BERMUDA | 98-0501001 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) |
Page | |
March 31, 2013 | December 31, 2012 | ||||||
(unaudited) | |||||||
Assets | |||||||
Fixed maturities, at fair value (amortized cost: 2013—$5,616,693; 2012—$5,008,514) | $ | 5,676,552 | $ | 5,085,334 | |||
Short-term investments, at fair value (amortized cost: 2013—$368,404; 2012—$1,112,929) | 367,619 | 1,114,250 | |||||
Other investments, at fair value (amortized cost: 2013—$552,233; 2012—$583,068) | 532,786 | 564,448 | |||||
Cash and cash equivalents | 1,369,224 | 1,219,379 | |||||
Total investments and cash | 7,946,181 | 7,983,411 | |||||
Investments in affiliates | 128,448 | 172,329 | |||||
Premiums receivable | 1,195,430 | 802,159 | |||||
Deferred acquisition costs | 219,504 | 146,588 | |||||
Prepaid reinsurance premiums | 200,577 | 99,593 | |||||
Securities lending collateral | 1,914 | 225 | |||||
Loss reserves recoverable | 429,252 | 439,967 | |||||
Paid losses recoverable | 15,831 | 46,435 | |||||
Income taxes recoverable | 2,203 | — | |||||
Intangible assets | 109,529 | 110,569 | |||||
Goodwill | 20,393 | 20,393 | |||||
Accrued investment income | 19,708 | 21,321 | |||||
Other assets | 275,430 | 177,274 | |||||
Total assets | $ | 10,564,400 | $ | 10,020,264 | |||
Liabilities | |||||||
Reserve for losses and loss expenses | $ | 3,357,691 | $ | 3,517,573 | |||
Unearned premiums | 1,381,829 | 894,362 | |||||
Reinsurance balances payable | 187,048 | 138,550 | |||||
Securities lending payable | 2,380 | 691 | |||||
Deferred income taxes | 21,800 | 20,259 | |||||
Net payable for investments purchased | 33,101 | 38,346 | |||||
Accounts payable and accrued expenses | 111,323 | 167,577 | |||||
AlphaCat variable funding notes | 290,588 | — | |||||
Senior notes payable | 247,117 | 247,090 | |||||
Debentures payable | 540,212 | 540,709 | |||||
Total liabilities | $ | 6,173,089 | $ | 5,565,157 | |||
Commitments and contingent liabilities | |||||||
Shareholders’ equity | |||||||
Common shares, 571,428,571 authorized, par value $0.175 (Issued: 2013—152,963,762; 2012—152,698,191; Outstanding: 2013—106,282,441; 2012—107,921,259) | $ | 26,769 | $ | 26,722 | |||
Treasury shares (2013—46,681,321; 2012—44,776,932) | (8,169 | ) | (7,836 | ) | |||
Additional paid-in-capital | 2,096,512 | 2,160,478 | |||||
Accumulated other comprehensive (loss) | (12,738 | ) | (2,953 | ) | |||
Retained earnings | 1,801,516 | 1,844,416 | |||||
Total shareholders’ equity available to Validus | 3,903,890 | 4,020,827 | |||||
Noncontrolling interest | 487,421 | 434,280 | |||||
Total shareholders’ equity | $ | 4,391,311 | $ | 4,455,107 | |||
Total liabilities and shareholders’ equity | $ | 10,564,400 | $ | 10,020,264 |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
(unaudited) | (unaudited) | |||||||
Revenues | ||||||||
Gross premiums written | $ | 1,104,760 | $ | 837,289 | ||||
Reinsurance premiums ceded | (187,216 | ) | (107,052 | ) | ||||
Net premiums written | 917,544 | 730,237 | ||||||
Change in unearned premiums | (386,483 | ) | (279,038 | ) | ||||
Net premiums earned | 531,061 | 451,199 | ||||||
Net investment income | 25,649 | 27,760 | ||||||
Net realized gains on investments | 1,721 | 7,532 | ||||||
Net unrealized (losses) gains on investments | (7,237 | ) | 20,671 | |||||
Income from investment affiliate | 1,477 | — | ||||||
Other income | 2,685 | 8,891 | ||||||
Foreign exchange gains | 6,922 | 3,166 | ||||||
Total revenues | 562,278 | 519,219 | ||||||
Expenses | ||||||||
Losses and loss expenses | 144,771 | 231,989 | ||||||
Policy acquisition costs | 93,611 | 78,132 | ||||||
General and administrative expenses | 80,279 | 66,375 | ||||||
Share compensation expenses | 2,318 | 5,438 | ||||||
Finance expenses | 24,446 | 16,279 | ||||||
Total expenses | 345,425 | 398,213 | ||||||
Net income before taxes and income from operating affiliates | 216,853 | 121,006 | ||||||
Tax benefit (expense) | 318 | (139 | ) | |||||
Income from operating affiliates | 3,523 | 3,367 | ||||||
Net income | $ | 220,694 | $ | 124,234 | ||||
Net loss attributable to noncontrolling interest | 2,549 | — | ||||||
Net income available to Validus | $ | 223,243 | $ | 124,234 | ||||
Other comprehensive (loss) income | ||||||||
Foreign currency translation adjustments | (9,785 | ) | 1,393 | |||||
Other comprehensive (loss) income | $ | (9,785 | ) | $ | 1,393 | |||
Comprehensive income available to Validus | $ | 213,458 | $ | 125,627 | ||||
Earnings per share | ||||||||
Weighted average number of common shares and common share equivalents outstanding | ||||||||
Basic | 107,386,438 | 99,425,140 | ||||||
Diluted | 110,052,999 | 105,096,090 | ||||||
Basic earnings per share available to common shareholders | $ | 1.94 | $ | 1.23 | ||||
Diluted earnings per share available to common shareholders | $ | 1.90 | $ | 1.18 | ||||
Cash dividends declared per share | $ | 2.30 | $ | 0.25 |
March 31, 2013 | March 31, 2012 | ||||||
(unaudited) | (unaudited) | ||||||
Common shares | |||||||
Balance - Beginning of period | $ | 26,722 | $ | 23,538 | |||
Common shares issued, net | 47 | 42 | |||||
Balance - End of period | $ | 26,769 | $ | 23,580 | |||
Treasury shares | |||||||
Balance - Beginning of period | $ | (7,836 | ) | $ | (6,131 | ) | |
Repurchase of common shares | (333 | ) | (65 | ) | |||
Balance - End of period | $ | (8,169 | ) | $ | (6,196 | ) | |
Additional paid-in capital | |||||||
Balance - Beginning of period | $ | 2,160,478 | $ | 1,893,890 | |||
Common shares issued (redeemed), net | 3,074 | (1,309 | ) | ||||
Repurchase of common shares | (69,358 | ) | (11,243 | ) | |||
Share compensation expenses | 2,318 | 5,438 | |||||
Balance - End of period | $ | 2,096,512 | $ | 1,886,776 | |||
Accumulated other comprehensive (loss) | |||||||
Balance - Beginning of period | $ | (2,953 | ) | $ | (6,601 | ) | |
Other comprehensive (loss) income | (9,785 | ) | 1,393 | ||||
Balance - End of period | $ | (12,738 | ) | $ | (5,208 | ) | |
Retained earnings | |||||||
Balance - Beginning of period | $ | 1,844,416 | $ | 1,543,729 | |||
Dividends | (266,143 | ) | (27,404 | ) | |||
Net income | 220,694 | 124,234 | |||||
Net loss attributable to noncontrolling interest | 2,549 | — | |||||
Balance - End of period | $ | 1,801,516 | $ | 1,640,559 | |||
Total shareholders’ equity available to Validus | $ | 3,903,890 | $ | 3,539,511 | |||
Noncontrolling interest | $ | 487,421 | $ | — | |||
Total shareholders’ equity | $ | 4,391,311 | $ | 3,539,511 | |||
March 31, 2013 | March 31, 2012 | ||||||
(unaudited) | (unaudited) | ||||||
Cash flows provided by (used in) operating activities | |||||||
Net income | $ | 220,694 | $ | 124,234 | |||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | |||||||
Share compensation expenses | 2,318 | 5,438 | |||||
Amortization of discount on senior notes | 27 | 27 | |||||
(Income) from investment affiliate | (1,477 | ) | — | ||||
Net realized (gains) on investments | (1,721 | ) | (7,532 | ) | |||
Net unrealized losses (gains) on investments | 7,237 | (20,671 | ) | ||||
Amortization of intangible assets | 1,040 | 1,040 | |||||
(Income) from operating affiliates | (3,523 | ) | (3,367 | ) | |||
Foreign exchange losses (gains) included in net income | 18,906 | (13,070 | ) | ||||
Amortization of premium on fixed maturities | 5,059 | 7,517 | |||||
Change in: | |||||||
Premiums receivable | (400,153 | ) | (246,039 | ) | |||
Deferred acquisition costs | (72,916 | ) | (49,217 | ) | |||
Prepaid reinsurance premiums | (100,984 | ) | (34,026 | ) | |||
Loss reserves recoverable | 6,447 | 22,916 | |||||
Paid losses recoverable | 30,438 | 42,903 | |||||
Income taxes recoverable | (2,132 | ) | (1,004 | ) | |||
Accrued investment income | 1,532 | 1,565 | |||||
Other assets | 8,020 | (10,880 | ) | ||||
Reserve for losses and loss expenses | (138,633 | ) | 8,702 | ||||
Unearned premiums | 487,467 | 313,064 | |||||
Reinsurance balances payable | 51,300 | 31,701 | |||||
Deferred income taxes | 1,250 | 1,029 | |||||
Accounts payable and accrued expenses | (59,513 | ) | (9,425 | ) | |||
Net cash provided by operating activities | 60,683 | 164,905 | |||||
Cash flows provided by (used in) investing activities | |||||||
Proceeds on sales of investments | 1,410,509 | 939,646 | |||||
Proceeds on maturities of investments | 125,841 | 108,360 | |||||
Purchases of fixed maturities | (2,140,447 | ) | (1,080,442 | ) | |||
Sales (purchases) of short-term investments, net | 744,518 | (23,943 | ) | ||||
Sales (purchases) of other investments | 31,121 | (947 | ) | ||||
(Increase) decrease in securities lending collateral | (1,689 | ) | 7,354 | ||||
Redemption from investment in operating affiliates | 50,222 | — | |||||
Purchase of investment in investment affiliate | (1,341 | ) | — | ||||
Net cash provided by (used in) investing activities | 218,734 | (49,972 | ) | ||||
Cash flows provided by (used in) financing activities | |||||||
Net proceeds on issuance of AlphaCat variable funding notes | 175,637 | — | |||||
Issuance (redemption) of common shares, net | 3,121 | (1,267 | ) | ||||
Purchases of common shares under share repurchase program | (69,691 | ) | (11,308 | ) | |||
Dividends paid | (262,232 | ) | (26,997 | ) | |||
Increase (decrease) in securities lending payable | 1,689 | (7,354 | ) | ||||
Third party investment in noncontrolling interest | 55,690 | — | |||||
Net cash (used in) financing activities | (95,786 | ) | (46,926 | ) | |||
Effect of foreign currency rate changes on cash and cash equivalents | (33,786 | ) | 16,545 | ||||
Net increase in cash | 149,845 | 84,552 | |||||
Cash and cash equivalents - beginning of period | $ | 1,219,379 | $ | 832,844 | |||
Cash and cash equivalents - end of period | $ | 1,369,224 | $ | 917,396 | |||
Taxes paid during the period | $ | 693 | $ | 3,194 | |||
Interest paid during the period | $ | 17,819 | $ | 15,611 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
U.S. government and government agency | $ | 1,417,884 | $ | 7,150 | $ | (65 | ) | $ | 1,424,969 | ||||||
Non-U.S. government and government agency | 396,948 | 4,314 | (5,061 | ) | 396,201 | ||||||||||
States, municipalities, political subdivision | 36,933 | 816 | (18 | ) | 37,731 | ||||||||||
Agency residential mortgage-backed securities | 372,469 | 12,311 | (284 | ) | 384,496 | ||||||||||
Non-agency residential mortgage-backed securities | 27,010 | 177 | (903 | ) | 26,284 | ||||||||||
U.S. corporate | 1,466,941 | 17,990 | (753 | ) | 1,484,178 | ||||||||||
Non-U.S. corporate | 632,880 | 9,027 | (915 | ) | 640,992 | ||||||||||
Bank loans | 718,427 | 13,617 | (233 | ) | 731,811 | ||||||||||
Catastrophe bonds | 47,006 | 748 | (182 | ) | 47,572 | ||||||||||
Asset-backed securities | 500,195 | 2,750 | (627 | ) | 502,318 | ||||||||||
Total fixed maturities | 5,616,693 | 68,900 | (9,041 | ) | 5,676,552 | ||||||||||
Total short-term investments | 368,404 | 60 | (845 | ) | 367,619 | ||||||||||
Other investments | |||||||||||||||
Fund of hedge funds | 4,192 | 273 | (465 | ) | 4,000 | ||||||||||
Private equity investments | 12,968 | 258 | (301 | ) | 12,925 | ||||||||||
Hedge funds (a) | 528,874 | 45,037 | (67,143 | ) | 506,768 | ||||||||||
Mutual funds | 6,199 | 2,894 | — | 9,093 | |||||||||||
Total other investments | 552,233 | 48,462 | (67,909 | ) | 532,786 | ||||||||||
Total | $ | 6,537,330 | $ | 117,422 | $ | (77,795 | ) | $ | 6,576,957 | ||||||
Noncontrolling interest (a) | $ | (450,000 | ) | $ | (38,441 | ) | $ | 60,354 | $ | (428,087 | ) | ||||
Total investments excluding noncontrolling interest | $ | 6,087,330 | $ | 78,981 | $ | (17,441 | ) | $ | 6,148,870 |
(a) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
U.S. government and government agency | $ | 1,091,357 | $ | 7,957 | $ | (84 | ) | $ | 1,099,230 | ||||||
Non-U.S. government and government agency | 295,602 | 6,904 | (227 | ) | 302,279 | ||||||||||
States, municipalities, political subdivision | 41,286 | 800 | (23 | ) | 42,063 | ||||||||||
Agency residential mortgage-backed securities | 375,368 | 13,708 | (202 | ) | 388,874 | ||||||||||
Non-agency residential mortgage-backed securities | 106,536 | 1,266 | (1,346 | ) | 106,456 | ||||||||||
U.S. corporate | 1,189,173 | 21,681 | (681 | ) | 1,210,173 | ||||||||||
Non-U.S. corporate | 582,115 | 11,373 | (223 | ) | 593,265 | ||||||||||
Bank loans | 663,217 | 10,593 | (427 | ) | 673,383 | ||||||||||
Catastrophe bonds | 56,757 | 481 | (291 | ) | 56,947 | ||||||||||
Asset-backed securities | 607,103 | 5,767 | (206 | ) | 612,664 | ||||||||||
Total fixed maturities | 5,008,514 | 80,530 | (3,710 | ) | 5,085,334 | ||||||||||
Total short-term investments | 1,112,929 | 1,349 | (28 | ) | 1,114,250 | ||||||||||
Other investments | |||||||||||||||
Fund of hedge funds | 4,677 | 299 | (219 | ) | 4,757 | ||||||||||
Private equity investments | 12,857 | 94 | — | 12,951 | |||||||||||
Hedge funds (a) | 559,335 | 21,814 | (42,623 | ) | 538,526 | ||||||||||
Mutual funds | 6,199 | 2,015 | — | 8,214 | |||||||||||
Total other investments | 583,068 | 24,222 | (42,842 | ) | 564,448 | ||||||||||
Total | $ | 6,704,511 | $ | 106,101 | $ | (46,580 | ) | $ | 6,764,032 | ||||||
Noncontrolling interest (a) | (450,000 | ) | (19,427 | ) | 36,690 | (432,737 | ) | ||||||||
Total investments excluding noncontrolling interest | $ | 6,254,511 | $ | 86,674 | $ | (9,890 | ) | $ | 6,331,295 |
(a) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
March 31, 2013 | December 31, 2012 | ||||||||||||
Estimated Fair Value | % of Total | Estimated Fair Value | % of Total | ||||||||||
AAA | $ | 820,687 | 14.5 | % | $ | 1,062,794 | 20.9 | % | |||||
AA | 2,338,976 | 41.2 | % | 1,862,322 | 36.6 | % | |||||||
A | 1,285,519 | 22.6 | % | 1,049,969 | 20.6 | % | |||||||
BBB | 447,761 | 7.9 | % | 374,447 | 7.4 | % | |||||||
Investment grade | 4,892,943 | 86.2 | % | 4,349,532 | 85.5 | % | |||||||
BB | 355,124 | 6.3 | % | 373,907 | 7.4 | % | |||||||
B | 397,877 | 7.0 | % | 330,416 | 6.5 | % | |||||||
CCC | 4,374 | 0.1 | % | 4,483 | 0.1 | % | |||||||
CC | 3,261 | — | % | 3,259 | 0.1 | % | |||||||
D/NR | 22,973 | 0.4 | % | 23,737 | 0.4 | % | |||||||
Non-Investment grade | 783,609 | 13.8 | % | 735,802 | 14.5 | % | |||||||
Total Fixed Maturities | $ | 5,676,552 | 100.0 | % | $ | 5,085,334 | 100.0 | % |
March 31, 2013 | December 31, 2012 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
Due in one year or less | $ | 719,492 | $ | 725,393 | $ | 526,529 | $ | 530,499 | |||||||
Due after one year through five years | 3,626,561 | 3,661,494 | 2,971,118 | 3,018,544 | |||||||||||
Due after five years through ten years | 367,885 | 373,504 | 418,377 | 424,304 | |||||||||||
Due after ten years | 3,081 | 3,063 | 3,483 | 3,993 | |||||||||||
4,717,019 | 4,763,454 | 3,919,507 | 3,977,340 | ||||||||||||
Asset-backed and mortgage-backed securities | 899,674 | 913,098 | 1,089,007 | 1,107,994 | |||||||||||
Total | $ | 5,616,693 | $ | 5,676,552 | $ | 5,008,514 | $ | 5,085,334 |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
Fixed maturities and short-term investments | $ | 27,531 | $ | 27,276 | ||||
Cash and cash equivalents | 533 | 2,317 | ||||||
Securities lending income | — | 5 | ||||||
Total gross investment income | 28,064 | 29,598 | ||||||
Investment expenses | (2,415 | ) | (1,838 | ) | ||||
Net investment income | $ | 25,649 | $ | 27,760 |
(c) | Net realized gains (losses) and change in net unrealized gains (losses) |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
Fixed maturities, short-term and other investments and cash equivalents | ||||||||
Gross realized gains | $ | 10,720 | $ | 10,008 | ||||
Gross realized (losses) | (8,999 | ) | (2,476 | ) | ||||
Net realized gains on investments | 1,721 | 7,532 | ||||||
Net unrealized gains on securities lending | — | 37 | ||||||
Change in net unrealized (losses) gains on investments | (7,237 | ) | 20,634 | |||||
Net change in unrealized (losses) gains on investments | $ | (7,237 | ) | $ | 20,671 | |||
Total net realized gains and change in net unrealized (losses) gains on investments | $ | (5,516 | ) | $ | 28,203 | |||
Noncontrolling interest (a) | 4,651 | — | ||||||
Total net realized gains and change in net unrealized (losses) gains on investments excluding noncontrolling interest | $ | (865 | ) | $ | 28,203 |
(a) | Includes change in net unrealized (losses) on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
March 31, 2013 | ||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 380,087 | 524,195 | |||||||||
$500,000 secured bi-lateral letter of credit facility | 500,000 | 89,511 | 126,146 | |||||||||
Talbot FAL Facility | 25,000 | 25,000 | 36,830 | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 258 | — | |||||||||
IPC Bi-lateral facility | 80,000 | 25,882 | 98,771 | |||||||||
$550,000 Flagstone Bi-lateral facility | 550,000 | 296,979 | 487,127 | |||||||||
$ | 2,090,000 | $ | 817,717 | $ | 1,273,069 |
December 31, 2012 | ||||||||||||
Description | Commitment | Issued and Outstanding | Investments pledged as collateral | |||||||||
$400,000 syndicated unsecured letter of credit facility | $ | 400,000 | $ | — | $ | — | ||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 376,570 | 517,210 | |||||||||
$500,000 secured bi-lateral letter of credit facility | 500,000 | 92,402 | 125,991 | |||||||||
Talbot FAL Facility | 25,000 | 25,000 | 41,372 | |||||||||
PaCRe senior secured letter of credit facility | 10,000 | 219 | — | |||||||||
IPC Bi-lateral facility | 80,000 | 40,613 | 98,593 | |||||||||
$550,000 Flagstone Bi-lateral facility | 550,000 | 381,019 | 416,414 | |||||||||
$ | 2,090,000 | $ | 915,823 | $ | 1,199,580 |
(a) | Classification within the fair value hierarchy |
• | Level 1 - Fair values are measured based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. |
• | Level 2 - Fair values are measured based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. |
• | Level 3 - Fair values are measured based on inputs that are unobservable and significant to the overall fair value measurement. The unobservable inputs reflect our own judgments about assumptions where there is little, if any, market activity for that asset or liability that market participants might use. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
U.S. government and government agency | $ | — | $ | 1,424,969 | $ | — | $ | 1,424,969 | |||||||
Non-U.S. government and government agency | — | 396,201 | — | 396,201 | |||||||||||
States, municipalities, political subdivision | — | 37,731 | — | 37,731 | |||||||||||
Agency residential mortgage-backed securities | — | 384,496 | — | 384,496 | |||||||||||
Non-agency residential mortgage-backed securities | — | 26,284 | — | 26,284 | |||||||||||
U.S. corporate | — | 1,484,178 | — | 1,484,178 | |||||||||||
Non-U.S. corporate | — | 640,992 | — | 640,992 | |||||||||||
Bank loans | — | 731,811 | — | 731,811 | |||||||||||
Catastrophe bonds | — | 47,572 | — | 47,572 | |||||||||||
Asset-backed securities | — | 502,318 | — | 502,318 | |||||||||||
Total fixed maturities | — | 5,676,552 | — | 5,676,552 | |||||||||||
