Bermuda re/insurer Validus Holdings Ltd plans to buy back shares worth more than one fifth of the company’s current market value.

In a boost for shareholders of the Class of 2005 start-up, the company announced that its board of directors had authorised a $750 million share repurchase programme and a 6.7 per cent increase in its quarterly dividend.

The buy-back is equivalent of around 22 per cent of Validus’ market capitalisation of approximately $3.4 billion.

Jeff Sangster, Validus’ chief financial officer, said: “We remain committed to returning excess capital to shareholders as evidenced by this latest share repurchase authorisation and increase in common share dividend.

“The authorisation is open-ended without a specific completion date and the increased common share dividend will start effective with the March 2015 dividend payment.”

The dividend increases to 32 cents per share from 30 cents and will be paid on March 31, 2015 to shareholders and warrant holders of record on March 13, 2015.

The company expects the share repurchases to be made from time to time in the open market or in privately negotiated transactions. The timing will depend on market conditions, the company’s capital position relative to internal and rating agency targets, legal requirements and other factors, Validus said.