44.2 million, the Company's share of net losses and loss expenses from the non-notable loss events, were
$48.3 million
, or
4.2
percentage points of the loss ratio. Net of losses of $5.5 million attributable to AlphaCat investors and noncontrolling interest and reinstatement premiums of $9.7 million, the net loss attributable to the Company was $33.1 million. There were no losses and loss expenses from non-notable loss events for the
six months ended
June 30, 2015
.
|
•
|
Loss ratios by line of business were as follows:
|
•
|
The loss ratio for the
six months ended
June 30, 2016
was
46.4%
which included
$116.5 million
of
favorable
loss reserve development on prior accident years, benefiting the loss ratio by
10.2
percentage points compared to a loss ratio for the
six months ended
June 30, 2015
of
44.1%
which included
$154.3 million
of
favorable
loss reserve development on prior accident years, benefiting the loss ratio by
13.4
percentage points. The
favorable
development of
$116.5 million
for the
six months ended
June 30, 2016
was primarily due to favorable development on non-event reserves of $127.8 million, partially offset by unfavorable development on event reserves of $11.3 million. The term events refers to aggregate notable and non-notable losses incurred.
|
•
|
Combined ratio for the
six months ended
June 30, 2016
was
82.5%
compared to
78.0%
for the
six months ended
June 30, 2015
.
|
•
|
Policy acquisition costs for the
six months ended
June 30, 2016
were
$215.2 million
compared to
$202.7 million
for the
six months ended
June 30, 2015
,
an increase
of
$12.4 million
or
6.1%
, primarily driven by an increase in the Western World segment due to the impact of the acquisition fair value adjustments during the
six months ended
June 30, 2015
.
|
•
|
Underwriting income for the
six months ended
June 30, 2016
was
$201.9 million
compared to
$253.9 million
for the
six months ended
June 30, 2015
,
a decrease
of
$52.0 million
or
20.5%
primarily as a result of the changes in underwriting revenues and deductions as described above.
|
•
|
Net operating income available to Validus common shareholders for the
six months ended
June 30, 2016
was
$172.3 million
compared to
$238.6 million
for the
six months ended
June 30, 2015
,
a decrease
of
$66.3 million
, or
27.8%
.
|
•
|
Net income available to Validus common shareholders for the
six months ended
June 30, 2016
was
$261.8 million
compared to
$239.2 million
for the
six months ended
June 30, 2015
,
an increase
of
$22.6 million
, or
9.4%
.
|
•
|
Annualized return on average equity was
14.2%
and annualized net operating return on average equity was
9.3%
for the
six months ended
June 30, 2016
compared to
13.1%
and
13.1%
, respectively, for the
six months ended
June 30, 2015
.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
977,478
|
|
|
$
|
(31,635
|
)
|
|
$
|
1,009,113
|
|
Reinsurance premiums ceded
|
|
(95,691
|
)
|
|
37,464
|
|
|
(133,155
|
)
|
|||
Net premiums written
|
|
881,787
|
|
|
5,829
|
|
|
875,958
|
|
|||
Change in unearned premiums
|
|
(390,834
|
)
|
|
(32,514
|
)
|
|
(358,320
|
)
|
|||
Net premiums earned
|
|
490,953
|
|
|
(26,685
|
)
|
|
517,638
|
|
|||
Other insurance related (loss) income
|
|
(165
|
)
|
|
(914
|
)
|
|
749
|
|
|||
Total underwriting revenues
|
|
490,788
|
|
|
(27,599
|
)
|
|
518,387
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
215,007
|
|
|
(21,526
|
)
|
|
236,533
|
|
|||
Policy acquisition costs
|
|
84,823
|
|
|
(1,097
|
)
|
|
85,920
|
|
|||
General and administrative expenses
|
|
35,051
|
|
|
(3,239
|
)
|
|
38,290
|
|
|||
Share compensation expenses
|
|
5,676
|
|
|
702
|
|
|
4,974
|
|
|||
Total underwriting deductions
|
|
340,557
|
|
|
(25,160
|
)
|
|
365,717
|
|
|||
Underwriting income (a)
|
|
$
|
150,231
|
|
|
$
|
(2,439
|
)
|
|
$
|
152,670
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
221,228
|
|
|
$
|
(35,691
|
)
|
|
$
|
256,919
|
|
Current period—notable loss events
|
|
17,884
|
|
|
(17,305
|
)
|
|
35,189
|
|
|||
Current period—non-notable loss events
|
|
32,456
|
|
|
32,456
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(56,561
|
)
|
|
(986
|
)
|
|
(55,575
|
)
|
|||
Total losses and loss expenses
|
|
$
|
215,007
|
|
|
$
|
(21,526
|
)
|
|
$
|
236,533
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
90.2
|
%
|
|
3.4
|
|
|
86.8
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
45.1
|
%
|
|
(4.5
|
)
|
|
49.6
|
%
|
|||
Current period—notable loss events
|
|
3.6
|
%
|
|
(3.2
|
)
|
|
6.8
|
%
|
|||
Current period—non-notable loss events
|
|
6.6
|
%
|
|
6.6
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(11.5
|
)%
|
|
(0.8
|
)
|
|
(10.7
|
)%
|
|||
Losses and loss expenses
|
|
43.8
|
%
|
|
(1.9
|
)
|
|
45.7
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
17.3
|
%
|
|
0.7
|
|
|
16.6
|
%
|
|||
General and administrative expenses (b)
|
|
8.3
|
%
|
|
(0.1
|
)
|
|
8.4
|
%
|
|||
Expense ratio
|
|
25.6
|
%
|
|
0.6
|
|
|
25.0
|
%
|
|||
Combined ratio
|
|
69.4
|
%
|
|
(1.3
|
)
|
|
70.7
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
408,671
|
|
|
41.8
|
%
|
|
$
|
(57,781
|
)
|
|
(4.4
|
)
|
|
$
|
466,452
|
|
|
46.2
|
%
|
Marine
|
|
114,409
|
|
|
11.7
|
%
|
|
(25,536
|
)
|
|
(2.2
|
)
|
|
139,945
|
|
|
13.9
|
%
|
|||
Specialty
|
|
454,398
|
|
|
46.5
|
%
|
|
51,682
|
|
|
6.6
|
|
|
402,716
|
|
|
39.9
|
%
|
|||
Total
|
|
$
|
977,478
|
|
|
100.0
|
%
|
|
$
|
(31,635
|
)
|
|
|
|
|
$
|
1,009,113
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
81,388
|
|
|
$
|
(33,711
|
)
|
|
$
|
115,099
|
|
Marine
|
|
6,547
|
|
|
(218
|
)
|
|
6,765
|
|
|||
Specialty
|
|
7,756
|
|
|
(3,535
|
)
|
|
11,291
|
|
|||
Total
|
|
$
|
95,691
|
|
|
$
|
(37,464
|
)
|
|
$
|
133,155
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written |
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|||||||||
Property
|
|
$
|
327,283
|
|
|
80.1
|
%
|
|
$
|
(24,070
|
)
|
|
4.8
|
|
|
$
|
351,353
|
|
|
75.3
|
%
|
Marine
|
|
107,862
|
|
|
94.3
|
%
|
|
(25,318
|
)
|
|
(0.9
|
)
|
|
133,180
|
|
|
95.2
|
%
|
|||
Specialty
|
|
446,642
|
|
|
98.3
|
%
|
|
55,217
|
|
|
1.1
|
|
|
391,425
|
|
|
97.2
|
%
|
|||
Total
|
|
$
|
881,787
|
|
|
90.2
|
%
|
|
$
|
5,829
|
|
|
3.4
|
|
|
$
|
875,958
|
|
|
86.8
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
207,380
|
|
|
$
|
(10,150
|
)
|
|
$
|
217,530
|
|
Marine
|
|
65,968
|
|
|
(16,679
|
)
|
|
82,647
|
|
|||
Specialty
|
|
217,605
|
|
|
144
|
|
|
217,461
|
|
|||
Total
|
|
$
|
490,953
|
|
|
$
|
(26,685
|
)
|
|
$
|
517,638
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
45.1
|
%
|
|
(4.5
|
)
|
|
49.6
|
%
|
All lines—current period—notable loss events
|
3.6
|
%
|
|
(3.2
|
)
|
|
6.8
|
%
|
All lines—current period—non-notable loss events
|
6.6
|
%
|
|
6.6
|
|
|
0.0
|
%
|
All lines—change in prior accident years
|
(11.5
|
)%
|
|
(0.8
|
)
|
|
(10.7
|
)%
|
All lines—loss ratio
|
43.8
|
%
|
|
(1.9
|
)
|
|
45.7
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
221,228
|
|
|
$
|
(35,691
|
)
|
|
$
|
256,919
|
|
All lines—current period—notable loss events
|
|
17,884
|
|
|
(17,305
|
)
|
|
35,189
|
|
|||
All lines—current period—non-notable loss events
|
|
32,456
|
|
|
32,456
|
|
|
—
|
|
|||
All lines—change in prior accident years
|
|
(56,561
|
)
|
|
(986
|
)
|
|
(55,575
|
)
|
|||
All lines
—
losses and loss expenses
|
|
$
|
215,007
|
|
|
$
|
(21,526
|
)
|
|
$
|
236,533
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
|||||||
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Property—current period excluding items below
|
19.8
|
%
|
|
(3.0
|
)
|
|
22.8
|
%
|
Property—current period—notable loss events
|
8.6
|
%
|
|
8.6
|
|
|
0.0
|
%
|
Property—current period—non-notable loss events
|
10.6
|
%
|
|
10.6
|
|
|
0.0
|
%
|
Property—change in prior accident years
|
(15.6
|
)%
|
|
(1.4
|
)
|
|
(14.2
|
)%
|
Property—loss ratio
|
23.4
|
%
|
|
14.8
|
|
|
8.6
|
%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
40,951
|
|
|
$
|
(8,577
|
)
|
|
$
|
49,528
|
|
Property—current period—notable loss events
|
|
17,884
|
|
|
17,884
|
|
|
—
|
|
|||
Property—current period—non-notable loss events
|
|
22,079
|
|
|
22,079
|
|
|
—
|
|
|||
Property—change in prior accident years
|
|
(32,300
|
)
|
|
(1,476
|
)
|
|
(30,824
|
)
|
|||
Property—losses and loss expenses
|
|
$
|
48,614
|
|
|
$
|
29,910
|
|
|
$
|
18,704
|
|
|
Losses and Loss Expense Ratio - Marine Lines
|
|||||||
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Marine—current period excluding items below
|
50.2
|
%
|
|
(5.8
|
)
|
|
56.0
|
%
|
Marine—current period—notable loss events
|
0.0
|
%
|
|
(40.6
|
)
|
|
40.6
|
%
|
Marine—current period—non-notable loss events
|
1.0
|
%
|
|
1.0
|
|
|
0.0
|
%
|
Marine—change in prior accident years
|
(9.8
|
)%
|
|
9.2
|
|
|
(19.0
|
)%
|
Marine—loss ratio
|
41.4
|
%
|
|
(36.2
|
)
|
|
77.6
|
%
|
|
|
Losses and Loss Expenses - Marine Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Marine—current period excluding items below
|
|
$
|
33,125
|
|
|
$
|
(13,147
|
)
|
|
$
|
46,272
