Validus profit plunges in third quarter
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Validus Holdings Ltd.'s third-quarter net income plunged to $39.7 million from $183.4 million the same period last year as the Pembroke, Bermuda-based underwriter was hit with losses in aviation war and energy, driving its combined ratio higher.
Net premiums written rose 3.6% to $328.8 million for the three months ended Sept. 30, but losses and loss expenses rose 26.1% to $224.1 million as underwriting income fell 44.8% to $92.1 million.
Net investment income increased 2.6% to $25.3 million for the quarter. The third-quarter combined ratio deteriorated to 81.4% from 68.6% in the year-ago period.
The company was tagged with $61.4 million of losses concentrated in the classes of aviation war and energy, Validus Chairman and CEO Ed Noonan said.
“Validus takes on volatile business, as we get paid more for assuming the risk. By definition this means that our results will sometimes be lumpy, but I'd rather have a lumpy high return on equity than a lower consistent one,” Mr. Noonan said in the company's earnings statement.
For the nine months ended Sept. 30, net income fell 18.7% to $355.4 million. Net premiums written slipped 3.6% to $1.75 billion while net investment income slid 2.7% to $69.9 million.
The company's nine-month combined ratio deteriorated to 72.9% from 69.3% in the year-ago period.
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