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	a20180331-earningsrelease.htm
8-K - 8-K - VALIDUS HOLDINGS LTD	a20180331-8ksupplementander.htm



		Validus Holdings, Ltd.
		Investor Financial Supplement – First Quarter 2018
		May 1, 2018

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

Validus Holdings, Ltd.

Table of Contents



Section		Page
Table of Contents		2
Explanatory Notes		3
Consolidated Financial Highlights		4
Summary Consolidated Balance Sheets		5
Computation of Book Value per Common Share, Book Value per Diluted Common Share and Tangible Book Value per Diluted Common Share		6
Consolidated Statements of Cash Flows		7
Consolidated Statements of (Loss) Income and Comprehensive Income (Loss)		8
Consolidated Statements of Operations - Underwriting Income Format		9
Computation of Earnings per Share		10
Underwriting Income Statement - Reinsurance Segment		11
Underwriting Results by Class of Business - Three Months Ended - Reinsurance Segment		12
Underwriting Income Statement - Insurance Segment		13
Underwriting Results by Class of Business - Three Months Ended - Insurance Segment		14
Asset Management Segment Information		15
Assets Under Management		16
Corporate and Investments		17
Segment Reconciliation - Three Months Ended		18
Non-GAAP Financial Measure Reconciliation		19
Gross Premiums Written by Segment by Class of Business		20
Consolidated Analysis of Reserves for Losses and Loss Expenses		21
Consolidated Losses and Loss Ratios by Segment		22
Losses and Loss Ratios by Class of Business - Reinsurance Segment		23
Losses and Loss Ratios by Class of Business - Insurance Segment		24
Analysis of Loss Ratios by Segment		25
Consolidated Reinsurance Recoverable Analysis		26
Consolidated Investment Portfolio Composition and Net Investment Income		27
Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile		28
Top Ten Exposures to Fixed Income Corporate Issuers		29
Capitalization		30
Estimated Exposures to Peak Zone Property Catastrophe Losses - As of April 1, 2018		31
Estimated Exposures to Specified Loss Scenarios - As of January 1, 2018		32

Validus Holdings, Ltd.

Explanatory Notes

Table of Contents

Basis of Presentation


•	This document should be read in conjunction with other documents filed by Validus Holdings, Ltd. (“Validus” or the “Company”) with the U.S. Securities and Exchange Commission pursuant to the Exchange Act of 1934, as amended.


•	All financial information contained herein is unaudited; however, certain information contained herein relating to the years ended December 31, 2017 and 2016 is derived from or agrees to audited financial statements. Unless otherwise noted, dollar amounts are in thousands of U.S. dollars, except for share and per share amounts.


•	The general and administrative expense ratio includes share compensation expenses.

•

On May 1, 2017, the Company acquired all of the outstanding capital stock of Crop Risk Services, Inc. ("CRS"), a primary crop insurance managing general agent. For segmental reporting purposes, the results of CRS have been included in the results of the Insurance segment as of the date of acquisition. Transaction expenses incurred during the year ended December 31, 2017 were in relation to the acquisition of CRS and are primarily composed of legal, financial advisory and audit related services.

•

On January 21, 2018, the Company entered into a definitive agreement and plan of merger (the “Merger Agreement”) with American International Group, Inc. (“AIG”). The Merger Agreement provides that, subject to the satisfaction or waiver of certain conditions set forth therein, the Company and its related subsidiaries will merge with an existing AIG subsidiary in accordance with the Bermuda Companies Act (the “Merger”), with the Company surviving the Merger as a wholly–owned subsidiary of AIG. The Merger is expected to close in mid-2018, subject to regulatory approvals and other customary closing conditions. Transaction expenses incurred during the three months ended March 31, 2018 were in relation to the Merger and are primarily composed of legal and financial advisory services.

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 income (loss) available (attributable) to Validus common shareholders, a non-GAAP financial measure, provides investors with a valuable measure of profitability and enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results in a manner similar to how management analyzes the Company’s underlying business performance.

•

Net operating income (loss) available (attributable) 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 19. The Company excludes these items from its calculation of net operating income (loss) available (attributable) to Validus common shareholders because the amount of these gains and losses is heavily influenced by, and fluctuates in part, according to availability of investment market opportunities and other factors. The Company believes these amounts are largely independent of its core underwriting activities and including them distorts the analysis of trends in its operations. The Company believes the reporting of net operating income (loss) available (attributable) 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.


•	Annualized return on average equity, a GAAP financial measure, and annualized 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 19.

•

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

Validus Holdings, Ltd.

Consolidated Financial Highlights

Table of Contents



		Three Months Ended															Years Ended
		March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Highlights	Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		$	(63,483	)	$	359,384
	Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	42,557			4,153			(254,459		)	88,466			76,834			(85,006		)	320,885
	Gross premiums written	1,832,456			443,323			523,856			792,902			1,190,857			2,950,938			2,648,705
	Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
	Total assets	15,600,642			14,426,879			14,601,240			13,951,146			12,137,121			14,426,879			11,349,755
	Total shareholders' equity available to Validus common shareholders	3,501,232			3,495,072			3,536,287			3,811,431			3,761,876			3,495,072			3,688,291
	Total shareholders' equity available to Validus	3,901,232			3,895,072			3,936,287			4,211,431			3,911,876			3,895,072			3,838,291

Per share	(Loss) earnings per basic common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.28		$	1.19		$	(0.80	)	$	4.43
	Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	0.54			0.05			(3.22		)	1.12			0.97			(1.07		)	3.96

	(Loss) earnings per diluted common share
	Net (loss) income (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.25		$	1.17		$	(0.80	)	$	4.36
	Net operating income (loss) available (attributable) to Validus common shareholders^(a)	0.53			0.05			(3.22		)	1.09			0.95			(1.07		)	3.90

	Book value per common share	$	44.14		$	44.06		$	44.51		$	47.93		$	47.54		$	44.06		$	46.61
	Book value per diluted common share ^(a)	$	42.79		$	42.71		$	43.13		$	46.45		$	45.88		$	42.71		$	44.97
	Change in book value per diluted common share inclusive of dividends ^(a)	1.1		%	(0.1		)%	(6.3		)%	2.1		%	2.9		%	(1.6		)%	9.5		%

	Book value per diluted common share plus accumulated dividends ^(a)	$	56.25		$	55.79		$	55.83		$	58.77		$	57.82		$	55.79		$	56.53

Ratios	Losses and loss expense ratio	52.0		%	73.7		%	173.5		%	46.9		%	46.9		%	89.1		%	47.4		%

	Policy acquisition cost ratio	18.8		%	19.5		%	16.0		%	18.6		%	19.4		%	18.3		%	20.0		%
	General and administration expense ratio	20.1		%	16.5		%	11.0		%	17.0		%	16.9		%	15.2		%	16.8		%
	Expense ratio	38.9		%	36.0		%	27.0		%	35.6		%	36.3		%	33.5		%	36.8		%
	Combined ratio	90.9		%	109.7		%	200.5		%	82.5		%	83.2		%	122.6		%	84.2		%

	Annualized return on average equity	(0.5		)%	(1.0		)%	(27.3		)%	10.7		%	10.2		%	(1.7		)%	9.7		%
	Annualized net operating return on average equity ^(a)	4.9		%	0.5		%	(27.7		)%	9.3		%	8.3		%	(2.3		)%	8.7		%

Notes:


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

Validus Holdings, Ltd.

Summary Consolidated Balance Sheets

Table of Contents



	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Assets
Fixed maturity investments trading, at fair value	$	5,803,022		$	5,858,348		$	5,419,966		$	5,418,643		$	5,365,216		$	5,543,030		$	5,576,341		$	5,551,586		$	5,481,304
Short-term investments trading, at fair value	3,638,940			3,381,757			2,993,246			2,871,353			2,785,226			2,796,170			2,481,406			2,369,654			2,108,199
Other investments, at fair value	357,246			355,218			471,300			448,618			443,004			405,712			394,695			359,526			344,151
Investments in investment affiliates, equity method	113,471			100,137			92,079			103,377			94,697			100,431			99,731			99,278			84,135
Cash and cash equivalents	672,173			754,990			965,630			800,405			623,937			419,976			443,992			568,798			569,774
Restricted cash	302,277			394,663			89,403			195,039			92,547			70,956			113,048			96,022			108,395
Total investments and cash	10,887,129			10,845,113			10,031,624			9,837,435			9,404,627			9,336,275			9,109,213			9,044,864			8,695,958
Investments in operating affiliate, equity method	—			—			—			—			—			—			—			—			369
Premiums receivable	1,865,460			939,487			1,569,374			1,940,637			1,214,745			725,390			939,127			1,372,000			1,176,684
Deferred acquisition costs	309,825			213,816			258,078			302,857			292,180			209,227			249,922			283,213			262,675
Prepaid reinsurance premiums	390,900			132,938			207,618			335,837			199,046			77,996			119,805			145,567			181,255
Securities lending collateral	4,210			2,717			2,115			2,514			10,386			9,779			10,629			10,224			9,721
Loss reserves recoverable	979,944			1,233,997			1,335,016			600,207			451,856			430,421			444,609			442,987			370,689
Paid losses recoverable	59,892			46,873			77,730			35,675			37,837			35,247			36,069			27,648			25,001
Income taxes recoverable	7,705			9,044			9,704			4,763			6,757			4,870			6,879			8,526			7,146
Deferred tax asset	56,739			52,467			52,228			52,655			45,995			43,529			26,015			23,745			27,771
Receivable for investments sold	31,512			12,182			37,493			20,519			9,302			3,901			21,854			13,736			16,278
Intangible assets	169,168			171,411			173,398			175,518			114,176			115,592			117,010			118,426			119,842
Goodwill	229,573			229,573			227,701			227,701			196,758			196,758			196,758			196,758			196,758
Accrued investment income	29,621			29,096			27,976			26,968			25,962			26,488			24,906			24,925			22,298
Other assets	578,964			508,165			591,185			387,860			127,494			134,282			183,357			105,625			92,076
Total assets	$	15,600,642		$	14,426,879		$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521
Liabilities
Reserve for losses and loss expenses	$	4,632,629		$	4,831,390		$	4,935,637		$	3,305,191		$	3,052,745		$	2,995,195		$	3,035,987		$	3,122,717		$	2,980,300
Unearned premiums	2,242,368			1,147,186			1,526,465			1,970,896			1,612,474			1,076,049			1,359,438			1,621,563			1,503,161
Reinsurance balances payable	398,861			331,645			527,881			461,261			118,119			54,781			76,429			92,488			96,685
Securities lending payable	4,210			2,717			2,581			2,980			10,852			10,245			11,095			10,690			10,187
Deferred tax liability	3,633			4,600			4,198			4,012			3,818			3,331			3,278			3,552			3,618
Payable for investments purchased	85,946			74,496			84,431			92,077			38,486			29,447			49,435			52,718			76,116
Accounts payable and accrued expenses	520,916			1,225,875			478,892			385,958			171,134			587,648			144,086			149,593			136,712
Notes payable to AlphaCat investors	1,268,194			1,108,364			1,107,618			1,066,159			446,576			278,202			372,730			370,982			323,510
Senior notes payable	245,614			245,564			245,513			245,463			245,412			245,362			245,311			245,261			245,211
Debentures payable	539,572			539,158			538,910			538,400			537,402			537,226			538,168			537,987			538,335
Total liabilities	9,941,943			9,510,995			9,452,126			8,072,397			6,237,018			5,817,486			5,835,957			6,207,551			5,913,835
Redeemable noncontrolling interests	1,423,110			1,004,094			1,133,880			1,251,660			1,657,630			1,528,001			1,559,580			1,532,283			1,409,037
Shareholders' equity
Preferred shares	$	400,000		$	400,000		$	400,000		$	400,000		$	150,000		$	150,000		$	150,000		$	150,000		$	—
Common shares	28,351			28,349			28,342			28,339			28,225			28,224			28,223			28,219			28,102
Treasury shares	(14,468		)	(14,468		)	(14,437		)	(14,423		)	(14,376		)	(14,376		)	(14,320		)	(14,084		)	(13,830		)
Additional paid-in capital	824,356			814,641			812,266			807,321			830,346			821,023			827,256			883,701			954,485
Accumulated other comprehensive income (loss)	9,405			(22,192		)	(18,430		)	(19,924		)	(22,453		)	(23,216		)	(21,092		)	(18,182		)	(15,438		)
Retained earnings	2,653,588			2,688,742			2,728,546			3,010,118			2,940,134			2,876,636			2,897,553			2,836,602			2,771,107
Total shareholders' equity available to Validus	3,901,232			3,895,072			3,936,287			4,211,431			3,911,876			3,838,291			3,867,620			3,866,256			3,724,426
Noncontrolling interests	334,357			16,718			78,947			415,658			330,597			165,977			222,996			212,154			157,223
Total shareholders' equity	4,235,589			3,911,790			4,015,234			4,627,089			4,242,473			4,004,268			4,090,616			4,078,410			3,881,649
Total liabilities, noncontrolling interests and shareholders' equity	$	15,600,642		$	14,426,879		$	14,601,240		$	13,951,146		$	12,137,121		$	11,349,755		$	11,486,153		$	11,818,244		$	11,204,521

