8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2008

VALIDUS HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

Bermuda
(State or other jurisdiction
of incorporation) 001-33606
(Commission File Number) 98-0501001
(I.R.S. Employer
Identification No.)

19 Par-La-Ville Road, Hamilton, HM 11 Bermuda
(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 278-9000

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     On August 7, 2008, Validus Holdings, Ltd. issued a press release reporting its earnings for the quarter ended June 30, 2008. A copy of this press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

     The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

Exhibit No.		Description
	99.1	Press Release dated August 7, 2008 announcing the earnings of Validus Holdings, Ltd. for the quarter ended June 30, 2008

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 7, 2008

VALIDUS HOLDINGS, LTD.      (Registrant)
By:	/s/ Joseph E. (Jeff) Consolino
Name:		Joseph E. (Jeff) Consolino
Title:		Executive Vice President & Chief Financial Officer

EX-99.1

FOR IMMEDIATE RELEASE

Contacts:
Investors:	Media:
Validus Holdings, Ltd.	Drew Brown / Jamie Tully
Jon Levenson, Senior Vice President	Sand Verbinnen & Co.
+1-441-278-9000	+1-212-687-8080
Jon.Levenson@Validusre.bm
	Roddy Watt / Francesca Tuckett
	College Hill
	+44 (0) 207-457-2020

VALIDUS ANNOUNCES SECOND QUARTER NET OPERATING INCOME OF
$111.7 MILLION, ANNUALIZED OPERATING RETURN ON AVERAGE EQUITY OF 22.1%

Diluted Book Value Per Share of $25.12 at June 30, 2008

Hamilton, Bermuda, August 7, 2008 — Validus Holdings Limited (“Validus”) (NYSE: VR) today reported net income for the quarter ended June 30, 2008 of $75.9 million, or $0.98 per diluted common share, compared with $70.8 million, or $1.17 per diluted common share, for the quarter ended June 30, 2007. Net income for the six months ended June 30, 2008 was $142.4 million, or $1.83 per diluted share, compared with $127.5 million, or $2.11 per diluted share, for the corresponding period in 2007.

Net operating income for the second quarter of 2008 was $111.7 million, or $1.45 per diluted share, compared with $75.2 million, or $1.24 per diluted common share, for the quarter ended June 30, 2007. Operating income for the six months ended June 30, 2008 was $177.2 million, or $2.28 per diluted share, compared with $128.8 million, or $2.13 per diluted common share, for the six months ended June 30, 2007.

Net operating income, a non-GAAP financial measure, is defined as net income excluding net realized and unrealized gains or losses on investments, foreign exchange gains and losses and non-recurring items. Reconciliations of this measure to net income, the most directly comparable GAAP measure, are presented at the end of this release.

Operating results of Talbot have been included in the consolidated financial statements from the acquisition date of July 2, 2007. The Validus data for first six months of 2007 refers only to the company prior to its acquisition of Talbot. Further, the 2008 Validus data gives effect to the initial public offering which was consummated on July 30, 2007.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

1

Second quarter 2008 results

Highlights for the second quarter include the following:

• Gross premiums written increased by 118.0% to $379.9 million from $174.3 million, due primarily to the addition of Talbot which added $197.2 million of gross premiums written;

• Net premiums earned increased by 132.6% to $309.3 million from $133.0 million, due primarily to the addition of Talbot which added $145.2 million of net premiums earned;

• Combined ratio of 71.0% which included $11.1 million of favorable prior year loss reserve development, benefitting the loss ratio by 3.6 percentage points;

• Investment income increased by 84.8% to $36.4 million from $19.7 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot;

• Net income increased by 7.2% to $75.9 million from $70.8 million, due to the addition of Talbot which added $7.7 million of net income and partially offset by higher corporate expenses; and

• Annualized return on average equity of 15.0% and annualized net operating return on average equity of 22.1%;