|
|
Marine—current period—notable loss events
|
|
—
|
|
|
(33,524
|
)
|
|
33,524
|
|
|||
Marine—current period—non-notable loss events
|
|
670
|
|
|
670
|
|
|
—
|
|
|||
Marine—change in prior accident years
|
|
(6,463
|
)
|
|
9,206
|
|
|
(15,669
|
)
|
|||
Marine—losses and loss expenses
|
|
$
|
27,332
|
|
|
$
|
(36,795
|
)
|
|
$
|
64,127
|
|
|
Losses and Loss Expense Ratio - Specialty Lines
|
|||||||
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Specialty—current period excluding items below
|
67.6
|
%
|
|
(6.5
|
)
|
|
74.1
|
%
|
Specialty—current period—notable loss events
|
0.0
|
%
|
|
(0.8
|
)
|
|
0.8
|
%
|
Specialty—current period—non-notable loss events
|
4.5
|
%
|
|
4.5
|
|
|
0.0
|
%
|
Specialty—change in prior accident years
|
(8.2
|
)%
|
|
(4.0
|
)
|
|
(4.2
|
)%
|
Specialty—loss ratio
|
63.9
|
%
|
|
(6.8
|
)
|
|
70.7
|
%
|
|
|
Losses and Loss Expenses - Specialty Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Specialty—current period excluding items below
|
|
$
|
147,152
|
|
|
$
|
(13,967
|
)
|
|
$
|
161,119
|
|
Specialty—current period—notable loss events
|
|
—
|
|
|
(1,665
|
)
|
|
1,665
|
|
|||
Specialty—current period—non-notable loss events
|
|
9,707
|
|
|
9,707
|
|
|
—
|
|
|||
Specialty—change in prior accident years
|
|
(17,798
|
)
|
|
(8,716
|
)
|
|
(9,082
|
)
|
|||
Specialty—losses and loss expenses
|
|
$
|
139,061
|
|
|
$
|
(14,641
|
)
|
|
$
|
153,702
|
|
|
|
Policy Acquisition Costs
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|||||||||
Property
|
|
$
|
37,213
|
|
|
17.9
|
%
|
|
$
|
537
|
|
|
1.0
|
|
|
$
|
36,676
|
|
|
16.9
|
%
|
Marine
|
|
10,193
|
|
|
15.5
|
%
|
|
(5,413
|
)
|
|
(3.4
|
)
|
|
15,606
|
|
|
18.9
|
%
|
|||
Specialty
|
|
37,417
|
|
|
17.2
|
%
|
|
3,779
|
|
|
1.7
|
|
|
33,638
|
|
|
15.5
|
%
|
|||
Total
|
|
$
|
84,823
|
|
|
17.3
|
%
|
|
$
|
(1,097
|
)
|
|
0.7
|
|
|
$
|
85,920
|
|
|
16.6
|
%
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
121,553
|
|
|
$
|
(40,597
|
)
|
|
$
|
162,150
|
|
Marine
|
|
28,443
|
|
|
25,529
|
|
|
2,914
|
|
|||
Specialty
|
|
41,127
|
|
|
11,006
|
|
|
30,121
|
|
|||
Other insurance related (loss) income
|
|
(165
|
)
|
|
(914
|
)
|
|
749
|
|
|||
Total
|
|
$
|
190,958
|
|
|
$
|
(4,976
|
)
|
|
$
|
195,934
|
|
|
|
General and Administrative and Share Compensation Expenses
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|||||||||
General and administrative expenses
|
|
$
|
35,051
|
|
|
7.1
|
%
|
|
$
|
(3,239
|
)
|
|
(0.3
|
)
|
|
$
|
38,290
|
|
|
7.4
|
%
|
Share compensation expenses
|
|
5,676
|
|
|
1.2
|
%
|
|
702
|
|
|
0.2
|
|
|
4,974
|
|
|
1.0
|
%
|
|||
Total
|
|
$
|
40,727
|
|
|
8.3
|
%
|
|
$
|
(2,537
|
)
|
|
(0.1
|
)
|
|
$
|
43,264
|
|
|
8.4
|
%
|
|
Select Underwriting Ratios
|
|||||||
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Losses and loss expense ratio
|
43.8
|
%
|
|
(1.9
|
)
|
|
45.7
|
%
|
Policy acquisition cost ratio
|
17.3
|
%
|
|
0.7
|
|
|
16.6
|
%
|
General and administrative expense ratio (a)
|
8.3
|
%
|
|
(0.1
|
)
|
|
8.4
|
%
|
Expense ratio
|
25.6
|
%
|
|
0.6
|
|
|
25.0
|
%
|
Combined ratio
|
69.4
|
%
|
|
(1.3
|
)
|
|
70.7
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
562,384
|
|
|
$
|
(739
|
)
|
|
$
|
563,123
|
|
Reinsurance premiums ceded
|
|
(114,619
|
)
|
|
13,702
|
|
|
(128,321
|
)
|
|||
Net premiums written
|
|
447,765
|
|
|
12,963
|
|
|
434,802
|
|
|||
Change in unearned premiums
|
|
(39,424
|
)
|
|
(32,649
|
)
|
|
(6,775
|
)
|
|||
Net premiums earned
|
|
408,341
|
|
|
(19,686
|
)
|
|
428,027
|
|
|||
Other insurance related income
|
|
290
|
|
|
196
|
|
|
94
|
|
|||
Total underwriting revenues
|
|
408,631
|
|
|
(19,490
|
)
|
|
428,121
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
209,411
|
|
|
35,313
|
|
|
174,098
|
|
|||
Policy acquisition costs
|
|
87,956
|
|
|
(8,807
|
)
|
|
96,763
|
|
|||
General and administrative expenses
|
|
77,596
|
|
|
5,547
|
|
|
72,049
|
|
|||
Share compensation expenses
|
|
6,792
|
|
|
811
|
|
|
5,981
|
|
|||
Total underwriting deductions
|
|
381,755
|
|
|
32,864
|
|
|
348,891
|
|
|||
Underwriting income (a)
|
|
$
|
26,876
|
|
|
$
|
(52,354
|
)
|
|
$
|
79,230
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
239,645
|
|
|
$
|
(8,841
|
)
|
|
$
|
248,486
|
|
Current period—notable loss events
|
|
11,703
|
|
|
(1,182
|
)
|
|
12,885
|
|
|||
Current period—non-notable loss events
|
|
9,111
|
|
|
9,111
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(51,048
|
)
|
|
36,225
|
|
|
(87,273
|
)
|
|||
Total losses and loss expenses
|
|
$
|
209,411
|
|
|
$
|
35,313
|
|
|
$
|
174,098
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
79.6
|
%
|
|
2.4
|
|
|
77.2
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
58.7
|
%
|
|
0.6
|
|
|
58.1
|
%
|
|||
Current period—notable loss events
|
|
2.9
|
%
|
|
(0.1
|
)
|
|
3.0
|
%
|
|||
Current period—non-notable loss events
|
|
2.2
|
%
|
|
2.2
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(12.5
|
)%
|
|
7.9
|
|
|
(20.4
|
)%
|
|||
Losses and loss expenses
|
|
51.3
|
%
|
|
10.6
|
|
|
40.7
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
21.5
|
%
|
|
(1.1
|
)
|
|
22.6
|
%
|
|||
General and administrative expenses (b)
|
|
20.7
|
%
|
|
2.5
|
|
|
18.2
|
%
|
|||
Expense ratio
|
|
42.2
|
%
|
|
1.4
|
|
|
40.8
|
%
|
|||
Combined ratio
|
|
93.5
|
%
|
|
12.0
|
|
|
81.5
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross
Premiums
Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross
Premiums
Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
181,413
|
|
|
32.2
|
%
|
|
$
|
934
|
|
|
0.1
|
|
|
$
|
180,479
|
|
|
32.1
|
%
|
Marine
|
|
174,212
|
|
|
31.0
|
%
|
|
(25,866
|
)
|
|
(4.5
|
)
|
|
200,078
|
|
|
35.5
|
%
|
|||
Specialty
|
|
206,759
|
|
|
36.8
|
%
|
|
24,193
|
|
|
4.4
|
|
|
182,566
|
|
|
32.4
|
%
|
|||
Total
|
|
$
|
562,384
|
|
|
100.0
|
%
|
|
$
|
(739
|
)
|
|
|
|
$
|
563,123
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
53,789
|
|
|
$
|
(8,788
|
)
|
|
$
|
62,577
|
|
Marine
|
|
26,101
|
|
|
(2,577
|
)
|
|
28,678
|
|
|||
Specialty
|
|
34,729
|
|
|
(2,337
|
)
|
|
37,066
|
|
|||
Total
|
|
$
|
114,619
|
|
|
$
|
(13,702
|
)
|
|
$
|
128,321
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Net
Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net
Premiums Written |
|
% of Gross Premiums Written
|
|
Net
Premiums Written |
|
% of Gross Premiums Written
|
|||||||||
Property
|
|
$
|
127,624
|
|
|
70.3
|
%
|
|
$
|
9,722
|
|
|
5.0
|
|
|
$
|
117,902
|
|
|
65.3
|
%
|
Marine
|
|
148,111
|
|
|
85.0
|
%
|
|
(23,289
|
)
|
|
(0.7
|
)
|
|
171,400
|
|
|
85.7
|
%
|
|||
Specialty
|
|
172,030
|
|
|
83.2
|
%
|
|
26,530
|
|
|
3.5
|
|
|
145,500
|
|
|
79.7
|
%
|
|||
Total
|
|
$
|
447,765
|
|
|
79.6
|
%
|
|
$
|
12,963
|
|
|
2.4
|
|
|
$
|
434,802
|
|
|
77.2
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
115,855
|
|
|
$
|
4,712
|
|
|
$
|
111,143
|
|
Marine
|
|
143,793
|
|
|
(26,260
|
)
|
|
170,053
|
|
|||
Specialty
|
|
148,693
|
|
|
1,862
|
|
|
146,831
|
|
|||
Total
|
|
$
|
408,341
|
|
|
$
|
(19,686
|
)
|
|
$
|
428,027
|
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
|
58.7
|
%
|
|
0.6
|
|
|
58.1
|
%
|
All lines—current period—notable loss events
|
|
2.9
|
%
|
|
(0.1
|
)
|
|
3.0
|
%
|
All lines—current period—non-notable loss events
|
|
2.2
|
%
|
|
2.2
|
|
|
0.0
|
%
|
All lines—change in prior accident years
|
|
(12.5
|
)%
|
|
7.9
|
|
|
(20.4
|
)%
|
All lines—loss ratio
|
|
51.3
|
%
|
|
10.6
|
|
|
40.7
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
239,645
|
|
|
$
|
(8,841
|
)
|
|
$
|
248,486
|
|
All lines—current period—notable loss events
|
|
11,703
|
|
|
(1,182
|
)
|
|
12,885
|
|
|||
All lines—current period—non-notable loss events
|
|
9,111
|
|
|
9,111
|
|
|
—
|
|
|||
All lines—change in prior accident years
|
|
(51,048
|
)
|
|
36,225
|
|
|
(87,273
|
)
|
|||
All lines—losses and loss expenses
|
|
$
|
209,411
|
|
|
$
|
35,313
|
|
|
$
|
174,098
|
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Property—current period excluding items below
|
|
59.4
|
%
|
|
(3.7
|
)
|
|
63.1
|
%
|
Property—current period—notable loss events
|
|
10.1
|
%
|
|
9.7
|
|
|
0.4
|
%
|
Property—current period—non-notable loss events
|
|
3.7
|
%
|
|
3.7
|
|
|
0.0
|
%
|
Property—change in prior accident years
|
|
(24.6
|
)%
|
|
9.1
|
|
|
(33.7
|
)%
|
Property—loss ratio
|
|
48.6
|
%
|
|
18.8
|
|
|
29.8
|
%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
68,874
|
|
|
$
|
(1,306
|
)
|
|
$
|
70,180
|
|
Property—current period—notable loss events
|
|
11,703
|
|
|
11,277
|
|
|
426
|
|
|||
Property—current period—non-notable loss events
|
|
4,274
|
|
|
4,274
|
|
|
—
|
|
|||
Property—change in prior accident years
|
|
(28,540
|
)
|
|
8,895
|
|
|
(37,435
|
)
|
|||
Property—losses and loss expenses
|
|
$
|
56,311
|
|
|
$
|
23,140
|
|
|
$
|
33,171
|
|
|
|
Losses and Loss Expense Ratio - Marine Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Marine—current period excluding items below
|
|
53.6
|
%
|
|
2.4
|
|
|
51.2
|
%
|
Marine—current period—notable loss events
|
|