Short-term investments | 332,663 | 34,956 | — | 367,619 | |||||||||||
Other investments | |||||||||||||||
Fund of hedge funds | — | — | 4,000 | 4,000 | |||||||||||
Private equity investments | — | — | 12,925 | 12,925 | |||||||||||
Hedge funds (a) | — | — | 506,768 | 506,768 | |||||||||||
Mutual funds | — | 9,093 | — | 9,093 | |||||||||||
Total other investments | — | 9,093 | 523,693 | 532,786 | |||||||||||
Total | $ | 332,663 | $ | 5,720,601 | $ | 523,693 | $ | 6,576,957 | |||||||
Noncontrolling interest (a) | — | — | (428,087 | ) | (428,087 | ) | |||||||||
Total investments excluding noncontrolling interest | $ | 332,663 | $ | 5,720,601 | $ | 95,606 | $ | 6,148,870 |
(a) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
U.S. government and government agency | $ | — | $ | 1,099,230 | $ | — | $ | 1,099,230 | |||||||
Non-U.S. government and government agency | — | 302,279 | — | 302,279 | |||||||||||
States, municipalities, political subdivision | — | 42,063 | — | 42,063 | |||||||||||
Agency residential mortgage-backed securities | — | 388,874 | — | 388,874 | |||||||||||
Non-agency residential mortgage-backed securities | — | 106,456 | — | 106,456 | |||||||||||
U.S. corporate | — | 1,210,173 | — | 1,210,173 | |||||||||||
Non-U.S. corporate | — | 593,265 | — | 593,265 | |||||||||||
Bank loans | — | 673,383 | — | 673,383 | |||||||||||
Catastrophe bonds | — | 56,947 | — | 56,947 | |||||||||||
Asset-backed securities | — | 612,664 | — | 612,664 | |||||||||||
Total fixed maturities | — | 5,085,334 | — | 5,085,334 | |||||||||||
Short-term investments | 1,063,175 | 51,075 | — | 1,114,250 | |||||||||||
Other investments | |||||||||||||||
Fund of hedge funds | — | — | 4,757 | 4,757 | |||||||||||
Private equity investments | — | — | 12,951 | 12,951 | |||||||||||
Hedge funds (a) | — | — | 538,526 | 538,526 | |||||||||||
Mutual funds | — | 8,214 | — | 8,214 | |||||||||||
Total other investments | — | 8,214 | 556,234 | 564,448 | |||||||||||
Total | $ | 1,063,175 | $ | 5,144,623 | $ | 556,234 | $ | 6,764,032 | |||||||
Noncontrolling interest (a) | (432,737 | ) | (432,737 | ) | |||||||||||
Total investments excluding noncontrolling interest | $ | 1,063,175 | $ | 5,144,623 | $ | 123,497 | $ | 6,331,295 |
(a) | Included in the Hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
Three Months Ended March 31, 2013 | ||||||||
Other Investments | Estimated Fair Value | |||||||
Level 3 investments - Beginning of period | $ | 556,234 | $ | 556,234 | ||||
Purchases | 459 | 459 | ||||||
Sales | (31,334 | ) | (31,334 | ) | ||||
Realized gains | 40 | 40 | ||||||
Unrealized (losses) | (1,706 | ) | (1,706 | ) | ||||
Level 3 investments - End of period | $ | 523,693 | $ | 523,693 | ||||
Noncontrolling interest (a) | (428,087 | ) | (428,087 | ) | ||||
Level 3 investments excluding noncontrolling interest | $ | 95,606 | $ | 95,606 |
Three Months Ended March 31, 2012 | ||||||||
Other Investments | Estimated Fair Value | |||||||
Level 3 investments - Beginning of period | $ | 8,880 | $ | 8,880 | ||||
Purchases | 1,529 | 1,529 | ||||||
Sales | (620 | ) | (620 | ) | ||||
Realized gains | 28 | 28 | ||||||
Unrealized (losses) | (1,492 | ) | (1,492 | ) | ||||
Level 3 investments - End of period | $ | 8,325 | $ | 8,325 |
(a) | Includes Level 3 investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors. |
Three Months Ended March 31, 2013 | |||||||||||||||
Investment in operating affiliate (AlphaCat Re 2011) | Investment in operating affiliate (AlphaCat Re 2012) | Investment in operating affiliate (AlphaCat 2013) | Total | ||||||||||||
As at December 31, 2012 | $ | 62,792 | $ | 29,319 | $ | 45,000 | $ | 137,111 | |||||||
Return of investment | (46,436 | ) | (3,786 | ) | — | (50,222 | ) | ||||||||
Income from operating affiliates | 449 | 1,825 | 1,100 | 3,374 | |||||||||||
As at March 31, 2013 | $ | 16,805 | $ | 27,358 | $ | 46,100 | $ | 90,263 |
Three Months Ended March 31, 2012 | |||||||
Investment in operating affiliate (AlphaCat Re 2011) | Total | ||||||
As at December 31, 2011 | $ | 53,031 | $ | 53,031 | |||
Income from operating affiliates | 3,367 | 3,367 | |||||
As at March 31, 2012 | $ | 56,398 | $ | 56,398 |
Investment in operating affiliates | |||||||||||||
Investment at cost | Voting ownership % | Equity ownership % | Carrying value | ||||||||||
AlphaCat Re 2011 | $ | 16,355 | 43.7 | % | 22.3 | % | $ | 16,805 | |||||
AlphaCat Re 2012 | 25,533 | 49.0 | % | 37.9 | % | 27,358 | |||||||
AlphaCat 2013 | 45,000 | 40.9 | % | 19.7 | % | 46,100 | |||||||
Total | $ | 86,888 | $ | 90,263 |
Three Months Ended March 31, 2013 | |||
Investment in limited partnership (Aquiline Financial Services Fund II L.P) (a) | |||
As at December 31, 2012 | $ | 15,218 | |
Capital contributions | 1,341 | ||
Income from investment affiliate | 1,477 | ||
As at March 31, 2013 | $ | 18,036 |
(a) | As at March 31, 2012, this investment was included in "Other investments" as a Level 3 investment in the fair value hierarchy. |
Investment in non-consolidated affiliate | |||||||||||||
Investment at cost | Voting ownership % | Equity Ownership | Carrying Value | ||||||||||
Aquiline Financial Services Fund II L.P | $ | 18,959 | — | % | 6.7 | % | $ | 18,036 |
Three Months Ended March 31, 2013 | |||||||||||
PaCRe | AlphaCat ILS Funds | Total | |||||||||
As at December 31, 2012 | $ | 434,280 | $ | — | $ | 434,280 | |||||
Purchase of shares by noncontrolling interest | — | 55,690 | 55,690 | ||||||||
Net (loss) income attributable to noncontrolling interest | (3,135 | ) | 586 | (2,549 | ) | ||||||
As at March 31, 2013 | $ | 431,145 | $ | 56,276 | $ | 487,421 |
Asset derivatives | Liability derivatives | |||||||||||||||
Derivatives not designated as hedging instruments: | Notional amount | Balance Sheet location | Fair value | Balance Sheet location | Fair value | |||||||||||
Foreign currency forward contracts | $ | 147,398 | Other assets | $ | 266 | Accounts payable and accrued expenses | $ | 2,646 |
Asset derivatives | Liability derivatives | |||||||||||||||
Derivatives designated as hedging instruments: | Notional amount | Balance Sheet location | Fair value | Balance Sheet location | Fair value | |||||||||||
Foreign currency forward contracts | $ | 55,450 | Other assets | $ | 701 | Accounts payable and accrued expenses | $ | — | ||||||||
Interest rate swap contracts | $ | 452,263 | Other assets | $ | — | Accounts payable and accrued expenses | $ | 447 |
Asset derivatives | Liability derivatives | |||||||||||||||
Derivatives not designated as hedging instruments: | Notional amount | Balance Sheet location | Fair value | Balance Sheet location | Fair value | |||||||||||
Currency swaps | $ | 17,153 | Other assets | $ | — | Accounts payable and accrued expenses | $ | 772 | ||||||||
Foreign currency forward contracts | $ | 310,541 | Other assets | $ | — | Accounts payable and accrued expenses | $ | 394 |
Asset derivatives | Liability derivatives | |||||||||||||||
Derivatives designated as hedging instruments: | Notional amount | Balance Sheet location | Fair value | Balance Sheet location | Fair value | |||||||||||
Foreign currency forward contracts | $ | 35,976 | Other assets | $ | — | Accounts payable and accrued expenses | $ | 223 | ||||||||
Interest rate swap contracts | $ | 289,800 | Other assets | $ | — | Accounts payable and accrued expenses | $ | 220 |
(a) | Classification within the fair value hierarchy |
(b) | Derivative instruments designated as a fair value hedge |
Three Months Ended March 31, 2013 | ||||||||||||||
Derivatives designated as fair value hedges and related hedged item: | Location of gain (loss) recognized in income | Amount of gain (loss) recognized in income on derivative | Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | Amount of gain (loss) recognized in income on derivative (ineffective portion) | ||||||||||
Foreign currency forward contracts | Foreign exchange gains (losses) | $ | 1,261 | $ | (1,261 | ) | $ | — | ||||||
Three Months Ended March 31, 2012 | ||||||||||||||
Derivatives designated as fair value hedges and related hedged item: | Location of gain (loss) recognized in income | Amount of gain (loss) recognized in income on derivative | Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | Amount of gain (loss) recognized in income on derivative (ineffective portion) | ||||||||||
Foreign currency forward contracts | Foreign exchange gains (losses) | $ | (3,319 | ) | $ | 3,319 | $ | — | ||||||
Three Months Ended March 31, 2013 | ||||||||||||||||
Derivatives designated as cash flow hedges and related hedged item: | Location of the effective portion recognized in other comprehensive (loss) recognized in income | Location of the effective portion subsequently reclassified to earnings and the ineffective portion excluded from effectiveness testing | Amount of effective portion recognized in other comprehensive income | Amount of effective portion subsequently reclassified to earnings | Amount of ineffective portion excluded from effectiveness testing | |||||||||||
Interest rate swap contracts | Other comprehensive income | Finance expenses | $ | 1,608 | $ | (1,608 | ) | $ | — | |||||||
Three Months Ended | |||||||
March 31, 2013 | March 31, 2012 | ||||||
Reserve for losses and loss expenses, beginning of period | $ | 3,517,573 | $ | 2,631,143 | |||
Losses and loss expenses recoverable | (439,967 | ) | (372,485 | ) | |||
Net reserves for losses and loss expenses, beginning of period | 3,077,606 | 2,258,658 | |||||
Increase (decrease) in net losses and loss expenses incurred in respect of losses occurring in: | |||||||
Current year | 210,569 | 262,413 | |||||
Prior years | (65,798 | ) | (30,424 | ) | |||
Total incurred losses and loss expenses | 144,771 | 231,989 | |||||
Total net paid losses | (260,112 | ) | (204,223 | ) | |||
Foreign exchange | (33,826 | ) | 11,894 | ||||
Net reserve for losses and loss expenses, end of period | 2,928,439 | 2,298,318 | |||||
Losses and loss expenses recoverable | 429,252 | 351,292 | |||||
Reserve for losses and loss expenses, end of period | $ | 3,357,691 | $ | 2,649,610 |
March 31, 2013 | December 31, 2012 | ||||||||||||
Reinsurance Recoverable | % of Total | Reinsurance Recoverable | % of Total | ||||||||||
Top 10 reinsurers | $ | 339,061 | 76.2 | % | $ | 360,234 | 74.1 | % | |||||
Other reinsurers’ balances > $1 million | 97,409 | 21.9 | % | 115,262 | 23.7 | % | |||||||
Other reinsurers’ balances < $1 million | 8,613 | 1.9 | % | 10,906 | 2.2 | % | |||||||
Total | $ | 445,083 | 100.0 | % | $ | 486,402 | 100.0 | % |
March 31, 2013 | |||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | ||||||
Lloyd’s Syndicates | A+ | $ | 69,769 | 20.6 | % | ||||
National Indemnity | AA+ | 64,667 | 19.1 | % | |||||
Everest Re | A+ | 52,863 | 15.6 | % | |||||
Hannover Re | AA- | 42,431 | 12.5 | % | |||||
Fully Collateralized | NR | 29,906 | 8.8 | % | |||||
Transatlantic Re | A+ | 20,584 | 6.1 | % | |||||
Swiss Re | AA- | 17,574 | 5.2 | % | |||||
XL Re | A | 15,350 | 4.5 | % | |||||
Tokio Millennium | AA+ | 13,439 | 4.0 | % | |||||
Munich Re | AA- | 12,478 | 3.6 | % | |||||
Total | $ | 339,061 | 100.0 | % |
December 31, 2012 | |||||||||
Top 10 Reinsurers | Rating | Reinsurance Recoverable | % of Total | ||||||
Lloyd’s Syndicates | A+ | $ | 71,469 | 19.9 | % | ||||
National Indemnity | AA+ | 59,941 | 16.6 | % | |||||
Everest Re | A+ | 51,340 | 14.3 | % | |||||
Fully Collateralized | NR | 47,445 | 13.2 | % | |||||
Hannover Re | AA- | 40,552 | 11.3 | % | |||||
Munich Re | AA- | 20,954 | 5.8 | % | |||||
Transatlantic Re | A+ | 20,320 | 5.6 | % | |||||
Swiss Re | AA- | 16,992 | 4.7 | % | |||||
Allianz | AA- | 16,367 | 4.5 | % | |||||
XL Re | A | 14,854 | 4.1 | % | |||||
Total | $ | 360,234 | 100.0 | % |
(a) | Authorized and issued |
Common Shares | ||
Common shares issued, December 31, 2012 | 152,698,191 | |
Restricted share awards vested, net of shares withheld | 130,637 | |
Restricted share units vested, net of shares withheld | 3,796 | |
Options exercised | 128,020 | |
Direct issuance of common stock | 183 | |
Deferred share units vested, net of shares withheld | 2,935 | |
Common shares issued, March 31, 2013 | 152,963,762 | |
Shares repurchased, March 31, 2013 | (46,681,321 | ) |
Common shares outstanding, March 31, 2013 | 106,282,441 |
Common Shares | ||
Common shares issued, December 31, 2011 | 134,503,065 | |
Restricted share awards vested, net of shares withheld | 229,688 | |
Restricted share units vested, net of shares withheld | 5,101 | |
Options exercised | 7,149 | |
Common shares issued, March 31, 2012 | 134,745,003 | |
Shares repurchased, March 31, 2012 | (35,404,545 | ) |
Common shares outstanding, March 31, 2012 | 99,340,458 |
(b) | Warrants |
(c) | Deferred share units |
(d) | Dividends |
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | ||||||||
Options outstanding, December 31, 2012 | 1,823,947 | $ | 6.52 | $ | 20.69 | |||||
Options regranted (repriced) | 1,833,414 | 6.76 | 19.02 | |||||||
Options granted | — | — | — | |||||||
Options exercised | (128,020 | ) | 3.40 | 28.98 | ||||||
Options cancelled (repriced) | (1,733,139 | ) | 6.76 | 20.12 | ||||||
Options forfeited | — | — | — | |||||||
Options outstanding, March 31, 2013 | 1,796,202 | $ | 6.75 | $ | 18.95 | |||||
Options exercisable, March 31, 2013 | 1,796,202 | $ | 6.75 | $ | 18.95 |
Options | Weighted Average Grant Date Fair Value | Weighted Average Grant Date Exercise Price | ||||||||
Options outstanding, December 31, 2011 | 2,263,012 | $ | 6.69 | $ | 20.12 | |||||
Options granted | — | — | — | |||||||
Options exercised | (7,149 | ) | 6.90 | 24.69 | ||||||
Options forfeited | — | — | — | |||||||
Options outstanding, March 31, 2012 | 2,255,863 | $ | 6.69 | $ | 20.10 | |||||
Options exercisable, March 31, 2012 | 2,227,043 | $ | 6.64 | $ | 20.08 |
Restricted Share Awards | Weighted Average Grant Date Fair Value | |||||
Restricted share awards outstanding, December 31, 2012 | 2,170,547 | $ | 29.24 | |||
Restricted share awards granted | 22,005 | 35.63 | ||||
Restricted share awards vested | (148,304 | ) | 25.97 | |||
Restricted share awards forfeited | (93,993 | ) | 28.42 | |||
Restricted share awards outstanding, March 31, 2013 | 1,950,255 | $ | 29.60 |
Restricted Share Awards | Weighted Average Grant Date Fair Value | |||||
Restricted share awards outstanding, December 31, 2011 | 3,003,547 | $ | 25.77 | |||
Restricted share awards granted | 4,500 | 30.49 | ||||
Restricted share awards vested | (259,017 | ) | 25.52 | |||
Restricted share awards forfeited | (20,371 | ) | 27.96 | |||
Restricted share awards outstanding, March 31, 2012 | 2,728,659 | $ | 25.78 |
Restricted Share Units | Weighted Average Grant Date Fair Value | |||||
Restricted share units outstanding, December 31, 2012 | 47,238 | $ | 29.61 | |||
Restricted share units vested | (5,468 | ) | 25.27 | |||
Restricted share units issued in lieu of cash dividends | 3,020 | 29.69 | ||||
Restricted share units outstanding, March 31, 2013 | 44,790 | $ | 30.15 |
Restricted Share Units | Weighted Average Grant Date Fair Value | |||||
Restricted share units outstanding, December 31, 2011 | 53,312 | $ | 27.60 | |||
Restricted share units vested | (7,314 | ) | 24.27 | |||
Restricted share units issued in lieu of cash dividends | 408 | 27.90 | ||||
Restricted share units outstanding, March 31, 2012 | 46,406 | $ | 28.13 |
Performance Share Awards | Weighted Average Grant Date Fair Value | |||||
Performance share awards outstanding, December 31, 2012 | 220,845 | $ | 31.81 | |||
Performance share awards forfeited | (128,667 | ) | 32.41 | |||
Performance share awards outstanding, March 31, 2013 | 92,178 | $ | 30.99 |
Performance Share Awards | Weighted Average Grant Date Fair Value | |||||
Performance share awards outstanding, December 31, 2011 | 279,019 | $ | 30.77 | |||
Performance share awards forfeited | (99,302 | ) | 28.70 | |||
Performance share awards outstanding, March 31, 2012 | 179,717 | $ | 31.91 |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
Options | $ | — | $ | 135 | ||||
Restricted share awards | 4,061 | 5,940 | ||||||
Restricted share units | 121 | 120 | ||||||
Performance share awards | (1,864 | ) | (757 | ) | ||||
Total | $ | 2,318 | $ | 5,438 |
(a) | Financing structure and finance expenses |
Commitment | Outstanding (a) | Drawn | |||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | |||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | ||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,117 | ||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | ||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 380,087 | — | ||||||||
$500,000 bi-lateral secured letter of credit facility | 500,000 | 89,511 | — | ||||||||
Talbot FAL Facility (b) | 25,000 | 25,000 | — | ||||||||
PaCRe senior secured letter of credit facility | 10,000 | 258 | — | ||||||||
IPC Bi-Lateral Facility | 80,000 | 25,882 | — | ||||||||
$550,000 Flagstone Bi-Lateral Facility | 550,000 | 296,979 | — | ||||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | 136,662 | 136,662 | 136,662 | ||||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | 113,750 | 113,750 | 113,750 | ||||||||
Total | $ | 2,940,412 | $ | 1,607,929 | $ | 787,329 |
Commitment | Outstanding (a) | Drawn | |||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | $ | 150,000 | |||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | 139,800 | ||||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | 247,090 | ||||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | — | ||||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 376,570 | — | ||||||||
$500,000 secured letter of credit facility | 500,000 | 92,402 | — | ||||||||
Talbot FAL Facility (b) | 25,000 | 25,000 | — | ||||||||
PaCRe senior secured letter of credit facility | 10,000 | 219 | — | ||||||||
IPC Bi-Lateral Facility | 80,000 | 40,613 | — | ||||||||
$550,000 Flagstone Bi-Lateral Facility | 550,000 | 381,019 | — | ||||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | 137,159 | 137,159 | 137,159 | ||||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | 113,750 | 113,750 | 113,750 | ||||||||
Total | $ | 2,940,909 | $ | 1,706,532 | $ | 787,799 |
(a) | Indicates utilization of commitment amount, not drawn borrowings. |
(b) | Talbot operates in the Lloyd’s market ("Lloyds") through a corporate member, Talbot 2002 Underwriting Capital Ltd (“T02”), which is the sole participant in Syndicate 1183. Lloyd’s sets T02’s required capital annually based on Syndicate 1183’s business plan, rating environment, reserving environment together with input arising from Lloyd’s discussions with, inter alia, regulatory and rating agencies. Such capital, called Funds at Lloyd’s (“FAL”), comprises: cash, investments and undrawn letters of credit provided by various banks. |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
2006 Junior Subordinated Deferrable Debentures | $ | 2,187 | $ | 1,549 | ||||
2007 Junior Subordinated Deferrable Debentures | 1,809 | 3,029 | ||||||
2010 Senior Notes due 2040 | 5,597 | 5,597 | ||||||
