Validus CEO Pushes Expansion in U.S. Crop Insurance
Validus Holdings Ltd. (VR), the reinsurer that reported a fourth-quarter loss yesterday, increased its investment in U.S. crop coverage as a drought-generated surge in claims boosts policy prices.
“We see prices becoming more attractive” in crop insurance, Chairman and Chief Executive Officer Ed Noonan said today in an interview. “We are a more sizable crop insurer going forward than we have been historically.”
Noonan, 54, said Bermuda-based Validus has written $55 million in crop-insurance business since Jan. 1. Policies in the U.S. Midwest and South cover crops including corn and soybeans, he said.
The worst drought since the 1930s led to record payouts on crop-insurance claims. Farmers collected more than $13 billion in the crop year through Jan. 28, exceeding the record of $10.84 billion set in 2011, according to a Risk Management Agency report published on the U.S. Department of Agriculture website.
Validus said yesterday it had a fourth-quarter loss of $90.7 million, or 94 cents a share, compared with net income of $27.3 million, or 25 cents, a year earlier. The reinsurer was little changed at $36.51 at 2:19 p.m. today in New York and has gained 12 percent in the past year.
Validus is in the process of acquiring closely held Bermuda-based reinsurer Longhorn Re to help expand in crop coverage, Noonan said.
“Its sole business was crop reinsurance and people we knew and have known for some time like the way they do business,” Noonan said.
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