0.0
|
%
|
|
(7.3
|
)
|
|
7.3
|
%
|
Marine—current period—non-notable loss events
|
|
3.4
|
%
|
|
3.4
|
|
|
0.0
|
%
|
Marine—change in prior accident years
|
|
(4.1
|
)%
|
|
17.3
|
|
|
(21.4
|
)%
|
Marine—loss ratio
|
|
52.9
|
%
|
|
15.8
|
|
|
37.1
|
%
|
|
|
Losses and Loss Expenses - Marine Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Marine—current period excluding items below
|
|
$
|
77,156
|
|
|
$
|
(9,831
|
)
|
|
$
|
86,987
|
|
Marine—current period—notable loss events
|
|
—
|
|
|
(12,459
|
)
|
|
12,459
|
|
|||
Marine—current period—non-notable loss events
|
|
4,837
|
|
|
4,837
|
|
|
—
|
|
|||
Marine—change in prior accident years
|
|
(5,964
|
)
|
|
30,360
|
|
|
(36,324
|
)
|
|||
Marine—losses and loss expenses
|
|
$
|
76,029
|
|
|
$
|
12,907
|
|
|
$
|
63,122
|
|
|
|
Losses and Loss Expense Ratio - Specialty Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Specialty—current period excluding items below
|
|
62.9
|
%
|
|
0.7
|
|
|
62.2
|
%
|
Specialty—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Specialty—current period—non-notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Specialty—change in prior accident years
|
|
(11.1
|
)%
|
|
(1.9
|
)
|
|
(9.2
|
)%
|
Specialty—loss ratio
|
|
51.8
|
%
|
|
(1.2
|
)
|
|
53.0
|
%
|
|
|
Losses and Loss Expenses - Specialty Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Specialty—current period excluding items above
|
|
$
|
93,615
|
|
|
$
|
2,296
|
|
|
$
|
91,319
|
|
Specialty—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Specialty—current period—non-notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Specialty—change in prior accident years
|
|
(16,544
|
)
|
|
(3,030
|
)
|
|
(13,514
|
)
|
|||
Specialty—losses and loss expenses
|
|
$
|
77,071
|
|
|
$
|
(734
|
)
|
|
$
|
77,805
|
|
|
|
Policy Acquisition Costs
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|||||||||
Property
|
|
$
|
17,474
|
|
|
15.1
|
%
|
|
$
|
1,385
|
|
|
0.6
|
|
|
$
|
16,089
|
|
|
14.5
|
%
|
Marine
|
|
36,097
|
|
|
25.1
|
%
|
|
(9,392
|
)
|
|
(1.6
|
)
|
|
45,489
|
|
|
26.7
|
%
|
|||
Specialty
|
|
34,385
|
|
|
23.1
|
%
|
|
(800
|
)
|
|
(0.9
|
)
|
|
35,185
|
|
|
24.0
|
%
|
|||
Total
|
|
$
|
87,956
|
|
|
21.5
|
%
|
|
$
|
(8,807
|
)
|
|
(1.1
|
)
|
|
$
|
96,763
|
|
|
22.6
|
%
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
42,070
|
|
|
$
|
(19,813
|
)
|
|
$
|
61,883
|
|
Marine
|
|
31,667
|
|
|
(29,775
|
)
|
|
61,442
|
|
|||
Specialty
|
|
37,237
|
|
|
3,396
|
|
|
33,841
|
|
|||
Other insurance related income
|
|
290
|
|
|
196
|
|
|
94
|
|
|||
Total
|
|
$
|
111,264
|
|
|
$
|
(45,996
|
)
|
|
$
|
157,260
|
|
|
|
General and Administrative and Share Compensation Expenses
|
||||||||||||||||||
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
||||||||
General and administrative expenses
|
|
$
|
77,596
|
|
|
19.0
|
%
|
|
$
|
5,547
|
|
|
2.2
|
|
$
|
72,049
|
|
|
16.8
|
%
|
Share compensation expenses
|
|
6,792
|
|
|
1.7
|
%
|
|
811
|
|
|
0.3
|
|
5,981
|
|
|
1.4
|
%
|
|||
Total
|
|
$
|
84,388
|
|
|
20.7
|
%
|
|
$
|
6,358
|
|
|
2.5
|
|
$
|
78,030
|
|
|
18.2
|
%
|
|
|
Select Underwriting Ratios
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Losses and loss expense ratio
|
|
51.3
|
%
|
|
10.6
|
|
|
40.7
|
%
|
Policy acquisition cost ratio
|
|
21.5
|
%
|
|
(1.1
|
)
|
|
22.6
|
%
|
General and administrative expense ratio (a)
|
|
20.7
|
%
|
|
2.5
|
|
|
18.2
|
%
|
Expense ratio
|
|
42.2
|
%
|
|
1.4
|
|
|
40.8
|
%
|
Combined ratio
|
|
93.5
|
%
|
|
12.0
|
|
|
81.5
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Underwriting revenues
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
150,930
|
|
|
$
|
14,429
|
|
|
$
|
136,501
|
|
Reinsurance premiums ceded
|
|
(9,145
|
)
|
|
(471
|
)
|
|
(8,674
|
)
|
|||
Net premiums written
|
|
141,785
|
|
|
13,958
|
|
|
127,827
|
|
|||
Change in unearned premiums
|
|
(14,630
|
)
|
|
(19,803
|
)
|
|
5,173
|
|
|||
Net premiums earned
|
|
127,155
|
|
|
(5,845
|
)
|
|
133,000
|
|
|||
Other insurance related income
|
|
477
|
|
|
(62
|
)
|
|
539
|
|
|||
Total underwriting revenues
|
|
127,632
|
|
|
(5,907
|
)
|
|
133,539
|
|
|||
|
|
|
|
|
|
|
||||||
Underwriting deductions
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
83,875
|
|
|
(13,413
|
)
|
|
97,288
|
|
|||
Policy acquisition costs
|
|
29,610
|
|
|
15,714
|
|
|
13,896
|
|
|||
General and administrative expenses
|
|
23,533
|
|
|
3,983
|
|
|
19,550
|
|
|||
Share compensation expenses
|
|
1,123
|
|
|
152
|
|
|
971
|
|
|||
Total underwriting deductions
|
|
138,141
|
|
|
6,436
|
|
|
131,705
|
|
|||
Underwriting (loss) income (a)
|
|
$
|
(10,509
|
)
|
|
$
|
(12,343
|
)
|
|
$
|
1,834
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
Losses and loss expenses
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
$
|
90,834
|
|
|
$
|
(17,039
|
)
|
|
$
|
107,873
|
|
Current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
Change in prior accident years
|
|
(7,584
|
)
|
|
3,001
|
|
|
(10,585
|
)
|
|||
Total losses and loss expenses
|
|
$
|
83,875
|
|
|
$
|
(13,413
|
)
|
|
$
|
97,288
|
|
|
|
|
|
|
|
|
||||||
Selected ratios:
|
|
|
|
|
|
|
||||||
Net premiums written / Gross premiums written
|
|
93.9
|
%
|
|
0.3
|
|
|
93.6
|
%
|
|||
|
|
|
|
|
|
|
||||||
Losses and loss expense ratio
|
|
|
|
|
|
|
||||||
Current period excluding items below
|
|
71.5
|
%
|
|
(9.6
|
)
|
|
81.1
|
%
|
|||
Current period—notable loss events
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Current period—non-notable loss events
|
|
0.5
|
%
|
|
0.5
|
|
|
—
|
%
|
|||
Change in prior accident years
|
|
(6.0
|
)%
|
|
2.0
|
|
|
(8.0
|
)%
|
|||
Losses and loss expenses
|
|
66.0
|
%
|
|
(7.1
|
)
|
|
73.1
|
%
|
|||
|
|
|
|
|
|
|
||||||
Policy acquisition costs
|
|
23.3
|
%
|
|
12.8
|
|
|
10.5
|
%
|
|||
General and administrative expense (b)
|
|
19.3
|
%
|
|
3.9
|
|
|
15.4
|
%
|
|||
Expense ratio
|
|
42.6
|
%
|
|
16.7
|
|
|
25.9
|
%
|
|||
Combined ratio
|
|
108.6
|
%
|
|
9.6
|
|
|
99.0
|
%
|
(a)
|
Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Business Mix - Ratio of Gross Premiums Written by Line of Business to Total Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Gross
Premiums
Written
|
|
% of Total
|
|
Gross Premiums Written
|
|
% of Total
|
|
Gross
Premiums
Written
|
|
% of Total
|
|||||||||
Property
|
|
$
|
41,644
|
|
|
27.6
|
%
|
|
$
|
16,372
|
|
|
9.1
|
|
|
$
|
25,272
|
|
|
18.5
|
%
|
Liability
|
|
109,286
|
|
|
72.4
|
%
|
|
(1,943
|
)
|
|
(9.1
|
)
|
|
111,229
|
|
|
81.5
|
%
|
|||
Total
|
|
$
|
150,930
|
|
|
100.0
|
%
|
|
$
|
14,429
|
|
|
|
|
$
|
136,501
|
|
|
100.0
|
%
|
|
|
Reinsurance Premiums Ceded
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
3,707
|
|
|
$
|
1,770
|
|
|
$
|
1,937
|
|
Liability
|
|
5,438
|
|
|
(1,299
|
)
|
|
6,737
|
|
|||
Total
|
|
$
|
9,145
|
|
|
$
|
471
|
|
|
$
|
8,674
|
|
|
|
Net Retention - Ratio of Net Premiums Written to Gross Premiums Written
|
|||||||||||||||||||
|
|
Six Months Ended June 30,
|
|||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
|||||||||||||||
(Dollars in thousands)
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|
Net Premiums
Written
|
|
% of Gross Premiums Written
|
|||||||||
Property
|
|
$
|
37,937
|
|
|
91.1
|
%
|
|
$
|
14,602
|
|
|
(1.2
|
)
|
|
$
|
23,335
|
|
|
92.3
|
%
|
Liability
|
|
103,848
|
|
|
95.0
|
%
|
|
(644
|
)
|
|
1.1
|
|
|
104,492
|
|
|
93.9
|
%
|
|||
Total
|
|
$
|
141,785
|
|
|
93.9
|
%
|
|
$
|
13,958
|
|
|
0.3
|
|
|
$
|
127,827
|
|
|
93.6
|
%
|
|
|
Net Premiums Earned
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
26,372
|
|
|
$
|
4,950
|
|
|
$
|
21,422
|
|
Liability
|
|
100,783
|
|
|
(10,795
|
)
|
|
111,578
|
|
|||
Total
|
|
$
|
127,155
|
|
|
$
|
(5,845
|
)
|
|
$
|
133,000
|
|
|
|
Losses and Loss Expense Ratio - All Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
All lines—current period excluding items below
|
|
71.5
|
%
|
|
(9.6
|
)
|
|
81.1
|
%
|
All lines—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
All lines—current period—non-notable loss events
|
|
0.5
|
%
|
|
0.5
|
|
|
0.0
|
%
|
All lines—change in prior accident years (a)
|
|
(6.0
|
)%
|
|
2.0
|
|
|
(8.0
|
)%
|
All lines—loss ratio (a)
|
|
66.0
|
%
|
|
(7.1
|
)
|
|
73.1
|
%
|
|
|
Losses and Loss Expenses - All Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
All lines—current period excluding items below
|
|
$
|
90,834
|
|
|
$
|
(17,039
|
)
|
|
$
|
107,873
|
|
All lines—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
All lines—current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
All lines—change in prior accident years (a)
|
|
(7,584
|
)
|
|
3,001
|
|
|
(10,585
|
)
|
|||
All lines
—
losses and loss expenses (a)
|
|
$
|
83,875
|
|
|
$
|
(13,413
|
)
|
|
$
|
97,288
|
|
(a)
|
Upon closing the acquisition, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $6,115 during the
six months ended
June 30, 2015
, benefiting the loss ratio by 4.6 percentage points. The remaining fair value adjustment of $4,864 was fully amortized during the year ended December 31, 2015.