Book value per common share	$	44.14		$	44.06		$	44.51		$	47.93		$	47.54		$	46.61		$	46.80		$	46.01		$	45.67
Book value per diluted common share ^(a)	$	42.79		$	42.71		$	43.13		$	46.45		$	45.88		$	44.97		$	45.16		$	44.41		$	44.00
Book value per diluted common share plus accumulated dividends ^(a)	$	56.25		$	55.79		$	55.83		$	58.77		$	57.82		$	56.53		$	56.37		$	55.27		$	54.51

Notes:


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

Validus Holdings, Ltd.

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

Table of Contents



	March 31, 2018						December 31, 2017
	Equity Amount			Common Shares	Per Share Amount ^(a)		Equity Amount			Common Shares	Per Share Amount ^(a)
Book value per common share ^(b)	$	3,501,232		79,329,028	$	44.14	$	3,495,072		79,319,550	$	44.06
Non-GAAP Adjustments:
Unvested restricted shares	—			2,489,888			—			2,503,859
Book value per diluted common share ^(c)	3,501,232			81,818,916	$	42.79	3,495,072			81,823,409	$	42.71
Goodwill	(229,573		)	—			(229,573		)	—
Intangible assets	(169,168		)	—			(171,411		)	—
Tangible book value per diluted common share ^(c)	$	3,102,491		81,818,916	$	37.92	$	3,094,088		81,823,409	$	37.81

Book value per diluted common share ^(c)					$	42.79					$	42.71
Accumulated dividends					13.46						13.08
Book value per diluted common share plus accumulated dividends ^(c)					$	56.25					$	55.79

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

Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Cash flows provided by (used in) operating activities
Net income (loss)	$	66,462		$	(70,001	)	$	(621,185	)	$	146,948		$	139,336		$	(404,902	)	$	487,202
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Loss on redemption of AlphaCat ILS fund	—			—			—			402			—			402			—
Amortization of discount on senior notes	27			27			27			27			27			108			108
(Income) loss from investment and operating affiliates	(13,068		)	(6,345		)	(1,011		)	(9,466		)	(5,188		)	(22,010		)	2,106
Net realized and change in net unrealized losses (gains) on investments	55,181			15,650			4,291			(18,595		)	(12,184		)	(10,838		)	(32,628		)
Amortization of intangible assets	2,243			2,146			2,120			2,579			1,416			8,261			5,666
Foreign exchange (gains) losses included in net income	(9,885		)	(540		)	(4,493		)	(4,748		)	(4,938		)	(14,719		)	3,043
Amortization of premium on fixed maturity investments	3,899			4,732			4,166			3,476			3,536			15,910			17,961
Change in operational balance sheet items, net	(68,646		)	130,152			857,839			(96,883		)	(113,697		)	777,411			(116,162		)
Net cash provided by operating activities	$	45,942		$	85,852		$	251,197		$	34,886		$	17,799		$	389,734		$	410,203
Cash flows provided by (used in) investing activities
(Purchases) sales of investments	$	(270,028	)	$	(717,157	)	$	(174,373	)	$	(92,623	)	$	167,286		$	(816,867	)	$	(974,719	)
(Increase) decrease in securities lending collateral	(1,493		)	(602		)	399			7,872			(607		)	7,062			(4,916		)
(Investments in) distributions from investment & operating affiliates, net	(266		)	(1,713		)	12,309			786			10,922			22,304			(14,472		)
Purchase of subsidiary, net of cash acquired	—			—			—			(183,923		)	—			(183,923		)	—
Net cash (used in) provided by investing activities	$	(271,787	)	$	(719,472	)	$	(161,665	)	$	(267,888	)	$	177,601		$	(971,424	)	$	(994,107	)
Cash flows provided by (used in) financing activities
Net proceeds on issuance of notes payable to AlphaCat investors	$	155,966		$	506		$	40,903		$	196,597		$	73,048		$	311,054		$	296,325
Proceeds drawn on credit facilities	—			206,000			—			—			—			206,000			—
Net proceeds on issuance of preferred shares	—			—			—			241,686			—			241,686			144,852
(Redemption) issuance of common shares, net	(12		)	545			(162		)	(11,794		)	(167		)	(11,578		)	(7,701		)
Purchases of common shares under share repurchase program	—			(8,225		)	(4,347		)	(13,996		)	—			(26,568		)	(212,675		)
Dividends paid on common and preferred shares	(36,860		)	(36,072		)	(35,956		)	(35,397		)	(32,295		)	(139,720		)	(120,080		)
Increase (decrease) in securities lending payable	1,493			136			(399		)	(7,872		)	607			(7,528		)	4,916
Third party investments in (redemptions of) redeemable noncontrolling interest, net	211,314			58,665			(51,201		)	95,463			35,403			138,330			376,165
Third party investments in (redemptions of) noncontrolling interest, net	281,300			(3,440		)	(101,125		)	69,965			92,210			57,610			44,571
Third party subscriptions (deployed) received on funds and sidecars, net	(578,666		)	516,333			114,500			(27,500		)	(144,452		)	458,881			(225,284		)
Net cash provided by (used in) financing activities	$	34,535		$	734,448		$	(37,787	)	$	507,152		$	24,354		$	1,228,167		$	301,089
Effect of foreign currency rate changes on cash and cash equivalents and restricted cash	16,107			(6,208		)	7,844			4,810			5,798			12,244			(22,632		)
Net (decrease) increase in cash and cash equivalents and restricted cash	(175,203		)	94,620			59,589			278,960			225,552			658,721			(305,447		)
Cash and cash equivalents and restricted cash - beginning of period	1,149,653			1,055,033			995,444			716,484			490,932			490,932			796,379
Cash and cash equivalents and restricted cash - end of period	$	974,450		$	1,149,653		$	1,055,033		$	995,444		$	716,484		$	1,149,653		$	490,932

Supplemental information:
Taxes paid during the period	$	460		$	1,511		$	2,242		$	552		$	16		$	4,321		$	6,034
Interest paid during the period	$	19,068		$	8,045		$	19,202		$	8,113		$	19,073		$	54,433		$	54,638
Losses paid during the period	$	281,880		$	485,913		$	372,706		$	236,023		$	245,787		$	1,340,429		$	1,114,402

Validus Holdings, Ltd.

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

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Revenues
Gross premiums written	$	1,832,456		$	443,323		$	523,856		$	792,902		$	1,190,857		$	2,950,938		$	2,648,705
Reinsurance premiums ceded	(376,294		)	(96,445		)	(116,860		)	(56,222		)	(200,106		)	(469,633		)	(289,705		)
Net premiums written	1,456,162			346,878			406,996			736,680			990,751			2,481,305			2,359,000
Change in unearned premiums	(837,220		)	304,599			316,212			(105,653		)	(415,375		)	99,783			(109,835		)
Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
Net investment income	52,072			48,960			44,458			44,241			40,214			177,873			150,385
Net realized gains (losses) on investments	2,200			5,607			906			2,274			(1,164		)	7,623			15,757
Change in net unrealized (losses) gains on investments	(57,381		)	(21,257		)	(5,197		)	16,321			13,348			3,215			16,871
Income (loss) from investment affiliates	13,068			6,345			1,011			9,466			5,188			22,010			(2,083		)
Other insurance related income and other income	25,540			6,939			3,571			1,339			1,330			13,179			2,195
Foreign exchange gains (losses)	525			(283		)	(1,404		)	(7,329		)	1,569			(7,447		)	10,864
Total revenues	654,966			697,788			766,553			697,339			635,861			2,797,541			2,443,154
Expenses
Losses and loss expenses	321,545			479,842			1,254,602			296,149			269,585			2,300,178			1,065,097
Policy acquisition costs	116,456			127,067			115,590			117,268			111,628			471,553			449,482
General and administrative expenses	114,726			97,522			70,342			96,349			87,924			352,137			336,294
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Finance expenses	14,263			15,871			14,523			14,209			13,943			58,546			58,520
Transaction expenses	7,756			—			—			4,427			—			4,427			—
Total expenses	584,475			730,333			1,464,500			539,548			492,571			3,226,952			1,952,300
Income (loss) before taxes, (loss) from operating affiliate and (income) loss attributable to AlphaCat investors	70,491			(32,545		)	(697,947		)	157,791			143,290			(429,411		)	490,854
Tax benefit	6,833			412			2,632			987			3,549			7,580			19,729
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
(Income) loss attributable to AlphaCat investors	(10,862		)	(37,868		)	74,130			(11,830		)	(7,503		)	16,929			(23,358		)
Net income (loss)	66,462			(70,001		)	(621,185		)	146,948			139,336			(404,902		)	487,202
Net (income) loss attributable to noncontrolling interests	(64,712		)	67,136			376,366			(43,650		)	(42,572		)	357,280			(123,363		)
Net income (loss) available (attributable) to Validus	1,750			(2,865		)	(244,819		)	103,298			96,764			(47,622		)	363,839
Dividends on preferred shares	(5,828		)	(5,828		)	(5,627		)	(2,203		)	(2,203		)	(15,861		)	(4,455		)
Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		$	(63,483	)	$	359,384

Comprehensive income (loss)
Net income (loss)	$	66,462		$	(70,001	)	$	(621,185	)	$	146,948		$	139,336		$	(404,902	)	$	487,202
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustments	1,837			490			1,481			1,489			597			4,057			(10,440		)
Change in minimum pension liability	(38		)	1,617			—			1,184			68			2,869			(484		)
Change in fair value of cash flow hedges	28,763			(6,319		)	13			(144		)	98			(6,352		)	277
Other comprehensive income (loss), net of tax	$	30,562		$	(4,212	)	$	1,494		$	2,529		$	763		$	574		$	(10,647	)
Comprehensive (income) loss attributable to noncontrolling interests	(64,712		)	67,136			376,366			(43,650		)	(42,572		)	357,280			(123,363		)
Comprehensive income (loss) available (attributable) to Validus	$	32,312		$	(7,077	)	$	(243,325	)	$	105,827		$	97,527		$	(47,048	)	$	353,192
(Loss) earnings per share
Weighted average number of common shares and common share equivalents outstanding
Basic	79,325,688			78,966,938			78,994,335			79,270,561			79,133,671			79,091,376			81,041,974
Diluted	79,325,688			78,966,938			78,994,335			80,872,451			80,739,142			79,091,376			82,359,460
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.28		$	1.19		$	(0.80	)	$	4.43
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.05	)	$	(0.11	)	$	(3.17	)	$	1.25		$	1.17		$	(0.80	)	$	4.36
Cash dividends declared per common share	$	0.38		$	0.38		$	0.38		$	0.38		$	0.38		$	1.52		$	1.40

Validus Holdings, Ltd.

