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	a20170930-earningsrelease.htm
8-K - 8-K - VALIDUS HOLDINGS LTD	a20170930-coverpageerandsu.htm



		Validus Holdings, Ltd.
		Investor Financial Supplement – Third Quarter 2017
		October 26, 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

Table of Contents



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 (Loss) Income and Comprehensive (Loss) 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 - Nine 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 - Nine 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 - Nine 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 - Nine 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 October 1, 2017		39
Estimated Exposures to Specified Loss Scenarios - As of July 1, 2017		40

Table of Contents

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 (loss) income (attributable) available to Validus common shareholders determined in accordance with U.S. GAAP, the Company believes that showing net operating (loss) income (attributable) 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 (loss) income (attributable) available to Validus common shareholders, a non-GAAP financial measure, is calculated by the addition or subtraction of certain Consolidated Statement of (Loss) Income line items from net (loss) income (attributable) 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 (loss) income (attributable) 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 (loss) income (attributable) 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 (loss) 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 (loss) income is the difference between revenues and expense items. A reconciliation of underwriting (loss) income to net (loss) income (attributable) available to Validus common shareholders, the most comparable U.S. GAAP financial measure, is presented on page 9.

Table of Contents

Validus Holdings, Ltd.

Consolidated Financial Highlights

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



		Three Months Ended															Nine Months Ended
		September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Highlights	Net (loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	101,095		$	94,561		$	7,767		$	89,844		$	(54,790	)	$	351,617
	Net operating (loss) income (attributable) available to Validus common shareholders ^(a)	(254,459		)	88,466			76,834			58,460			83,040			(89,159		)	262,425
	Gross premiums written	523,856			792,902			1,190,857			339,454			372,418			2,507,615			2,309,251
	Net premiums earned	723,208			631,027			575,376			540,399			563,775			1,929,611			1,708,766
	Total assets	14,601,240			13,951,146			12,137,121			11,349,755			11,486,153			14,601,240			11,486,153
	Total shareholders' equity available to Validus common shareholders	3,536,287			3,811,431			3,761,876			3,688,291			3,717,620			3,536,287			3,717,620
	Total shareholders' equity available to Validus	3,936,287			4,211,431			3,911,876			3,838,291			3,867,620			3,936,287			3,867,620

Per share data	(Loss) earnings per basic common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(3.17	)	$	1.28		$	1.19		$	0.10		$	1.12		$	(0.69	)	$	4.31
	Net operating (loss) income (attributable) available to Validus common shareholders ^(a)	(3.22		)	1.12			0.97			0.74			1.04			(1.13		)	3.21

	(Loss) earnings per diluted common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(3.17	)	$	1.25		$	1.17		$	0.10		$	1.11		$	(0.69	)	$	4.24
	Net operating (loss) income (attributable) available to Validus common shareholders ^(a)	(3.22		)	1.09			0.95			0.73			1.02			(1.13		)	3.16

	Book value per common share	$	44.51		$	47.93		$	47.54		$	46.61		$	46.80		$	44.51		$	46.80
	Book value per diluted common share ^(a)	$	43.13		$	46.45		$	45.88		$	44.97		$	45.16		$	43.13		$	45.16
	Change in book value per diluted common share inclusive of dividends ^(a)	(6.3		)%	2.1%			2.9%			0.4%			2.5%			(1.6		)%	9.2		%

	Book value per diluted common share plus accumulated dividends ^(a)	$	55.83		$	58.77		$	57.82		$	56.53		$	56.37		$	55.83		$	56.37

Financial ratios	Losses and loss expense ratio ^(b)	173.5		%	46.9		%	46.9		%	50.9		%	45.8		%	94.3		%	46.2		%

	Policy acquisition cost ratio	16.0		%	18.6		%	19.4		%	22.4		%	20.1		%	17.9		%	19.2		%
	General and administration expense ratio ^(c)	11.0		%	17.0		%	16.9		%	16.3		%	16.5		%	14.7		%	17.1		%
	Expense ratio	27.0		%	35.6		%	36.3		%	38.7		%	36.6		%	32.6		%	36.3		%
	Combined ratio ^(b)	200.5		%	82.5		%	83.2		%	89.6		%	82.4		%	126.9		%	82.5		%

	Annualized return on average equity	(27.3		)%	10.7		%	10.2		%	0.8		%	9.7		%	(2.0		)%	12.7		%
	Annualized net operating return on average equity ^(a)	(27.7		)%	9.3		%	8.3		%	6.3		%	8.9		%	(3.2		)%	9.5		%

Notes:


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


(b)	Excluding the AlphaCat segment, which includes results attributable to AlphaCat’s third party investors and noncontrolling interests, the loss and combined ratios for the three months ended September 30, 2017 were 110.0% and 138.8%, respectively and 73.5% and 107.7% for the nine months ended September 30, 2017, respectively.


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

Table of Contents

Validus Holdings, Ltd.

Summary Consolidated Balance Sheets

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



	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015
Assets
Fixed maturity investments trading, at fair value	$	5,419,966		$	5,418,643		$	5,365,216		$	5,543,030		$	5,576,341		$	5,551,586		$	5,481,304		$	5,510,331		$	5,596,403
Short-term investments trading, at fair value	2,993,246			2,871,353			2,785,226			2,796,170			2,481,406			2,369,654			2,108,199			1,941,635			1,731,443
Other investments, at fair value	471,300			448,618			443,004			405,712			394,695			359,526			344,151			336,856			334,667
Investments in investment affiliates, equity method	92,079			103,377			94,697			100,431			99,731			99,278			84,135			87,673			88,134
Cash and cash equivalents	965,630			800,405			623,937			419,976			443,992			568,798			569,774			723,109			412,474
Restricted cash	89,403			195,039			92,547			70,956			113,048			96,022			108,395			73,270			74,002
Total investments and cash	10,031,624			9,837,435			9,404,627			9,336,275			9,109,213			9,044,864			8,695,958			8,672,874			8,237,123
Investments in operating affiliate, equity method	—			—			—			—			—			—			369			392			48,703
Premiums receivable	1,569,374			1,940,637			1,214,745			725,390			939,127			1,372,000			1,176,684			658,682			1,060,923
Deferred acquisition costs	258,078			302,857			292,180			209,227			249,922			283,213			262,675			181,002			224,982
Prepaid reinsurance premiums	207,618			335,837			199,046			77,996			119,805			145,567			181,255			77,992			126,278
Securities lending collateral	2,115			2,514			10,386			9,779			10,629			10,224			9,721			4,863			6,461
Loss reserves recoverable	1,335,016			600,207			451,856			430,421			444,609			442,987			370,689			350,586			385,212
Paid losses recoverable	77,730			35,675			37,837			35,247			36,069			27,648			25,001			23,071			21,681
Income taxes recoverable	9,704			4,763			6,757			4,870			6,879			8,526			7,146			16,228			15,870
Deferred tax asset	52,228			52,655			45,995			43,529			26,015			23,745			27,771			21,661			22,352
Receivable for investments sold	37,493			20,519			9,302			3,901			21,854			13,736			16,278			39,766			15,055
Intangible assets	173,398			175,518			114,176			115,592			117,010			118,426			119,842			121,258			122,676
Goodwill	227,701			227,701			196,758			196,758			196,758			196,758			196,758			196,758			196,758
Accrued investment income	27,976			26,968			25,962			26,488			24,906			24,925			22,298			23,897			23,755
Other assets	591,185			387,860			127,494			134,282			183,357			105,625			92,076			126,782			93,181
Total assets	$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521		$	10,515,812		$	10,601,010
Liabilities
Reserve for losses and loss expenses	$	4,935,637		$	3,305,191		$	3,052,745		$	2,995,195		$	3,035,987		$	3,122,717		$	2,980,300		$	2,996,567		$	3,172,285
Unearned premiums	1,526,465			1,970,896			1,612,474			1,076,049			1,359,438			1,621,563			1,503,161			966,210			1,281,319
Reinsurance balances payable	527,881			461,261			118,119			54,781			76,429			92,488			96,685			75,380			89,954
Securities lending payable	2,581			2,980			10,852			10,245			11,095			10,690			10,187			5,329			6,927
Deferred tax liability	4,198			4,012			3,818			3,331			3,278			3,552			3,618			3,847			8,921
Payable for investments purchased	84,431			92,077			38,486			29,447			49,435			52,718			76,116			77,475			118,164
Accounts payable and accrued expenses	478,892			385,958			171,134			587,648			144,086			149,593			136,712			627,331			159,440
Notes payable to AlphaCat investors	1,107,618			1,066,159			446,576			278,202			372,730			370,982			323,510			75,493			75,607
Senior notes payable	245,513			245,463			245,412			245,362			245,311			245,261			245,211			245,161			245,111
Debentures payable	538,910			538,400			537,402			537,226			538,168			537,987			538,335			537,668			538,054
Total liabilities	9,452,126			8,072,397			6,237,018			5,817,486			5,835,957			6,207,551			5,913,835			5,610,461			5,695,782
Redeemable noncontrolling interests	1,133,880			1,251,660			1,657,630			1,528,001			1,559,580			1,532,283			1,409,037			1,111,714			1,101,147
Shareholders' equity
Preferred shares	$	400,000		$	400,000		$	150,000		$	150,000		$	150,000		$	150,000		$	—		$	—		$	—
Common shares	28,342			28,339			28,225			28,224			28,223			28,219			28,102			28,100			27,726
Treasury shares	(14,437		)	(14,423		)	(14,376		)	(14,376		)	(14,320		)	(14,084		)	(13,830		)	(13,592		)	(13,376		)
Additional paid-in capital	812,266			807,321			830,346			821,023			827,256			883,701			954,485			1,002,980			1,048,917
Accumulated other comprehensive (loss)	(18,430		)	(19,924		)	(22,453		)	(23,216		)	(21,092		)	(18,182		)	(15,438		)	(12,569		)	(10,869		)
Retained earnings	2,728,546			3,010,118			2,940,134			2,876,636			2,897,553			2,836,602			2,771,107			2,634,056			2,592,567
Total shareholders' equity available to Validus	3,936,287			4,211,431			3,911,876			3,838,291			3,867,620			3,866,256			3,724,426			3,638,975			3,644,965
Noncontrolling interests	78,947			415,658			330,597			165,977			222,996			212,154			157,223			154,662			159,116
Total shareholders' equity	4,015,234			4,627,089			4,242,473			4,004,268			4,090,616			4,078,410			3,881,649			3,793,637			3,804,081
Total liabilities, noncontrolling interests and shareholders' equity	$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521		$	10,515,812		$	10,601,010

Book value per common share	$	44.51		$	47.93		$	47.54		$	46.61		$	46.80		$	46.01		$	45.67		$	43.90		$	44.45
Book value per diluted common share	$	43.13		$	46.45		$	45.88		$	44.97		$	45.16		$	44.41		$	44.00		$	42.33		$	41.89
Book value per diluted common share plus accumulated dividends	$	55.83		$	58.77		$	57.82		$	56.53		$	56.37		$	55.27		$	54.51		$	52.49		$	51.73

Table of Contents

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)



	September 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)	$	3,536,287		79,457,253	$	44.51	$	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	—			2,518,217			—			2,868,610
Book value per diluted common share ^(e)	3,536,901			82,001,606	$	43.13	3,688,905			82,026,998	$	44.97
Goodwill	(227,701		)	—			(196,758		)	—
Intangible assets	(173,398		)	—			(115,592		)	—
Tangible book value per diluted common share ^(e)	$	3,135,802		82,001,606	$	38.24	$	3,376,555		82,026,998	$	41.16

Book value per diluted common share ^(e)					$	43.13					$	44.97
Accumulated dividends					12.70						11.56
Book value per diluted common share plus accumulated dividends ^(e)					$	55.83					$	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 September 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.