|
|
|
Losses and Loss Expense Ratio - Property Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Property—current period excluding items below
|
|
78.2
|
%
|
|
(7.3
|
)
|
|
85.5
|
%
|
Property—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Property—current period—non-notable loss events
|
|
2.4
|
%
|
|
2.4
|
|
|
0.0
|
%
|
Property—change in prior accident years (a)
|
|
(7.7
|
)%
|
|
9.1
|
|
|
(16.8
|
)%
|
Property—loss ratio (a)
|
|
72.9
|
%
|
|
4.2
|
|
|
68.7
|
%
|
|
|
Losses and Loss Expenses - Property Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property—current period excluding items below
|
|
$
|
20,629
|
|
|
$
|
2,316
|
|
|
$
|
18,313
|
|
Property—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Property—current period—non-notable loss events
|
|
625
|
|
|
625
|
|
|
—
|
|
|||
Property—change in prior accident years (a)
|
|
(2,023
|
)
|
|
1,571
|
|
|
(3,594
|
)
|
|||
Property—losses and loss expenses (a)
|
|
$
|
19,231
|
|
|
$
|
4,512
|
|
|
$
|
14,719
|
|
(a)
|
Upon closing the acquisition, an adjustment of $409 was made to decrease net reserves to reflect fair value. This adjustment was amortized to income through an increase in losses and loss expenses of $161 during the
six months ended
June 30, 2015
, increasing the loss ratio by 0.8 percentage points. The remaining fair value adjustment of $127 was fully amortized during the year ended December 31, 2015.
|
|
|
Losses and Loss Expense Ratio - Liability Lines
|
|||||||
|
|
Six Months Ended June 30,
|
|||||||
|
|
2016
|
|
Change
|
|
2015
|
|||
Liability—current period excluding items below
|
|
69.6
|
%
|
|
(10.7
|
)
|
|
80.3
|
%
|
Liability—current period—notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Liability—current period—non-notable loss events
|
|
0.0
|
%
|
|
0.0
|
|
|
0.0
|
%
|
Liability—change in prior accident years (a)
|
|
(5.5
|
)%
|
|
0.8
|
|
|
(6.3
|
)%
|
Liability—loss ratio (a)
|
|
64.1
|
%
|
|
(9.9
|
)
|
|
74.0
|
%
|
|
|
Losses and Loss Expenses - Liability Lines
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Liability—current period excluding items above
|
|
$
|
70,205
|
|
|
$
|
(19,355
|
)
|
|
$
|
89,560
|
|
Liability—current period—notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Liability—current period—non-notable loss events
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Liability—change in prior accident years (a)
|
|
(5,561
|
)
|
|
1,430
|
|
|
(6,991
|
)
|
|||
Liability—losses and loss expenses (a)
|
|
$
|
64,644
|
|
|
$
|
(17,925
|
)
|
|
$
|
82,569
|
|
(a)
|
Upon closing the acquisition, an adjustment of $15,995 was made to increase net reserves to reflect fair value. This adjustment was amortized to income through a reduction in losses and loss expenses of $6,276 during the
six months ended
June 30, 2015
, benefiting the loss ratio by 5.6 percentage points. The remaining fair value adjustment of $4,991 was fully amortized during the year ended December 31, 2015.
|
|
|
Policy Acquisition Costs
|
||||||||||||||||||
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
|
Policy Acquisition Costs
|
|
% of Net Premiums Earned
|
||||||||
Property
|
|
$
|
6,283
|
|
|
23.8
|
%
|
|
$
|
4,734
|
|
|
16.6
|
|
$
|
1,549
|
|
|
7.2
|
%
|
Liability
|
|
23,327
|
|
|
23.1
|
%
|
|
10,980
|
|
|
12.0
|
|
12,347
|
|
|
11.1
|
%
|
|||
Total (a)
|
|
$
|
29,610
|
|
|
23.3
|
%
|
|
$
|
15,714
|
|
|
12.8
|
|
$
|
13,896
|
|
|
10.5
|
%
|
(a)
|
Upon closing the acquisition, an adjustment of $34,736 was made to reduce deferred acquisition costs to reflect fair value. These deferred acquisition costs would otherwise have been expensed in the amount of $16,992 during the
six months ended
June 30, 2015
, benefiting the policy acquisition cost ratio by 12.8 percentage points.
|
|
|
Underwriting Income Before General and Administrative and Share Compensation Expenses
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Property
|
|
$
|
858
|
|
|
$
|
(4,296
|
)
|
|
$
|
5,154
|
|
Liability
|
|
12,812
|
|
|
(3,850
|
)
|
|
16,662
|
|
|||
Other insurance related income
|
|
477
|
|
|
(62
|
)
|
|
539
|
|
|||
Total
|
|
$
|
14,147
|
|
|
$
|
(8,208
|
)
|
|
$
|
22,355
|
|
|
|
General and Administrative and Share Compensation Expenses
|
||||||||||||||||||
|
|
Six Months Ended June 30,
|
||||||||||||||||||
|
|
2016
|
|
Change
|
|
2015
|
||||||||||||||
(Dollars in thousands)
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
|
Expenses
|
|
% of Net Premiums Earned
|
||||||||
General and administrative expenses
|
|
$
|
23,533
|
|
|
18.4
|
%
|
|
$
|
3,983
|
|
|
3.7
|
|
$
|
19,550
|
|
|
14.7
|
%
|
Share compensation expenses
|
|
1,123
|
|
|
0.9
|
%
|
|
152
|
|
|
0.2
|
|
971
|
|
|
0.7
|
%
|
|||
Total
|
|
$
|
24,656
|
|
|
19.3
|
%
|
|
$
|
4,135
|
|
|
3.9
|
|
$
|
20,521
|
|
|
15.4
|
%
|
|
Six Months Ended June 30,
|
|||||||
|
2016
|
|
Change
|
|
2015
|
|||
Losses and loss expense ratio
|
66.0
|
%
|
|
(7.1
|
)
|
|
73.1
|
%
|
Policy acquisition cost ratio
|
23.3
|
%
|
|
12.8
|
|
|
10.5
|
%
|
General and administrative expense ratio (a)
|
19.3
|
%
|
|
3.9
|
|
|
15.4
|
%
|
Expense ratio
|
42.6
|
%
|
|
16.7
|
|
|
25.9
|
%
|
Combined ratio
|
108.6
|
%
|
|
9.6
|
|
|
99.0
|
%
|
(a)
|
The general and administrative expense ratio includes share compensation expenses.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Third party
|
|
$
|
7,818
|
|
|
$
|
(1,042
|
)
|
|
$
|
8,860
|
|
Related party
|
|
1,219
|
|
|
(1,101
|
)
|
|
2,320
|
|
|||
Total revenues
|
|
9,037
|
|
|
(2,143
|
)
|
|
11,180
|
|
|||
|
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
4,233
|
|
|
(526
|
)
|
|
4,759
|
|
|||
Share compensation expenses
|
|
274
|
|
|
(25
|
)
|
|
299
|
|
|||
Finance expenses
|
|
883
|
|
|
(6,079
|
)
|
|
6,962
|
|
|||
Foreign exchange gains
|
|
12
|
|
|
10
|
|
|
2
|
|
|||
Total expenses
|
|
5,402
|
|
|
(6,620
|
)
|
|
12,022
|
|
|||
|
|
|
|
|
|
|
||||||
Income (loss) before investments from AlphaCat Funds and Sidecars
|
|
$
|
3,635
|
|
|
$
|
4,477
|
|
|
$
|
(842
|
)
|
|
|
|
|
|
|
|
||||||
Investment income (loss) from AlphaCat Funds and Sidecars (b)
|
|
|
|
|
||||||||
AlphaCat Sidecars
|
|
665
|
|
|
(1,776
|
)
|
|
2,441
|
|
|||
AlphaCat ILS Funds - Lower Risk (c)
|
|
4,582
|
|
|
1,402
|
|
|
3,180
|
|
|||
AlphaCat ILS Funds - Higher Risk (c)
|
|
3,128
|
|
|
(1,673
|
)
|
|
4,801
|
|
|||
BetaCat ILS Funds
|
|
1,676
|
|
|
1,442
|
|
|
234
|
|
|||
PaCRe
|
|
(23
|
)
|
|
(5,745
|
)
|
|
5,722
|
|
|||
Total investment income from AlphaCat Funds and Sidecars
|
|
10,028
|
|
|
(6,350
|
)
|
|
16,378
|
|
|||
|
|
|
|
|
|
|
||||||
Validus' share of AlphaCat income
|
|
$
|
13,663
|
|
|
$
|
(1,873
|
)
|
|
$
|
15,536
|
|
|
|
|
|
|
|
|
||||||
Supplemental information:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
(66
|
)
|
|
$
|
(43,413
|
)
|
|
$
|
43,347
|
|
AlphaCat ILS Funds - Lower Risk (c)
|
|
110,192
|
|
|
21,757
|
|
|
88,435
|
|
|||
AlphaCat ILS Funds - Higher Risk (c)
|
|
138,330
|
|
|
105,512
|
|
|
32,818
|
|
|||
AlphaCat Direct (d)
|
|
17,797
|
|
|
17,797
|
|
|
—
|
|
|||
Total
|
|
$
|
266,253
|
|
|
$
|
101,653
|
|
|
$
|
164,600
|
|
(a)
|
In presenting the Company’s results, management has included and discussed the results of AlphaCat, which are presented on an asset manager basis. Validus' share of AlphaCat income is a non-GAAP measure and is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled
“Non-GAAP Financial Measures.”
|
(b)
|
The investment income from the AlphaCat funds and sidecars is based on equity accounting.
|
(c)
|
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 greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.
|
(d)
|
AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.
