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Validus Announces Third Quarter 2012 Net Operating Income of $170.6 Million, Diluted Book Value Growth of 14.7% Year to Date

  Validus Announces Third Quarter 2012 Net Operating Income of $170.6 Million,
  Diluted Book Value Growth of 14.7% Year to Date Inclusive of Dividends

                Diluted Operating Earnings Per Share of $1.74

         Diluted Book Value Per Share of $36.27 at September30, 2012

Business Wire

PEMBROKE, Bermuda -- October 25, 2012

Validus Holdings, Ltd. (“Validus” or the “Company”) (NYSE: VR) today reported
net income available to Validus of $207.3 million, or $2.11 per diluted common
share for the three months ended September30, 2012, compared to $56.5
million, or $0.54 per diluted common share, for the three months ended
September30, 2011. Net income available to Validus for the nine months ended
September30, 2012 was $499.2 million, or $4.88 per diluted common share
compared to net (loss) attributable to Validus of $(6.0) million, or $(0.12)
per diluted common share for the nine months ended September30, 2011.

Net operating income available to Validus for the three months ended
September30, 2012 was $170.6 million, or $1.74 per diluted common share,
compared to $112.6 million, or $1.09 per diluted common share, for the three
months ended September30, 2011. Net operating income available to Validus for
the nine months ended September30, 2012 was $434.6 million, or $4.25 per
diluted common share, compared to $29.0 million, or $0.23 per diluted common
share, for the nine months ended September30, 2011.

Net operating income (loss), a non-GAAP financial measure, is defined as net
income (loss) excluding net realized and unrealized gains (losses) on
investments, foreign exchange gains (losses) and non-recurring items. Net
operating income (loss) available (attributable) to Validus is defined as net
operating income (loss) as defined above, but excluding income (loss)
available (attributable) to noncontrolling interest. Reconciliations of these
measures to net income (loss) and net income (loss) available (attributable)
to Validus, the most directly comparable GAAP measures, are presented at the
end of this release.

Net income available to Validus, net operating income available to Validus and
diluted earnings per share by Validus entity for the three months ended
September30, 2012 were as follows:

                                                            
                                                                     Diluted
                                       Diluted        Net            Operating
                      Net Income       Earnings       Operating      Earnings
                     Available to    Per Share     Income        Per
                      Validus          Available      Available      Share
                                       to             to Validus     Available
                                       Validus                       to
                                                                     Validus
                      (Expressed in millions of U.S. dollars, except per share
                      information)

                      
Validus Re          $ 164.7                         $ 139.0
PaCRe                 6.3                             0.1
Other
AlphaCat              18.0                           17.2    
Companies &
Other
Validus Re            189.0                           156.3
consolidated
Talbot                52.1                            44.1
Corporate &          (33.8    )                   (29.8   )     
Eliminations
Total               $ 207.3         $ 2.11        $ 170.6       $ 1.74   
                                                                            

Commenting on the financial results for the three months ended September30,
2012, Ed Noonan, Validus' Chairman and Chief Executive Officer stated:“I am
pleased to report third quarter net operating income for Validus in the amount
of $170.6 million which equates to an annualized operating return on average
equity of 19.2%. These results and growth in diluted book value per share of
6.1% inclusive of dividends for the quarter and 14.7% year to date reflect a
light quarter for natural catastrophes, Validus' rock solid balance sheet and
the excellent portfolio of short tail risks which we have been able to
assemble due to Validus' size, scale and expertise in both its Bermuda and
London operations.”

Third Quarter 2012 Results

Highlights for the third quarter include the following:

  *Total managed gross premiums written which include gross premiums written
    from our non-consolidated affiliates, AlphaCat Re 2011,Ltd. ("AlphaCat Re
    2011") and AlphaCat Re 2012, Ltd. ("AlphaCat Re 2012"), for the three
    months ended September30, 2012 were $399.5 million compared to $391.1
    million for the three months ended September30, 2011, an increase of $8.3
    million or 2.1%.
  *Gross premiums written for the three months ended September30, 2012 were
    $390.2 million compared to $391.1 million for the three months ended
    September30, 2011, a decrease of $0.9 million, or 0.2%.
  *Net premiums earned for the three months ended September30, 2012 were
    $475.1 million compared to $458.6 million for the three months ended
    September30, 2011, an increase of $16.5 million, or 3.6%.
  *Underwriting income for the three months ended September30, 2012 was
    $143.1 million compared to $111.8 million for the three months ended
    September30, 2011, an increase of $31.3 million, or 28.0%.

  *Combined ratio of 69.9% which included $49.8 million of favorable loss
    reserve development on prior accident years, benefiting the loss ratio by
    10.5 percentage points.
  *Net operating income available to Validus for the three months ended
    September30, 2012 was $170.6 million compared to $112.6 million for the
    three months ended September30, 2011, an increase of $58.0 million, or
    51.5%.
  *Net income available to Validus for the three months ended September30,
    2012 was $207.3 million compared to $56.5 million for the three months
    ended September30, 2011, an increase of $150.8 million, or 267.0%.
  *Annualized return on average equity of 23.3% and annualized net operating
    return on average equity of 19.2%.