Consolidated Statements of Operations - Underwriting Income Format

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Underwriting revenues
Gross premiums written	$	1,832,456		$	443,323		$	523,856		$	792,902		$	1,190,857		$	2,950,938		$	2,648,705
Reinsurance premiums ceded	(376,294		)	(96,445		)	(116,860		)	(56,222		)	(200,106		)	(469,633		)	(289,705		)
Net premiums written	1,456,162			346,878			406,996			736,680			990,751			2,481,305			2,359,000
Change in unearned premiums	(837,220		)	304,599			316,212			(105,653		)	(415,375		)	99,783			(109,835		)
Net premiums earned	618,942			651,477			723,208			631,027			575,376			2,581,088			2,249,165
Other insurance related income	25,496			6,939			3,536			1,165			1,236			12,876			2,961
Total underwriting revenues	644,438			658,416			726,744			632,192			576,612			2,593,964			2,252,126
Underwriting deductions
Losses and loss expenses	321,545			479,842			1,254,602			296,149			269,585			2,300,178			1,065,097
Policy acquisition costs	116,456			127,067			115,590			117,268			111,628			471,553			449,482
General and administrative expenses	114,726			97,522			70,342			96,349			87,924			352,137			336,294
Share compensation expenses	9,729			10,031			9,443			11,146			9,491			40,111			42,907
Total underwriting deductions	562,456			714,462			1,449,977			520,912			478,628			3,163,979			1,893,780
Underwriting income (loss) ^(a)	$	81,982		$	(56,046	)	$	(723,233	)	$	111,280		$	97,984		$	(570,015	)	$	358,346
Net investment income	52,072			48,960			44,458			44,241			40,214			177,873			150,385
Finance expenses	(14,263		)	(15,871		)	(14,523		)	(14,209		)	(13,943		)	(58,546		)	(58,520		)
Dividends on preferred shares	(5,828		)	(5,828		)	(5,627		)	(2,203		)	(2,203		)	(15,861		)	(4,455		)
Tax benefit (expense)	3,739			(927		)	2,164			2,735			4,129			8,101			21,416
(Loss) from operating affiliate	—			—			—			—			—			—			(23		)
(Income) loss attributable to AlphaCat investors	(10,862		)	(37,868		)	74,130			(11,830		)	(7,503		)	16,929			(23,358		)
Net operating (income) loss attributable to noncontrolling interests	(64,283		)	71,733			368,172			(41,548		)	(41,844		)	356,513			(122,906		)
Net operating income (loss) available (attributable) to Validus common shareholders ^(a)	$	42,557		$	4,153		$	(254,459	)	$	88,466		$	76,834		$	(85,006	)	$	320,885
Net realized gains (losses) on investments	2,200			5,607			906			2,274			(1,164		)	7,623			15,757
Change in net unrealized (losses) gains on investments	(57,381		)	(21,257		)	(5,197		)	16,321			13,348			3,215			16,871
Income (loss) from investment affiliates	13,068			6,345			1,011			9,466			5,188			22,010			(2,083		)
Foreign exchange gains (losses)	525			(283		)	(1,404		)	(7,329		)	1,569			(7,447		)	10,864
Other income (loss)	44			—			35			174			94			303			(766		)
Transaction expenses	(7,756		)	—			—			(4,427		)	—			(4,427		)	—
Net (income) loss attributable to noncontrolling interests	(429		)	(4,597		)	8,194			(2,102		)	(728		)	767			(457		)
Tax benefit (expense)	3,094			1,339			468			(1,748		)	(580		)	(521		)	(1,687		)
Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	(8,693	)	$	(250,446	)	$	101,095		$	94,561		(63,483		)	359,384

Selected ratios:
Ratio of net to gross premiums written	79.5		%	78.2		%	77.7		%	92.9		%	83.2		%	84.1		%	89.1		%

Losses and loss expense ratio	52.0		%	73.7		%	173.5		%	46.9		%	46.9		%	89.1		%	47.4		%

Policy acquisition cost ratio	18.8		%	19.5		%	16.0		%	18.6		%	19.4		%	18.3		%	20.0		%
General and administrative expense ratio	20.1		%	16.5		%	11.0		%	17.0		%	16.9		%	15.2		%	16.8		%
Expense ratio	38.9		%	36.0		%	27.0		%	35.6		%	36.3		%	33.5		%	36.8		%
Combined ratio	90.9		%	109.7		%	200.5		%	82.5		%	83.2		%	122.6		%	84.2		%

Notes:


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

Validus Holdings, Ltd.

Computation of Earnings per Share

Table of Contents



	Three Months Ended ^(a)
	March 31, 2018							March 31, 2017
	Net (Loss)			Net Operating Income		Comprehensive Income		Net Income		Net Operating Income		Comprehensive Income
Basic (loss) earnings per share ^(b)
(Loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	42,557	$	26,484	$	94,561	$	76,834	$	95,324
Weighted average number of common shares outstanding	79,325,688			79,325,688		79,325,688		79,133,671		79,133,671		79,133,671
Basic (loss) earnings per share (attributable) available to Validus common shareholders	$	(0.05	)	$	0.54	$	0.33	$	1.19	$	0.97	$	1.20

(Loss) earnings per diluted share^(c)
(Loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	42,557	$	26,484	$	94,561	$	76,834	$	95,324
Weighted average number of common shares outstanding	79,325,688			79,325,688		79,325,688		79,133,671		79,133,671		79,133,671
Share equivalents:
Stock options	—			—		—		15,379		15,379		15,379
Unvested restricted shares	—			1,650,434		1,650,434		1,590,092		1,590,092		1,590,092
Weighted average number of diluted common shares outstanding	79,325,688			80,976,122		80,976,122		80,739,142		80,739,142		80,739,142
(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.05	)	$	0.53	$	0.33	$	1.17	$	0.95	$	1.18

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 months ended March 31, 2018 share equivalents were not included in the computation of (loss) per diluted common share due to their anti-dilutive effect.

Validus Holdings, Ltd.

Underwriting Income Statement - Reinsurance Segment

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Underwriting revenues
Gross premiums written	$	765,573		$	51,960		$	169,572		$	330,534		$	643,141		$	1,195,207		$	1,184,912
Reinsurance premiums ceded	(190,194		)	(40,716		)	(43,849		)	(10,278		)	(114,446		)	(209,289		)	(121,331		)
Net premiums written	575,379			11,244			125,723			320,256			528,695			985,918			1,063,581
Change in unearned premiums	(350,627		)	239,320			156,754			(61,948		)	(297,040		)	37,086			(67,432		)
Net premiums earned	224,752			250,564			282,477			258,308			231,655			1,023,004			996,149
Other insurance related income	2			15			49			1			2			67			25
Total underwriting revenues	224,754			250,579			282,526			258,309			231,657			1,023,071			996,174
Underwriting deductions
Losses and loss expenses	103,473			135,804			361,693			114,341			80,881			692,719			415,505
Policy acquisition costs	48,340			58,107			47,822			49,966			43,535			199,430			189,797
General and administrative expenses	28,915			23,604			14,400			22,204			19,969			80,177			85,000
Share compensation expenses	2,663			2,331			3,083			2,725			2,623			10,762			11,668
Total underwriting deductions	183,391			219,846			426,998			189,236			147,008			983,088			701,970
Underwriting income (loss)	$	41,363		$	30,733		$	(144,472	)	$	69,073		$	84,649		$	39,983		$	294,204

Supplemental information:
Losses and loss expenses:
Current period excluding items below	$	121,311		$	132,919		$	123,095		$	124,268		$	106,932		$	487,214		$	459,249
Current period—notable loss events	—			14,738			283,027			—			—			297,765			45,164
Current period—non-notable loss events	—			9,392			796			5,781			5,073			21,042			46,718
Change in prior accident years	(17,838		)	(21,245		)	(45,225		)	(15,708		)	(31,124		)	(113,302		)	(135,626		)
Total losses and loss expenses	$	103,473		$	135,804		$	361,693		$	114,341		$	80,881		$	692,719		$	415,505
Selected ratios:
Ratio of net to gross premiums written	75.2		%	21.6		%	74.1		%	96.9		%	82.2		%	82.5		%	89.8		%
Losses and loss expense ratio:
Current period excluding items below	53.9		%	53.1		%	43.5		%	48.2		%	46.1		%	47.6		%	46.1		%
Current period—notable loss events	—		%	5.9		%	100.2		%	—		%	—		%	29.1		%	4.5		%
Current period—non-notable loss events	—		%	3.7		%	0.3		%	2.2		%	2.2		%	2.1		%	4.7		%
Change in prior accident years	(7.9		)%	(8.5		)%	(16.0		)%	(6.1		)%	(13.4		)%	(11.1		)%	(13.6		)%
Losses and loss expense ratio	46.0		%	54.2		%	128.0		%	44.3		%	34.9		%	67.7		%	41.7		%
Policy acquisition cost ratio	21.5		%	23.2		%	16.9		%	19.3		%	18.8		%	19.5		%	19.1		%
General and administrative expense ratio	14.1		%	10.4		%	6.2		%	9.7		%	9.8		%	8.9		%	9.7		%
Expense ratio	35.6		%	33.6		%	23.1		%	29.0		%	28.6		%	28.4		%	28.8		%
Combined ratio	81.6		%	87.8		%	151.1		%	73.3		%	63.5		%	96.1		%	70.5		%

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Three Months Ended - Reinsurance Segment

