‘Milestone year’ for Validus as profits double

by David Masters

Story link: ‘Milestone year’ for Validus as profits double

Validus has announced a net income for the fourth quarter of 2007 of $139 million. This is compared to $69.1 million for the fourth quarter of 2006.

Net income for 2007 was $403 million, compared to $183.1 million in 2006.

Net operating income in the fourth quarter was $131.5 million, compared to $68.2 million in the same period the previous year.

The company also saw a net operating income for 2007 of $388.2 million. This is compared to the $182.1 million total they saw in 2006.

Validus acquired Talbot on 2nd July 2007. The operating results of Talbot have been included in the financial statements since that date.

The fourth quarter saw Validus gross premiums written increase by 191.6% due to the addition of Talbot. The combined ratio for the quarter was 63.1%, including $10 million of losses that occurred due to the California wild fires, and £30.6 million of favourable prior year loss reserve development, which benefited the loss ratio by 9.6%.

2007 saw gross premiums written increase by 82.8% to $988.6 million. The acquisition of Talbot added a total of $286.5 million in gross premiums written.

Ed Noonan, chairman and CEO of Validus, said of the results: “2007 was a milestone year for Validus. We successfully completed the acquisition of Talbot and our initial public offering, while continuing to grow our franchise at Validus Re.

“The enhanced operating leverage resulting from the Talbot acquisition allowed us to generate an annualised return on average equity of 29.9% in the fourth quarter and 26.9% for the year.

“In 2007 we grew diluted book value per share by 21.6% and leave 2007 with a strong balance sheet comprising of $3.1 billion total investments and cash and total capitalization of $2.3 billion.”