Highlights for the year to date include the following:

  *Total managed gross premiums written which include gross premiums written
    from our non-consolidated affiliates, AlphaCat Re 2011 and AlphaCat Re
    2012, for the nine months ended September 30, 2012 were $1,981.1 million
    compared to $1,846.4 million for the nine months ended September 30, 2011,
    an increase of $134.7 million or 7.3%.
  *Gross premiums written for the nine months ended September30, 2012 were
    $1,854.6 million compared to $1,846.4 million for the nine months ended
    September30, 2011, an increase of $8.2 million, or 0.4%.
  *Net premiums earned for the nine months ended September30, 2012 were
    $1,373.9 million compared to $1,313.8 million for the nine months ended
    September30, 2011, an increase of $60.1 million, or 4.6%.
  *Underwriting income for the nine months ended September30, 2012 was
    $361.8 million compared to an underwriting (loss) of $(1.0) million for
    the nine months ended September30, 2011, an increase of $362.8 million.
  *Combined ratio of 73.7% which included $117.7 million of favorable loss
    reserve development on prior accident years, benefiting the loss ratio by
    8.6 percentage points.
  *Net operating income available to Validus for the nine months ended
    September30, 2012 was $434.6 million compared to $29.0 million for the
    nine months ended September30, 2011, an increase of $405.7 million.
  *Net income available to Validus for the nine months ended September30,
    2012 was $499.2 million compared to a net (loss) attributable to Validus
    of $(6.0) million for the nine months ended September30, 2011, an
    increase of $505.1 million.
  *Annualized return on average equity of 18.9% and annualized net operating
    return on average equity of 16.4%.

Notable Loss Events

During the three months ended September30, 2012, the Company incurred losses
and loss expenses of $37.2 million from notable loss events which represented
7.8 percentage points of the loss ratio. Including the impact of $1.6 million
of reinstatement premiums, the effect of these events on net income was a
decrease of $35.6 million. For the three months ended September30, 2011, the
Company incurred $51.9 million of losses from notable loss events, which
represented 11.3 percentage points of the loss ratio. Including the impact of
$4.0 million of reinstatement premiums, the effect of these events on net
income was a decrease of $47.9 million. The Company's loss ratio, excluding
prior year development and notable loss events, for the three months ended
September30, 2012 and 2011 was 35.4% and 51.3%, respectively.

                           
                                    Three Months Ended September 30, 2012
                                    (U.S. Dollars in thousands)

                                    
Third Quarter 2012 Notable          Validus Re           Talbot             Total
Loss Events (a)
                                    Net                   Net                Net
                                    Losses     % of       Losses     % of    Losses     % of
Description                        and Loss  NPE        and Loss  NPE     and Loss  NPE
                                    Expenses              Expenses           Expenses
                                    (b)                   (b)                (b)
U.S.              Drought         $ 22,021     9.1  %   $ —          0.0 % $ 22,021     4.6  %
drought
Hurricane         Windstorm         13,459    5.6  %     1,750     0.8 %   15,209    3.2  %
Isaac
Total                             $ 35,480    14.7 %   $ 1,750     0.8 % $ 37,230    7.8  %
                                                                                        
                                    Three Months Ended September 30, 2011
                                    (U.S. Dollars in thousands)

                                    
Third Quarter 2011 Notable          Validus Re            Talbot             Total
Loss Events (a)
                                    Net                   Net                Net
                                    Losses     % of       Losses     % of    Losses     % of
Description                         and Loss   NPE        and Loss   NPE     and Loss   NPE
                                    Expenses   (c)        Expenses           Expenses
                                    (b)                   (b)                (b)
Danish            Rainstorm       $ 16,429     6.8  %   $ 3,000      1.6 % $ 19,429     4.2  %
flood
Hurricane         Windstorm         22,951    9.6  %     9,500     5.0 %   32,451    7.1  %
Irene
Total                             $ 39,380    16.4 %   $ 12,500    6.6 % $ 51,880    11.3 %
                                                                                             

      These notable loss event amounts were based on management's estimates
      following a review of the Company's potential exposure and discussions
      with certain clients and brokers. Given the magnitude and recent
(a)  occurrence 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.

      Net of reinsurance but not net of reinstatement premiums. Total
(b)   reinstatement premiums were $1.6 million and $4.0 million for the three
      months ended September 30, 2012 and September 30, 2011, respectively.

(c)   2011 loss ratios for the Validus Re segment have been represented to
      exclude the impact of the AlphaCat segment.

Validus Re Segment Results

Gross premiums written for the three months ended September30, 2012 were
$145.0 million compared to $163.9 million for the three months ended
September30, 2011, a decrease of $18.9 million, or 11.5%. Gross premiums
written for the three months ended September30, 2012 included $106.0 million
of property premiums, $25.5 million of marine premiums and $13.5 million of
specialty premiums compared to $122.6 million of property premiums, $32.8
million of marine premiums and $8.5 million of specialty premiums for the
three months ended September30, 2011.

Net premiums earned for the three months ended September30, 2012 were $242.3
million compared to $240.2 million for the three months ended September30,
2011, an increase of $2.1 million, or 0.9%.

The combined ratio for the three months ended September30, 2012 was 51.0%
compared to 74.5% for the three months ended September30, 2011, a decrease of
23.5 percentage points.

The loss ratio for the three months ended September30, 2012 was 27.6%
compared to 53.6% for the three months ended September30, 2011, a decrease of
26.0 percentage points. For the three months ended September30, 2012, Validus
Re incurred $35.5 million of losses attributable to notable loss events which
represented 14.7 percentage points of the loss ratio. The loss ratio for the
three months ended September30, 2012 included favorable loss reserve
development on prior accident years of $23.8 million, benefiting the loss
ratio by 9.8 percentage points.