Table of Contents

Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Cash flows provided by (used in) operating activities
Net (loss) income	$	(621,185	)	$	146,948		$	139,336		$	37,170		$	129,535		$	(334,901	)	$	450,032
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Share compensation expenses	9,443			11,146			9,491			10,442			10,501			30,080			32,465
Loss on deconsolidation of AlphaCat ILS fund	—			402			—			—			—			402			—
Amortization of discount on senior notes	27			27			27			27			27			81			81
(Income) loss from investment and operating affiliates	(1,011		)	(9,466		)	(5,188		)	(2,166		)	(453		)	(15,665		)	4,272
Net realized and change in net unrealized losses (gains) on investments	4,291			(18,595		)	(12,184		)	58,240			(9,856		)	(26,488		)	(90,868		)
Amortization of intangible assets	2,120			2,579			1,416			1,418			1,416			6,115			4,248
Foreign exchange (gains) losses included in net income	(4,493		)	(4,748		)	(4,938		)	7,628			1,704			(14,179		)	(4,585		)
Amortization of premium on fixed maturities	4,166			3,476			3,536			4,580			4,671			11,178			13,381
Change in operational balance sheet items, net	857,839			(96,883		)	(113,697		)	38,268			47,608			647,259			(154,430		)
Net cash provided by operating activities	$	251,197		$	34,886		$	17,799		$	155,607		$	185,153		$	303,882		$	254,596
Cash flows provided by (used in) investing activities
(Purchases) sales of investments	$	(174,373	)	$	(92,623	)	$	167,286		$	(366,894	)	$	(182,873	)	$	(99,710	)	$	(607,825	)
Decrease (increase) in securities lending collateral	399			7,872			(607		)	850			(405		)	7,664			(5,766		)
Distributions (contributions) in investment & operating affiliates, net	12,309			786			10,922			1,466			—			24,017			(15,938		)
Decrease (increase) in restricted cash	105,636			(102,492		)	(21,591		)	42,092			(17,026		)	(18,447		)	(39,778		)
Purchase of subsidiary, net of cash acquired	—			(183,923		)	—			—			—			(183,923		)	—
Net cash (used in) provided by investing activities	$	(56,029	)	$	(370,380	)	$	156,010		$	(322,486	)	$	(200,304	)	$	(270,399	)	$	(669,307	)
Cash flows provided by (used in) financing activities
Net proceeds on issuance of notes payable to AlphaCat investors	$	40,903		$	196,597		$	73,048		$	(202	)	$	1,779		$	310,548		$	296,527
Net proceeds on issuance of preferred shares	—			241,686			—			—			—			241,686			144,852
Issuance of common shares, net	(162		)	(11,794		)	(167		)	(70		)	(246		)	(12,123		)	(7,631		)
Purchases of common shares under share repurchase program	(4,347		)	(13,996		)	—			(16,660		)	(66,932		)	(18,343		)	(196,015		)
Dividends paid on common and preferred shares	(35,956		)	(35,397		)	(32,295		)	(29,927		)	(30,192		)	(103,648		)	(90,153		)
(Decrease) increase in securities lending payable	(399		)	(7,872		)	607			(850		)	405			(7,664		)	5,766
Third party (redemption) investment in redeemable noncontrolling interest, net	(51,201		)	95,463			35,403			11,499			(5,784		)	79,665			364,666
Third party (redemption) investment in noncontrolling interest, net	(101,125		)	69,965			92,210			—			—			61,050			44,571
Third party subscriptions received (deployed) in AlphaCat Funds and Sidecars	114,500			(27,500		)	(144,452		)	187,452			(1,400		)	(57,452		)	(412,736		)
Net cash (used in) provided by financing activities	$	(37,787	)	$	507,152		$	24,354		$	151,242		$	(102,370	)	$	493,719		$	149,847
Effect of foreign currency rate changes on cash and cash equivalents	7,844			4,810			5,798			(8,379		)	(7,285		)	18,452			(14,253		)
Net increase (decrease) in cash and cash equivalents	165,225			176,468			203,961			(24,016		)	(124,806		)	545,654			(279,117		)
Cash and cash equivalents - beginning of period	800,405			623,937			419,976			443,992			568,798			419,976			723,109
Cash and cash equivalents - end of period	$	965,630		$	800,405		$	623,937		$	419,976		$	443,992		$	965,630		$	443,992

Taxes paid during the period	$	2,242		$	552		$	16		$	120		$	2,077		$	2,810		$	5,914
Interest paid during the period	$	19,202		$	8,113		$	19,073		$	8,566		$	18,520		$	46,388		$	46,072
Losses paid during the period	$	372,706		$	236,023		$	245,787		$	277,422		$	345,246		$	854,516		$	836,980

Table of Contents

Validus Holdings, Ltd.

Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Revenues
Gross premiums written	$	523,856		$	792,902		$	1,190,857		$	339,454		$	372,418		$	2,507,615		$	2,309,251
Reinsurance premiums ceded	(116,860		)	(56,222		)	(200,106		)	(40,635		)	(45,006		)	(373,188		)	(249,070		)
Net premiums written	406,996			736,680			990,751			298,819			327,412			2,134,427			2,060,181
Change in unearned premiums	316,212			(105,653		)	(415,375		)	241,580			236,363			(204,816		)	(351,415		)
Net premiums earned	723,208			631,027			575,376			540,399			563,775			1,929,611			1,708,766
Net investment income	44,458			44,241			40,214			38,153			43,514			128,913			112,232
Net realized gains (losses) on investments	906			2,274			(1,164		)	9,220			4,397			2,016			6,537
Change in net unrealized (losses) gains on investments	(5,197		)	16,321			13,348			(67,460		)	5,459			24,472			84,331
Income (loss) from investment affiliates	1,011			9,466			5,188			2,166			453			15,665			(4,249		)
Other insurance related income and other income (loss)	3,571			1,339			1,330			568			(610		)	6,240			1,627
Foreign exchange (losses) gains	(1,404		)	(7,329		)	1,569			(901		)	(766		)	(7,164		)	11,765
Total revenues	766,553			697,339			635,861			522,145			616,222			2,099,753			1,921,009
Expenses
Losses and loss expenses	1,254,602			296,149			269,585			275,126			258,394			1,820,336			789,971
Policy acquisition costs	115,590			117,268			111,628			120,889			113,434			344,486			328,593
General and administrative expenses	70,342			96,349			87,924			77,955			82,443			254,615			258,339
Share compensation expenses	9,443			11,146			9,491			10,442			10,501			30,080			32,465
Finance expenses	14,523			14,209			13,943			14,630			14,521			42,675			43,890
Transaction expenses	—			4,427			—			—			—			4,427			—
Total expenses	1,464,500			539,548			492,571			499,042			479,293			2,496,619			1,453,258
(Loss) income before taxes, (loss) from operating affiliate and loss (income) attributable to AlphaCat investors	(697,947		)	157,791			143,290			23,103			136,929			(396,866		)	467,751
Tax benefit (expense)	2,632			987			3,549			21,147			(1,830		)	7,168			(1,418		)
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
Loss (income) attributable to AlphaCat investors	74,130			(11,830		)	(7,503		)	(7,080		)	(5,564		)	54,797			(16,278		)
Net (loss) income	(621,185		)	146,948			139,336			37,170			129,535			(334,901		)	450,032
Net loss (income) attributable to noncontrolling interests	376,366			(43,650		)	(42,572		)	(27,200		)	(37,439		)	290,144			(96,163		)
Net (loss) income (attributable) available to Validus	(244,819		)	103,298			96,764			9,970			92,096			(44,757		)	353,869
Dividends on preferred shares	(5,627		)	(2,203		)	(2,203		)	(2,203		)	(2,252		)	(10,033		)	(2,252		)
Net (loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	101,095		$	94,561		$	7,767		$	89,844		$	(54,790	)	$	351,617

Comprehensive (loss) income
Net (loss) income	$	(621,185	)	$	146,948		$	139,336		$	37,170		$	129,535		$	(334,901	)	$	450,032
Other comprehensive income (loss)
Change in foreign currency translation adjustments	1,481			1,489			597			(3,755		)	(1,370		)	3,567			(6,685		)
Change in minimum pension liability, net of tax	—			1,184			68			221			(1,101		)	1,252			(705		)
Change in fair value of cash flow hedge	13			(144		)	98			1,410			(439		)	(33		)	(1,133		)
Other comprehensive income (loss)	$	1,494		$	2,529		$	763		$	(2,124	)	$	(2,910	)	$	4,786		$	(8,523	)
Comprehensive loss (income) attributable to noncontrolling interests	376,366			(43,650		)	(42,572		)	(27,200		)	(37,439		)	290,144			(96,163		)
Comprehensive (loss) income (attributable) available to Validus	$	(243,325	)	$	105,827		$	97,527		$	7,846		$	89,186		$	(39,971	)	$	345,346

(Loss) earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic	78,994,335			79,270,561			79,133,671			79,261,409			80,134,394			79,132,856			81,635,496
Diluted	78,994,335			80,872,451			80,739,142			80,621,967			81,244,556			79,132,856			82,938,624

Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(3.17	)	$	1.28		$	1.19		$	0.10		$	1.12		$	(0.69	)	$	4.31
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(3.17	)	$	1.25		$	1.17		$	0.10		$	1.11		$	(0.69	)	$	4.24

Cash dividends declared per common share	$	0.38		$	0.38		$	0.38		$	0.35		$	0.35		$	1.14		$	1.05

Table of Contents

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															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Underwriting revenues
Gross premiums written	$	523,856		$	792,902		$	1,190,857		$	339,454		$	372,418		$	2,507,615		$	2,309,251
Reinsurance premiums ceded	(116,860		)	(56,222		)	(200,106		)	(40,635		)	(45,006		)	(373,188		)	(249,070		)
Net premiums written	406,996			736,680			990,751			298,819			327,412			2,134,427			2,060,181
Change in unearned premiums	316,212			(105,653		)	(415,375		)	241,580			236,363			(204,816		)	(351,415		)
Net premiums earned	723,208			631,027			575,376			540,399			563,775			1,929,611			1,708,766
Other insurance related income	3,536			1,165			1,236			561			919			5,937			2,400
Total underwriting revenues	726,744			632,192			576,612			540,960			564,694			1,935,548			1,711,166
Underwriting deductions
Losses and loss expenses	1,254,602			296,149			269,585			275,126			258,394			1,820,336			789,971
Policy acquisition costs	115,590			117,268			111,628			120,889			113,434			344,486			328,593
General and administrative expenses	70,342			96,349			87,924			77,955			82,443			254,615			258,339
Share compensation expenses	9,443			11,146			9,491			10,442			10,501			30,080			32,465
Total underwriting deductions	1,449,977			520,912			478,628			484,412			464,772			2,449,517			1,409,368
Underwriting (loss) income ^(a)	$	(723,233	)	$	111,280		$	97,984		$	56,548		$	99,922		$	(513,969	)	$	301,798
Net investment income	44,458			44,241			40,214			38,153			43,514			128,913			112,232
Finance expenses	(14,523		)	(14,209		)	(13,943		)	(14,630		)	(14,521		)	(42,675		)	(43,890		)
Dividends on preferred shares	(5,627		)	(2,203		)	(2,203		)	(2,203		)	(2,252		)	(10,033		)	(2,252		)
Tax benefit (expense)	2,164			2,735			4,129			15,284			(1,387		)	9,028			6,132
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
Loss (income) attributable to AlphaCat investors	74,130			(11,830		)	(7,503		)	(7,080		)	(5,564		)	54,797			(16,278		)
Net operating loss (income) attributable to noncontrolling interests	368,172			(41,548		)	(41,844		)	(27,612		)	(36,672		)	284,780			(95,294		)
Net operating (loss) income (attributable) available to Validus common shareholders ^(a)	$	(254,459	)	$	88,466		$	76,834		$	58,460		$	83,040		$	(89,159	)	$	262,425
Net realized gains (losses) on investments	906			2,274			(1,164		)	9,220			4,397			2,016			6,537
Change in net unrealized (losses) gains on investments	(5,197		)	16,321			13,348			(67,460		)	5,459			24,472			84,331
Income (loss) from investment affiliates	1,011			9,466			5,188			2,166			453			15,665			(4,249		)
Foreign exchange (losses) gains	(1,404		)	(7,329		)	1,569			(901		)	(766		)	(7,164		)	11,765
Other income (loss)	35			174			94			7			(1,529		)	303			(773		)
Transaction expenses	—			(4,427		)	—			—			—			(4,427		)	—
Net loss (income) loss attributable to noncontrolling interests	8,194			(2,102		)	(728		)	412			(767		)	5,364			(869		)
Tax benefit (expense)	468			(1,748		)	(580		)	5,863			(443		)	(1,860		)	(7,550		)
Net (loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	101,095		$	94,561		$	7,767		$	89,844		$	(54,790	)	$	351,617

Selected ratios:
Ratio of net to gross premiums written	77.7		%	92.9		%	83.2		%	88.0		%	87.9		%	85.1		%	89.2		%

Losses and loss expense ratio ^(b)	173.5		%	46.9		%	46.9		%	50.9		%	45.8		%	94.3		%	46.2		%

Policy acquisition cost ratio	16.0		%	18.6		%	19.4		%	22.4		%	20.1		%	17.9		%	19.2		%
General and administrative expense ratio^(c)	11.0		%	17.0		%	16.9		%	16.3		%	16.5		%	14.7		%	17.1		%
Expense ratio	27.0		%	35.6		%	36.3		%	38.7		%	36.6		%	32.6		%	36.3		%
Combined ratio^(b)	200.5		%	82.5		%	83.2		%	89.6		%	82.4		%	126.9		%	82.5		%

Notes:


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


(b)	Excluding the AlphaCat segment, which includes results attributable to AlphaCat’s third party investors and noncontrolling interests, the loss and combined ratios for the three months ended September 30, 2017 were 110.0% and 138.8%, respectively and 73.5% and 107.7% for the nine months ended September 30, 2017, respectively.


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

Table of Contents

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)
	September 30, 2017									September 30, 2016
	Net Loss			Net Operating Loss			Comprehensive Loss			Net Income		Net Operating Income		Comprehensive Income
Basic (loss) earnings per share ^(b)
(Loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	(254,459	)	$	(243,325	)	$	89,844	$	83,040	$	89,186
Weighted average number of common shares outstanding	78,994,335			78,994,335			78,994,335			80,134,394		80,134,394		80,134,394
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(3.17	)	$	(3.22	)	$	(3.08	)	$	1.12	$	1.04	$	1.11

(Loss) earnings per diluted share^(c)
(Loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	(254,459	)	$	(243,325	)	$	89,844	$	83,040	$	89,186

Weighted average number of common shares outstanding	78,994,335			78,994,335			78,994,335			80,134,394		80,134,394		80,134,394
Share equivalents:
Stock options	—			—			—			26,705		26,705		26,705
Unvested restricted shares	—			—			—			1,083,457		1,083,457		1,083,457
Weighted average number of diluted common shares outstanding	78,994,335			78,994,335			78,994,335			81,244,556		81,244,556		81,244,556
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(3.17	)	$	(3.22	)	$	(3.08	)	$	1.11	$	1.02	$	1.10

	Nine Months Ended ^(a)
	September 30, 2017									September 30, 2016
	Net Loss			Net Operating Loss			Comprehensive Loss			Net Income		Net Operating income		Comprehensive income
Basic (loss) earnings per share ^(b)
(Loss) income (attributable) available to Validus common shareholders	$	(54,790	)	$	(89,159	)	$	(39,971	)	$	351,617	$	262,425	$	345,346
Weighted average number of common shares outstanding	79,132,856			79,132,856			79,132,856			81,635,496		81,635,496		81,635,496
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(0.69	)	$	(1.13	)	$	(0.51	)	$	4.31	$	3.21	$	4.23

(Loss) earnings per diluted share^(c)
(Loss) income (attributable) available to Validus common shareholders	$	(54,790	)	$	(89,159	)	$	(39,971	)	$	351,617	$	262,425	$	345,346

Weighted average number of common shares outstanding	79,132,856			79,132,856			79,132,856			81,635,496		81,635,496		81,635,496
Share equivalents:
Stock options	—			—			—			32,126		32,126		32,126
Unvested restricted shares	—			—			—			1,271,002		1,271,002		1,271,002
Weighted average number of diluted common shares outstanding	79,132,856			79,132,856			79,132,856			82,938,624		82,938,624		82,938,624
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.69	)	$	(1.13	)	$	(0.51	)	$	4.24	$	3.16	$	4.16

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


(c)	(Loss) earnings per diluted common share assumes the exercise of all dilutive stock options and restricted stock grants. Due to the net loss incurred during the three and nine months ended September 30, 2017, share equivalents were not included in the computation of diluted loss per share due to their anti-dilutive effect.

