validus Q3

REPORT CARD

Net income: $37 million compared to $139 million in 2007.

Combined ratio: 89.5 percent compared to 63.1 percent in 2007.

Gross premiums written: $191.7 million compared to $191 million in 2007./B>

Validus Holdings Ltd. last night said it increased gross premiums written by 26 percent during the January 1 renewal season, as it announced net income of $37 million for the fourth quarter of last year.

The fourth-quarter profit broke down to 47 cents per share, compared to net income of $139 million, or $1.77 per share a year earlier. Full-year net income was $53.1 million, or 61 cents per share, compared to $403 million or $5.95 a share for 2007.

Despite the plunge in profit, Validus chief executive officer Ed Noonan said the company had stood up well to the multiple challenges of last year and was well positioned to take advantage of weakened rivals this year.

"2008 was an extraordinary test of our enterprise risk management and we are very pleased with our success in such troubled times," Mr. Noonan said in the company's earnings statement, released last night.

"We absorbed the worst financial markets in recent memory, as well as one of the most costly natural disasters in history, and still generated $98.4 million of underwriting income and $53.1 million in net income for our shareholders." The company gave details of the $366.7 million in gross premiums it wrote during this year's January 1 renewals season, boosted by a 24.3 percent increase in US property business to $138.2 million and a 44.5 percent increase in marine premiums to $105.8 million.

"Our ability to protect our capital has positioned us to benefit strongly from the improving pricing environment we see in our core short-tail lines of business," Mr. Noonan said.

"We continue to expand our business platform and see strong growth opportunities arising from dislocation among competitors. Having grown our gross premium by 26 percent at January 1 in our Validus Re segment, due to rate increases coupled with modest exposure growth, we expect to see rates continue to increase over the balance of 2009."

In the fourth quarter gross premiums written were $191.7 million, $700,000 more than in the same period last year.

The three months included previously disclosed losses of $70.1 million relating to Hurricane Ike, which impacted 24.4 points on the combined ratio of 89.5 percent for the quarter.

Validus suffered $255.9 million in losses related to hurricanes Gustav and Ike, when the losses accounted for in the third quarter are also taken into account. Net investment income was $30.7 million in the fourth quarter compared to $37.5 million in the corresponding three-month period in 2007.