VALIDUS HOLDINGS LTD - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

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EX-99.1 - EXHIBIT 99.1 - VALIDUS HOLDINGS LTD	a20170630-earningsrelease.htm
8-K - 8-K - VALIDUS HOLDINGS LTD	a20170630-coverpageerandsu.htm



		Validus Holdings, Ltd.
		Investor Financial Supplement – Second Quarter 2017
		July 27, 2017

		29 Richmond Road
		Pembroke, HM 08 Bermuda
		Telephone: (441) 278-9000
		Facsimile: (441) 278-9090
		Website: www.validusholdings.com
		Mailing address: Suite 1790 48 Par-la-Ville Road
		Hamilton, HM 11 Bermuda



Validus Holdings, Ltd.
Table of Contents

Section		Page
Table of Contents		2
Explanatory Notes		3
Consolidated Financial Highlights		4
Summary Consolidated Balance Sheets		5
Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share		6
Consolidated Statements of Cash Flows		7
Consolidated Statements of Income and Comprehensive Income		8
Consolidated Statements of Operations - Underwriting Income Format		9
Computation of Earnings per Share		10
Underwriting Income Statement - Validus Re		11
Underwriting Results by Class of Business - Three months ended - Validus Re		12
Underwriting Results by Class of Business - Six months ended - Validus Re		13
Underwriting Income Statement - Talbot		14
Underwriting Results by Class of Business - Three months ended - Talbot		15
Underwriting Results by Class of Business - Six months ended - Talbot		16
Underwriting Income Statement - Western World		17
Underwriting Results by Class of Business - Three months ended - Western World		18
Underwriting Results by Class of Business - Six months ended - Western World		19
AlphaCat Managers Segment Information		20
AlphaCat Assets Under Management		21
Corporate and Investments		22
Segment Reconciliation - Three months ended		23
Segment Reconciliation - Six months ended		24
Non-GAAP Financial Measure Reconciliation		25
Consolidated Class of Business Policy Type Detail - Gross Premiums Written		26
Gross Premiums Written by Segment by Class of Business		27
Consolidated Analysis of Reserves for Losses and Loss Expenses		28
Consolidated Losses and Loss Ratios by Segment		29
Losses and Loss Ratios by Class of Business - Validus Re		30
Losses and Loss Ratios by Class of Business - Talbot		31
Losses and Loss Ratios by Class of Business - Western World		32
Analysis of Loss Ratios by Segment		33
Consolidated Reinsurance Recoverable Analysis		34
Consolidated Investment Portfolio Composition and Net Investment Income		35
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile		36
Top Ten Exposures to Fixed Income Corporate Issuers		37
Capitalization		38
Estimated Exposures to Peak Zone Property Catastrophe Losses - As of July 1, 2017		39
Estimated Exposures to Specified Loss Scenarios - As of January 1, 2017		40

Validus Holdings, Ltd.

Explanatory Notes

Basis of Presentation

•

All financial information contained herein is unaudited however, certain information relating to the years ended December 31, 2016 and 2015 is derived from or agrees to audited financial information. Unless otherwise noted, dollar amounts are in thousands of U.S. dollars, except for share and per share amounts and ratio information. Certain amounts in prior periods have been reclassified to conform to current period presentation.

•

On May 1, 2017, the Company acquired all of the outstanding capital stock of Crop Risk Services ("CRS"), a primary crop insurance managing general agent ("MGA"). For segmental reporting purposes, the results of CRS have been included in the results of the Western World segment as of the date of acquisition. Transaction expenses incurred in relation to the acquisition of CRS are primarily comprised of legal, financial advisory and audit related services.


•	On June 1, 2017, the Company redeemed its investment in one of the lower risk AlphaCat ILS funds. As a result, the Company was no longer deemed to be the primary beneficiary and therefore this fund was deconsolidated effective June 1, 2017.

Non-GAAP Financial Measures

•

In presenting the Company’s results, management has included and discussed certain non-GAAP financial measures. The Company believes that these non-GAAP measures, which may be defined and calculated differently by other companies, better explain and enhance the understanding of the Company’s results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP.

•

In addition to presenting book value per common share determined in accordance with U.S. GAAP, the Company believes that the following non-GAAP book value financial measures are key financial indicators for evaluating performance and measuring overall growth: book value per diluted common share, book value per diluted common share plus accumulated dividends and tangible book value per diluted common share. A reconciliation of book value per common share, a GAAP financial measure, to the non-GAAP book value financial measures has been included on page 6.

•

In addition to presenting net income available to Validus common shareholders determined in accordance with U.S. GAAP, the Company believes that showing net operating income available to Validus common shareholders, a non-GAAP financial measure, provides investors with a valuable measure of profitability and enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results in a manner similar to how management analyzes the Company’s underlying business performance.

•

Net operating income available to Validus common shareholders, a non-GAAP financial measure, is calculated by the addition or subtraction of certain Consolidated Statement of Income line items from net income available to Validus common shareholders, the most directly comparable GAAP financial measure, and measures the performance of the Company’s operations without the influence of gains or losses on investments and foreign currencies and other items as noted in the reconciliation on page 25. The Company excludes these items from its calculation of net operating income available to Validus common shareholders because the amount of these gains and losses is heavily influenced by, and fluctuates in part, according to availability of investment market opportunities and other factors. The Company believes these amounts are largely independent of its core underwriting activities and including them distorts the analysis of trends in its operations. The Company believes the reporting of net operating income available to Validus common shareholders enhances the understanding of results by highlighting the underlying profitability of the Company’s core (re)insurance operations. This profitability is influenced significantly by earned premium growth, adequacy of the Company’s pricing, as well as loss frequency and severity. Over time it 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.


•	Return on average equity, a GAAP financial measure, and net operating return on average equity, a non-GAAP financial measure, represents the returns generated on common shareholders’ equity during the year and are presented on page 25.

•

The Company also considers underwriting income to be a measure of profitability that takes into account net premiums earned and other insurance related income as revenue and losses and loss expenses, acquisition costs and underwriting related general and administrative and share compensation expenses as expenses. Underwriting income is the difference between revenues and expense items. A reconciliation of underwriting income to net income available to Validus common shareholders, the most comparable U.S. GAAP financial measure, is presented on page 9.

Validus Holdings, Ltd.

Consolidated Financial Highlights

(Expressed in thousands of U.S. Dollars, except share and per share information



		Three Months Ended															Six Months Ended
		June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Highlights	Net income available to Validus common shareholders	$	101,095		$	94,561		$	7,767		$	89,844		$	94,963		$	195,656		$	261,773
	Net operating income available to Validus common shareholders ^(a)	88,466			76,834			58,460			83,040			57,880			165,300			179,385
	Gross premiums written	792,902			1,190,857			339,454			372,418			764,042			1,983,759			1,936,833
	Net premiums earned	631,027			575,376			540,399			563,775			573,723			1,206,403			1,144,991
	Total assets	13,951,146			12,137,121			11,349,755			11,486,153			11,818,244			13,951,146			11,818,244
	Total shareholders' equity available to Validus common shareholders	3,811,431			3,761,876			3,688,291			3,717,620			3,716,256			3,811,431			3,716,256

Per share data	Earnings per basic common share
	Net income available to Validus common shareholders	$	1.28		$	1.19		$	0.10		$	1.12		$	1.16		$	2.47		$	3.18
	Net operating income available to Validus common shareholders ^(a)	1.12			0.97			0.74			1.04			0.71			2.09			2.18

	Earnings per diluted common share
	Net income available to Validus common shareholders	$	1.25		$	1.17		$	0.10		$	1.11		$	1.14		$	2.42		$	3.12
	Net operating income available to Validus common shareholders ^(a)	1.09			0.95			0.73			1.02			0.69			2.04			2.14

	Book value per common share	$	47.93		$	47.54		$	46.61		$	46.80		$	46.01		$	47.93		$	46.01
	Book value per diluted common share ^(a)	$	46.45		$	45.88		$	44.97		$	45.16		$	44.41		$	46.45		$	44.41
	Growth in book value per diluted common share inclusive of dividends ^(a)	2.1%			2.9%			0.4%			2.5%			1.7%			5.0%			6.6		%

	Book value per diluted common share plus accumulated dividends ^(a)	$	58.77		$	57.82		$	56.53		$	56.37		$	55.27		$	58.77		$	55.27

Financial ratios	Losses and loss expense ratio	46.9		%	46.9		%	50.9		%	45.8		%	53.5		%	46.9		%	46.4		%

	Policy acquisition cost ratio	18.6		%	19.4		%	22.4		%	20.1		%	18.8		%	19.0		%	18.8		%
	General and administration expense ratio ^(b)	17.0		%	16.9		%	16.3		%	16.5		%	17.6		%	17.0		%	17.3		%
	Expense ratio	35.6		%	36.3		%	38.7		%	36.6		%	36.4		%	36.0		%	36.1		%
	Combined ratio	82.5		%	83.2		%	89.6		%	82.4		%	89.9		%	82.9		%	82.5		%

	Annualized return on average equity	10.7		%	10.2		%	0.8		%	9.7		%	10.2		%	10.4		%	14.2		%
	Annualized net operating return on average equity ^(a)	9.3		%	8.3		%	6.3		%	8.9		%	6.2		%	8.8		%	9.7		%

Notes:


(a)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.


(b)	The general and administrative ratio includes share compensation expenses.

Validus Holdings, Ltd.

Summary Consolidated Balance Sheets

(Expressed in thousands of U.S. Dollars, except share and per share information)



	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Assets
Fixed maturity investments trading, at fair value	$	5,418,643		$	5,365,216		$	5,543,030		$	5,576,341		$	5,551,586		$	5,481,304		$	5,510,331		$	5,596,403		$	5,471,804
Short-term investments trading, at fair value	2,871,353			2,785,226			2,796,170			2,481,406			2,369,654			2,108,199			1,941,635			1,731,443			1,600,207
Other investments, at fair value	448,618			443,004			405,712			394,695			359,526			344,151			336,856			334,667			331,458
Investments in investment affiliates, equity method	103,377			94,697			100,431			99,731			99,278			84,135			87,673			88,134			89,681
Cash and cash equivalents	800,405			623,937			419,976			443,992			568,798			569,774			723,109			412,474			439,092
Restricted cash	195,039			92,547			70,956			113,048			96,022			108,395			73,270			74,002			140,019
Total investments and cash	9,837,435			9,404,627			9,336,275			9,109,213			9,044,864			8,695,958			8,672,874			8,237,123			8,072,261
Investments in operating affiliate, equity method	—			—			—			—			—			369			392			48,703			56,666
Premiums receivable	1,940,637			1,214,745			725,390			939,127			1,372,000			1,176,684			658,682			1,060,923			1,273,387
Deferred acquisition costs	302,857			292,180			209,227			249,922			283,213			262,675			181,002			224,982			253,042
Prepaid reinsurance premiums	335,837			199,046			77,996			119,805			145,567			181,255			77,992			126,278			162,251
Securities lending collateral	2,514			10,386			9,779			10,629			10,224			9,721			4,863			6,461			7,021
Loss reserves recoverable	600,207			451,856			430,421			444,609			442,987			370,689			350,586			385,212			376,665
Paid losses recoverable	35,675			37,837			35,247			36,069			27,648			25,001			23,071			21,681			40,198
Income taxes recoverable	4,763			6,757			4,870			6,879			8,526			7,146			16,228			15,870			13,787
Deferred tax asset	52,655			45,995			43,529			26,015			23,745			27,771			21,661			22,352			23,079
Receivable for investments sold	20,519			9,302			3,901			21,854			13,736			16,278			39,766			15,055			29,131
Intangible assets	175,518			114,176			115,592			117,010			118,426			119,842			121,258			122,676			124,092
Goodwill	227,701			196,758			196,758			196,758			196,758			196,758			196,758			196,758			196,758
Accrued investment income	26,968			25,962			26,488			24,906			24,925			22,298			23,897			23,755			23,894
Other assets	387,860			127,494			134,282			183,357			105,625			92,076			126,782			93,181			105,182
Total assets	$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521		$	10,515,812		$	10,601,010		$	10,757,414
Liabilities
Reserve for losses and loss expenses	$	3,305,191		$	3,052,745		$	2,995,195		$	3,035,987		$	3,122,717		$	2,980,300		$	2,996,567		$	3,172,285		$	3,192,663
Unearned premiums	1,970,896			1,612,474			1,076,049			1,359,438			1,621,563			1,503,161			966,210			1,281,319			1,518,603
Reinsurance balances payable	461,261			118,119			54,781			76,429			92,488			96,685			75,380			89,954			94,795
Securities lending payable	2,980			10,852			10,245			11,095			10,690			10,187			5,329			6,927			7,487
Deferred tax liability	4,012			3,818			3,331			3,278			3,552			3,618			3,847			8,921			8,063
Payable for investments purchased	92,077			38,486			29,447			49,435			52,718			76,116			77,475			118,164			105,871
Accounts payable and accrued expenses	385,958			171,134			587,648			144,086			149,593			136,712			627,331			159,440			200,469
Notes payable to AlphaCat investors	1,066,159			446,576			278,202			372,730			370,982			323,510			75,493			75,607			—
Senior notes payable	245,463			245,412			245,362			245,311			245,261			245,211			245,161			245,111			245,061
Debentures payable	538,400			537,402			537,226			538,168			537,987			538,335			537,668			538,054			538,032
Total liabilities	8,072,397			6,237,018			5,817,486			5,835,957			6,207,551			5,913,835			5,610,461			5,695,782			5,911,044
Redeemable noncontrolling interests	1,251,660			1,657,630			1,528,001			1,559,580			1,532,283			1,409,037			1,111,714			1,101,147			1,035,511
Shareholders' equity
Preferred shares	$	400,000		$	150,000		$	150,000		$	150,000		$	150,000		$	—		$	—		$	—		$	—
Common shares	28,339			28,225			28,224			28,223			28,219			28,102			28,100			27,726			27,716
Treasury shares	(14,423		)	(14,376		)	(14,376		)	(14,320		)	(14,084		)	(13,830		)	(13,592		)	(13,376		)	(13,140		)
Additional paid-in capital	807,321			830,346			821,023			827,256			883,701			954,485			1,002,980			1,048,917			1,097,527
Accumulated other comprehensive (loss)	(19,924		)	(22,453		)	(23,216		)	(21,092		)	(18,182		)	(15,438		)	(12,569		)	(10,869		)	(9,066		)
Retained earnings	3,010,118			2,940,134			2,876,636			2,897,553			2,836,602			2,771,107			2,634,056			2,592,567			2,554,299
Total shareholders' equity available to Validus	4,211,431			3,911,876			3,838,291			3,867,620			3,866,256			3,724,426			3,638,975			3,644,965			3,657,336
Noncontrolling interests	415,658			330,597			165,977			222,996			212,154			157,223			154,662			159,116			153,523
Total shareholders' equity	4,627,089			4,242,473			4,004,268			4,090,616			4,078,410			3,881,649			3,793,637			3,804,081			3,810,859
Total liabilities, noncontrolling interests and shareholders' equity	$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521		$	10,515,812		$	10,601,010		$	10,757,414

Book value per common share	$	47.93		$	47.54		$	46.61		$	46.80		$	46.01		$	45.67		$	43.90		$	44.45		$	43.91
Book value per diluted common share	$	46.45		$	45.88		$	44.97		$	45.16		$	44.41		$	44.00		$	42.33		$	41.89		$	41.44
Book value per diluted common share plus accumulated dividends	$	58.77		$	57.82		$	56.53		$	56.37		$	55.27		$	54.51		$	52.49		$	51.73		$	50.96

Validus Holdings, Ltd.

Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share

(Expressed in thousands of U.S. Dollars, except share and per share information)



	June 30, 2017						December 31, 2016
	Equity Amount			Common Shares	Per Share Amount ^(a)		Equity Amount			Common Shares	Per Share Amount ^(a)
Book value per common share ^(b)	$	3,811,431		79,518,581	$	47.93	$	3,688,291		79,132,252	$	46.61
Non-GAAP Adjustments:
Assumed exercise of outstanding stock options ^(c)(d)	614			26,136			614			26,136
Unvested restricted shares	—			2,530,559			—			2,868,610
Book value per diluted common share ^(e)	3,812,045			82,075,276	$	46.45	3,688,905			82,026,998	$	44.97
Goodwill	(227,701		)	—			(196,758		)	—
Intangible assets	(175,518		)	—			(115,592		)	—
Tangible book value per diluted common share ^(e)	$	3,408,826		82,075,276	$	41.53	$	3,376,555		82,026,998	$	41.16

Book value per diluted common share ^(e)					$	46.45					$	44.97
Accumulated dividends					12.32						11.56
Book value per diluted common share plus accumulated dividends ^(e)					$	58.77					$	56.53

Notes:


(a)	Per share amounts are calculated by dividing the equity amount by the common shares.