Table of Contents



	Three Months Ended March 31, 2018												Three Months Ended March 31, 2017
	Property			Specialty - Short-tail			Specialty - Other			Total			Property			Specialty - Short-tail			Specialty - Other			Total
Underwriting revenues
Gross premiums written	$	273,989		$	352,110		$	139,474		$	765,573		$	216,667		$	376,878		$	49,596		$	643,141
Reinsurance premiums ceded	(136,390		)	(31,643		)	(22,161		)	(190,194		)	(88,417		)	(24,591		)	(1,438		)	(114,446		)
Net premiums written	137,599			320,467			117,313			575,379			128,250			352,287			48,158			528,695
Change in unearned premiums	(47,748		)	(223,413		)	(79,466		)	(350,627		)	(25,868		)	(247,936		)	(23,236		)	(297,040		)
Net premiums earned	89,851			97,054			37,847			224,752			102,382			104,351			24,922			231,655
Other insurance related income										2												2
Total underwriting revenues										224,754												231,657
Underwriting deductions
Losses and loss expenses	29,122			50,907			23,444			103,473			17,437			49,450			13,994			80,881
Policy acquisition costs	17,631			19,760			10,949			48,340			17,884			18,103			7,548			43,535
Total underwriting deductions before G&A	46,753			70,667			34,393			151,813			35,321			67,553			21,542			124,416
Underwriting income before G&A	$	43,098		$	26,387		$	3,454		$	72,941		$	67,061		$	36,798		$	3,380		$	107,241
General and administrative expenses										28,915												19,969
Share compensation expenses										2,663												2,623
Total underwriting deductions										183,391												147,008
Underwriting income										$	41,363											$	84,649

Supplemental information:
Losses and loss expenses:
Current period excluding items below	$	33,944		$	64,358		$	23,009		$	121,311		$	21,144		$	71,480		$	14,308		$	106,932
Current period—notable loss events	—			—			—			—			—			—			—			—
Current period—non-notable loss events	—			—			—			—			355			4,718			—			5,073
Change in prior accident years	(4,822		)	(13,451		)	435			(17,838		)	(4,062		)	(26,748		)	(314		)	(31,124		)
Total losses and loss expenses	$	29,122		$	50,907		$	23,444		$	103,473		$	17,437		$	49,450		$	13,994		$	80,881
Selected ratios:
Ratio of net to gross premiums written	50.2		%	91.0		%	84.1		%	75.2		%	59.2		%	93.5		%	97.1		%	82.2		%
Losses and loss expense ratio:
Current period excluding items below	37.8		%	66.3		%	60.8		%	53.9		%	20.7		%	68.5		%	57.5		%	46.1		%
Current period—notable loss events	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%
Current period—non-notable loss events	—		%	—		%	—		%	—		%	0.3		%	4.5		%	—		%	2.2		%
Change in prior accident years	(5.4		)%	(13.9		)%	1.1		%	(7.9		)%	(4.0		)%	(25.6		)%	(1.3		)%	(13.4		)%
Losses and loss expense ratio	32.4		%	52.4		%	61.9		%	46.0		%	17.0		%	47.4		%	56.2		%	34.9		%
Policy acquisition cost ratio	19.6		%	20.4		%	28.9		%	21.5		%	17.5		%	17.3		%	30.3		%	18.8		%
General and administrative expense ratio										14.1		%										9.8		%
Expense ratio										35.6		%										28.6		%
Combined ratio										81.6		%										63.5		%

Validus Holdings, Ltd.

Underwriting Income Statement - Insurance Segment

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Underwriting revenues
Gross premiums written	$	785,795		$	377,014		$	333,272		$	360,057		$	382,790		$	1,453,133		$	1,194,137
Reinsurance premiums ceded	(191,637		)	(56,378		)	(76,362		)	(49,315		)	(79,000		)	(261,055		)	(162,669		)
Net premiums written	594,158			320,636			256,910			310,742			303,790			1,192,078			1,031,468
Change in unearned premiums	(294,620		)	12,393			82,185			(5,875		)	(24,696		)	64,007			(28,524		)
Net premiums earned	299,538			333,029			339,095			304,867			279,094			1,256,085			1,002,944
Other insurance related income	2,170			3,957			1,354			728			996			7,035			1,367
Total underwriting revenues	301,708			336,986			340,449			305,595			280,090			1,263,120			1,004,311
Underwriting deductions
Losses and loss expenses	183,389			244,908			321,940			180,741			186,610			934,199			604,741
Policy acquisition costs	60,057			60,403			59,454			60,137			61,192			241,186			232,780
General and administrative expenses	68,050			64,945			43,369			53,596			45,276			207,186			165,529
Share compensation expenses	2,989			3,512			2,187			3,702			3,373			12,774			14,987
Total underwriting deductions	314,485			373,768			426,950			298,176			296,451			1,395,345			1,018,037
Underwriting (loss) income	$	(12,777	)	$	(36,782	)	$	(86,501	)	$	7,419		$	(16,361	)	$	(132,225	)	$	(13,726	)

Supplemental information:
Losses and loss expenses:
Current period excluding items below	$	198,937		$	245,952		$	255,425		$	202,684		$	198,610		$	902,671		$	644,512
Current period—notable loss events	—			20,917			82,111			—			—			103,028			20,752
Current period—non-notable loss events	—			(2,276		)	10,992			1,787			14,689			25,192			17,306
Change in prior accident years	(15,548		)	(19,685		)	(26,588		)	(23,730		)	(26,689		)	(96,692		)	(77,829		)
Total losses and loss expenses	$	183,389		$	244,908		$	321,940		$	180,741		$	186,610		$	934,199		$	604,741
Selected ratios:
Ratio of net to gross premiums written	75.6		%	85.0		%	77.1		%	86.3		%	79.4		%	82.0		%	86.4		%
Losses and loss expense ratio:
Current period excluding items below	66.4		%	73.8		%	75.3		%	66.5		%	71.2		%	71.9		%	64.3		%
Current period—notable loss events	—		%	6.3		%	24.2		%	—		%	—		%	8.2		%	2.1		%
Current period—non-notable loss events	—		%	(0.7		)%	3.2		%	0.6		%	5.3		%	2.0		%	1.7		%
Change in prior accident years	(5.2		)%	(5.9		)%	(7.8		)%	(7.8		)%	(9.6		)%	(7.7		)%	(7.8		)%
Losses and loss expense ratio	61.2		%	73.5		%	94.9		%	59.3		%	66.9		%	74.4		%	60.3		%
Policy acquisition cost ratio	20.0		%	18.1		%	17.5		%	19.7		%	21.9		%	19.2		%	23.2		%
General and administrative expense ratio	23.7		%	20.6		%	13.4		%	18.8		%	17.4		%	17.5		%	18.0		%
Expense ratio	43.7		%	38.7		%	30.9		%	38.5		%	39.3		%	36.7		%	41.2		%
Combined ratio	104.9		%	112.2		%	125.8		%	97.8		%	106.2		%	111.1		%	101.5		%

Validus Holdings, Ltd.

Underwriting Results by Class of Business - Three Months Ended - Insurance Segment

Table of Contents



	Three Months Ended March 31, 2018												Three Months Ended March 31, 2017
	Property			Specialty - Short-tail			Specialty - Other			Total			Property			Specialty - Short-tail			Specialty - Other			Total
Underwriting revenues
Gross premiums written	$	91,958		$	538,322		$	155,515		$	785,795		$	81,547		$	179,221		$	122,022		$	382,790
Reinsurance premiums ceded	(47,055		)	(105,303		)	(39,279		)	(191,637		)	(33,263		)	(26,554		)	(19,183		)	(79,000		)
Net premiums written	44,903			433,019			116,236			594,158			48,284			152,667			102,839			303,790
Change in unearned premiums	30,084			(312,988		)	(11,716		)	(294,620		)	19,990			(40,070		)	(4,616		)	(24,696		)
Net premiums earned	74,987			120,031			104,520			299,538			68,274			112,597			98,223			279,094
Other insurance related income										2,170												996
Total underwriting revenues										301,708												280,090
Underwriting deductions
Losses and loss expenses	53,552			59,674			70,163			183,389			59,487			55,708			71,415			186,610
Policy acquisition costs	16,556			21,481			22,020			60,057			13,823			26,618			20,751			61,192
Total underwriting deductions before G&A	70,108			81,155			92,183			243,446			73,310			82,326			92,166			247,802
Underwriting income (loss) before G&A	$	4,879		$	38,876		$	12,337		$	58,262		$	(5,036	)	$	30,271		$	6,057		$	32,288
General and administrative expenses										68,050												45,276
Share compensation expenses										2,989												3,373
Total underwriting deductions										314,485												296,451
Underwriting (loss)										$	(12,777	)										$	(16,361	)

Supplemental information:
Losses and loss expenses:
Current period excluding items below	$	49,484		$	71,875		$	77,578		$	198,937		$	53,464		$	67,471		$	77,675		$	198,610
Current period—notable loss events	—			—			—			—			—			—			—			—
Current period—non-notable loss events	—			—			—			—			14,689			—			—			14,689
Change in prior accident years	4,068			(12,201		)	(7,415		)	(15,548		)	(8,666		)	(11,763		)	(6,260		)	(26,689		)
Total losses and loss expenses	$	53,552		$	59,674		$	70,163		$	183,389		$	59,487		$	55,708		$	71,415		$	186,610
Selected ratios:
Ratio of net to gross premiums written	48.8		%	80.4		%	74.7		%	75.6		%	59.2		%	85.2		%	84.3		%	79.4		%
Losses and loss expense ratio:
Current period excluding items below	66.0		%	59.9		%	74.2		%	66.4		%	78.3		%	59.9		%	79.1		%	71.2		%
Current period—notable loss events	—		%	—		%	—		%	—		%	—		%	—		%	—		%	—		%
Current period—non-notable loss events	—		%	—		%	—		%	—		%	21.5		%	—		%	—		%	5.3		%
Change in prior accident years	5.4		%	(10.2		)%	(7.1		)%	(5.2		)%	(12.7		)%	(10.4		)%	(6.4		)%	(9.6		)%
Losses and loss expense ratio	71.4		%	49.7		%	67.1		%	61.2		%	87.1		%	49.5		%	72.7		%	66.9		%
Policy acquisition cost ratio	22.1		%	17.9		%	21.1		%	20.0		%	20.2		%	23.6		%	21.1		%	21.9		%
General and administrative expense ratio										23.7		%										17.4		%
Expense ratio										43.7		%										39.3		%
Combined ratio										104.9		%										106.2		%

Validus Holdings, Ltd.

Asset Management Segment Information

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Fee revenues
Third party	$	6,209		$	5,061		$	5,095		$	5,549		$	4,644		$	20,349		$	18,771
Related party	443			418			457			644			631			2,150			3,329
Total fee revenues	6,652			5,479			5,552			6,193			5,275			22,499			22,100
Expenses
General and administrative expenses	4,547			2,582			2,929			3,549			3,844			12,904			10,233
Share compensation expenses	41			41			183			83			82			389			249
Finance expenses	78			30			32			44			31			137			947
Tax (benefit) expense	(7		)	(61		)	(65		)	135			(1		)	8			90
Foreign exchange losses (gains)	1			—			7			1			(1		)	7			19
Total expenses	4,660			2,592			3,086			3,812			3,955			13,445			11,538
Income before investment income (loss) from funds and sidecars	1,992			2,887			2,466			2,381			1,320			9,054			10,562
Investment income (loss) from funds and sidecars^(a)
AlphaCat Sidecars	32			11			201			(21		)	(112		)	79			607
AlphaCat ILS Funds - Lower Risk ^(b)	1,234			961			(7,553		)	1,301			2,189			(3,102		)	8,901
AlphaCat ILS Funds - Higher Risk ^(b)	3,820			(5,813		)	(21,816		)	2,600			2,367			(22,662		)	7,471
BetaCat ILS Funds	186			827			(922		)	263			368			536			3,623
PaCRe	—			—			—			—			—			—			(23		)
Validus' share of investment income (loss) from funds and sidecars	5,272			(4,014		)	(30,090		)	4,143			4,812			(25,149		)	20,579
Asset Management segment income (loss)	$	7,264		$	(1,127	)	$	(27,624	)	$	6,524		$	6,132		$	(16,095	)	$	31,141

Gross premiums written
AlphaCat Sidecars	$	(143	)	$	(247	)	$	—		$	—		$	66		$	(181	)	$	(341	)
AlphaCat ILS Funds - Lower Risk ^(b)	109,950			10,776			10,979			53,632			52,908			128,295			112,222
AlphaCat ILS Funds - Higher Risk ^(b)	165,896			4,493			16,275			43,672			93,536			157,976			140,022
AlphaCat Direct ^(c)	10,922			(24		)	(41		)	8,378			18,416			26,729			18,499
Total	$	286,625		$	14,998		$	27,213		$	105,682		$	164,926		$	312,819		$	270,402

Notes:


(a)	The investment income (loss) from 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 7% or greater. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.