Gross premiums written for the nine months ended September30, 2012 were
$1,052.7 million compared to $1,058.6 million for the nine months ended
September30, 2011, a decrease of $5.9 million, or 0.6%. Gross premiums
written for the nine months ended September30, 2012 included $716.7 million
of property premiums, $248.8 million of marine premiums and $87.1 million of
specialty premiums compared to $752.9 million of property premiums, $222.7
million of marine premiums and $83.1 million of specialty premiums for the
nine months ended September30, 2011.

Net premiums earned for the nine months ended September30, 2012 were $738.0
million compared to $713.4 million for the nine months ended September30,
2011, an increase of $24.6 million, or 3.4%.

The combined ratio for the nine months ended September30, 2012 was 55.9%
compared to 96.6% for the nine months ended September30, 2011, a decrease of
40.7 percentage points.

The loss ratio for the nine months ended September30, 2012 was 33.1% compared
to 74.8% for the nine months ended September30, 2011, a decrease of 41.7
percentage points. For the nine months ended September30, 2012, Validus Re
incurred $120.2 million of losses attributable to notable loss events, which
represented 16.3 percentage points of the loss ratio. The loss ratio for the
nine months ended September30, 2012 included favorable loss reserve
development on prior accident years of $52.8 million, benefiting the loss
ratio by 7.2 percentage points.

AlphaCat Segment Results

Managed gross premiums written from our non-consolidated affiliates, AlphaCat
Re 2011 and AlphaCat Re 2012, for the three months ended September30, 2012
were $9.3 million compared to $18.8 million for the three months ended
September30, 2011, a decrease of $9.6 million or 50.8%.

Gross premiums written from our consolidated entities for the three months
ended September30, 2012 were $2.9 million compared to $0.1 million for the
three months ended September30, 2011, an increase of $2.8 million.

Net premiums earned for the three months ended September30, 2012 were $5.5
million compared to $27.7 million for the three months ended September30,
2011, a decrease of $22.2 million or 80.1%.

The combined ratio for the three months ended September30, 2012 was 49.2%
compared to 19.9% for the three months ended September30, 2011, an increase
of 29.3 percentage points.

The loss ratio for the three months ended September30, 2012 and 2011 was
0.0%.

Managed gross premiums written from our non-consolidated affiliates, AlphaCat
Re 2011 and AlphaCat Re 2012, for the nine months ended September30, 2012
were $126.5 million compared to $61.4 million for the nine months ended
September30, 2011, an increase of $65.1 million or 106.1%.

Gross premiums written from our consolidated entities for the nine months
ended September30, 2012 were $21.6 million compared to $15.7 million for the
nine months ended September30, 2011, an increase of $6.0 million or 38.0%.

Net premiums earned for the nine months ended September30, 2012 were $11.8
million compared to $39.5 million for the nine months ended September30,
2011, a decrease of $27.7 million or 70.2%.

The combined ratio for the nine months ended September30, 2012 was 58.6%
compared to 22.3% for the nine months ended September30, 2011, an increase of
36.3 percentage points.

The loss ratio for the nine months ended September30, 2012 and 2011 was 0.0%.

Talbot Segment Results

Gross premiums written for the three months ended September30, 2012 were
$260.8 million compared to $238.9 million for the three months ended
September30, 2011, an increase of $21.8 million, or 9.1%. Gross premiums
written for the three months ended September30, 2012 included $84.3 million
of property premiums, $100.8 million of marine premiums and $75.6 million of
specialty premiums compared to $86.1 million of property premiums, $69.2
million of marine premiums and $83.7 million of specialty premiums in the
three months ended September30, 2011.

Net premiums earned for the three months ended September30, 2012 were $227.3
million compared to $190.7 million for the three months ended September30,
2011, an increase of $36.6 million, or 19.2%.

The combined ratio for the three months ended September30, 2012 was 83.2%
compared to 82.6% for the three months ended September30, 2011, an increase
of 0.6 percentage points.

The loss ratio for the three months ended September30, 2012 was 39.0%
compared to 51.0% for the three months ended September30, 2011, a decrease of
12.0 percentage points. For the three months ended September30, 2012, Talbot
incurred $1.8 million of losses attributable to notable loss events which
represented 0.8 percentage points of the loss ratio. The loss ratio for the
three months ended September30, 2012 included favorable loss reserve
development on prior accident years of $26.0 million, benefiting the loss
ratio by 11.4 percentage points.

Gross premiums written for the nine months ended September30, 2012 were
$837.5 million compared to $778.9 million for the nine months ended
September30, 2011, an increase of $58.7 million, or 7.5%. Gross premiums
written for the nine months ended September30, 2012 included $262.7 million
of property premiums, $314.7 million of marine premiums and $260.2 million of
specialty premiums compared to $254.5 million of property premiums, $267.6
million of marine premiums and $256.8 million of specialty premiums in the
nine months ended September30, 2011.

Net premiums earned for the nine months ended September30, 2012 were $624.1
million compared to $560.9 million for the nine months ended September30,
2011, an increase of $63.3 million, or 11.3%.

The combined ratio for the nine months ended September30, 2012 was 87.4%
compared to 103.7% for the nine months ended September30, 2011, a decrease of
16.3 percentage points.

