Validus profit plunges on catastrophe losses
Bermudian reinsurer Validus Holdings Ltd's fourth-quarter net income plummeted to $7.8 million, down from $69 million in the same period last year, as it dealt with losses from Hurricane Matthew and an earthquake in New Zealand.
The group's net income for the year dropped from $374.9 million, or $4.34 per share, to $359.4 million, or $4.36 per share.
However, operating income at Validus for the final three months of the year was $64.3 million, or 80 cents per share, comfortably beating the 74 cents consensus forecast of market analysts.
Ed Noonan, chief executive officer of Validus, said: “Validus had another strong year in 2016.
“Despite the global insurance market growing more competitive, we were able to deliver an 84.2 per cent combined ratio and grow our book value per diluted share, including dividends, by 9.5 per cent.
“We continue to position the company well to weather the soft market while building the foundation to capitalise on better market conditions down the road.”
During the January renewals, the Validus Re and AlphaCat segments of the company underwrote $628.9 million in gross written premiums, an increase of 3 per cent on January 2016.
Fourth-quarter results included $70.6 million of losses from Hurricane Matthew and the earthquake in New Zealand. This was partially offset by a reduction in the second-quarter losses associated with the Canadian wildfires, which were reduced by $18.3 million.
Gross written premiums for the year were $2.64 billion, a rise of $91.2 million on 2015. The combined ratio for the year 84.2 per cent, compared with 79.7 per cent the previous year.
During the fourth quarter, Validus repurchased 317,401 shares.
Validus shares yesterday rose $1.04 to close at $58.66 before the company announced its results.