Validus Holdings Ltd. saw its net earnings rise seven percent for the second quarter with the acquisition of Lloyd's speciality insurer Talbot being credited with much of the improvement.

Yesterday the company reported net income for the quarter ended June 30, 2008 of $75.9 million, compared to $70.8 million during the same period last year.

Gross written premiums jumped 118 percent to $379.9 million from $174.3 million for the same period in 2007, while net premiums earned soared 132.6 percent to $309.3 million from $133.0 million.

Both dramatic increases were attributed to the acquisition of Talbot which added $197.2 million of gross written premiums and $145.2 million of net premiums earned.

Investment income also increased, by 84.8 percent, to $36.4 million from $19.7 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot.

Ed Noonan, chairman and chief executive officer of Validus, said: "We are very pleased to report a 22.1-percent annualised operating return on average equity for the second quarter of 2008, which reflects strong underwriting margins due to our underwriting discipline, low catastrophe activity and favourable reserve development.

"Reinsurance renewal terms in the quarter generally met or exceeded our expectations, and the quarter's relatively high frequency of catastrophe events were not sufficiently large in most cases to penetrate the reinsurance markets.

"Inclusive of accumulated dividends, we have grown diluted book value per share by 18.2 percent over the prior 12 months, despite the headwinds in the investment markets and the completion of our IPO and the acquisition of Talbot subsequent to June 30, 2007. We have now consolidated Talbot for four quarterly reporting periods during which time the segment has rewarded us with $108.3 million of net operating income."