AlphaCat Variable Funding Notes (a) | 11,191 | — | ||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | 1,472 | — | ||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | 1,072 | — | ||||||
Credit facilities | 954 | 6,016 | ||||||
Bank charges | 133 | 57 | ||||||
Talbot FAL Facility | 31 | 31 | ||||||
Total | $ | 24,446 | $ | 16,279 |
(a) | Refer to Note 13: "AlphaCat variable funding notes" for further details. |
(b) | $250,000 2010 Senior Notes due 2040 |
2013 | $ | — | |
2014 | — | ||
2015 | — | ||
2016 | — | ||
2017 and thereafter | 250,000 | ||
Total minimum future payments | $ | 250,000 |
(c) | Junior subordinated deferrable debentures and Junior subordinated deferrable interest notes |
2013 | $ | — | |
2014 | — | ||
2015 | — | ||
2016 | — | ||
2017 and thereafter | 540,709 | ||
Total minimum future payments | $ | 540,709 |
(d) | Credit facilities |
(i) | $400,000 syndicated unsecured letter of credit facility and $525,000 syndicated secured letter of credit facility |
(ii) | Talbot FAL Facility |
(iii) | IPC Syndicated Facility and IPC Bi-Lateral Facility |
March 31, 2013 | |||
AlphaCat 2013 | $ | 161,439 | |
AlphaCat ILS Funds | 129,149 | ||
Total | $ | 290,588 |
(a) | Concentrations of credit risk |
(b) | Funds at Lloyd's |
(c) | Lloyd's Central Fund |
Three Months Ended | ||||||||
March 31, 2013 | March 31, 2012 | |||||||
Basic earnings per share | ||||||||
Net income | $ | 220,694 | $ | 124,234 | ||||
Loss attributable to noncontrolling interest | 2,549 | — | ||||||
Net income available to Validus | 223,243 | 124,234 | ||||||
Less: Dividends and distributions declared on outstanding warrants | (14,464 | ) | (1,729 | ) | ||||
Income available to common shareholders | $ | 208,779 | $ | 122,505 | ||||
Weighted average number of common shares outstanding | 107,386,438 | 99,425,140 | ||||||
Basic earnings per share available to common shareholders | $ | 1.94 | $ | 1.23 | ||||
Diluted earnings per share | ||||||||
Net income | $ | 220,694 | $ | 124,234 | ||||
Loss attributable to noncontrolling interest | 2,549 | — | ||||||
Net income available to Validus | 223,243 | 124,234 | ||||||
Less: Dividends and distributions declared on outstanding warrants | (14,464 | ) | — | |||||
Income available to common shareholders | $ | 208,779 | $ | 124,234 | ||||
Weighted average number of common shares outstanding | 107,386,438 | 99,425,140 | ||||||
Share equivalents: | ||||||||
Warrants | — | 3,022,971 | ||||||
Stock options | 1,631,556 | 813,863 | ||||||
Unvested restricted shares | 1,035,005 | 1,834,116 | ||||||
Weighted average number of diluted common shares outstanding | 110,052,999 | 105,096,090 | ||||||
Diluted earnings per share available to common shareholders | $ | 1.90 | $ | 1.18 |
Three Months Ended March 31, 2013 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & Eliminations | Total | |||||||||||||||
Underwriting income | ||||||||||||||||||||
Gross premiums written | $ | 747,963 | $ | 96,516 | $ | 293,530 | $ | (33,249 | ) | $ | 1,104,760 | |||||||||
Reinsurance premiums ceded | (125,728 | ) | — | (94,737 | ) | 33,249 | (187,216 | ) | ||||||||||||
Net premiums written | 622,235 | 96,516 | 198,793 | — | 917,544 | |||||||||||||||
Change in unearned premiums | (319,101 | ) | (68,899 | ) | 1,517 | — | (386,483 | ) | ||||||||||||
Net premiums earned | 303,134 | 27,617 | 200,310 | — | 531,061 | |||||||||||||||
Underwriting deductions | ||||||||||||||||||||
Losses and loss expenses | 73,402 | — | 71,369 | — | 144,771 | |||||||||||||||
Policy acquisition costs | 51,744 | 2,638 | 40,526 | (1,297 | ) | 93,611 | ||||||||||||||
General and administrative expenses | 29,441 | 4,037 | 30,912 | 15,889 | 80,279 | |||||||||||||||
Share compensation expenses | 1,413 | 77 | 1,405 | (577 | ) | 2,318 | ||||||||||||||
Total underwriting deductions | 156,000 | 6,752 | 144,212 | 14,015 | 320,979 | |||||||||||||||
Underwriting income (loss) | $ | 147,134 | $ | 20,865 | $ | 56,098 | $ | (14,015 | ) | $ | 210,082 | |||||||||
Net investment income | 23,193 | 881 | 4,718 | (3,143 | ) | 25,649 | ||||||||||||||
Other income | 13,490 | 6,633 | — | (17,438 | ) | 2,685 | ||||||||||||||
Finance expenses | (3,252 | ) | (11,325 | ) | (74 | ) | (9,795 | ) | (24,446 | ) | ||||||||||
Operating income (loss) before taxes and income from operating affiliates | 180,565 | 17,054 | 60,742 | (44,391 | ) | 213,970 | ||||||||||||||
Tax benefit (expense) | 1,757 | — | (1,054 | ) | (385 | ) | 318 | |||||||||||||
Income from operating affiliates | — | 3,523 | — | — | 3,523 | |||||||||||||||
Net operating income (loss) | $ | 182,322 | $ | 20,577 | $ | 59,688 | $ | (44,776 | ) | $ | 217,811 | |||||||||
Net realized gains on investments | 1,593 | — | 128 | — | 1,721 | |||||||||||||||
Net unrealized (losses) on investments | (2,193 | ) | (4,788 | ) | (256 | ) | — | (7,237 | ) | |||||||||||
Income from investment affiliate | 1,477 | — | — | — | 1,477 | |||||||||||||||
Foreign exchange gains (losses) | 11,162 | (1,187 | ) | (3,918 | ) | 865 | 6,922 | |||||||||||||
Net income (loss) | $ | 194,361 | $ | 14,602 | $ | 55,642 | $ | (43,911 | ) | $ | 220,694 | |||||||||
Net loss attributable to noncontrolling interest | — | 2,549 | — | — | 2,549 | |||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 194,361 | $ | 17,151 | $ | 55,642 | $ | (43,911 | ) | $ | 223,243 | |||||||||
Selected ratios (a): | ||||||||||||||||||||
Net premiums written / Gross premiums written | 83.2 | % | 100.0 | % | 67.7 | % | 83.1 | % | ||||||||||||
Losses and loss expenses | 24.2 | % | 0.0 | % | 35.6 | % | 27.3 | % | ||||||||||||
Policy acquisition costs | 17.1 | % | 9.6 | % | 20.2 | % | 17.6 | % | ||||||||||||
General and administrative expenses (b) | 10.2 | % | 14.9 | % | 16.1 | % | 15.6 | % | ||||||||||||
Expense ratio | 27.3 | % | 24.5 | % | 36.3 | % | 33.2 | % | ||||||||||||
Combined ratio | 51.5 | % | 24.5 | % | 71.9 | % | 60.5 | % | ||||||||||||
Total assets | $ | 6,299,481 | $ | 1,189,190 | $ | 3,043,312 | $ | 32,417 | $ | 10,564,400 |
(a) | Ratios are based on net premiums earned. |
(b) | The general and administrative expense ratio includes share compensation expenses. |
Three Months Ended March 31, 2012 | Validus Re Segment | AlphaCat Segment | Talbot Segment | Corporate & Eliminations | Total | |||||||||||||||
Underwriting income | ||||||||||||||||||||
Gross premiums written | $ | 566,866 | $ | 3,518 | $ | 293,253 | $ | (26,348 | ) | $ | 837,289 | |||||||||
Reinsurance premiums ceded | (30,001 | ) | — | (103,399 | ) | 26,348 | (107,052 | ) | ||||||||||||
Net premiums written | 536,865 | 3,518 | 189,854 | — | 730,237 | |||||||||||||||
Change in unearned premiums | (283,856 | ) | (855 | ) | 5,673 | — | (279,038 | ) | ||||||||||||
Net premiums earned | 253,009 | 2,663 | 195,527 | — | 451,199 | |||||||||||||||
Underwriting deductions | ||||||||||||||||||||
Losses and loss expenses | 124,206 | — | 107,783 | — | 231,989 | |||||||||||||||
Policy acquisition costs | 38,790 | 256 | 38,738 | 348 | 78,132 | |||||||||||||||
General and administrative expenses | 17,252 | 1,032 | 33,348 | 14,743 | 66,375 | |||||||||||||||
Share compensation expenses | 1,872 | 52 | 1,348 | 2,166 | 5,438 | |||||||||||||||
Total underwriting deductions | 182,120 | 1,340 | 181,217 | 17,257 | 381,934 | |||||||||||||||
Underwriting income (loss) | $ | 70,889 | $ | 1,323 | $ | 14,310 | $ | (17,257 | ) | $ | 69,265 | |||||||||
Net investment income | 23,577 | 659 | 5,790 | (2,266 | ) | 27,760 | ||||||||||||||
Other income | 2,219 | 7,974 | 1,026 | (2,328 | ) | 8,891 | ||||||||||||||
Finance expenses | (3,694 | ) | (2 | ) | (31 | ) | (12,552 | ) | (16,279 | ) | ||||||||||
Operating income (loss) before taxes and income from operating affiliates | 92,991 | 9,954 | 21,095 | (34,403 | ) | 89,637 | ||||||||||||||
Tax (expense) | (7 | ) | — | (132 | ) | — | (139 | ) | ||||||||||||
Income from operating affiliates | — | 3,367 | — | — | 3,367 | |||||||||||||||
Net operating income (loss) | $ | 92,984 | $ | 13,321 | $ | 20,963 | $ | (34,403 | ) | $ | 92,865 | |||||||||
Net realized gains on investments | 6,242 | — | 1,290 | — | 7,532 | |||||||||||||||
Net unrealized gains (losses) on investments | 19,865 | (597 | ) | 1,403 | — | 20,671 | ||||||||||||||
Foreign exchange (losses) gains | (262 | ) | (9 | ) | 3,623 | (186 | ) | 3,166 | ||||||||||||
Net income (loss) | $ | 118,829 | $ | 12,715 | $ | 27,279 | $ | (34,589 | ) | $ | 124,234 | |||||||||
Net (income) attributable to noncontrolling interest | — | — | — | — | — | |||||||||||||||
Net income (loss) available (attributable) to Validus | $ | 118,829 | $ | 12,715 | $ | 27,279 | $ | (34,589 | ) | $ | 124,234 | |||||||||
Selected ratios (a): | ||||||||||||||||||||
Net premiums written / Gross premiums written | 94.7 | % | 100.0 | % | 64.7 | % | 87.2 | % | ||||||||||||
Losses and loss expenses | 49.1 | % | 0.0 | % | 55.1 | % | 51.4 | % | ||||||||||||
Policy acquisition costs | 15.3 | % | 9.6 | % | 19.8 | % | 17.3 | % | ||||||||||||
General and administrative expenses (b) | 7.6 | % | 40.7 | % | 17.7 | % | 15.9 | % | ||||||||||||
Expense ratio | 22.9 | % | 50.3 | % | 37.5 | % | 33.2 | % | ||||||||||||
Combined ratio | 72.0 | % | 50.3 | % | 92.6 | % | 84.6 | % | ||||||||||||
Total assets | $ | 4,940,727 | $ | 237,528 | $ | 2,929,817 | $ | 13,797 | $ | 8,121,869 |
(a) | Ratios are based on net premiums earned. |
(b) | The general and administrative expense ratio includes share compensation expenses. |
Three Months Ended March 31, 2013 | ||||||||||||||||||||||
Gross Premiums Written | ||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | |||||||||||||||||
United States | $ | 236,496 | $ | 17,489 | $ | 20,541 | $ | (6,864 | ) | $ | 267,662 | 24.2 | % | |||||||||
Worldwide excluding United States (a) | 50,308 | 14,689 | 39,458 | (4,508 | ) | 99,947 | 9.0 | % | ||||||||||||||
Australia and New Zealand | 25,026 | 2,183 | 3,005 | (230 | ) | 29,984 | 2.7 | % | ||||||||||||||
Europe | 40,870 | 1,964 | 18,311 | (2,848 | ) | 58,297 | 5.3 | % | ||||||||||||||
Latin America and Caribbean | 8,418 | — | 42,000 | (3,218 | ) | 47,200 | 4.3 | % | ||||||||||||||
Japan | 737 | — | 654 | (50 | ) | 1,341 | 0.1 | % | ||||||||||||||
Canada | 2,642 | 318 | 2,706 | (525 | ) | 5,141 | 0.5 | % | ||||||||||||||
Rest of the world (b) | 19,079 | — | 18,314 | (1,403 | ) | 35,990 | 3.3 | % | ||||||||||||||
Sub-total, non United States | 147,080 | 19,154 | 124,448 | (12,782 | ) | 277,900 | 25.2 | % | ||||||||||||||
Worldwide including United States (a) | 100,540 | 59,873 | 19,156 | (3,689 | ) | 175,880 | 15.9 | % | ||||||||||||||
Other location non-specific (c) | 263,847 | — | 129,385 | (9,914 | ) | 383,318 | 34.7 | % | ||||||||||||||
Total | $ | 747,963 | $ | 96,516 | $ | 293,530 | $ | (33,249 | ) | $ | 1,104,760 | 100.0 | % |
Three Months Ended March 31, 2012 | ||||||||||||||||||||||
Gross Premiums Written | ||||||||||||||||||||||
Validus Re | AlphaCat | Talbot | Eliminations | Total | % | |||||||||||||||||
United States | $ | 106,936 | $ | 1,326 | $ | 18,426 | $ | (1,656 | ) | $ | 125,032 | 14.9 | % | |||||||||
Worldwide excluding United States (a) | 37,116 | 279 | 51,317 | (4,611 | ) | 84,101 | 10.0 | % | ||||||||||||||
Australia and New Zealand | 24,785 | — | 3,534 | (316 | ) | 28,003 | 3.3 | % | ||||||||||||||
Europe | 45,274 | 338 | 15,247 | (1,370 | ) | 59,489 | 7.1 | % | ||||||||||||||
Latin America and Caribbean | 3,789 | — | 40,570 | (3,645 | ) | 40,714 | 4.9 | % | ||||||||||||||
Japan | (1,311 | ) | — | 660 | (59 | ) | (710 | ) | (0.1 | )% | ||||||||||||
Canada | 2,430 | — | 3,522 | (318 | ) | 5,634 | 0.7 | % | ||||||||||||||
Rest of the world (b) | 17,397 | — | 20,482 | (1,840 | ) | 36,039 | 4.3 | % | ||||||||||||||
Sub-total, non United States | 129,480 | 617 | 135,332 | (12,159 | ) | 253,270 | 30.2 | % | ||||||||||||||
Worldwide including United States (a) | 103,575 | 1,575 | 14,797 | (1,329 | ) | 118,618 | 14.2 | % | ||||||||||||||
Other location non-specific (c) | 226,875 | — | 124,698 | (11,204 | ) | 340,369 | 40.7 | % | ||||||||||||||
Total | $ | 566,866 | $ | 3,518 | $ | 293,253 | $ | (26,348 | ) | $ | 837,289 | 100.0 | % |
(a) | Represents risks in two or more geographic zones. |
(b) | Represents risks in one geographic zone. |
(c) | The Other location non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable such as marine and aerospace risks and can span multiple geographic areas and are not fixed locations in some instances. |
(a) | Quarterly Dividend |
(b) | Longhorn Re Acquisition |
Three Months Ended March 31, | Year Ended December 31, | |||||||
2013 | 2012 | 2012 | ||||||
Annualized return on average equity | 22.5 | % | 14.2 | % | 11.3 | % |
• | Reserve for losses and loss expenses; |
• | Premiums; |
• | Reinsurance premiums ceded and reinsurance recoverable; and |
• | Investment valuation. |
Three Months Ended March 31, | ||||||||
(Dollars in thousands) | 2013 | 2012 (a) | ||||||
Underwriting income | ||||||||
Gross premiums written | $ | 1,104,760 | $ | 837,289 | ||||
Reinsurance premiums ceded | (187,216 | ) | (107,052 | ) | ||||
Net premiums written | 917,544 | 730,237 | ||||||
Change in unearned premiums | (386,483 | ) | (279,038 | ) | ||||
Net premiums earned | 531,061 | 451,199 | ||||||
Underwriting deductions | ||||||||
Losses and loss expenses | 144,771 | 231,989 | ||||||
Policy acquisition costs | 93,611 | 78,132 | ||||||
General and administrative expenses | 80,279 | 66,375 | ||||||
Share compensation expenses | 2,318 | 5,438 | ||||||
Total underwriting deductions | 320,979 | 381,934 | ||||||
Underwriting income (b) | 210,082 | 69,265 | ||||||
Net investment income | 25,649 | 27,760 | ||||||
Other income | 2,685 | 8,891 | ||||||
Finance expenses | (24,446 | ) | (16,279 | ) | ||||
Operating income before taxes and income from operating affiliates (b) | 213,970 | 89,637 | ||||||
Tax benefit (expense) | 318 | (139 | ) | |||||
Income from operating affiliates | 3,523 | 3,367 | ||||||
Net operating income (b) | 217,811 | 92,865 | ||||||
Net realized gains on investments | 1,721 | 7,532 | ||||||
Net unrealized (losses) gains on investments | (7,237 | ) | 20,671 | |||||
Income from investment affiliate | 1,477 | — | ||||||
Foreign exchange gains | 6,922 | 3,166 | ||||||
Net income | 220,694 | 124,234 | ||||||
Net loss attributable to noncontrolling interest | 2,549 | — | ||||||
Net income available to Validus | $ | 223,243 | $ | 124,234 | ||||
Selected ratios: | ||||||||
Net premiums written / Gross premiums written | 83.1 | % | 87.2 | % | ||||
Losses and loss expenses | 27.3 | % | 51.4 | % | ||||
Policy acquisition costs | 17.6 | % | 17.3 | % | ||||
General and administrative expenses (c) | 15.6 | % | 15.9 | % | ||||
Expense ratio | 33.2 | % | 33.2 | % | ||||
Combined ratio | 60.5 | % | 84.6 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | |||||||
2013 | 2012 (a) | ||||||
Validus Re | |||||||
Gross premiums written | $ | 747,963 | $ | 566,866 | |||
Reinsurance premiums ceded | (125,728 | ) | (30,001 | ) | |||
Net premiums written | 622,235 | 536,865 | |||||
Change in unearned premiums | (319,101 | ) | (283,856 | ) | |||
Net premiums earned | 303,134 | 253,009 | |||||
Losses and loss expenses | 73,402 | 124,206 | |||||
Policy acquisition costs | 51,744 | 38,790 | |||||
General and administrative expenses | 29,441 | 17,252 | |||||
Share compensation expenses | 1,413 | 1,872 | |||||
Total underwriting deductions | 156,000 | 182,120 | |||||
Underwriting income (b) | $ | 147,134 | $ | 70,889 | |||
AlphaCat | |||||||
Gross premiums written | $ | 96,516 | $ | 3,518 | |||
Reinsurance premiums ceded | — | — | |||||
Net premiums written | 96,516 | 3,518 | |||||
Change in unearned premiums | (68,899 | ) | (855 | ) | |||
Net premiums earned | 27,617 | 2,663 | |||||
Policy acquisition costs | 2,638 | 256 | |||||
General and administrative expenses | 4,037 | 1,032 | |||||
Share compensation expenses | 77 | 52 | |||||
Total underwriting deductions | 6,752 | 1,340 | |||||
Underwriting income (b) | $ | 20,865 | $ | 1,323 | |||
Talbot | |||||||
Gross premiums written | $ | 293,530 | $ | 293,253 | |||
Reinsurance premiums ceded | (94,737 | ) | (103,399 | ) | |||
Net premiums written | 198,793 | 189,854 | |||||
Change in unearned premiums | 1,517 | 5,673 | |||||
Net premiums earned | 200,310 | 195,527 | |||||
Losses and loss expenses | 71,369 | 107,783 | |||||
Policy acquisition costs | 40,526 | 38,738 | |||||
General and administrative expenses | 30,912 | 33,348 | |||||
Share compensation expenses | 1,405 | 1,348 | |||||
Total underwriting deductions | 144,212 | 181,217 | |||||
Underwriting income (b) | $ | 56,098 | $ | 14,310 | |||
Corporate & Eliminations | |||||||
Gross premiums written | $ | (33,249 | ) | $ | (26,348 | ) | |
Reinsurance premiums ceded | 33,249 | 26,348 | |||||
Net premiums written | — | — | |||||
Policy acquisition costs | (1,297 | ) | 348 | ||||
General and administrative expenses | 15,889 | 14,743 | |||||
Share compensation expenses | (577 | ) | 2,166 | ||||
Total underwriting deductions | 14,015 | 17,257 | |||||
Underwriting (loss) (b) | $ | (14,015 | ) | $ | (17,257 | ) | |
Total underwriting income (b) | $ | 210,082 | $ | 69,265 |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
b) | Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income that is 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 this measure to net income, the most comparable U.S. GAAP financial measure, is presented in the section below entitled "Underwriting Income." |
• | Increase in underwriting income of $140.8 million primarily due to: |
• | An increase in net premiums earned of $79.9 million; |
• | A decrease in underwriting deductions of $61.0 million due primarily to a decrease in losses and loss expenses of $87.2 million, partially offset by an increase in policy acquisition costs of $15.5 million; and |
• | A favorable movement in foreign exchange gains of $3.8 million. |
• | An unfavorable movement of $27.9 million in net unrealized gains (losses) on investments, of which $4.7 million is attributable to noncontrolling interest; and |
• | An increase in finance expenses of $8.2 million. |
Three Months Ended March 31, 2013 | ||||||||||||||||||||
Increase (Decrease) Over the Three Months Ended March 31, 2012 | ||||||||||||||||||||
(Dollars in thousands) | Validus Re | AlphaCat | Talbot | Corporate and Eliminations | Total | |||||||||||||||
Notable losses - decrease in net loss and loss expenses (a) | $ | 85,497 | $ | — | $ | 13,413 | — | $ | 98,910 | |||||||||||
Less: Notable losses - (decrease) increase in net reinstatement premiums (a) | (17,796 | ) | — | 3,424 | — | (14,372 | ) | |||||||||||||
Other underwriting income | 8,544 | 19,542 | 24,951 | 3,242 | 56,279 | |||||||||||||||
Underwriting income (b) | 76,245 | 19,542 | 41,788 | 3,242 | 140,817 | |||||||||||||||
Net investment income | (384 | ) | 222 | (1,072 | ) | (877 | ) | (2,111 | ) | |||||||||||
Other income | 11,271 | (1,341 | ) | (1,026 | ) | (15,110 | ) | (6,206 | ) | |||||||||||
Finance expenses | 442 | (11,323 | ) | (43 | ) | 2,757 | (8,167 | ) | ||||||||||||