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

Validus Holdings, Ltd.

Assets Under Management

Table of Contents



	As at
	April 1, 2018		January 1, 2018		October 1, 2017		July 1, 2017		April 1, 2017
Assets Under Management - Related Party ^(a)
AlphaCat Sidecars	$	4,777	$	5,631	$	5,608	$	5,686	$	5,656
AlphaCat ILS Funds - Lower Risk^(b)	75,283		75,898		75,492		79,808		125,098
AlphaCat ILS Funds - Higher Risk^(b)	74,253		68,290		62,566		84,663		86,679
AlphaCat Direct^(c)	—		—		—		—		—
BetaCat ILS Funds	25,104		24,914		24,084		25,000		27,062
Total	$	179,417	$	174,733	$	167,750	$	195,157	$	244,495

Assets Under Management - Third Party ^(a)
AlphaCat Sidecars	$	17,120	$	20,565	$	20,459	$	20,590	$	20,422
AlphaCat ILS Funds - Lower Risk^(b)	1,741,804		1,663,606		1,317,417		1,309,377		1,302,337
AlphaCat ILS Funds - Higher Risk^(b)	1,157,510		1,029,224		687,674		896,639		790,734
AlphaCat Direct^(c)	490,716		443,730		546,226		534,555		457,744
BetaCat ILS Funds	77,547		67,046		120,391		118,493		87,375
Total	$	3,484,697	$	3,224,171	$	2,692,167	$	2,879,654	$	2,658,612
Total Assets Under Management^(a)	$	3,664,114	$	3,398,904	$	2,859,917	$	3,074,811	$	2,903,107

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.


(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 7% or greater. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.


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

Validus Holdings, Ltd.

Corporate and Investments

Table of Contents



	Three Months Ended															Years Ended
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Managed investments
Managed net investment income ^(a)	$	39,791		$	41,609		$	37,091		$	38,063		$	36,192		$	152,955		$	141,718
Net realized gains (losses) on managed investments ^(a)	1,142			7,157			903			2,269			(2,892		)	7,437			14,680
Change in net unrealized (losses) gains on managed investments ^(a)	(56,777		)	(24,861		)	941			15,942			14,349			6,371			14,106
Income (loss) from investment affiliates	13,068			6,345			1,011			9,466			5,188			22,010			(2,083		)
Total managed investment return	(2,776		)	30,250			39,946			65,740			52,837			188,773			168,421

Corporate expenses
General and administrative expenses	12,309			5,582			8,836			16,219			17,961			48,598			72,249
Share compensation expenses	4,036			4,147			3,990			4,636			3,413			16,186			16,003
Finance expenses^(a)	14,090			15,732			14,449			14,149			13,864			58,194			57,183
Dividends on preferred shares	5,828			5,828			5,627			2,203			2,203			15,861			4,455
Tax (benefit) ^(a)	(6,826		)	(351		)	(2,567		)	(1,122		)	(3,548		)	(7,588		)	(19,819		)
Total Corporate expenses	29,437			30,938			30,335			36,085			33,893			131,251			130,071

Other items
Foreign exchange (losses) gains ^(a)	(3		)	(829		)	(1,495		)	(7,323		)	1,103			(8,544		)	10,778
Other income (loss)	44			—			35			174			94			303			(766		)
Transaction expenses	(7,756		)	—			—			(4,427		)	—			(4,427		)	—
Total other items	(7,715		)	(829		)	(1,460		)	(11,576		)	1,197			(12,668		)	10,012
Total Corporate and Investments	$	(39,928	)	$	(1,517	)	$	8,151		$	18,079		$	20,141		$	44,854		$	48,362

Notes:


(a)	These items exclude the components which are included in the Asset Management segment income (loss) and amounts which are consolidated from variable interest entities.

Validus Holdings, Ltd.

Segment Reconciliation - Three Months Ended

Table of Contents



	Three Months Ended March 31, 2018
	Reinsurance Segment			Insurance Segment			Asset Management Segment and Consolidated VIEs			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	765,573		$	785,795		$	286,625		$	—		$	(5,537	)	$	1,832,456
Reinsurance premiums ceded	(190,194		)	(191,637		)	—			—			5,537			(376,294		)
Net premiums written	575,379			594,158			286,625			—			—			1,456,162
Change in unearned premiums	(350,627		)	(294,620		)	(191,973		)	—			—			(837,220		)
Net premiums earned	224,752			299,538			94,652			—			—			618,942
Other insurance related income	2			2,170			28,080			—			(4,756		)	25,496
Total underwriting revenues	224,754			301,708			122,732			—			(4,756		)	644,438
Underwriting deductions
Losses and loss expenses	103,473			183,389			34,683			—			—			321,545
Policy acquisition costs	48,340			60,057			8,059			—			—			116,456
General and administrative expenses	28,915			68,050			10,208			12,309			(4,756		)	114,726
Share compensation expenses	2,663			2,989			41			4,036			—			9,729
Total underwriting deductions	183,391			314,485			52,991			16,345			(4,756		)	562,456
Underwriting income (loss)	$	41,363		$	(12,777	)	$	69,741		$	(16,345	)	$	—		$	81,982
Net investment return ^(a)	—			—			12,735			(2,776		)	—			9,959
Other items ^(b)	—			—			362			(20,807		)	—			(20,445		)
(Income) attributable to AlphaCat investors	—			—			(10,862		)	—			—			(10,862		)
Net (income) attributable to noncontrolling interests	—			—			(64,712		)	—			—			(64,712		)
Net income (loss) available (attributable) to Validus common shareholders	$	41,363		$	(12,777	)	$	7,264		$	(39,928	)	$	—		$	(4,078	)

	Three Months Ended March 31, 2017
	Reinsurance Segment			Insurance Segment			Asset Management Segment and Consolidated VIEs			Corporate & Investments			Eliminations			Total
Underwriting revenues
Gross premiums written	$	643,141		$	382,790		$	164,926		$	—		$	—		$	1,190,857
Reinsurance premiums ceded	(114,446		)	(79,000		)	(6,660		)	—			—			(200,106		)
Net premiums written	528,695			303,790			158,266			—			—			990,751
Change in unearned premiums	(297,040		)	(24,696		)	(93,639		)	—			—			(415,375		)
Net premiums earned	231,655			279,094			64,627			—			—			575,376
Other insurance related income	2			996			5,161			—			(4,923		)	1,236
Total underwriting revenues	231,657			280,090			69,788			—			(4,923		)	576,612
Underwriting deductions
Losses and loss expenses	80,881			186,610			2,094			—			—			269,585
Policy acquisition costs	43,535			61,192			6,901			—			—			111,628
General and administrative expenses	19,969			45,276			9,641			17,961			(4,923		)	87,924
Share compensation expenses	2,623			3,373			82			3,413			—			9,491
Total underwriting deductions	147,008			296,451			18,718			21,374			(4,923		)	478,628
Underwriting income (loss)	$	84,649		$	(16,361	)	$	51,070		$	(21,374	)	$	—		$	97,984
Net investment return ^(a)	—			—			4,749			52,837			—			57,586
Other items ^(b)	—			—			388			(11,322		)	—			(10,934		)
(Income) attributable to AlphaCat investors	—			—			(7,503		)	—			—			(7,503		)
Net (income) attributable to noncontrolling interests	—			—			(42,572		)	—			—			(42,572		)
Net income (loss) available (attributable) to Validus common shareholders	$	84,649		$	(16,361	)	$	6,132		$	20,141		$	—		$	94,561

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, foreign exchange gains (losses) and other income (loss).

Validus Holdings, Ltd.

Non-GAAP Financial Measure Reconciliation

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

Table of Contents



	Three Months Ended						Years Ended
	March 31, 2018			March 31, 2017			December 31, 2017			December 31, 2016
Net (loss) income (attributable) available to Validus common shareholders	$	(4,078	)	$	94,561		$	(63,483	)	$	359,384
Non-GAAP Adjustments:
Net realized (gains) losses on investments	(2,200		)	1,164			(7,623		)	(15,757		)
Change in net unrealized losses (gains) on investments	57,381			(13,348		)	(3,215		)	(16,871		)
(Income) loss from investment affiliates	(13,068		)	(5,188		)	(22,010		)	2,083
Foreign exchange (gains) losses	(525		)	(1,569		)	7,447			(10,864		)
Other (income) loss	(44		)	(94		)	(303		)	766
Transaction expenses	7,756			—			4,427			—
Net income (loss) attributable to noncontrolling interests	429			728			(767		)	457
Tax (benefit) expense ^(a)	(3,094		)	580			521			1,687
Net operating income (loss) available (attributable) to Validus common shareholders ^(b)	$	42,557		$	76,834		$	(85,006	)	$	320,885

Weighted average number of diluted common shares outstanding	79,325,688			80,739,142			79,091,376			82,359,460

(Loss) earnings per diluted share (attributable) available to Validus common shareholders	$	(0.05	)	$	1.17		$	(0.80	)	$	4.36
Non-GAAP Adjustments:
Net realized (gains) losses on investments	(0.03		)	0.01			(0.10		)	(0.19		)
Change in net unrealized losses (gains) on investments	0.72			(0.17		)	(0.04		)	(0.20		)
(Income) loss from investment affiliates	(0.17		)	(0.06		)	(0.28		)	0.03
Foreign exchange (gains) losses	(0.01		)	(0.02		)	0.09			(0.14		)
Other (income) loss	—			—			—			0.01
Transaction expenses	0.10			—			0.06			—
Net income (loss) attributable to noncontrolling interests	0.01			0.01			(0.01		)	0.01
Tax (benefit) expense ^(a)	(0.04		)	0.01			0.01			0.02
Net operating income (loss) per diluted share available (attributable) to Validus common shareholders ^(b)	$	0.53		$	0.95		$	(1.07	)	$	3.90

Average shareholders' equity available to Validus common shareholders ^(c)	$	3,498,152		$	3,725,084		$	3,658,591		$	3,697,114

Annualized return on average equity	(0.5		%)	10.2		%	(1.7		%)	9.7		%
Annualized net operating return on average equity ^(b)	4.9		%	8.3		%	(2.3		%)	8.7		%

Notes:


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


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

(c)

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

Validus Holdings, Ltd.