|
|
|
Assets Under Management (a)
|
||||||||||
(Dollars in thousands)
|
|
July 1, 2016
|
|
Change
|
|
January 1, 2016
|
||||||
Assets Under Management - Related Party
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
8,045
|
|
|
$
|
(27,371
|
)
|
|
$
|
35,416
|
|
AlphaCat ILS Funds - Lower Risk (b)
|
|
175,832
|
|
|
11,818
|
|
|
164,014
|
|
|||
AlphaCat ILS Funds - Higher Risk (b)
|
|
76,287
|
|
|
10,823
|
|
|
65,464
|
|
|||
AlphaCat Direct (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
BetaCat ILS Funds
|
|
63,453
|
|
|
1,704
|
|
|
61,749
|
|
|||
Total
|
|
$
|
323,617
|
|
|
$
|
(3,026
|
)
|
|
$
|
326,643
|
|
|
|
|
|
|
|
|
||||||
Assets Under Management - Third Party
|
|
|
|
|
|
|
||||||
AlphaCat Sidecars
|
|
$
|
30,078
|
|
|
$
|
(124,308
|
)
|
|
$
|
154,386
|
|
AlphaCat ILS Funds - Lower Risk (b)
|
|
1,226,709
|
|
|
124,247
|
|
|
1,102,462
|
|
|||
AlphaCat ILS Funds - Higher Risk (b)
|
|
564,513
|
|
|
129,662
|
|
|
434,851
|
|
|||
AlphaCat Direct (c)
|
|
365,558
|
|
|
(2,262
|
)
|
|
367,820
|
|
|||
BetaCat ILS Funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
2,186,858
|
|
|
127,339
|
|
|
2,059,519
|
|
|||
Total Assets Under Management
|
|
$
|
2,510,475
|
|
|
$
|
124,313
|
|
|
$
|
2,386,162
|
|
(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 greater than 7%. 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 third party investors in AlphaCat Re.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Investment income
|
|
|
|
|
|
|
||||||
Net investment income (a)
|
|
$
|
64,772
|
|
|
$
|
3,482
|
|
|
$
|
61,290
|
|
|
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
||||||
General and administrative expenses
|
|
34,055
|
|
|
1,357
|
|
|
32,698
|
|
|||
Share compensation expenses
|
|
8,099
|
|
|
2,028
|
|
|
6,071
|
|
|||
Finance expenses (a)
|
|
28,320
|
|
|
(2,160
|
)
|
|
30,480
|
|
|||
Tax (benefit) expenses
|
|
(412
|
)
|
|
(5,526
|
)
|
|
5,114
|
|
|||
Total operating expenses
|
|
70,062
|
|
|
(4,301
|
)
|
|
74,363
|
|
|||
|
|
|
|
|
|
|
||||||
Other items
|
|
|
|
|
|
|
||||||
Net realized gains on investments (a)
|
|
1,434
|
|
|
(4,850
|
)
|
|
6,284
|
|
|||
Change in net unrealized gains on investments (a)
|
|
77,130
|
|
|
76,387
|
|
|
743
|
|
|||
(Loss) income from investment affiliate
|
|
(4,702
|
)
|
|
(7,762
|
)
|
|
3,060
|
|
|||
Foreign exchange gains (losses) (a)
|
|
12,695
|
|
|
19,388
|
|
|
(6,693
|
)
|
|||
Other income (loss)
|
|
756
|
|
|
1,364
|
|
|
(608
|
)
|
|||
Total other items
|
|
87,313
|
|
|
84,527
|
|
|
2,786
|
|
|||
|
|
|
|
|
|
|
||||||
Total corporate and investment information
|
|
$
|
82,023
|
|
|
$
|
92,310
|
|
|
$
|
(10,287
|
)
|
(a)
|
These items exclude the components which are included in the Company's share of AlphaCat and amounts which are consolidated from VIEs.
|
|
|
Net Investment Income
|
||||||||||
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Managed investments
|
|
|
|
|
|
|
||||||
Fixed maturities and short-term investments
|
|
$
|
58,638
|
|
|
$
|
1,532
|
|
|
$
|
57,106
|
|
Other investments
|
|
8,898
|
|
|
1,696
|
|
|
7,202
|
|
|||
Cash and cash equivalents
|
|
1,245
|
|
|
402
|
|
|
843
|
|
|||
Securities lending income
|
|
17
|
|
|
8
|
|
|
9
|
|
|||
Total gross investment income
|
|
68,798
|
|
|
3,638
|
|
|
65,160
|
|
|||
Investment expenses
|
|
(4,026
|
)
|
|
(156
|
)
|
|
(3,870
|
)
|
|||
Total managed net investment income
|
|
$
|
64,772
|
|
|
$
|
3,482
|
|
|
$
|
61,290
|
|
|
|
Six Months Ended June 30,
|
||||
U.S. dollar (weakened) strengthened against:
|
|
2016
|
|
2015
|
||
British Pound sterling
|
|
10.8
|
%
|
|
(0.8
|
)%
|
Euro
|
|
(2.2
|
)%
|
|
8.6
|
%
|
Canadian dollar
|
|
(6.4
|
)%
|
|
7.5
|
%
|
Swiss franc
|
|
(2.6
|
)%
|
|
(6.0
|
)%
|
Australian dollar
|
|
(1.9
|
)%
|
|
5.9
|
%
|
New Zealand dollar
|
|
(4.2
|
)%
|
|
14.8
|
%
|
Singapore dollar
|
|
(4.7
|
)%
|
|
1.6
|
%
|
Japanese yen
|
|
(14.7
|
)%
|
|
2.4
|
%
|
South African rand
|
|
(5.0
|
)%
|
|
5.3
|
%
|
|
|
Three Months Ended June 30,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Underwriting income
|
|
$
|
58,957
|
|
|
$
|
109,660
|
|
Net investment income
|
|
39,257
|
|
|
33,611
|
|
||
Finance expenses
|
|
(14,166
|
)
|
|
(18,682
|
)
|
||
Dividends on preferred shares
|
|
—
|
|
|
—
|
|
||
Tax expense
|
|
(1,706
|
)
|
|
(2,549
|
)
|
||
Income from operating affiliates
|
|
—
|
|
|
1,738
|
|
||
(Income) attributable to AlphaCat investors
|
|
(6,114
|
)
|
|
—
|
|
||
Net operating (income) attributable to noncontrolling interest
|
|
(21,328
|
)
|
|
(22,061
|
)
|
||
Net operating income available to Validus common shareholders
|
|
$
|
54,900
|
|
|
$
|
101,717
|
|
Net realized gains on investments
|
|
2,724
|
|
|
2,244
|
|
||
Change in net unrealized gains (losses) on investments
|
|
31,428
|
|
|
(34,676
|
)
|
||
(Loss) income from investment affiliate
|
|
(589
|
)
|
|
284
|
|
||
Foreign exchange gains (losses)
|
|
6,286
|
|
|
(2,671
|
)
|
||
Other income (loss)
|
|
79
|
|
|
(608
|
)
|
||
Net loss (income) attributable to noncontrolling interest
|
|
135
|
|
|
(500
|
)
|
||
Net income available to Validus common shareholders
|
|
$
|
94,963
|
|
|
$
|
65,790
|
|
|
|
Six Months Ended June 30,
|
||||||
(Dollars in thousands)
|
|
2016
|
|
2015
|
||||
Underwriting income
|
|
$
|
201,876
|
|
|
$
|
253,861
|
|
Net investment income
|
|
68,718
|
|
|
64,640
|
|
||
Finance expenses
|
|
(29,369
|
)
|
|
(39,649
|
)
|
||
Dividends on preferred shares
|
|
—
|
|
|
—
|
|
||
Tax benefit (expense)
|
|
412
|
|
|
(5,114
|
)
|
||
(Loss) income from operating affiliates
|
|
(23
|
)
|
|
5,722
|
|
||
(Income) attributable to AlphaCat investors
|
|
(10,714
|
)
|
|
—
|
|
||
Net operating (income) attributable to noncontrolling interest
|
|
(58,622
|
)
|
|
(40,869
|
)
|
||
Net operating income available to Validus common shareholders
|
|
$
|
172,278
|
|
|
$
|
238,591
|
|
Net realized gains on investments
|
|
2,140
|
|
|
6,413
|
|
||
Change in net unrealized gains (losses) on investments
|
|
78,872
|
|
|
(1,449
|
)
|
||
(Loss) income from investment affiliate
|
|
(4,702
|
)
|
|
3,060
|
|
||
Foreign exchange gains (losses)
|
|
12,531
|
|
|
(6,936
|
)
|
||
Other income (loss)
|
|
756
|
|
|
(608
|
)
|
||
Net (income) loss attributable to noncontrolling interest
|
|
(102
|
)
|
|
130
|
|
||
Net income available to Validus common shareholders
|
|
$
|
261,773
|
|
|
$
|
239,201
|
|
|
|
June 30, 2016
|
|||||||||||||
(Dollars in thousands, except share and per share amounts)
|
|
Equity Amount
|
|
Shares
|
|
Exercise Price (a)
|
|
Book Value Per
Share
|
|||||||
Book value per common share
|
|
|
|
|
|
|
|
|
|||||||
Total shareholders' equity available to Validus common shareholders (b)
|
|
$
|
3,716,256
|
|
|
80,772,238
|
|
|
|
|
$
|
46.01
|
|
||
|
|
|
|
|
|
|
|
|
|||||||
Tangible book value per common share
|
|
|
|
|
|
|
|
$
|
42.11
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Book value per diluted common share
|
|
|
|
|
|
|
|
|
|||||||
Total shareholders' equity available to Validus common shareholders (b)
|
|
3,716,256
|
|
|
80,772,238
|
|
|
|
|
|
|||||
Assumed exercise of outstanding stock options (c)
|
|
1,080
|
|
|
51,357
|
|
|
$
|
21.03
|
|
|
|
|||
Unvested restricted shares
|
|
—
|
|
|
2,876,998
|
|
|
|
|
|
|||||
Book value per diluted common share
|
|
$
|
3,717,336
|
|
|
83,700,593
|
|
|
|
|
$
|
44.41
|
|
||
Adjustment for accumulated dividends
|
|
|
|
|
|
|
|
10.86
|
|
||||||
Book value per diluted common share plus accumulated dividends
|
|
|
|
|
|
|
|
$
|
55.27
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Tangible book value per diluted common share
|
|
|
|
|
|
|
|
$
|
40.65
|
|
|
|
December 31, 2015
|
|||||||||||||
(Dollars in thousands, except share and per share amounts)
|
|
Equity Amount
|
|
Shares
|
|
Exercise Price (a)
|
|
Book Value Per
Share
|
|||||||
Book value per common share
|
|
|
|
|
|
|
|
|
|||||||
Total shareholders' equity available to Validus common shareholders (b)
|
|
$
|
3,638,975
|
|
|
82,900,617
|
|
|
|
|
$
|
43.90
|
|
||
|
|
|
|
|
|
|
|
|
|||||||
Tangible book value per common share
|
|
|
|
|
|
|
|
$
|
40.06
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Book value per diluted common share
|
|
|
|
|
|
|
|
|
|||||||
Total shareholders' equity available to Validus common shareholders (b)
|
|
3,638,975
|
|
|
82,900,617
|
|
|
|
|
|
|||||
Assumed exercise of outstanding stock options (c)
|
|
1,319
|
|
|
65,401
|
|
|
$
|
20.17
|
|
|
|
|||
Unvested restricted shares
|
|
—
|
|
|
3,026,376
|
|
|
|
|
|
|||||
Book value per diluted common share
|
|
$
|
3,640,294
|
|
|
85,992,394
|
|
|
|
|
$
|
42.33
|
|
||
Adjustment for accumulated dividends
|
|
|
|
|
|
|
|
10.16
|
|
||||||
Book value per diluted common share plus accumulated dividends
|
|
|
|
|
|
|
|
$
|
52.49
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Tangible book value per diluted common share
|
|
|
|
|
|
|
|
$
|
38.63
|
|
(a)
|
Weighted average exercise price for those warrants and stock options that have an exercise price lower than book value per share.
|
(b)
|
Total shareholders' equity available to Validus common shareholders excludes the liquidation value of the preferred shares of $150,000.
|
(c)
|
Using the "as-if-converted" method, assuming all proceeds received upon exercise of warrants and stock options will be retained by the Company and the resulting common shares from exercise remain outstanding.