Operating income (loss) before taxes and income from operating affiliates | 87,574 | 7,100 | 39,647 | (9,988 | ) | 124,333 | ||||||||||||||
Tax benefit (expense) | 1,764 | — | (922 | ) | (385 | ) | 457 | |||||||||||||
Income from operating affiliates | — | 156 | — | — | 156 | |||||||||||||||
Net operating income (loss) | 89,338 | 7,256 | 38,725 | (10,373 | ) | 124,946 | ||||||||||||||
Net realized (losses) on investments | (4,649 | ) | — | (1,162 | ) | — | (5,811 | ) | ||||||||||||
Net unrealized (losses) on investments | (22,058 | ) | (4,191 | ) | (1,659 | ) | — | (27,908 | ) | |||||||||||
Income from investment affilate | 1,477 | — | — | — | 1,477 | |||||||||||||||
Foreign exchange gains (losses) | 11,424 | (1,178 | ) | (7,541 | ) | 1,051 | 3,756 | |||||||||||||
Net income (loss) | 75,532 | 1,887 | 28,363 | (9,322 | ) | 96,460 | ||||||||||||||
Net loss attributable to noncontrolling interest | — | 2,549 | — | — | 2,549 | |||||||||||||||
Net income (loss) available to Validus | $ | 75,532 | $ | 4,436 | $ | 28,363 | $ | (9,322 | ) | $ | 99,009 |
(a) | There were no notable losses for the three months ended March 31, 2013. Notable losses for the three months ended March 31, 2012 included: Costa Concordia and Cat 67. Excludes the reserve for potential development on 2012 notable loss events. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Gross Premiums Written | Gross Premiums Written (%) | Gross Premiums Written | Gross Premiums Written (%) | % Change | ||||||||||||
Property | $ | 471,526 | 42.7 | % | $ | 381,381 | 45.5 | % | 23.6 | % | |||||||
Marine | 283,822 | 25.7 | % | 306,235 | 36.6 | % | (7.3 | )% | |||||||||
Specialty | 349,412 | 31.6 | % | 149,673 | 17.9 | % | 133.5 | % | |||||||||
Total | $ | 1,104,760 | 100.0 | % | $ | 837,289 | 100.0 | % | 31.9 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Gross Premiums Written | Gross Premium Written (%) | Gross Premiums Written | Gross Premiums Written (%) | % Change | ||||||||||||
Property | $ | 326,024 | 43.6 | % | $ | 318,485 | 56.2 | % | 2.4 | % | |||||||
Marine | 161,432 | 21.6 | % | 198,427 | 35.0 | % | (18.6 | )% | |||||||||
Specialty | 260,507 | 34.8 | % | 49,954 | 8.8 | % | 421.5 | % | |||||||||
Total | $ | 747,963 | 100.0 | % | $ | 566,866 | 100.0 | % | 31.9 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | |||||||||||||||
(Dollars in thousands) | Gross Premiums Written | Gross Premiums Written (%) | Gross Premiums Written | Gross Premiums Written (%) | % Change | |||||||||||
Property | $ | 96,516 | 100.0 | % | $ | 3,518 | 100.0 | % | NM | |||||||
Total | $ | 96,516 | 100.0 | % | $ | 3,518 | 100.0 | % | NM |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||
(Dollars in thousands) | Gross Premiums Written | Gross Premiums Written (%) | Gross Premiums Written | Gross Premiums Written (%) | % Change | ||||||||||||
Property | $ | 77,975 | 26.6 | % | $ | 81,534 | 27.8 | % | (4.4 | )% | |||||||
Marine | 124,726 | 42.5 | % | 109,998 | 37.5 | % | 13.4 | % | |||||||||
Specialty | 90,829 | 30.9 | % | 101,721 | 34.7 | % | (10.7 | )% | |||||||||
Total | $ | 293,530 | 100.0 | % | $ | 293,253 | 100.0 | % | 0.1 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | % Change | ||||||||||||
Property | $ | 103,478 | 55.3 | % | $ | 56,605 | 52.9 | % | 82.8 | % | |||||||
Marine | 15,992 | 8.5 | % | 20,109 | 18.8 | % | (20.5 | )% | |||||||||
Specialty | 67,746 | 36.2 | % | 30,338 | 28.3 | % | 123.3 | % | |||||||||
Total | $ | 187,216 | 100.0 | % | $ | 107,052 | 100.0 | % | 74.9 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | % Change | ||||||||||||
Property | $ | 84,058 | 66.9 | % | $ | 29,344 | 97.8 | % | 186.5 | % | |||||||
Marine | 2,972 | 2.4 | % | 125 | 0.4 | % | NM | ||||||||||
Specialty | 38,698 | 30.7 | % | 532 | 1.8 | % | NM | ||||||||||
Total | $ | 125,728 | 100.0 | % | $ | 30,001 | 100.0 | % | 319.1 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||
(Dollars in thousands) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | Reinsurance Premiums Ceded | Reinsurance Premiums Ceded (%) | % Change | ||||||||||||
Property | $ | 48,409 | 51.1 | % | $ | 49,417 | 47.8 | % | (2.0 | )% | |||||||
Marine | 15,356 | 16.2 | % | 22,174 | 21.4 | % | (30.7 | )% | |||||||||
Specialty | 30,972 | 32.7 | % | 31,808 | 30.8 | % | (2.6 | )% | |||||||||
Total | $ | 94,737 | 100.0 | % | $ | 103,399 | 100.0 | % | (8.4 | )% |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Net Premiums Written | Net Premiums Written (%) | Net Premiums Written | Net Premiums Written (%) | % Change | ||||||||||||
Property | $ | 368,048 | 40.1 | % | $ | 324,776 | 44.5 | % | 13.3 | % | |||||||
Marine | 267,830 | 29.2 | % | 286,126 | 39.2 | % | (6.4 | )% | |||||||||
Specialty | 281,666 | 30.7 | % | 119,335 | 16.3 | % | 136.0 | % | |||||||||
Total | $ | 917,544 | 100.0 | % | $ | 730,237 | 100.0 | % | 25.7 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Net Premiums Written | Net Premiums Written (%) | Net Premiums Written | Net Premiums Written (%) | % Change | ||||||||||||
Property | $ | 241,966 | 38.9 | % | $ | 289,141 | 53.9 | % | (16.3 | )% | |||||||
Marine | 158,460 | 25.5 | % | 198,302 | 36.9 | % | (20.1 | )% | |||||||||
Specialty | 221,809 | 35.6 | % | 49,422 | 9.2 | % | 348.8 | % | |||||||||
Total | $ | 622,235 | 100.0 | % | $ | 536,865 | 100.0 | % | 15.9 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | |||||||||||||||
(Dollars in thousands) | Net Premiums Written | Net Premiums Written (%) | Net Premiums Written | Net Premiums Written (%) | % Change | |||||||||||
Property | $ | 96,516 | 100.0 | % | $ | 3,518 | 100.0 | % | NM | |||||||
Total | $ | 96,516 | 100.0 | % | $ | 3,518 | 100.0 | % | NM |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||
(Dollars in thousands) | Net Premiums Written | Net Premiums Written (%) | Net Premiums Written | Net Premiums Written (%) | % Change | ||||||||||||
Property | $ | 29,566 | 14.9 | % | $ | 32,117 | 16.9 | % | (7.9 | )% | |||||||
Marine | 109,370 | 55.0 | % | 87,824 | 46.3 | % | 24.5 | % | |||||||||
Specialty | 59,857 | 30.1 | % | 69,913 | 36.8 | % | (14.4 | )% | |||||||||
Total | $ | 198,793 | 100.0 | % | $ | 189,854 | 100.0 | % | 4.7 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||
(Dollars in thousands) | Net Change in Unearned Premiums | Net Change in Unearned Premiums | % Change | ||||||||
Change in gross unearned premiums | $ | (487,467 | ) | $ | (313,064 | ) | (55.7 | )% | |||
Change in prepaid reinsurance premiums | 100,984 | 34,026 | 196.8 | % | |||||||
Net change in unearned premiums | $ | (386,483 | ) | $ | (279,038 | ) | (38.5 | )% |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||
(Dollars in thousands) | Net Change in Unearned Premiums | Net Change in Unearned Premiums | % Change | ||||||||
Change in gross unearned premiums | $ | (372,940 | ) | $ | (279,582 | ) | (33.4 | )% | |||
Change in prepaid reinsurance premiums | 53,839 | (4,274 | ) | NM | |||||||
Net change in unearned premiums | $ | (319,101 | ) | $ | (283,856 | ) | (12.4 | )% |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | |||||||||
(Dollars in thousands) | Net Change in Unearned Premiums | Net Change in Unearned Premiums | % Change | |||||||
Change in gross unearned premiums | $ | (68,899 | ) | $ | (855 | ) | NM | |||
Net change in unearned premiums | $ | (68,899 | ) | $ | (855 | ) | NM |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||
(Dollars in thousands) | Net Change in Unearned Premiums | Net Change in Unearned Premiums | % Change | ||||||||
Change in gross unearned premiums | $ | (45,628 | ) | $ | (32,627 | ) | (39.8 | )% | |||
Change in prepaid reinsurance premiums | 47,145 | 38,300 | 23.1 | % | |||||||
Net change in unearned premiums | $ | 1,517 | $ | 5,673 | (73.3 | )% |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Net Premiums Earned | Net Premiums Earned (%) | Net Premiums Earned | Net Premiums Earned (%) | % Change | ||||||||||||
Property | $ | 255,647 | 48.2 | % | $ | 207,333 | 46.0 | % | 23.3 | % | |||||||
Marine | 141,579 | 26.7 | % | 145,741 | 32.3 | % | (2.9 | )% | |||||||||
Specialty | 133,835 | 25.1 | % | 98,125 | 21.7 | % | 36.4 | % | |||||||||
Total | $ | 531,061 | 100.0 | % | $ | 451,199 | 100.0 | % | 17.7 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Net Premiums Earned | Net Premiums Earned (%) | Net Premiums Earned | Net Premiums Earned (%) | % Change | ||||||||||||
Property | $ | 184,482 | 60.9 | % | $ | 160,048 | 63.3 | % | 15.3 | % | |||||||
Marine | 56,601 | 18.7 | % | 71,877 | 28.4 | % | (21.3 | )% | |||||||||
Specialty | 62,051 | 20.4 | % | 21,084 | 8.3 | % | 194.3 | % | |||||||||
Total | $ | 303,134 | 100.0 | % | $ | 253,009 | 100.0 | % | 19.8 | % |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||
(Dollars in thousands) | Net Premiums Earned | Net Premiums Earned (%) | Net Premiums Earned | Net Premiums Earned (%) | % Change | ||||||||||||
Property | $ | 27,617 | 100.0 | % | $ | 2,663 | 100.0 | % | 937.1 | % | |||||||
Total | $ | 27,617 | 100.0 | % | $ | 2,663 | 100.0 | % | 937.1 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||
(Dollars in thousands) | Net Premiums Earned | Net Premiums Earned (%) | Net Premiums Earned | Net Premiums Earned (%) | % Change | ||||||||||||
Property | $ | 43,548 | 21.7 | % | $ | 44,622 | 22.8 | % | (2.4 | )% | |||||||
Marine | 84,978 | 42.4 | % | 73,864 | 37.8 | % | 15.0 | % | |||||||||
Specialty | 71,784 | 35.9 | % | 77,041 | 39.4 | % | (6.8 | )% | |||||||||
Total | $ | 200,310 | 100.0 | % | $ | 195,527 | 100.0 | % | 2.4 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | Percentage Point Change | ||||||
Property | 5.4 | % | 27.5 | % | (22.1 | ) | ||
Marine | 38.2 | % | 89.0 | % | (50.8 | ) | ||
Specialty | 57.3 | % | 46.1 | % | 11.2 | |||
All lines | 27.3 | % | 51.4 | % | (24.1 | ) |
a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
First Quarter 2013 Notable Loss Events | Validus Re | Talbot | Total | ||||||||||||||||||||
Description | Net Losses and Loss Expenses | % of NPE | Net Losses and Loss Expenses | % of NPE | Net Losses and Loss Expenses | % of NPE | |||||||||||||||||
None | $ | — | — | % | $ | — | — | % | $ | — | — | % | |||||||||||
Total | $ | — | — | % | — | % | $ | — | — | % |
Three Months Ended March 31, 2012 | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
First Quarter 2012 Notable Loss Events (b) | Validus Re (a) | Talbot | Total | ||||||||||||||||||||
Description | Net Losses and Loss Expenses (c) | % of NPE | Net Losses and Loss Expenses (c) | % of NPE | Net Losses and Loss Expenses (c) | % of NPE | |||||||||||||||||
Costa Concordia | Grounding | $ | 62,798 | 24.8 | % | $ | 13,399 | 6.9 | % | $ | 76,197 | 16.9 | % | ||||||||||
Cat 67 | Tornadoes | 22,699 | 9.0 | % | 14 | — | % | 22,713 | 5.0 | % | |||||||||||||
Total | $ | 85,497 | 33.8 | % | $ | 13,413 | 6.9 | % | $ | 98,910 | 21.9 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(b) | These notable loss events and are based on management's estimates following a review of the Company's potential exposure and discussions with certain clients and brokers. Given the magnitude of these events, and other uncertainties inherent in loss estimation, meaningful uncertainty remains regarding losses from these events and the Company's actual ultimate net losses from these events may vary materially from these estimates. |
(c) | Net of reinsurance but not net of reinstatement premiums. Total reinstatement premiums were $14.4 million for the three months ended March 31, 2012. |
Three Months Ended March 31, | ||||||||
2013 | 2012 (a) | Percentage Point Change | ||||||
Property - current period - excluding items below | 21.9 | % | 21.5 | % | 0.4 | |||
Property - current period - notable losses | 0.0 | % | 11.0 | % | (11.0 | ) | ||
Property - change in prior accident years | (16.5 | )% | (5.0 | )% | (11.5 | ) | ||
Property - loss ratio | 5.4 | % | 27.5 | % | (22.1 | ) | ||
Marine - current period - excluding items below | 47.2 | % | 44.2 | % | 3.0 | |||
Marine - current period - notable losses | 0.0 | % | 52.3 | % | (52.3 | ) | ||
Marine - change in prior accident years | (9.0 | )% | (7.5 | )% | (1.5 | ) | ||
Marine - loss ratio | 38.2 | % | 89.0 | % | (50.8 | ) | ||
Specialty - current period - excluding items below | 65.5 | % | 55.6 | % | 9.9 | |||
Specialty - current period - notable losses | 0.0 | % | 0.0 | % | 0.0 | |||
Specialty - change in prior accident years | (8.2 | )% | (9.5 | )% | 1.3 | |||
Specialty – loss ratio | 57.3 | % | 46.1 | % | 11.2 | |||
All lines - current period - excluding items below | 39.7 | % | 36.2 | % | 3.5 | |||
All lines - current period - notable losses | 0.0 | % | 21.9 | % | (21.9 | ) | ||
All lines - change in prior accident years | (12.4 | )% | (6.7 | )% | (5.7 | ) | ||
All lines - loss ratio | 27.3 | % | 51.4 | % | (24.1 | ) |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | ||||||||
2013 | 2012 (a) | Percentage Point Change | ||||||
Property - current period excluding items below | 18.3 | % | 12.9 | % | 5.4 | |||
Property - current period - notable losses | 0.0 | % | 14.2 | % | (14.2 | ) | ||
Property - change in prior accident years | (17.7 | )% | (7.2 | )% | (10.5 | ) | ||
Property - loss ratio | 0.6 | % | 19.9 | % | (19.3 | ) | ||
Marine - current period excluding items below | 36.8 | % | 39.7 | % | (2.9 | ) | ||
Marine - current period - notable losses | 0.0 | % | 87.4 | % | (87.4 | ) | ||
Marine - change in prior accident years | 10.3 | % | (7.6 | )% | 17.9 | |||
Marine - loss ratio | 47.1 | % | 119.5 | % | (72.4 | ) | ||
Specialty - current period excluding items below | 76.8 | % | 37.8 | % | 39.0 | |||
Specialty - current period - notable losses | 0.0 | % | 0.0 | % | 0.0 | |||
Specialty - change in prior accident years | (3.3 | )% | (6.8 | )% | 3.5 | |||
Specialty – loss ratio | 73.5 | % | 31.0 | % | 42.5 | |||
All lines - current period excluding items below | 33.7 | % | 22.5 | % | 11.2 | |||
All lines - current period - notable losses | 0.0 | % | 33.8 | % | (33.8 | ) | ||
All lines - change in prior accident years | (9.5 | )% | (7.2 | )% | (2.3 | ) | ||
All lines - loss ratio | 24.2 | % | 49.1 | % | (24.9 | ) |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | ||||||||
2013 | 2012 | Percentage Point Change | ||||||
Property - current period excluding items below | 51.3 | % | 53.9 | % | (2.6 | ) | ||
Property - current period - notable losses | 0.0 | % | 0.0 | % | 0.0 | |||
Property - change in prior accident years | (21.9 | )% | 2.7 | % | (24.6 | ) | ||
Property - loss ratio | 29.4 | % | 56.6 | % | (27.2 | ) | ||
Marine - current period excluding items below | 54.1 | % | 48.5 | % | 5.6 | |||
Marine - current period - notable losses | 0.0 | 18.1 | % | (18.1 | ) | |||
Marine - change in prior accident years | (21.8 | )% | (7.3 | )% | (14.5 | ) | ||
Marine - loss ratio | 32.3 | % | 59.3 | % | (27.0 | ) | ||
Specialty - current period excluding items below | 55.9 | % | 60.5 | % | (4.6 | ) | ||
Specialty - current period - notable losses | 0.0 | % | 0.0 | % | 0.0 | |||
Specialty - change in prior accident years | (12.5 | )% | (10.2 | )% | (2.3 | ) | ||
Specialty – loss ratio | 43.4 | % | 50.3 | % | (6.9 | ) | ||
All lines - current period excluding items below | 54.1 | % | 54.4 | % | (0.3 | ) | ||
All lines - current period - notable losses | 0.0 | % | 6.9 | % | (6.9 | ) | ||
All lines - change in prior accident years | (18.5 | )% | (6.2 | )% | (12.3 | ) | ||
All lines - loss ratio | 35.6 | % | 55.1 | % | (19.5 | ) |
As at March 31, 2013 | ||||||||||||
(Dollars in thousands) | Gross Case Reserves | Gross IBNR | Total Gross Reserve for Losses and Loss Expenses | |||||||||
Property | $ | 942,151 | $ | 736,908 | $ | 1,679,059 | ||||||
Marine | 537,777 | 460,830 | 998,607 | |||||||||
Specialty | 272,804 | 407,221 | 680,025 | |||||||||
Total | $ | 1,752,732 | $ | 1,604,959 | $ | 3,357,691 |
As at March 31, 2013 | ||||||||||||
(Dollars in thousands) | Net Case Reserves | Net IBNR | Total Net Reserve for Losses and Loss Expenses | |||||||||
Property | $ | 781,912 | $ | 643,290 | $ | 1,425,202 | ||||||
Marine | 482,162 | 430,421 | 912,583 | |||||||||
Specialty | 240,569 | 350,085 | 590,654 | |||||||||
Total | $ | 1,504,643 | $ | 1,423,796 | $ | 2,928,439 |
Three Months Ended March 31, 2013 | ||||||||||||||||||||
(Dollars in thousands) | Validus Re Segment | AlphaCat Segment | Talbot Segment | Eliminations | Total | |||||||||||||||
Gross reserves at period beginning | $ | 2,122,895 | $ | 5,000 | $ | 1,480,307 | $ | (90,629 | ) | $ | 3,517,573 | |||||||||
Losses recoverable | (148,646 | ) | — | (381,950 | ) | 90,629 | (439,967 | ) | ||||||||||||
Net reserves at period beginning | 1,974,249 | 5,000 | 1,098,357 | — | 3,077,606 | |||||||||||||||
Incurred losses - current year | 102,184 | — | 108,385 | — | 210,569 | |||||||||||||||
Change in prior accident years | (28,782 | ) | — | (37,016 | ) | — | (65,798 | ) | ||||||||||||
Incurred losses | 73,402 | — | 71,369 | — | 144,771 | |||||||||||||||
Foreign exchange | (16,890 | ) | — | (16,936 | ) | — | (33,826 | ) | ||||||||||||
Total net paid losses | (158,126 | ) | — | (101,986 | ) | — | (260,112 | ) | ||||||||||||
Net reserves at period end | 1,872,635 | 5,000 | 1,050,804 | — | 2,928,439 | |||||||||||||||
Losses recoverable | 142,828 | — | 369,332 | (82,908 | ) | 429,252 | ||||||||||||||
Gross reserves at period end | $ | 2,015,463 | $ | 5,000 | $ | 1,420,136 | $ | (82,908 | ) | $ | 3,357,691 |
RESERVES FOR NOTABLE LOSS EVENTS - USD (000's) | ||||||||||||||||||||||||||||||||||||||||||||||
2011 NOTABLE LOSS EVENTS | Year Ended December 31, 2011 | Year Ended December 31, 2012 | Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Development | Closing | Development | Closing | Development | Closing | |||||||||||||||||||||||||||||||||||||||||
Initial | (Favorable) / | Allocations | Estimate (c) | (Favorable) / | Allocations | Estimate (c) | (Favorable) / | Allocations | Estimate (c) | |||||||||||||||||||||||||||||||||||||
Notable Loss | Estimate (a) | Unfavorable (b) | of RDE | 31-Dec-11 | Unfavorable (b) | of RDE | 31-Dec-12 | Unfavorable (b) | of RDE | 31-Mar-13 | ||||||||||||||||||||||||||||||||||||
Tohoku earthquake | $ | 148,926 | $ | 37,963 | $ | 29,788 | $ | 216,677 | $ | (6,652 | ) | $ | 16,342 | $ | 226,367 | $ | (11 | ) | $ | — | $ | 226,356 | ||||||||||||||||||||||||
Thailand floods | 54,148 | — | — | 54,148 | 10,704 | 14,262 | 79,114 | (3,237 | ) | — | 75,877 | |||||||||||||||||||||||||||||||||||
Gryphon Alpha | 52,434 | 9,151 | — | 61,585 | 874 | 5,356 | 67,815 | 7 | 1,970 | 69,792 | ||||||||||||||||||||||||||||||||||||
Cat 46 | 43,806 | 18,553 | — | 62,359 | 118 | — | 62,477 | (895 | ) | — | 61,582 | |||||||||||||||||||||||||||||||||||
Christchurch earthquake | 41,881 | 16,854 | 20,212 | 78,947 | (495 | ) | 20,121 | 98,573 | (5 | ) | 6,031 | 104,599 | ||||||||||||||||||||||||||||||||||
Hurricane Irene (e) | 32,451 | 3 | — | 32,454 | (10,788 | ) | — | 21,666 | — | 21,666 | ||||||||||||||||||||||||||||||||||||
Cat 48 | 31,481 | 9,190 | — | 40,671 | 5,612 | — | 46,283 | (2,548 | ) | — | 43,735 | |||||||||||||||||||||||||||||||||||