Gross Premiums Written by Segment by Class of Business

Table of Contents



		Three Months Ended															Years Ended
		March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Reinsurance Segment
Property	Cat XOL ^(a)	$	204,633		$	5,089		$	108,717		$	162,701		$	155,977		$	432,484		$	374,242
	Per Risk XOL	8,292			1,330			11,907			4,358			8,385			25,980			25,360
	Proportional ^(b)	61,064			11,707			6,857			19,644			52,305			90,513			97,661
	Total Property	273,989			18,126			127,481			186,703			216,667			548,977			497,263
Specialty - Short-tail	Aerospace and Aviation	18,473			886			4,751			25,308			21,334			52,279			62,071
	Agriculture	93,214			5,168			449			22,061			152,447			180,125			243,180
	Composite	54,422			4,209			7,170			17,349			34,090			62,818			59,244
	Marine	100,311			1,224			2,559			16,324			103,162			123,269			117,614
	Other Specialty - Short-tail ^(c)	22,283			365			1,410			3,507			10,837			16,119			8,359
	Technical Lines	5,547			110			3,207			4,959			4,182			12,458			12,534
	Terrorism	6,082			529			1,010			(154		)	5,039			6,424			6,159
	Trade Credit	48,824			(89		)	(8		)	50			44,154			44,107			38,279
	Workers' Compensation	2,954			595			3,084			2,200			1,633			7,512			8,064
	Total Specialty - Short Tail	352,110			12,997			23,632			91,604			376,878			505,111			555,504
Specialty - Other	Casualty	102,431			12,023			8,890			39,126			24,510			84,549			86,107
	Financial	37,043			8,814			9,569			13,101			25,086			56,570			46,038
	Total Specialty - Other	139,474			20,837			18,459			52,227			49,596			141,119			132,145
	Total Reinsurance Segment	$	765,573		$	51,960		$	169,572		$	330,534		$	643,141		1,195,207			1,184,912
Insurance Segment
Property	Direct	$	73,329		$	78,639		$	76,868		$	86,113		$	67,878		$	309,498		$	277,024
	Downstream Energy and Power	18,629			26,366			17,994			29,765			13,669			87,794			94,197
	Total Property	91,958			105,005			94,862			115,878			81,547			397,292			371,221
Specialty - Short-tail	Accident and Health	3,248			4,560			4,411			5,176			5,910			20,057			29,326
	Agriculture	444,203			65,737			51,800			23,939			84,299			225,775			—
	Aviation	4,842			9,119			5,587			4,417			5,159			24,282			27,290
	Contingency	9,637			11,754			3,615			6,988			3,964			26,321			35,412
	Marine	46,046			34,761			29,735			59,409			47,364			171,269			192,526
	Political Lines ^(d)	30,346			29,302			23,167			28,254			32,525			113,248			113,048
	Total Specialty - Short Tail	538,322			155,233			118,315			128,183			179,221			580,952			397,602
Specialty - Other	Financial	24,439			22,281			19,530			13,980			13,738			69,529			53,484
	Liability^(e)	68,437			60,874			65,906			67,393			58,637			252,810			225,776
	Marine and Energy Liability	25,640			10,428			8,034			12,900			24,172			55,534			53,515
	Political Risk	26,229			21,394			20,231			18,545			22,136			82,306			78,598
	Products and Airports	10,770			1,799			6,394			3,178			3,339			14,710			13,941
	Total Specialty - Other	155,515			116,776			120,095			115,996			122,022			474,889			425,314
	Total Insurance Segment	$	785,795		$	377,014		$	333,272		$	360,057		$	382,790		1,453,133			1,194,137
Asset Management Segment
Property	Cat XOL	$	282,491		$	13,278		$	22,013		$	99,318		$	159,765		$	294,374		$	260,786
	Total Property	282,491			13,278			22,013			99,318			159,765			294,374			260,786
Specialty - Short-tail	Agriculture	—			(1,391		)	1,936			4,020			(35		)	4,530			2,879
	Composite	3,697			3,111			2,872			2,362			4,788			13,133			5,518
	Workers' Compensation	437			—			392			(18		)	408			782			1,219
	Total Specialty - Short Tail	4,134			1,720			5,200			6,364			5,161			18,445			9,616
	Total Asset Management Segment	$	286,625		$	14,998		$	27,213		$	105,682		$	164,926		312,819			270,402
Intersegment Revenue	Property	(5,537		)	(649		)	(6,248		)	(725		)	—			(7,622		)	(746		)
	Specialty - Short-tail	—			—			47			(2,646		)	—			(2,599		)	—
	Specialty - Other	—			—			—			—			—			—			—
	Total Intersegment Revenue	$	(5,537	)	$	(649	)	$	(6,201	)	$	(3,371	)	$	—		$	(10,221	)	$	(746	)
Total Gross Premiums Written		$	1,832,456		$	443,323		$	523,856		$	792,902		$	1,190,857		$	2,950,938		$	2,648,705

Notes:


(a)	Property Cat XOL is composed of Catastrophe XOL, Aggregate XOL, Reinstatement Premium Protection, Per Event XOL, Second Event and Third Event covers.


(b)	Proportional is composed of Quota Share and Surplus Share covers.


(c)	Other Specialty - Short-tail classes include Contingency, Crisis Management and Life and Accident & Health.


(d)	Political Lines includes War and Political Violence.


(e)	Liability includes General Liability, Professional Liability, Products Liability and Miscellaneous Malpractice.

Validus Holdings, Ltd.

Consolidated Analysis of Reserves for Losses and Loss Expenses

Table of Contents



	March 31, 2018									December 31, 2017
	Reserve for losses and loss expenses			Loss reserves recoverable			Net			Reserve for losses and loss expenses			Loss reserves recoverable			Net
Property	$	2,212,591		$	634,217		$	1,578,374		$	2,291,743		$	739,153		$	1,552,590
Specialty - Short-tail	1,283,695			204,415			1,079,280			1,445,512			356,618			1,088,894
Specialty - Other	1,136,343			141,312			995,031			1,094,135			138,226			955,909
Total	$	4,632,629		$	979,944		$	3,652,685		$	4,831,390		$	1,233,997		$	3,597,393

	March 31, 2018									December 31, 2017
	Case Reserves			IBNR Reserves			Reserve for losses and loss expenses			Case Reserves			IBNR Reserves			Reserve for losses and loss expenses
Property	$	898,512		$	1,314,079		$	2,212,591		$	893,180		$	1,398,563		$	2,291,743
Specialty - Short-tail	537,548			746,147			1,283,695			515,450			930,062			1,445,512
Specialty - Other	334,218			802,125			1,136,343			345,214			748,921			1,094,135
Total	$	1,770,278		$	2,862,351		$	4,632,629		$	1,753,844		$	3,077,546		$	4,831,390
% of Total	38.2		%	61.8		%	100.0		%	36.3		%	63.7		%	100.0		%

Validus Holdings, Ltd.

Consolidated Losses and Loss Ratios by Segment

Table of Contents



	At or for the Three Months Ended
	March 31, 2018												March 31, 2017
	Reinsurance Segment			Insurance Segment			Asset Management Segment			Total			Reinsurance Segment			Insurance Segment			Asset Management Segment			Total
Gross reserves, beginning of period	$	1,816,654		$	2,300,437		$	714,299		$	4,831,390		$	1,193,497		$	1,753,164		$	48,534		$	2,995,195
Loss reserves recoverable	(548,131		)	(640,866		)	(45,000		)	(1,233,997		)	(108,528		)	(321,893		)	—			(430,421		)
Net reserves, beginning of period	1,268,523			1,659,571			669,299			3,597,393			1,084,969			1,431,271			48,534			2,564,774

Incurred losses - current year	121,311			198,937			8,867			329,115			112,005			213,299			5,512			330,816
Change in prior accident years	(17,838		)	(15,548		)	25,816			(7,570		)	(31,124		)	(26,689		)	(3,418		)	(61,231		)
Total net incurred losses and loss expenses	103,473			183,389			34,683			321,545			80,881			186,610			2,094			269,585

Foreign exchange loss	8,683			6,803			141			15,627			8,996			3,173			148			12,317

Paid losses - current year	(3,081		)	(16,654		)	—			(19,735		)	(2,346		)	(5,352		)	—			(7,698		)
Paid losses - prior years	(93,307		)	(192,024		)	23,186			(262,145		)	(95,130		)	(137,988		)	(4,971		)	(238,089		)
Total net paid losses	(96,388		)	(208,678		)	23,186			(281,880		)	(97,476		)	(143,340		)	(4,971		)	(245,787		)

Net reserves, end of period	1,284,291			1,641,085			727,309			3,652,685			1,077,370			1,477,714			45,805			2,600,889
Loss reserves recoverable	529,574			450,370			—			979,944			99,504			352,352			—			451,856
Gross reserves, end of period	$	1,813,865		$	2,091,455		$	727,309		$	4,632,629		$	1,176,874		$	1,830,066		$	45,805		$	3,052,745

Net premiums earned	$	224,752		$	299,538		$	94,652		$	618,942		$	231,655		$	279,094		$	64,627		$	575,376

Current year loss ratio	53.9		%	66.4		%	9.3		%	53.2		%	48.3		%	76.5		%	8.5		%	57.5		%
Change in prior accident years loss ratio	(7.9		)%	(5.2		)%	27.3		%	(1.2		)%	(13.4		)%	(9.6		)%	(5.3		)%	(10.6		)%
Net loss ratio	46.0		%	61.2		%	36.6		%	52.0		%	34.9		%	66.9		%	3.2		%	46.9		%
Paid to incurred ratio	93.2		%	113.8		%	(66.9		)%	87.7		%	120.5		%	76.8		%	237.4		%	91.2		%

Validus Holdings, Ltd.

Losses and Loss Ratios by Class of Business - Reinsurance Segment

Table of Contents



	At or for the Three Months Ended
	March 31, 2018												March 31, 2017
	Property			Specialty - Short-tail			Specialty - Other			Total			Property			Specialty - Short-tail			Specialty - Other			Total
Gross reserves, beginning of period	$	974,797		$	724,954		$	116,903		$	1,816,654		$	476,908		$	672,512		$	44,077		$	1,193,497
Loss reserves recoverable	(412,592		)	(131,287		)	(4,252		)	(548,131		)	(41,892		)	(66,423		)	(213		)	(108,528		)
Net reserves, beginning of period	562,205			593,667			112,651			1,268,523			435,016			606,089			43,864			1,084,969

Incurred losses - current year	33,944			64,358			23,009			121,311			21,499			76,198			14,308			112,005
Change in prior accident years	(4,822		)	(13,451		)	435			(17,838		)	(4,062		)	(26,748		)	(314		)	(31,124		)
Total net incurred losses and loss expenses	29,122			50,907			23,444			103,473			17,437			49,450			13,994			80,881

Foreign exchange loss	5,979			2,615			89			8,683			8,286			400			310			8,996

Paid losses - current year	183			(3,144		)	(120		)	(3,081		)	(286		)	(1,991		)	(69		)	(2,346		)
Paid losses - prior years	(64,267		)	(28,139		)	(901		)	(93,307		)	(37,138		)	(57,817		)	(175		)	(95,130		)
Total net paid losses	(64,084		)	(31,283		)	(1,021		)	(96,388		)	(37,424		)	(59,808		)	(244		)	(97,476		)

Net reserves, end of period	533,222			615,906			135,163			1,284,291			423,315			596,131			57,924			1,077,370
Loss reserves recoverable	399,788			123,038			6,748			529,574			36,452			62,456			596			99,504
Gross reserves, end of period	$	933,010		$	738,944		$	141,911		$	1,813,865		$	459,767		$	658,587		$	58,520		$	1,176,874

Net premiums earned	$	89,851		$	97,054		$	37,847		$	224,752		$	102,382		$	104,351		$	24,922		$	231,655

Current year loss ratio	37.8		%	66.3		%	60.8		%	53.9		%	21.0		%	73.0		%	57.5		%	48.3		%
Change in prior accident years loss ratio	(5.4		)%	(13.9		)%	1.1		%	(7.9		)%	(4.0		)%	(25.6		)%	(1.3		)%	(13.4		)%
Net loss ratio	32.4		%	52.4		%	61.9		%	46.0		%	17.0		%	47.4		%	56.2		%	34.9		%
Paid to incurred ratio	220.1		%	61.5		%	4.4		%	93.2		%	214.6		%	120.9		%	1.7		%	120.5		%

Validus Holdings, Ltd.