|
|
|
June 30, 2016
|
|||||
(Dollars in thousands)
|
|
Fair Value
|
|
% of Total
|
|||
Germany
|
|
$
|
58,646
|
|
|
10.1
|
%
|
United Kingdom
|
|
36,759
|
|
|
6.3
|
%
|
|
Supranational
|
|
35,830
|
|
|
6.2
|
%
|
|
France
|
|
15,695
|
|
|
2.7
|
%
|
|
Norway
|
|
13,057
|
|
|
2.3
|
%
|
|
Jordan
|
|
10,354
|
|
|
1.8
|
%
|
|
Other (individual jurisdictions below $10,000)
|
|
44,909
|
|
|
7.7
|
%
|
|
Total Managed Non-U.S. Government Securities
|
|
215,250
|
|
|
37.1
|
%
|
|
European Corporate Securities
|
|
132,075
|
|
|
22.8
|
%
|
|
United Kingdom Corporate Securities
|
|
108,446
|
|
|
18.7
|
%
|
|
Other Non-U.S. Corporate Securities
|
|
123,885
|
|
|
21.4
|
%
|
|
Total Managed Non-U.S. Fixed Maturity Portfolio
|
|
$
|
579,656
|
|
|
100.0
|
%
|
|
|
June 30, 2016
|
|||||||
Issuer (a)
|
|
Fair Value (b)
|
|
S&P Rating (c)
|
|
% of Total Managed Cash and Investments
|
|||
JPMorgan Chase & Co
|
|
$
|
55,981
|
|
|
BBB+
|
|
0.9
|
%
|
HSBC Holdings plc
|
|
51,668
|
|
|
A
|
|
0.8
|
%
|
|
Goldman Sachs Group
|
|
47,396
|
|
|
BBB+
|
|
0.7
|
%
|
|
Morgan Stanley
|
|
44,855
|
|
|
BBB+
|
|
0.7
|
%
|
|
Bank of America Corp
|
|
41,513
|
|
|
BBB
|
|
0.6
|
%
|
|
Citigroup Inc
|
|
39,510
|
|
|
BBB
|
|
0.6
|
%
|
|
US Bancorp
|
|
36,612
|
|
|
AA-
|
|
0.6
|
%
|
|
Anheuser-Busch Inbev NV
|
|
33,297
|
|
|
A-
|
|
0.5
|
%
|
|
Bank of New York Mellon Corp
|
|
32,276
|
|
|
A
|
|
0.5
|
%
|
|
Ford Motor Company
|
|
32,022
|
|
|
BBB
|
|
0.5
|
%
|
|
Total
|
|
$
|
415,130
|
|
|
|
|
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.
|
|
|
June 30, 2016
|
||||||||||
(Dollars in thousands)
|
|
Gross Case Reserves
|
|
Gross IBNR
|
|
Total Gross Reserve for Losses and Loss Expenses
|
||||||
Property
|
|
$
|
403,515
|
|
|
$
|
471,549
|
|
|
$
|
875,064
|
|
Marine
|
|
389,833
|
|
|
479,529
|
|
|
869,362
|
|
|||
Specialty
|
|
273,646
|
|
|
530,728
|
|
|
804,374
|
|
|||
Liability
|
|
200,631
|
|
|
373,286
|
|
|
573,917
|
|
|||
Total
|
|
$
|
1,267,625
|
|
|
$
|
1,855,092
|
|
|
$
|
3,122,717
|
|
|
|
June 30, 2016
|
||||||||||
(Dollars in thousands)
|
|
Net Case Reserves
|
|
Net IBNR
|
|
Total Net Reserve for Losses and Loss Expenses
|
||||||
Property
|
|
$
|
354,328
|
|
|
$
|
405,042
|
|
|
$
|
759,370
|
|
Marine
|
|
347,628
|
|
|
375,303
|
|
|
722,931
|
|
|||
Specialty
|
|
228,062
|
|
|
481,227
|
|
|
709,289
|
|
|||
Liability
|
|
186,156
|
|
|
301,984
|
|
|
488,140
|
|
|||
Total
|
|
$
|
1,116,174
|
|
|
$
|
1,563,556
|
|
|
$
|
2,679,730
|
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World Segment
|
|
AlphaCat Segment
|
|
Eliminations
|
|
Total
|
||||||||||||
Reserve for losses and loss expenses, beginning of period
|
|
$
|
1,107,747
|
|
|
$
|
1,333,578
|
|
|
$
|
593,356
|
|
|
$
|
12,913
|
|
|
$
|
(67,294
|
)
|
|
$
|
2,980,300
|
|
Loss reserves recoverable
|
|
(31,566
|
)
|
|
(321,644
|
)
|
|
(84,773
|
)
|
|
—
|
|
|
67,294
|
|
|
(370,689
|
)
|
||||||
Net reserves for losses and loss expenses, beginning of period
|
|
1,076,181
|
|
|
1,011,934
|
|
|
508,583
|
|
|
12,913
|
|
|
—
|
|
|
2,609,611
|
|
||||||
Increase (decrease) in net reserves for losses and loss expenses in respect of losses occurring in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current year
|
|
163,016
|
|
|
137,638
|
|
|
47,387
|
|
|
21,870
|
|
|
—
|
|
|
369,911
|
|
||||||
Prior years
|
|
(30,877
|
)
|
|
(28,328
|
)
|
|
(3,158
|
)
|
|
(418
|
)
|
|
—
|
|
|
(62,781
|
)
|
||||||
Total incurred losses and loss expenses
|
|
132,139
|
|
|
109,310
|
|
|
44,229
|
|
|
21,452
|
|
|
—
|
|
|
307,130
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange gain
|
|
(712
|
)
|
|
(13,467
|
)
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
(14,354
|
)
|
||||||
Net paid losses
|
|
(78,230
|
)
|
|
(93,670
|
)
|
|
(50,678
|
)
|
|
(79
|
)
|
|
—
|
|
|
(222,657
|
)
|
||||||
Net reserve for losses and loss expenses, end of period
|
|
1,129,378
|
|
|
1,014,107
|
|
|
502,134
|
|
|
34,111
|
|
|
—
|
|
|
2,679,730
|
|
||||||
Loss reserves recoverable
|
|
111,015
|
|
|
308,686
|
|
|
86,018
|
|
|
—
|
|
|
(62,732
|
)
|
|
442,987
|
|
||||||
Reserve for losses and loss expenses, end of period
|
|
$
|
1,240,393
|
|
|
$
|
1,322,793
|
|
|
$
|
588,152
|
|
|
$
|
34,111
|
|
|
$
|
(62,732
|
)
|
|
$
|
3,122,717
|
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||||
(Dollars in thousands)
|
|
Validus Re Segment
|
|
Talbot Segment
|
|
Western World
|
|
AlphaCat Segment
|
|
Eliminations
|
|
Total
|
||||||||||||
Reserve for losses and loss expenses, beginning of period
|
|
$
|
1,146,869
|
|
|
$
|
1,302,635
|
|
|
$
|
600,331
|
|
|
$
|
11,013
|
|
|
$
|
(64,281
|
)
|
|
$
|
2,996,567
|
|
Loss reserves recoverable
|
|
(36,055
|
)
|
|
(293,662
|
)
|
|
(85,150
|
)
|
|
—
|
|
|
64,281
|
|
|
(350,586
|
)
|
||||||
Net reserves for losses and loss expenses, beginning of period
|
|
1,110,814
|
|
|
1,008,973
|
|
|
515,181
|
|
|
11,013
|
|
|
—
|
|
|
2,645,981
|
|
||||||
Increase (decrease) in net reserves for losses and loss expenses in respect of losses occurring in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current year
|
|
271,568
|
|
|
260,459
|
|
|
91,459
|
|
|
24,611
|
|
|
—
|
|
|
648,097
|
|
||||||
Prior years
|
|
(56,561
|
)
|
|
(51,048
|
)
|
|
(7,584
|
)
|
|
(1,327
|
)
|
|
—
|
|
|
(116,520
|
)
|
||||||
Total incurred losses and loss expenses
|
|
215,007
|
|
|
209,411
|
|
|
83,875
|
|
|
23,284
|
|
|
—
|
|
|
531,577
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange loss (gain)
|
|
12,101
|
|
|
(18,130
|
)
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(6,094
|
)
|
||||||
Net paid losses
|
|
(208,544
|
)
|
|
(186,147
|
)
|
|
(96,922
|
)
|
|
(121
|
)
|
|
—
|
|
|
(491,734
|
)
|
||||||
Net reserves for losses and loss expenses, end of period
|
|
1,129,378
|
|
|
1,014,107
|
|
|
502,134
|
|
|
34,111
|
|
|
—
|
|
|
2,679,730
|
|
||||||
Loss reserves recoverable
|
|
111,015
|
|
|
308,686
|
|
|
86,018
|
|
|
—
|
|
|
(62,732
|
)
|
|
442,987
|
|
||||||
Reserve for losses and loss expenses, end of period
|
|
$
|
1,240,393
|
|
|
$
|
1,322,793
|
|
|
$
|
588,152
|
|
|
$
|
34,111
|
|
|
$
|
(62,732
|
)
|
|
$
|
3,122,717
|
|
(a)
|
Includes paid losses, case reserves and IBNR reserves.
|
(b)
|
Development other than allocation of RDE.
|
(c)
|
Excludes impact of movements in foreign exchange rates.
|
(d)
|
Closing Reserve for the period equals Closing Estimate for the period less cumulative Paid Losses (Recovery).
|
(e)
|
As at September 30, 2014, the initial estimate for Tripoli Airport was below the $30.0 million notable loss event threshold; however, during the fourth quarter of 2014 adverse development caused this event to exceed the notable loss event threshold.
|
(Dollars in thousands)
|
|
June 30, 2016
|
||
Validus Reinsurance, Ltd. (excluding capital supporting FAL) (a) (b)
|
|
$
|
3,686,639
|
|
Talbot Holdings, Ltd. (including capital supporting FAL) (b)
|
|
917,798
|
|
|
Other, net
|
|
45,067
|
|
|
Redeemable noncontrolling interest in AlphaCat
|
|
1,532,283
|
|
|
Noncontrolling interest in AlphaCat
|
|
212,154
|
|
|
Total consolidated capitalization
|
|
6,393,941
|
|
|
Senior notes payable
|
|
(245,261
|
)
|
|
Debentures payable
|
|
(537,987
|
)
|
|
Redeemable noncontrolling interest in AlphaCat
|
|
(1,532,283
|
)
|
|
Total shareholders’ equity
|
|
4,078,410
|
|
|
Preferred shares (c)
|
|
(150,000
|
)
|
|
Noncontrolling interest in AlphaCat
|
|
(212,154
|
)
|
|
Total shareholders' equity available to Validus common shareholders (c)
|
|
$
|
3,716,256
|
|
(a)
|
Validus Reinsurance, Ltd. (excluding capital supporting FAL) includes capital of
$661,480
relating to Western World Insurance Group, Inc.
|
(b)
|
Validus Reinsurance, Ltd. (excluding capital supporting FAL) excludes capital of
$737,168
which supports Talbot's FAL. This capital was included in Talbot Holdings, Ltd. (including capital supporting FAL).
|
(c)
|
Total shareholders' equity available to Validus common shareholders excludes the liquidation value of the preferred shares of $150,000.
|
|
|
Six Months Ended June 30,
|
||||||||||
(Dollars in thousands)
|
|
2016
|
|
Change
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
69,443
|
|
|
$
|
36,969
|
|
|
$
|
32,474
|
|
Net cash used in investing activities
|
|
(469,003
|
)
|
|
(408,188
|
)
|
|
(60,815
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
252,217
|
|
|
326,455
|
|
|
(74,238
|
)
|
|||
Effect of foreign currency rate changes on cash and cash equivalents
|
|
(6,968
|
)
|
|
1,762
|
|
|
(8,730
|
)
|
|||
Net decrease in cash and cash equivalents
|
|
$
|
(154,311
|
)
|
|
$
|
(43,002
|
)
|
|
$
|
(111,309
|
)
|
Capitalization (Dollars in thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Senior Notes (a)
|
$
|
245,261
|
|
|
$
|
245,161
|
|
Junior Subordinated Deferrable Debentures (JSDs) (a)
|
289,800
|
|
|
289,800
|
|
||
Flagstone Junior Subordinated Deferrable Debentures (JSDs) (a)
|
248,187
|
|
|
247,868
|
|
||
Total debt
|
$
|
783,248
|
|
|
$
|
782,829
|
|
|
|
|
|
||||
Redeemable noncontrolling interest
|
$
|
1,532,283
|
|
|
$
|
1,111,714
|
|
|
|
|
|
||||
Preferred shares (b)
|
$
|
150,000
|
|
|
$
|
—
|
|
Ordinary shares, capital and surplus available to Validus
|
3,734,438
|
|
|
3,651,544
|
|
||
Accumulated other comprehensive loss
|
(18,182
|
)
|
|
(12,569
|
)
|
||
Noncontrolling interest
|
212,154
|
|
|
154,662
|
|
||
Total shareholders' equity
|
$
|
4,078,410
|
|
|
$
|
3,793,637
|
|
|
|
|
|
||||
Total capitalization (c)
|
$
|
6,393,941
|
|
|
$
|
5,688,180
|
|
Total capitalization available to Validus (d)
|
$
|
4,649,504
|
|
|
$
|
4,421,804
|
|
|
|
|
|
||||
Debt to total capitalization
|
12.2
|
%
|
|
13.8
|
%
|
||
Debt (excluding JSDs) to total capitalization
|
3.8
|
%
|
|
4.3
|
%
|
||
Debt and preferred shares to total capitalization
|
14.6
|
%
|
|
13.8
|
%
|
||
|
|
|
|
||||
Debt to total capitalization available to Validus
|
16.8
|
%
|
|
17.7
|
%
|
||
Debt (excluding JSDs) to total capitalization available to Validus
|
5.3
|
%
|
|
5.5
|
%
|
||
Debt and preferred shares to total capitalization available to Validus
|
20.1
|
%
|
|
17.7
|
%
|
(a)
|
Refer to Part I, Item 1, Note
13
, “
Debt and financing arrangements,"
to the Consolidated Financial Statements for further details and discussion on the debt and financing arrangements of the Company.