Table of Contents

Validus Holdings, Ltd.

Underwriting Income Statement - Validus Re

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Underwriting revenues
Gross premiums written	$	153,890		$	296,997		$	620,522		$	38,835		$	94,741		$	1,071,409		$	1,072,219
Reinsurance premiums ceded	(40,988		)	(11,387		)	(108,813		)	94			(15,967		)	(161,188		)	(111,658		)
Net premiums written	112,902			285,610			511,709			38,929			78,774			910,221			960,561
Change in unearned premiums	154,145			(45,003		)	(293,297		)	185,584			149,705			(184,155		)	(241,129		)
Net premiums earned	267,047			240,607			218,412			224,513			228,479			726,066			719,432
Other insurance related income (loss)	68			58			78			52			58			204			(107		)
Total underwriting revenues	267,115			240,665			218,490			224,565			228,537			726,270			719,325
Underwriting deductions
Losses and loss expenses	347,484			104,685			86,154			98,056			98,425			538,323			313,432
Policy acquisition costs	45,422			47,158			41,256			53,380			42,837			133,836			127,660
General and administrative expenses	12,444			19,274			16,832			20,191			17,528			48,550			52,579
Share compensation expenses	2,606			2,663			2,477			2,663			2,695			7,746			8,371
Total underwriting deductions	407,956			173,780			146,719			174,290			161,485			728,455			502,042
Underwriting (loss) income	$	(140,841	)	$	66,885		$	71,771		$	50,275		$	67,052		$	(2,185	)	$	217,283

Selected ratios:
Ratio of net to gross premiums written	73.4		%	96.2		%	82.5		%	100.2		%	83.1		%	85.0		%	89.6		%

Losses and loss expense ratio	130.1		%	43.5		%	39.4		%	43.7		%	43.1		%	74.1		%	43.6		%

Policy acquisition cost ratio	17.0		%	19.6		%	18.9		%	23.8		%	18.7		%	18.4		%	17.7		%
General and administrative expense ratio^(a)	5.7		%	9.1		%	8.9		%	10.1		%	8.9		%	7.8		%	8.5		%
Expense ratio	22.7		%	28.7		%	27.8		%	33.9		%	27.6		%	26.2		%	26.2		%
Combined ratio	152.8		%	72.2		%	67.2		%	77.6		%	70.7		%	100.3		%	69.8		%

Notes:


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

Table of Contents

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 September 30, 2017												Three Months Ended September 30, 2016
	Property			Marine			Specialty ^(a)			Total			Property			Marine			Specialty ^(a)			Total
Underwriting revenues
Gross premiums written	$	117,657		$	1,226		$	35,007		$	153,890		$	53,761		$	(4,533	)	$	45,513		$	94,741
Reinsurance premiums ceded	(20,455		)	(3,824		)	(16,709		)	(40,988		)	(5,357		)	(6,021		)	(4,589		)	(15,967		)
Net premiums written	97,202			(2,598		)	18,298			112,902			48,404			(10,554		)	40,924			78,774
Change in unearned premiums	37,307			27,555			89,283			154,145			45,290			31,711			72,704			149,705
Net premiums earned	134,509			24,957			107,581			267,047			93,694			21,157			113,628			228,479
Other insurance related income										68												58
Total underwriting revenues										267,115												228,537
Underwriting deductions
Losses and loss expenses	248,984			41,953			56,547			347,484			10,024			13,229			75,172			98,425
Policy acquisition costs	18,783			3,551			23,088			45,422			18,138			3,744			20,955			42,837
Total underwriting deductions before G&A	267,767			45,504			79,635			392,906			28,162			16,973			96,127			141,262
Underwriting (loss) income before G&A	$	(133,258	)	$	(20,547	)	$	27,946		$	(125,791	)	$	65,532		$	4,184		$	17,501		$	87,275
General and administrative expenses										12,444												17,528
Share compensation expenses										2,606												2,695
Total underwriting deductions										407,956												161,485
Underwriting (loss) income										$	(140,841	)										$	67,052

Selected ratios:
Ratio of net to gross premiums written	82.6		%	(211.9		%)	52.3		%	73.4		%	90.0		%	232.8		%	89.9		%	83.1		%

Losses and loss expense ratio	185.1		%	168.1		%	52.6		%	130.1		%	10.7		%	62.5		%	66.2		%	43.1		%

Policy acquisition cost ratio	14.0		%	14.2		%	21.5		%	17.0		%	19.4		%	17.7		%	18.4		%	18.7		%
General and administrative expense ratio^(b)										5.7		%										8.9		%
Expense ratio										22.7		%										27.6		%
Combined ratio										152.8		%										70.7		%

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.

Table of Contents

Validus Holdings, Ltd.

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

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



	Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
	Property			Marine			Specialty ^(a)			Total			Property			Marine			Specialty^(a)			Total
Underwriting revenues
Gross premiums written	$	496,120		$	116,331		$	458,958		$	1,071,409		$	462,432		$	109,876		$	499,911		$	1,072,219
Reinsurance premiums ceded	(108,496		)	(18,295		)	(34,397		)	(161,188		)	(86,745		)	(12,568		)	(12,345		)	(111,658		)
Net premiums written	387,624			98,036			424,561			910,221			375,687			97,308			487,566			960,561
Change in unearned premiums	(59,990		)	(19,410		)	(104,755		)	(184,155		)	(74,613		)	(10,183		)	(156,333		)	(241,129		)
Net premiums earned	327,634			78,626			319,806			726,066			301,074			87,125			331,233			719,432
Other insurance related income (loss)										204												(107		)
Total underwriting revenues										726,270												719,325
Underwriting deductions
Losses and loss expenses	306,021			41,192			191,110			538,323			58,638			40,561			214,233			313,432
Policy acquisition costs	53,607			13,785			66,444			133,836			55,351			13,937			58,372			127,660
Total underwriting deductions before G&A	359,628			54,977			257,554			672,159			113,989			54,498			272,605			441,092
Underwriting (loss) income before G&A	$	(31,994	)	$	23,649		$	62,252		$	54,111		$	187,085		$	32,627		$	58,628		$	278,233
General and administrative expenses										48,550												52,579
Share compensation expenses										7,746												8,371
Total underwriting deductions										728,455												502,042
Underwriting (loss) income										$	(2,185	)										$	217,283

Selected ratios:
Ratio of net to gross premiums written	78.1		%	84.3		%	92.5		%	85.0		%	81.2		%	88.6		%	97.5		%	89.6		%

Losses and loss expense ratio	93.4		%	52.4		%	59.8		%	74.1		%	19.5		%	46.6		%	64.7		%	43.6		%

Policy acquisition cost ratio	16.4		%	17.5		%	20.8		%	18.4		%	18.4		%	16.0		%	17.6		%	17.7		%
General and administrative expense ratio ^(b)										7.8		%										8.5		%
Expense ratio										26.2		%										26.2		%
Combined ratio										100.3		%										69.8		%

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.

Table of Contents

Validus Holdings, Ltd.

Underwriting Income Statement - Talbot

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Underwriting revenues
Gross premiums written	$	192,883		$	262,477		$	247,175		$	218,644		$	189,674		$	702,535		$	752,058
Reinsurance premiums ceded	(36,462		)	(24,977		)	(92,824		)	(38,233		)	(22,877		)	(154,263		)	(137,496		)
Net premiums written	156,421			237,500			154,351			180,411			166,797			548,272			614,562
Change in unearned premiums	23,191			(45,626		)	40,714			(5,891		)	32,258			18,279			(7,166		)
Net premiums earned	179,612			191,874			195,065			174,520			199,055			566,551			607,396
Other insurance related income	692			65			755			66			99			1,512			389
Total underwriting revenues	180,304			191,939			195,820			174,586			199,154			568,063			607,785
Underwriting deductions
Losses and loss expenses	178,440			93,389			106,412			105,675			109,860			378,241			319,271
Policy acquisition costs	41,493			44,305			43,276			42,683			46,488			129,074			134,444
General and administrative expenses	23,069			35,582			38,443			24,550			32,333			97,094			109,929
Share compensation expenses	2,310			3,155			2,827			3,123			3,163			8,292			9,955
Total underwriting deductions	245,312			176,431			190,958			176,031			191,844			612,701			573,599
Underwriting (loss) income	$	(65,008	)	$	15,508		$	4,862		$	(1,445	)	$	7,310		$	(44,638	)	$	34,186

Selected ratios:
Ratio of net to gross premiums written	81.1		%	90.5		%	62.4		%	82.5		%	87.9		%	78.0		%	81.7		%

Losses and loss expense ratio	99.3		%	48.7		%	54.6		%	60.6		%	55.2		%	66.8		%	52.6		%

Policy acquisition cost ratio	23.1		%	23.1		%	22.2		%	24.5		%	23.4		%	22.8		%	22.1		%
General and administrative expense ratio ^(a)	14.2		%	20.2		%	21.1		%	15.8		%	17.8		%	18.5		%	19.7		%
Expense ratio	37.3		%	43.3		%	43.3		%	40.3		%	41.2		%	41.3		%	41.8		%
Combined ratio	136.6		%	92.0		%	97.9		%	100.9		%	96.4		%	108.1		%	94.4		%

Notes:


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

Table of Contents

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 September 30, 2017												Three Months Ended September 30, 2016
	Property ^(a)			Marine			Specialty^(b)			Total			Property ^(a)			Marine			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	68,848		$	39,167		$	84,868		$	192,883		$	64,301		$	48,093		$	77,280		$	189,674
Reinsurance premiums ceded	(25,972		)	(2,626		)	(7,864		)	(36,462		)	(12,497		)	(352		)	(10,028		)	(22,877		)
Net premiums written	42,876			36,541			77,004			156,421			51,804			47,741			67,252			166,797
Change in unearned premiums	5,005			15,017			3,169			23,191			5,465			16,495			10,298			32,258
Net premiums earned	47,881			51,558			80,173			179,612			57,269			64,236			77,550			199,055
Other insurance related income										692												99
Total underwriting revenues										180,304												199,154
Underwriting deductions
Losses and loss expenses	99,156			52,474			26,810			178,440			40,330			38,076			31,454			109,860
Policy acquisition costs	9,520			12,346			19,627			41,493			10,476			17,680			18,332			46,488
Total underwriting deductions before G&A	108,676			64,820			46,437			219,933			50,806			55,756			49,786			156,348
Underwriting (loss) income before G&A	$	(60,795	)	$	(13,262	)	$	33,736		$	(39,629	)	$	6,463		$	8,480		$	27,764		$	42,806
General and administrative expenses										23,069												32,333
Share compensation expenses										2,310												3,163
Total underwriting deductions										245,312												191,844
Underwriting (loss) income										$	(65,008	)										$	7,310

Selected ratios:
Ratio of net to gross premiums written	62.3		%	93.3		%	90.7		%	81.1		%	80.6		%	99.3		%	87.0		%	87.9		%

Losses and loss expense ratio	207.1		%	101.8		%	33.4		%	99.3		%	70.4		%	59.3		%	40.6		%	55.2		%

Policy acquisition cost ratio	19.9		%	23.9		%	24.5		%	23.1		%	18.3		%	27.5		%	23.6		%	23.4		%
General and administrative expense ratio ^(c)										14.2		%										17.8		%
Expense ratio										37.3		%										41.2		%
Combined ratio										136.6		%										96.4		%

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.

Table of Contents

Validus Holdings, Ltd.

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

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



	Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
	Property ^(a)			Marine			Specialty ^(b)			Total			Property ^(a)			Marine			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	230,633		$	190,793		$	281,109		$	702,535		$	245,714		$	222,305		$	284,039		$	752,058
Reinsurance premiums ceded	(80,129		)	(22,752		)	(51,382		)	(154,263		)	(66,286		)	(26,453		)	(44,757		)	(137,496		)
Net premiums written	150,504			168,041			229,727			548,272			179,428			195,852			239,282			614,562
Change in unearned premiums	7,967			951			9,361			18,279			(6,304		)	12,177			(13,039		)	(7,166		)
Net premiums earned	158,471			168,992			239,088			566,551			173,124			208,029			226,243			607,396
Other insurance related income										1,512												389
Total underwriting revenues										568,063												607,785
Underwriting deductions
Losses and loss expenses	176,290			82,791			119,160			378,241			96,641			114,105			108,525			319,271
Policy acquisition costs	28,694			41,610			58,770			129,074			27,950			53,777			52,717			134,444
Total underwriting deductions before G&A	204,984			124,401			177,930			507,315			124,591			167,882			161,242			453,715
Underwriting (loss) income before G&A	$	(46,513	)	$	44,591		$	61,158		$	60,748		$	48,533		$	40,147		$	65,001		$	154,070
General and administrative expenses										97,094												109,929
Share compensation expenses										8,292												9,955
Total underwriting deductions										612,701												573,599
Underwriting (loss) income										$	(44,638	)										$	34,186

Selected ratios:
Ratio of net to gross premiums written	65.3		%	88.1		%	81.7		%	78.0		%	73.0		%	88.1		%	84.2		%	81.7		%

Losses and loss expense ratio	111.2		%	49.0		%	49.8		%	66.8		%	55.8		%	54.9		%	48.0		%	52.6		%

Policy acquisition cost ratio	18.1		%	24.6		%	24.6		%	22.8		%	16.1		%	25.9		%	23.3		%	22.1		%
General and administrative expense ratio ^(c)										18.5		%										19.7		%
Expense ratio										41.3		%										41.8		%
Combined ratio										108.1		%										94.4		%

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.