Highlights for the six months ended June 30, 2008 include the following:

• Gross premiums written increased by 63.2% to $901.5 million from $552.4 million, due to the addition of Talbot which added $399.0 million of gross premiums written and offset by reduced gross premiums written in the Validus Re segment;

• Net premiums earned increased by 145.9% to $601.2 million from $244.5 million, due primarily to the addition of Talbot which added $293.4 million of net premiums earned;

• Combined ratio of 76.5% which included $23.9 million of favorable prior year loss reserve development, benefitting the loss ratio by 4.0 percentage points;

• Investment income increased by 89.5% to $72.5 million from $38.2 million primarily due to higher investment balances resulting from funds from operations and the addition of Talbot;

• Net income increased by 11.7% to $142.4 million from $127.5 million, due to the addition of Talbot which added $23.7 million of net income and partially offset by higher corporate expenses; and

• Annualized return on average equity of 14.3% and annualized net operating return on average equity of 17.8%;

Commenting on the second quarter of 2008 results, Ed Noonan, Chairman and Chief Executive Officer of Validus, stated: “We are very pleased to report a 22.1% annualized 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 favorable 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% over the prior twelve months, despite the headwinds in the

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

2

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.”

Validus Re Segment Results

Gross premiums written during the second quarter of 2008 were $187.8 million, an increase of $13.5 million from $174.3 million in the second quarter of 2007. Gross premiums written were comprised of $171.3 million of property premiums, $8.8 million of marine premiums and $7.8 million of specialty premiums compared to $156.7 million of property premiums, $9.1 million of marine premiums and $8.5 million of specialty premiums in the second quarter of 2007.

Net premiums earned for the second quarter of 2008 were $164.1 million compared to $133.0 million for the second quarter of 2007, an increase of $31.1 million or 23.4%. The increase in net premiums earned reflects the benefit of earning premiums written in 2007.

The combined ratio increased to 52.1% from 51.2% in the second quarter of 2007. This increase was primarily due to a 2.0 percentage point increase in the Company’s acquisition cost ratio. The loss ratio of 29.7% included favorable prior year loss reserve development of $0.5 million (representing 0.3 percentage points on the loss ratio).

Gross premiums written during the first six months of 2008 were $518.9 million, a decrease of $33.5 million from $552.4 million in the first six months of 2007. Gross premiums written were comprised of $374.4 million of property premiums, $92.8 million of marine premiums and $51.7 million of specialty premiums compared to $395.5 million of property premiums, $110.3 million of marine premiums and $46.6 million of specialty premiums in the second quarter of 2007. The decreases in property and marine premiums written were primarily driven by reduced market pricing, increased client retentions and reduced participation on certain property proportional treaties.

Net premiums earned for the first six months of 2008 were $307.8 million compared to $244.5 million for first six months of 2007, an increase of $63.2 million or 25.9%. The increase in net premiums earned reflects the benefit of earning premiums written in 2007.

The combined ratio increased to 57.0% from 55.1% in the first six months of 2007. This increase was primarily due to a 2.6 percentage point increase in the Company’s acquisition cost ratio. The loss ratio of 35.0% included favorable prior year loss reserve development of $5.4 million (representing 1.8 percentage points on the loss ratio).

Talbot Segment Results

Gross premiums written during the second quarter of 2008 were $197.2 million, comprised of $47.4 million of property premiums, $73.1 million of marine premiums and $76.7 million of specialty premiums. Net premiums earned for the second quarter of 2008 were $145.2 million. The combined ratio was 86.4%, comprised of a loss ratio of 50.6%, a policy acquisition costs ratio of 21.5% and a general and administrative expense ratio of 14.4%. The loss ratio of 50.6% included favorable prior year loss reserve development of $10.6 million (representing 7.3 percentage points on the loss ratio).