(b)	The equity amount used in the calculation of book value per common share represents total shareholders' equity available to Validus excluding the liquidation value of the preferred shares.


(c)	Using the "as-if-converted" method, assuming all proceeds received upon exercise of stock options will be retained by the Company and the resulting common shares from exercise remain outstanding.


(d)	At June 30, 2017, the weighted average exercise price for those stock options that had an exercise price lower than book value per share was $23.48 (December 31, 2016: $23.48).


(e)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Cash flows provided by (used in) operating activities
Net Income	$	146,948		$	139,336		$	37,170		$	129,535		$	116,156		$	286,284		$	320,497
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Share compensation expenses	11,146			9,491			10,442			10,501			10,727			20,637			21,964
Loss on deconsolidation of AlphaCat ILS fund	402			—			—			—			—			402			—
Amortization of discount on senior notes	27			27			27			27			27			54			54
(Income) loss from investment and operating affiliates	(9,466		)	(5,188		)	(2,166		)	(453		)	589			(14,654		)	4,725
Net realized and change in net unrealized (gains) losses on investments	(18,595		)	(12,184		)	58,240			(9,856		)	(34,152		)	(30,779		)	(81,012		)
Amortization of intangible assets	2,578			1,416			1,418			1,416			1,416			3,994			2,832
Foreign exchange (gains) losses included in net income	(4,748		)	(4,938		)	7,628			1,704			168			(9,686		)	(6,289		)
Amortization of premium on fixed maturities	3,476			3,536			4,580			4,671			4,172			7,012			8,710
Change in operational balance sheet items, net	(96,882		)	(113,697		)	38,268			47,608			4,386			(210,579		)	(202,038		)
Net cash provided by (used in) operating activities	$	34,886		$	17,799		$	155,607		$	185,153		$	103,489		$	52,685		$	69,443
Cash flows provided by investing activities
(Purchases) sales of investments	$	(92,623	)	$	167,286		$	(366,894	)	$	(182,871	)	$	(343,486	)	$	74,663		$	(424,954	)
Decrease (increase) in securities lending collateral	7,872			(607		)	850			(405		)	(503		)	7,265			(5,361		)
Distributions (contributions) in investment & operating affiliates, net	786			10,922			1,466			(2		)	(15,361		)	11,708			(15,936		)
(Increase) decrease in restricted cash	(102,492		)	(21,591		)	42,092			(17,026		)	12,373			(124,083		)	(22,752		)
Purchase of subsidiary, net of cash acquired	(183,923		)	—			—			—			—			(183,923		)	—
Net cash (used in) provided by investing activities	$	(370,380	)	$	156,010		$	(322,486	)	$	(200,304	)	$	(346,977	)	$	(214,370	)	$	(469,003	)
Cash flows provided by (used in) financing activities
Net proceeds on issuance of notes payable to AlphaCat investors	$	196,597		$	73,048		$	(202	)	$	1,779		$	47,348		$	269,645		$	294,748
Net proceeds on issuance of preferred shares	241,686			—			—			—			144,852			241,686			144,852
Issuance of common shares, net	(11,794		)	(167		)	(70		)	(246		)	(7,785		)	(11,961		)	(7,385		)
Purchases of common shares under share repurchase program	(13,996		)	—			(16,660		)	(66,932		)	(68,715		)	(13,996		)	(129,083		)
Dividends paid on common and preferred shares	(35,397		)	(32,295		)	(29,927		)	(30,192		)	(31,324		)	(67,692		)	(59,961		)
(Decrease) increase in securities lending payable	(7,872		)	607			(850		)	405			503			(7,265		)	5,361
Third party investment (redemption) in redeemable noncontrolling interest, net	95,462			35,403			11,499			(5,784		)	112,500			130,865			370,450
Third party investment in noncontrolling interest, net	69,966			92,210			—			—			50,968			162,176			44,571
Third party subscriptions (deployed) received in AlphaCat Funds and Sidecars	(27,500		)	(144,452		)	187,452			(1,400		)	700			(171,952		)	(411,336		)
Net cash provided by (used in) financing activities	$	507,152		$	24,354		$	151,242		$	(102,370	)	$	249,047		$	531,506		$	252,217
Effect of foreign currency rate changes on cash and cash equivalents	4,810			5,798			(8,379		)	(7,285		)	(6,535		)	10,608			(6,968		)
Net increase (decrease) in cash and cash equivalents	176,468			203,961			(24,016		)	(124,806		)	(976		)	380,429			(154,311		)
Cash and cash equivalents - beginning of period	623,937			419,976			443,992			568,798			569,774			419,976			723,109
Cash and cash equivalents - end of period	$	800,405		$	623,937		$	419,976		$	443,992		$	568,798		$	800,405		$	568,798

Taxes paid during the period	$	552		$	16		$	120		$	2,077		$	1,720		$	568		$	3,837
Interest paid during the period	$	8,113		$	19,073		$	8,566		$	18,520		$	8,249		$	27,186		$	27,552
Losses paid during the period	$	236,023		$	245,787		$	277,422		$	345,246		$	222,657		$	481,810		$	491,734

Validus Holdings, Ltd.

Consolidated Statements of Income and Comprehensive Income

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Revenues
Gross premiums written	$	792,902		$	1,190,857		$	339,454		$	372,418		$	764,042		$	1,983,759		$	1,936,833
Reinsurance premiums ceded	(56,222		)	(200,106		)	(40,635		)	(45,006		)	(36,229		)	(256,328		)	(204,064		)
Net premiums written	736,680			990,751			298,819			327,412			727,813			1,727,431			1,732,769
Change in unearned premiums	(105,653		)	(415,375		)	241,580			236,363			(154,090		)	(521,028		)	(587,778		)
Net premiums earned	631,027			575,376			540,399			563,775			573,723			1,206,403			1,144,991
Net investment income	44,241			40,214			38,153			43,514			39,257			84,455			68,718
Net realized gains (losses) on investments	2,274			(1,164		)	9,220			4,397			2,724			1,110			2,140
Change in net unrealized gains (losses) on investments	16,321			13,348			(67,460		)	5,459			31,428			29,669			78,872
Income (loss) from investment affiliates	9,466			5,188			2,166			453			(589		)	14,654			(4,702		)
Other insurance related income and other income (loss)	1,339			1,330			568			(610		)	824			2,669			2,237
Foreign exchange (losses) gains	(7,329		)	1,569			(901		)	(766		)	6,286			(5,760		)	12,531
Total revenues	697,339			635,861			522,145			616,222			653,653			1,333,200			1,304,787
Expenses
Losses and loss expenses	296,149			269,585			275,126			258,394			307,130			565,734			531,577
Policy acquisition costs	117,268			111,628			120,889			113,434			107,966			228,896			215,159
General and administrative expenses	96,349			87,924			77,955			82,443			89,688			184,273			175,896
Share compensation expenses	11,146			9,491			10,442			10,501			10,727			20,637			21,964
Finance expenses	14,209			13,943			14,630			14,521			14,166			28,152			29,369
Transaction expenses	4,427			—			—			—			—			4,427			—
Total expenses	539,548			492,571			499,042			479,293			529,677			1,032,119			973,965
Income before taxes, loss from operating affiliate and (income) attributable to AlphaCat investors	157,791			143,290			23,103			136,929			123,976			301,081			330,822
Tax benefit (expense)	987			3,549			21,147			(1,830		)	(1,706		)	4,536			412
Loss from operating affiliate	—			—			—			—			—			—			(23		)
(Income) attributable to AlphaCat investors	(11,830		)	(7,503		)	(7,080		)	(5,564		)	(6,114		)	(19,333		)	(10,714		)
Net income	146,948			139,336			37,170			129,535			116,156			286,284			320,497
Net (income) attributable to noncontrolling interests	(43,650		)	(42,572		)	(27,200		)	(37,439		)	(21,193		)	(86,222		)	(58,724		)
Net income available to Validus	103,298			96,764			9,970			92,096			94,963			200,062			261,773
Dividends on preferred shares	(2,203		)	(2,203		)	(2,203		)	(2,252		)	—			(4,406		)	—
Net income available to Validus common shareholders	$	101,095		$	94,561		$	7,767		$	89,844		$	94,963		$	195,656		$	261,773

Comprehensive income
Net income	$	146,948		$	139,336		$	37,170		$	129,535		$	116,156		$	286,284		$	320,497
Other comprehensive income (loss)
Change in foreign currency translation adjustments	1,489			597			(3,755		)	(1,370		)	(3,287		)	2,086			(5,315		)
Change in minimum pension liability, net of tax	1,184			68			221			(1,101		)	479			1,252			396
Change in fair value of cash flow hedge	(144		)	98			1,410			(439		)	64			(46		)	(694		)
Other comprehensive income (loss)	$	2,529		$	763		$	(2,124	)	$	(2,910	)	$	(2,744	)	$	3,292		$	(5,613	)
Comprehensive (income) attributable to noncontrolling interests	(43,650		)	(42,572		)	(27,200		)	(37,439		)	(21,193		)	(86,222		)	(58,724		)
Comprehensive income available to Validus	$	105,827		$	97,527		$	7,846		$	89,186		$	92,219		$	203,354		$	256,160

Earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic	79,270,561			79,133,671			79,261,409			80,134,394			81,950,833			79,202,116			82,386,047
Diluted	80,872,451			80,739,142			80,621,967			81,244,556			83,373,003			80,861,998			83,785,659

Basic earnings per share available to Validus common shareholders	$	1.28		$	1.19		$	0.10		$	1.12		$	1.16		$	2.47		$	3.18
Earnings per diluted share available to Validus common shareholders	$	1.25		$	1.17		$	0.10		$	1.11		$	1.14		$	2.42		$	3.12

Cash dividends declared per common share	$	0.38		$	0.38		$	0.35		$	0.35		$	0.35		$	0.76		$	0.70

Validus Holdings, Ltd.

Consolidated Statements of Operations - Underwriting Income Format

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Underwriting revenues
Gross premiums written	$	792,902		$	1,190,857		$	339,454		$	372,418		$	764,042		$	1,983,759		$	1,936,833
Reinsurance premiums ceded	(56,222		)	(200,106		)	(40,635		)	(45,006		)	(36,229		)	(256,328		)	(204,064		)
Net premiums written	736,680			990,751			298,819			327,412			727,813			1,727,431			1,732,769
Change in unearned premiums	(105,653		)	(415,375		)	241,580			236,363			(154,090		)	(521,028		)	(587,778		)
Net premiums earned	631,027			575,376			540,399			563,775			573,723			1,206,403			1,144,991
Other insurance related income	1,165			1,236			561			919			745			2,401			1,481
Total underwriting revenues	632,192			576,612			540,960			564,694			574,468			1,208,804			1,146,472
Underwriting deductions
Losses and loss expenses	296,149			269,585			275,126			258,394			307,130			565,734			531,577
Policy acquisition costs	117,268			111,628			120,889			113,434			107,966			228,896			215,159
General and administrative expenses	96,349			87,924			77,955			82,443			89,688			184,273			175,896
Share compensation expenses	11,146			9,491			10,442			10,501			10,727			20,637			21,964
Total underwriting deductions	520,912			478,628			484,412			464,772			515,511			999,540			944,596
Underwriting income ^(a)	$	111,280		$	97,984		$	56,548		$	99,922		$	58,957		$	209,264		$	201,876
Net investment income	44,241			40,214			38,153			43,514			39,257			84,455			68,718
Finance expenses	(14,209		)	(13,943		)	(14,630		)	(14,521		)	(14,166		)	(28,152		)	(29,369		)
Dividends on preferred shares	(2,203		)	(2,203		)	(2,203		)	(2,252		)	—			(4,406		)	—
Tax benefit (expense)	2,735			4,129			15,284			(1,387		)	1,274			6,864			7,519
Loss from operating affiliate	—			—			—			—			—			—			(23		)
(Income) attributable to AlphaCat investors	(11,830		)	(7,503		)	(7,080		)	(5,564		)	(6,114		)	(19,333		)	(10,714		)
Net operating (income) attributable to noncontrolling interests	(41,548		)	(41,844		)	(27,612		)	(36,672		)	(21,328		)	(83,392		)	(58,622		)
Net operating income available to Validus common shareholders ^(a)	$	88,466		$	76,834		$	58,460		$	83,040		$	57,880		$	165,300		$	179,385
Net realized gains (losses) on investments	2,274			(1,164		)	9,220			4,397			2,724			1,110			2,140
Change in net unrealized gains (losses) on investments	16,321			13,348			(67,460		)	5,459			31,428			29,669			78,872
Income (loss) from investment affiliates	9,466			5,188			2,166			453			(589		)	14,654			(4,702		)
Foreign exchange (losses) gains	(7,329		)	1,569			(901		)	(766		)	6,286			(5,760		)	12,531
Other income (loss)	174			94			7			(1,529		)	79			268			756
Transaction expenses	(4,427		)	—			—			—			—			(4,427		)	—
Net (income) loss attributable to noncontrolling interests	(2,102		)	(728		)	412			(767		)	135			(2,830		)	(102		)
Tax (expense) benefit	(1,748		)	(580		)	5,863			(443		)	(2,980		)	(2,328		)	(7,107		)
Net income available to Validus common shareholders	$	101,095		$	94,561		$	7,767		$	89,844		$	94,963		$	195,656		$	261,773

Selected ratios:
Ratio of net to gross premiums written	92.9		%	83.2		%	88.0		%	87.9		%	95.3		%	87.1		%	89.5		%

Losses and loss expense ratio	46.9		%	46.9		%	50.9		%	45.8		%	53.5		%	46.9		%	46.4		%

Policy acquisition cost ratio	18.6		%	19.4		%	22.4		%	20.1		%	18.8		%	19.0		%	18.8		%
General and administrative expense ratio^(b)	17.0		%	16.9		%	16.3		%	16.5		%	17.6		%	17.0		%	17.3		%
Expense ratio	35.6		%	36.3		%	38.7		%	36.6		%	36.4		%	36.0		%	36.1		%
Combined ratio	82.5		%	83.2		%	89.6		%	82.4		%	89.9		%	82.9		%	82.5		%

Notes:


(a)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.


(b)	The general and administrative ratio includes share compensation expenses.

Validus Holdings, Ltd.

Computation of Earnings per Share

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended ^(a)
	June 30, 2017						June 30, 2016
	Net Income		Net Operating Income		Comprehensive Income		Net Income		Net Operating Income		Comprehensive Income
Basic earnings per share ^(b)
Income available to Validus common shareholders	$	101,095	$	88,466	$	105,827	$	94,963	$	57,880	$	92,219
Weighted average number of common shares outstanding	79,270,561		79,270,561		79,270,561		81,950,833		81,950,833		81,950,833
Basic earnings per share available to Validus common shareholders	$	1.28	$	1.12	$	1.34	$	1.16	$	0.71	$	1.13

Earnings per diluted share^(c)
Income available to Validus common shareholders	$	101,095	$	88,466	$	105,827	$	94,963	$	57,880	$	92,219

Weighted average number of common shares outstanding	79,270,561		79,270,561		79,270,561		81,950,833		81,950,833		81,950,833
Share equivalents:
Stock options	14,739		14,739		14,739		33,796		33,796		33,796
Unvested restricted shares	1,587,151		1,587,151		1,587,151		1,388,374		1,388,374		1,388,374
Weighted average number of diluted common shares outstanding	80,872,451		80,872,451		80,872,451		83,373,003		83,373,003		83,373,003
Earnings per diluted share available to Validus common shareholders	$	1.25	$	1.09	$	1.31	$	1.14	$	0.69	$	1.11

	Six Months Ended^(a)
	June 30, 2017						June 30, 2016
	Net Income		Net Operating income		Comprehensive income		Net Income		Net Operating income		Comprehensive income
Basic earnings per share ^(b)
Income available to Validus common shareholders	$	195,656	$	165,300	$	203,354	$	261,773	$	179,385	$	256,160
Weighted average number of common shares outstanding	79,202,116		79,202,116		79,202,116		82,386,047		82,386,047		82,386,047
Basic earnings per share available to Validus common shareholders	$	2.47	$	2.09	$	2.57	$	3.18	$	2.18	$	3.11

Earnings per diluted share^(c)
Income available to Validus common shareholders	$	195,656	$	165,300	$	203,354	$	261,773	$	179,385	$	256,160

Weighted average number of common shares outstanding	79,202,116		79,202,116		79,202,116		82,386,047		82,386,047		82,386,047
Share equivalents:
Stock options	15,059		15,059		15,059		34,837		34,837		34,837
Unvested restricted shares	1,644,823		1,644,823		1,644,823		1,364,775		1,364,775		1,364,775
Weighted average number of diluted common shares outstanding	80,861,998		80,861,998		80,861,998		83,785,659		83,785,659		83,785,659
Earnings per diluted share available to Validus common shareholders	$	2.42	$	2.04	$	2.51	$	3.12	$	2.14	$	3.06

Notes:


(a)	ASC 718 requires that any unrecognized stock based compensation expense that will be recorded in future periods be included as proceeds for purposes of treasury stock repurchases, which is applied against the unvested restricted shares balance.