Table of Contents

Validus Holdings, Ltd.

Underwriting Income Statement - Western World

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Underwriting revenues
Gross premiums written	$	156,517		$	131,068		$	172,043		$	87,030		$	85,260		$	459,628		$	236,190
Reinsurance premiums ceded	(43,207		)	(23,180		)	(5,618		)	(7,287		)	(6,202		)	(72,005		)	(15,347		)
Net premiums written	113,310			107,888			166,425			79,743			79,058			387,623			220,843
Change in unearned premiums	61,603			22,806			(69,153		)	(4,464		)	(8,260		)	15,256			(22,890		)
Net premiums earned	174,913			130,694			97,272			75,279			70,798			402,879			197,953
Other insurance related income	662			663			241			216			219			1,566			696
Total underwriting revenues	175,575			131,357			97,513			75,495			71,017			404,445			198,649
Underwriting deductions
Losses and loss expenses	157,709			97,008			74,925			54,189			45,748			329,642			129,623
Policy acquisition costs	20,721			19,230			20,236			17,738			17,094			60,187			46,704
General and administrative expenses	21,553			18,316			10,754			9,576			10,171			50,623			33,704
Share compensation expenses	354			609			692			718			702			1,655			1,825
Total underwriting deductions	200,337			135,163			106,607			82,221			73,715			442,107			211,856
Underwriting (loss)	$	(24,762	)	$	(3,806	)	$	(9,094	)	$	(6,726	)	$	(2,698	)	$	(37,662	)	$	(13,207	)

Selected ratios:
Ratio of net to gross premiums written	72.4		%	82.3		%	96.7		%	91.6		%	92.7		%	84.3		%	93.5		%

Losses and loss expense ratio	90.2		%	74.2		%	77.0		%	72.0		%	64.6		%	81.8		%	65.5		%

Policy acquisition cost ratio	11.8		%	14.7		%	20.8		%	23.5		%	24.1		%	14.9		%	23.6		%
General and administrative expense ratio ^(a)	12.5		%	14.5		%	11.8		%	13.7		%	15.4		%	13.0		%	17.9		%
Expense ratio	24.3		%	29.2		%	32.6		%	37.2		%	39.5		%	27.9		%	41.5		%
Combined ratio	114.5		%	103.4		%	109.6		%	109.2		%	104.1		%	109.7		%	107.0		%

Notes:


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

Table of Contents

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 September 30, 2017												Three Months Ended September 30, 2016
	Property			Liability ^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	36,359		$	68,358		$	51,800		$	156,517		$	23,757		$	61,503		$	—		$	85,260
Reinsurance premiums ceded	(22,466		)	(1,793		)	(18,948		)	(43,207		)	(2,688		)	(3,514		)	—			(6,202		)
Net premiums written	13,893			66,565			32,852			113,310			21,069			57,989			—			79,058
Change in unearned premiums	800			(5,102		)	65,905			61,603			(4,371		)	(3,889		)	—			(8,260		)
Net premiums earned	14,693			61,463			98,757			174,913			16,698			54,100			—			70,798
Other insurance related income										662												219
Total underwriting revenues										175,575												71,017
Underwriting deductions
Losses and loss expenses	29,086			43,784			84,839			157,709			9,604			36,144			—			45,748
Policy acquisition costs	6,672			14,062			(13		)	20,721			4,382			12,712			—			17,094
Total underwriting deductions before G&A	35,758			57,846			84,826			178,430			13,986			48,856			—			62,842
Underwriting (loss) income before G&A	$	(21,065	)	$	3,617		$	13,931		$	(2,855	)	$	2,712		$	5,244		$	—		$	8,175
General and administrative expenses										21,553												10,171
Share compensation expenses										354												702
Total underwriting deductions										200,337												73,715
Underwriting (loss)										$	(24,762	)										$	(2,698	)

Selected ratios:
Ratio of net to gross premiums written	38.2		%	97.4		%	63.4		%	72.4		%	88.7		%	94.3		%	—		%	92.7		%

Losses and loss expense ratio	198.0		%	71.2		%	85.9		%	90.2		%	57.5		%	66.8		%	—		%	64.6		%

Policy acquisition cost ratio	45.4		%	22.9		%	—		%	11.8		%	26.2		%	23.5		%	—		%	24.1		%
General and administrative expense ratio ^(c)										12.5		%										15.4		%
Expense ratio										24.3		%										39.5		%
Combined ratio										114.5		%										104.1		%

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.

Table of Contents

Validus Holdings, Ltd.

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

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



	Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
	Property			Liability^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Underwriting revenues
Gross premiums written	$	103,462		$	196,128		$	160,038		$	459,628		$	65,401		$	170,789		$	—		$	236,190
Reinsurance premiums ceded	(32,821		)	(3,285		)	(35,899		)	(72,005		)	(6,395		)	(8,952		)	—			(15,347		)
Net premiums written	70,641			192,843			124,139			387,623			59,006			161,837			—			220,843
Change in unearned premiums	(12,756		)	(17,436		)	45,448			15,256			(15,936		)	(6,954		)	—			(22,890		)
Net premiums earned	57,885			175,407			169,587			402,879			43,070			154,883			—			197,953
Other insurance related income										1,566												696
Total underwriting revenues										404,445												198,649
Underwriting deductions
Losses and loss expenses	55,665			125,536			148,441			329,642			28,835			100,788			—			129,623
Policy acquisition costs	18,714			39,522			1,951			60,187			10,665			36,039			—			46,704
Total underwriting deductions before G&A	74,379			165,058			150,392			389,829			39,500			136,827			—			176,327
Underwriting (loss) income before G&A	$	(16,494	)	$	10,349		$	19,195		$	14,616		$	3,570		$	18,056		$	—		$	22,322
General and administrative expenses										50,623												33,704
Share compensation expenses										1,655												1,825
Total underwriting deductions										442,107												211,856
Underwriting (loss)										$	(37,662	)										$	(13,207	)

Selected ratios:
Ratio of net to gross premiums written	68.3		%	98.3		%	77.6		%	84.3		%	90.2		%	94.8		%	—		%	93.5		%

Losses and loss expense ratio	96.2		%	71.6		%	87.5		%	81.8		%	66.9		%	65.1		%	—		%	65.5		%

Policy acquisition cost ratio	32.3		%	22.5		%	1.2		%	14.9		%	24.8		%	23.3		%	—		%	23.6		%
General and administrative expense ratio ^(c)										13.0		%										17.9		%
Expense ratio										27.9		%										41.5		%
Combined ratio										109.7		%										107.0		%

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.

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Validus Holdings, Ltd.

AlphaCat Managers Segment Information

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Fee revenues
Third party	$	5,095		$	5,549		$	4,644		$	3,928		$	7,025		$	15,288		$	14,843
Related party	457			644			631			737			1,373			1,732			2,592
Total fee revenues	5,552			6,193			5,275			4,665			8,398			17,020			17,435
Expenses
General and administrative expenses	2,929			3,549			3,844			2,676			3,324			10,322			7,557
Share compensation expenses	183			83			82			82			(107		)	348			167
Finance expenses	32			44			31			33			31			107			914
Tax (benefit) expense	(65		)	135			(1		)	90			—			69			—
Foreign exchange losses (gains)	7			1			(1		)	2			5			7			17
Total expenses	3,086			3,812			3,955			2,883			3,253			10,853			8,655
Income before investment (loss) income from AlphaCat Funds and Sidecars	2,466			2,381			1,320			1,782			5,145			6,167			8,780
Investment (loss) income from AlphaCat Funds and Sidecars^(a)
AlphaCat Sidecars	201			(21		)	(112		)	14			(72		)	68			593
AlphaCat ILS Funds - Lower Risk ^(b)	(7,553		)	1,301			2,189			1,998			2,321			(4,063		)	6,903
AlphaCat ILS Funds - Higher Risk ^(b)	(21,816		)	2,600			2,367			1,864			2,479			(16,849		)	5,607
BetaCat ILS Funds	(922		)	263			368			644			1,303			(291		)	2,979
PaCRe	—			—			—			—			—			—			(23		)
Validus' share of investment (loss) income from AlphaCat Funds and Sidecars	(30,090		)	4,143			4,812			4,520			6,031			(21,135		)	16,059
Validus' share of AlphaCat (loss) income	$	(27,624	)	$	6,524		$	6,132		$	6,302		$	11,176		$	(14,968	)	$	24,839

Gross premiums written
AlphaCat Sidecars	$	—		$	—		$	66		$	(163	)	$	(112	)	$	66		$	(178	)
AlphaCat ILS Funds - Lower Risk ^(b)	10,979			53,632			52,908			(19		)	2,049			117,519			112,241
AlphaCat ILS Funds - Higher Risk ^(b)	16,275			43,672			93,536			(105		)	1,797			153,483			140,127
AlphaCat Direct ^(c)	(41		)	8,378			18,416			23			679			26,753			18,476
Total	$	27,213		$	105,682		$	164,926		$	(264	)	$	4,413		$	297,821		$	270,666

Notes:


(a)	The investment (loss) income 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.

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Validus Holdings, Ltd.

AlphaCat Assets Under Management

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



	As at
	October 1, 2017		July 1, 2017		April 1, 2017		January 1, 2017		October 1, 2016
Assets Under Management - Related Party ^(a)
AlphaCat Sidecars	$	5,608	$	5,686	$	5,656	$	7,729	$	7,922
AlphaCat ILS Funds - Lower Risk	75,492		79,808		125,098		124,297		181,744
AlphaCat ILS Funds - Higher Risk	62,566		84,663		86,679		83,881		81,636
AlphaCat Direct	—		—		—		—		—
BetaCat ILS Funds	24,084		25,000		27,062		26,808		51,160
Total	$	167,750	$	195,157	$	244,495	$	242,715	$	322,462

Assets Under Management - Third Party ^(a)
AlphaCat Sidecars	$	20,459	$	20,590	$	20,422	$	28,829	$	29,603
AlphaCat ILS Funds - Lower Risk	1,317,417		1,309,377		1,302,337		1,257,287		1,276,874
AlphaCat ILS Funds - Higher Risk	687,674		896,639		790,734		738,813		612,456
AlphaCat Direct	546,226		534,555		457,744		444,668		373,659
BetaCat ILS Funds	120,391		118,493		87,375		29,000		—
Total	$	2,692,167	$	2,879,654	$	2,658,612	$	2,498,597	$	2,292,592
Total Assets Under Management	$	2,859,917	$	3,074,811	$	2,903,107	$	2,741,312	$	2,615,054

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.

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Validus Holdings, Ltd.

Corporate and Investments

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



	Three Months Ended															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Managed investments
Managed net investment income ^(a)	$	37,091		$	38,063		$	36,192		$	35,875		$	41,071		$	111,346		$	105,843
Net realized gains (losses) on managed investments ^(a)	903			2,269			(2,892		)	9,166			4,080			280			5,514
Change in net unrealized gains (losses) on managed investments ^(a)	941			15,942			14,349			(67,676		)	4,652			31,232			81,782
Income (loss) from investment affiliates	1,011			9,466			5,188			2,166			453			15,665			(4,249		)
Total managed investment return	$	39,946		$	65,740		$	52,837		$	(20,469	)	$	50,256		$	158,523		$	188,890

Corporate expenses
General and administrative expenses	$	9,539		$	18,847		$	17,177		$	19,973		$	18,221		$	45,563		$	52,276
Share compensation expenses	3,990			4,636			3,413			3,856			4,048			12,039			12,147
Finance expenses^(a)	14,449			14,149			13,864			14,546			14,317			42,462			42,637
Dividends on preferred shares	5,627			2,203			2,203			2,203			2,252			10,033			2,252
Tax (benefit) expense ^(a)	(2,567		)	(1,122		)	(3,548		)	(21,237		)	1,830			(7,237		)	1,418
Total Corporate expenses	$	31,038		$	38,713		$	33,109		$	19,341		$	40,668		$	102,860		$	110,730

Other items
Foreign exchange (losses) gains ^(a)	(1,495		)	(7,323		)	1,103			(850		)	(1,067		)	(7,715		)	11,628
Other income (loss)	35			174			94			7			(1,529		)	303			(773		)
Transaction expenses	—			(4,427		)	—			—			—			(4,427		)	—
Total other items	$	(1,460	)	$	(11,576	)	$	1,197		$	(843	)	$	(2,596	)	$	(11,839	)	$	10,855
Total Corporate and Investments	$	7,448		$	15,451		$	20,925		$	(40,653	)	$	6,992		$	43,824		$	89,015

Notes:


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

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Validus Holdings, Ltd.