Gross premiums written during the first six months of 2008 were $399.0 million, comprised of $87.8 million of property premiums, $164.1 million of marine premiums and $147.1 million of specialty premiums. Net premiums earned for the first six months of 2008 were $293.4 million. The combined ratio was 90.3%, comprised of a loss ratio of 52.7%, a policy acquisition costs ratio

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

3

of 23.0% and a general and administrative expense ratio of 14.6%. The loss ratio of 52.7% included favorable prior year loss reserve development of $18.5 million (representing 6.3 percentage points on the loss ratio).

Corporate Segment Results

Corporate results are comprised of executive and board expenses, internal and external audit expenses, interest and costs from the junior subordinated deferrable debentures, and other costs relating to the Company as a whole. General and administrative expenses for the three months ended June 30, 2008 were $4.2 million compared to $4.3 million for the three months ended June 30, 2007. Stock compensation expenses for the three months ended June 30, 2008 were $4.5 million compared to $1.2 million for the three months ended June 30, 2007, which primarily reflects the added cost from the Employee Seller shares issued to Talbot employees as part of the acquisition.

General and administrative expenses for the six months ended June 30, 2008 were $11.0 million compared to $8.3 million for the six months ended June 30, 2007. Stock compensation expenses for the six months ended June 30, 2008 were $8.9 million compared to $2.4 million for the six months ended June 30, 2007, which primarily reflects the added cost from the Employee Seller shares issued to Talbot employees as part of the acquisition.

On April 29, 2008, the Company announced that it had repurchased $45.7 million principal amount of its Junior Subordinated Deferrable Interest Debentures (“debentures”) from an unaffiliated financial institution in a privately negotiated transaction. The aggregate price of the repurchased debentures was $36.5 million, plus accrued and unpaid interest of $0.5 million. The transaction resulted in a gain of $8.8 million in the quarter and six months ended June 30, 2008.

Investments

Net investment income increased in the second quarter of 2008 and first six months of 2008 due to higher investment balances resulting from the addition of Talbot and from funds generated from operations.

Investment income was $36.4 million in the second quarter of 2008 compared to $19.7 million in the second quarter of 2007, an increase of 84.8%, or $16.7 million. Net realized losses on investments were $2.4 million, compared to $0.2 of net realized losses in the second quarter of 2007. Investment income was $72.5 million in the first six months of 2008 compared to $38.2 million in the first six months of 2007, an increase of 89.5%, or $34.2 million. Net realized gains on investments were $5.3 million, compared to $0.2 of net realized losses in the second quarter of 2007.

The Company recorded $43.0 million of net unrealized losses in the three months ended June 30, 2008 and $58.0 million in the six months ended June 30, 2008. The Company recorded $6.2 million net unrealized losses in the three months ended June 30, 2007 and $4.5 million net unrealized losses in the six months ended June 30, 2007. The net unrealized losses in the three months and six months ended June 30, 2008 were primarily the result of increasing interest rates in the quarter.

Finance Expenses

Finance expenses for the quarter ended June 30, 2008 were $12.8 million, increasing from $4.0 million in the three months ended June 30, 2007. Finance expenses consist of interest due on outstanding debt, the amortization of debt offering expenses and offering discount fees relating to

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

4

the Company’s credit facility, and third-party capital costs for Talbot. The increase partially relates to the inclusion of Talbot in the consolidated financial statements effective with the beginning of the third quarter of 2007. Talbot’s third-party capital costs were $5.4 million in the second quarter of 2008. In addition, the increase in finance expenses is partially attributable to the issuance of junior subordinated deferrable debentures in the second quarter of 2007.

Finance expenses for the six months ended June 30, 2008 were $34.3 million, increasing from $8.4 million in the six months ended June 30, 2007. The increase partially relates to the inclusion of Talbot in the consolidated financial statements effective with the beginning of the third quarter of 2007. Talbot’s third-party capital costs were $18.4 million in the first six months of 2008. In addition, the increase in finance expenses is partially attributable to the issuance of junior subordinated deferrable debentures in the second quarter of 2007.

