Validus Holdings, Ltd. Provides Initial Estimate of Losses from Second Quarter 2016 Notable and Non-notable Loss Events
July 11 2016 - 4:30PM
Business Wire
Validus Holdings, Ltd. (“Validus” or the “Company”) (NYSE:VR)
today provided an initial estimate of Validus’ net losses from
second quarter 2016 notable and non-notable loss events. Validus
expects to record losses from these events, net of reinsurance and
retrocessional recoveries, noncontrolling interest and
reinstatement premiums, in the amount of $60.0 million. This amount
is apportioned between events as follows:
Three Months Ended June 30, 2016 (Amounts in
millions of USD)
NotableLoss Event (a)
Non-notable Loss Events (a) Total
Second Quarter 2016 Notable and Non-notable Loss Events
Canadian Wildfires
Texas Hailstorms
Kumamoto Earthquake
Jubilee Oil (b)
Net Losses and Loss Expenses $ 36.9 $ 17.8 $ 15.3
$ 15.2 $ 85.2 Less: Net Losses and Loss Expenses
Attributable to AlphaCat Investors and Noncontrolling Interest
(6.4 ) (5.5 ) - -
(11.9 )
Validus' Share of Net Losses and Loss
Expenses 30.5 12.3 15.3 15.2
73.3 Less: Reinstatement Premiums (3.6 ) (2.0
) - (7.7 ) (13.3 )
Net Loss
Attributable to Validus (c) $ 26.9
$ 10.3 $ 15.3
$ 7.5 $ 60.0 (a)
Notable loss events are loss events which aggregate to over
$30.0 million on a consolidated basis. Non-notable loss events are
loss events which aggregate to over $15.0 million but less than
$30.0 million on a consolidated basis. (b) As at March 31, 2016,
the initial estimate for Jubilee Oil was below the $15.0 million
non-notable loss event threshold; however, during the three months
ended June 30, 2016 adverse development caused this event to exceed
the non-notable loss event threshold. (c) The total net loss
attributable to Validus of $60.0 million is allocated by segment as
follows: Validus Re $38.7 million; Talbot $19.2 million; Western
World $0.6 million; and AlphaCat $1.5 million.
The above estimates are based on Validus’ current evaluation of
impacted contracts and information provided by customers and
intermediaries. Validus’ actual losses from these events may vary
materially from these estimates due to uncertainties inherent in
this preliminary information.
As part of the loss evaluation process, Validus has estimated
the industry losses from the notable and non-notable loss events as
follows: Canadian Wildfires CAD$4.5-6.0 billion (US$3.6-4.8
billion); Texas Hailstorms $2.8 billion; Kumamoto Earthquake
$3.0-4.0 billion; and Jubilee Oil is estimated at over $1.0
billion. The estimates of industry losses are also preliminary and
subject to change.
About Validus Holdings,
Ltd.
Validus Holdings, Ltd. (“Validus”) is a holding company for
reinsurance and insurance operating companies and investment
advisors including Validus Reinsurance, Ltd. (“Validus Re”), Talbot
Holdings Ltd. (“Talbot”), Western World Insurance Group, Inc.
(“Western World”) and AlphaCat Managers, Ltd. (“AlphaCat”).
Validus Re is a Bermuda based reinsurer focused on treaty
reinsurance. Talbot is the Bermuda parent of the specialty
insurance group primarily operating within the Lloyd's insurance
market through Syndicate 1183. Western World is a U.S. specialty
lines insurance company focused on excess and surplus lines.
AlphaCat is a Bermuda based investment adviser managing capital for
third parties and Validus in insurance linked securities and other
property catastrophe reinsurance investments.
Cautionary Note Regarding
Forward-Looking Statements
This press release may include forward-looking statements, both
with respect to the Company and its industry, that reflect our
current views with respect to future events and financial
performance. Statements that include the words "expect", "intend",
"plan", "believe", "project", "anticipate", "will", "may" and
similar statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties, many of which are
beyond the Company's control. Accordingly, there are or will be
important factors that could cause actual results to differ
materially from those indicated in such statements and, therefore,
you should not place undue reliance on any such statements. We
believe that these factors include, but are not limited to, the
following: 1) unpredictability and severity of catastrophic events;
2) rating agency actions; 3) adequacy of Validus' risk management
and loss limitation methods; 4) cyclicality of demand and pricing
in the insurance and reinsurance markets; 5) statutory or
regulatory developments including tax policy, reinsurance and other
regulatory matters; 6) Validus' ability to implement its business
strategy during "soft" as well as "hard" markets; 7) adequacy of
Validus' loss reserves; 8) continued availability of capital and
financing; 9) retention of key personnel; 10) competition; 11)
potential loss of business from one or more major insurance or
reinsurance brokers; 12) Validus' ability to implement,
successfully and on a timely basis, complex infrastructure,
distribution capabilities, systems, procedures and internal
controls, and to develop accurate actuarial data to support the
business and regulatory and reporting requirements; 13) general
economic and market conditions (including inflation, volatility in
the credit and capital markets, interest rates and foreign currency
exchange rates); 14) the integration of businesses Validus may
acquire or new business ventures Validus may start; 15) the effect
on Validus' investment portfolios of changing financial market
conditions including inflation, interest rates, liquidity and other
factors; 16) acts of terrorism or outbreak of war; and 17)
availability of reinsurance and retrocessional coverage, as well as
management's response to any of the aforementioned factors.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein and elsewhere,
including the risk factors included in Validus' most recent reports
on Form 10-K and Form 10-Q and other documents of the Company on
file with or furnished to the U.S. Securities and Exchange
Commission (“SEC”). Any forward-looking statements made in this
press release are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by Validus will be realized or, even if substantially
realized, that they will have the expected consequences to, or
effects on, Validus or its business or operations. Except as
required by law, the Company undertakes no obligation to update
publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
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Investors:Validus Holdings,
Ltd.investor.relations@validusholdings.com+1-441-278-9000orMedia:Brunswick
GroupMustafa Riffat / Laura Pietruszki+1-212-333-3810
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