Segment Reconciliation - Three months ended

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



	Three Months Ended September 30, 2017
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	153,890		$	192,883		$	156,517		$	27,213		$	—		$	(6,647	)	$	523,856
Reinsurance premiums ceded	(40,988		)	(36,462		)	(43,207		)	(2,850		)	—			6,647			(116,860		)
Net premiums written	112,902			156,421			113,310			24,363			—			—			406,996
Change in unearned premiums	154,145			23,191			61,603			77,273			—			—			316,212
Net premiums earned	267,047			179,612			174,913			101,636			—			—			723,208
Other insurance related income	68			692			662			6,083			—			(3,969		)	3,536
Total underwriting revenues	267,115			180,304			175,575			107,719			—			(3,969		)	726,744
Underwriting deductions
Losses and loss expenses	347,484			178,440			157,709			570,969			—			—			1,254,602
Policy acquisition costs	45,422			41,493			20,721			8,314			—			(360		)	115,590
General and administrative expenses	12,444			23,069			21,553			7,687			9,539			(3,950		)	70,342
Share compensation expenses	2,606			2,310			354			183			3,990			—			9,443
Total underwriting deductions	407,956			245,312			200,337			587,153			13,529			(4,310		)	1,449,977
Underwriting (loss)	$	(140,841	)	$	(65,008	)	$	(24,762	)	$	(479,434	)	$	(13,529	)	$	341		$	(723,233	)
Net investment return^(a)	—			—			—			1,232			39,946			—			41,178
Other items ^(b)	—			—			—			82			(18,969		)	—			(18,887		)
Loss attributable to AlphaCat investors	—			—			—			74,130			—			—			74,130
Net loss attributable to noncontrolling interests	—			—			—			376,366			—			—			376,366
Segmental (loss)	(140,841		)	(65,008		)	(24,762		)	(27,624		)	7,448			341
Net loss attributable to Validus common shareholders																			$	(250,446	)
	Three Months Ended September 30, 2016
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	94,741		$	189,674		$	85,260		$	4,413		$	—		$	(1,670	)	$	372,418
Reinsurance premiums ceded	(15,967		)	(22,877		)	(6,202		)	(1,630		)	—			1,670			(45,006		)
Net premiums written	78,774			166,797			79,058			2,783			—			—			327,412
Change in unearned premiums	149,705			32,258			(8,260		)	62,660			—			—			236,363
Net premiums earned	228,479			199,055			70,798			65,443			—			—			563,775
Other insurance related income	58			99			219			8,656			—			(8,113		)	919
Total underwriting revenues	228,537			199,154			71,017			74,099			—			(8,113		)	564,694
Underwriting deductions
Losses and loss expenses	98,425			109,860			45,748			4,361			—			—			258,394
Policy acquisition costs	42,837			46,488			17,094			7,075			—			(60		)	113,434
General and administrative expenses	17,528			32,333			10,171			12,255			18,221			(8,065		)	82,443
Share compensation expenses	2,695			3,163			702			(107		)	4,048			—			10,501
Total underwriting deductions	161,485			191,844			73,715			23,584			22,269			(8,125		)	464,772
Underwriting income (loss)	$	67,052		$	7,310		$	(2,698	)	$	50,515		$	(22,269	)	$	12		$	99,922
Net investment return^(a)	—			—			—			3,567			50,256			—			53,823
Other items ^(b)	—			—			—			97			(20,995		)	—			(20,898		)
(Income) attributable to AlphaCat investors	—			—			—			(5,564		)	—			—			(5,564		)
Net (income) attributable to noncontrolling interests	—			—			—			(37,439		)	—			—			(37,439		)
Segmental income (loss)	67,052			7,310			(2,698		)	11,176			6,992			12
Net income available to Validus common shareholders																			$	89,844

Notes:


(a)	Net investment return includes net investment income, net realized and change in net unrealized gains (losses) on investments and income (loss) from investment affiliates.


(b)	Other items includes finance expenses, transaction expenses, dividends on preferred shares, tax benefit (expense), foreign exchange gains (losses), loss from operating affiliate and other income (loss).

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Validus Holdings, Ltd.

Segment Reconciliation - Nine months ended

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



	Nine Months Ended September 30, 2017
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	1,071,409		$	702,535		$	459,628		$	297,821		$	—		$	(23,778	)	$	2,507,615
Reinsurance premiums ceded	(161,188		)	(154,263		)	(72,005		)	(9,510		)	—			23,778			(373,188		)
Net premiums written	910,221			548,272			387,623			288,311			—			—			2,134,427
Change in unearned premiums	(184,155		)	18,279			15,256			(54,196		)	—			—			(204,816		)
Net premiums earned	726,066			566,551			402,879			234,115			—			—			1,929,611
Other insurance related income	204			1,512			1,566			17,118			—			(14,463		)	5,937
Total underwriting revenues	726,270			568,063			404,445			251,233			—			(14,463		)	1,935,548
Underwriting deductions
Losses and loss expenses	538,323			378,241			329,642			574,130			—			—			1,820,336
Policy acquisition costs	133,836			129,074			60,187			22,380			—			(991		)	344,486
General and administrative expenses	48,550			97,094			50,623			27,096			45,563			(14,311		)	254,615
Share compensation expenses	7,746			8,292			1,655			348			12,039			—			30,080
Total underwriting deductions	728,455			612,701			442,107			623,954			57,602			(15,302		)	2,449,517
Underwriting (loss)	$	(2,185	)	$	(44,638	)	$	(37,662	)	$	(372,721	)	$	(57,602	)	$	839		$	(513,969	)
Net investment return^(a)	—			—			—			12,543			158,523			—			171,066
Other items ^(b)	—			—			—			269			(57,097		)	—			(56,828		)
Loss attributable to AlphaCat investors	—			—			—			54,797			—			—			54,797
Net loss attributable to noncontrolling interests	—			—			—			290,144			—			—			290,144
Segmental (loss)	(2,185		)	(44,638		)	(37,662		)	(14,968		)	43,824			839
Net loss attributable to Validus common shareholders																			$	(54,790	)
	Nine Months Ended September 30, 2016
	Validus Re Segment			Talbot Segment			Western World Segment			AlphaCat & Consolidated Variable Interest Entities			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	1,072,219		$	752,058		$	236,190		$	270,666		$	—		$	(21,882	)	$	2,309,251
Reinsurance premiums ceded	(111,658		)	(137,496		)	(15,347		)	(6,451		)	—			21,882			(249,070		)
Net premiums written	960,561			614,562			220,843			264,215			—			—			2,060,181
Change in unearned premiums	(241,129		)	(7,166		)	(22,890		)	(80,230		)	—			—			(351,415		)
Net premiums earned	719,432			607,396			197,953			183,985			—			—			1,708,766
Other insurance related (loss) income	(107		)	389			696			17,722			—			(16,300		)	2,400
Total underwriting revenues	719,325			607,785			198,649			201,707			—			(16,300		)	1,711,166
Underwriting deductions
Losses and loss expenses	313,432			319,271			129,623			27,645			—			—			789,971
Policy acquisition costs	127,660			134,444			46,704			19,762			—			23			328,593
General and administrative expenses	52,579			109,929			33,704			26,272			52,276			(16,421		)	258,339
Share compensation expenses	8,371			9,955			1,825			167			12,147			—			32,465
Total underwriting deductions	502,042			573,599			211,856			73,846			64,423			(16,398		)	1,409,368
Underwriting income (loss)	$	217,283		$	34,186		$	(13,207	)	$	127,861		$	(64,423	)	$	98		$	301,798
Net investment return^(a)	—			—			—			10,558			188,890			(597		)	198,851
Other items ^(b)	—			—			—			(1,139		)	(35,452		)	—			(36,591		)
(Income) attributable to AlphaCat investors	—			—			—			(16,278		)	—			—			(16,278		)
Net (income) attributable to noncontrolling interest	—			—			—			(96,163		)	—			—			(96,163		)
Segmental income (loss)	217,283			34,186			(13,207		)	24,839			89,015			(499		)
Net income available to Validus common shareholders																			$	351,617

Notes:


(a)	Net investment return includes net investment income, net realized and change in net unrealized gains (losses) on investments and income (loss) from investment affiliates.


(b)	Other items includes finance expenses, transaction expenses, dividends on preferred shares, tax benefit (expense), foreign exchange gains (losses), loss from operating affiliate and other income (loss).

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Validus Holdings, Ltd.

Non-GAAP Financial Measure Reconciliation

Net Operating (Loss) Income (attributable) available to Validus Common Shareholders, Net Operating (Loss) Income per diluted share (attributable) 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						Nine Months Ended
	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Net (loss) income (attributable) available to Validus common shareholders	$	(250,446	)	$	89,844		$	(54,790	)	$	351,617
Non-GAAP Adjustments:
Net realized gains on investments	(906		)	(4,397		)	(2,016		)	(6,537		)
Change in net unrealized losses (gains) on investments	5,197			(5,459		)	(24,472		)	(84,331		)
(Income) loss from investment affiliates	(1,011		)	(453		)	(15,665		)	4,249
Foreign exchange losses (gains)	1,404			766			7,164			(11,765		)
Other (income) loss	(35		)	1,529			(303		)	773
Transaction expenses	—			—			4,427			—
Net (loss) income attributable to noncontrolling interests	(8,194		)	767			(5,364		)	869
Tax (benefit) expense ^(a)	(468		)	443			1,860			7,550
Net operating (loss) income (attributable) available to Validus common shareholders ^(b)	$	(254,459	)	$	83,040		$	(89,159	)	$	262,425

(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(3.17	)	$	1.11		$	(0.69	)	$	4.24
Non-GAAP Adjustments:
Net realized gains on investments	(0.01		)	(0.06		)	(0.03		)	(0.08		)
Change in net unrealized losses (gains) on investments	0.06			(0.07		)	(0.31		)	(1.02		)
(Income) loss from investment affiliates	(0.01		)	(0.01		)	(0.20		)	0.05
Foreign exchange losses (gains)	0.02			0.01			0.09			(0.14		)
Other (income) loss	—			0.02			—			0.01
Transaction expenses	—			—			0.06			—
Net (loss) income attributable to noncontrolling interests	(0.10		)	0.01			(0.07		)	0.01
Tax (benefit) expense ^(a)	(0.01		)	0.01			0.02			0.09
Net operating (loss) income per diluted share (attributable) available to Validus common shareholders ^(b)	$	(3.22	)	$	1.02		$	(1.13	)	$	3.16

Average shareholders' equity available to Validus common shareholders ^(c)	$	3,673,859		$	3,716,938		$	3,699,471		$	3,699,319

Annualized return on average equity	(27.3		%)	9.7		%	(2.0		%)	12.7		%
Annualized net operating return on average equity ^(b)	(27.7		%)	8.9		%	(3.2		%)	9.5		%

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

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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									Nine Months Ended
		September 30, 2017				September 30, 2016					September 30, 2017				September 30, 2016
Line of business	Treaty type	Gross premiums written		%		Gross premiums written			%		Gross premiums written		%		Gross premiums written		%
Property	Treaty Reinsurance	$	143,237	27.3	%	$	61,640		16.6	%	$	805,009	32.1	%	$	749,172	32.4	%
	Facultative Reinsurance	29,699		5.7	%	31,088			8.3	%	91,945		3.7	%	99,162		4.3	%
	Direct Insurance	65,172		12.4	%	51,740			13.9	%	200,307		8.0	%	175,749		7.6	%
		238,108		45.4	%	144,468			38.8	%	1,097,261		43.8	%	1,024,083		44.3	%

Marine	Treaty Reinsurance	2,671		0.5	%	(3,290		)	(0.9	%)	141,431		5.6	%	139,678		6.0	%
	Facultative Reinsurance	8,651		1.7	%	12,112			3.3	%	58,148		2.3	%	60,652		2.6	%
	Direct Insurance	29,005		5.5	%	35,204			9.5	%	104,079		4.2	%	126,248		5.5	%
		40,327		7.7	%	44,026			11.9	%	303,658		12.1	%	326,578		14.1	%

Specialty ^(a)	Treaty Reinsurance	43,815		8.4	%	49,235			13.2	%	511,315		20.4	%	555,837		24.1	%
	Facultative Reinsurance	22,975		4.4	%	22,522			6.0	%	61,225		2.4	%	65,643		2.9	%
	Direct Insurance	110,273		21.1	%	50,664			13.6	%	338,028		13.5	%	166,321		7.2	%
		177,063		33.9	%	122,421			32.8	%	910,568		36.3	%	787,801		34.2	%

Liability ^(b)	Direct Insurance	68,358		13.0	%	61,503			16.5	%	196,128		7.8	%	170,789		7.4	%
		68,358		13.0	%	61,503			16.5	%	196,128		7.8	%	170,789		7.4	%

Total	Treaty Reinsurance	189,723		36.2	%	107,585			28.9	%	1,457,755		58.1	%	1,444,687		62.5	%
	Facultative Reinsurance	61,325		11.8	%	65,722			17.6	%	211,318		8.4	%	225,457		9.8	%
	Direct Insurance	272,808		52.0	%	199,111			53.5	%	838,542		33.5	%	639,107		27.7	%
		$	523,856	100.0	%	$	372,418		100.0	%	$	2,507,615	100.0	%	$	2,309,251	100.0	%

Total	Reinsurance	189,723		36.2	%	107,585			28.9	%	1,457,755		58.1	%	1,444,687		62.5	%
	Insurance ^(c)	334,133		63.8	%	264,833			71.1	%	1,049,860		41.9	%	864,564		37.5	%
		$	523,856	100.0	%	$	372,418		100.0	%	$	2,507,615	100.0	%	$	2,309,251	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.