Shareholders’ Equity and Capitalization

At June 30 2008, shareholders’ equity was $2.1 billion. Diluted book value per common share was $25.12 and book value per common share was $27.70 compared to $24.00 and $26.08, respectively, at December 31, 2007. Diluted book value per share is a non-GAAP financial measure. A reconciliation of this measure to shareholders’ equity is presented at the end of this release.

Total capitalization at June 30, 2008 was $2.4 billion, including $304.3 million of junior subordinated deferrable debentures.

Conference Call

We will host a conference call for analysts and investors on August 8, 2008 at 10:00 AM (Eastern) to discuss the second quarter financial results and related matters. The conference call can be accessed via telephone by dialing 1-800-860-2442 (toll-free U.S.) or 1-412-858-4600 (international). Those who intend to participate in the conference call should register at least ten minutes in advance to ensure access to the call. A telephone replay of the conference call will be available through August 25, 2008 by dialing 1-877-344-7529 and entering the pass code 420583#.

This conference call will also be available through a live audio webcast accessible through the Investor Information section of our website at www.validusre.bm. In addition, a financial supplement relating to our financial results for the quarter ended June 30, 2008 is available in the Investor Information section of our website.

About Validus Holdings, Ltd.

Validus Holdings, Ltd. is a provider of reinsurance and insurance, conducting its operations worldwide through two wholly-owned subsidiaries, Validus Reinsurance, Ltd. (“Validus Re”) and Talbot Holdings Ltd. (“Talbot”). Validus Re is a Bermuda based reinsurer focused on short-tail lines of reinsurance. Talbot is the Bermuda parent of the specialty insurance group primarily operating within the Lloyd’s insurance market through Syndicate 1183.

Validus Re is rated “A-” (“Excellent”) by A.M. Best. For more information about Validus, visit our website at www.validusre.bm.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

5

Validus Holdings, Ltd.
Consolidated Balance Sheets
As at June 30, 2008 (unaudited) and December 31, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	June 30,		December 31,
	2008		2007
Assets
Fixed maturities, at fair value	$	2,601,315	$	2,411,398
Short-term investments, at fair value		141,638		250,623
Cash and cash equivalents		487,260		444,698
Total cash and investments		3,230,213		3,106,719
Premiums receivable		609,757		401,241
Deferred acquisition costs		146,216		105,562
Prepaid reinsurance premiums		45,717		22,817
Securities lending collateral		199,075		164,324
Loss reserves recoverable		132,880		134,404
Paid losses recoverable		2,683		7,810
Taxes recoverable		3,258		3,325
Goodwill and other intangible assets		149,691		151,772
Accrued investment income		16,177		19,960
Other assets		34,075		26,290
Total assets	$	4,569,742	$	4,144,224
Liabilities
Reserve for losses and loss expenses	$	1,029,739	$	926,117
Unearned premiums		793,356		557,344
Reinsurance balances payables		66,386		36,848
Securities lending payable		199,968		164,324
Deferred taxation		20,173		16,663
Net payable for investments purchased		9,105		31,426
Accounts payable and accrued expenses		89,934		126,702
Debentures payable		304,300		350,000
Total liabilities		2,512,961		2,209,424
Commitments and contingent liabilities
Shareholders’ equity
Ordinary shares		12,993		12,985
Additional paid-in capital		1,398,913		1,384,604
Accumulated other comprehensive income (loss)		28		(49	)
Retained earnings		644,847		537,260
Total shareholders’ equity		2,056,781		1,934,800
Total liabilities and shareholders’ equity	$	4,569,742	$	4,144,224