(b)	Earnings per basic common share is based on weighted average common shares and excludes any dilutive effects of options and restricted stock.


(c)	Earnings per diluted common share assumes the exercise of all dilutive stock options and restricted stock grants.

Validus Holdings, Ltd.

Underwriting Income Statement - Validus Re

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Underwriting revenues
Gross premiums written	$	296,997		$	620,522		$	38,835		$	94,741		$	285,810		$	917,519		$	977,478
Reinsurance premiums ceded	(11,387		)	(108,813		)	94			(15,967		)	(3,196		)	(120,200		)	(95,691		)
Net premiums written	285,610			511,709			38,929			78,774			282,614			797,319			881,787
Change in unearned premiums	(45,003		)	(293,297		)	185,584			149,705			(35,492		)	(338,300		)	(390,834		)
Net premiums earned	240,607			218,412			224,513			228,479			247,122			459,019			490,953
Other insurance related income (loss)	58			78			52			58			150			136			(165		)
Total underwriting revenues	240,665			218,490			224,565			228,537			247,272			459,155			490,788
Underwriting deductions
Losses and loss expenses	104,685			86,154			98,056			98,425			132,139			190,839			215,007
Policy acquisition costs	47,158			41,256			53,380			42,837			42,564			88,414			84,823
General and administrative expenses	19,274			16,832			20,191			17,528			17,872			36,106			35,051
Share compensation expenses	2,663			2,477			2,663			2,695			2,775			5,140			5,676
Total underwriting deductions	173,780			146,719			174,290			161,485			195,350			320,499			340,557
Underwriting income	$	66,885		$	71,771		$	50,275		$	67,052		$	51,922		$	138,656		$	150,231

Selected ratios:
Ratio of net to gross premiums written	96.2		%	82.5		%	100.2		%	83.1		%	98.9		%	86.9		%	90.2		%

Losses and loss expense ratio	43.5		%	39.4		%	43.7		%	43.1		%	53.5		%	41.6		%	43.8		%

Policy acquisition cost ratio	19.6		%	18.9		%	23.8		%	18.7		%	17.2		%	19.3		%	17.3		%
General and administrative expense ratio^(a)	9.1		%	8.9		%	10.1		%	8.9		%	8.4		%	8.9		%	8.3		%
Expense ratio	28.7		%	27.8		%	33.9		%	27.6		%	25.6		%	28.2		%	25.6		%
Combined ratio	72.2		%	67.2		%	77.6		%	70.7		%	79.1		%	69.8		%	69.4		%

Notes:


(a)	The general and administrative ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Three months ended - Validus Re

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended June 30, 2017												Three Months Ended June 30, 2016
	Property			Marine			Specialty ^(a)			Total			Property			Marine			Specialty ^(a)			Total
Underwriting revenues
Gross premiums written	$	174,759		$	14,557		$	107,681		$	296,997		$	216,034		$	7,806		$	61,970		$	285,810
Reinsurance premiums ceded	(4,227		)	(38		)	(7,122		)	(11,387		)	(8,892		)	868			4,828			(3,196		)
Net premiums written	170,532			14,519			100,559			285,610			207,142			8,674			66,798			282,614
Change in unearned premiums	(75,148		)	15,275			14,870			(45,003		)	(101,914		)	22,423			43,999			(35,492		)
Net premiums earned	95,384			29,794			115,429			240,607			105,228			31,097			110,797			247,122
Other insurance related income										58												150
Total underwriting revenues										240,665												247,272
Underwriting deductions
Losses and loss expenses	32,750			(1,732		)	73,667			104,685			51,856			6,921			73,362			132,139
Policy acquisition costs	17,359			5,246			24,553			47,158			18,269			5,281			19,014			42,564
Total underwriting deductions before G&A	50,109			3,514			98,220			151,843			70,125			12,202			92,376			174,703
Underwriting income before G&A	$	45,275		$	26,280		$	17,209		$	88,822		$	35,103		$	18,895		$	18,421		$	72,569
General and administrative expenses										19,274												17,872
Share compensation expenses										2,663												2,775
Total underwriting deductions										173,780												195,350
Underwriting income										$	66,885											$	51,922

Selected ratios:
Ratio of net to gross premiums written	97.6		%	99.7		%	93.4		%	96.2		%	95.9		%	111.1		%	107.8		%	98.9		%

Losses and loss expense ratio	34.3		%	(5.8		%)	63.8		%	43.5		%	49.3		%	22.3		%	66.2		%	53.5		%

Policy acquisition cost ratio	18.2		%	17.6		%	21.3		%	19.6		%	17.4		%	17.0		%	17.2		%	17.2		%
General and administrative expense ratio^(b)										9.1		%										8.4		%
Expense ratio										28.7		%										25.6		%
Combined ratio										72.2		%										79.1		%

Notes:


(a)	Specialty includes Aerospace & Aviation, Agriculture, Casualty, Composite, Financial, Technical Lines, Terrorism, Trade Credit, Workers' Compensation and Other Specialty. Other Specialty includes Contingency, Crisis Management and Life and Accident & Health.


(b)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Six months ended - Validus Re

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Six Months Ended June 30, 2017												Six Months Ended June 30, 2016
	Property			Marine			Specialty ^(a)			Total			Property			Marine			Specialty^(a)			Total
Underwriting revenues
Gross premiums written	$	378,463		$	115,105		$	423,951		$	917,519		$	408,671		$	114,409		$	454,398		$	977,478
Reinsurance premiums ceded	(88,041		)	(14,471		)	(17,688		)	(120,200		)	(81,388		)	(6,547		)	(7,756		)	(95,691		)
Net premiums written	290,422			100,634			406,263			797,319			327,283			107,862			446,642			881,787
Change in unearned premiums	(97,297		)	(46,965		)	(194,038		)	(338,300		)	(119,903		)	(41,894		)	(229,037		)	(390,834		)
Net premiums earned	193,125			53,669			212,225			459,019			207,380			65,968			217,605			490,953
Other insurance related income (loss)										136												(165		)
Total underwriting revenues										459,155												490,788
Underwriting deductions
Losses and loss expenses	57,037			(761		)	134,563			190,839			48,614			27,332			139,061			215,007
Policy acquisition costs	34,824			10,234			43,356			88,414			37,213			10,193			37,417			84,823
Total underwriting deductions before G&A	91,861			9,473			177,919			279,253			85,827			37,525			176,478			299,830
Underwriting income before G&A	$	101,264		$	44,196		$	34,306		$	179,902		$	121,553		$	28,443		$	41,127		$	190,958
General and administrative expenses										36,106												35,051
Share compensation expenses										5,140												5,676
Total underwriting deductions										320,499												340,557
Underwriting income										$	138,656											$	150,231

Selected ratios:
Ratio of net to gross premiums written	76.7		%	87.4		%	95.8		%	86.9		%	80.1		%	94.3		%	98.3		%	90.2		%

Losses and loss expense ratio	29.5		%	(1.4		%)	63.4		%	41.6		%	23.4		%	41.4		%	63.9		%	43.8		%

Policy acquisition cost ratio	18.0		%	19.1		%	20.4		%	19.3		%	17.9		%	15.5		%	17.2		%	17.3		%
General and administrative expense ratio ^(b)										8.9		%										8.3		%
Expense ratio										28.2		%										25.6		%
Combined ratio										69.8		%										69.4		%

Notes:


(a)	Specialty includes Aerospace & Aviation, Agriculture, Casualty, Composite, Financial, Technical Lines, Terrorism, Trade Credit, Workers' Compensation and Other Specialty. Other Specialty includes Contingency, Crisis Management and Life and Accident & Health.


(b)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Income Statement - Talbot

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Underwriting revenues
Gross premiums written	$	262,477		$	247,175		$	218,644		$	189,674		$	296,067		$	509,652		$	562,384
Reinsurance premiums ceded	(24,977		)	(92,824		)	(38,233		)	(22,877		)	(27,161		)	(117,801		)	(114,619		)
Net premiums written	237,500			154,351			180,411			166,797			268,906			391,851			447,765
Change in unearned premiums	(45,626		)	40,714			(5,891		)	32,258			(67,357		)	(4,912		)	(39,424		)
Net premiums earned	191,874			195,065			174,520			199,055			201,549			386,939			408,341
Other insurance related income	65			755			66			99			279			820			290
Total underwriting revenues	191,939			195,820			174,586			199,154			201,828			387,759			408,631
Underwriting deductions
Losses and loss expenses	93,389			106,412			105,675			109,860			109,310			199,801			209,411
Policy acquisition costs	44,305			43,276			42,683			46,488			43,613			87,581			87,956
General and administrative expenses	35,582			38,443			24,550			32,333			39,061			74,025			77,596
Share compensation expenses	3,155			2,827			3,123			3,163			3,270			5,982			6,792
Total underwriting deductions	176,431			190,958			176,031			191,844			195,254			367,389			381,755
Underwriting income (loss)	$	15,508		$	4,862		$	(1,445	)	$	7,310		$	6,574		$	20,370		$	26,876

Selected ratios:
Ratio of net to gross premiums written	90.5		%	62.4		%	82.5		%	87.9		%	90.8		%	76.9		%	79.6		%

Losses and loss expense ratio	48.7		%	54.6		%	60.6		%	55.2		%	54.2		%	51.6		%	51.3		%

Policy acquisition cost ratio	23.1		%	22.2		%	24.5		%	23.4		%	21.6		%	22.6		%	21.5		%
General and administrative expense ratio ^(a)	20.2		%	21.1		%	15.8		%	17.8		%	21.1		%	20.7		%	20.7		%
Expense ratio	43.3		%	43.3		%	40.3		%	41.2		%	42.7		%	43.3		%	42.2		%
Combined ratio	92.0		%	97.9		%	100.9		%	96.4		%	96.9		%	94.9		%	93.5		%

Notes:


(a)	The general and administrative ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Three months ended - Talbot

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended June 30, 2017												Three Months Ended June 30, 2016
	Property ^(a)			Marine			Specialty^(b)			Total			Property ^(a)			Marine			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	88,525		$	74,308		$	99,644		$	262,477		$	111,646		$	85,992		$	98,429		$	296,067
Reinsurance premiums ceded	(14,376		)	(5,119		)	(5,482		)	(24,977		)	(19,733		)	(4,729		)	(2,699		)	(27,161		)
Net premiums written	74,149			69,189			94,162			237,500			91,913			81,263			95,730			268,906
Change in unearned premiums	(16,408		)	(15,570		)	(13,648		)	(45,626		)	(37,054		)	(7,341		)	(22,962		)	(67,357		)
Net premiums earned	57,741			53,619			80,514			191,874			54,859			73,922			72,768			201,549
Other insurance related income										65												279
Total underwriting revenues										191,939												201,828
Underwriting deductions
Losses and loss expenses	39,222			13,529			40,638			93,389			40,856			29,922			38,532			109,310
Policy acquisition costs	10,269			14,514			19,522			44,305			9,057			17,582			16,974			43,613
Total underwriting deductions before G&A	49,491			28,043			60,160			137,694			49,913			47,504			55,506			152,923
Underwriting income before G&A	$	8,250		$	25,576		$	20,354		$	54,245		$	4,946		$	26,418		$	17,262		$	48,905
General and administrative expenses										35,582												39,061
Share compensation expenses										3,155												3,270
Total underwriting deductions										176,431												195,254
Underwriting income										$	15,508											$	6,574

Selected ratios:
Ratio of net to gross premiums written	83.8		%	93.1		%	94.5		%	90.5		%	82.3		%	94.5		%	97.3		%	90.8		%

Losses and loss expense ratio	67.9		%	25.2		%	50.5		%	48.7		%	74.5		%	40.5		%	53.0		%	54.2		%

Policy acquisition cost ratio	17.8		%	27.1		%	24.2		%	23.1		%	16.5		%	23.8		%	23.3		%	21.6		%
General and administrative expense ratio ^(c)										20.2		%										21.1		%
Expense ratio										43.3		%										42.7		%
Combined ratio										92.0		%										96.9		%

Notes:


(a)	Property includes Downstream Energy and Power.


(b)	Specialty includes Accident & Health, Aviation (Direct & Treaty), Contingency, Financial Lines and Political Lines. Political Lines includes War, Political Risk and Political Violence.


(c)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Six months ended - Talbot

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Six Months Ended June 30, 2017												Six Months Ended June 30, 2016
	Property ^(a)			Marine			Specialty ^(b)			Total			Property ^(a)			Marine			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	161,785		$	151,626		$	196,241		$	509,652		$	181,413		$	174,212		$	206,759		$	562,384
Reinsurance premiums ceded	(54,157		)	(20,126		)	(43,518		)	(117,801		)	(53,789		)	(26,101		)	(34,729		)	(114,619		)
Net premiums written	107,628			131,500			152,723			391,851			127,624			148,111			172,030			447,765
Change in unearned premiums	2,962			(14,066		)	6,192			(4,912		)	(11,769		)	(4,318		)	(23,337		)	(39,424		)
Net premiums earned	110,590			117,434			158,915			386,939			115,855			143,793			148,693			408,341
Other insurance related income										820												290
Total underwriting revenues										387,759												408,631
Underwriting deductions
Losses and loss expenses	77,134			30,317			92,350			199,801			56,311			76,029			77,071			209,411
Policy acquisition costs	19,174			29,264			39,143			87,581			17,474			36,097			34,385			87,956
Total underwriting deductions before G&A	96,308			59,581			131,493			287,382			73,785			112,126			111,456			297,367
Underwriting income before G&A	$	14,282		$	57,853		$	27,422		$	100,377		$	42,070		$	31,667		$	37,237		$	111,264
General and administrative expenses										74,025												77,596
Share compensation expenses										5,982												6,792
Total underwriting deductions										367,389												381,755
Underwriting income										$	20,370											$	26,876

Selected ratios:
Ratio of net to gross premiums written	66.5		%	86.7		%	77.8		%	76.9		%	70.3		%	85.0		%	83.2		%	79.6		%

Losses and loss expense ratio	69.7		%	25.8		%	58.1		%	51.6		%	48.6		%	52.9		%	51.8		%	51.3		%

Policy acquisition cost ratio	17.3		%	24.9		%	24.6		%	22.6		%	15.1		%	25.1		%	23.1		%	21.5		%
General and administrative expense ratio ^(c)										20.7		%										20.7		%
Expense ratio										43.3		%										42.2		%
Combined ratio										94.9		%										93.5		%

Notes:


(a)	Property includes Downstream Energy and Power.


(b)	Specialty includes Accident & Health, Aviation (Direct & Treaty), Contingency, Financial Lines and Political Lines. Political Lines includes War, Political Risk and Political Violence.