Table of Contents

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															Nine Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Validus Re
Property - Cat XOL^(a)	$	99,681		$	152,234		$	139,244		$	1,150		$	33,032		$	391,159		$	344,359
Property - Per Risk XOL	11,899			2,050			12,023			238			10,525			25,972			26,584
Property - Proportional ^(b)	6,077			20,475			52,437			9,145			10,204			78,989			91,489
Marine	1,226			14,557			100,548			(4,178		)	(4,533		)	116,331			109,876
Aerospace & Aviation	334			5,446			10,497			(1,574		)	888			16,277			20,814
Agriculture	449			22,061			152,447			(9,681		)	8,625			174,957			252,861
Casualty	8,890			39,126			24,510			31,991			7,539			72,526			54,116
Composite	7,170			17,349			34,090			2,281			8,932			58,609			56,963
Financial	9,714			13,101			25,090			10,163			9,565			47,905			36,088
Technical Lines	3,207			4,959			4,182			629			4,100			12,348			11,905
Terrorism	732			(117		)	8,827			(2,116		)	2,116			9,442			13,056
Trade Credit	(8		)	50			44,154			28			(647		)	44,196			38,251
Workers' Compensation	3,084			2,200			1,633			732			3,230			6,917			7,332
Other Specialty^(c)	1,435			3,506			10,840			27			1,165			15,781			8,525
Total Validus Re Segment	153,890			296,997			620,522			38,835			94,741			1,071,409			1,072,219
AlphaCat
Property - Cat XOL^(a)	22,013			99,318			159,765			(264		)	3,933			281,096			261,050
Agriculture	1,936			4,020			(35		)	4			77			5,921			2,875
Composite	2,872			2,362			4,788			—			—			10,022			5,518
Workers' Compensation	392			(18		)	408			(4		)	403			782			1,223
Total AlphaCat Segment	27,213			105,682			164,926			(264		)	4,413			297,821			270,666
Talbot
Property	50,854			58,760			59,591			46,499			44,982			169,205			176,389
Downstream Energy and Power	17,994			29,765			13,669			24,872			19,319			61,428			69,325
Marine	39,167			74,308			77,318			39,635			48,093			190,793			222,305
Accident & Health	4,411			5,176			5,910			4,929			4,170			15,497			24,397
Aviation, Direct	11,981			7,595			8,498			16,398			10,241			28,074			24,833
Aviation Treaty	4,384			19,875			10,797			3,355			4,810			35,056			40,227
Contingency	3,615			6,988			3,964			14,160			6,183			14,567			21,252
Financial Lines	17,079			13,211			12,767			15,308			13,594			43,057			35,172
Political Lines^(d)	43,398			46,799			54,661			53,488			38,282			144,858			138,158
Total Talbot Segment	192,883			262,477			247,175			218,644			189,674			702,535			752,058
Western World
Property	36,359			38,967			28,136			29,039			23,757			103,462			65,401
Liability^(e)	68,358			68,162			59,608			57,991			61,503			196,128			170,789
Agriculture	51,800			23,939			84,299			—			—			160,038			—
Total Western World Segment	156,517			131,068			172,043			87,030			85,260			459,628			236,190
Intersegment Revenue
Property	(6,769		)	(395		)	(6,886		)	(6,239		)	(1,284		)	(14,050		)	(10,514		)
Marine	(66		)	(231		)	(3,169		)	1,621			466			(3,466		)	(5,603		)
Specialty	188			(2,696		)	(3,754		)	(173		)	(852		)	(6,262		)	(5,765		)
Total Intersegment Revenue Eliminated	(6,647		)	(3,322		)	(13,809		)	(4,791		)	(1,670		)	(23,778		)	(21,882		)
Total Gross Premiums Written	$	523,856		$	792,902		$	1,190,857		$	339,454		$	372,418		$	2,507,615		$	2,309,251

Notes:


(a)	Property Cat XOL is comprised of Catastrophe XOL, Aggregate XOL, Reinstatement Premium Protection. 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.

Table of Contents

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)



	September 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)	$	2,410,605		$	832,380		$	1,578,225		$	830,672		$	107,573		$	723,099
Marine	842,391			185,146			657,245			861,459			154,001			707,458
Specialty ^(b)	1,118,963			238,712			880,251			732,907			81,547			651,360
Liability^(c)	563,678			78,778			484,900			570,157			87,300			482,857
Total	$	4,935,637		$	1,335,016		$	3,600,621		$	2,995,195		$	430,421		$	2,564,774

	September 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)	$	464,050		$	1,946,555		$	2,410,605		$	390,141		$	440,531		$	830,672
Marine	341,920			500,471			842,391			389,614			471,845			861,459
Specialty ^(b)	276,713			842,250			1,118,963			259,251			473,656			732,907
Liability ^(c)	188,897			374,781			563,678			198,766			371,391			570,157
Total	$	1,271,580		$	3,664,057		$	4,935,637		$	1,237,772		$	1,757,423		$	2,995,195

% of Total	25.8		%	74.2		%	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.

Table of Contents

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
	September 30, 2017																		September 30, 2016
	Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total			Validus Re			AlphaCat			Talbot			Western World			Eliminations			Total
Gross reserves at period beginning	$	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
Loss reserves recoverable	(101,926		)	—			(364,658		)	(196,018		)	62,395			(600,207		)	(111,015		)	—			(308,686		)	(86,018		)	62,732			(442,987		)
Net reserves at period beginning	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

Incurred losses - current year	395,621			574,220			202,054			157,771			—			1,329,666			131,458			4,642			128,551			46,628			—			311,279
Change in prior accident years	(48,137		)	(3,251		)	(23,614		)	(62		)	—			(75,064		)	(33,033		)	(281		)	(18,691		)	(880		)	—			(52,885		)
Total net incurred losses	347,484			570,969			178,440			157,709			—			1,254,602			98,425			4,361			109,860			45,748			—			258,394
Foreign exchange	7,140			292			6,309			—			—			13,741			3,915			(121		)	(5,294		)	—			—			(1,500		)
Paid losses - current year	(74,457		)	(58		)	(37,318		)	(79,779		)	—			(191,612		)	(123,677		)	(1,172		)	(41,771		)	(12,087		)	—			(178,707		)
Paid losses - prior years	(60,532		)	(1,471		)	(77,476		)	(41,615		)	—			(181,094		)	(73,880		)	(35		)	(56,449		)	(36,175		)	—			(166,539		)
Total net paid losses	(134,989		)	(1,529		)	(114,794		)	(121,394		)	—			(372,706		)	(197,557		)	(1,207		)	(98,220		)	(48,262		)	—			(345,246		)

Net reserves at period end	1,257,110			616,215			1,098,936			628,360			—			3,600,621			1,034,161			37,144			1,020,453			499,620			—			2,591,378
Loss reserves recoverable	589,963			60,000			430,399			317,489			(62,835		)	1,335,016			113,121			—			304,216			89,225			(61,953		)	444,609
Gross reserves at period end	$	1,847,073		$	676,215		$	1,529,335		$	945,849		$	(62,835	)	$	4,935,637		$	1,147,282		$	37,144		$	1,324,669		$	588,845		$	(61,953	)	$	3,035,987

Net premiums earned	$	267,047		$	101,636		$	179,612		$	174,913					$	723,208		$	228,479		$	65,443		$	199,055		$	70,798					$	563,775

Current year loss ratio	148.1		%	565.0		%	112.4		%	90.2		%				183.9		%	57.6		%	7.1		%	64.6		%	65.8		%				55.2		%
Prior accident years adjustments	-18.0		%	-3.2		%	-13.1		%	—		%				-10.4		%	-14.5		%	-0.4		%	-9.4		%	-1.2		%				-9.4		%
Net loss ratio ^(a)	130.1		%	561.8		%	99.3		%	90.2		%				173.5		%	43.1		%	6.7		%	55.2		%	64.6		%				45.8		%

Paid to incurred	38.8		%	0.3		%	64.3		%	77.0		%				29.7		%	200.7		%	27.7		%	89.4		%	105.5		%				133.6		%

	At or for the Nine Months Ended
	September 30, 2017																		September 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
Loss reserves 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	638,339			584,651			446,545			330,386			—			1,999,921			403,026			29,253			389,010			138,087			—			959,376
Change in prior accident years	(100,016		)	(10,521		)	(68,304		)	(744		)	—			(179,585		)	(89,594		)	(1,608		)	(69,739		)	(8,464		)	—			(169,405		)
Total net incurred losses	538,323			574,130			378,241			329,642			—			1,820,336			313,432			27,645			319,271			129,623			—			789,971
Foreign exchange	27,734			1,073			17,467			—			—			46,274			16,016			(186		)	(23,424		)	—			—			(7,594		)
Paid losses - current year	(84,683		)	(58		)	(59,824		)	(97,503		)	—			(242,068		)	(133,736		)	(1,172		)	(79,206		)	(26,248		)	—			(240,362		)
Paid losses - prior years	(243,012		)	(7,464		)	(232,427		)	(129,545		)	—			(612,448		)	(272,365		)	(156		)	(205,161		)	(118,936		)	—			(596,618		)
Total net paid losses	(327,695		)	(7,522		)	(292,251		)	(227,048		)	—			(854,516		)	(406,101		)	(1,328		)	(284,367		)	(145,184		)	—			(836,980		)

Net reserves at period end	1,257,110			616,215			1,098,936			628,360			—			3,600,621			1,034,161			37,144			1,020,453			499,620			—			2,591,378
Loss reserves recoverable	589,963			60,000			430,399			317,489			(62,835		)	1,335,016			113,121			—			304,216			89,225			(61,953		)	444,609
Gross reserves at period end	$	1,847,073		$	676,215		$	1,529,335		$	945,849		$	(62,835	)	$	4,935,637		$	1,147,282		$	37,144		$	1,324,669		$	588,845		$	(61,953	)	$	3,035,987

Net premiums earned	$	726,066		$	234,115		$	566,551		$	402,879					$	1,929,611		$	719,432		$	183,985		$	607,396		$	197,953					$	1,708,766

Current year loss ratio	87.9		%	249.7		%	78.9		%	82.0		%				103.6		%	56.1		%	15.9		%	64.1		%	69.8		%				56.1		%
Prior accident years adjustments	-13.8		%	-4.5		%	-12.1		%	-0.2		%				-9.3		%	-12.5		%	-0.9		%	-11.5		%	-4.3		%				-9.9		%
Net loss ratio ^(a)	74.1		%	245.2		%	66.8		%	81.8		%				94.3		%	43.6		%	15.0		%	52.6		%	65.5		%				46.2		%

Paid to incurred	60.9		%	1.3		%	77.3		%	68.9		%				46.9		%	129.6		%	4.8		%	89.1		%	112.0		%				106.0		%


(a)	Excluding the AlphaCat segment, which includes results attributable to AlphaCat’s third party investors and noncontrolling interests, the loss ratios for the three and nine months ended September 30, 2017 were 110.0% and 73.5%, respectively.

Table of Contents

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
	September 30, 2017												September 30, 2016
	Property			Marine			Specialty^(a)			Total			Property			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	445,610		$	315,716		$	378,075		$	1,139,401		$	550,427		$	368,432		$	321,534		$	1,240,393
Loss reserves recoverable	(32,190		)	(65,870		)	(3,866		)	(101,926		)	(53,758		)	(54,020		)	(3,237		)	(111,015		)
Net reserves at period beginning	413,420			249,846			374,209			1,037,475			496,669			314,412			318,297			1,129,378

Incurred losses - current year	275,356			49,058			71,207			395,621			29,760			21,733			79,965			131,458
Change in prior accident years	(26,372		)	(7,105		)	(14,660		)	(48,137		)	(19,736		)	(8,504		)	(4,793		)	(33,033		)
Total net incurred losses	248,984			41,953			56,547			347,484			10,024			13,229			75,172			98,425

Foreign exchange	4,873			789			1,478			7,140			3,355			129			431			3,915

Paid losses - current year	(5,225		)	(690		)	(68,542		)	(74,457		)	(4,755		)	(4,135		)	(114,787		)	(123,677		)
Paid losses - prior years	(25,587		)	(28,000		)	(6,945		)	(60,532		)	(57,940		)	(11,654		)	(4,286		)	(73,880		)
Total net paid losses	(30,812		)	(28,690		)	(75,487		)	(134,989		)	(62,695		)	(15,789		)	(119,073		)	(197,557		)

Net reserves at period end	636,465			263,898			356,747			1,257,110			447,353			311,981			274,827			1,034,161
Loss reserves recoverable	463,109			120,580			6,274			589,963			55,920			53,463			3,738			113,121
Gross reserves at period end	$	1,099,574		$	384,478		$	363,021		$	1,847,073		$	503,273		$	365,444		$	278,565		$	1,147,282

Net premiums earned	$	134,509		$	24,957		$	107,581		$	267,047		$	93,694		$	21,157		$	113,628		$	228,479

Current year loss ratio	204.7		%	196.6		%	66.2		%	148.1		%	31.8		%	102.7		%	70.4		%	57.6		%
Prior accident years adjustments	-19.6		%	-28.5		%	-13.6		%	-18.0		%	-21.1		%	-40.2		%	-4.2		%	-14.5		%
Net loss ratio	185.1		%	168.1		%	52.6		%	130.1		%	10.7		%	62.5		%	66.2		%	43.1		%

Paid to incurred	12.4		%	68.4		%	133.5		%	38.8		%	NM			119.4		%	158.4		%	200.7		%

	At or for the Nine Months Ended
	September 30, 2017												September 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
Loss reserves 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	336,635			80,039			221,665			638,339			110,674			55,528			236,824			403,026
Change in prior accident years	(30,614		)	(38,847		)	(30,555		)	(100,016		)	(52,036		)	(14,967		)	(22,591		)	(89,594		)
Total net incurred losses	306,021			41,192			191,110			538,323			58,638			40,561			214,233			313,432

Foreign exchange	21,457			2,485			3,792			27,734			15,294			161			561			16,016

Paid losses - current year	(9,447		)	(1,486		)	(73,750		)	(84,683		)	(7,023		)	(5,159		)	(121,554		)	(133,736		)
Paid losses - prior years	(103,412		)	(81,628		)	(57,972		)	(243,012		)	(152,651		)	(39,888		)	(79,826		)	(272,365		)
Total net paid losses	(112,859		)	(83,114		)	(131,722		)	(327,695		)	(159,674		)	(45,047		)	(201,380		)	(406,101		)

Net reserves at period end	636,465			263,898			356,747			1,257,110			447,353			311,981			274,827			1,034,161
Loss reserves recoverable	463,109			120,580			6,274			589,963			55,920			53,463			3,738			113,121
Gross reserves at period end	$	1,099,574		$	384,478		$	363,021		$	1,847,073		$	503,273		$	365,444		$	278,565		$	1,147,282

Net premiums earned	$	327,634		$	78,626		$	319,806		$	726,066		$	301,074		$	87,125		$	331,233		$	719,432

Current year loss ratio	102.7		%	101.8		%	69.3		%	87.9		%	36.8		%	63.7		%	71.5		%	56.1		%
Prior accident years adjustments	-9.3		%	-49.4		%	-9.5		%	-13.8		%	-17.3		%	-17.1		%	-6.8		%	-12.5		%
Net loss ratio	93.4		%	52.4		%	59.8		%	74.1		%	19.5		%	46.6		%	64.7		%	43.6		%

Paid to incurred	36.9		%	201.8		%	68.9		%	60.9		%	272.3		%	111.1		%	94.0		%	129.6		%

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.