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

6

Validus Holdings, Ltd.
Consolidated Statements of Operations and Comprehensive Income
For the three and six months June 30, 2008 and 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended						Six months ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Revenues
Gross premiums written	$	379,919		$	174,300		$	901,513		$	552,370
Reinsurance premiums ceded		(1,399	)		(26,780	)		(86,299	)		(57,738	)
Net premiums written		378,520			147,520			815,214			494,632
Change in unearned premiums		(69,222	)		(14,490	)		(214,052	)		(250,110	)
Net premiums earned		309,298			133,030			601,162			244,522
Net investment income		36,435			19,742			72,478			38,239
Realized gain on repurchase of debentures		8,752			—			8,752			—
Net realized (losses) gains on investments		(2,425	)		(232	)		5,319			(186	)
Net unrealized losses on investments		(42,982	)		(6,189	)		(57,959	)		(4,546	)
Other income		1,462			—			2,397			—
Foreign exchange gains		911			2,003			9,090			3,392
Total revenues		311,451			148,354			621,239			281,421
Expenses
Losses and loss expense		122,089			42,675			262,113			89,162
Policy acquisition costs		56,419			17,837			113,120			30,056
General and administrative expenses		33,912			11,107			71,019			22,335
Share compensation expense		7,271			1,978			13,806			3,922
Finance expenses		12,762			4,003			34,279			8,444
Total expenses		232,453			77,600			494,337			153,919
Net income before taxes		78,998			70,754			146,902			127,502
Taxes		3,077			—			4,506			—
Net income	$	75,921		$	70,754		$	142,396			127,502
Comprehensive income
Foreign currency translation adjustments		10			—			77			—
Comprehensive income	$	75,931		$	70,754		$	142,473		$	127,502
Earnings per share
Weighted average number of common shares and common share equivalents outstanding Basic		74,233,425			58,482,600			74,221,398			58,482,601
Diluted		77,257,545			60,647,354			77,793,636			60,431,373
Basic earnings per share	$	1.00		$	1.21		$	1.87		$	2.18
Diluted earnings per share	$	0.98		$	1.17		$	1.83		$	2.11
Cash dividends declared per share	$	0.20		$	0.00		$	0.40		$	0.00

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

7

Validus Holdings, Ltd.
Consolidated Statements of Operations
For the three months ended June 30, 2008
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended June 30 2008
							Corporate
							&
	Validus Re			Talbot			Elimination			Total
Gross premiums written	$	187,820		$	197,235		$	(5,136	)	$	379,919
Reinsurance premiums ceded		(1,208	)		(5,327	)		5,136			(1,399	)
Net premiums written		186,612			191,908			—			378,520
Change in unearned premiums		(22,500	)		(46,722	)		—			(69,222	)
Net premiums earned		164,112			145,186			—			309,298
Losses and loss expense		48,677			73,412			—			122,089
Policy acquisition costs		25,309			31,134			(24	)		56,419
General and administrative expenses		9,955			19,787			4,170			33,912
Stock compensation expenses		1,597			1,126			4,548			7,271
Underwriting income (loss)	$	78,574		$	19,727		$	(8,694	)	$	89,607
Net investment income		25,725			11,726			(1,016	)		36,435
Other income		24			1,462			(24	)		1,462
Finance expenses		(88	)		(5,400	)		(7,274	)		(12,762	)
Operating income (loss) before taxes		104,235			27,515			(17,008	)		114,742
Taxes		20			3,057			—			3,077
Net operating income (loss)	$	104,215		$	24,458		$	(17,008	)	$	111,665
Realized gain on repurchase of debentures		—			—			8,752			8,752
Net realized gains on investments		(3,260	)		835			—			(2,425	)
Net unrealized losses on investments		(24,059	)		(18,923	)		—			(42,982	)
Foreign exchange gains		(403	)		1,314			—			911
Net income (loss)	$	76,493		$	7,684		$	(8,256	)	$	75,921
Loss and loss expense ratio		29.7	%		50.6	%					39.5	%
Policy acquisition cost ratio		15.4	%		21.5	%					18.2	%
General and administrative expense ratio		7.0	%		14.4	%					13.3	%
Expense ratio		22.4	%		35.9	%					31.6	%
Combined ratio		52.1	%		86.4	%					71.0	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