The loss ratio for the nine months ended September30, 2012 was 47.6% compared
to 67.1% for the nine months ended September30, 2011, a decrease of 19.5
percentage points. For the nine months ended September30, 2012, Talbot
incurred $17.8 million of losses attributable to notable loss events, which
represented 2.8 percentage points of the loss ratio. The loss ratio for the
nine months ended September30, 2012 included favorable loss reserve
development on prior accident years of $65.0 million, benefiting the loss
ratio by 10.4 percentage points.

Corporate Results

Corporate results include executive and board expenses, internal and external
audit expenses, interest and costs incurred in connection with the Company's
senior notes and junior subordinated deferrable debentures and other costs
relating to the Company as a whole. General and administrative expenses for
the three months ended September30, 2012 were $14.9 million compared to $4.7
million for the three months ended September30, 2011, an increase of $10.3
million, or 220.4%. Share compensation expenses for the three months ended
September30, 2012 were $3.0 million compared to $3.3 million for the three
months ended September30, 2011, a decrease of $0.3 million, or 8.5%.
Additionally, there were $3.8 million of non-recurring costs relating to the
proposed acquisition of Flagstone Reinsurance Holdings, S.A. in the quarter.

General and administrative expenses for the nine months ended September30,
2012 were $43.8 million compared to $25.8 million for the nine months ended
September30, 2011, an increase of $18.0 million, or 69.9%. Share compensation
expenses for the nine months ended September30, 2012 were $8.1 million
compared to $13.2 million for the nine months ended September30, 2011, a
decrease of $5.1 million, or 38.5%.

Investments

Net investment income for the three months ended September30, 2012 was $25.5
million compared to $27.7 million for the three months ended September30,
2011, a decrease of $2.3 million, or 8.1%. Net investment income for the nine
months ended September30, 2012 was $79.1 million compared to $84.2 million
for the nine months ended September30, 2011, a decrease of $5.1 million or
6.0%.

Net realized gains on investments for the three months ended September30,
2012 were $9.1 million compared to $5.2 million for the three months ended
September30, 2011, an increase of $3.8 million, or 72.8%. Net realized gains
on investments for the nine months ended September30, 2012 were $22.7 million
compared to $23.2 million for the nine months ended September30, 2011, a
decrease of $0.4 million or 1.8%.

Net unrealized gains on investments for the three months ended September30,
2012 were $86.3 million compared to (losses) of $(27.8) million for the three
months ended September30, 2011, an increase of $114.2 million, or 410.1%. Net
unrealized gains for the nine months ended September30, 2012 were $53.4
million compared to (losses) of $(22.2) million for the nine months ended
September30, 2011, an increase of $75.6 million or 341.3%.

Finance Expenses

Finance expenses for the three months ended September30, 2012 were $9.4
million compared to $10.9 million for the three months ended September30,
2011, a decrease of $1.6 million, or 14.4%. Finance expenses for the nine
months ended September30, 2012 were $39.3 million compared to $41.3 million
for the nine months ended September30, 2011, a decrease of $2.0 million or
4.7%.

Shareholders' Equity and Capitalization

As at September30, 2012, total shareholders' equity was $4.1 billion
including $461.5 million of noncontrolling interest. Shareholders' equity
available to Validus was $3.6 billion as at September30, 2012. Diluted book
value per common share was $36.27 at September30, 2012, compared to $34.43 at
June30, 2012. Diluted book value per common share is a non-GAAP financial
measure. A reconciliation of this measure to shareholders' equity is presented
at the end of this release.

Total capitalization at September30, 2012 was $4.6 billion, including $289.8
million of junior subordinated deferrable debentures and $247.1 million of
senior notes.

Share Repurchases

A summary of the share repurchases made to date under the Company’s previously
announced share repurchase program is as follows:

                
                     Share Repurchase Activity
                     (Expressed in thousands of U.S. dollars except for share and
                     per share information)
                     As at June                                     Quarter
                     30, 2012                                           ended
Effect of                                                               September
share                (cumulative)   July        August      September   30, 2012
repurchases:
Aggregate
purchase             $ 1,168,422    $ 22,805    $ 15,618    $   —       $  38,423
price (a)
Shares               41,963,429     696,347     478,281     —           1,174,628
repurchased
Average              $ 27.84        $ 32.75     $ 32.65     $   —       $  32.71
price (a)
Estimated
cumulative
net
accretive
(dilutive)
impact on:
Diluted BV
per common                                                              2.42
share (b)
Diluted EPS
- Quarter                                                               0.63
(c)
                                                                        

                       
                           Share Repurchase Activity

                           (Expressed in thousands of U.S. dollars except for
                           share and per share information)
                           As at September 30,   As at       
                           2012
Effect of share            (cumulative)           October 23,    Cumulative to
repurchases:                                      2012           Date Effect
Aggregate purchase         $    1,206,845         $    —         $  1,206,845
price (a)
Shares repurchased         43,138,057             —              43,138,057
Average price (a)          $    27.98             $    —         $  27.98
                                                                    

      Share transactions are on a trade date basis through October 23, 2012
(a)  and are inclusive of commissions. Average share price is rounded to two
      decimal places.

      As the average price per share repurchased during the periods 2009,
(b)   2010, 2011 and 2012 was lower than the book value per common share, the
      repurchase of shares increased the Company's period ending book value
      per share.

      The estimated impact on diluted earnings per share was calculated by
      comparing reported results versus i) net income per share plus an
      estimate of lost net investment income on the cumulative share
(c)   repurchases divided by ii) weighted average diluted shares outstanding
      excluding the weighted average impact of cumulative share repurchases.
      The impact of cumulative share repurchases was accretive to diluted
      earnings per share.