(c)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Income Statement - Western World

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Underwriting revenues
Gross premiums written	$	131,068		$	172,043		$	87,030		$	85,260		$	86,971		$	303,111		$	150,930
Reinsurance premiums ceded	(23,180		)	(5,618		)	(7,287		)	(6,202		)	(5,006		)	(28,798		)	(9,145		)
Net premiums written	107,888			166,425			79,743			79,058			81,965			274,313			141,785
Change in unearned premiums	22,806			(69,153		)	(4,464		)	(8,260		)	(16,309		)	(46,347		)	(14,630		)
Net premiums earned	130,694			97,272			75,279			70,798			65,656			227,966			127,155
Other insurance related income	663			241			216			219			189			904			477
Total underwriting revenues	131,357			97,513			75,495			71,017			65,845			228,870			127,632
Underwriting deductions
Losses and loss expenses	97,008			74,925			54,189			45,748			44,229			171,933			83,875
Policy acquisition costs	19,230			20,236			17,738			17,094			15,410			39,466			29,610
General and administrative expenses	18,316			10,754			9,576			10,171			11,458			29,070			23,533
Share compensation expenses	609			692			718			702			542			1,301			1,123
Total underwriting deductions	135,163			106,607			82,221			73,715			71,639			241,770			138,141
Underwriting loss	$	(3,806	)	$	(9,094	)	$	(6,726	)	$	(2,698	)	$	(5,794	)	$	(12,900	)	$	(10,509	)

Selected ratios:
Ratio of net to gross premiums written	82.3		%	96.7		%	91.6		%	92.7		%	94.2		%	90.5		%	93.9		%

Losses and loss expense ratio	74.2		%	77.0		%	72.0		%	64.6		%	67.4		%	75.4		%	66.0		%

Policy acquisition cost ratio	14.7		%	20.8		%	23.5		%	24.1		%	23.5		%	17.3		%	23.3		%
General and administrative expense ratio ^(a)	14.5		%	11.8		%	13.7		%	15.4		%	18.2		%	13.4		%	19.3		%
Expense ratio	29.2		%	32.6		%	37.2		%	39.5		%	41.7		%	30.7		%	42.6		%
Combined ratio	103.4		%	109.6		%	109.2		%	104.1		%	109.1		%	106.1		%	108.6		%

Notes:


(a)	The general and administrative ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Three months ended - Western World

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended June 30, 2017												Three Months Ended June 30, 2016
	Property			Liability ^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	38,967		$	68,162		$	23,939		$	131,068		$	26,218		$	60,753		$	—		$	86,971
Reinsurance premiums ceded	(5,383		)	(846		)	(16,951		)	(23,180		)	(2,153		)	(2,853		)	—			(5,006		)
Net premiums written	33,584			67,316			6,988			107,888			24,065			57,900			—			81,965
Change in unearned premiums	(10,459		)	(9,791		)	43,056			22,806			(9,888		)	(6,421		)	—			(16,309		)
Net premiums earned	23,125			57,525			50,044			130,694			14,177			51,479			—			65,656
Other insurance related income										663												189
Total underwriting revenues										131,357												65,845
Underwriting deductions
Losses and loss expenses	11,854			40,374			44,780			97,008			10,176			34,053			—			44,229
Policy acquisition costs	6,656			12,574			—			19,230			3,381			12,029			—			15,410
Total underwriting deductions before G&A	18,510			52,948			44,780			116,238			13,557			46,082			—			59,639
Underwriting income before G&A	$	4,615		$	4,577		$	5,264		$	15,119		$	620		$	5,397		$	—		$	6,206
General and administrative expenses										18,316												11,458
Share compensation expenses										609												542
Total underwriting deductions										135,163												71,639
Underwriting loss										$	(3,806	)										$	(5,794	)

Selected ratios:
Ratio of net to gross premiums written	86.2		%	98.8		%	29.2		%	82.3		%	91.8		%	95.3		%	—		%	94.2		%

Losses and loss expense ratio	51.3		%	70.2		%	89.5		%	74.2		%	71.8		%	66.1		%	—		%	67.4		%

Policy acquisition cost ratio	28.8		%	21.9		%	—		%	14.7		%	23.8		%	23.4		%	—		%	23.5		%
General and administrative expense ratio ^(c)										14.5		%										18.2		%
Expense ratio										29.2		%										41.7		%
Combined ratio										103.4		%										109.1		%

Notes:


(a)	Liability includes general liability, professional liability, products liability and miscellaneous malpractice.


(b)	Specialty includes agriculture premiums written through CRS.


(c)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Six months ended - Western World

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Six Months Ended June 30, 2017												Six Months Ended June 30, 2016
	Property			Liability^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	67,103		$	127,770		$	108,238		$	303,111		$	41,644		$	109,286		$	—		$	150,930
Reinsurance premiums ceded	(10,355		)	(1,492		)	(16,951		)	(28,798		)	(3,707		)	(5,438		)	—			(9,145		)
Net premiums written	56,748			126,278			91,287			274,313			37,937			103,848			—			141,785
Change in unearned premiums	(13,556		)	(12,334		)	(20,457		)	(46,347		)	(11,565		)	(3,065		)	—			(14,630		)
Net premiums earned	43,192			113,944			70,830			227,966			26,372			100,783			—			127,155
Other insurance related income										904												477
Total underwriting revenues										228,870												127,632
Underwriting deductions
Losses and loss expenses	26,579			81,752			63,602			171,933			19,231			64,644			—			83,875
Policy acquisition costs	12,042			25,460			1,964			39,466			6,283			23,327			—			29,610
Total underwriting deductions before G&A	38,621			107,212			65,566			211,399			25,514			87,971			—			113,485
Underwriting income before G&A	$	4,571		$	6,732		$	5,264		$	17,471		$	858		$	12,812		$	—		$	14,147
General and administrative expenses										29,070												23,533
Share compensation expenses										1,301												1,123
Total underwriting deductions										241,770												138,141
Underwriting loss										$	(12,900	)										$	(10,509	)

Selected ratios:
Ratio of net to gross premiums written	84.6		%	98.8		%	84.3		%	90.5		%	91.1		%	95.0		%	—		%	93.9		%

Losses and loss expense ratio	61.5		%	71.7		%	89.8		%	75.4		%	72.9		%	64.1		%	—		%	66.0		%

Policy acquisition cost ratio	27.9		%	22.3		%	2.8		%	17.3		%	23.8		%	23.1		%	—		%	23.3		%
General and administrative expense ratio ^(c)										13.4		%										19.3		%
Expense ratio										30.7		%										42.6		%
Combined ratio										106.1		%										108.6		%

Notes:


(a)	Liability includes general liability, professional liability, products liability and miscellaneous malpractice.


(b)	Specialty includes agriculture premiums written through CRS.


(c)	The general and administrative expenses ratio includes share compensation expenses.

Validus Holdings, Ltd.

AlphaCat Managers Segment Information

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Fee revenues
Third party	$	5,549		$	4,644		$	3,928		$	7,025		$	3,091		$	10,193		$	7,818
Related party	644			631			737			1,373			328			1,275			1,219
Total fee revenues	6,193			5,275			4,665			8,398			3,419			11,468			9,037
Expenses
General and administrative expenses	3,549			3,844			2,676			3,324			2,751			7,393			4,233
Share compensation expenses	83			82			82			(107		)	133			165			274
Finance expenses	44			31			33			31			75			75			883
Tax expense (benefit)	135			(1		)	90			—			—			134			—
Foreign exchange losses (gains)	1			(1		)	2			5			4			—			12
Total expenses	3,812			3,955			2,883			3,253			2,963			7,767			5,402
Income before investment income from AlphaCat Funds and Sidecars	2,381			1,320			1,782			5,145			456			3,701			3,635
Investment income (loss) from AlphaCat Funds and Sidecars^(a)
AlphaCat Sidecars	(21		)	(112		)	14			(72		)	541			(133		)	665
AlphaCat ILS Funds - Lower Risk ^(b)	1,301			2,189			1,998			2,321			2,075			3,490			4,582
AlphaCat ILS Funds - Higher Risk ^(b)	2,600			2,367			1,864			2,479			692			4,967			3,128
BetaCat ILS Funds	263			368			644			1,303			1,113			631			1,676
PaCRe	—			—			—			—			—			—			(23		)
Validus' share of investment income from AlphaCat Funds and Sidecars	4,143			4,812			4,520			6,031			4,421			8,955			10,028
Validus' share of AlphaCat income	$	6,524		$	6,132		$	6,302		$	11,176		$	4,877		$	12,656		$	13,663

Gross premiums written
AlphaCat Sidecars	$	—		$	66		$	(163	)	$	(112	)	$	(14	)	$	66		$	(66	)
AlphaCat ILS Funds - Lower Risk ^(b)	53,632			52,908			(19		)	2,049			50,234			106,540			110,192
AlphaCat ILS Funds - Higher Risk ^(b)	43,672			93,536			(105		)	1,797			42,010			137,208			138,330
AlphaCat Direct ^(c)	8,378			18,416			23			679			6,675			26,794			17,797
Total	$	105,682		$	164,926		$	(264	)	$	4,413		$	98,905		$	270,608		$	266,253

Notes:


(a)	The investment income (loss) from AlphaCat funds and sidecars is based on equity accounting.


(b)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.


(c)	AlphaCat Direct includes direct investments from a third party investor in AlphaCat Reinsurance Ltd.

Validus Holdings, Ltd.

AlphaCat Assets Under Management

(Expressed in thousands of U.S. Dollars, except share and per share information)



	As at
	July 1, 2017		April 1, 2017		January 1, 2017		October 1, 2016		July 1, 2016
Assets Under Management - Related Party ^(a)	Related Party
AlphaCat Sidecars	$	5,686	$	5,656	$	7,729	$	7,922	$	8,045
AlphaCat ILS Funds - Lower Risk	79,808		125,098		124,297		181,744		175,832
AlphaCat ILS Funds - Higher Risk	84,663		86,679		83,881		81,636		76,287
AlphaCat Direct	—		—		—		—		—
BetaCat ILS Funds	25,000		27,062		26,808		51,160		63,453
Total	$	195,157	$	244,495	$	242,715	$	322,462	$	323,617

Assets Under Management - Third Party ^(a)	Third Party
AlphaCat Sidecars	$	20,590	$	20,422	$	28,829	$	29,603	$	30,078
AlphaCat ILS Funds - Lower Risk	1,309,377		1,302,337		1,257,287		1,276,874		1,226,709
AlphaCat ILS Funds - Higher Risk	896,639		790,734		738,813		612,456		564,513
AlphaCat Direct	534,555		457,744		444,668		373,659		365,558
BetaCat ILS Funds	118,493		87,375		29,000		—		—
Total	$	2,879,654	$	2,658,612	$	2,498,597	$	2,292,592	$	2,186,858
Total Assets Under Management	$	3,074,811	$	2,903,107	$	2,741,312	$	2,615,054	$	2,510,475

Notes:


(a)	The Company’s assets under management are based on NAV and are represented by investments made by related parties and third parties in the feeder funds and on a direct basis.

Validus Holdings, Ltd.

Corporate and Investments

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Investment income
Managed net investment income ^(a)	$	38,063		$	36,192		$	35,875		$	41,071		$	36,849		$	74,255		$	64,772

Corporate expenses
General and administrative expenses	$	18,847		$	17,177		$	19,973		$	18,221		$	17,872		$	36,024		$	34,055
Share compensation expenses	4,636			3,413			3,856			4,048			4,007			8,049			8,099
Finance expenses^(a)	14,149			13,864			14,546			14,317			13,979			28,013			28,320
Dividends on preferred shares	2,203			2,203			2,203			2,252			—			4,406			—
Tax (benefit) expense ^(a)	(1,122		)	(3,548		)	(21,237		)	1,830			1,706			(4,670		)	(412		)
Total Corporate expenses	$	38,713		$	33,109		$	19,341		$	40,668		$	37,564		$	71,822		$	70,062

Other items
Net realized gains (losses) on managed investments ^(a)	$	2,269		$	(2,892	)	$	9,166		$	4,080		$	2,520		$	(623	)	$	1,434
Change in net unrealized gains (losses) on managed investments ^(a)	15,942			14,349			(67,676		)	4,652			30,052			30,291			77,130
Income (loss) from investment affiliates	9,466			5,188			2,166			453			(589		)	14,654			(4,702		)
Foreign exchange (losses) gains ^(a)	(7,323		)	1,103			(850		)	(1,067		)	6,621			(6,220		)	12,695
Other income (loss)	174			94			7			(1,529		)	79			268			756
Transaction expenses	(4,427		)	—			—			—			—			(4,427		)	—
Total other items	$	16,101		$	17,842		$	(57,187	)	$	6,589		$	38,683		$	33,943		$	87,313
Total Corporate and Investments	$	15,451		$	20,925		$	(40,653	)	$	6,992		$	37,968		$	36,376		$	82,023

Notes:


(a)	These items exclude the components which are included in Validus' share of AlphaCat and amounts which are consolidated from variable interest entities.

Validus Holdings, Ltd.

Segment Reconciliation - Three months ended

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended June 30, 2017
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	296,997		$	262,477		$	131,068		$	105,682		$	—		$	(3,322	)	$	792,902
Reinsurance premiums ceded	(11,387		)	(24,977		)	(23,180		)	—			—			3,322			(56,222		)
Net premiums written	285,610			237,500			107,888			105,682			—			—			736,680
Change in unearned premiums	(45,003		)	(45,626		)	22,806			(37,830		)	—			—			(105,653		)
Net premiums earned	240,607			191,874			130,694			67,852			—			—			631,027
Other insurance related income	58			65			663			5,874			—			(5,495		)	1,165
Total underwriting revenues	240,665			191,939			131,357			73,726			—			(5,495		)	632,192
Underwriting deductions
Losses and loss expenses	104,685			93,389			97,008			1,067			—			—			296,149
Policy acquisition costs	47,158			44,305			19,230			7,165			—			(590		)	117,268
General and administrative expenses	19,274			35,582			18,316			9,768			18,847			(5,438		)	96,349
Share compensation expenses	2,663			3,155			609			83			4,636			—			11,146
Total underwriting deductions	173,780			176,431			135,163			18,083			23,483			(6,028		)	520,912
Underwriting income (loss)	$	66,885		$	15,508		$	(3,806	)	$	55,643		$	(23,483	)	$	533		$	111,280
Other items^(a)	—			—			—			183			7,501			—			7,684
Dividends on preferred shares	—			—			—			—			(2,203		)	—			(2,203		)
Net investment income	—			—			—			6,178			38,063			—			44,241
Transaction expenses	—			—			—			—			(4,427		)	—			(4,427		)
(Income) attributable to AlphaCat investors	—			—			—			(11,830		)	—			—			(11,830		)
Net (income) attributable to noncontrolling interests	—			—			—			(43,650		)	—			—			(43,650		)
Segmental income (loss)	66,885			15,508			(3,806		)	6,524			15,451			533
Net income available to Validus common shareholders																			$	101,095
	Three Months Ended June 30, 2016
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	285,810		$	296,067		$	86,971		$	98,905		$	—		$	(3,711	)	$	764,042
Reinsurance premiums ceded	(3,196		)	(27,161		)	(5,006		)	(4,577		)	—			3,711			(36,229		)
Net premiums written	282,614			268,906			81,965			94,328			—			—			727,813
Change in unearned premiums	(35,492		)	(67,357		)	(16,309		)	(34,932		)	—			—			(154,090		)
Net premiums earned	247,122			201,549			65,656			59,396			—			—			573,723
Other insurance related (loss) income	150			279			189			3,401			—			(3,274		)	745
Total underwriting revenues	247,272			201,828			65,845			62,797			—			(3,274		)	574,468
Underwriting deductions
Losses and loss expenses	132,139			109,310			44,229			21,452			—			—			307,130
Policy acquisition costs	42,564			43,613			15,410			6,530			—			(151		)	107,966
General and administrative expenses	17,872			39,061			11,458			6,561			17,872			(3,136		)	89,688
Share compensation expenses	2,775			3,270			542			133			4,007			—			10,727
Total underwriting deductions	195,350			195,254			71,639			34,676			21,879			(3,287		)	515,511
Underwriting income (loss)	$	51,922		$	6,574		$	(5,794	)	$	28,121		$	(21,879	)	$	13		$	58,957
Other items^(a)	—			—			—			1,058			22,998			—			24,056
Dividends on preferred shares	—			—			—			—			—			—			—
Net investment income	—			—			—			3,005			36,849			(597		)	39,257
(Income) attributable to AlphaCat investors	—			—			—			(6,114		)	—			—			(6,114		)
Net (income) attributable to noncontrolling interests	—			—			—			(21,193		)	—			—			(21,193		)
Segmental income (loss)	51,922			6,574			(5,794		)	4,877			37,968			(584		)
Net income available to Validus common shareholders																			$	94,963

Notes:


(a)	Other items includes finance expenses, tax benefit (expense), foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).