Brisbane floods | 31,023 | 4,848 | — | 35,871 | (1,394 | ) | — | 34,477 | — | 34,477 | ||||||||||||||||||||||||||||||||||||
CNRL Horizon | 19,500 | (8,706 | ) | — | 10,794 | 558 | — | 11,352 | — | 11,352 | ||||||||||||||||||||||||||||||||||||
Danish flood | 19,429 | 5,987 | — | 25,416 | 2,566 | 7,665 | 35,647 | — | 35,647 | |||||||||||||||||||||||||||||||||||||
Jupiter 1 | 15,008 | (73 | ) | — | 14,935 | (166 | ) | — | 14,769 | 5 | — | 14,774 | ||||||||||||||||||||||||||||||||||
Total 2011 Notable Loss Events | $ | 490,087 | $ | 93,770 | $ | 50,000 | $ | 633,857 | $ | 937 | $ | 63,746 | $ | 698,540 | $ | (6,684 | ) | $ | 8,001 | $ | 699,857 | |||||||||||||||||||||||||
Closing | Closing | Closing | ||||||||||||||||||||||||||||||||||||||||||||
Paid Loss (Recovery) | Reserve (d) | Paid Loss (Recovery) | Reserve (d) | Paid Loss (Recovery) | Reserve (d) | |||||||||||||||||||||||||||||||||||||||||
Notable Loss | 31-Dec-11 | 31-Dec-12 | 31-Mar-13 | |||||||||||||||||||||||||||||||||||||||||||
Tohoku earthquake | $ | 59,100 | $ | 157,577 | $ | 94,011 | $ | 73,256 | $ | 4,360 | $ | 68,885 | ||||||||||||||||||||||||||||||||||
Thailand floods | 1,748 | 52,400 | 13,017 | 64,349 | 9,988 | 51,124 | ||||||||||||||||||||||||||||||||||||||||
Gryphon Alpha | 8,686 | 52,899 | 19,487 | 39,641 | 10,727 | 30,892 | ||||||||||||||||||||||||||||||||||||||||
Cat 46 | 51,429 | 10,930 | 1,700 | 9,348 | 1,865 | 6,588 | ||||||||||||||||||||||||||||||||||||||||
Christchurch earthquake | (42 | ) | 78,989 | 5,708 | 92,907 | 19,769 | 79,164 | |||||||||||||||||||||||||||||||||||||||
Hurricane Irene (e) | 8,669 | 23,785 | 3,743 | 9,254 | 197 | 9,057 | ||||||||||||||||||||||||||||||||||||||||
Cat 48 | 19,934 | 20,737 | 14,032 | 12,317 | 820 | 8,949 | ||||||||||||||||||||||||||||||||||||||||
Brisbane floods | 16,151 | 19,720 | 10,998 | 7,328 | 953 | 6,375 | ||||||||||||||||||||||||||||||||||||||||
CNRL Horizon | 5,600 | 5,194 | 5,746 | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||
Danish flood | 7,872 | 17,544 | 15,099 | 12,676 | 723 | 11,953 | ||||||||||||||||||||||||||||||||||||||||
Jupiter 1 | 14,342 | 593 | 245 | 182 | 1 | 186 | ||||||||||||||||||||||||||||||||||||||||
Total 2011 Notable Loss Events | $ | 193,489 | $ | 440,368 | $ | 183,786 | $ | 321,264 | $ | 49,403 | $ | 273,179 | ||||||||||||||||||||||||||||||||||
RESERVES FOR NOTABLE LOSS EVENTS - USD (000's) CONTINUED | |||||||||||||||||||||||||||||||||||
2012 NOTABLE LOSS EVENTS | Year Ended December 31, 2012 | Three Months Ended March 31, 2013 | |||||||||||||||||||||||||||||||||
Development | Closing | Development | Closing | ||||||||||||||||||||||||||||||||
Initial | (Favorable) / | Allocations | Estimate (c) | (Favorable) / | Allocations | Estimate (c) | |||||||||||||||||||||||||||||
Notable Loss | Estimate (a) | Unfavorable (b) | of RDE | 31-Dec-12 | Unfavorable (b) | of RDE | 31-Mar-13 | ||||||||||||||||||||||||||||
Hurricane Sandy | $ | 361,036 | — | — | $ | 361,036 | $ | (977 | ) | — | $ | 360,059 | |||||||||||||||||||||||
Costa Concordia | 76,197 | (2,061 | ) | — | 74,136 | (267 | ) | — | 73,869 | ||||||||||||||||||||||||||
Cat 67 | 22,713 | 5,377 | — | 28,090 | (6,816 | ) | — | 21,274 | |||||||||||||||||||||||||||
U.S. Drought | 22,021 | — | — | 22,021 | 6,207 | — | 28,228 | ||||||||||||||||||||||||||||
Hurricane Isaac | 15,209 | 67 | — | 15,276 | (9,829 | ) | — | 5,447 | |||||||||||||||||||||||||||
Total 2012 Notable Loss Events | $ | 497,176 | $ | 3,383 | $ | — | $ | 500,559 | $ | (11,682 | ) | $ | — | $ | 488,877 | ||||||||||||||||||||
Closing | Closing | ||||||||||||||||||||||||||||||||||
Paid Loss (Recovery) | Reserve (d) | Paid Loss (Recovery) | Reserve (d) | ||||||||||||||||||||||||||||||||
Notable Loss | 31-Dec-12 | 31-Mar-13 | |||||||||||||||||||||||||||||||||
Hurricane Sandy | $ | 38,515 | $ | 322,521 | $ | 40,050 | $ | 281,494 | |||||||||||||||||||||||||||
Costa Concordia | 13,040 | 61,096 | (7,136 | ) | 67,965 | ||||||||||||||||||||||||||||||
Cat 67 | 13,432 | 14,658 | 1,651 | 6,191 | |||||||||||||||||||||||||||||||
U.S. Drought | 12,346 | 9,675 | 8,654 | 7,228 | |||||||||||||||||||||||||||||||
Hurricane Isaac | 313 | 14,963 | 254 | 4,880 | |||||||||||||||||||||||||||||||
Total 2012 Notable Loss Events | $ | 77,646 | $ | 422,913 | $ | 43,473 | $ | 367,758 | |||||||||||||||||||||||||||
RESERVE FOR DEVELOPMENT ON EVENTS | Reserve for potential development on 2010 notable loss events | Reserve for potential development on 2011 notable loss events | Reserve for potential development on 2012 notable loss events | Reserve for potential development on 2013 notable loss events | Total Reserve for potential development on notable loss events | ||||||||||||||
($ in 000's) | ($ in 000's) | ($ in 000's) | ($ in 000's) | ($ in 000's) | |||||||||||||||
As at December 31, 2009 | $ | — | $ | — | |||||||||||||||
Reserve for potential development additions | 69,242 | — | — | — | 69,242 | ||||||||||||||
Reserve for potential development allocations (a) | (35,856 | ) | — | — | — | (35,856 | ) | ||||||||||||
Reserve for potential development releases | — | — | — | — | — | ||||||||||||||
As at December 31, 2010 (b) | $ | 33,386 | $ | — | $ | — | $ | — | $ | 33,386 | |||||||||
Reserve for potential development additions | — | 128,000 | — | — | 128,000 | ||||||||||||||
Reserve for potential development allocations (a) | (14,769 | ) | (50,000 | ) | — | — | (64,769 | ) | |||||||||||
Reserve for potential development releases | — | — | — | — | — | ||||||||||||||
As at December 31, 2011 (b) | $ | 18,617 | $ | 78,000 | $ | — | $ | — | $ | 96,617 | |||||||||
Reserve for potential development additions (c) | — | 27,926 | — | — | 27,926 | ||||||||||||||
Reserve for potential development allocations (a) | (18,617 | ) | (63,746 | ) | — | — | (82,363 | ) | |||||||||||
Reserve for potential development releases | — | — | — | — | — | ||||||||||||||
As at December 31, 2012 (b) | $ | — | $ | 42,180 | $ | — | $ | — | $ | 42,180 | |||||||||
Reserve for potential development additions | — | — | — | — | — | ||||||||||||||
Reserve for potential development allocations (a) | — | (8,001 | ) | — | — | (8,001 | ) | ||||||||||||
Reserve for potential development releases | — | — | — | — | — | ||||||||||||||
As at March 31, 2013 (b) | $ | — | $ | 34,179 | $ | — | $ | — | $ | 34,179 | |||||||||
(a) | During the year ended December 31, 2010, $19,242 was allocated to the Chilean earthquake and $16,614 was allocated to the New Zealand earthquake from the 2010 reserve for potential development on notable loss events. |
(b) | Notable losses for the year ended December 31, 2010 included Chilean earthquake, Melbourne hailstorm, Windstorm Xynthia, Deepwater Horizon, Aban Pearl, Bangkok riots, Perth hailstorm, New Zealand earthquake, Oklahoma windstorm, Political risk loss, Hurricane Karl, Queensland floods, Political violence loss, Satellite failure and Financial institution loss. |
(c) | Contract complexity, the nature and number of perils arising from these events, limits and sub limits exposed, the quality, flow and timing of information received by the Company, information regarding retrocessional covers, assumptions, both explicit and implicit, regarding future paid and reported loss development patterns, frequency and severity trends, claims settlement practices and potential changes in the legal environment continue to lead to complexity and volatility in the ultimate loss estimates for these events. Given the potential that one or some of the 2011 notable loss events eligible for potential allocation from the 2011 RDE may experience adverse development, rather than all deteriorating proportionately, an addition to the 2011 RDE of $27.9 million was made during the year ended December 31, 2012. |
(d) | The reserve for potential development on notable loss events (or “RDE”) is included as part of the Company's overall reserve requirement as defined and disclosed in the Critical Accounting Policies and Estimates section of the Company's Annual Report on Form 10-K/A. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||||||||
(Dollars in thousands) | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | % Change | ||||||||||||||||
Property | $ | 34,940 | 37.3 | % | 13.7 | % | $ | 27,897 | 35.7 | % | 13.5 | % | 25.2 | % | |||||||||
Marine | 29,677 | 31.7 | % | 21.0 | % | 29,789 | 38.1 | % | 20.4 | % | (0.4 | )% | |||||||||||
Specialty | 28,994 | 31.0 | % | 21.7 | % | 20,446 | 26.2 | % | 20.8 | % | 41.8 | % | |||||||||||
Total | $ | 93,611 | 100.0 | % | 17.6 | % | $ | 78,132 | 100.0 | % | 17.3 | % | 19.8 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||||||||
(Dollars in thousands) | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | % Change | ||||||||||||||||
Property | $ | 28,532 | 55.2 | % | 15.5 | % | $ | 23,914 | 61.7 | % | 14.9 | % | 19.3 | % | |||||||||
Marine | 11,604 | 22.4 | % | 20.5 | % | 11,521 | 29.7 | % | 16.0 | % | 0.7 | % | |||||||||||
Specialty | 11,608 | 22.4 | % | 18.7 | % | 3,355 | 8.6 | % | 15.9 | % | 246.0 | % | |||||||||||
Total | $ | 51,744 | 100.0 | % | 17.1 | % | $ | 38,790 | 100.0 | % | 15.3 | % | 33.4 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||||||||
(Dollars in thousands) | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | % Change | ||||||||||||||||
Property | $ | 2,638 | 100.0 | % | 9.6 | % | $ | 256 | 100.0 | % | 9.6 | % | 930.5 | % | |||||||||
Total | $ | 2,638 | 100.0 | % | 9.6 | % | $ | 256 | 100.0 | % | 9.6 | % | 930.5 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | ||||||||||||||||||||||
(Dollars in thousands) | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | Policy Acquisition Costs | Policy Acquisition Costs (%) | Acquisition Cost Ratio | % Change | ||||||||||||||||
Property | $ | 5,024 | 12.4 | % | 11.5 | % | $ | 3,372 | 8.7 | % | 7.6 | % | 49.0 | % | |||||||||
Marine | 18,095 | 44.7 | % | 21.3 | % | 18,285 | 47.2 | % | 24.8 | % | (1.0 | )% | |||||||||||
Specialty | 17,407 | 42.9 | % | 24.2 | % | 17,081 | 44.1 | % | 22.2 | % | 1.9 | % | |||||||||||
Total | $ | 40,526 | 100.0 | % | 20.2 | % | $ | 38,738 | 100.0 | % | 19.8 | % | 4.6 | % |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | General and Administrative Expenses | General and Administrative Expenses (%) | General and Administrative Expenses | General and Administrative Expenses (%) | % Change | ||||||||||||
Validus Re (a) | $ | 29,441 | 36.7 | % | $ | 17,252 | 26.0 | % | 70.7 | % | |||||||
AlphaCat | 4,037 | 5.0 | % | 1,032 | 1.6 | % | 291.2 | % | |||||||||
Talbot | 30,912 | 38.5 | % | 33,348 | 50.2 | % | (7.3 | )% | |||||||||
Corporate & Eliminations | 15,889 | 19.8 | % | 14,743 | 22.2 | % | 7.8 | % | |||||||||
Total | $ | 80,279 | 100.0 | % | $ | 66,375 | 100.0 | % | 20.9 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||||||||||||
(Dollars in thousands) | Share Compensation Expenses | Share Compensation Expenses (%) | Share Compensation Expenses | Share Compensation Expenses (%) | % Change | ||||||||||||
Validus Re (a) | $ | 1,413 | 61.0 | % | $ | 1,872 | 34.4 | % | (24.5 | )% | |||||||
AlphaCat | 77 | 3.3 | % | 52 | 1.0 | % | 48.1 | % | |||||||||
Talbot | 1,405 | 60.6 | % | 1,348 | 24.8 | % | 4.2 | % | |||||||||
Corporate & Eliminations | (577 | ) | (24.9 | )% | 2,166 | 39.8 | % | (126.6 | )% | ||||||||
Total | $ | 2,318 | 100.0 | % | $ | 5,438 | 100.0 | % | (57.4 | )% |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Consolidated | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | Percentage Point Change | ||||||
Losses and loss expense ratio | 27.3 | % | 51.4 | % | (24.1 | ) | |||
Policy acquisition cost ratio | 17.6 | % | 17.3 | % | 0.3 | ||||
General and administrative expense ratio (b) | 15.6 | % | 15.9 | % | (0.3 | ) | |||
Expense ratio | 33.2 | % | 33.2 | % | — | ||||
Combined ratio | 60.5 | % | 84.6 | % | (24.1 | ) |
Validus Re | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | Percentage Point Change | ||||||
Losses and loss expense ratio | 24.2 | % | 49.1 | % | (24.9 | ) | |||
Policy acquisition cost ratio | 17.1 | % | 15.3 | % | 1.8 | ||||
General and administrative expense ratio (b) | 10.2 | % | 7.6 | % | 2.6 | ||||
Expense ratio | 27.3 | % | 22.9 | % | 4.4 | ||||
Combined ratio | 51.5 | % | 72.0 | % | (20.5 | ) |
AlphaCat | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | Percentage Point Change | ||||||
Losses and loss expense ratio | 0.0 | % | 0.0 | % | — | ||||
Policy acquisition cost ratio | 9.6 | % | 9.6 | % | — | ||||
General and administrative expense ratio (b) | 14.9 | % | 40.7 | % | (25.8 | ) | |||
Expense ratio | 24.5 | % | 50.3 | % | (25.8 | ) | |||
Combined ratio | 24.5 | % | 50.3 | % | (25.8 | ) |
Talbot | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 | Percentage Point Change | ||||||
Losses and loss expense ratio | 35.6 | % | 55.1 | % | (19.5 | ) | |||
Policy acquisition cost ratio | 20.2 | % | 19.8 | % | 0.4 | ||||
General and administrative expense ratio (a) | 16.1 | % | 17.7 | % | (1.6 | ) | |||
Expense ratio | 36.3 | % | 37.5 | % | (1.2 | ) | |||
Combined ratio | 71.9 | % | 92.6 | % | (20.7 | ) |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(b) | Includes general and administrative expenses and share compensation expenses. |
Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | |||||||||||||
(Dollars in thousands) | Expenses | Expenses as % of Net Earned Premiums | Expenses | Expenses as % of Net Earned Premiums | ||||||||||
General and administrative expenses | $ | 80,279 | 15.2 | % | $ | 66,375 | 14.7 | % | ||||||
Share compensation expenses | 2,318 | 0.4 | % | 5,438 | 1.2 | % | ||||||||
Total | $ | 82,597 | 15.6 | % | $ | 71,813 | 15.9 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(Dollars in thousands) | Three Months Ended March 31, 2013 | % of sub-total | Three Months Ended March 31, 2012 (a) | % of sub-total | % Change | ||||||||||||
Validus Re | $ | 147,134 | 65.6 | % | $ | 70,889 | 82.0 | % | 107.6 | % | |||||||
AlphaCat | 20,865 | 9.3 | % | 1,323 | 1.5 | % | NM | ||||||||||
Talbot | 56,098 | 25.1 | % | 14,310 | 16.5 | % | 292.0 | % | |||||||||
Sub-total | 224,097 | 100.0 | % | 86,522 | 100.0 | % | 159.0 | % | |||||||||
Corporate & Eliminations | (14,015 | ) | (17,257 | ) | 18.8 | % | |||||||||||
Total | $ | 210,082 | $ | 69,265 | 203.3 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(Dollars in thousands) | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | ||||||
Underwriting income | $ | 210,082 | $ | 69,265 | ||||
Net investment income | 25,649 | 27,760 | ||||||
Other income | 2,685 | 8,891 | ||||||
Finance expenses | (24,446 | ) | (16,279 | ) | ||||
Net realized gains on investments | 1,721 | 7,532 | ||||||
Net unrealized (losses) gains on investments | (7,237 | ) | 20,671 | |||||
Income from investment affiliate | 1,477 | — | ||||||
Foreign exchange gains | 6,922 | 3,166 | ||||||
Tax benefit (expense) | 318 | (139 | ) | |||||
Income from operating affiliates | 3,523 | 3,367 | ||||||
Net income | $ | 220,694 | $ | 124,234 |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(Dollars in thousands) | Three Months Ended March 31, 2013 | Three Months Ended March 31, 2012 (a) | % Change | ||||||||
Fixed maturities and short-term investments | $ | 27,531 | $ | 27,276 | 0.9 | % | |||||
Cash and cash equivalents | 533 | 2,317 | (77.0 | )% | |||||||
Securities lending income | — | 5 | (100.0 | )% | |||||||
Total gross investment income | 28,064 | 29,598 | (5.2 | )% | |||||||
Investment expenses | (2,415 | ) | (1,838 | ) | (31.4 | )% | |||||
Net investment income | $ | 25,649 | $ | 27,760 | (7.6 | )% |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | |||||||||||
(Dollars in thousands) | 2013 | 2012 (a) | % Change | ||||||||
2006 Junior Subordinated Deferrable Debentures | $ | 2,187 | $ | 1,549 | 41.2 | % | |||||
2007 Junior Subordinated Deferrable Debentures | 1,809 | 3,029 | (40.3 | )% | |||||||
2010 Senior Notes due 2040 | 5,597 | 5,597 | 0.0 | % | |||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | 1,472 | — | NM | ||||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | 1,072 | — | NM | ||||||||
Credit facilities | 954 | 6,016 | (84.1 | )% | |||||||
Bank charges | 133 | 57 | 133.3 | % | |||||||
AlphaCat Variable Funding Notes (b) | 11,191 | — | NM | ||||||||
Talbot FAL Facility | 31 | 31 | 0.0 | % | |||||||
Finance expenses | $ | 24,446 | $ | 16,279 | 50.2 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
(b) | Please refer to Note 13 "AlphaCat variable funding notes" in the unaudited Consolidated Financial Statements contained herein for further details. |
U.S. dollar strengthened (weakened) against: | Three Months Ended March 31, 2013 | Year Ended December 31, 2012 | |||||
British Pound sterling | 6.9 | % | (4.4 | )% | |||
Euro | 3.2 | % | (1.7 | )% | |||
Canadian Dollar | 2.4 | % | (2.7 | )% | |||
Swiss Franc | 4.0 | % | (2.4 | )% | |||
Indian Rupee | (1.3 | )% | 3.6 | % | |||
South African Rand | 9.3 | % | 4.7 | % | |||
Singapore Dollar | 1.7 | % | (5.8 | )% |
As at March 31, 2013 | ||||||||||||||
(unaudited) | ||||||||||||||
Equity Amount | Shares | Exercise Price | Book Value Per Share | |||||||||||
Book value per common share | ||||||||||||||
Total shareholders' equity available to Validus | $ | 3,903,890 | 106,282,441 | $ | 36.73 | |||||||||
Diluted book value per common share | ||||||||||||||
Total shareholders' equity available to Validus | 3,903,890 | 106,282,441 | ||||||||||||
Assumed exercise of outstanding warrants | 118,015 | 6,410,472 | $ | 18.41 | ||||||||||
Assumed exercise of outstanding stock options | 34,030 | 1,796,202 | $ | 18.95 | ||||||||||
Unvested restricted shares | — | 2,087,223 | ||||||||||||
Diluted book value per common share | $ | 4,055,935 | 116,576,338 | $ | 34.79 |
As at December 31, 2012 | ||||||||||||||
Equity Amount | Shares | Exercise Price | Book Value Per Share | |||||||||||
Book value per common share | ||||||||||||||
Total shareholders' equity available to Validus | $ | 4,020,827 | 107,921,259 | $ | 37.26 | |||||||||
Diluted book value per common share | ||||||||||||||
Total shareholders' equity available to Validus | 4,020,827 | 107,921,259 | ||||||||||||
Assumed exercise of outstanding warrants | 118,015 | 6,410,472 | $ | 18.41 | ||||||||||
Assumed exercise of outstanding stock options | 37,745 | 1,823,947 | $ | 20.69 | ||||||||||
Unvested restricted shares | — | 2,443,631 | ||||||||||||
Diluted book value per common share | $ | 4,176,587 | 118,599,309 | $ | 35.22 |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended | ||||||||
(unaudited) | ||||||||
March 31, | March 31, | |||||||
2013 | 2012 (a) | |||||||
Total gross premiums written | $ | 1,104,760 | $ | 837,289 | ||||
Adjustments for: | ||||||||
Gross premiums written on behalf of AlphaCat Re 2011 | (110 | ) | 73,875 | |||||
Gross premiums written on behalf of AlphaCat Re 2012 | (398 | ) | — | |||||
Total managed gross premiums written | $ | 1,104,252 | $ | 911,164 |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | |||||||||||