Conference Call

The Company will host a conference call for analysts and investors on October
26, 2012 at 9:30 AM (Eastern) to discuss the third quarter 2012 financial
results and related matters. The conference call can be accessed via telephone
by dialing 1-800-706-7745 (toll-free U.S.) or 1-617-614-3472 (international)
and entering the pass code 61856228#. Those who intend to participate in the
conference call should register at least ten minutes in advance to ensure
access to the call. A telephone replay of the conference call will be
available through November 9, 2012 by dialing 1-888-286-8010 (toll-free U.S.)
or 1-617-801-6888 (international) and entering the pass code 86075046#.

This conference call will also be available through a live audio webcast
accessible through the Investor Relations section of the Company's website
located at www.validusholdings.com. A replay of the webcast will be available
at the Investor Relations section of the Company's website through November 9,
2012. In addition, a financial supplement relating to the Company's financial
results for the three and nine months ended September30, 2012 is available in
the Investor Relations section of the Company's website.

About Validus Holdings, Ltd.

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

                                                      
Validus Holdings, Ltd.
Consolidated Balance Sheets
As at September 30, 2012 (unaudited) and December 31, 2011
(Expressed in thousands of U.S. dollars, except share and per share
information)

                                                             
                                     September 30, 2012     December 31, 2011
                                      (unaudited)
Assets
Fixed maturities, at fair
value (amortized cost:              $ 4,887,622            $ 4,894,145
2012—$4,803,217;
2011—$4,859,705)
Short-term investments, at
fair value (amortized cost:           275,324                280,191
2012—$275,099; 2011—$280,299)
Other investments, at fair
value (amortized cost:                525,441                16,787
2012—$511,310; 2011—$15,002)
Cash and cash equivalents             1,005,829             832,844      
Total investments and cash            6,694,216              6,023,967
Investments in affiliates             99,312                 53,031
Premiums receivable                   781,991                646,354
Deferred acquisition costs            155,456                121,505
Prepaid reinsurance premiums          144,788                91,381
Securities lending collateral         10,383                 7,736
Loss reserves recoverable             317,252                372,485
Paid losses recoverable               36,209                 90,495
Income taxes recoverable              5,019                  —
Intangible assets                     111,611                114,731
Goodwill                              20,393                 20,393
Accrued investment income             19,945                 25,906
Other assets                         67,245               50,487       
Total assets                        $ 8,463,820           $ 7,618,471    
                                                             
Liabilities
Reserve for losses and loss         $ 2,562,604            $ 2,631,143
expenses
Unearned premiums                     1,034,605              772,382
Reinsurance balances payable          87,955                 119,899
Securities lending payable            10,849                 8,462
Deferred income taxes                 22,848                16,720
Net payable for investments           26,629                 1,256
purchased
Accounts payable and accrued          86,128                 83,402
expenses
Senior notes payable                  247,063                246,982
Debentures payable                   289,800              289,800      
Total liabilities                    4,368,481            4,170,046    
                                                             
Commitments and contingent
liabilities
                                                             
Shareholders' equity
Common shares, 571,428,571
authorized, par value $0.175
(Issued: 2012—136,632,448;            23,911                 23,538
2011—134,503,065;
Outstanding: 2012—93,494,391;
2011—99,471,080)
Treasury shares
(2012—43,138,057;                     (7,549        )      (6,131       )
2011—35,031,985)
Additional paid-in-capital            1,657,767              1,893,890
Accumulated other                     (4,565        )        (6,601       )
comprehensive (loss)
Retained earnings                    1,964,289            1,543,729    
Total shareholders' equity           3,633,853            3,448,425    
available to Validus
                                                             
Noncontrolling interest               461,486                —
                                                          
Total shareholders' equity           4,095,339            3,448,425    
                                                             
Total liabilities and               $ 8,463,820           $ 7,618,471    
shareholders' equity

                                            
Validus Holdings, Ltd.
Consolidated Statement of Operations
For the three and nine months ended September 30, 2012 and 2011 (unaudited)
(Expressed in thousands of U.S. dollars, except share and per share
information)

                                                                             
                     Three Months Ended          Nine Months Ended
                     September 30,               September 30,
                     (unaudited)                (unaudited)                 
                     2012        2011         2012          2011        
Underwriting
income
Gross premiums       $ 390,215     $ 391,129     $ 1,854,593     $ 1,846,412
written
Reinsurance           (45,743 )    (30,586 )    (271,847  )    (272,752  )
premiums ceded
Net premiums           344,472       360,543       1,582,746       1,573,660
written
Change in
unearned              130,632     98,081      (208,816  )    (259,863  )
premiums
Net premiums          475,104     458,624     1,373,930     1,313,797 
earned
                                                                   
Underwriting
deductions
Losses and             155,455       226,067       541,136         909,572
loss expenses
Policy
acquisition            98,623        77,405        252,884         232,931
costs
General and
administrative         70,547        35,926        198,557         145,244
expenses
Share
compensation          7,345       7,382       19,583        27,059    
expenses
Total
underwriting          331,970     346,780     1,012,160     1,314,806 
deductions
                                                                   
Underwriting         $ 143,134     $ 111,844     $ 361,770       $ (1,009    )
income (loss)
                                                                   