8

Validus Holdings, Ltd.
Consolidated Statements of Operations
For the three months ended June 30, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended June 30, 2007
							Corporate
							&
	Validus Re			Talbot			Elimination			Total
Gross premiums written	$	174.300		$	—		$	—		$	174.300
Reinsurance premiums ceded		(26,780	)		—			—			(26,780	)
Net premiums written		147,520			—			—			147,520
Change in unearned premiums		(14,490	)		—			—			(14,490	)
Net premiums earned		133,030			—			—			133,030
Losses and loss expense		42,675			—			—			42,675
Policy acquisition costs		17,837			—			—			17,837
General and administrative expenses		6,773			—			4,334			11,107
Stock compensation expenses		779			—			1,199			1,978
Underwriting income (loss)	$	64,966		$	—		$	(5,533	)	$	59,433
Net investment income		19,740			—			2			19,742
Other income		—			—			—			—
Finance expenses		(112	)		—			(3,891	)		(4,003	)
Operating income (loss) before taxes		84,594			—			(9,422	)		75,172
Taxes		—			—			—			—
Net operating income (loss)	$	84,594		$	—		$	(9,422	)	$	75,172
Net realized losses on investments		(232	)		—			—			(232	)
Net unrealized losses on investments		(6,189	)		—			—			(6,189	)
Foreign exchange gains		2,003			—			—			2,003
Net income (loss)	$	80,176		$	—		$	(9,422	)	$	70,754
Loss and loss expense ratio		32.1	%		0.0	%					32.1	%
Policy acquisition cost ratio		13.4	%		0.0	%					13.4	%
General and administrative expense ratio		5.7	%		0.0	%					9.8	%
Expense ratio		19.1	%		0.0	%					23.2	%
Combined ratio		51.2	%		0.0	%					55.3	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

9

Validus Holdings, Ltd.
Consolidated Statements of Operations
For the six months ended June 30, 2008
(expressed in thousands of U.S. dollars, except share amounts)

	Six months ended June 30, 2008
							Corporate
							&
	Validus Re			Talbot			Elimination			Total
Gross premiums written	$	518,869		$	399,028		$	(16,384	)	$	901,513
Reinsurance premiums ceded		(24,951	)		(77,732	)		16,384			(86,299	)
Net premiums written		493,918			321,296			—			815,214
Change in unearned premiums		(186,151	)		(27,901	)		—			(214,052	)
Net premiums earned		307,767			293,395			—			601,162
Losses and loss expense		107,591			154,522			—			262,113
Policy acquisition costs		45,712			67,432			(24	)		113,120
General and administrative expenses		19,334			40,710			10,975			71,019
Stock compensation expenses		2,823			2,102			8,881			13,806
Underwriting income (loss)	$	132,307		$	28,629		$	(19,832	)	$	141,104
Net investment income		50,752			22,708			(982	)		72,478
Other income		24			2,397			(24	)		2,397
Finance expenses		(442	)		(18,620	)		(15,217	)		(34,279	)
Operating income (loss) before taxes		182,641			35,114			(36,055	)		181,700
Taxes		48			4,458			—			4,506
Net operating income (loss)	$	182,593		$	30,656		$	(36,055	)	$	177,194
Realized gain on repurchase of debentures		—			—			8,752			8,752
Net realized (losses) gains on investments		(1,183	)		6,502			—			5,319
Net unrealized losses on investments		(42,671	)		(15,288	)		—			(57,959	)
Foreign exchange gains		7,272			1,818			—			9,090
Net income (loss)	$	146,011		$	23,688		$	(27,303	)	$	142,396
Loss and loss expense ratio		35.0	%		52.7	%					43.6	%
Policy acquisition cost ratio		14.9	%		23.0	%					18.8	%
General and administrative expense ratio		7.1	%		14.6	%					14.1	%
Expense ratio		22.0	%		37.6	%					32.9	%
Combined ratio		57.0	%		90.3	%					76.5	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