Table of Contents

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
	September 30, 2017												September 30, 2016
	Property ^(a)			Marine			Specialty^(a)			Total			Property ^(a)			Marine			Specialty^(a)			Total
Gross reserves at period beginning	$	417,846		$	470,769		$	505,024		$	1,393,639		$	313,789		$	524,411		$	484,593		$	1,322,793
Loss reserves recoverable	(156,969		)	(92,039		)	(115,650		)	(364,658		)	(93,048		)	(115,892		)	(99,746		)	(308,686		)
Net reserves at period beginning	260,877			378,730			389,374			1,028,981			220,741			408,519			384,847			1,014,107

Incurred losses - current year	107,908			55,211			38,935			202,054			42,759			42,623			43,169			128,551
Change in prior accident years	(8,752		)	(2,737		)	(12,125		)	(23,614		)	(2,429		)	(4,547		)	(11,715		)	(18,691		)
Total net incurred losses	99,156			52,474			26,810			178,440			40,330			38,076			31,454			109,860

Foreign exchange	1,464			1,804			3,041			6,309			(1,375		)	(1,465		)	(2,454		)	(5,294		)

Paid losses - current year	(23,785		)	(7,920		)	(5,613		)	(37,318		)	(16,367		)	(7,786		)	(17,618		)	(41,771		)
Paid losses - prior years	(22,476		)	(31,741		)	(23,259		)	(77,476		)	(14,035		)	(20,499		)	(21,915		)	(56,449		)
Total net paid losses	(46,261		)	(39,661		)	(28,872		)	(114,794		)	(30,402		)	(28,285		)	(39,533		)	(98,220		)

Net reserves at period end	315,236			393,347			390,353			1,098,936			229,294			416,845			374,314			1,020,453
Loss reserves recoverable	241,271			80,099			109,029			430,399			89,398			117,217			97,601			304,216
Gross reserves at period end	$	556,507		$	473,446		$	499,382		$	1,529,335		$	318,692		$	534,062		$	471,915		$	1,324,669

Net premiums earned	$	47,881		$	51,558		$	80,173		$	179,612		$	57,269		$	64,236		$	77,550		$	199,055

Current year loss ratio	225.4		%	107.1		%	48.5		%	112.4		%	74.7		%	66.4		%	55.7		%	64.6		%
Prior accident years adjustments	-18.3		%	-5.3		%	-15.1		%	-13.1		%	-4.3		%	-7.1		%	-15.1		%	-9.4		%
Net loss ratio	207.1		%	101.8		%	33.4		%	99.3		%	70.4		%	59.3		%	40.6		%	55.2		%

Paid to incurred	46.7		%	75.6		%	107.7		%	64.3		%	75.4		%	74.3		%	125.7		%	89.4		%

	At or for the Nine Months Ended
	September 30, 2017												September 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
Loss reserves 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	196,270			118,580			131,695			446,545			127,610			124,616			136,784			389,010
Change in prior accident years	(19,980		)	(35,789		)	(12,535		)	(68,304		)	(30,969		)	(10,511		)	(28,259		)	(69,739		)
Total net incurred losses	176,290			82,791			119,160			378,241			96,641			114,105			108,525			319,271

Foreign exchange	3,868			5,041			8,558			17,467			(3,946		)	(7,344		)	(12,134		)	(23,424		)

Paid losses - current year	(31,921		)	(11,583		)	(16,320		)	(59,824		)	(26,281		)	(25,768		)	(27,157		)	(79,206		)
Paid losses - prior years	(73,752		)	(87,025		)	(71,650		)	(232,427		)	(56,144		)	(70,131		)	(78,886		)	(205,161		)
Total net paid losses	(105,673		)	(98,608		)	(87,970		)	(292,251		)	(82,425		)	(95,899		)	(106,043		)	(284,367		)

Net reserves at period end	315,236			393,347			390,353			1,098,936			229,294			416,845			374,314			1,020,453
Loss reserves recoverable	241,271			80,099			109,029			430,399			89,398			117,217			97,601			304,216
Gross reserves at period end	$	556,507		$	473,446		$	499,382		$	1,529,335		$	318,692		$	534,062		$	471,915		$	1,324,669

Net premiums earned	$	158,471		$	168,992		$	239,088		$	566,551		$	173,124		$	208,029		$	226,243		$	607,396

Current year loss ratio	123.8		%	70.2		%	55.0		%	78.9		%	73.7		%	59.9		%	60.5		%	64.1		%
Prior accident years adjustments	-12.6		%	-21.2		%	-5.2		%	-12.1		%	-17.9		%	-5.0		%	-12.5		%	-11.5		%
Net loss ratio	111.2		%	49.0		%	49.8		%	66.8		%	55.8		%	54.9		%	48.0		%	52.6		%

Paid to incurred	59.9		%	119.1		%	73.8		%	77.3		%	85.3		%	84.0		%	97.7		%	89.1		%

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.

Table of Contents

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
	September 30, 2017												September 30, 2016
	Property			Liability ^(a)			Specialty ^(b)			Total			Property			Liability ^(a)			Specialty ^(b)			Total
Gross reserves at period beginning	$	25,141		$	565,790		$	197,132		$	788,063		$	14,235		$	573,917		$	—		$	588,152
Loss reserves recoverable	(2,841		)	(83,400		)	(109,777		)	(196,018		)	(241		)	(85,777		)	—			(86,018		)
Net reserves at period beginning	22,300			482,390			87,355			592,045			13,994			488,140			—			502,134

Incurred losses - current year	28,622			44,310			84,839			157,771			10,157			36,471			—			46,628
Change in prior accident years	464			(526		)	—			(62		)	(553		)	(327		)	—			(880		)
Total net incurred losses	29,086			43,784			84,839			157,709			9,604			36,144			—			45,748

Paid losses - current year	(14,337		)	(3,143		)	(62,299		)	(79,779		)	(9,354		)	(2,733		)	—			(12,087		)
Paid losses - prior years	(3,484		)	(38,131		)	—			(41,615		)	(1,187		)	(34,988		)	—			(36,175		)
Total net paid losses	(17,821		)	(41,274		)	(62,299		)	(121,394		)	(10,541		)	(37,721		)	—			(48,262		)

Net reserves at period end	33,565			484,900			109,895			628,360			13,057			486,563			—			499,620
Loss reserves recoverable	105,822			78,778			132,889			317,489			2,686			86,539			—			89,225
Gross reserves at period end	$	139,387		$	563,678		$	242,784		$	945,849		$	15,743		$	573,102		$	—		$	588,845

Net premiums earned	$	14,693		$	61,463		$	98,757		$	174,913		$	16,698		$	54,100		$	—		$	70,798

Current year loss ratio	194.8		%	72.1		%	85.9		%	90.2		%	60.8		%	67.4		%	—		%	65.8		%
Prior accident years adjustments	3.2		%	-0.9		%	—		%	—		%	-3.3		%	-0.6		%	—		%	-1.2		%
Net loss ratio	198.0		%	71.2		%	85.9		%	90.2		%	57.5		%	66.8		%	—		%	64.6		%

Paid to incurred	61.3		%	94.3		%	73.4		%	77.0		%	109.8		%	104.4		%	—		%	105.5		%

	At or for the Nine Months Ended
	September 30, 2017												September 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
Loss reserves 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	58,503			123,442			148,441			330,386			31,411			106,676			—			138,087
Change in prior accident years	(2,838		)	2,094			—			(744		)	(2,576		)	(5,888		)	—			(8,464		)
Total net incurred losses	55,665			125,536			148,441			329,642			28,835			100,788			—			129,623

Paid losses - current year	(27,478		)	(7,726		)	(62,299		)	(97,503		)	(20,747		)	(5,501		)	—			(26,248		)
Paid losses - prior years	(13,778		)	(115,767		)	—			(129,545		)	(7,476		)	(111,460		)	—			(118,936		)
Total net paid losses	(41,256		)	(123,493		)	(62,299		)	(227,048		)	(28,223		)	(116,961		)	—			(145,184		)

Net reserves at period end	33,565			484,900			109,895			628,360			13,057			486,563			—			499,620
Loss reserves recoverable	105,822			78,778			132,889			317,489			2,686			86,539			—			89,225
Gross reserves at period end	$	139,387		$	563,678		$	242,784		$	945,849		$	15,743		$	573,102		$	—		$	588,845

Net premiums earned	$	57,885		$	175,407		$	169,587		$	402,879		$	43,070		$	154,883		$	—		$	197,953

Current year loss ratio	101.1		%	70.4		%	87.5		%	82.0		%	72.9		%	68.9		%	—		%	69.8		%
Prior accident years adjustments	-4.9		%	1.2		%	—		%	-0.2		%	-6.0		%	-3.8		%	—		%	-4.3		%
Net loss ratio	96.2		%	71.6		%	87.5		%	81.8		%	66.9		%	65.1		%	—		%	65.5		%

Paid to incurred	74.1		%	98.4		%	42.0		%	68.9		%	97.9		%	116.0		%	—		%	112.0		%

Notes:


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


(b)	Specialty includes agriculture premiums written through CRS.

Table of Contents

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										Nine Months Ended
	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		September 30, 2017		September 30, 2016
Validus Re Segment
Current period - excluding items below	45.7	%	50.0	%	47.6	%	47.5	%	53.1	%	47.7	%	47.6	%
Current period - notable loss events	102.4	%	0.0	%	0.0	%	9.1	%	0.0	%	37.6	%	2.5	%
Current period - non-notable loss events	0.0	%	3.1	%	5.0	%	0.0	%	4.5	%	2.6	%	6.0	%
Change in prior accident years	(18.0	)%	(9.6	)%	(13.2	)%	(12.9	)%	(14.5	)%	(13.8	)%	(12.5	)%
Net loss ratio	130.1	%	43.5	%	39.4	%	43.7	%	43.1	%	74.1	%	43.6	%
AlphaCat Segment
Current period - excluding items below	13.0	%	7.3	%	8.5	%	3.3	%	5.6	%	10.1	%	8.1	%
Current period - notable loss events	552.0	%	0.0	%	0.0	%	24.2	%	1.5	%	239.6	%	4.5	%
Current period - non-notable loss events	0.0	%	0.0	%	0.0	%	0.2	%	0.0	%	0.0	%	3.3	%
Change in prior accident years	(3.2	)%	(5.7	)%	(5.3	)%	(1.7	)%	(0.4	)%	(4.5	)%	(0.9	)%
Net loss ratio	561.8	%	1.6	%	3.2	%	26.0	%	6.7	%	245.2	%	15.0	%
Talbot Segment
Current period - excluding items below	66.9	%	57.0	%	64.9	%	62.6	%	58.9	%	63.0	%	58.8	%
Current period - notable loss events	45.5	%	0.0	%	0.0	%	7.1	%	0.0	%	14.4	%	1.9	%
Current period - non-notable loss events	0.0	%	0.0	%	4.5	%	0.1	%	5.7	%	1.5	%	3.4	%
Change in prior accident years	(13.1	)%	(8.3	)%	(14.8	)%	(9.2	)%	(9.4	)%	(12.1	)%	(11.5	)%
Net loss ratio	99.3	%	48.7	%	54.6	%	60.6	%	55.2	%	66.8	%	52.6	%
Western World Segment ^(b)
Current period - excluding items below	84.5	%	74.6	%	77.2	%	68.3	%	65.8	%	79.5	%	69.5	%
Current period - notable loss events	5.7	%	0.0	%	0.0	%	4.5	%	0.0	%	2.5	%	0.0	%
Current period - non-notable loss events	0.0	%	0.0	%	0.0	%	0.1	%	0.0	%	0.0	%	0.3	%
Change in prior accident years	0.0	%	(0.4	)%	(0.2	)%	(0.9	)%	(1.2	)%	(0.2	)%	(4.3	)%
Net loss ratio	90.2	%	74.2	%	77.0	%	72.0	%	64.6	%	81.8	%	65.5	%
Consolidated ^(c)
Current period - excluding items below	55.8	%	52.6	%	54.1	%	49.8	%	51.2	%	54.2	%	49.8	%
Current period - notable loss events	128.1	%	0.0	%	0.0	%	9.7	%	0.2	%	48.0	%	2.2	%
Current period - non-notable loss events	0.0	%	1.2	%	3.4	%	0.1	%	3.8	%	1.4	%	4.1	%
Change in prior accident years	(10.4	)%	(6.9	)%	(10.6	)%	(8.7	)%	(9.4	)%	(9.3	)%	(9.9	)%
Net loss ratio	173.5	%	46.9	%	46.9	%	50.9	%	45.8	%	94.3	%	46.2	%

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.