Losses and Loss Ratios by Class of Business - Insurance Segment

Table of Contents



	At or for the Three Months Ended
	March 31, 2018												March 31, 2017
	Property			Specialty - Short-tail			Specialty - Other			Total			Property			Specialty - Short-tail			Specialty - Other			Total
Gross reserves, beginning of period	$	627,892		$	695,313		$	977,232		$	2,300,437		$	312,418		$	505,954		$	934,792		$	1,753,164
Loss reserves recoverable	(281,561		)	(225,331		)	(133,974		)	(640,866		)	(65,681		)	(120,394		)	(135,818		)	(321,893		)
Net reserves, beginning of period	346,331			469,982			843,258			1,659,571			246,737			385,560			798,974			1,431,271

Incurred losses - current year	49,484			71,875			77,578			198,937			68,153			67,471			77,675			213,299
Change in prior accident years	4,068			(12,201		)	(7,415		)	(15,548		)	(8,666		)	(11,763		)	(6,260		)	(26,689		)
Total net incurred losses and loss expenses	53,552			59,674			70,163			183,389			59,487			55,708			71,415			186,610

Foreign exchange loss	1,201			2,267			3,335			6,803			621			1,035			1,517			3,173

Paid losses - current year	(5,533		)	(10,478		)	(643		)	(16,654		)	(4,125		)	(393		)	(834		)	(5,352		)
Paid losses - prior years	(51,218		)	(84,561		)	(56,245		)	(192,024		)	(36,858		)	(50,235		)	(50,895		)	(137,988		)
Total net paid losses	(56,751		)	(95,039		)	(56,888		)	(208,678		)	(40,983		)	(50,628		)	(51,729		)	(143,340		)

Net reserves, end of period	344,333			436,884			859,868			1,641,085			265,862			391,675			820,177			1,477,714
Loss reserves recoverable	234,429			81,377			134,564			450,370			109,385			96,451			146,516			352,352
Gross reserves, end of period	$	578,762		$	518,261		$	994,432		$	2,091,455		$	375,247		$	488,126		$	966,693		$	1,830,066

Net premiums earned	$	74,987		$	120,031		$	104,520		$	299,538		$	68,274		$	112,597		$	98,223		$	279,094

Current year loss ratio	66.0		%	59.9		%	74.2		%	66.4		%	99.8		%	59.9		%	79.1		%	76.5		%
Change in prior accident years loss ratio	5.4		%	(10.2		)%	(7.1		)%	(5.2		)%	(12.7		)%	(10.4		)%	(6.4		)%	(9.6		)%
Net loss ratio	71.4		%	49.7		%	67.1		%	61.2		%	87.1		%	49.5		%	72.7		%	66.9		%
Paid to incurred ratio	106.0		%	159.3		%	81.1		%	113.8		%	68.9		%	90.9		%	72.4		%	76.8		%

Validus Holdings, Ltd.

Analysis of Loss Ratios by Segment

Table of Contents



	Three Months Ended										Years Ended
	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2017		December 31, 2016
Reinsurance Segment
Current period - excluding items below	53.9	%	53.1	%	43.5	%	48.2	%	46.1	%	47.6	%	46.1	%
Current period - notable loss events^(a)	—	%	5.9	%	100.2	%	—	%	—	%	29.1	%	4.5	%
Current period - non-notable loss events^(b)	—	%	3.7	%	0.3	%	2.2	%	2.2	%	2.1	%	4.7	%
Change in prior accident years	(7.9	)%	(8.5	)%	(16.0	)%	(6.1	)%	(13.4	)%	(11.1	)%	(13.6	)%
Net loss ratio	46.0	%	54.2	%	128.0	%	44.3	%	34.9	%	67.7	%	41.7	%

Insurance Segment
Current period - excluding items below	66.4	%	73.8	%	75.3	%	66.5	%	71.2	%	71.9	%	64.3	%
Current period - notable loss events^(a)	—	%	6.3	%	24.2	%	—	%	—	%	8.2	%	2.1	%
Current period - non-notable loss events^(b)	—	%	(0.7	)%	3.2	%	0.6	%	5.3	%	2.0	%	1.7	%
Change in prior accident years	(5.2	)%	(5.9	)%	(7.8	)%	(7.8	)%	(9.6	)%	(7.7	)%	(7.8	)%
Net loss ratio	61.2	%	73.5	%	94.9	%	59.3	%	66.9	%	74.4	%	60.3	%

Asset Management Segment
Current period - excluding items below	9.3	%	19.7	%	11.3	%	7.3	%	8.5	%	11.7	%	6.8	%
Current period - notable loss events^(a)	—	%	125.4	%	552.0	%	—	%	—	%	214.0	%	9.7	%
Current period - non-notable loss events^(b)	—	%	3.9	%	1.7	%	—	%	—	%	1.4	%	2.5	%
Change in prior accident years	27.3	%	(3.0	)%	(3.2	)%	(5.7	)%	(5.3	)%	(4.2	)%	(1.1	)%
Net loss ratio	36.6	%	146.0	%	561.8	%	1.6	%	3.2	%	222.9	%	17.9	%

Consolidated
Current period - excluding items below	53.2	%	60.3	%	53.9	%	52.6	%	54.1	%	55.1	%	49.9	%
Current period - notable loss events^(a)	—	%	18.5	%	128.1	%	—	%	—	%	40.6	%	4.0	%
Current period - non-notable loss events^(b)	—	%	1.5	%	1.9	%	1.2	%	3.4	%	2.0	%	3.1	%
Change in prior accident years	(1.2	)%	(6.6	)%	(10.4	)%	(6.9	)%	(10.6	)%	(8.6	)%	(9.6	)%
Net loss ratio	52.0	%	73.7	%	173.5	%	46.9	%	46.9	%	89.1	%	47.4	%

Notes:


(a)	The Company defines a notable loss event as an event whereby consolidated net losses and loss expenses aggregate to a threshold greater than or equal to $30.0 million.


(b)	The Company defines a non-notable loss event as an event whereby consolidated net losses and loss expenses aggregate to a threshold greater than or equal to $15.0 million but less than $30.0 million.

Validus Holdings, Ltd.

Consolidated Reinsurance Recoverable Analysis

Table of Contents



Consolidated Reinsurance Recoverable at March 31, 2018
Categories	Reinsurance Recoverable^(a)		%		Top 10 Reinsurers	Rating ^(b)	Reinsurance Recoverable^(a)		%
Top 10 reinsurers	$	878,685	84.5	%	Fully collateralized reinsurers	NR	$	407,361	39.2	%
Other reinsurers' balances > $1 million	153,572		14.8	%	Everest Re	A+	128,360		12.3	%
Other reinsurers' balances < $1 million	7,579		0.7	%	Lloyd's Syndicates	A+	69,885		6.7	%
Total	$	1,039,836	100.0	%	Swiss Re	AA-	56,892		5.5	%
					Munich Re	AA-	50,097		4.8	%
					Hannover Re	AA-	49,501		4.8	%
					Transatlantic Re	A+	38,446		3.7	%
					Qatar Insurance Company	A	30,981		3.0	%
					Markel	A	25,893		2.5	%
					XL Catlin	A+	21,269		2.0	%
					Total		$	878,685	84.5	%

Consolidated Reinsurance Recoverable at December 31, 2017
Categories	Reinsurance Recoverable^(a)		%		Top 10 Reinsurers	Rating ^(b)	Reinsurance Recoverable^(a)		%
Top 10 reinsurers	$	1,055,445	82.5	%	Fully collateralized reinsurers	NR	$	459,339	35.9	%
Other reinsurers' balances > $1 million	218,226		17.0	%	Everest Re	A+	128,206		10.0	%
Other reinsurers' balances < $1 million	7,199		0.5	%	Munich Re	AA-	94,180		7.4	%
Total	$	1,280,870	100.0	%	Lloyd's Syndicates	A+	74,277		5.8	%
					Federal Crop Insurance Corporation	(c)	68,745		5.4	%
					Swiss Re	AA-	65,218		5.1	%
					Hannover Re	AA-	53,523		4.2	%
					Qatar Insurance Company	A	50,160		3.9	%
					Transatlantic Re	A+	33,729		2.6	%
					Markel	A	28,068		2.2	%
					Total		$	1,055,445	82.5	%

Notes:


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


(b)	99.0% of Reinsurance Recoverable at March 31, 2018 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 Insurance segment agriculture line of business.

Validus Holdings, Ltd.

Consolidated Investment Portfolio Composition and Net Investment Income

Table of Contents



Investment portfolio	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
Managed investments, cash and cash equivalents and restricted cash
U.S. Government and Government Agency	$	589,161		$	727,397		$	595,694		$	646,436		$	718,025
Non-U.S. Government and Government Agency	318,345			312,239			290,538			292,504			258,463
States, municipalities, political subdivision	184,964			201,303			206,667			227,949			229,129
Agency residential mortgage-backed securities	968,258			978,049			828,400			783,006			653,395
Non-Agency residential mortgage-backed securities	43,487			40,373			38,993			26,683			19,382
U.S. corporate	1,534,805			1,533,395			1,466,739			1,386,484			1,486,882
Non-U.S. corporate	415,156			422,249			392,242			379,480			397,989
Bank loans	468,815			442,951			464,464			552,901			567,012
Asset-backed securities	741,712			658,303			522,524			502,056			514,690
Commercial mortgage-backed securities	318,392			312,395			314,221			316,190			318,288
Total fixed maturities	5,583,095			5,628,654			5,120,482			5,113,689			5,163,255
Total short-term investments	188,251			230,011			258,646			255,516			232,955
Total other investments	357,246			355,218			471,300			448,618			443,004
Investment in investment affiliates	113,471			100,137			92,079			103,377			94,697
Cash and cash equivalents	666,527			691,687			961,539			796,476			619,810
Restricted cash	70,968			62,848			51,585			48,101			36,099
Total managed investments, cash and cash equivalents and restricted cash^(a)	6,979,558			7,068,555			6,955,631			6,765,777			6,589,820
Non-managed investments, cash and cash equivalents and restricted cash
Catastrophe bonds	219,927			229,694			299,484			304,954			201,961
Short-term investments	3,450,689			3,151,746			2,734,600			2,615,837			2,552,271
Cash and cash equivalents	5,646			63,303			4,091			3,929			4,127
Restricted cash	231,309			331,815			37,818			146,938			56,448
Total non-managed investments, cash and cash equivalents and restricted cash ^(a)	3,907,571			3,776,558			3,075,993			3,071,658			2,814,807
Total investments, cash and cash equivalents and restricted cash	$	10,887,129		$	10,845,113		$	10,031,624		$	9,837,435		$	9,404,627