Net investment         25,489        27,747        79,134          84,216
income
Other income           7,324         —             22,209          2,201
Finance               (9,362  )    (10,935 )    (39,347   )    (41,297   )
expenses
Operating
income before
taxes and            $ 166,585     $ 128,656     $ 423,766       $ 44,111
income from
operating
affiliates
Tax (expense)          (1,343  )     (2,538  )     (1,886    )     (1,050    )
Income from
operating             6,235       —           13,194        —         
affiliates
Net operating        $ 171,477     $ 126,118     $ 435,074       $ 43,061
income
                                                                   
Net realized
gains on               9,063         5,246         22,749          23,177
investments
Net unrealized
gains (losses)         86,345        (27,848 )     53,442          (22,150   )
on investments
(Loss) from
investment             (160    )     —             (558      )     —
affiliate
Foreign
exchange gains         1,103         (19,932 )     3,617           (22,390   )
(losses)
Transaction           (3,784  )    (13,583 )    (3,784    )    (13,583   )
expenses (a)
Net income           $ 264,044     $ 70,001      $ 510,540       $ 8,115
                                                                   
Net (income)
attributable
to                     (56,746 )     (13,516 )     (11,386   )     (14,110   )
noncontrolling
interest
                                                            
Net income
(loss)
available            $ 207,298    $ 56,485     $ 499,154      $ (5,995    )
(attributable)
to Validus
                                                                   
Selected
ratios:
Net premiums
written /              88.3    %     92.2    %     85.3      %     85.2      %
Gross premiums
written
                                                                   
Losses and             32.7    %     49.3    %     39.4      %     69.2      %
loss expenses
Policy
acquisition            20.8    %     16.9    %     18.4      %     17.7      %
costs
General and
administrative        16.4    %    9.4     %    15.9      %    13.1      %
expenses
Expense ratio         37.2    %    26.3    %    34.3      %    30.8      %
                                                                   
Combined ratio        69.9    %    75.6    %    73.7      %    100.0     %
                                                                             

(a) The transaction expenses relate to costs incurred in connection with the
proposed acquisition of Flagstone Reinsurance Holdings, S.A. The transaction
expenses for 2011 relate to costs incurred in connection with the Company's
proposed acquisition of Transatlantic Holdings, Inc. Transaction expenses are
primarily comprised of legal, financial advisory and audit related services.

                                            
Validus Holdings, Ltd.
Consolidated Segment Underwriting Income (Loss)
For the three and nine months ended September 30, 2012 and 2011 (unaudited)
(Expressed in thousands of U.S. dollars, except share and per share
information)

                                                                             
                     Three Months Ended          Nine Months Ended September
                     September 30,               30,
                     (unaudited)                (unaudited)                 
                     2012        2011         2012          2011        
Validus Re
Gross premiums       $ 145,010     $ 163,863     $ 1,052,726     $ 1,058,642
written
Reinsurance           (10,426 )    (5,646  )    (137,504  )    (150,669  )
premiums ceded
Net premiums           134,584       158,217       915,222         907,973
written
Change in
unearned              107,728     81,997      (177,215  )    (194,529  )
premiums
Net premiums          242,312     240,214     738,007       713,444   
earned
                                                                   
Losses and             66,890        128,823       244,286         533,402
loss expenses
Policy
acquisition            37,785        40,592        113,659         115,355
costs
General and
administrative         16,938        7,358         48,332          32,947
expenses
Share
compensation          2,076       2,190       5,914         7,118     
expenses
Total
underwriting          123,689     178,963     412,191       688,822   
deductions
                                                                   
Underwriting          118,623     61,251      325,816       24,622    
income
                                                                   
AlphaCat
Gross premiums       $ 2,934       $ 18,940      $ 21,607        $ 77,050
written
Reinsurance           —           —           —             —         
premiums ceded
Net premiums           2,934         18,940        21,607          77,050
written
Change in
unearned              2,591       8,758       (9,832    )    (37,595   )
premiums
Net premiums          5,525       27,698      11,775        39,455    
earned
                                                                   
Losses and             —             —             —               —
loss expenses
Policy
acquisition            547           3,326         1,185           4,615
costs
General and
administrative         2,087         2,167         5,521           4,122
expenses
Share
compensation          84          26          195           74        
expenses
Total
underwriting          2,718       5,519       6,901         8,811     
deductions
                                                                   
Underwriting          2,807       22,179      4,874         30,644    
income
                                                                   
Talbot
Gross premiums       $ 260,755     $ 238,937     $ 837,536       $ 778,880
written
Reinsurance           (53,801 )    (55,551 )    (191,619  )    (190,243  )
premiums ceded
Net premiums           206,954       183,386       645,917         588,637
written
Change in
unearned              20,313      7,326       (21,769   )    (27,739   )
premiums
Net premiums          227,267     190,712     624,148       560,898   
earned
                                                                   
Losses and             88,565        97,244        296,850         376,170
loss expenses
Policy
acquisition            61,640        36,651        142,181         116,174
costs
General and
administrative         36,605        21,745        100,910         82,396
expenses
Share
compensation          2,200       1,903       5,347         6,648     
expenses
Total
underwriting          189,010     157,543     545,288       581,388   
deductions
                                                                   
Underwriting          38,257      33,169      78,860        (20,490   )
income (loss)
                                                                             

                                                
Validus Holdings, Ltd.
Consolidated Segment Underwriting Income (Loss)
For the three and nine months ended September 30, 2012 and 2011 (unaudited)
(Expressed in thousands of U.S. dollars, except share and per share
information)