(Dollars in thousands) | 2013 | 2012 (a) | % Change | ||||||||
Net cash provided by operating activities | $ | 60,683 | $ | 164,905 | (63.2 | )% | |||||
Net cash provided by (used in) investing activities | 218,734 | (49,972 | ) | 537.7 | % | ||||||
Net cash (used in) financing activities | (95,786 | ) | (46,926 | ) | (104.1 | )% | |||||
Effect of foreign currency rate changes on cash and cash equivalents | (33,786 | ) | 16,545 | (304.2 | )% | ||||||
Net increase in cash | $ | 149,845 | $ | 84,552 | 77.2 | % |
(a) | The results of operations for Flagstone are consolidated only from the November 30, 2012 date of acquisition. |
Three Months Ended March 31, | ||||||||
Net cash used in: | 2013 | 2012 | ||||||
Investments in operating affiliates, net | $ | 50,222 | $ | — | ||||
Investments in investment affiliates, net | (1,341 | ) | — |
(Dollars in thousands) | Maturity Date / Term | In Use/Outstanding | ||||
2006 Junior Subordinated Deferrable Debentures | June 15, 2036 | $ | 150,000 | |||
2007 Junior Subordinated Deferrable Debentures | June 15, 2037 | 139,800 | ||||
2010 Senior Notes due 2040 | January 26, 2040 | 250,000 | ||||
$400,000 syndicated unsecured letter of credit facility | March 9, 2016 | — | ||||
$525,000 syndicated secured letter of credit facility | March 9, 2016 | 380,087 | ||||
$500,000 bi-lateral secured letter of credit facility | Evergreen | 89,511 | ||||
Talbot FAL Facility | December 31, 2015 | 25,000 | ||||
PaCRe senior secured letter of credit facility | May 10, 2013 | 258 | ||||
IPC Bi-Lateral Facility | Evergreen | 25,882 | ||||
Flagstone Bi-Lateral Facility | Evergreen | 296,979 | ||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | September 15, 2037 | 136,662 | ||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | September 15, 2036 | 113,750 | ||||
Total | $ | 1,607,929 |
Three Months Ended March 31, | ||||||||
Net cash used in: | 2013 | 2012 | ||||||
Share repurchases | $ | (69,691 | ) | $ | (11,308 | ) | ||
Dividends paid to shareholders | (262,232 | ) | (26,997 | ) |
Capital at | ||||
(Dollars in thousands) | March 31, 2013 | |||
Validus Reinsurance, Ltd. (consolidated), excluding Validus Re Americas, Ltd. and Validus UPS, Ltd. | $ | 2,718,660 | ||
Validus Re Americas, Ltd. (formerly IPCRe, Ltd) | 132,501 | |||
Validus UPS, Ltd. (formerly Flagstone) | 1,055,541 | |||
Total Validus Reinsurance, Ltd. (consolidated) | 3,906,702 | |||
Noncontrolling interest in PacRe, Ltd. | 431,144 | |||
Noncontrolling interest in AlphaCat ILS Funds | 56,278 | |||
Talbot Holdings, Ltd. (consolidated) | 826,630 | |||
Other subsidiaries, net | 48,442 | |||
Other, net | (90,556 | ) | ||
Total consolidated capitalization | 5,178,640 | |||
Senior notes payable | (247,117 | ) | ||
Debentures payable | (540,212 | ) | ||
Total shareholders' equity | $ | 4,391,311 |
A.M. Best (a) | S&P (b) | Moody’s (c) | Fitch (d) | ||||
Validus Holdings, Ltd. | |||||||
Issuer credit rating | bbb | BBB+ | Baa2 | A- | |||
Senior debt | bbb | BBB+ | Baa2 | BBB+ | |||
Subordinated debt | bbb- | BBB- | Baa3 | BBB- | |||
Preferred stock | bb+ | BBB- | Ba1 | — | |||
Outlook on ratings | Stable | Stable | Stable | Stable | |||
Validus Reinsurance, Ltd. | |||||||
Financial strength rating | A | A | A3 | A | |||
Issuer credit rating | a | — | — | — | |||
Outlook on ratings | Stable | Stable | Stable | Stable | |||
Talbot | |||||||
Financial strength rating applicable to all Lloyds syndicates | A | A+ | — | A+ | |||
Flagstone Reassurance Suisse, SA | |||||||
Financial strength rating | A- | ||||||
Issuer credit rating | a- | ||||||
Outlook on ratings | Stable |
(a) | The A.M. Best ratings were most recently affirmed on February 7, 2013 |
(b) | The S&P ratings were most recently affirmed on August 30, 2012 |
(c) | All Moody’s ratings were most recently affirmed on August 31, 2012 |
(d) | All Fitch ratings were most recently affirmed on February 21, 2013 |
(Dollars in thousands) | Commitments (a) | In Use/Outstanding | ||||||
2006 Junior Subordinated Deferrable Debentures | $ | 150,000 | $ | 150,000 | ||||
2007 Junior Subordinated Deferrable Debentures | 200,000 | 139,800 | ||||||
2010 Senior Notes due 2040 | 250,000 | 250,000 | ||||||
$400,000 syndicated unsecured letter of credit facility | 400,000 | — | ||||||
$525,000 syndicated secured letter of credit facility | 525,000 | 380,087 | ||||||
$500,000 bi-lateral secured letter of credit facility | 500,000 | 89,511 | ||||||
Talbot FAL Facility (b) | 25,000 | 25,000 | ||||||
PaCRe senior secured letter of credit facility | 10,000 | 258 | ||||||
IPC Bi-Lateral Facility | 80,000 | 25,882 | ||||||
Flagstone Bi-Lateral Facility | 550,000 | 296,979 | ||||||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | 136,662 | 136,662 | ||||||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | 113,750 | 113,750 | ||||||
Total | $ | 2,940,412 | $ | 1,607,929 |
(a) | Indicates utilization of commitment amount, not drawn borrowings. |
(b) | Talbot operates in Lloyd’s through a corporate member, Talbot 2002 Underwriting Capital Ltd (“T02”), which is the sole participant in Syndicate 1183. Lloyd’s sets T02’s required capital annually based on Syndicate 1183’s business plan, rating environment, reserving environment together with input arising from Lloyd’s discussions with, inter alia, regulatory and rating agencies. Such capital, called Funds at Lloyd’s (“FAL”), comprises: cash, investments and undrawn letters of credit provided by various banks. |
• | unpredictability and severity of catastrophic events; |
• | our ability to obtain and maintain ratings, which may affect our ability to raise additional equity or debt financings, as well as other factors described herein; |
• | adequacy of the Company’s and Flagstone's risk management and loss limitation methods; |
• | cyclicality of demand and pricing in the insurance and reinsurance markets; |
• | the Company’s ability to implement its business strategy during “soft” as well as “hard” markets; |
• | adequacy of the Company’s and Flagstone's loss reserves; |
• | continued availability of capital and financing; |
• | the Company’s ability to identify, hire and retain, on a timely and unimpeded basis and on anticipated economic and other terms, experienced and capable senior management, as well as underwriters, claims professionals and support staff; |
• | acceptance of our business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and (re)insureds; |
• | competition, including increased competition, on the basis of pricing, capacity, coverage terms or other factors; |
• | potential loss of business from one or more major insurance or reinsurance brokers; |
• | the Company’s 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; |
• | general economic and market conditions (including inflation, volatility in the credit and capital markets, interest rates and foreign currency exchange rates) and conditions specific to the insurance and reinsurance markets in which we operate; |
• | the integration of Flagstone and other businesses we may acquire or new business ventures, including overseas offices, we may start; |
• | accuracy of those estimates and judgments used in the preparation of the Company's and Flagstone's financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, taxes, contingencies, litigation and any determination to use the deposit method of accounting, which, for a relatively new insurance and reinsurance company like the Company and Flagstone, are even more difficult to make than those made in a mature company because of limited historical information; |
• | the effect on the Company’s and Flagstone's investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and the possible downgrade of U.S. securities by credit rating agencies and the resulting effect on the value of securities in the Company’s and Flagstone's investment portfolio, as well as other factors; |
• | acts of terrorism, political unrest, outbreak of war and other hostilities or other non-forecasted and unpredictable events; |
• | availability and cost of reinsurance and retrocession coverage; |
• | the failure of reinsurers, retrocessionaires, producers or others to meet their obligations to us; |
• | the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by us; |
• | changes in domestic or foreign laws or regulations, or their interpretations; |
• | changes in accounting principles or the application of such principles by regulators; |
• | statutory or regulatory or rating agency developments, including as to tax policy and reinsurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers; and |
• | the other factors set forth herein under Part I Item 1A "Risk Factors" and under Part II Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other sections of the Company's Annual Report on Form 10-K/A for the year ended December 31, 2012, as well as the risk and other factors set forth in the Company's other filings with the SEC, as well as management's response to any of the aforementioned factors. |
• | interest rate risk; |
• | foreign currency risk; |
• | credit risk; |
• | liquidity risk; and |
• | effects of inflation. |
(Dollars in thousands) | Maturity Date / Term | In Use / Outstanding | |||
2006 Junior Subordinated Deferrable Debentures | June 15, 2036 | $ | 150,000 | ||
2007 Junior Subordinated Deferrable Debentures | June 15, 2037 | 139,800 | |||
2010 Senior Notes due 2040 | January 26, 2040 | 250,000 | |||
$400,000 syndicated unsecured letter of credit facility | March 9, 2016 | — | |||
$525,000 syndicated secured letter of credit facility | March 9, 2016 | 380,087 | |||
$500,000 bi-lateral secured letter of credit facility | Evergreen | 89,511 | |||
Talbot FAL Facility | December 31, 2015 | 25,000 | |||
PaCRe senior secured letter of credit facility | May 10, 2013 | 258 | |||
IPC Bi-Lateral Facility | Evergreen | 25,882 | |||
$550,000 Flagstone Bi-Lateral Facility | Evergreen | 296,979 | |||
Flagstone 2006 Junior Subordinated Deferrable Interest Notes | September 15, 2037 | 136,662 | |||
Flagstone 2007 Junior Subordinated Deferrable Interest Notes | September 15, 2036 | 113,750 | |||
Total | $ | 1,607,929 |
Share Repurchase Activity (Expressed in thousands of U.S. dollars except for share and per share information) | ||||||||||||||||||||
As at December 31, 2012 | Quarter ended | |||||||||||||||||||
Effect of share repurchases: | (cumulative) | January | February | March | March 31, 2013 | |||||||||||||||
Aggregate purchase price (a) | $ | 1,206,845 | $ | — | $ | 36,559 | $ | 33,132 | $ | 69,691 | ||||||||||
Shares repurchased | 43,138,057 | $ | — | $ | 1,017,380 | $ | 887,009 | $ | 1,904,389 | |||||||||||
Average price (a) | $ | 27.98 | $ | — | $ | 35.93 | $ | 37.35 | $ | 36.59 | ||||||||||
Estimated cumulative net accretive (dilutive) impact on: | ||||||||||||||||||||
Diluted BV per common share (b) | $ | 1.80 | ||||||||||||||||||
Diluted EPS - Quarter (c) | $ | 0.49 |
Share Repurchase Activity (Expressed in thousands of U.S. dollars except for share and per share information) | ||||||||||||||||
Effect of share repurchases: | As at March 31, 2013 (cumulative) | April | As at May 1, 2013 | Cumulative to Date Effect | ||||||||||||
Aggregate purchase price (a) | $ | 1,276,536 | $ | 71,058 | $ | 2,288 | $ | 1,349,882 | ||||||||
Shares repurchased | 45,042,446 | 1,883,310 | 59,000 | 46,984,756 | ||||||||||||
Average price (a) | $ | 28.34 | $ | 37.73 | $ | 38.78 | $ | 28.73 |
Exhibit | Description |
Exhibit 10.1 * | Employment Agreement dated as of April 2, 2013 between Validus America, Inc. and Romel Salam. |
Exhibit 10.2 * | Amended and Restated Employment Agreement dated as of April 30, 2013 between Validus Services (Bermuda), Ltd. and Kean Driscoll. |
Exhibit 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. |
Exhibit 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002. |
Exhibit 32* | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. |
Exhibit 101.1 INS* | XBRL Instance Document |
Exhibit 101.SCH* | XBRL Taxonomy Extension Schema Document |
Exhibit 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document |
Exhibit 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document |
Exhibit 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document |
Exhibit 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
VALIDUS HOLDINGS, LTD. | ||
(Registrant) | ||
Date: | May 6, 2013 | /s/ Edward J. Noonan |
Edward J. Noonan | ||
Chief Executive Officer | ||
Date: | May 6, 2013 | /s/ Jeffrey D. Sangster |
Jeffrey D. Sangster | ||
Executive Vice President and Chief Financial Officer |
If to the Executive: | To the last address delivered to the Company by the Executive in the manner set forth herein. |
If to the Company: | Validus Holdings, Ltd. 29 Richmond Road Pembroke, HM08 Bermuda Attn: General Counsel |
If to the Executive: | To the last address delivered to the Company by the Executive in the manner set forth herein. |
If to the Company: | Validus Holdings, Ltd. 29 Richmond Road Pembroke, HM08 Bermuda Attn: General Counsel |
1. | I have reviewed this Quarterly Report on Form 10-Q of Validus Holdings, Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ EDWARD J. NOONAN | ||
Edward J. Noonan Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Validus Holdings, Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ JEFFREY D. SANGSTER | ||
Jeffrey D. Sangster Executive Vice President and Chief Financial Officer |
/s/ EDWARD J. NOONAN | ||
Edward J. Noonan Chief Executive Officer Validus Holdings, Ltd. |
/s/ JEFFREY D. SANGSTER | ||
Jeffrey D. Sangster Executive Vice President and Chief Financial Officer Validus Holdings, Ltd. |
Basis of preparation and consolidation Basis of preparation and consolidation (Details) (Flagstone Reinsurance Holdings Sa [Member], USD $)
|
0 Months Ended |
---|---|
Nov. 30, 2012
|
|
Flagstone Reinsurance Holdings Sa [Member]
|
|
Business Acquisition [Line Items] | |
Exchange Ratio | 0.1935 |
Per share price paid by Company to acquire FSR common shares | $ 2.00 |
Derivative instruments used in hedging activities (Amount and balance sheet location) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Not designated as hedging instruments | Foreign exchange contracts
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Notional amount | $ 147,398 | $ 310,541 |
Not designated as hedging instruments | Foreign exchange contracts | Other assets
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative assets | 266 | 0 |
Not designated as hedging instruments | Foreign exchange contracts | Accounts payable and accrued expenses
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative liabilities | 2,646 | 394 |
Not designated as hedging instruments | Currency swap
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Notional amount | 17,153 | |
Not designated as hedging instruments | Currency swap | Other assets
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative assets | 0 | |
Not designated as hedging instruments | Currency swap | Accounts payable and accrued expenses
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative liabilities | 772 | |
Designated as hedging instruments | Interest rate swap contracts
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Notional amount | 452,263 | 289,800 |
Designated as hedging instruments | Interest rate swap contracts | Other assets
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative assets | 0 | 0 |
Designated as hedging instruments | Interest rate swap contracts | Accounts payable and accrued expenses
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative liabilities | 447 | 220 |
Designated as hedging instruments | Foreign exchange contracts
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Notional amount | 55,450 | 35,976 |
Designated as hedging instruments | Foreign exchange contracts | Other assets
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative assets | 701 | 0 |
Designated as hedging instruments | Foreign exchange contracts | Accounts payable and accrued expenses
|
||
Summary of amount of derivatives designated as hedging instruments | ||
Fair value, derivative liabilities | $ 0 | $ 223 |
Junior subordinated deferrable debentures | Interest rate swap contracts
|
||
Number of instruments held: | ||
Number of derivative instruments held | 2 | |
Flagstone Junior subordinated deferrable debentures | Interest rate swap contracts
|
||
Number of instruments held: | ||
Number of derivative instruments held | 3 | |
Flagstone Junior subordinated deferrable debentures | Cross currency interest rate swap
|
||
Number of instruments held: | ||
Number of derivative instruments held | 1 |
Commitments and contingencies (Aquiline commitment) (Details) (Aquiline Capital Partners II GP Offshore Ltd, USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Aquiline Capital Partners II GP Offshore Ltd
|
|
Related Party Transaction [Line Items] | |
Percentage of Assignor's interest assumed | 100.00% |
Total capital commitment | $ 50,000 |
Remaining capital commitment | $ 31,041 |
Derivative instruments used in hedging activities (Amount included in statement of operations) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Cash flow hedge | Interest rate swap contracts
|
||
Derivative instruments designated as a cash flow hedge | ||
Amount of ineffective portion excluded from effectiveness testing | $ 0 | |
Cash flow hedge | Interest rate swap contracts | Other comprehensive income
|
||
Derivative instruments designated as a cash flow hedge | ||
Amount of effective portion recognized in other comprehensive income | 1,608 | |
Cash flow hedge | Interest rate swap contracts | Finance expenses
|
||
Derivative instruments designated as a cash flow hedge | ||
Amount of effective portion subsequently reclassified to earnings | (1,608) | |
Fair value hedge | Foreign exchange contracts | Foreign exchange gains (losses)
|
||
Derivatives designated as fair value hedges and related hedged item | ||
Amount of gain (loss) recognized in income on derivative | 1,261 | (3,319) |
Amount of gain (loss) on hedged item recognized in income attributable to risk being hedged | (1,261) | 3,319 |
Amount of gain (loss) recognized in income on derivative (ineffective portion) | $ 0 | $ 0 |
Fair value measurements (Fair value hierarchy) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
||||
---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | $ 5,676,552 | $ 5,085,334 | ||||
Short-term investments, at fair value | 367,619 | 1,114,250 | ||||
Other investments, at fair value | 532,786 | 564,448 | ||||
Total | 6,576,957 | 6,764,032 | ||||
Noncontrolling interest | (428,087) | (432,737) | [1] | |||
Investments Excluding Noncontrolling Interest | 6,148,870 | 6,331,295 | ||||
U.S. government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,424,969 | 1,099,230 | ||||
Non-US government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 396,201 | 302,279 | ||||
States, municipalities, political subdivision