	Three Months Ended															Years Ended
Net investment income	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2017			December 31, 2016
Managed investments ^(a)
Fixed maturities and short-term investments	$	37,769		$	33,894		$	30,823		$	31,212		$	31,671		$	127,600		$	119,085
Other investments	4,223			8,098			7,391			7,571			6,870			29,930			27,860
Cash and cash equivalents and restricted cash	1,139			1,513			1,230			716			610			4,069			2,939
Securities lending income	3			2			3			7			13			25			55
Total gross investment income	43,134			43,507			39,447			39,506			39,164			161,624			149,939
Investment expenses	(3,343		)	(1,898		)	(2,356		)	(1,443		)	(2,972		)	(8,669		)	(8,221		)
Total managed net investment income	$	39,791		$	41,609		$	37,091		$	38,063		$	36,192		$	152,955		$	141,718

Annualized effective investment yield - managed investments ^(b)	2.33		%	2.44		%	2.23		%	2.35		%	2.27		%	2.32		%	2.24		%

Non-managed investments
Fixed maturities and short-term investments	$	4,148		$	3,332		$	3,941		$	4,500		$	3,060		$	14,833		$	6,931
Cash and cash equivalents and restricted cash	8,133			4,019			3,426			1,678			962			10,085			1,736
Total non-managed net investment income	12,281			7,351			7,367			6,178			4,022			24,918			8,667
Total net investment income	$	52,072		$	48,960		$	44,458		$	44,241		$	40,214		$	177,873		$	150,385

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 effective investment yield on managed investments is calculated by dividing managed 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 year ended is the average of the beginning, ending and intervening quarter end asset balances. Percentages for the quarter periods are annualized.

Validus Holdings, Ltd.

Consolidated Fixed Maturity Portfolio Credit Quality and Maturity Profile

Table of Contents



	March 31, 2018				December 31, 2017
Fixed maturities - Credit Quality	Fair Value		%		Fair Value		%
Managed fixed maturities
AAA	$	2,648,321	45.7	%	$	2,715,074	46.4	%
AA	419,695		7.2	%	442,397		7.6	%
A	1,159,233		20.0	%	1,137,795		19.4	%
BBB	830,866		14.3	%	828,392		14.1	%
Total investment grade managed fixed maturities	5,058,115		87.2	%	5,123,658		87.5	%
BB	170,818		2.9	%	168,967		2.9	%
B	240,099		4.1	%	237,131		4.0	%
CCC	21,783		0.4	%	18,217		0.3	%
NR	92,280		1.6	%	80,681		1.4	%
Total non-investment grade managed fixed maturities	524,980		9.0	%	504,996		8.6	%
Total managed fixed maturities	5,583,095		96.2	%	5,628,654		96.1	%

Non-managed catastrophe bonds
BB	21,607		0.4	%	22,110		0.3	%
B	2,379		—	%	3,265		0.1	%
NR	195,941		3.4	%	204,319		3.5	%
Total non-investment grade non-managed catastrophe bonds	219,927		3.8	%	229,694		3.9	%
Total non-managed catastrophe bonds	219,927		3.8	%	229,694		3.9	%
Total fixed maturities	$	5,803,022	100.0	%	$	5,858,348	100.0	%

	March 31, 2018				December 31, 2017
Fixed maturities - Maturity Profile	Fair Value		%		Fair Value		%
Managed fixed maturities
Due in one year or less	$	344,749	5.9	%	$	343,541	5.9	%
Due after one year through five years	2,424,185		41.9	%	2,513,620		42.8	%
Due after five years through ten years	554,188		9.5	%	577,109		9.9	%
Due after ten years	188,124		3.2	%	205,264		3.5	%
	3,511,246		60.5	%	3,639,534		62.1	%
Asset-backed and mortgage backed securities	2,071,849		35.7	%	1,989,120		34.0	%
Total managed fixed maturities	5,583,095		96.2	%	5,628,654		96.1	%

Non-managed catastrophe bonds
Due in one year or less	67,926		1.2	%	88,367		1.5	%
Due after one year through five years	146,238		2.5	%	138,844		2.4	%
Due after five years through ten years	5,763		0.1	%	2,483		—	%
Total non-managed catastrophe bonds	219,927		3.8	%	229,694		3.9	%
Total fixed maturities	$	5,803,022	100.0	%	$	5,858,348	100.0	%

Validus Holdings, Ltd.

Top Ten Exposures to Fixed Income Corporate Issuers

Table of Contents



	March 31, 2018
Issuer^(a)	Fair Value ^(b)		Rating ^(c)	% of Managed Investments, Cash and Cash Equivalents and Restricted Cash
JPMorgan Chase & Co.	$	62,897	BBB+	0.9	%
Morgan Stanley	55,645		BBB+	0.8	%
Goldman Sachs Group	55,316		BBB+	0.8	%
Citigroup Inc.	49,566		BBB+	0.7	%
Bank of America Corp.	48,184		BBB+	0.7	%
Wells Fargo & Company	47,163		A	0.7	%
HSBC Holdings plc	34,960		A	0.5	%
CVS Health Corp.	33,611		BBB	0.5	%
AT&T Inc.	30,973		BBB+	0.4	%
International Business Machines Corp.	30,303		A+	0.4	%
Total	$	448,618		6.4	%

Notes:


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


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


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

Validus Holdings, Ltd.

Capitalization

Table of Contents



Capitalization	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
Senior Notes^(a)	$	245,614		$	245,564		$	245,513		$	245,463		$	245,412
Junior Subordinated Deferrable Debentures (JSDs) ^(a)	289,800			289,800			289,800			289,800			289,800
Flagstone Junior Subordinated Deferrable Debentures (JSDs)^(a)	249,772			249,358			249,110			248,600			247,602
Total debt	785,186			784,722			784,423			783,863			782,814

Redeemable noncontrolling interests	1,423,110			1,004,094			1,133,880			1,251,660			1,657,630

Preferred shares, liquidation value^(a)	400,000			400,000			400,000			400,000			150,000
Ordinary shares, capital and surplus available to Validus common shareholders	3,491,827			3,517,264			3,554,717			3,831,355			3,784,329
Accumulated other comprehensive income (loss)	9,405			(22,192		)	(18,430		)	(19,924		)	(22,453		)
Noncontrolling interests	334,357			16,718			78,947			415,658			330,597
Total shareholders' equity	$	4,235,589		$	3,911,790		$	4,015,234		$	4,627,089		$	4,242,473

Total capitalization^(b)	$	6,443,885		$	5,700,606		$	5,933,537		$	6,662,612		$	6,682,917
Total capitalization available to Validus^(c)	$	4,686,418		$	4,679,794		$	4,720,710		$	4,995,294		$	4,694,690

Debt to total capitalization	12.2		%	13.8		%	13.2		%	11.8		%	11.7		%
Debt (excluding JSDs) to total capitalization	3.8		%	4.3		%	4.1		%	3.7		%	3.7		%
Debt and preferred shares to total capitalization	18.4		%	20.8		%	20.0		%	17.8		%	14.0		%

Debt to total capitalization available to Validus	16.8		%	16.8		%	16.6		%	15.7		%	16.7		%
Debt (excluding JSDs) to total capitalization available to Validus	5.2		%	5.2		%	5.2		%	4.9		%	5.2		%
Debt and preferred shares to total capitalization available to Validus	25.3		%	25.3		%	25.1		%	23.7		%	19.9		%

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 interests, Senior Notes and Junior Subordinated Deferrable Debentures.


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

Validus Holdings, Ltd.

Estimated Exposures to Peak Zone Property Catastrophe Losses - As of April 1, 2018

Table of Contents

Probable Maximum Losses by Zone and Peril



		Consolidated (Insurance and Reinsurance Segments) Estimated Net Loss ^(a)
Zones	Perils	20 year return period		50 year return period		100 year return period		250 year return period		Reinsurance Segment Net Maximum Zonal Aggregate ^(a)
United States	Hurricane	$	261,449	$	313,056	$	358,264	$	543,353	$	1,739,376
California	Earthquake	45,763		222,126		307,794		375,656		1,400,160
Europe	Windstorm	87,168		214,874		311,995		438,009		1,333,173
Japan	Earthquake	58,155		136,074		215,854		299,025		983,881
Japan	Typhoon	68,704		156,639		232,234		259,318		883,725

Notes:


(a)	Net probable maximum losses and maximum zonal aggregates include Validus' share of the Asset Management segment limits.

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

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

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

Validus Holdings, Ltd.

Estimated Exposures to Specified Loss Scenarios - As of January 1, 2018

Table of Contents

Consolidated Realistic Disaster Scenarios ("RDS")



Type	Catastrophe Scenarios	Description	Estimated Consolidated Net Loss (in millions of U.S. dollars)		% 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	$	200.1	7.6	%
Marine	Major cruise vessel incident	U.S.-owned cruise vessel sunk or severely damaged	143.7		5.5	%
Marine	Marine collision	Fully laden tanker collides with a cruise vessel in U.S. waters	111.7		4.3	%
Political Risks	South East Asia	Chinese economy has a "hard landing" with sharp fall in growth rates; regional contagion	214.4		8.2	%
Political Risks	Russia	The Russian corporate sector struggles to deal with the effects of crashing commodity and stock prices	97.8		3.7	%
Political Risks	Turkey	Severe economic crisis in Turkey due to political upheaval	72.1		2.7	%
Political Risks	Nigeria	Severe economic, political and social crisis in Nigeria leads to widespread civil unrest	66.0		2.5	%
Political Risks	Middle East	U.S. and Iran escalate into military confrontation; regional contagion	98.8		3.8	%
Aviation	Aviation collision	Collision of two aircraft over a major city	46.7		1.8	%
Satellite	Solar flare	Large single or sequence of proton flares results in loss to all satellites in synchronous orbit	42.0		1.6	%
Satellite	Generic defect	Undetected defect in a number of operational satellites causing major loss	23.7		0.9	%
Terrorism	Rockefeller Center	Midtown Manhattan suffers a 2-tonne conventional bomb blast	111.6		4.3	%
Terrorism	One World Trade Center	Lower Manhattan suffers a 2-tonne conventional bomb blast	85.2		3.2	%
Liability	Professional lines	Failure or collapse of a major corporation	39.1		1.5	%
Liability	Professional lines	U.K. pensions mis-selling	22.1		0.8	%
Cyber	Major data security breach	Simultaneous cyber-attacks on organizations within one industrial sector; loss of customer data	62.2		2.4	%

The Company has presented the Company Realistic Disaster Scenarios for non-natural catastrophe events. Twice yearly, Lloyd's syndicates' including the Company's Syndicate 1183 are required to provide details of their potential exposures to specific disaster scenarios. Lloyd’s makes its updated Realistic Disaster Scenarios (RDS) guidance available to the market annually. The RDS scenario specification document for 2018 can be accessed at the RDS part of the Lloyd's public website: https://www.lloyds.com/market-resources/underwriting/realistic-disaster-scenarios-rds.

The Consolidated Net Premiums Earned used in the calculation represent the latest 12 months of net premiums earned up to March 31, 2018.

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 - May 1, 2018

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VALIDUS HOLDINGS LTD Reports