Validus Holdings, Ltd.

Segment Reconciliation - Six months ended

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Six Months Ended June 30, 2017
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	917,519		$	509,652		$	303,111		$	270,608		$	—		$	(17,131	)	$	1,983,759
Reinsurance premiums ceded	(120,200		)	(117,801		)	(28,798		)	(6,660		)	—			17,131			(256,328		)
Net premiums written	797,319			391,851			274,313			263,948			—			—			1,727,431
Change in unearned premiums	(338,300		)	(4,912		)	(46,347		)	(131,469		)	—			—			(521,028		)
Net premiums earned	459,019			386,939			227,966			132,479			—			—			1,206,403
Other insurance related income	136			820			904			11,035			—			(10,494		)	2,401
Total underwriting revenues	459,155			387,759			228,870			143,514			—			(10,494		)	1,208,804
Underwriting deductions
Losses and loss expenses	190,839			199,801			171,933			3,161			—			—			565,734
Policy acquisition costs	88,414			87,581			39,466			14,066			—			(631		)	228,896
General and administrative expenses	36,106			74,025			29,070			19,409			36,024			(10,361		)	184,273
Share compensation expenses	5,140			5,982			1,301			165			8,049			—			20,637
Total underwriting deductions	320,499			367,389			241,770			36,801			44,073			(10,992		)	999,540
Underwriting income (loss)	$	138,656		$	20,370		$	(12,900	)	$	106,713		$	(44,073	)	$	498		$	209,264
Other items^(a)	—			—			—			1,298			15,027			—			16,325
Dividends on preferred shares	—			—			—			—			(4,406		)	—			(4,406		)
Net investment income	—			—			—			10,200			74,255			—			84,455
Transaction expenses	—			—			—			—			(4,427		)	—			(4,427		)
(Income) attributable to AlphaCat investors	—			—			—			(19,333		)	—			—			(19,333		)
Net (income) attributable to noncontrolling interest	—			—			—			(86,222		)	—			—			(86,222		)
Segmental income (loss)	138,656			20,370			(12,900		)	12,656			36,376			498
Net income available to Validus common shareholders																			$	195,656
	Six Months Ended June 30, 2016
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	977,478		$	562,384		$	150,930		$	266,253		$	—		$	(20,212	)	$	1,936,833
Reinsurance premiums ceded	(95,691		)	(114,619		)	(9,145		)	(4,821		)	—			20,212			(204,064		)
Net premiums written	881,787			447,765			141,785			261,432			—			—			1,732,769
Change in unearned premiums	(390,834		)	(39,424		)	(14,630		)	(142,890		)	—			—			(587,778		)
Net premiums earned	490,953			408,341			127,155			118,542			—			—			1,144,991
Other insurance related (loss) income	(165		)	290			477			9,066			—			(8,187		)	1,481
Total underwriting revenues	490,788			408,631			127,632			127,608			—			(8,187		)	1,146,472
Underwriting deductions
Losses and loss expenses	215,007			209,411			83,875			23,284			—			—			531,577
Policy acquisition costs	84,823			87,956			29,610			12,687			—			83			215,159
General and administrative expenses	35,051			77,596			23,533			14,017			34,055			(8,356		)	175,896
Share compensation expenses	5,676			6,792			1,123			274			8,099			—			21,964
Total underwriting deductions	340,557			381,755			138,141			50,262			42,154			(8,273		)	944,596
Underwriting income (loss)	$	150,231		$	26,876		$	(10,509	)	$	77,346		$	(42,154	)	$	86		$	201,876
Other items ^(a)	—			—			—			1,212			59,405			—			60,617
Dividends on preferred shares	—			—			—			—			—			—			—
Net investment income	—			—			—			4,543			64,772			(597		)	68,718
(Income) attributable to AlphaCat investors	—			—			—			(10,714		)	—			—			(10,714		)
Net (income) attributable to noncontrolling interest	—			—			—			(58,724		)	—			—			(58,724		)
Segmental income (loss)	150,231			26,876			(10,509		)	13,663			82,023			(511		)
Net income available to Validus common shareholders																			$	261,773

Notes:


(a)	Other items includes finance expenses, tax benefit (expense), foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).

Validus Holdings, Ltd.

Non-GAAP Financial Measure Reconciliation

Net Operating Income available to Validus Common Shareholders, Net Operating Income per diluted share available to Validus Common Shareholders and Annualized Net Operating Return on Average Equity

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended						Six Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Net income available to Validus common shareholders	$	101,095		$	94,963		$	195,656		$	261,773
Non-GAAP Adjustments:
Net realized gains on investments	(2,274		)	(2,724		)	(1,110		)	(2,140		)
Change in net unrealized gains on investments	(16,321		)	(31,428		)	(29,669		)	(78,872		)
(Income) loss from investment affiliates	(9,466		)	589			(14,654		)	4,702
Foreign exchange losses (gains)	7,329			(6,286		)	5,760			(12,531		)
Other income	(174		)	(79		)	(268		)	(756		)
Transaction expenses	4,427			—			4,427			—
Net income (loss) attributable to noncontrolling interests	2,102			(135		)	2,830			102
Tax expense ^(a)	1,748			2,980			2,328			7,107
Net operating income available to Validus common shareholders ^(b)	$	88,466		$	57,880		$	165,300		$	179,385

Earnings per diluted share available to Validus common shareholders	$	1.25		$	1.14		$	2.42		$	3.12
Non-GAAP Adjustments:
Net realized gains on investments	(0.03		)	(0.03		)	(0.01		)	(0.02		)
Change in net unrealized gains on investments	(0.20		)	(0.38		)	(0.37		)	(0.94		)
(Income) loss from investment affiliates	(0.12		)	0.01			(0.18		)	0.06
Foreign exchange losses (gains)	0.09			(0.08		)	0.07			(0.15		)
Other income	—			—			—			(0.01		)
Transaction expenses	0.05			—			0.05			—
Net income (loss) attributable to noncontrolling interests	0.03			—			0.03			—
Tax expense ^(a)	0.02			0.03			0.03			0.08
Net operating income per diluted share available to Validus common shareholders ^(b)	$	1.09		$	0.69		$	2.04		$	2.14

Average shareholders' equity available to Validus common shareholders ^(c)	$	3,786,654		$	3,720,341		$	3,753,866		$	3,693,219

Annualized return on average equity ^(c)	10.7		%	10.2		%	10.4		%	14.2		%
Annualized net operating return on average equity ^(b)(c)	9.3		%	6.2		%	8.8		%	9.7		%

Notes:


(a)	Represents the tax expense or benefit associated with the specific country to which the pre-tax adjustment relates to. The tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors including the ability to utilize tax losses carried forward.


(b)	Non-GAAP financial measure. Refer to the Explanatory Notes on page 3 for further information.

(c)

Average shareholders’ equity for the three months ended is the average of the beginning and ending quarter end shareholders’ equity balances, excluding the liquidation value of the preferred shares. Average shareholders’ equity for the six months ended is the average of the beginning, ending and intervening quarter end shareholders’ equity balances, excluding the liquidation value of the preferred shares.

Validus Holdings, Ltd.

Consolidated Class of Business Policy Type Detail - Gross Premiums Written

(Expressed in thousands of U.S. Dollars, except share and per share information)



		Three Months Ended								Six Months Ended
		June 30, 2017				June 30, 2016				June 30, 2017				June 30, 2016
Line of business	Treaty type	Gross premiums written		%		Gross premiums written		%		Gross premiums written		%		Gross premiums written		%
Property	Treaty Reinsurance	$	285,313	36.0	%	$	319,430	41.9	%	$	661,772	33.4	%	$	687,532	35.5	%
	Facultative Reinsurance	36,880		4.7	%	43,161		5.6	%	62,246		3.1	%	68,074		3.5	%
	Direct Insurance	78,981		10.0	%	81,105		10.6	%	135,135		6.8	%	124,009		6.4	%
		401,174		50.7	%	443,696		58.1	%	859,153		43.3	%	879,615		45.4	%

Marine	Treaty Reinsurance	27,624		3.5	%	19,503		2.5	%	138,760		7.0	%	142,968		7.4	%
	Facultative Reinsurance	23,355		2.9	%	22,688		3.0	%	49,497		2.5	%	48,540		2.5	%
	Direct Insurance	37,655		4.7	%	51,396		6.7	%	75,074		3.8	%	91,044		4.7	%
		88,634		11.1	%	93,587		12.2	%	263,331		13.3	%	282,552		14.6	%

Specialty ^(a)	Treaty Reinsurance	131,891		16.6	%	83,015		10.8	%	467,500		23.6	%	506,602		26.2	%
	Facultative Reinsurance	17,328		2.2	%	21,311		2.8	%	38,250		1.9	%	43,121		2.2	%
	Direct Insurance	85,713		10.8	%	61,680		8.1	%	227,755		11.5	%	115,657		6.0	%
		234,932		29.6	%	166,006		21.7	%	733,505		37.0	%	665,380		34.4	%

Liability ^(b)	Direct Insurance	68,162		8.6	%	60,753		8.0	%	127,770		6.4	%	109,286		5.6	%
		68,162		8.6	%	60,753		8.0	%	127,770		6.4	%	109,286		5.6	%

Total	Treaty Reinsurance	444,828		56.1	%	421,948		55.2	%	1,268,032		64.0	%	1,337,102		69.1	%
	Facultative Reinsurance	77,563		9.8	%	87,160		11.4	%	149,993		7.5	%	159,735		8.2	%
	Direct Insurance	270,511		34.1	%	254,934		33.4	%	565,734		28.5	%	439,996		22.7	%
		$	792,902	100.0	%	$	764,042	100.0	%	$	1,983,759	100.0	%	$	1,936,833	100.0	%

Total	Reinsurance	444,828		56.1	%	421,948		55.2	%	1,268,032		64.0	%	1,337,102		69.1	%
	Insurance ^(c)	348,074		43.9	%	342,094		44.8	%	715,727		36.0	%	599,731		30.9	%
		$	792,902	100.0	%	$	764,042	100.0	%	$	1,983,759	100.0	%	$	1,936,833	100.0	%

Notes:

(a)

For the Validus Re segment, Specialty includes Aerospace & Aviation, Agriculture, Casualty, Composite, Financial, Technical Lines, Terrorism, Trade Credit, Workers' Compensation and Other Specialty. Other Specialty includes Contingency, Crisis Management and Life and Accident & Health. For the Talbot segment, Specialty includes Accident & Health, Aviation (Direct & Treaty), Contingency, Financial Lines and Political Lines. Political lines includes War, Political Risk and Political Violence. For the Western World segment, Specialty includes Agriculture. For the AlphaCat segment, Specialty includes Agriculture, Composite and Workers' Compensation.


(b)	For the Western World segment, the Liability class includes general liability, professional liability, products liability and miscellaneous malpractice.


(c)	Insurance includes facultative reinsurance and direct insurance.

Validus Holdings, Ltd.

Gross Premiums Written by Segment by Class of Business

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended															Six Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Validus Re
Property - Cat XOL^(a)	$	152,234		$	139,244		$	1,150		$	33,032		$	185,253		$	291,478		$	311,327
Property - Per Risk XOL	2,050			12,023			238			10,525			4,640			14,073			16,059
Property - Proportional ^(b)	20,475			52,437			9,145			10,204			26,141			72,912			81,285
Marine	14,557			100,548			(4,178		)	(4,533		)	7,806			115,105			114,409
Aerospace & Aviation	5,446			10,497			(1,574		)	888			6,875			15,943			19,926
Agriculture	22,061			152,447			(9,681		)	8,625			15,480			174,508			244,236
Casualty	39,126			24,510			31,991			7,539			22,990			63,636			46,577
Composite	17,349			34,090			2,281			8,932			7,404			51,439			48,031
Financial	13,101			25,090			10,163			9,565			3,790			38,191			26,523
Technical Lines	4,959			4,182			629			4,100			2,154			9,141			7,805
Terrorism	(117		)	8,827			(2,116		)	2,116			(1,346		)	8,710			10,940
Trade Credit	50			44,154			28			(647		)	36			44,204			38,898
Workers' Compensation	2,200			1,633			732			3,230			683			3,833			4,102
Other Specialty^(c)	3,506			10,840			27			1,165			3,904			14,346			7,360
Total Validus Re Segment	296,997			620,522			38,835			94,741			285,810			917,519			977,478
AlphaCat
Property - Cat XOL^(a)	99,318			159,765			(264		)	3,933			93,282			259,083			257,117
Agriculture	4,020			(35		)	4			77			2,798			3,985			2,798
Composite	2,362			4,788			—			—			2,821			7,150			5,518
Workers' Compensation	(18		)	408			(4		)	403			4			390			820
Total AlphaCat Segment	105,682			164,926			(264		)	4,413			98,905			270,608			266,253
Talbot
Property	58,760			59,591			46,499			44,982			76,424			118,351			131,407
Downstream Energy and Power	29,765			13,669			24,872			19,319			35,222			43,434			50,006
Marine	74,308			77,318			39,635			48,093			85,992			151,626			174,212
Accident & Health	5,176			5,910			4,929			4,170			8,861			11,086			20,227
Aviation, Direct	7,595			8,498			16,398			10,241			8,676			16,093			14,592
Aviation Treaty	19,875			10,797			3,355			4,810			15,053			30,672			35,417
Contingency	6,988			3,964			14,160			6,183			6,665			10,952			15,069
Financial Lines	13,211			12,767			15,308			13,594			11,473			25,978			21,578
Political Lines^(d)	46,799			54,661			53,488			38,282			47,701			101,460			99,876
Total Talbot Segment	262,477			247,175			218,644			189,674			296,067			509,652			562,384
Western World
Property	38,967			28,136			29,039			23,757			26,218			67,103			41,644
Liability^(e)	68,162			59,608			57,991			61,503			60,753			127,770			109,286
Agriculture	23,939			84,299			—			—			—			108,238			—
Total Western World Segment	131,068			172,043			87,030			85,260			86,971			303,111			150,930
Intersegment Revenue
Property	(395		)	(6,886		)	(6,239		)	(1,284		)	(3,484		)	(7,281		)	(9,230		)
Marine	(231		)	(3,169		)	1,621			466			(211		)	(3,400		)	(6,069		)
Specialty	(2,696		)	(3,754		)	(173		)	(852		)	(16		)	(6,450		)	(4,913		)
Total Intersegment Revenue Eliminated	(3,322		)	(13,809		)	(4,791		)	(1,670		)	(3,711		)	(17,131		)	(20,212		)
Total Gross Premiums Written	$	792,902		$	1,190,857		$	339,454		$	372,418		$	764,042		$	1,983,759		$	1,936,833

Notes:


(a)	Property Cat XOL is comprised of Catastrophe XOL, Aggregate XOL, RPP. Per Event XOL, Second Event and Third Event covers.


(b)	Proportional is comprised of Quota Share and Surplus Share cover.


(c)	Other Specialty includes Contingency, Crisis Management and Life and Accident & Health.


(d)	Political Lines includes War, Political Risk and Political Violence.


(e)	Liability includes general liability, professional liability, products liability and miscellaneous malpractice.

Validus Holdings, Ltd.

