It’s full steam ahead for Validus Re after record $124 million first-quarter earnings.The company’s CEO Ed Noonan told The Royal Gazette that despite experiencing sizeable claims during the first three months of the year, Validus Re is performing as it should.“For us, it’s a combination of strong underwriting both in our Lloyd’s syndicate and in Validus Re despite the Costa Concordia loss, which was a very sizeable loss,” he said. “Our core businesses are performing well; we keep our assets very clean, our investment portfolio is of very high quality and we reserve very strongly. Our business model is pretty good and it has performed the way we expected to this quarter.”Validus’ operating income per share was 88 cents, comfortably beating the 77 cents estimate of analysts polled by Yahoo Finance. The Costa Concordia disaster had a negative impact of $63.1 million on the company’s results.In the second quarter, Mr Noonan said Validus had seen hardening rates in several lines of business, particularly in the US and Japan, adding that it’s not yet a hard market, but a “disciplined” one.“US catastrophe risk continues to see rate increases and that’s been going on since the RMS model change of last spring and so we’ll see more of that at June 1 and July 1,” he said. “Japanese rates, particularly for earthquake are up 80 to 100 percent.”He added that rates have been hardening for their aviation reinsurance accounts and the company’s Lloyd’s syndicate, Talbot, has seen rates increase within their energy classes. Where rates aren’t increasing, they have remained generally flat, said Mr Noonan, only declining by three or four percent in “one or two classes”.Validus Re announced the formation of PaCRe, a $500-million venture with hedge-fund manager John Paulson back in January and will officially start writing high-layer catastrophe risk at June 1 renewals. However, Mr Noonan said it has a “number of authorisations out pending already.”“PaCRe will only be on business that Validus Re writes on, so essentially it will be putting down companion lines on high layer business that we underwrite at Validus Re,” said Mr Noonan. “That makes us more important to the market, allows us to deliver more capacity to our clients, makes us more important to brokers so that all works for us very well.”PaCRe will be managed by Validus’ subsidiary, AlphaCat, and will be staffed by those existing employees. Underwriting and modelling is being done by Validus.Though the new Class 4 reinsurer won’t be staffing up, Mr Noonan believes that new capital flowing into Bermuda is good news.“We’re a very committed Bermuda company,” he said. “We think Bermuda is the centre for global catastrophe risk and continues to have an attractive future in that capacity.“Bringing more capital to the Bermuda market makes Bermuda more important in the global marketplace and more important in financial markets as well. We’re always mindful that our success is hand in glove with the success of Bermuda.”Mr Noonan added that Validus has been fairly busy fielding calls from potential investors.“It’s a point in time when capital is looking for opportunity,” he said. “We like the idea of having that capital come to Validus rather than go someplace else and we’ve had a relatively easy time attracting capital. We field inbound calls every day from people who are interested in talking to us about bringing capital into this space.”The Class of 2005 company continues to look for opportunities for growth, with an eye on the US.“The US is the world’s biggest insurance market and we’re not represented there in any meaningful fashion,” said Mr Noonan, adding that they will continue to grow in Latin America and Asia as well. “The day will likely come where we’ll feel the US market has reached an attractive level where we might start to contemplate an entrance.”Validus has grown rapidly into a company with more than $3.5 billion in shareholders’ equity by the end of the first quarter. Mr Noonan rejected the notion that Validus might have grown too quickly.“Look at our performance in the last year — how many companies on the Island actually made money last year,” he said. “Within the six years we’ve been in business, we’ve been through the financial crisis, Hurricane Ike, disasters of 2011, Chilean earthquake and we’ve made money every year we’ve been in existence.“I’m not sure how many companies on the Island could replicate that record. I don’t think anyone could accuse us of having grown at a rate without having the right risk management controls and discipline in place. It’s one of the reasons we’ve been able to attract capital seemingly more easily than most.”