|
(b)
|
Refer to Part I, Item 1, Note
11
, “
Share capital
,"
to the Consolidated Financial Statements for further details and discussion on the Company's preferred shares.
|
(c)
|
Total capitalization equals shareholders' equity plus noncontrolling interests, Senior Notes and Junior Subordinated Deferrable Debentures.
|
(d)
|
Total capitalization available to Validus equals total shareholder's equity less noncontrolling interests plus Senior Notes and Junior Subordinated Deferrable Debentures.
|
(Dollars in thousands)
|
|
Maturity Date /
Term (a)
|
Commitment
|
|
Issued and Outstanding (b)
|
||||
2006 Junior Subordinated Deferrable Debentures
|
|
June 15, 2036
|
$
|
150,000
|
|
|
$
|
150,000
|
|
2007 Junior Subordinated Deferrable Debentures
|
|
June 15, 2037
|
200,000
|
|
|
139,800
|
|
||
Flagstone 2006 Junior Subordinated Deferrable Debentures
|
|
September 15, 2036
|
134,437
|
|
|
134,437
|
|
||
Flagstone 2007 Junior Subordinated Deferrable Debentures
|
|
September 15, 2037
|
113,750
|
|
|
113,750
|
|
||
Total debentures payable
|
|
|
598,187
|
|
|
537,987
|
|
||
2010 Senior Notes due 2040
|
|
January 26, 2040
|
250,000
|
|
|
250,000
|
|
||
Total debentures and senior notes payable
|
|
|
848,187
|
|
|
787,987
|
|
||
$85,000 syndicated unsecured letter of credit facility
|
|
December 9, 2020
|
85,000
|
|
|
—
|
|
||
$300,000 syndicated secured letter of credit facility
|
|
December 9, 2020
|
300,000
|
|
|
105,575
|
|
||
$24,000 secured bi-lateral letter of credit facility
|
|
Evergreen
|
24,000
|
|
|
11,805
|
|
||
AlphaCat Re secured letter of credit facility
|
|
Evergreen
|
20,000
|
|
|
20,000
|
|
||
IPC bi-lateral facility
|
|
Evergreen
|
25,000
|
|
|
5,666
|
|
||
$236,000 Flagstone bi-lateral facility
|
|
Evergreen
|
236,000
|
|
|
195,622
|
|
||
Total credit and other facilities
|
|
|
690,000
|
|
|
338,668
|
|
||
Total debt and financing arrangements
|
|
|
$
|
1,538,187
|
|
|
$
|
1,126,655
|
|
(a)
|
The arrangement is indicated as evergreen if, unless written notice to the contrary is given, it automatically renews on a regular basis.
|
(b)
|
Indicates utilization of commitment amount, not necessarily drawn borrowings.
|
|
A.M. Best
|
|
S&P
|
|
Moody’s
|
|
Fitch
|
Validus Holdings, Ltd.
|
|
|
|
|
|
|
|
Issuer credit rating
|
bbb
|
|
BBB+
|
|
Baa2
|
|
A-
|
Senior debt
|
bbb
|
|
BBB+
|
|
Baa2
|
|
BBB+
|
Subordinated debt
|
bbb-
|
|
—
|
|
Baa3
|
|
BBB
|
Preferred stock
|
bb+
|
|
BBB-
|
|
Ba1
|
|
BBB
|
Outlook on ratings
|
Positive
|
|
Stable
|
|
Positive
|
|
Stable
|
|
|
|
|
|
|
|
|
Validus Reinsurance, Ltd.
|
|
|
|
|
|
|
|
Financial strength rating
|
A
|
|
A
|
|
A3
|
|
A
|
Outlook on ratings
|
Stable
|
|
Stable
|
|
Positive
|
|
Stable
|
|
|
|
|
|
|
|
|
Lloyd's of London
|
|
|
|
|
|
|
|
Financial strength rating applicable to all Lloyd's syndicates
|
A
|
|
A+
|
|
—
|
|
AA-
|
Outlook on ratings
|
Stable
|
|
Stable
|
|
—
|
|
Stable
|
|
|
|
|
|
|
|
|
Validus Reinsurance (Switzerland), Ltd.
|
|
|
|
|
|
|
|
Financial strength rating
|
A
|
|
A
|
|
—
|
|
—
|
Outlook on ratings
|
Stable
|
|
Stable
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
Western World Insurance Company
|
|
|
|
|
|
|
|
Financial strength rating
|
A
|
|
—
|
|
—
|
|
—
|
Outlook on ratings
|
Stable
|
|
—
|
|
—
|
|
—
|
•
|
reserve for losses and loss expenses;
|
•
|
premium estimates for business written on a line slip or proportional basis;
|
•
|
the valuation of goodwill and intangible assets;
|
•
|
reinsurance recoverable balances including the provision for uncollectible amounts; and
|
•
|
investment valuation of financial assets.
|
•
|
unpredictability and severity of catastrophic events;
|
•
|
our ability to obtain and maintain ratings, which may affect by our ability to raise additional equity or debt financings, as well as other factors described herein;
|
•
|
adequacy of the Company’s risk management and loss limitation methods;
|
•
|
cyclicality of demand and pricing in the insurance and reinsurance markets;
|
•
|
the Company’s ability to implement its business strategy during “soft” as well as “hard” markets;
|
•
|
adequacy of the Company’s loss reserves;
|
•
|
continued availability of capital and financing;
|
•
|
the Company’s ability to identify, hire and retain, on a timely and unimpeded basis and on anticipated economic and other terms, experienced and capable senior management, as well as underwriters, claims professionals and support staff;
|
•
|
acceptance of our business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and (re)insureds;
|
•
|
competition, including increased competition, on the basis of pricing, capacity, coverage terms or other factors;
|
•
|
potential loss of business from one or more major insurance or reinsurance brokers;
|
•
|
the Company’s ability to implement, successfully and on a timely basis, complex infrastructure, distribution capabilities, systems, procedures and internal controls, and to develop accurate actuarial data to support the business and regulatory and reporting requirements;
|
•
|
general economic and market conditions (including inflation, volatility in the credit and capital markets, interest rates and foreign currency exchange rates) and conditions specific to the insurance and reinsurance markets in which we operate;
|
•
|
the integration of businesses we may acquire or new business ventures, including overseas offices, we may start and the risk associated with implementing our business strategies and initiatives with respect to the new business ventures;
|
•
|
accuracy of those estimates and judgments used in the preparation of our financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, taxes, contingencies, litigation and any determination to use the deposit method of accounting, which, for a relatively new insurance and reinsurance company like our company, are even more difficult to make than those made in a mature company because of limited historical information;
|
•
|
the effect on the Company’s investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors;
|
•
|
acts of terrorism, political unrest, outbreak of war and other hostilities or other non-forecasted and unpredictable events;
|
•
|
availability and cost of reinsurance and retrocession coverage;
|
•
|
the failure of reinsurers, retrocessionaires, producers or others to meet their obligations to us;
|
•
|
the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by us;
|
•
|
changes in domestic or foreign laws or regulations, or their interpretations;
|
•
|
changes in accounting principles or the application of such principles by regulators;
|
•
|
statutory or regulatory or rating agency developments, including as to tax policy and reinsurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers; and
|
•
|
the other factors set forth under Part I Item 1A "
Risk Factors
" and under Part II Item 7 "
Management's Discussion and Analysis of Financial Condition and Results of Operations
" and the other sections of the Company's Annual Report on Form 10-K for the year ended
December 31, 2015
, as well as the risk and other factors set forth in the Company's other filings with the SEC, as well as management's response to any of the aforementioned factors.
|
•
|
interest rate risk;
|
•
|
foreign currency risk;
|
•
|
credit risk;
|
•
|
liquidity risk; and
|
•
|
inflation risk.
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
(Dollars in thousands)
|
|
Increase (decrease) in market value
|
|
Increase (decrease) in market value
|
||||||||||
Immediate 100 basis point increase in market interest rates
|
|
$
|
(127,105
|
)
|
|
(2.3
|
)%
|
|
$
|
(126,908
|
)
|
|
(2.4
|
)%
|
Immediate 100 basis point decrease in market interest
|
|
$
|
125,452
|
|
|
2.2
|
%
|
|
$
|
127,976
|
|
|
2.4
|
%
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||
(Dollars in thousands)
|
|
Balance
|
|
% of Total
|
|
Balance
|
|
% of Total
|
||||||
Total monetary assets held in foreign currencies
|
|
$
|
612,970
|
|
|
5.2
|
%
|
|
$
|
568,153
|
|
|
5.4
|
%
|
Total monetary liabilities held in foreign currencies
|
|
751,370
|
|
|
12.1
|
%
|
|
732,730
|
|
|
13.1
|
%
|
||
Total non-monetary assets that do not require revaluation
|
|
17,970
|
|
|
0.2
|
%
|
|
15,937
|
|
|
0.2
|
%
|
||
Total non-monetary liabilities that do not require revaluation
|
|
92,830
|
|
|
1.5
|
%
|
|
81,718
|
|
|
1.5
|
%
|
|
|
|
|
Second Quarter Share Repurchase Activity
|
|
|
||||||||||||||
Effect of share repurchases
(Dollars in thousands, except per share amounts)
|
|
As at March 31, 2016
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||||||
|
(cumulative)
|
|
April
|
|
May
|
|
June
|
|
June 30, 2016
|
|||||||||||
Aggregate purchase price (a)
|
|
$
|
2,552,098
|
|
|
$
|
387
|
|
|
$
|
32,686
|
|
|
$
|
35,643
|
|
|
$
|
68,716
|
|
Shares repurchased
|
|
77,387,916
|
|
|
8,718
|
|
|
686,272
|
|
|
758,852
|
|
|
1,453,842
|
|
|||||
Average price (a)
|
|
$
|
32.98
|
|
|
$
|
44.45
|
|
|
$
|
47.63
|
|
|
$
|
46.97
|
|
|
$
|
47.27
|
|
Maximum number of shares that may yet be purchased under the program (b)
|
|
|
|
10,619,240
|
|
|
9,092,374
|
|
|
8,393,464
|
|
|
|
|
|
|
|
Share Repurchase Activity Post Quarter End
|
|
|
||||||||||||||
Effect of share repurchases
(Dollars in thousands, except per share amounts) |
|
As at June 30, 2016 (cumulative)
|
|
July
|
|
August
|
|
As at August 3, 2016
|
|
Cumulative to Date Effect
|
||||||||||
Aggregate purchase price (a)
|
|
$
|
2,620,814
|
|
|
$
|
18,438
|
|
|
$
|
2,877
|
|
|
$
|
21,315
|
|
|
$
|
2,642,129
|
|
Shares repurchased
|
|
78,841,758
|
|
|
382,648
|
|
|
58,089
|
|
|
440,737
|
|
|
79,282,495
|
|
|||||
Average price (a)
|
|
$
|
33.24
|
|
|
$
|
48.18
|
|
|
$
|
49.53
|
|
|
$
|
48.36
|
|
|
$
|
33.33
|
|
(a)
|
Share transactions are on a trade date basis through
August 3, 2016
and are inclusive of commissions. Average share price is rounded to two decimal places.