                                                                             
                      Three Months Ended             Nine Months Ended
                      September 30,                  September 30,
                      (unaudited)                   (unaudited)             
                      2012           2011         2012        2011      
Corporate &
Eliminations
Gross premiums        $  (18,484  )    $ (30,611 )   $ (57,276 )   $ (68,160 )
written
Reinsurance             18,484        30,611      57,276      68,160  
premiums ceded
Net premiums             —               —             —             —
written
Change in
unearned                —             —           —           —       
premiums
Net premiums            —             —           —           —       
earned
                                                                     
Losses and loss          —               —             —             —
expenses
Policy
acquisition              (1,349   )      (3,164  )     (4,141  )     (3,213  )
costs
General and
administrative           14,917          4,656         43,794        25,779
expenses
Share
compensation            2,985         3,263       8,127       13,219  
expenses
Total
underwriting            16,553        4,755       47,780      35,785  
deductions
                                                                     
Underwriting            (16,553  )     (4,755  )    (47,780 )    (35,785 )
(loss)
                                                              
Total
underwriting          $  143,134      $ 111,844    $ 361,770    $ (1,009  )
income (loss)
                                                                             

                                              
Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Managed Gross Premiums Written
For the three and nine months ended September 30, 2012 and 2011 (unaudited)
(Expressed in thousands of U.S. dollars, except share and per share
information)

                                                   
                     Three Months Ended            Nine Months Ended
                     (unaudited)                  (unaudited)
                     September      September       September      September
                     30,             30,             30,             30,
                     2012           2011(a)        2012           2011(a)
                                                                     
Total gross
premiums           $ 390,215       $ 391,129       $ 1,854,593     $ 1,846,412
written
Adjustments
for:
Gross
premiums
written on           7,604           —               94,309          —
behalf of
AlphaCat Re
2011
Gross
premiums
written on          1,658         —             32,216        —
behalf of
AlphaCat Re
2012
Total
managed
gross              $ 399,477      $ 391,129      $ 1,981,118    $ 1,846,412
premiums
written
                                                                     

(a) Total gross premiums written for the three and nine months ended September
30, 2011 included $18.8 million and $61.4 million, respectively, of gross
premiums written from AlphaCat Re 2011, which was a consolidated subsidiary
during the three months ended June 30, September 30 and December 31, 2011. The
balance sheet of AlphaCat Re 2011 was deconsolidated as at December 31, 2011.

                                                   
Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Net Operating Income (Loss), Net Operating Income (Loss) per share,
and Annualized Net Operating Return on Average Equity
For the three and nine months ended September 30, 2012 and 2011 (unaudited)
(Expressed in thousands of U.S. dollars, except share and per share information)

                                                                                        
                       Three Months Ended               Nine Months Ended
                      (unaudited)                     (unaudited)                     
                       September       September 30,     September 30,    September 30,
                       30,
                      2012            2011             2012             2011
                                                                            
Net income
(loss)
available            $ 207,298        $ 56,485          $ 499,154         $ (5,995      )
(attributable)
to Validus
Adjustments
for:
Net realized
(gains) on             (9,063     )     (5,246      )     (22,749     )     (23,177     )
investments
Net unrealized
(gains) losses         (86,345    )     27,848            (53,442     )     22,150
on investments
Loss from
investment             160              —                 558               —
affiliate
Foreign
exchange               (1,103     )     19,932            (3,617      )     22,390
(gains) losses
Transaction            3,784            13,583            3,784             13,583
expenses (a)
Net income
attributable
to                     55,821          —                10,940           —           
noncontrolling
interest
Net operating
income                 170,552          112,602           434,628           28,951
available to
Validus
Less:
Dividends and
distributions         (1,663     )    (1,966      )    (5,121      )    (5,916      )
declared on
outstanding
warrants
Net operating
income
available to         $ 168,889       $ 110,636        $ 429,507        $ 23,035      
Validus,
adjusted
                                                                            
Net income
(loss) per
share
available            $ 2.11           $ 0.54            $ 4.88            $ (0.12       )
(attributable)
to Validus -
diluted
Adjustments
for:
Net realized
(gains) on             (0.09      )     (0.04       )     (0.22       )     (0.22       )
investments
Net unrealized
(gains) losses         (0.88      )     0.27              (0.52       )     0.22
on investments
Loss from
investment             —                —                 —                 —
affiliate
Foreign
exchange               (0.01      )     0.19              (0.04       )     0.22
(gains) losses
Transaction            0.04             0.13              0.04              0.13
expenses (a)
Net income
attributable
to                    0.57           —               0.11            —           
noncontrolling
interest
Net operating
income per
share
available            $ 1.74          $ 1.09           $ 4.25           $ 0.23        
(attributable)
to Validus -
diluted
                                                                            
Weighted
average number
of common              98,236,490       103,482,263       102,333,515       100,796,280
shares and
common share
equivalents
                                                                            
Average
shareholders'
equity               $ 3,555,844      $ 3,426,093       $ 3,524,906       $ 3,418,085
available to
Validus
                                                                            
Annualized net
operating             19.2       %    13.1        %    16.4        %    1.1         %
return on
average equity
                                                                                        

(a) The transaction expenses relate to costs incurred in connection with the
proposed acquisition of Flagstone Reinsurance Holdings, S.A. The transaction
expenses for 2011 relate to costs incurred in connection with the Company's
proposed acquisition of Transatlantic Holdings, Inc. Transaction expenses are
primarily comprised of legal, financial advisory and audit related services.