Consolidated Analysis of Reserves for Losses and Loss Expenses

(Expressed in thousands of U.S. Dollars, except share and per share information)



	June 30, 2017									December 31, 2016
	Reserve for losses and loss expenses			Loss reserves recoverable			Net			Reserve for losses and loss expenses			Loss reserves recoverable			Net
Property ^(a)	$	925,962		$	191,956		$	734,006		$	830,672		$	107,573		$	723,099
Marine	733,702			105,126			628,576			861,459			154,001			707,458
Specialty ^(b)	1,079,737			219,725			860,012			732,907			81,547			651,360
Liability^(c)	565,790			83,400			482,390			570,157			87,300			482,857
Total	$	3,305,191		$	600,207		$	2,704,984		$	2,995,195		$	430,421		$	2,564,774

	June 30, 2017									December 31, 2016
	Case Reserves			IBNR			Reserve for losses and loss expenses			Case Reserves			IBNR			Reserve for losses and loss expenses
Property ^(a)	$	410,232		$	515,730		$	925,962		$	390,141		$	440,531		$	830,672
Marine	349,501			384,201			733,702			389,614			471,845			861,459
Specialty ^(b)	280,942			798,795			1,079,737			259,251			473,656			732,907
Liability ^(c)	196,124			369,666			565,790			198,766			371,391			570,157
Total	$	1,236,799		$	2,068,392		$	3,305,191		$	1,237,772		$	1,757,423		$	2,995,195

% of Total	37.4		%	62.6		%	100.0		%	41.3		%	58.7		%	100.0		%

Notes:


(a)	For the Talbot segment, Property includes Downstream Energy and Power.

(b)


(c)	Liability includes general liability, professional liability, products liability and miscellaneous malpractice.

Validus Holdings, Ltd.

Consolidated Losses and Loss Ratios by Segment

(Expressed in thousands of U.S. Dollars, except share and per share information)



	At or for the Three Months Ended
	June 30, 2017																		June 30, 2016
	Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total			Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total
Gross reserves at period beginning	$	1,107,080		$	45,805		$	1,346,517		$	615,428		$	(62,085	)	$	3,052,745		$	1,107,747		$	12,913		$	1,333,578		$	593,356		$	(67,294	)	$	2,980,300
Losses recoverable	(89,645		)	—			(335,352		)	(88,944		)	62,085			(451,856		)	(31,566		)	—			(321,644		)	(84,773		)	67,294			(370,689		)
Net reserves at period beginning	1,017,435			45,805			1,011,165			526,484			—			2,600,889			1,076,181			12,913			1,011,934			508,583			—			2,609,611

Net reserves acquired	—			—			—			23,753			—			23,753			—			—			—			—			—			—

Incurred losses - current year	127,784			4,919			109,265			97,471			—			339,439			163,016			21,870			137,638			47,387			—			369,911
Change in prior accident years	(23,099		)	(3,852		)	(15,876		)	(463		)	—			(43,290		)	(30,877		)	(418		)	(28,328		)	(3,158		)	—			(62,781		)
Incurred losses	104,685			1,067			93,389			97,008			—			296,149			132,139			21,452			109,310			44,229			—			307,130

Foreign exchange	11,848			633			7,735			—			—			20,216			(712		)	(175		)	(13,467		)	—			—			(14,354		)

Paid losses - current year	(7,970		)	—			(21,423		)	(13,365		)	—			(42,758		)	(6,474		)	—			(27,106		)	(12,302		)	—			(45,882		)
Paid losses - prior years	(88,523		)	(1,022		)	(61,885		)	(41,835		)	—			(193,265		)	(71,756		)	(79		)	(66,564		)	(38,376		)	—			(176,775		)
Paid losses	(96,493		)	(1,022		)	(83,308		)	(55,200		)	—			(236,023		)	(78,230		)	(79		)	(93,670		)	(50,678		)	—			(222,657		)

Net reserves at period end	1,037,475			46,483			1,028,981			592,045			—			2,704,984			1,129,378			34,111			1,014,107			502,134			—			2,679,730
Losses recoverable	101,926			—			364,658			196,018			(62,395		)	600,207			111,015			—			308,686			86,018			(62,732		)	442,987
Gross reserves at period end	$	1,139,401		$	46,483		$	1,393,639		$	788,063		$	(62,395	)	$	3,305,191		$	1,240,393		$	34,111		$	1,322,793		$	588,152		$	(62,732	)	$	3,122,717

Net premiums earned	$	240,607		$	67,852		$	191,874		$	130,694					$	631,027		$	247,122		$	59,396		$	201,549		$	65,656					$	573,723

Current year loss ratio	53.1		%	7.3		%	57.0		%	74.6		%				53.8		%	66.0		%	36.8		%	68.3		%	72.2		%				64.4		%
Prior accident years adjustments	-9.6		%	-5.7		%	-8.3		%	-0.4		%				-6.9		%	-12.5		%	-0.7		%	-14.1		%	-4.8		%				-10.9		%
Net loss ratio	43.5		%	1.6		%	48.7		%	74.2		%				46.9		%	53.5		%	36.1		%	54.2		%	67.4		%				53.5		%
Paid to incurred	92.2		%	95.8		%	89.2		%	56.9		%				79.7		%	59.2		%	0.4		%	85.7		%	114.6		%				72.5		%

	At or for the Six Months Ended
	June 30, 2017																		June 30, 2016
	Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total			Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total
Gross reserves at period beginning	$	1,116,753		$	48,534		$	1,301,517		$	589,500		$	(61,109	)	$	2,995,195		$	1,146,869		$	11,013		$	1,302,635		$	600,331		$	(64,281	)	$	2,996,567
Losses recoverable	(98,005		)	—			(306,038		)	(87,487		)	61,109			(430,421		)	(36,055		)	—			(293,662		)	(85,150		)	64,281			(350,586		)
Net reserves at period beginning	1,018,748			48,534			995,479			502,013			—			2,564,774			1,110,814			11,013			1,008,973			515,181			—			2,645,981

Net reserves acquired	—			—			—			23,753			—			23,753			—			—			—			—			—			—

Incurred losses - current year	242,718			10,431			244,491			172,615			—			670,255			271,568			24,611			260,459			91,459			—			648,097
Change in prior accident years	(51,879		)	(7,270		)	(44,690		)	(682		)	—			(104,521		)	(56,561		)	(1,327		)	(51,048		)	(7,584		)	—			(116,520		)
Incurred losses	190,839			3,161			199,801			171,933			—			565,734			215,007			23,284			209,411			83,875			—			531,577

Foreign exchange	20,594			781			11,158			—			—			32,533			12,101			(65		)	(18,130		)	—			—			(6,094		)

Paid losses - current year	(10,226		)	—			(22,506		)	(17,724		)	—			(50,456		)	(10,059		)	—			(37,435		)	(14,161		)	—			(61,655		)
Paid losses - prior years	(182,480		)	(5,993		)	(154,951		)	(87,930		)	—			(431,354		)	(198,485		)	(121		)	(148,712		)	(82,761		)	—			(430,079		)
Paid losses	(192,706		)	(5,993		)	(177,457		)	(105,654		)	—			(481,810		)	(208,544		)	(121		)	(186,147		)	(96,922		)	—			(491,734		)

Net reserves at period end	1,037,475			46,483			1,028,981			592,045			—			2,704,984			1,129,378			34,111			1,014,107			502,134			—			2,679,730
Losses recoverable	101,926			—			364,658			196,018			(62,395		)	600,207			111,015			—			308,686			86,018			(62,732		)	442,987
Gross reserves at period end	$	1,139,401		$	46,483		$	1,393,639		$	788,063		$	(62,395	)	$	3,305,191		$	1,240,393		$	34,111		$	1,322,793		$	588,152		$	(62,732	)	$	3,122,717

Net premiums earned	$	459,019		$	132,479		$	386,939		$	227,966					$	1,206,403		$	490,953		$	118,542		$	408,341		$	127,155					$	1,144,991

Current year loss ratio	52.9		%	7.9		%	63.1		%	75.7		%				55.6		%	55.3		%	20.7		%	63.8		%	72.0		%				56.6		%
Prior accident years adjustments	-11.3		%	-5.5		%	-11.5		%	-0.3		%				-8.7		%	-11.5		%	-1.1		%	-12.5		%	-6.0		%				-10.2		%
Net loss ratio	41.6		%	2.4		%	51.6		%	75.4		%				46.9		%	43.8		%	19.6		%	51.3		%	66.0		%				46.4		%
Paid to incurred	101.0		%	189.6		%	88.8		%	61.5		%				85.2		%	97.0		%	0.5		%	88.9		%	115.6		%				92.5		%

Validus Holdings, Ltd.

Losses and Loss Ratios by Class of Business - Validus Re

(Expressed in thousands of U.S. Dollars, except share and per share information)



	At or for the Three Months Ended
	June 30, 2017												June 30, 2016
	Property			Marine			Specialty^(a)			Total			Property			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	456,626		$	322,912		$	327,542		$	1,107,080		$	500,078		$	332,430		$	275,239		$	1,107,747
Losses recoverable	(38,062		)	(49,299		)	(2,284		)	(89,645		)	(18,640		)	(10,439		)	(2,487		)	(31,566		)
Net reserves at period beginning	418,564			273,613			325,258			1,017,435			481,438			321,991			272,752			1,076,181

Incurred losses - current year	33,421			14,581			79,782			127,784			61,324			16,939			84,753			163,016
Change in prior accident years	(671		)	(16,313		)	(6,115		)	(23,099		)	(9,468		)	(10,018		)	(11,391		)	(30,877		)
Incurred losses	32,750			(1,732		)	73,667			104,685			51,856			6,921			73,362			132,139

Foreign exchange	8,415			1,308			2,125			11,848			633			(560		)	(785		)	(712		)

Paid losses - current year	(3,967		)	(357		)	(3,646		)	(7,970		)	(2,006		)	(791		)	(3,677		)	(6,474		)
Paid losses - prior years	(42,342		)	(22,986		)	(23,195		)	(88,523		)	(35,252		)	(13,149		)	(23,355		)	(71,756		)
Paid losses	(46,309		)	(23,343		)	(26,841		)	(96,493		)	(37,258		)	(13,940		)	(27,032		)	(78,230		)

Net reserves at period end	413,420			249,846			374,209			1,037,475			496,669			314,412			318,297			1,129,378
Losses recoverable	32,190			65,870			3,866			101,926			53,758			54,020			3,237			111,015
Gross reserves at period end	$	445,610		$	315,716		$	378,075		$	1,139,401		$	550,427		$	368,432		$	321,534		$	1,240,393

Net premiums earned	$	95,384		$	29,794		$	115,429		$	240,607		$	105,228		$	31,097		$	110,797		$	247,122

Current year loss ratio	35.0		%	49.0		%	69.1		%	53.1		%	58.3		%	54.5		%	76.5		%	66.0		%
Prior accident years adjustments	-0.7		%	-54.8		%	-5.3		%	-9.6		%	-9.0		%	-32.2		%	-10.3		%	-12.5		%
Net loss ratio	34.3		%	-5.8		%	63.8		%	43.5		%	49.3		%	22.3		%	66.2		%	53.5		%
Paid to incurred	141.4		%	NM			36.4		%	92.2		%	71.8		%	201.4		%	36.8		%	59.2		%

	At or for the Six Months Ended
	June 30, 2017												June 30, 2016
	Property			Marine			Specialty^(a)			Total			Property			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	464,719		$	356,305		$	295,729		$	1,116,753		$	556,204		$	325,299		$	265,366		$	1,146,869
Losses recoverable	(42,873		)	(52,970		)	(2,162		)	(98,005		)	(23,109		)	(8,993		)	(3,953		)	(36,055		)
Net reserves at period beginning	421,846			303,335			293,567			1,018,748			533,095			316,306			261,413			1,110,814

Incurred losses - current year	61,279			30,981			150,458			242,718			80,914			33,795			156,859			271,568
Change in prior accident years	(4,242		)	(31,742		)	(15,895		)	(51,879		)	(32,300		)	(6,463		)	(17,798		)	(56,561		)
Incurred losses	57,037			(761		)	134,563			190,839			48,614			27,332			139,061			215,007

Foreign exchange	16,584			1,696			2,314			20,594			11,939			32			130			12,101

Paid losses - current year	(4,222		)	(796		)	(5,208		)	(10,226		)	(2,268		)	(1,024		)	(6,767		)	(10,059		)
Paid losses - prior years	(77,825		)	(53,628		)	(51,027		)	(182,480		)	(94,711		)	(28,234		)	(75,540		)	(198,485		)
Paid losses	(82,047		)	(54,424		)	(56,235		)	(192,706		)	(96,979		)	(29,258		)	(82,307		)	(208,544		)

Net reserves at period end	413,420			249,846			374,209			1,037,475			496,669			314,412			318,297			1,129,378
Losses recoverable	32,190			65,870			3,866			101,926			53,758			54,020			3,237			111,015
Gross reserves at period end	$	445,610		$	315,716		$	378,075		$	1,139,401		$	550,427		$	368,432		$	321,534		$	1,240,393

Net premiums earned	$	193,125		$	53,669		$	212,225		$	459,019		$	207,380		$	65,968		$	217,605		$	490,953

Current year loss ratio	31.7		%	57.7		%	70.9		%	52.9		%	39.0		%	51.2		%	72.1		%	55.3		%
Prior accident years adjustments	-2.2		%	-59.1		%	-7.5		%	-11.3		%	-15.6		%	-9.8		%	-8.2		%	-11.5		%
Net loss ratio	29.5		%	-1.4		%	63.4		%	41.6		%	23.4		%	41.4		%	63.9		%	43.8		%
Paid to incurred	143.8		%	NM			41.8		%	101.0		%	199.5		%	107.0		%	59.2		%	97.0		%

Notes:


(a)	Specialty includes Aerospace & Aviation, Agriculture, Casualty, Composite, Financial, Technical Lines, Terrorism, Trade Credit, Workers' Compensation and Other Specialty. Other Specialty includes Contingency, Crisis Management and Life and Accident & Health.

Validus Holdings, Ltd.

Losses and Loss Ratios by Class of Business - Talbot

(Expressed in thousands of U.S. Dollars, except share and per share information)



	At or for the Three Months Ended
	June 30, 2017												June 30, 2016
	Property ^(a)			Marine			Specialty^(a)			Total			Property ^(a)			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	388,792		$	477,727		$	479,998		$	1,346,517		$	309,022		$	533,378		$	491,178		$	1,333,578
Losses recoverable	(140,518		)	(92,374		)	(102,460		)	(335,352		)	(99,557		)	(115,989		)	(106,098		)	(321,644		)
Net reserves at period beginning	248,274			385,353			377,538			1,011,165			209,465			417,389			385,080			1,011,934

Incurred losses - current year	44,116			30,585			34,564			109,265			50,950			38,850			47,838			137,638
Change in prior accident years	(4,894		)	(17,056		)	6,074			(15,876		)	(10,094		)	(8,928		)	(9,306		)	(28,328		)
Incurred losses	39,222			13,529			40,638			93,389			40,856			29,922			38,532			109,310

Foreign exchange	1,666			2,275			3,794			7,735			(1,864		)	(4,403		)	(7,200		)	(13,467		)

Paid losses - current year	(7,677		)	(3,606		)	(10,140		)	(21,423		)	(8,989		)	(9,817		)	(8,300		)	(27,106		)
Paid losses - prior years	(20,608		)	(18,821		)	(22,456		)	(61,885		)	(18,727		)	(24,572		)	(23,265		)	(66,564		)
Paid losses	(28,285		)	(22,427		)	(32,596		)	(83,308		)	(27,716		)	(34,389		)	(31,565		)	(93,670		)

Net reserves at period end	260,877			378,730			389,374			1,028,981			220,741			408,519			384,847			1,014,107
Losses recoverable	194,413			54,595			115,650			364,658			93,048			115,892			99,746			308,686
Gross reserves at period end	$	455,290		$	433,325		$	505,024		$	1,393,639		$	313,789		$	524,411		$	484,593		$	1,322,793

Net premiums earned	$	57,741		$	53,619		$	80,514		$	191,874		$	54,859		$	73,922		$	72,768		$	201,549

Current year loss ratio	76.4		%	57.0		%	43.0		%	57.0		%	92.9		%	52.6		%	65.8		%	68.3		%
Prior accident years adjustments	-8.5		%	-31.8		%	7.5		%	-8.3		%	-18.4		%	-12.1		%	-12.8		%	-14.1		%
Net loss ratio	67.9		%	25.2		%	50.5		%	48.7		%	74.5		%	40.5		%	53.0		%	54.2		%
Paid to incurred	72.1		%	165.8		%	80.2		%	89.2		%	67.8		%	114.9		%	81.9		%	85.7		%