|
(b)
|
The maximum number of shares that may yet be purchased under the program is calculated using the average execution price at month end.
|
Exhibit
|
Description
|
|
|
Exhibit 4.1*
|
Fifth Supplemental Indenture dated as of July 13, 2016 between Validus Reinsurance, Ltd. and Wilmington Trust Company, a Delaware trust company, as trustee
|
|
|
Exhibit 4.2*
|
Fourth Supplemental Indenture dated as of July 12, 2016 between Validus UPS, Ltd. and Wilmington Trust Company, a Delaware trust company, as trustee
|
|
|
Exhibit 4.3*
|
Fourth Supplemental Indenture dated as of July 13, 2016 between Validus Reinsurance Ltd. and The Bank of New York Mellon Trust Company, National Association (as successor in interest to The Bank of New York Trust Company, National Association), as trustee
|
|
|
Exhibit 4.4*
|
Fourth Supplemental Indenture dated as of July 13, 2016 between Validus Reinsurance Ltd. and The Bank of New York Mellon Trust Company, National Association (as successor in interest to JPMorgan Chase Bank, National Association), as trustee
|
|
|
Exhibit 4.5*
|
Amendment No. 3 to Note Purchase Agreement dated as of July 13, 2016 between Validus Reinsurance, Ltd. and Validus Holdings, Ltd. as Guarantor
|
|
|
Exhibit 4.6
|
Certificate of Designations of 5.875% Non-Cumulative Preference Shares, Series A, of Validus Holdings, Ltd. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 13, 2016)
|
|
|
Exhibit 4.7
|
Specimen 5.875% Non-Cumulative Preference Shares, Series A (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 13, 2016)
|
|
|
Exhibit 4.8
|
Form of depositary receipt (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on June 13, 2016)
|
|
|
Exhibit 10.1*
|
Amended and Restated Employment Agreement dated as of June 1, 2016 between Validus Holdings, Ltd. and Michael Moore
|
|
|
Exhibit 10.2*
|
Amended and Restated Employment Agreement dated as of May 18, 2016 between Validus Holdings, Ltd. Patrick Boisvert
|
|
|
Exhibit 10.3*
|
Form of Amended Restricted Share Award Agreement for Talbot Executive Officers
|
|
|
Exhibit 31.1*
|
Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit 31.2*
|
Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit 32*
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.
|
|
|
Exhibit 101.1 INS*
|
XBRL Instance Document
|
|
|
Exhibit 101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
Exhibit 101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
Exhibit 101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
Exhibit 101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Exhibit 101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
VALIDUS HOLDINGS, LTD.
|
|
|
(Registrant)
|
|
|
|
Date:
|
August 5, 2016
|
/s/ Edward J. Noonan
|
|
|
Edward J. Noonan
|
|
|
Chief Executive Officer
|
|
|
|
Date:
|
August 5, 2016
|
/s/ Jeffrey D. Sangster
|
|
|
Jeffrey D. Sangster
|
|
|
Executive Vice President and Chief Financial Officer
|
If to the Executive:
|
To the last address delivered to the Company by the Executive in the manner set forth herein.
|
|
|
If to the Company:
|
Validus Holdings, Ltd.
29 Richmond Road Pembroke, HM08 Bermuda Attn: General Counsel |
If to the Executive:
|
To the last address delivered to the Company by the Executive in the manner set forth herein.
|
|
|
If to the Company:
|
Validus Holdings, Ltd.
29 Richmond Road Pembroke, HM08 Bermuda Attn: General Counsel |
1.
|
Award of Shares:
Pursuant to the provisions of the Plan, the terms of which are incorporated herein by reference, the Participant is hereby awarded the number of Restricted Shares set forth in the Grant Letter (the “Award”), subject to the terms and conditions of the Plan and those herein set forth. The Award is granted as of the date set forth in the Grant Letter. Capitalized terms used herein and not defined shall have the meanings set forth in the Plan. In the event of any conflict between this Agreement and the Plan, the Plan shall control.
|
2.
|
Terms and Conditions:
It is understood and agreed that the Award of Restricted Shares evidenced hereby is subject to the following terms and conditions:
|
(a)
|
Vesting of Award:
Subject to the provisions of this Section 2 below and the other terms and conditions of this Agreement, this Award shall vest as set forth in the Grant Letter. All dividends and other amounts receivable in connection with any adjustments to the Shares under Section 4(b) of the Plan shall be subject to the vesting schedule herein and shall be paid to the Participant upon any vesting of the Restricted Shares hereunder in respect of which such dividends or other amounts are payable.
|
(b)
|
Termination by a Group Company with Cause or as a result of the Participant’s Permanent Disability:
If the Participant’s employment is terminated by a Group Company (as defined below) with Cause or as a result of the Participant’s Permanent Disability, any portion of the Award that is not vested on the date of Termination of Service shall be forfeited by the Participant and become the property of the Company. For purposes of this Agreement, the Participant shall be considered to have incurred a Termination of Service on the date notice of termination (“Notice of Termination”) of the Participant’s employment is given by the Participant (such date being a “Notice Date”), unless the Participant remains actively employed with any Group Company after such date, in which case a Termination of Service will be deemed to occur hereunder on the date the
|
(c)
|
Termination by a Group Company not for Cause or by the Participant for Good Reason:
Except as provided in Sections 2(e) and 2(f) below, 45% of the unvested portion of the Award shall vest (i) in the event the Participant’s employment is terminated by a Group Company not for Cause, upon the delivery by such Group Company of a notice of termination not for Cause, or (ii) in the event the Participant’s employment is terminated by the Participant for Good Reason, at the end of the applicable correction period following the Participant’s delivery of Good Reason Notice, so long as the Group Company has not corrected the event or condition giving rise to Good Reason by the end of the correction period; and the remaining 55% of the unvested portion of the Award will vest on the last vesting date for such award as set forth in the Grant Letter but only if the Participant (i) delivers to the Company a legal release letter in a form satisfactory to the Company and (ii) does not breach (a) any confidentiality, noncompetition, non-solicitation or assignment of inventions policies, terms, conditions or
|
(d)
|
Resignation Without Good Reason:
If the Participant’s employment shall be terminated as a result of the Participant’s resignation or leaving of his employment, other than for Good Reason, no portion of the Award shall vest on or following the Notice Date. Any portion of the Award that has not vested on the Notice Date shall be forfeited by the Participant and become the property of the Company.
|
(e)
|
Change in Control:
Notwithstanding any provision of this Agreement to the contrary, if, within two years following a Change in Control, the Participant’s employment is terminated by a Group Company not for Cause or by the Participant for Good Reason, the Award shall become immediately vested in full upon such termination of employment. For purposes of this Agreement, "Change in Control" shall have the meaning set forth in the Plan.
|
(f)
|
Death of the Participant:
If the Participant’s employment is terminated by a Group Company by reason of the Participant’s death, any unvested portion of the Award shall become immediately vested in full and be transferred to the beneficiary named by the Participant.
|
(g)
|
Termination of Service; Forfeiture of Unvested Shares:
In the event of Termination of Service of the Participant other than as set forth above prior to the date the Award otherwise becomes vested, the unvested portion of the Award shall immediately be forfeited by the Participant and become the property of the Company.
|
(h)
|
In the event that the Participant is found to have materially breached any provision of his or her employment agreement or the Company’s Employee
|
(i)
|
Certificates:
Each certificate or other evidence of ownership issued in respect of Restricted Shares awarded hereunder shall be deposited with the Company, or its designee, together with, if requested by the Company, a stock power executed in blank by the Participant, and shall bear a legend disclosing the restrictions on transferability imposed on such Restricted Shares by this Agreement (the “Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to Section 2 hereof and the satisfaction of any tax liability pursuant to Section 5 hereof, the certificates evidencing such vested Shares, not bearing the Restrictive Legend, shall be delivered to the Participant or other evidence of vested Shares shall be provided to the Participant.
|
(j)
|
Rights of a Stockholder:
Prior to the time a Restricted Share is fully vested hereunder, the Participant shall have no right to transfer, pledge, hypothecate or otherwise encumber such Restricted Share. During such period, the Participant shall have all other rights of a stockholder, including, but not limited to, the right to vote and to receive dividends (subject to Section 2(a) hereof) at the time paid on such Restricted Shares.
|
(k)
|
No Right to Continued Employment:
This Award shall not confer upon the Participant any right with respect to continuance of employment by any Group Company nor shall this Award interfere with the right of any Group Company to terminate the Participant’s employment at any time.
|
3.
|
Transfer of Shares:
Any vested Shares delivered hereunder, or any interest therein, may be sold, assigned, pledged, hypothecated, encumbered, or transferred or disposed of in any other manner, in whole or in part, only in compliance with the terms, conditions and restrictions as set forth in the governing instruments of the Company, the provisions of this Agreement, applicable federal and state securities laws or any other applicable laws or regulations and the terms and conditions hereof.
|
4.
|
Expenses of Issuance of Shares:
The issuance of stock certificates hereunder shall be without charge to the Participant. The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of Shares.
|
5.
|
Taxation:
The Participant agrees and undertakes to be responsible for, and to indemnify any relevant Group Company in respect of, any liability of such Group Company to account to any tax authority for any amount of, or representing, income tax or national insurance contributions (excluding any employer’s secondary national insurance contributions) or any other personal tax, charge, levy or other sum whether under the laws of the United Kingdom or otherwise which may arise on the Award and such agreement and/or undertaking may be in such form as the relevant Group Company may reasonably require. In the event that the Participant wishes to make an election under Section 431 of the Income Tax (Earnings and Pensions) Act 2003 for the full
|
6.
|
Forfeiture Upon Breach of Certain Other Agreements:
The Participant’s breach of any non-compete, nondisclosure, non-solicitation, assignment of inventions, or other intellectual property agreement that he may be a party to with any Group Company, in addition to whatever other equitable relief or monetary damages that such Group Company may be entitled to, shall, for a period of five years from the date of grant, result in automatic rescission, forfeiture, cancellation, and return of any Shares (whether or not otherwise vested) held by the Participant, and all profits, proceeds, gains, or other consideration received through the sale or other transfer of the Shares shall be promptly returned and repaid to the Company.
|
7.
|
References:
References herein to rights and obligations of the Participant shall apply, where appropriate, to the Participant’s legal representative or estate without regard to whether specific reference to such legal representative or estate is contained in a particular provision of this Agreement.
|
8.
|
Notices:
Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:
|
9.
|
Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of Bermuda, without giving effect to principles of conflict of laws.
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Validus Holdings, Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ EDWARD J. NOONAN
|
|
|
Edward J. Noonan
Chief Executive Officer
|
1.
|
I have reviewed this
Quarterly Report on Form 10-Q
of Validus Holdings, Ltd.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ JEFFREY D. SANGSTER
|
|
|
Jeffrey D. Sangster
Executive Vice President and Chief Financial Officer
|
|
|
/s/ EDWARD J. NOONAN
|
|
|
Edward J. Noonan
Chief Executive Officer
Validus Holdings, Ltd.
|
|
|
/s/ JEFFREY D. SANGSTER
|
|
|
Jeffrey D. Sangster
Executive Vice President and Chief Financial Officer
Validus Holdings, Ltd.
|