                  
Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Book Value and Diluted Book Value per Common Share
As at September 30, 2012 (unaudited) and December 31, 2011
(Expressed in thousands of U.S. dollars, except share and per share
information)

                      
                      As at September 30, 2012
                      (unaudited)
                      Equity                            Exercise     Book
                      Amount        Shares          Price      Value
                                                                     Per Share
Book value per                                          
common share
Total
shareholders'
equity                $ 3,633,853       93,494,391                   $  38.87
available to
Validus
                                                                        
Diluted book
value per
common share
Total
shareholders'
equity                  3,633,853       93,494,391
available to
Validus
Assumed
exercise of             116,822         6,652,550       $  17.56
outstanding
warrants
Assumed
exercise of             37,745          1,823,947       $  20.69
outstanding
stock options
Unvested
restricted             —             2,468,053   
shares
Diluted book
value per             $ 3,788,420     104,438,941                 $  36.27
common share
                                                                        
                      As at December 31, 2011
                      Equity                            Exercise     Book
                      Amount         Shares           Price       Value
                                                                     Per Share
Book value per
common share
Total
shareholders'
equity                $ 3,448,425       99,471,080                   $  34.67
available to
Validus
                                                                        
Diluted book
value per
common share
Total
shareholders'
equity                  3,448,425       99,471,080
available to
Validus
Assumed
exercise of             121,445         6,916,677       $  17.56
outstanding
warrants
Assumed
exercise of             45,530          2,263,012       $  20.12
outstanding
stock options
Unvested
restricted             —             3,340,729   
shares
Diluted book
value per             $ 3,615,400     111,991,498                 $  32.28
common share
                                                                        

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.

Non-GAAP Financial Measures

In presenting the Company's results, management has included and discussed
certain schedules containing net operating income (loss), net operating income
(loss) available (attributable) to Validus, net operating income (loss) per
share, underwriting income (loss), managed gross premiums written, annualized
net operating return on average equity and diluted book value per common share
that are not calculated under standards or rules that comprise U.S. GAAP. Such
measures are referred to as non-GAAP. Non-GAAP measures may be defined or
calculated differently by other companies. These measures should not be viewed
as a substitute for those determined in accordance with U.S. GAAP. A
reconciliation of net operating income (loss) to net income (loss), the most
comparable U.S. GAAP financial measure, is presented in the section above
entitled “Net Operating Income (Loss), Net Operating Income (Loss) per share
and Annualized Net Operating Return on Average Equity”. A reconciliation of
underwriting income and operating income to net income, the most comparable
U.S. GAAP financial measure, is presented in the “Consolidated Statements of
Operations” above. A reconciliation of managed gross premiums written to gross
premiums written, the most comparable U.S. GAAP financial measure, is
presented in the section above entitled "Managed Gross Premiums Written".

Underwriting income indicates the performance of the Company's core
underwriting function, excluding revenues and expenses such as net investment
income (loss), other income, finance expenses, net realized and unrealized
gains (losses)on investments, foreign exchange gains (losses) and transaction
expenses. The Company believes the reporting of underwriting income enhances
the understanding of our results by highlighting the underlying profitability
of the Company's core insurance and reinsurance business. Underwriting
profitability is influenced significantly by earned premium growth, adequacy
of the Company's pricing and loss frequency and severity.

Underwriting profitability over time is also influenced by the Company's
underwriting discipline, which seeks to manage exposure to loss through
favorable risk selection and diversification, its management of claims, its
use of reinsurance and its ability to manage its expense ratio, which it
accomplishes through its management of acquisition costs and other
underwriting expenses. The Company believes that underwriting income provides
investors with a valuable measure of profitability derived from underwriting
activities.

Managed gross premiums written represents gross premiums written by the
Company and its operating affiliates. Managed gross premiums written differs
from total gross premiums written, which the Company believes is the most
directly comparable GAAP measure, due to the inclusion of premiums written on
behalf of the Company's operating affiliates, AlphaCat Re 2011, Ltd. and
AlphaCat Re 2012, Ltd., which are accounted for under the equity method of
accounting.

Annualized net operating return on average equity is presented in the section
above entitled “Net Operating Income (Loss), Net Operating Income (Loss) per
share and Annualized Net Operating Return on Average Equity.” A reconciliation
of diluted book value per common share to book value per common share, the
most comparable U.S. GAAP financial measure, is presented in the section above
entitled “Book Value Per Common Share and Diluted Book Value Per Common
Share.” Net operating income (loss) is calculated based on net income (loss)
excluding net realized gains (losses) on investments, net unrealized gains
(losses) on investments, gains (losses) arising from translation of non-US$
denominated balances and non-recurring items. Realized gains (losses) from the
sale of investments are driven by the timing of the disposition of
investments, not by our operating performance. Gains (losses) arising from
translation of non-US$ denominated balances are unrelated to our underlying
business. Net operating income (loss) available (attributable) to Validus is
defined as net operating income (loss) as defined above, but excluding income
(loss) available (attributable) to noncontrolling interest.

Contact:

Investors:
Validus Holdings, Ltd.
Jon Levenson, +1-441-278-9000
Executive Vice President
Jon.Levenson@validusholdings.com
or
Media:
Brunswick Group
Greg Faje / Beau Allen
+1-212-333-3810