Slide 1: Investor Presentation May 29, 2009
Investor Presentation May 29, 2009
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements: This presentation may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. State
Slide 3: Non-GAAP Financial Measures and Proposed Acquisition
Non-GAAP Financial Measures and Proposed Acquisition In presenting Validus' results, management has included and discussed certain schedules containing net operating income (loss), annualized net operating return on average equity and diluted book value per common share that are not calculated under
Slide 4: Market Value is the Criteria on Which to Judge a Transaction
Market Value is the Criteria on Which to Judge a Transaction The Validus offer provides IPC shareholders with $30.14 of consideration based on May 15, 2009 share prices1 Represents a premium of 13.2% to IPC's closing share price as of that date Shareholders of any company receive market value for th
Slide 5: Validus Has a History of Growing Book Value Faster than Max
Validus Has a History of Growing Book Value Faster than Max Source: SEC filings and other public disclosures, SNL Financial 1 2005-Q109 CAGR of Diluted BVPS, including accumulated dividends 2 Max's 2005 and 2006 Diluted BVPS figures are calculated using the treasury stock method and 2007, 2008 and 2
Slide 6: ROE is a Major Determinant of Price to Book Multiple
ROE is a Major Determinant of Price to Book Multiple 1 Companies shown include Allied World Assurance (AWH), Arch Capital (ACGL), Aspen Insurance (AHL), Axis Capital (AXS), Endurance Specialty (ENH), Everest Re (RE), Flagstone Re (FSR) , IPC (IPCR), Max Capital (MXGL), Montpelier Re (MRH), PartnerRe
Slide 7: Max / IPC Are Relying on Outdated, Misleading Book Value Figures
Max / IPC Are Relying on Outdated, Misleading Book Value Figures While Validus continues to believe shareholders should evaluate the transaction based on market values, the fact is that Max and Validus deliver very similar book value per IPC share when up-to-date financials are used and GAAP purchas
Slide 8: Validus Has a Superior Record of Underwriting Performance
Validus Has a Superior Record of Underwriting Performance Historically, Max's Results Have Been Driven by Alternative Investments and Lack of Underwriting Profit Comprehensive Income Per Share Contribution 2006 2007 2008 VR: $3.12 VR: $5.94 VR: $0.51 MXGL: $3.01 MXGL: $4.77 MXGL: $(3.54) Validus Max
Slide 9: A Validus / IPC Combination Has a Clear Strategic Rationale
A Validus / IPC Combination Has a Clear Strategic Rationale Reinsurance industry capital and capacity has been materially depleted U.S. Statutory surplus was down 11%, or ~$60 billion in 20081 Limited access to replacement capital and new capacity Disrupted capital markets and depressed valuations m
Slide 10: The Validus Offer Creates a Larger, Better-Capitalized Company
The Validus Offer Creates a Larger, Better-Capitalized Company A Pro Forma Comparison of 12/31/08 Shareholders' Equity Source: SEC filings and other public disclosures; pro forma for Max / IPC is as per Max / IPC Form DEFM14A filed 5/7/09 "...greater size and scale enhances valuation and ratings pro
Slide 11: Validus Offers IPC Quality Diversification
Validus Offers IPC Quality Diversification Significantly less catastrophe weighting than IPC stand-alone Higher participation in profitable lines than Max can offer Each of Validus and Max offer ~$1 billion of property and casualty gross premiums excluding Validus property cat Major lines for Validu
Slide 12: Validus / IPC Would be Diversified / Majority Non-Cat
Validus / IPC Would be Diversified / Majority Non-Cat Note: Based on 2008 GPW except ACGL which is NPW Source: SEC filings and other public disclosures
Slide 13: The Value of Diversification
The Value of Diversification A.M. Best, one of the foremost credit rating agencies for insurance companies, specifically addresses the value of diversification via a "Diversification Credit" in its BCAR ratings methodology "The diversification factor reflects the reduction in overall premium risk wi
Slide 14: IPC Board Has Abdicated Its Fiduciary Duties; Max/IPC Poor Governance
We believe the IPC Board has abdicated its fiduciary duties and continues to try to raise false impediments to Validus providing its superior offer to IPC shareholders The Max / IPC Transaction Reflects Poor Governance Flawed "strategic process" leading up to signing the transaction Specifically exc
Slide 15: The IPC Board's Claims of Max Deal or No Deal Are Irresponsible
The IPC Board's Claims of Max Deal or No Deal Are Irresponsible Claims by Max / IPC that shareholders' choice is to "Vote to Approve Max Merger or NO transaction" are reckless and self-serving IPC's Board is irresponsibly threatening IPC shareholders by stating their choice is to "Vote to Approve Ma
Slide 16: Max / IPC's May 27th Presentation Is Rife with Misrepresentations
Max / IPC's May 27th Presentation Is Rife with Misrepresentations Uses OUTDATED December 31 financial information and EXCLUDES GAAP adjustments to pro forma company analysis FALSELY claims Max has superior historical risk management, despite significant 2008 loss INCORRECTLY claims Validus is a mono
Slide 17: Validus Has a Clear Path to Completion
Validus Has a Clear Path to Completion Vote AGAINST the proposed Max / IPC transaction IPC can then take one of the following actions: Sign the binding Validus Amalgamation Agreement already delivered to IPC Recommend the Validus Exchange Offer, which can close in late-June If IPC does not take one
Slide 18: Appendix
Appendix VALIDUS
Slide 19: Comparable Company Analysis
Comparable Company Analysis Source: SNL Financial and FactSet as of 5/27/09 1 2009 IBES mean estimate 2As of 3/31/09
Slide 20: Reconciliation of Validus Operating Income
Reconciliation of Validus Operating Income (expressed in thousands of U.S. dollars, except share amounts)
Slide 21: Reconciliation of Validus Book Value
Reconciliation of Validus Book Value (expressed in thousands of U.S. dollars, except share amounts)