	At or for the Six Months Ended
	June 30, 2017												June 30, 2016
	Property ^(a)			Marine			Specialty^(a)			Total			Property ^(a)			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	334,525		$	529,800		$	437,192		$	1,301,517		$	328,526		$	501,477		$	472,632		$	1,302,635
Losses recoverable	(93,774		)	(125,677		)	(86,587		)	(306,038		)	(109,502		)	(95,494		)	(88,666		)	(293,662		)
Net reserves at period beginning	240,751			404,123			350,605			995,479			219,024			405,983			383,966			1,008,973

Incurred losses - current year	88,362			63,369			92,760			244,491			84,851			81,993			93,615			260,459
Change in prior accident years	(11,228		)	(33,052		)	(410		)	(44,690		)	(28,540		)	(5,964		)	(16,544		)	(51,048		)
Incurred losses	77,134			30,317			92,350			199,801			56,311			76,029			77,071			209,411

Foreign exchange	2,404			3,237			5,517			11,158			(2,571		)	(5,879		)	(9,680		)	(18,130		)

Paid losses - current year	(8,136		)	(3,663		)	(10,707		)	(22,506		)	(9,914		)	(17,982		)	(9,539		)	(37,435		)
Paid losses - prior years	(51,276		)	(55,284		)	(48,391		)	(154,951		)	(42,109		)	(49,632		)	(56,971		)	(148,712		)
Paid losses	(59,412		)	(58,947		)	(59,098		)	(177,457		)	(52,023		)	(67,614		)	(66,510		)	(186,147		)

Net reserves at period end	260,877			378,730			389,374			1,028,981			220,741			408,519			384,847			1,014,107
Losses recoverable	194,413			54,595			115,650			364,658			93,048			115,892			99,746			308,686
Gross reserves at period end	$	455,290		$	433,325		$	505,024		$	1,393,639		$	313,789		$	524,411		$	484,593		$	1,322,793

Net premiums earned	$	110,590		$	117,434		$	158,915		$	386,939		$	115,855		$	143,793		$	148,693		$	408,341

Current year loss ratio	79.9		%	53.9		%	58.4		%	63.1		%	73.2		%	57.0		%	62.9		%	63.8		%
Prior accident years adjustments	-10.2		%	-28.1		%	-0.3		%	-11.5		%	-24.6		%	-4.1		%	-11.1		%	-12.5		%
Net loss ratio	69.7		%	25.8		%	58.1		%	51.6		%	48.6		%	52.9		%	51.8		%	51.3		%
Paid to incurred	77.0		%	194.4		%	64.0		%	88.8		%	92.4		%	88.9		%	86.3		%	88.9		%

Notes:


(a)	Property includes Downstream Energy and Power. Specialty includes Accident & Health, Aviation (Direct & Treaty), Contingency, Financial Lines and Political Lines. Political Lines includes War, Political Risk and Political Violence.

Validus Holdings, Ltd.

Losses and Loss Ratios by Class of Business - Western World

(Expressed in thousands of U.S. Dollars, except share and per share information)



	At or for the Three Months Ended
	June 30, 2017												June 30, 2016
	Property			Liability ^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Gross reserves at period beginning	$	26,248		$	570,358		$	18,822		$	615,428		$	16,159		$	577,197		$	—		$	593,356
Losses recoverable	(3,909		)	(85,035		)	—			(88,944		)	(554		)	(84,219		)	—			(84,773		)
Net reserves at period beginning	22,339			485,323			18,822			526,484			15,605			492,978			—			508,583

Net reserves acquired	—			—			23,753			23,753			—			—			—			—

Incurred losses - current year	12,333			40,358			44,780			97,471			11,758			35,629			—			47,387
Change in prior accident years	(479		)	16			—			(463		)	(1,582		)	(1,576		)	—			(3,158		)
Incurred losses	11,854			40,374			44,780			97,008			10,176			34,053			—			44,229

Paid losses - current year	(9,444		)	(3,921		)	—			(13,365		)	(10,082		)	(2,220		)	—			(12,302		)
Paid losses - prior years	(2,449		)	(39,386		)	—			(41,835		)	(1,705		)	(36,671		)	—			(38,376		)
Paid losses	(11,893		)	(43,307		)	—			(55,200		)	(11,787		)	(38,891		)	—			(50,678		)

Net reserves at period end	22,300			482,390			87,355			592,045			13,994			488,140			—			502,134
Losses recoverable	2,841			83,400			109,777			196,018			241			85,777			—			86,018
Gross reserves at period end	$	25,141		$	565,790		$	197,132		$	788,063		$	14,235		$	573,917		$	—		$	588,152

Net premiums earned	$	23,125		$	57,525		$	50,044		$	130,694		$	14,177		$	51,479		$	—		$	65,656

Current year loss ratio	53.4		%	70.2		%	89.5		%	74.6		%	83.0		%	69.2		%	—		%	72.2		%
Prior accident years adjustments	-2.1		%	—		%	—		%	-0.4		%	-11.2		%	-3.1		%	—		%	-4.8		%
Net loss ratio	51.3		%	70.2		%	89.5		%	74.2		%	71.8		%	66.1		%	—		%	67.4		%
Paid to incurred	100.3		%	107.3		%	—		%	56.9		%	115.8		%	114.2		%	—		%	114.6		%

	At or for the Six Months Ended
	June 30, 2017												June 30, 2016
	Property			Liability ^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Gross reserves at period beginning	$	19,343		$	570,157		$	—		$	589,500		$	12,508		$	587,823		$	—		$	600,331
Losses recoverable	(187		)	(87,300		)	—			(87,487		)	(63		)	(85,087		)	—			(85,150		)
Net reserves at period beginning	19,156			482,857			—			502,013			12,445			502,736			—			515,181

Net reserves acquired	—			—			23,753			23,753			—			—			—			—

Incurred losses - current year	29,881			79,132			63,602			172,615			21,254			70,205			—			91,459
Change in prior accident years	(3,302		)	2,620			—			(682		)	(2,023		)	(5,561		)	—			(7,584		)
Incurred losses	26,579			81,752			63,602			171,933			19,231			64,644			—			83,875

Paid losses - current year	(13,141		)	(4,583		)	—			(17,724		)	(11,393		)	(2,768		)	—			(14,161		)
Paid losses - prior years	(10,294		)	(77,636		)	—			(87,930		)	(6,289		)	(76,472		)	—			(82,761		)
Paid losses	(23,435		)	(82,219		)	—			(105,654		)	(17,682		)	(79,240		)	—			(96,922		)

Net reserves at period end	22,300			482,390			87,355			592,045			13,994			488,140			—			502,134
Losses recoverable	2,841			83,400			109,777			196,018			241			85,777			—			86,018
Gross reserves at period end	$	25,141		$	565,790		$	197,132		$	788,063		$	14,235		$	573,917		$	—		$	588,152

Net premiums earned	$	43,192		$	113,944		$	70,830		$	227,966		$	26,372		$	100,783		$	—		$	127,155

Current year loss ratio	69.1		%	69.4		%	89.8		%	75.7		%	80.6		%	69.6		%	—		%	72.0		%
Prior accident years adjustments	-7.6		%	2.3		%	—		%	-0.3		%	-7.7		%	-5.5		%	—		%	-6.0		%
Net loss ratio	61.5		%	71.7		%	89.8		%	75.4		%	72.9		%	64.1		%	—		%	66.0		%
Paid to incurred	88.2		%	100.6		%	—		%	61.5		%	91.9		%	122.6		%	—		%	115.6		%

Notes:


(a)	Liability includes general liability, professional liability, products liability and miscellaneous malpractice.


(b)	Specialty includes agriculture premiums written through CRS.

Validus Holdings, Ltd.

Analysis of Loss Ratios by Segment

(Expressed in thousands of U.S. Dollars, except share and per share information)



	Three Months Ended										Six Months Ended
	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		June 30, 2017		June 30, 2016
Validus Re Segment
Current period - excluding items below	50.0	%	47.6	%	47.5	%	53.1	%	45.7	%	48.9	%	45.1	%
Current period - notable loss events	0.0	%	0.0	%	9.1	%	0.0	%	7.2	%	0.0	%	3.6	%
Current period - non-notable loss events	3.1	%	5.0	%	0.0	%	4.5	%	13.1	%	4.0	%	6.6	%
Change in prior accident years	(9.6	)%	(13.2	)%	(12.9	)%	(14.5	)%	(12.5	)%	(11.3	)%	(11.5	)%
Net loss ratio	43.5	%	39.4	%	43.7	%	43.1	%	53.5	%	41.6	%	43.8	%
AlphaCat Segment
Current period - excluding items below	7.3	%	8.5	%	3.3	%	5.6	%	14.2	%	7.9	%	9.4	%
Current period - notable loss events	0.0	%	0.0	%	24.2	%	1.5	%	12.3	%	0.0	%	6.2	%
Current period - non-notable loss events	0.0	%	0.0	%	0.2	%	0.0	%	10.3	%	0.0	%	5.1	%
Change in prior accident years	(5.7	)%	(5.3	)%	(1.7	)%	(0.4	)%	(0.7	)%	(5.5	)%	(1.1	)%
Net loss ratio	1.6	%	3.2	%	26.0	%	6.7	%	36.1	%	2.4	%	19.6	%
Talbot Segment
Current period - excluding items below	57.0	%	64.9	%	62.6	%	58.9	%	58.0	%	60.8	%	58.7	%
Current period - notable loss events	0.0	%	0.0	%	7.1	%	0.0	%	5.8	%	0.0	%	2.9	%
Current period - non-notable loss events	0.0	%	4.5	%	0.1	%	5.7	%	4.5	%	2.3	%	2.2	%
Change in prior accident years	(8.3	)%	(14.8	)%	(9.2	)%	(9.4	)%	(14.1	)%	(11.5	)%	(12.5	)%
Net loss ratio	48.7	%	54.6	%	60.6	%	55.2	%	54.2	%	51.6	%	51.3	%
Western World Segment ^(b)
Current period - excluding items below	74.6	%	77.2	%	68.3	%	65.8	%	71.2	%	75.7	%	71.5	%
Current period - notable loss events	0.0	%	0.0	%	4.5	%	0.0	%	0.0	%	0.0	%	0.0	%
Current period - non-notable loss events	0.0	%	0.0	%	0.1	%	0.0	%	1.0	%	0.0	%	0.5	%
Change in prior accident years	(0.4	)%	(0.2	)%	(0.9	)%	(1.2	)%	(4.8	)%	(0.3	)%	(6.0	)%
Net loss ratio	74.2	%	77.0	%	72.0	%	64.6	%	67.4	%	75.4	%	66.0	%
Consolidated
Current period - excluding items below	52.6	%	54.1	%	49.8	%	51.2	%	49.6	%	53.3	%	49.2	%
Current period - notable loss events	0.0	%	0.0	%	9.7	%	0.2	%	6.4	%	0.0	%	3.2	%
Current period - non-notable loss events	1.2	%	3.4	%	0.1	%	3.8	%	8.4	%	2.3	%	4.2	%
Change in prior accident years	(6.9	)%	(10.6	)%	(8.7	)%	(9.4	)%	(10.9	)%	(8.7	)%	(10.2	)%
Net loss ratio	46.9	%	46.9	%	50.9	%	45.8	%	53.5	%	46.9	%	46.4	%

Notes:

(a)

For disclosure purposes, only those loss events which aggregate to over $30.0 million on a consolidated basis (“notable loss events”) are disclosed separately in the Company’s analysis of loss ratios and also included in the reserve for notable loss events table in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. In addition, loss events which aggregate to over $15.0 million but less than $30.0 million on a consolidated basis (“non-notable loss events") are incorporated into the Company’s analysis of loss ratios. Net losses and loss expenses are net of reinsurance but not net of reinstatement premiums.


(b)	On May 1, 2017, the Company acquired all of the outstanding capital stock of CRS, a primary crop insurance MGA. For segmental reporting purposes, the results of CRS have been included as the Specialty line of business within the Western World segment as of the date of acquisition.

Validus Holdings, Ltd.

Consolidated Reinsurance Recoverable Analysis

(Expressed in thousands of U.S. Dollars, except share and per share information)



Consolidated Reinsurance Recoverable at June 30, 2017
Categories	Reinsurance Recoverable^(a)		%		Top 10 Reinsurers	Rating ^(b)	Reinsurance Recoverable^(a)		%
Top 10 reinsurers	$	521,027	81.9	%	Munich Re	AA-	$	96,997	15.2	%
Other reinsurers' balances > $1 million	106,432		16.8	%	Lloyd's Syndicates	A+	84,742		13.2	%
Other reinsurers' balances < $1 million	8,423		1.3	%	Fully collateralized reinsurers	NR	80,558		12.7	%
Total	$	635,882	100.0	%	Swiss Re	AA-	77,928		12.3	%
					Everest Re	A+	54,565		8.6	%
					Hannover Re	AA-	48,037		7.6	%
					Federal Crop Insurance Corporation	(c)	29,009		4.6	%
					Transatlantic Re	A+	23,066		3.6	%
					XL Catlin	A+	16,062		2.5	%
					Helvetia Group	A	10,063		1.6	%
					Total		$	521,027	81.9	%

Consolidated Reinsurance Recoverable at December 31, 2016
Categories	Reinsurance Recoverable^(a)		%		Top 10 Reinsurers	Rating ^(b)	Reinsurance Recoverable^(a)		%
Top 10 reinsurers	$	395,308	84.9	%	Lloyd's Syndicates	A+	$	84,419	18.2	%
Other reinsurers' balances > $1 million	66,944		14.4	%	Swiss Re	AA-	84,044		18.1	%
Other reinsurers' balances < $1 million	3,416		0.7	%	Fully collateralized reinsurers	NR	83,088		17.8	%
Total	$	465,668	100.0	%	Hannover Re	AA-	50,603		10.9	%
					Everest Re	A+	36,912		7.9	%
					Munich Re	AA-	18,214		3.9	%
					Transatlantic Re	A+	10,593		2.3	%
					Hamilton Re	A-	10,343		2.2	%
					Toa Re	A+	9,510		2.0	%
					National Indemnity Company	AA+	7,582		1.6	%
					Total		$	395,308	84.9	%

Notes:


(a)	Reinsurance Recoverable includes Loss Reserves Recoverable and Paid Losses Recoverable.


(b)	99.2% of Reinsurance Recoverable at June 30, 2017 were from reinsurers rated A- or better by internationally recognized rating agencies or were fully collateralized.


(c)	The Company participates in a crop reinsurance program sponsored by the U.S. federal government. The Company remains obligated for amounts ceded in the event that its reinsurers or retrocessionaires do not meet their obligations, except for amounts ceded to the U.S. federal government in the agriculture line of business.

Validus Holdings, Ltd.

