Validus swings back to profit in first quarter

PEMBROKE, Bermuda—Validus Holdings Ltd. reported $124.3 million in net income for the first quarter of 2012, up from a $172.4 million loss during the same period last year.

While gross written premiums declined 1.5% from the first quarter of 2011 to $837.3 million, the Pembroke, Bermuda-based insurer and reinsurer’s combined ratio for the quarter improved to 84.6% from 143% registered during the same period last year.

“I am pleased to report nearly $125 million in net income and annualized growth in diluted book value per share of 15.1% despite meaningful catastrophe losses in connection with the Costa Concordia sinking and severe tornado activity in the U.S. heartland,” Validus Chairman and CEO Ed Noonan said Thursday in a statement.

“The net effect of the Costa Concordia loss, after the impact of reinstatement premiums, was $63.1 million, which was within our pre-announced range of $50 million to $65 million,” he said.

“The total effect of notable losses after reinstatement premiums was $84.5 million in the first quarter of 2012, as compared to $271.1 million for the first quarter of 2011. Validus continues to expand and leverage our core capabilities as evidenced by the announcement of the capitalization of PaCRe Ltd. and continued development of AlphaCat,” Mr. Noonan said in the statement.