Slide 1: Investor Presentation First Quarter 2009
Investor Presentation First Quarter 2009
Slide 2: 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. Statements that include the words "expect," "intend," "plan
Slide 3: Note on Non-GAAP Financial Measures
Note on Non-GAAP Financial Measures In presenting the Company's results herein, management has included and discussed underwriting income, operating income, and diluted book value per share that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non
Slide 4: Validus Overview
Validus Overview Focus on short-tail (re)insurance Outstanding first quarter financial performance Superior increases in book value Poised for profitable growth Transparent risk disclosure
Slide 5: Selected Market Information
Primary Shares Outstanding: 75,828,922 Share Price (March 31, 2009): $23.68 Primary Market Capitalization: Annual Dividend/Yield : $0.80 per share (3.4%) Exchange / Ticker: NYSE / "VR" Analyst Coverage: Matt Carletti, Fox-Pitt Kelton Cochran Caronia Waller Jay Cohen, Merrill Lynch Dean Evans, Keefe,
Slide 6: Validus is Diversified in Short-Tail Specialty Classes
Validus is Diversified in Short-Tail Specialty Classes Validus Re GPW LTM GPW Through March 31, 2009: $766.8 million LTM GPW of $1.45 billion Balanced by Class: 47% Property, 30% Marine, 23% Specialty Note: $1.45bb consolidated GPW reflects $51.2mm intersegment eliminations; $766.8mm and $735.1mm se
Slide 7: Balanced Between Insurance and Reinsurance
Balanced Between Insurance and Reinsurance Based on 2008 GPW except ACGL which is NPW. Source: SEC filings and other public disclosures.
Slide 8: Focused on Short-Tail Specialty Classes
Focused on Short-Tail Specialty Classes Based on 2008 GPW except ACGL which is NPW. Source: SEC filings and other public disclosures.
Slide 9: Property Cat Reinsurance is Important But Not Dominant
Property Cat Reinsurance is Important But Not Dominant Based on 2008 GPW except ACGL which is NPW. Source: SEC filings and other public disclosures.
Slide 10: Talbot 2008 Market Share by Lloyd's Class of Business
Talbot 2008 Market Share by Lloyd's Class of Business Note: Market share expressed as a % of gross premium for 2008. Source: Lloyd's
Slide 11: Current Market Dynamics
Current Market Dynamics 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 mean reloading by incumbents is diffi
Slide 12: Validus Reported Excellent First Quarter 2009 Results
Validus Reported Excellent First Quarter 2009 Results 1Reconciliations of VR diluted book value per share, operating income and operating ROAE, non-GAAP financial measures, to book value per share, net income and ROAE are presented in the appendix Source: SNL Financial 16.9% growth in gross premiums
Slide 13: Validus Holdings, Ltd. - Quarterly Overview
Validus Holdings, Ltd. - Quarterly Overview Gross premiums written increased by 16.9% 23.9% increase in Validus Re segment 12.9% in Talbot segment Net underwriting income increased by 55.4% 9.2% growth in net premiums earned Combined ratio improved by 7.4 percentage points Net investment income decr
Slide 14: Validus Re - Quarterly Segment Results
Validus Re - Quarterly Segment Results Gross premiums written increased by 23.9% ($79.1 million) $42.3 million increase in property $37.5 million increase in marine Rate increases of 10 to 15% globally at Jan 1 Property Late renewals for US cat - market well behaved and disciplined Virtually no new
Slide 15: Talbot - Quarterly Segment Results
Talbot - Quarterly Segment Results Gross premiums written increased by 12.9% ($26.1 million) 25.2% on a constant currency basis ($50.8 million) Rate increases in 16 of 18 classes Contributions from new ventures to gross premiums written: $9.3 million from Validus Reaseguros $9.0 million from Onshore
Slide 16: Investment Portfolio at March 31, 2009
Investment Portfolio at March 31, 2009 Conservative investment strategy Emphasize the preservation of invested assets Provide sufficient liquidity for the prompt payment of claims No exposure to alternative asset classes, equities, derivatives Comprehensive portfolio disclosure Average portfolio rat
Slide 17: Loss Reserves at March 31, 2009
Loss Reserves at March 31, 2009 Validus Gross Reserve Mix As of March 31, 2009 Gross reserves for losses and loss expenses of $1.32 billion IBNR represents 43.6% of reserves No exposures pre-dating 2002 Talbot has a history of favorable reserve development: $113.3mm since acquisition $54.7mm during
Slide 18: Growth in Diluted Book Value Per Share
Growth in Diluted Book Value Per Share Growth in diluted book value per share plus accumulated dividends 13.6% compounded annual growth through March 31, 2009
Slide 19: Change in 2008 Diluted BV/Share plus Dividends - P/C Industry
Change in 2008 Diluted BV/Share plus Dividends - P/C Industry Universe: 55 public listed P&C companies reporting through February 18, 2009 Results: 16 companies (29.1%) reported positive change in 2008 diluted BV/share plus dividends Range: From +15.0% (FMR) to -67.0% (XL), Average of -9.6% Source:
Slide 20: First Quarter 2009 Change in Diluted Book Value Per Share
First Quarter 2009 Change in Diluted Book Value Per Share Note (1): Diluted book value per share calculation includes impact of quarterly dividends Note(2): Reconciliations of VR diluted book value per share are presented in the appendix Source: SNL Financial and company reports
Slide 21: Catastrophe Reinsurance Market Update
Catastrophe Reinsurance Market Update Significant Pricing Gains in Property Lines since 2001 10-15% rate increases at January 1, 2009 Rate pressures building through the year Capacity shortages appearing Expect June 1 renewals to show 15-20% rate increases Legislation pending for reduction in TICL l
Slide 22: Ability to Scale Platform
Ability to Scale Platform Note: Certain subsidiaries have been excluded for the purposes of presentation. For a complete organizational chart see the company's most recent Annual Report on Form 10-K Singapore representative office Miami office targeting Latin America Onshore Energy Aviation Flexible
Slide 23: Transparent Risk Disclosure - April 1, 2009 Portfolio
Transparent Risk Disclosure - April 1, 2009 Portfolio 1:100 year PML equal to 21.2% of March 31, 2009 capital, 24.4% of shareholders' equity Net loss estimates are before income tax, net of reinstatement premiums, and net of reinsurance and retrocessional recoveries. The estimates set forth above ar
Slide 24: Realistic Disaster Scenarios - January 1, 2009 Portfolio
Realistic Disaster Scenarios - January 1, 2009 Portfolio
Slide 25: Appendix First Quarter 2009
Investor Presentation - Appendix First Quarter 2009
Slide 26: Net Operating Income Reconciliation
Net Operating Income Reconciliation
Slide 27: Diluted Book Value Per Share Reconciliation
Diluted Book Value Per Share Reconciliation