Consolidated Investment Portfolio Composition and Net Investment Income

(Expressed in thousands of U.S. Dollars, except share and per share information)



Investment portfolio	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Managed investments, cash and cash equivalents and restricted cash
U.S. Government and Government Agency	$	646,436		$	718,025		$	804,126		$	837,546		$	931,803
Non-U.S. Government and Government Agency	292,504			258,463			240,791			248,390			215,250
States, municipalities, political subdivision	227,949			229,129			271,830			283,361			285,412
Agency residential mortgage-backed securities	783,006			653,395			679,595			657,876			676,783
Non-Agency residential mortgage-backed securities	26,683			19,382			15,477			20,615			23,389
U.S. corporate	1,386,484			1,486,882			1,534,508			1,526,677			1,556,047
Non-U.S. corporate	379,480			397,989			410,227			431,632			364,406
Bank loans	552,901			567,012			570,399			587,537			597,062
Asset-backed securities	502,056			514,690			526,814			485,519			429,340
Commercial mortgage-backed securities	316,190			318,288			330,932			340,797			314,033
Total fixed maturities	5,113,689			5,163,255			5,384,699			5,419,950			5,393,525
Total short-term investments	255,516			232,955			228,386			197,803			189,628
Total other investments	448,618			443,004			405,712			394,695			359,526
Investment in investment affiliates	103,377			94,697			100,431			99,731			99,278
Cash and cash equivalents	796,476			619,810			415,419			439,192			500,000
Restricted cash	48,101			36,099			15,000			9,970			1,663
Total managed investments, cash and cash equivalents and restricted cash^(a)	6,765,777			6,589,820			6,549,647			6,561,341			6,543,620
Non-managed investments, cash and cash equivalents and restricted cash
Catastrophe bonds	304,954			201,961			158,331			156,391			158,061
Short-term investments	2,615,837			2,552,271			2,567,784			2,283,603			2,180,026
Cash and cash equivalents	3,929			4,127			4,557			4,800			68,798
Restricted cash	146,938			56,448			55,956			103,078			94,359
Total non-managed investments, cash and cash equivalents and restricted cash ^(a)	3,071,658			2,814,807			2,786,628			2,547,872			2,501,244
Total investments, cash and cash equivalents and restricted cash	$	9,837,435		$	9,404,627		$	9,336,275		$	9,109,213		$	9,044,864

	Three Months Ended															Six Months Ended
Net investment income	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			June 30, 2017			June 30, 2016
Managed investments ^(a)
Fixed maturities and short-term investments	$	31,312		$	31,671		$	29,875		$	30,572		$	30,621		$	62,983		$	58,638
Other investments	7,571			6,870			7,194			11,768			8,026			14,441			8,898
Cash and cash equivalents and restricted cash	616			610			803			891			380			1,226			1,245
Securities lending income	7			13			16			22			12			20			17
Total gross investment income	39,506			39,164			37,888			43,253			39,039			78,670			68,798
Investment expenses	(1,443		)	(2,972		)	(2,013		)	(2,182		)	(2,190		)	(4,415		)	(4,026		)
Total managed net investment income	$	38,063		$	36,192		$	35,875		$	41,071		$	36,849		$	74,255		$	64,772

Annualized effective investment yield - managed investments ^(b)	2.35		%	2.27		%	2.25		%	2.58		%	2.34		%	2.31		%	2.06		%

Non-managed investments
Fixed maturities and short-term investments	$	4,500		$	3,060		$	1,689		$	1,970		$	1,977		$	7,560		$	3,272
Cash and cash equivalents and restricted cash	1,678			962			589			473			431			2,640			674
Total non-managed net investment income	6,178			4,022			2,278			2,443			2,408			10,200			3,946
Total net investment income	$	44,241		$	40,214		$	38,153		$	43,514		$	39,257		$	84,455		$	68,718

Notes:


(a)	Managed investments represent assets governed by the Company’s investment policy statement (“IPS”) whereas, non-managed investments represent assets held in support of consolidated AlphaCat variable interest entities which are not governed by the Company’s IPS.

(b)

Annualized investment yield is calculated by dividing net investment income by the average balance of the yield bearing assets managed by our portfolio managers (including funds of high grade structured products which are included in other investments, but excluding all other investments). Average assets for the three months ended is the average of the beginning and ending quarter end asset balances. Average assets for the six months ended is the average of the beginning, ending and intervening quarter end asset balances. Percentages for the quarter periods are annualized.

Validus Holdings, Ltd.

Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile

(Expressed in thousands of U.S. Dollars, except share and per share information)



	June 30, 2017				December 31, 2016
Fixed maturities - Credit Quality	Fair Value		%		Fair Value		%
Managed fixed maturities
AAA	$	2,318,254	42.8	%	$	2,405,597	43.4	%
AA	463,060		8.5	%	538,289		9.7	%
A	1,009,366		18.6	%	1,081,949		19.5	%
BBB	703,563		13.0	%	740,861		13.4	%
Total investment grade managed fixed maturities	4,494,243		82.9	%	4,766,696		86.0	%
BB	229,023		4.2	%	213,568		3.9	%
B	176,743		3.3	%	177,737		3.2	%
CCC	11,114		0.2	%	13,371		0.2	%
NR	202,566		3.8	%	213,327		3.8	%
Total non-investment grade managed fixed maturities	619,446		11.5	%	618,003		11.1	%
Total managed fixed maturities	$	5,113,689	94.4	%	$	5,384,699	97.1	%

Non-managed catastrophe bonds
BB	28,177		0.4	%	29,731		0.6	%
B	2,781		0.1	%	4,524		0.1	%
NR	273,996		5.1	%	124,076		2.2	%
Total non-investment grade non-managed catastrophe bonds	304,954		5.6	%	158,331		2.9	%
Total fixed maturities	$	5,418,643	100.0	%	$	5,543,030	100.0	%

	June 30, 2017				December 31, 2016
Fixed maturities - Maturity Profile	Fair Value		%		Fair Value		%
Managed fixed maturities
Due in one year or less	$	492,256	9.1	%	$	346,161	6.2	%
Due after one year through five years	2,461,870		45.5	%	2,933,146		52.9	%
Due after five years through ten years	459,311		8.5	%	426,647		7.7	%
Due after ten years	72,317		1.3	%	125,927		2.3	%
	3,485,754		64.4	%	3,831,881		69.1	%
Asset-backed and mortgage backed securities	1,627,935		30.0	%	1,552,818		28.0	%
Total managed fixed maturities	5,113,689		94.4	%	5,384,699		97.1	%

Non-managed catastrophe bonds
Due in one year or less	32,441		0.6	%	45,418		0.8	%
Due after one year through five years	265,735		4.9	%	111,656		2.1	%
Due after five years through ten years	6,778		0.1	%	1,257		0.0	%
Due after ten years	—		0.0	%	—		0.0	%
Total non-managed catastrophe bonds	304,954		5.6	%	158,331		2.9	%
Total fixed maturities	$	5,418,643	100.0	%	$	5,543,030	100.0	%

Validus Holdings, Ltd.

Top Ten Exposures to Fixed Income Corporate Issuers

(Expressed in thousands of U.S. Dollars, except share and per share information)



	June 30, 2017
Issuer^(a)	Fair Value ^(b)		S&P Rating ^(c)	% of Managed Investments, Cash and Cash Equivalents
JPMorgan Chase & Co	$	57,817	BBB+	0.9	%
Bank of America Corp	53,459		BBB+	0.8	%
Morgan Stanley	51,656		BBB+	0.8	%
Citigroup Inc	44,525		BBB+	0.7	%
Wells Fargo & Company	43,374		A	0.6	%
Goldman Sachs Group	43,289		BBB+	0.6	%
Bank of New York Mellon Corp	33,048		A	0.5	%
Anheuser-Busch Inbev NV	28,753		A-	0.4	%
Capital One Financial Corporation	28,617		BBB+	0.4	%
Verizon Communications Inc.	28,438		BBB+	0.4	%
Total	$	412,976		6.1	%

Notes:


(a)	Issuers exclude government-backed, government-sponsored enterprises and cash and cash equivalents.


(b)	Credit exposures represent only direct exposure to fixed maturities and short-term investments of the parent issuer and its major subsidiaries. These exposures exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent.


(c)	Investment ratings are the median of Moody's, Standard & Poor's and Fitch, presented in Standard & Poor's equivalent rating. For investments where three ratings are unavailable, the lower of the ratings shall apply, presented in Standard & Poor's equivalent rating.

Validus Holdings, Ltd.

Capitalization

(Expressed in thousands of U.S. Dollars, except share and per share information)



Capitalization	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Senior Notes^(a)	$	245,463		$	245,412		$	245,362		$	245,311		$	245,261
Junior Subordinated Deferrable Debentures (JSDs) ^(a)	289,800			289,800			289,800			289,800			289,800
Flagstone Junior Subordinated Deferrable Debentures (JSDs)^(a)	248,600			247,602			247,426			248,368			248,187
Total debt	$	783,863		$	782,814		$	782,588		$	783,479		$	783,248

Redeemable noncontrolling interest	$	1,251,660		$	1,657,630		$	1,528,001		$	1,559,580		$	1,532,283

Preferred shares, liquidation value^(a)	$	400,000		$	150,000		$	150,000		$	150,000		$	150,000
Ordinary shares, capital and surplus available to Validus common shareholders	3,831,355			3,784,329			3,711,507			3,738,712			3,734,438
Accumulated other comprehensive loss	(19,924		)	(22,453		)	(23,216		)	(21,092		)	(18,182		)
Noncontrolling interest	415,658			330,597			165,977			222,996			212,154
Total shareholders' equity	$	4,627,089		$	4,242,473		$	4,004,268		$	4,090,616		$	4,078,410

Total capitalization^(b)	$	6,662,612		$	6,682,917		$	6,314,857		$	6,433,675		$	6,393,941
Total capitalization available to Validus^(c)	$	4,995,294		$	4,694,690		$	4,620,879		$	4,651,099		$	4,649,504

Debt to total capitalization	11.8		%	11.7		%	12.4		%	12.2		%	12.2		%
Debt (excluding JSDs) to total capitalization	3.7		%	3.7		%	3.9		%	3.8		%	3.8		%
Debt to total capitalization available to Validus	15.7		%	16.7		%	16.9		%	16.8		%	16.8		%
Debt (excluding JSDs) to total capitalization available to Validus	4.9		%	5.2		%	5.3		%	5.3		%	5.3		%

Notes:


(a)	For further information regarding the Company's debt and preferred shares, refer to the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.


(b)	Total capitalization equals total shareholders' equity plus redeemable noncontrolling interest, Senior Notes and Junior Subordinated Deferrable Debentures.


(c)	Total capitalization available to Validus equals total shareholders' equity less noncontrolling interests plus Senior Notes and Junior Subordinated Deferrable Debentures.

Validus Holdings, Ltd.

Estimated Exposures to Peak Zone Property Catastrophe Losses - As of July 1, 2017

(Expressed in thousands of U.S. Dollars, except share and per share information)

Probable Maximum Losses by Zone and Peril



		Consolidated (Validus Re, Talbot and Western World) Estimated Net Loss
Zones	Perils	20 year return period		50 year return period		100 year return period		250 year return period		Validus Re Net Maximum Zonal Aggregate (a)
United States	Hurricane	$	241,418	$	374,916	$	602,067	$	880,085	$	1,741,815
California	Earthquake	69,137		197,186		275,120		384,570		1,439,656
Europe	Windstorm	84,967		198,704		263,619		441,666		1,202,636
Japan	Earthquake	54,903		117,396		212,654		271,174		796,085
Japan	Typhoon	69,899		143,518		229,285		263,211		730,086

Notes:


(a)	Validus Re net maximum zonal aggregate includes Validus share of AlphaCat limits, excludes Western World and the limits supported by the Funds at Lloyds ("FAL") provided by Validus Re.

Net loss estimates and zonal aggregates are before income tax, net of reinstatement premiums, and net of reinsurance and retrocessional recoveries. The estimates set forth above are based on an Occurrence basis on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses to differ materially from those expressed above. In particular, modeled loss estimates do not necessarily accurately predict actual losses, and may significantly mis-estimate actual losses. Such estimates, therefore, should not be considered as a representation of actual losses.

The Company has developed the estimates of losses expected from certain catastrophes for its portfolio of property, marine, workers’ compensation, and personal accident contracts using commercially available catastrophe models such as RMS, AIR and EQECAT, which are applied and adjusted by the Company. These estimates include assumptions regarding the location, size and magnitude of an event, the frequency of events, the construction type and damageability of property in a zone, policy terms and conditions and the cost of rebuilding property in a zone, among other assumptions. These assumptions will evolve following any actual event. Accordingly, if the estimates and assumptions that are entered into the risk model are incorrect, or if the risk model proves to be an inaccurate forecasting tool, the losses the Company might incur from an actual catastrophe could be materially higher than its expectation of losses generated from modeled catastrophe scenarios. In addition, many risks such as second-event covers, aggregate excess of loss, or attritional loss components cannot be fully evaluated using the vendor models. Further, the Company cannot assure that such third party models are free of defects in the modeling logic or in the software code.

Investors should not rely on the information set forth in this presentation when considering investment in the Company. The information contained in this presentation has not been audited nor has it been subject to independent verification. The estimates set forth above speak only as of the date of this presentation and the Company undertakes no obligation to update or revise such information to reflect the occurrence of future events, including, but not limited to, the composition of the Company's business. The events presented reflect a specific set of proscribed calculations and do not necessarily reflect all events that may impact the Company.

Validus Holdings, Ltd.

Estimated Exposures to Specified Loss Scenarios - As of January 1, 2017

(Expressed in thousands of U.S. Dollars, except share and per share information)

Consolidated (Validus Re, Talbot and Western World) Realistic Disaster Scenarios (RDS)



Type	Catastrophe Scenarios		Estimated Consolidated (Validus Re, Talbot and Western World) Net Loss		% of latest 12 Months Consolidated Net Premiums Earned
Marine	Loss of major complex	Total loss to all platforms and bridge links of a major oil complex	$	207.9	9.0	%
Marine	Major cruise vessel incident	US-owned cruise vessel sunk or severely damaged	133.3		5.8	%
Marine	Marine collision	Fully laden tanker collides with a cruise vessel in US waters	85.4		3.7	%
Political Risks	South East Asia	Chinese economy has a "hard landing" with sharp fall in growth rates; regional contagion	176.8		7.7	%
Political Risks	Russia	The Russian corporate sector struggles to deal with the effects of crashing commodity and stock prices	69.7		3.0	%
Political Risks	Turkey	Severe economic crisis in Turkey due to political upheaval	60.4		2.6	%
Political Risks	Nigeria	Severe economic, political and social crisis in Nigeria leads to widespread civil unrest	58.1		2.5	%
Political Risks	Middle East	US and Iran escalate into military confrontation; regional contagion	90.4		3.9	%
Aviation	Aviation collision	Collision of two aircraft over a major city	89.7		3.9	%
Satellite	Solar flare	Large single or sequence of proton flares results in loss to all satellites in synchronous orbit	41.3		1.8	%
Satellite	Generic defect	Undetected defect in a number of operational satellites causing major loss	23.6		1.0	%
Terrorism	Rockefeller Center	Midtown Manhattan suffers a 2-tonne conventional bomb blast	62.1		2.7	%
Terrorism	One World Trade Center	Lower Manhattan suffers a 2-tonne conventional bomb blast	19.1		0.8	%
Liability	Professional lines	Failure or collapse of a major corporation	28.8		1.2	%
Liability	Professional lines	UK pensions mis-selling	14.3		0.6	%
Cyber	Major data security breach	Simultaneous cyber-attacks on organizations within one industrial sector; loss of customer data	61.3		2.7	%

The Company has presented the Company Realistic Disaster Scenarios for non-natural catastrophe events. Twice yearly, Lloyd's syndicates' including the Company's Talbot Syndicate 1183 are required to provide details of their potential exposures to specific disaster scenarios. Lloyd’s makes its updated Realistic Disaster Scenarios (RDS) guidance available to the market annually. The RDS scenario specification document for 2016 can be accessed at the RDS part of the Lloyd's public website: http://www.lloyds.com/the-market/tools-and-resources/research/exposure-management/realistic-disaster-scenarios.

The Consolidated Net Premiums Earned used in the calculation represent the latest 12 months of net premiums earned up to June 30, 2017.

Modeling catastrophe threat scenarios is a complex exercise involving numerous variables and is inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses incurred by the Company to differ materially from those expressed above. Should an event occur, the modeled outcomes may prove inadequate, possibly materially so. This may occur for a number of reasons including, legal requirements, model deficiency, non-modeled risks or data inaccuracies.

A modeled outcome of net loss from a single event also relies in significant part on the reinsurance and retrocession arrangements in place, or expected to be in place at the time of the analysis, and may change during the year. Modeled outcomes assume that the reinsurance and retrocession in place responds as expected with minimal reinsurance failure or dispute. Reinsurance is purchased to match the original exposure as far as possible, but it is possible for there to be a mismatch or gap in cover which could result in higher than modeled losses to the Company. In addition, many parts of the reinsurance program are purchased with limited reinstatements and, therefore, the number of claims or events which may be recovered from second or subsequent events is limited. It should also be noted that renewal dates of the reinsurance program do not necessarily coincide with those of the inwards business written. Where original business is not protected by risks attaching reinsurance or retrocession programs, the programs could expire resulting in an increase in the possible net loss retained by the Company.

Investors should not rely on the information set forth in this presentation when considering investment in the Company. The information contained in this presentation has not been audited nor has it been subject to independent verification. The estimates set forth above speak only as of the date of this presentation and the Company undertakes no obligation to update or revise such information to reflect the occurrence of future events. The events presented reflect a specific set of prescribed calculations and do not necessarily reflect all events that may impact the Company.

VALIDUS HOLDINGS LTD - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - July 27, 2017

Attached files

VALIDUS HOLDINGS LTD Reports