10

Validus Holdings, Ltd.
Consolidated Statements of Operations
For the six months ended June 30, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Six months ended June 30, 2007
							Corporate
							&
	Validus Re			Talbot			Elimination			Total
Gross premiums written	$	552,370		$	—		$	—		$	552,370
Reinsurance premiums ceded		(57,738	)		—			—			(57,738	)
Net premiums written		494,632			—			—			494,632
Change in unearned premiums		(250,110	)		—			—			(250,110	)
Net premiums earned		244,522			—			—			244,522
Losses and loss expense		89,162			—			—			89,162
Policy acquisition costs		30,056			—			—			30,056
General and administrative expenses		14,065			—			8,270			22,335
Stock compensation expenses		1,544			—			2,378			3,922
Underwriting income (loss)	$	109,695		$	—		$	(10,648	)	$	99,047
Net investment income		38,236			—			3			38,239
Other income		—			—			—			—
Finance expenses		(968	)		—			(7,476	)		(8,444	)
Operating income (loss) before taxes		146,963			—			(18,121	)		128,842
Taxes		—			—			—			—
Net operating income (loss)	$	146,963		$	—		$	(18,121	)	$	128,842
Net realized losses on investments		(186	)		—			—			(186	)
Net unrealized losses on investments		(4,546	)		—			—			(4,546	)
Foreign exchange gains		3,392			—			—			3,392
Net income (loss)	$	145,623		$	—		$	(18,121	)	$	127,502
Loss and loss expense ratio		36.5	%		0.0	%					36.5	%
Policy acquisition cost ratio		12.3	%		0.0	%					12.3	%
General and administrative expense ratio		6.4	%		0.0	%					10.7	%
Expense ratio		18.7	%		0.0	%					23.0	%
Combined ratio		55.1	%		0.0	%					59.5	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

11

Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Net Operating Income and Annualized Net Operating Return on Average Equity
For the three and six months ended June 30, 2008 and 2007
(expressed in thousands of U.S. dollars, except share amounts)

	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2008			2007			2008			2007
Net income	$	75,921		$	70,754		$	142,396		$	127,502
Adjustment for realize gain on repurchase of debentures		(8,752	)		—			(8,752	)		—
Adjustment for net realized gains on investments		2,425			232			(5,319	)		186
Adjustment for net unrealized (gains) on investments		42,982			6,189			57,959			4,546
Adjustment for foreign exchange gains		(911	)		(2,003	)		(9,090	)		(3,392	)
Net operating income	$	111,665		$	75,172		$	177,194		$	128,842
Net income per share — diluted	$	0.98		$	1.17		$	1.83		$	2.11
Adjustment for realize gain on repurchase of debentures		(0.11	)		—			(0.11	)		—
Adjustment for net realized gains on investments		0.03			—			(0.07	)		—
Adjustment for net unrealized (gains) on investments		0.56			0.10			0.75			0.08
Adjustment for foreign exchange gains		(0.01	)		(0.03	)		(0.12	)		(0.06	)
Net operating income per share — diluted	$	1.45		$	1.24		$	2.28		$	2.13
Weighted average number of common shares and common share equivalents — diluted		77,257,545			60,647,354			77,793,636			60,431,373
Net operating income	$	111,665		$	75,172		$	177,194		$	128,842
Average shareholders’ equity		2,023,720			1,287,582			1,994,080			1,255,895
Annualized net operating return on average equity		22.1	%		23.4	%		17.8	%		20.5	%

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

12

Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Diluted Book Value Per Share
As at June 30, 2008 and December 31, 2007
(expressed in thousands of U.S. dollars, except share amounts)