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 37,731 | 42,063 | ||||
Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 384,496 | 388,874 | ||||
Non-Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 26,284 | 106,456 | ||||
U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,484,178 | 1,210,173 | ||||
Non-U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 640,992 | 593,265 | ||||
Bank loans
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 731,811 | 673,383 | ||||
Catastrophe bonds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 47,572 | 56,947 | ||||
Asset-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 502,318 | 612,664 | ||||
Fund of hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 4,000 | 4,757 | ||||
Private equity investments
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 12,925 | 12,951 | ||||
Hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 506,768 | 538,526 | ||||
Mutual funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 9,093 | 8,214 | ||||
PaCRe funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Noncontrolling Interest, Ownership Percentage by Parent | 10.00% | |||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 90.00% | 90.00% | ||||
Fair Value, Measurements, Recurring [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 5,676,552 | 5,085,334 | ||||
Short-term investments, at fair value | 367,619 | 1,114,250 | ||||
Other investments, at fair value | 532,786 | 564,448 | ||||
Total | 6,576,957 | 6,764,032 | ||||
Noncontrolling interest | (428,087) | [1] | (432,737) | |||
Investments Excluding Noncontrolling Interest | 6,148,870 | 6,331,295 | ||||
Fair Value, Measurements, Recurring [Member] | U.S. government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,424,969 | 1,099,230 | ||||
Fair Value, Measurements, Recurring [Member] | Non-US government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 396,201 | 302,279 | ||||
Fair Value, Measurements, Recurring [Member] | States, municipalities, political subdivision
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 37,731 | 42,063 | ||||
Fair Value, Measurements, Recurring [Member] | Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 384,496 | 388,874 | ||||
Fair Value, Measurements, Recurring [Member] | Non-Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 26,284 | 106,456 | ||||
Fair Value, Measurements, Recurring [Member] | U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,484,178 | 1,210,173 | ||||
Fair Value, Measurements, Recurring [Member] | Non-U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 640,992 | 593,265 | ||||
Fair Value, Measurements, Recurring [Member] | Bank loans
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 731,811 | 673,383 | ||||
Fair Value, Measurements, Recurring [Member] | Catastrophe bonds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 47,572 | 56,947 | ||||
Fair Value, Measurements, Recurring [Member] | Asset-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 502,318 | 612,664 | ||||
Fair Value, Measurements, Recurring [Member] | Fund of hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 4,000 | 4,757 | ||||
Fair Value, Measurements, Recurring [Member] | Private equity investments
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 12,925 | 12,951 | ||||
Fair Value, Measurements, Recurring [Member] | Hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 506,768 | [1] | 538,526 | |||
Fair Value, Measurements, Recurring [Member] | Mutual funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 9,093 | 8,214 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Short-term investments, at fair value | 332,663 | 1,063,175 | ||||
Other investments, at fair value | 0 | 0 | ||||
Total | 332,663 | 1,063,175 | ||||
Noncontrolling interest | 0 | [1] | ||||
Investments Excluding Noncontrolling Interest | 332,663 | 1,063,175 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | U.S. government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Non-US government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | States, municipalities, political subdivision
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Non-Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Non-U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Bank loans
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Catastrophe bonds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Asset-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Fund of hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Private equity investments
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 1 | Hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | [1] | 0 | |||
Fair Value, Measurements, Recurring [Member] | Level 1 | Mutual funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 5,676,552 | 5,085,334 | ||||
Short-term investments, at fair value | 34,956 | 51,075 | ||||
Other investments, at fair value | 9,093 | 8,214 | ||||
Total | 5,720,601 | 5,144,623 | ||||
Noncontrolling interest | 0 | [1] | ||||
Investments Excluding Noncontrolling Interest | 5,720,601 | 5,144,623 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | U.S. government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,424,969 | 1,099,230 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Non-US government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 396,201 | 302,279 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | States, municipalities, political subdivision
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 37,731 | 42,063 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 384,496 | 388,874 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Non-Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 26,284 | 106,456 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 1,484,178 | 1,210,173 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Non-U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 640,992 | 593,265 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Bank loans
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 731,811 | 673,383 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Catastrophe bonds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 47,572 | 56,947 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Asset-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 502,318 | 612,664 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Fund of hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Private equity investments
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 2 | Hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 0 | [1] | 0 | |||
Fair Value, Measurements, Recurring [Member] | Level 2 | Mutual funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 9,093 | 8,214 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Short-term investments, at fair value | 0 | 0 | ||||
Other investments, at fair value | 523,693 | 556,234 | ||||
Total | 523,693 | 556,234 | ||||
Noncontrolling interest | (428,087) | [1] | (432,737) | |||
Investments Excluding Noncontrolling Interest | 95,606 | 123,497 | ||||
Percentage Of Fair Value Assets Measured On Recurring Basis | 1.60% | 2.00% | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | U.S. government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Non-US government and government agency
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | States, municipalities, political subdivision
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Non-Agency residential mortgage-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Non-U.S. corporate
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Bank loans
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Catastrophe bonds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Asset-backed securities
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fixed maturities, at fair value | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Fund of hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 4,000 | 4,757 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Private equity investments
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 12,925 | 12,951 | ||||
Fair Value, Measurements, Recurring [Member] | Level 3 | Hedge funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | 506,768 | [1] | 538,526 | |||
Fair Value, Measurements, Recurring [Member] | Level 3 | Mutual funds
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Other investments, at fair value | $ 0 | $ 0 | ||||
|
Share capital (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of common shares issued and outstanding | The following table is a summary of the common shares issued and outstanding:
|
Segment information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
segments
subsidiaries
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|||||||
Segment Reporting Information [Line Items] | |||||||||
Number of wholly owned subsidiaries | 2 | ||||||||
Number of operating segments | 3 | ||||||||
Underwriting income | |||||||||
Gross premiums written | $ 1,104,760 | $ 837,289 | |||||||
Reinsurance premiums ceded | (187,216) | (107,052) | |||||||
Net premiums written | 917,544 | 730,237 | |||||||
Change in unearned premiums | (386,483) | (279,038) | |||||||
Net premiums earned | 531,061 | 451,199 | |||||||
Underwriting deductions | |||||||||
Losses and loss expenses | 144,771 | 231,989 | |||||||
Policy acquisition costs | 93,611 | 78,132 | |||||||
General and administrative expenses | 80,279 | 66,375 | |||||||
Share compensation expenses | 2,318 | 5,438 | |||||||
Total underwriting deductions | 320,979 | 381,934 | |||||||
Underwriting income (loss) | 210,082 | 69,265 | |||||||
Net investment income | 25,649 | 27,760 | |||||||
Other income | 2,685 | 8,891 | |||||||
Finance expenses | (24,446) | (16,279) | |||||||
Operating income (loss) before taxes and income from operating affiliates | 213,970 | 89,637 | |||||||
Tax benefit (expense) | 318 | (139) | |||||||
Income from operating affilates | 3,523 | 3,367 | |||||||
Net operating income (loss) | 217,811 | 92,865 | |||||||
Net realized gains on investments | 1,721 | 7,532 | |||||||
Net unrealized (losses) gains on investments | (7,237) | 20,671 | |||||||
Income from investment affiliate | 1,477 | 0 | |||||||
Foreign exchange gains (losses) | 6,922 | 3,166 | |||||||
Net income | 220,694 | 124,234 | |||||||
Net loss attributable to noncontrolling interest | 2,549 | 0 | |||||||
Net income (loss) available (attributable) to Validus | 223,243 | 124,234 | |||||||
Selected ratios: | |||||||||
Net premiums written / Gross premiums written | 83.10% | 87.20% | |||||||
Losses and loss expenses | 27.30% | [1] | 51.40% | [1] | |||||
Policy acquisition costs | 17.60% | [1] | 17.30% | [1] | |||||
General and administrative expenses | 15.60% | [1],[2] | 15.90% | [1],[2] | |||||
Expense ratio | 33.20% | 33.20% | |||||||
Combined ratio | 60.50% | 84.60% | |||||||
Total assets | 10,564,400 | 8,121,869 | 10,020,264 | ||||||
Validus Re Segment
|
|||||||||
Underwriting income | |||||||||
Gross premiums written | 747,963 | 566,866 | |||||||
Reinsurance premiums ceded | (125,728) | (30,001) | |||||||
Net premiums written | 622,235 | 536,865 | |||||||
Change in unearned premiums | (319,101) | (283,856) | |||||||
Net premiums earned | 303,134 | 253,009 | |||||||
Underwriting deductions | |||||||||
Losses and loss expenses | 73,402 | 124,206 | |||||||
Policy acquisition costs | 51,744 | 38,790 | |||||||
General and administrative expenses | 29,441 | 17,252 | |||||||
Share compensation expenses | 1,413 | 1,872 | |||||||
Total underwriting deductions | 156,000 | 182,120 | |||||||
Underwriting income (loss) | 147,134 | 70,889 | |||||||
Net investment income | 23,193 | 23,577 | |||||||
Other income | 13,490 | 2,219 | |||||||
Finance expenses | (3,252) | (3,694) | |||||||
Operating income (loss) before taxes and income from operating affiliates | 180,565 | 92,991 | |||||||
Tax benefit (expense) | 1,757 | (7) | |||||||
Income from operating affilates | 0 | 0 | |||||||
Net operating income (loss) | 182,322 | 92,984 | |||||||
Net realized gains on investments | 1,593 | 6,242 | |||||||
Net unrealized (losses) gains on investments | (2,193) | 19,865 | |||||||
Income from investment affiliate | 1,477 | ||||||||
Foreign exchange gains (losses) | 11,162 | (262) | |||||||
Net income | 194,361 | 118,829 | |||||||
Net loss attributable to noncontrolling interest | 0 | 0 | |||||||
Net income (loss) available (attributable) to Validus | 194,361 | 118,829 | |||||||
Selected ratios: | |||||||||
Net premiums written / Gross premiums written | 83.20% | 94.70% | |||||||
Losses and loss expenses | 24.20% | [1] | 49.10% | [1] | |||||
Policy acquisition costs | 17.10% | [1] | 15.30% | [1] | |||||
General and administrative expenses | 10.20% | [1],[2] | 7.60% | [1],[2] | |||||
Expense ratio | 27.30% | 22.90% | |||||||
Combined ratio | 51.50% | 72.00% | |||||||
Total assets | 6,299,481 | 4,940,727 | |||||||
AlphaCat Segment
|
|||||||||
Underwriting income | |||||||||
Gross premiums written | 96,516 | 3,518 | |||||||
Reinsurance premiums ceded | 0 | 0 | |||||||
Net premiums written | 96,516 | 3,518 | |||||||
Change in unearned premiums | (68,899) | (855) | |||||||
Net premiums earned | 27,617 | 2,663 | |||||||
Underwriting deductions | |||||||||
Losses and loss expenses | 0 | 0 | |||||||
Policy acquisition costs | 2,638 | 256 | |||||||
General and administrative expenses | 4,037 | 1,032 | |||||||
Share compensation expenses | 77 | 52 | |||||||
Total underwriting deductions | 6,752 | 1,340 | |||||||
Underwriting income (loss) | 20,865 | 1,323 | |||||||
Net investment income | 881 | 659 | |||||||
Other income | 6,633 | 7,974 | |||||||
Finance expenses | (11,325) | (2) | |||||||
Operating income (loss) before taxes and income from operating affiliates | 17,054 | 9,954 | |||||||
Tax benefit (expense) | 0 | 0 | |||||||
Income from operating affilates | 3,523 | 3,367 | |||||||
Net operating income (loss) | 20,577 | 13,321 | |||||||
Net realized gains on investments | 0 | 0 | |||||||
Net unrealized (losses) gains on investments | (4,788) | (597) | |||||||
Income from investment affiliate | 0 | ||||||||
Foreign exchange gains (losses) | (1,187) | (9) | |||||||
Net income | 14,602 | 12,715 | |||||||
Net loss attributable to noncontrolling interest | 2,549 | 0 | |||||||
Net income (loss) available (attributable) to Validus | 17,151 | 12,715 | |||||||
Selected ratios: | |||||||||
Net premiums written / Gross premiums written | 100.00% | 100.00% | |||||||
Losses and loss expenses | 0.00% | [1] | 0.00% | [1] | |||||
Policy acquisition costs | 9.60% | [1] | 9.60% | [1] | |||||
General and administrative expenses | 14.90% | [1],[2] | 40.70% | [1],[2] | |||||
Expense ratio | 24.50% | 50.30% | |||||||
Combined ratio | 24.50% | 50.30% | |||||||
Total assets | 1,189,190 | 237,528 | |||||||
Talbot Segment
|
|||||||||
Underwriting income | |||||||||
Gross premiums written | 293,530 | 293,253 | |||||||
Reinsurance premiums ceded | (94,737) | (103,399) | |||||||
Net premiums written | 198,793 | 189,854 | |||||||
Change in unearned premiums | 1,517 | 5,673 | |||||||
Net premiums earned | 200,310 | 195,527 | |||||||
Underwriting deductions | |||||||||
Losses and loss expenses | 71,369 | 107,783 | |||||||
Policy acquisition costs | 40,526 | 38,738 | |||||||
General and administrative expenses | 30,912 | 33,348 | |||||||
Share compensation expenses | 1,405 | 1,348 | |||||||
Total underwriting deductions | 144,212 | 181,217 | |||||||
Underwriting income (loss) | 56,098 | 14,310 | |||||||
Net investment income | 4,718 | 5,790 | |||||||
Other income | 0 | 1,026 | |||||||
Finance expenses | (74) | (31) | |||||||
Operating income (loss) before taxes and income from operating affiliates | 60,742 | 21,095 | |||||||
Tax benefit (expense) | (1,054) | (132) | |||||||
Income from operating affilates | 0 | 0 | |||||||
Net operating income (loss) | 59,688 | 20,963 | |||||||
Net realized gains on investments | 128 | 1,290 | |||||||
Net unrealized (losses) gains on investments | (256) | 1,403 | |||||||
Income from investment affiliate | 0 | ||||||||
Foreign exchange gains (losses) | (3,918) | 3,623 | |||||||
Net income | 55,642 | 27,279 | |||||||
Net loss attributable to noncontrolling interest | 0 | 0 | |||||||
Net income (loss) available (attributable) to Validus | 55,642 | 27,279 | |||||||
Selected ratios: | |||||||||
Net premiums written / Gross premiums written | 67.70% | 64.70% | |||||||
Losses and loss expenses | 35.60% | [1] | 55.10% | [1] | |||||
Policy acquisition costs | 20.20% | [1] | 19.80% | [1] | |||||
General and administrative expenses | 16.10% | [1],[2] | 17.70% | [1],[2] | |||||
Expense ratio | 36.30% | 37.50% | |||||||
Combined ratio | 71.90% | 92.60% | |||||||
Total assets | 3,043,312 | 2,929,817 | |||||||
Corporate & Eliminations
|
|||||||||
Underwriting income | |||||||||
Gross premiums written | (33,249) | (26,348) | |||||||
Reinsurance premiums ceded | 33,249 | 26,348 | |||||||
Net premiums written | 0 | 0 | |||||||
Change in unearned premiums | 0 | 0 | |||||||
Net premiums earned | 0 | 0 | |||||||
Underwriting deductions | |||||||||
Losses and loss expenses | 0 | 0 | |||||||
Policy acquisition costs | (1,297) | 348 | |||||||
General and administrative expenses | 15,889 | 14,743 | |||||||
Share compensation expenses | (577) | 2,166 | |||||||
Total underwriting deductions | 14,015 | 17,257 | |||||||
Underwriting income (loss) | (14,015) | (17,257) | |||||||
Net investment income | (3,143) | (2,266) | |||||||
Other income | (17,438) | (2,328) | |||||||
Finance expenses | (9,795) | (12,552) | |||||||
Operating income (loss) before taxes and income from operating affiliates | (44,391) | (34,403) | |||||||
Tax benefit (expense) | (385) | 0 | |||||||
Income from operating affilates | 0 | 0 | |||||||
Net operating income (loss) | (44,776) | (34,403) | |||||||
Net realized gains on investments | 0 | 0 | |||||||
Net unrealized (losses) gains on investments | 0 | 0 | |||||||
Income from investment affiliate | 0 | ||||||||
Foreign exchange gains (losses) | 865 | (186) | |||||||
Net income | (43,911) | (34,589) | |||||||
Net loss attributable to noncontrolling interest | 0 | 0 | |||||||
Net income (loss) available (attributable) to Validus | (43,911) | (34,589) | |||||||
Selected ratios: | |||||||||
Total assets | $ 32,417 | $ 13,797 | |||||||
|
Reinsurance (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | $ 445,083 | $ 486,402 |
Percentage of reinsurance recoverables | 100.00% | 100.00% |
Reinsurance (Textuals) [Abstract] | ||
Incurred but not reported recoverable | 181,163 | 185,255 |
Provision for uncollectible reinsurance relating to losses recoverable | 6,046 | 6,602 |
A- or better rating
|
||
Reinsurance (Textuals) [Abstract] | ||
Percentage of total (including loss reserves recoverable and recoverables on paid losses) | 97.90% | |
Fully Collateralized Reinsurers
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 29,906 | 47,445 |