(c)	Excluding the AlphaCat segment, which includes results attributable to AlphaCat’s third party investors, the loss ratios for the three and nine months ended September 30, 2017 were 110.0% and 73.5%, respectively.

Table of Contents

Validus Holdings, Ltd.

Consolidated Reinsurance Recoverable Analysis

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



Consolidated Reinsurance Recoverable at September 30, 2017
Categories	Reinsurance Recoverable^(a)		%		Top 10 Reinsurers	Rating ^(b)	Reinsurance Recoverable^(a)		%
Top 10 reinsurers	$	1,208,003	85.5	%	Fully collateralized reinsurers	NR	$	564,714	40.0	%
Other reinsurers' balances > $1 million	198,774		14.1	%	Munich Re	AA-	164,131		11.6	%
Other reinsurers' balances < $1 million	5,969		0.4	%	Everest Re	A+	95,759		6.8	%
Total	$	1,412,746	100.0	%	Lloyd's Syndicates	A+	94,845		6.7	%
					Swiss Re	AA-	81,921		5.8	%
					Hannover Re	AA-	62,715		4.4	%
					Federal Crop Insurance Corporation	(c)	49,503		3.5	%
					Qatar Insurance Company	A	38,061		2.7	%
					Transatlantic Re	A+	29,795		2.1	%
					XL Catlin	A+	26,559		1.9	%
					Total		$	1,208,003	85.5	%

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)	99.1% of Reinsurance Recoverable at September 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.

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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	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Managed investments, cash and cash equivalents and restricted cash
U.S. Government and Government Agency	$	595,694		$	646,436		$	718,025		$	804,126		$	837,546
Non-U.S. Government and Government Agency	290,538			292,504			258,463			240,791			248,390
States, municipalities, political subdivision	206,667			227,949			229,129			271,830			283,361
Agency residential mortgage-backed securities	828,400			783,006			653,395			679,595			657,876
Non-agency residential mortgage-backed securities	38,993			26,683			19,382			15,477			20,615
U.S. corporate	1,466,739			1,386,484			1,486,882			1,534,508			1,526,677
Non-U.S. corporate	392,242			379,480			397,989			410,227			431,632
Bank loans	464,464			552,901			567,012			570,399			587,537
Asset-backed securities	522,524			502,056			514,690			526,814			485,519
Commercial mortgage-backed securities	314,221			316,190			318,288			330,932			340,797
Total fixed maturities	5,120,482			5,113,689			5,163,255			5,384,699			5,419,950
Total short-term investments	258,646			255,516			232,955			228,386			197,803
Total other investments	471,300			448,618			443,004			405,712			394,695
Investment in investment affiliates	92,079			103,377			94,697			100,431			99,731
Cash and cash equivalents	961,539			796,476			619,810			415,419			439,192
Restricted cash	51,585			48,101			36,099			15,000			9,970
Total managed investments, cash and cash equivalents and restricted cash^(a)	6,955,631			6,765,777			6,589,820			6,549,647			6,561,341
Non-managed investments, cash and cash equivalents and restricted cash
Catastrophe bonds	299,484			304,954			201,961			158,331			156,391
Short-term investments	2,734,600			2,615,837			2,552,271			2,567,784			2,283,603
Cash and cash equivalents	4,091			3,929			4,127			4,557			4,800
Restricted cash	37,818			146,938			56,448			55,956			103,078
Total non-managed investments, cash and cash equivalents and restricted cash ^(a)	3,075,993			3,071,658			2,814,807			2,786,628			2,547,872
Total investments, cash and cash equivalents and restricted cash	$	10,031,624		$	9,837,435		$	9,404,627		$	9,336,275		$	9,109,213

	Three Months Ended															Nine Months Ended
Net investment income	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			September 30, 2017			September 30, 2016
Managed investments ^(a)
Fixed maturities and short-term investments	$	30,823		$	31,212		$	31,671		$	29,875		$	30,572		$	93,706		$	89,210
Other investments	7,391			7,571			6,870			7,194			11,768			21,832			20,666
Cash and cash equivalents and restricted cash	1,230			716			610			803			891			2,556			2,136
Securities lending income	3			7			13			16			22			23			39
Total gross investment income	39,447			39,506			39,164			37,888			43,253			118,117			112,051
Investment expenses	(2,356		)	(1,443		)	(2,972		)	(2,013		)	(2,182		)	(6,771		)	(6,208		)
Total managed net investment income	$	37,091		$	38,063		$	36,192		$	35,875		$	41,071		$	111,346		$	105,843

Annualized effective investment yield - managed investments ^(b)	2.23		%	2.35		%	2.27		%	2.25		%	2.58		%	2.28		%	2.24		%

Non-managed investments
Fixed maturities and short-term investments	$	3,941		$	4,500		$	3,060		$	1,689		$	1,970		$	11,501		$	5,242
Cash and cash equivalents and restricted cash	3,426			1,678			962			589			473			6,066			1,147
Total non-managed net investment income	7,367			6,178			4,022			2,278			2,443			17,567			6,389
Total net investment income	$	44,458		$	44,241		$	40,214		$	38,153		$	43,514		$	128,913		$	112,232

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 nine months ended is the average of the beginning, ending and intervening quarter end asset balances. Percentages for the quarter periods are annualized.

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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)



	September 30, 2017				December 31, 2016
Fixed maturities - Credit Quality	Fair Value		%		Fair Value		%
Managed fixed maturities
AAA	$	2,349,803	43.3	%	$	2,405,597	43.4	%
AA	437,215		8.1	%	538,289		9.7	%
A	1,060,849		19.6	%	1,081,949		19.5	%
BBB	752,808		13.9	%	740,861		13.4	%
Total investment grade managed fixed maturities	4,600,675		84.9	%	4,766,696		86.0	%
BB	177,667		3.2	%	213,568		3.9	%
B	156,590		2.9	%	177,737		3.2	%
CCC	5,286		0.1	%	13,371		0.2	%
NR	180,264		3.4	%	213,327		3.8	%
Total non-investment grade managed fixed maturities	519,807		9.6	%	618,003		11.1	%
Total managed fixed maturities	$	5,120,482	94.5	%	$	5,384,699	97.1	%

Non-managed catastrophe bonds
AAA	1,650		0.0	%	—		0.0	%
Total investment grade non-managed catastrophe bonds	1,650		0.0	%	—		0.0	%
BB	28,031		0.5	%	29,731		0.6	%
B	2,755		0.1	%	4,524		0.1	%
NR	267,048		4.9	%	124,076		2.2	%
Total non-investment grade non-managed catastrophe bonds	297,834		5.5	%	158,331		2.9	%
Total non-managed catastrophe bonds	$	299,484	5.5	%	$	158,331	2.9	%
Total fixed maturities	$	5,419,966	100.0	%	$	5,543,030	100.0	%

	September 30, 2017				December 31, 2016
Fixed maturities - Maturity Profile	Fair Value		%		Fair Value		%
Managed fixed maturities
Due in one year or less	$	278,118	5.1	%	$	346,161	6.2	%
Due after one year through five years	2,416,963		44.7	%	2,933,146		52.9	%
Due after five years through ten years	535,538		9.9	%	426,647		7.7	%
Due after ten years	185,725		3.4	%	125,927		2.3	%
	3,416,344		63.1	%	3,831,881		69.1	%
Asset-backed and mortgage backed securities	1,704,138		31.4	%	1,552,818		28.0	%
Total managed fixed maturities	5,120,482		94.5	%	5,384,699		97.1	%

Non-managed catastrophe bonds
Due in one year or less	88,202		1.6	%	45,418		0.8	%
Due after one year through five years	206,117		3.8	%	111,656		2.1	%
Due after five years through ten years	5,165		0.1	%	1,257		0.0	%
Due after ten years	—		0.0	%	—		0.0	%
Total non-managed catastrophe bonds	299,484		5.5	%	158,331		2.9	%
Total fixed maturities	$	5,419,966	100.0	%	$	5,543,030	100.0	%

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Validus Holdings, Ltd.

Top Ten Exposures to Fixed Income Corporate Issuers

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



	September 30, 2017
Issuer^(a)	Fair Value ^(b)		S&P Rating ^(c)	% of Managed Investments, Cash and Cash Equivalents
JPMorgan Chase & Co.	$	59,650	BBB+	0.9	%
Citigroup Inc.	58,171		BBB+	0.8	%
Morgan Stanley	56,445		BBB+	0.7	%
Bank of America Corp.	50,634		BBB+	0.7	%
Wells Fargo & Company	49,373		A	0.7	%
Goldman Sachs Group	45,835		BBB+	0.7	%
Bank of New York Mellon Corp.	33,147		A	0.5	%
AT&T Inc.	31,882		BBB+	0.5	%
British American Tobacco Plc.	28,416		BBB	0.4	%
Anheuser-Busch Inbev NV	27,761		A-	0.4	%
Total	$	441,314		6.3	%

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.

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Validus Holdings, Ltd.

Capitalization

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



Capitalization	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Senior Notes^(a)	$	245,513		$	245,463		$	245,412		$	245,362		$	245,311
Junior Subordinated Deferrable Debentures (JSDs) ^(a)	289,800			289,800			289,800			289,800			289,800
Flagstone Junior Subordinated Deferrable Debentures (JSDs)^(a)	249,110			248,600			247,602			247,426			248,368
Total debt	$	784,423		$	783,863		$	782,814		$	782,588		$	783,479

Redeemable noncontrolling interests	$	1,133,880		$	1,251,660		$	1,657,630		$	1,528,001		$	1,559,580

Preferred shares, liquidation value^(a)	$	400,000		$	400,000		$	150,000		$	150,000		$	150,000
Ordinary shares, capital and surplus available to Validus common shareholders	3,554,717			3,831,355			3,784,329			3,711,507			3,738,712
Accumulated other comprehensive (loss)	(18,430		)	(19,924		)	(22,453		)	(23,216		)	(21,092		)
Noncontrolling interests	78,947			415,658			330,597			165,977			222,996
Total shareholders' equity	$	4,015,234		$	4,627,089		$	4,242,473		$	4,004,268		$	4,090,616

Total capitalization^(b)	$	5,933,537		$	6,662,612		$	6,682,917		$	6,314,857		$	6,433,675
Total capitalization available to Validus^(c)	$	4,720,710		$	4,995,294		$	4,694,690		$	4,620,879		$	4,651,099

Debt to total capitalization	13.2		%	11.8		%	11.7		%	12.4		%	12.2		%
Debt (excluding JSDs) to total capitalization	4.1		%	3.7		%	3.7		%	3.9		%	3.8		%
Debt to total capitalization available to Validus	16.6		%	15.7		%	16.7		%	16.9		%	16.8		%
Debt (excluding JSDs) to total capitalization available to Validus	5.2		%	4.9		%	5.2		%	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.

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Validus Holdings, Ltd.

Estimated Exposures to Peak Zone Property Catastrophe Losses - As of October 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	$	272,688	$	531,267	$	755,747	$	1,002,419	$	1,769,395
California	Earthquake	70,238		193,206		367,941		622,943		1,622,881
Europe	Windstorm	87,734		194,143		402,578		689,535		1,444,805
Japan	Earthquake	56,205		146,415		199,550		314,354		1,019,641
Japan	Typhoon	73,039		153,150		262,024		371,557		953,033

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.

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Validus Holdings, Ltd.

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

(Expressed in millions 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	$	173.3	7.0	%
Marine	Major cruise vessel incident	US-owned cruise vessel sunk or severely damaged	147.3		6.0	%
Marine	Marine collision	Fully laden tanker collides with a cruise vessel in US waters	111.6		4.5	%
Political Risks	South East Asia	Chinese economy has a "hard landing" with sharp fall in growth rates; regional contagion	177.4		7.2	%
Political Risks	Russia	The Russian corporate sector struggles to deal with the effects of crashing commodity and stock prices	62.2		2.5	%
Political Risks	Turkey	Severe economic crisis in Turkey due to political upheaval	50.1		2.0	%
Political Risks	Nigeria	Severe economic, political and social crisis in Nigeria leads to widespread civil unrest	49.8		2.0	%
Political Risks	Middle East	US and Iran escalate into military confrontation; regional contagion	88.2		3.6	%
Aviation	Aviation collision	Collision of two aircraft over a major city	34.0		1.4	%
Satellite	Solar flare	Large single or sequence of proton flares results in loss to all satellites in synchronous orbit	54.7		2.2	%
Satellite	Generic defect	Undetected defect in a number of operational satellites causing major loss	29.4		1.2	%
Terrorism	Rockefeller Center	Midtown Manhattan suffers a 2-tonne conventional bomb blast	96.2		3.9	%
Terrorism	One World Trade Center	Lower Manhattan suffers a 2-tonne conventional bomb blast	45.3		1.8	%
Liability	Professional lines	Failure or collapse of a major corporation	42.4		1.7	%
Liability	Professional lines	UK pensions mis-selling	19.1		0.8	%
Cyber	Major data security breach	Simultaneous cyber-attacks on organizations within one industrial sector; loss of customer data	74.6		3.0	%

The Company has presented RDS 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 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 September 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 - October 26, 2017

Attached files

VALIDUS HOLDINGS LTD Reports