	At June 30, 2008
					Exercise		Book value
	Equity amount		Shares		Price		per share
Book value per common share
Total shareholders’ equity	$	2,056,781		74,243,477			$	27.70
Diluted book value per common share
Total shareholders’ equity	$	2,056,781		74,243,477
Assumed exercise of outstanding warrants		152,316		8,680,149	$	17.55
Assumed exercise of outstanding options		52,786		2,898,830	$	18.21
Unvested restricted shares		—		4,217,102
Diluted book value per common share	$	2,261,883		90,039,558			$	25.12

	At December 31, 2007
					Exercise		Book value
	Equity amount		Shares		Price		per share
Book value per common share
Total shareholders’ equity	$	1,934,800		74,199,836			$	26.08
Diluted book value per common share
Total shareholders’ equity	$	1,934,800		74,199,836
Assumed exercise of outstanding warrants
		152,869		8,711,729	$	17.55
Assumed exercise of outstanding options
		49,196		2,761,176	$	17.82
Unvested restricted shares		—		3,367,961
Diluted book value per common share	$	2,136,865		89,040,702			$	24.00

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

13

Cautionary Note Regarding Forward-Looking Statements

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, additionally, you should not place undue reliance on any such statements. This news release may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “will,” “may” and similar statements of a future or forward-looking nature identify forward-looking statements. We believe that these factors include, but are not limited to, the following: 1) unpredictability and severity of catastrophic events; 2) rating agency actions; 3) adequacy of our risk management and loss limitation methods;4) cyclicality of demand and pricing in the insurance and reinsurance markets; 5) our limited operating history; 6) our ability to successfully implement our business strategy during “soft” as well as “hard” markets; 7) adequacy of our loss reserves; 8) continued availability of capital and financing; 9) retention of key personnel; 10) competition; 11) potential loss of business from one or more major insurance or reinsurance brokers; 12) our ability to implement, successfully and on a timely basis, complex infrastructure, distribution capabilities, systems, procedures and internal controls, and to develop accurate actuarial data to support the business and regulatory and reporting requirements; 13) general economic and market conditions (including inflation, interest rates and foreign currency exchange rates); 14) the integration of Talbot or other businesses we may acquire or new business ventures we may start; 15) the effect on our investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors; 16) acts of terrorism or outbreak of war; and 17) availability of reinsurance and retrocessional coverage.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein or elsewhere, including the Risk Factors included in our most recent reports on Form 10-K and Form 10-Q and other documents on file with the Securities and Exchange Commission, as well as management’s response to any of the aforementioned factors. Any forward-looking statements made in this news release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. We undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Non-GAAP Financial Measures

In presenting the Company’s results, management has included and discussed certain schedules containing net operating income (loss), underwriting income, annualized net operating return on average equity and diluted book value per share that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. A reconciliation of net operating income to net income, the most comparable U.S. GAAP financial measure, is presented in the section below entitled “Net Operating Income and Annualized Net Operating Return on Average Equity”. A reconciliation of underwriting income to net income, the most comparable U.S. GAAP financial measure, is presented in the “Consolidated Statement of Operations”. Annualized net operating return on average equity is presented in the section below entitled “Net Operating Income and Annualized Net Operating Return on Average Equity”. A reconciliation of diluted book value per share to book value per share, the most comparable U.S. GAAP financial measure, is presented in the section below entitled “Diluted Book Value Per Share”. Net operating income is calculated based on net income (loss) excluding net realized gains (losses), net unrealized gains (losses) on investments, gains (losses) arising from translation of non-US$ denominated balances and non-recurring items. Realized gains (losses) from the sale of investments are driven by the timing of the disposition of investments, not by our operating performance. Gains (losses) arising from translation of non-US$ denominated balances are unrelated to our underlying business.

Validus Holdings Limited, 19 Par-la-Ville Road, Hamilton, Bermuda HM11
Tel: 441.278.9000 Fax: 441.278.9090
www.validusre.bm

14