Top 10 reinsurers
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 339,061 | 360,234 |
Percentage of reinsurance recoverables | 76.20% | 74.10% |
Percentage of top 10 reinsurers reinsurance recoverable | 100.00% | 100.00% |
Top 10 reinsurers | Lloyd's Syndicates | A plus
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 69,769 | 71,469 |
Percentage of top 10 reinsurers reinsurance recoverable | 20.60% | 19.90% |
Top 10 reinsurers | National Indemnity | AA plus
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 64,667 | 59,941 |
Percentage of top 10 reinsurers reinsurance recoverable | 19.10% | 16.60% |
Top 10 reinsurers | Everest Re | A plus
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 52,863 | 51,340 |
Percentage of top 10 reinsurers reinsurance recoverable | 15.60% | 14.30% |
Top 10 reinsurers | Hannover Re | AA-
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 42,431 | 40,552 |
Percentage of top 10 reinsurers reinsurance recoverable | 12.50% | 11.30% |
Top 10 reinsurers | Fully Collateralized Reinsurers | NR
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 29,906 | 47,445 |
Percentage of top 10 reinsurers reinsurance recoverable | 8.80% | 13.20% |
Top 10 reinsurers | Transatlantic Re | A plus
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 20,584 | 20,320 |
Percentage of top 10 reinsurers reinsurance recoverable | 6.10% | 5.60% |
Top 10 reinsurers | Swiss Re | AA-
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 17,574 | 16,992 |
Percentage of top 10 reinsurers reinsurance recoverable | 5.20% | 4.70% |
Top 10 reinsurers | XL Re | A
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 15,350 | 14,854 |
Percentage of top 10 reinsurers reinsurance recoverable | 4.50% | 4.10% |
Top 10 reinsurers | Tokio Millennium | AA plus
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 13,439 | |
Percentage of top 10 reinsurers reinsurance recoverable | 4.00% | |
Top 10 reinsurers | Munich Re | AA-
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 12,478 | 20,954 |
Percentage of top 10 reinsurers reinsurance recoverable | 3.60% | 5.80% |
Top 10 reinsurers | Allianz | AA-
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 16,367 | |
Percentage of top 10 reinsurers reinsurance recoverable | 4.50% | |
Other reinsurers' balances > $1 million
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | 97,409 | 115,262 |
Percentage of reinsurance recoverables | 21.90% | 23.70% |
Other reinsurers' balances less than $1 million
|
||
Reinsurance recoverables by reinsurer | ||
Reinsurance recoverable | $ 8,613 | $ 10,906 |
Percentage of reinsurance recoverables | 1.90% | 2.20% |
Related party transactions (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Aquiline Capital Partners LLC
|
|||
Related Party Transaction [Line Items] | |||
Shares owned by related party | 6,255,943 | ||
Warrants to purchase shares | 2,756,088 | ||
Group Ark Insurance Holdings Ltd
|
|||
Related Party Transaction [Line Items] | |||
Gross premiums written | $ 1,795 | $ 297 | |
Premiums receivable | 198 | 251 | |
Reinsurance premiums ceded | 4 | 0 | |
Loss reserves recoverable | 4,417 | 3,694 | |
Earned premium adjustments | 719 | 362 | |
Tiger Risk Partners LLC
|
|||
Related Party Transaction [Line Items] | |||
Brokerage expenses | 290 | ||
Accounts payable and accrued expenses | 964 | ||
Conning Inc
|
|||
Related Party Transaction [Line Items] | |||
Accounts payable and accrued expenses | 196 | 201 | |
Investment management fees | 191 | 203 | |
Aquiline Capital Partners II GP Offshore Ltd
|
|||
Related Party Transaction [Line Items] | |||
Accounts payable and accrued expenses | 0 | 0 | |
Percentage of Assignor's interest assumed | 100.00% | ||
Total capital commitment | 50,000 | ||
Partnership fees incurred | 120 | 1,436 | |
Capital contributions | $ 1,341 | $ 1,529 |
Significant accounting policies (Policies)
|
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Accounting Policies [Abstract] | |
Basis of preparation | These unaudited consolidated financial statements include Validus Holdings, Ltd. and its subsidiaries (together, the "Company") and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 in Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In addition, the year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. This Quarterly Report should be read in conjunction with the financial statements included in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2012, as filed with the U.S. Securities and Exchange Commission (the "SEC"). In the opinion of management, these unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company's financial position and results of operations as at the end of and for the periods presented. Certain amounts in prior periods have been reclassified to conform to current period presentation. All significant intercompany accounts and transactions have been eliminated. |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates reflected in the Company's consolidated financial statements include the reserve for losses and loss expenses, premium estimates for business written on a line slip or proportional basis, the valuation of goodwill and intangible assets, reinsurance premiums ceded and reinsurance recoverable balances including the provision for unrecoverable reinsurance recoverable balances and investment valuation. Actual results could differ from those estimates. |
Reserves for losses and loss expenses | Reserves for losses and loss expenses are based in part upon the estimation of case losses reported from brokers, insureds and ceding companies. The Company also uses statistical and actuarial methods to estimate ultimate expected losses and loss expenses. The period of time from the occurrence of a loss, the reporting of a loss to the Company and the settlement of the Company's liability may be several months or years. During this period, additional facts and trends may be revealed. As these factors become apparent, case reserves will be adjusted, sometimes requiring an increase or decrease in the overall reserves of the Company, and at other times requiring a reallocation of incurred but not reported reserves to specific case reserves. These estimates are reviewed and adjusted regularly, and such adjustments, if any, are reflected in earnings in the period in which they become known. While management believes that it has made a reasonable estimate of ultimate losses, there can be no assurances that ultimate losses and loss expenses will not exceed the total reserves. |
Reinsurance | The Company uses a default analysis to estimate uncollectible reinsurance. The primary components of the default analysis are reinsurance recoverable balances by reinsurer and default factors used to determine the portion of a reinsurer's balance deemed to be uncollectible. Default factors require considerable judgment and are determined using the current rating, or rating equivalent, of each reinsurer as well as other key considerations and assumptions. To estimate the provision for uncollectible reinsurance recoverable, the reinsurance recoverable is first allocated to applicable reinsurers. This determination is based on a process rather than an estimate, although an element of judgment is applied. The Company enters into reinsurance and retrocession agreements in order to mitigate its accumulation of loss, reduce its liability on individual risks, enable it to underwrite policies with higher limits and increase its aggregate capacity. The cession of insurance and reinsurance does not legally discharge the Company from its primary liability for the full amount of the policies, and the Company is required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance or retrocession agreement. Amounts recoverable from reinsurers are estimated in a manner consistent with the underlying liabilities. |
Investments in affiliates (Operating affiliates - other details) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
---|---|---|---|---|
Investment: | ||||
Investment at cost | $ 86,888 | |||
Carrying value | 90,263 | 137,111 | 56,398 | 53,031 |
AlphaCat Re 2011 Ltd
|
||||
Investment: | ||||
Investment at cost | 16,355 | |||
Voting ownership % | 43.70% | |||
Equity ownership % | 22.30% | |||
Carrying value | 16,805 | 62,792 | 56,398 | 53,031 |
AlphaCat Re 2012 Ltd
|
||||
Investment: | ||||
Investment at cost | 25,533 | |||
Voting ownership % | 49.00% | |||
Equity ownership % | 37.90% | |||
Carrying value | 27,358 | 29,319 | ||
AlphaCat 2013 Ltd
|
||||
Investment: | ||||
Investment at cost | 45,000 | |||
Voting ownership % | 40.90% | |||
Equity ownership % | 19.70% | |||
Carrying value | $ 46,100 | $ 45,000 |
Investments (Maturity profile of fixed maturity investments) (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Maturity profile | ||
Amortized cost | $ 5,616,693 | $ 5,008,514 |
Estimated fair value | 5,676,552 | 5,085,334 |
Fixed maturities trading securities allocated to contractual maturity
|
||
Maturity profile | ||
Amortized cost | 4,717,019 | 3,919,507 |
Estimated fair value | 4,763,454 | 3,977,340 |
Due in one year or less | Fixed maturities trading securities allocated to contractual maturity
|
||
Maturity profile | ||
Amortized cost | 719,492 | 526,529 |
Estimated fair value | 725,393 | 530,499 |
Due after one year through five years | Fixed maturities trading securities allocated to contractual maturity
|
||
Maturity profile | ||
Amortized cost | 3,626,561 | 2,971,118 |
Estimated fair value | 3,661,494 | 3,018,544 |
Due after five years through ten years | Fixed maturities trading securities allocated to contractual maturity
|
||
Maturity profile | ||
Amortized cost | 367,885 | 418,377 |
Estimated fair value | 373,504 | 424,304 |
Due after ten years | Fixed maturities trading securities allocated to contractual maturity
|
||
Maturity profile | ||
Amortized cost | 3,081 | 3,483 |
Estimated fair value | 3,063 | 3,993 |
Asset backed and mortgaged backed securities | No single maturity date
|
||
Maturity profile | ||
Amortized cost | 899,674 | 1,089,007 |
Estimated fair value | $ 913,098 | $ 1,107,994 |
Subsequent events (Details) (USD $)
|
0 Months Ended |
---|---|
May 01, 2013
|
|
Dividend declared | Common shares
|
|
Subsequent events (Textuals) [Abstract] | |
Subsequent event date | May 01, 2013 |
Subsequent event, dividends declared | $ 0.30 |
Dividend declared | Common share equivalents
|
|
Subsequent events (Textuals) [Abstract] | |
Subsequent event, dividends declared | $ 0.30 |
Longhorn Re acquisition
|
|
Subsequent events (Textuals) [Abstract] | |
Subsequent event date | Apr. 25, 2013 |
Earnings per share (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2013 and 2012:
|
Investments in affiliates (Text) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Schedule of Equity Method Investments [Line Items] | ||||
Return of investment | $ 50,222 | |||
Equity Method Investments Proportional Share Of Income | 3,374 | 3,367 | ||
Carrying value | 90,263 | 56,398 | 137,111 | 53,031 |
AlphaCat Re 2011 Ltd
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment Voting Percentage | 43.70% | |||
Ownership percentage required for consolidation | 50.00% | |||
Return of investment | 46,436 | |||
Equity ownership % | 22.30% | |||
Equity Method Investments Proportional Share Of Income | 449 | 3,367 | ||
Carrying value | 16,805 | 56,398 | 62,792 | 53,031 |
AlphaCat Re 2012 Ltd
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment Voting Percentage | 49.00% | |||
Return of investment | 3,786 | |||
Equity ownership % | 37.90% | |||
Equity Method Investments Proportional Share Of Income | 1,825 | |||
Carrying value | 27,358 | 29,319 | ||
AlphaCat 2013 Ltd
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment Voting Percentage | 40.90% | |||
Return of investment | 0 | |||
Equity ownership % | 19.70% | |||
Equity Method Investments Proportional Share Of Income | 1,100 | |||
Carrying value | 46,100 | 45,000 | ||
Investment in ILS Funds
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Third party subscriptions | 219,400 | |||
Equity Method Investments Proportional Share Of Income | 149 | |||
Carrying value | 20,149 | |||
Aquiline Financial Services Fund LP
|
||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment Voting Percentage | 0.00% | |||
Equity ownership % | 6.70% | |||
Investment Time Lag Reporting | 3 months | |||
Percentage of Assignor's interest assumed | 100.00% | |||
Total capital commitment | $ 50,000 |
AlphaCat variable funding notes (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
AlphaCat variable funding notes | $ 290,588 | $ 0 |
Variable interest entity, not primary beneficiary
|
||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
AlphaCat variable funding notes | 290,588 | |
Variable interest entity, not primary beneficiary | AlphaCat 2013 Ltd
|
||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
AlphaCat variable funding notes | 161,439 | |
Variable interest entity, not primary beneficiary | AlphaCat ILS Funds
|
||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
AlphaCat variable funding notes | $ 129,149 |
Stock plans (Components of share compensation expenses) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Total share compensation expenses | ||
Share compensation expenses | $ 2,318 | $ 5,438 |
Options
|
||
Total share compensation expenses | ||
Share compensation expenses | 0 | 135 |
Restricted share awards
|
||
Total share compensation expenses | ||
Share compensation expenses | 4,061 | 5,940 |
Restricted share units
|
||
Total share compensation expenses | ||
Share compensation expenses | 121 | 120 |
Performance shares
|
||
Total share compensation expenses | ||
Share compensation expenses | $ (1,864) | $ (757) |
Fair value measurements (Level 3 rollforward) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|||||||
Reconciliation of beginning and ending balances for all investments measured at fair value on recurring basis | |||||||||
Noncontrolling interest | $ (428,087) | $ (432,737) | [1] | ||||||
Fair Value, Measurements, Recurring [Member]
|
|||||||||
Reconciliation of beginning and ending balances for all investments measured at fair value on recurring basis | |||||||||
Noncontrolling interest | (428,087) | [1] | (432,737) | ||||||
Level 3 | Fair Value, Measurements, Recurring [Member]
|
|||||||||
Reconciliation of beginning and ending balances for all investments measured at fair value on recurring basis | |||||||||
Level 3 investments - beginning of period | 556,234 | 8,880 | |||||||
Purchases | 459 | 1,529 | |||||||
Sales | (31,334) | (620) | |||||||
Realized gains | 40 | 28 | |||||||
Unrealized losses | (1,706) | (1,492) | |||||||
Level 3 investments - end of period | 523,693 | 8,325 | |||||||
Noncontrolling interest | (428,087) | [1] | (432,737) | ||||||
Investments excluding noncontrolling interest level three rollforward | 95,606 | ||||||||
Level 3 | Fair Value, Measurements, Recurring [Member] | Other Investments
|
|||||||||
Reconciliation of beginning and ending balances for all investments measured at fair value on recurring basis | |||||||||
Level 3 investments - beginning of period | 556,234 | 8,880 | |||||||
Purchases | 459 | 1,529 | |||||||
Sales | (31,334) | (620) | |||||||
Realized gains | 40 | 28 | |||||||
Unrealized losses | (1,706) | (1,492) | |||||||
Level 3 investments - end of period | 523,693 | 8,325 | |||||||
Noncontrolling interest | (428,087) | [2] | |||||||
Investments excluding noncontrolling interest level three rollforward | $ 95,606 | ||||||||
|
Investments
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
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Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments (a) Trading Securities The Company's investments in fixed maturities, short-term investments and other investments are classified as trading and carried at fair value, with related net unrealized gains or losses included in earnings. The amortized cost, gross unrealized gains and (losses) and estimated fair value of investments at March 31, 2013 were as follows:
The amortized cost, gross unrealized gains and (losses) and estimated fair value of investments at December 31, 2012 were as follows:
The following table sets forth certain information regarding the investment ratings of the Company’s fixed maturities portfolio as at March 31, 2013 and December 31, 2012. Investment ratings are the lower of Moody’s or Standard & Poor’s rating for each investment security, presented in Standard & Poor’s equivalent rating. For investments where Moody’s and Standard & Poor’s ratings are not available, Fitch ratings are used and presented in Standard & Poor’s equivalent rating.
The amortized cost and estimated fair value amounts for fixed maturity securities held at March 31, 2013 and December 31, 2012 are shown below by contractual maturity. Actual maturity may differ from contractual maturity because certain borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.
(b) Net investment income Net investment income was derived from the following sources:
The following represents an analysis of net realized gains and the change in net unrealized (losses) gains on investments:
(d) Pledged investments The following tables outline investments pledged as collateral under the Company's credit facilities. For further details of the credit facilities, please refer to Note 12: “Debt and financing arrangements.”
|
Stock plans (Text) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Stock plans (other details) | |||
Number of shares reserved for issuance under the LTIP and STIP | 13,126,896 | ||
Remaining number of shares reserved for issuance | 3,016,246 | ||
Share compensation expenses | $ 2,318 | $ 5,438 | |
Options
|
|||
Stock plans (other details) | |||
Life of options | 10 years | ||
Share compensation expenses | 0 | 135 | |
Unrecognized share compensation expenses | 0 | 0 | |
Weighted average period of recognizing share based compensation expenses | 0 years | 0 years | |
Restricted share awards
|
|||
Stock plans (other details) | |||
Share compensation expenses | 4,061 | 5,940 | |
Unrecognized share compensation expenses | 38,226 | 43,952 | |
Weighted average period of recognizing share based compensation expenses | 2 years 6 months | 2 years 7 months 6 days | |
Restricted share units
|
|||
Stock plans (other details) | |||
Share compensation expenses | 121 | 120 | |
Unrecognized share compensation expenses | 861 | 978 | |
Weighted average period of recognizing share based compensation expenses | 2 years 6 months | 2 years 7 months 6 days | |
Performance shares
|
|||
Stock plans (other details) | |||
Share compensation expenses | (1,864) | (757) | |
Unrecognized share compensation expenses | $ 1,148 | $ 3,328 | |
Performance share awards performance period | P3Y | ||
Weighted average period of recognizing share based compensation expenses | 1 year 8 months 12 days | 1 year 8 months 12 days |