VALIDUS HOLDINGS LTD - FORM 8-K - EX-99.1 - UNAUDITED HISTORICAL FINANCIAL INFORMATION - January 26, 2015

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Validus Holdings, Ltd.
Western World Insurance Group, Inc.
Unaudited Historical Financial Information
 
 
 
 
 
29 Richmond Road
 
 
Pembroke, HM 08 Bermuda
 
 
Telephone: (441) 278-9000
 
 
Facsimile: (441) 278-9009
 
 
Website: www.validusholdings.com
 
 
Mailing address: Suite 1790 48 Par-la-Ville Road
 
 
Hamilton, HM 11 Bermuda



Validus Holdings, Ltd.
Western World Insurance Group, Inc.
Historical Unaudited Financial Information

The following unaudited financial information is intended to provide you with information on the quarterly results of Western World Insurance Group, Inc. ("Western World") for the period January 1, 2013 to September 30, 2014. The financial information has been prepared and presented in conformity with accounting principles generally accepted in the United States of America. On October 2, 2014, Validus Holdings, Ltd. ("Validus") acquired all of the outstanding capital stock of Western World. The results of Western World will be included in the consolidated results of Validus from October 2, 2014.

Basis of Presentation
    
•
This supplement is for information purposes only. It should be read in conjunction with documents filed by Validus Holdings, Ltd. with the U.S. Securities and Exchange Commission pursuant to the Securities Exchange Act 1934.

•
All financial information contained herein is unaudited.
 
•
Unless otherwise noted, dollar amounts are in thousands of U.S. dollars, except for share and per share amounts and ratio information.
 
•
The attached unaudited quarterly income statements attached are prepared using Western World's accounting policies, which differ from those of Validus. Western World recorded underwriting costs as policy acquisition costs, and deferred and amortized these costs over the terms of the policies to which they related. It is Validus’ policy not to defer and amortize internal underwriting costs. Western World classified fixed maturities as either held-to-maturity or available-for-sale, with held-to-maturity securities carried at amortized cost as Western World had the positive intent and ability to hold each of these securities to maturity. It is Validus' policy to hold investments as trading. As of October 2, 2014, the closing date of Western World's acquisition by Validus, Western World has adopted the accounting policies of Validus.




Validus Holdings, Ltd.
Western World Insurance Group, Inc. - Unaudited Historical Financial Information
(Expressed in thousands of U.S. Dollars, except share and per share information)
 
Three Months Ended
 
 
September 30,
2014
 
June 30,
2014
 
March 31,
2014
 
December 31, 2013
 
September 30, 2013
 
June 30,
2013
 
March 31,
2013
 
Revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross premiums written
$
82,705

 
$
100,134

 
$
74,069

 
$
75,162

 
$
72,149

 
$
75,318

 
$
57,062

 
Reinsurance premiums ceded
(6,838
)
 
(9,605
)
 
(6,334
)
 
(7,605
)
 
(6,689
)
 
(7,479
)
 
(5,753
)
 
Net premiums written
75,867

 
90,529

 
67,735

 
67,557

 
65,460

 
67,839

 
51,309

 
Change in unearned premiums
239

 
(18,832
)
 
(1,593
)
 
(4,231
)
 
(6,873
)
 
(15,246
)
 
(2,453
)
 
Net premiums earned
76,106


71,697


66,142


63,326


58,587


52,593


48,856

 
Net investment income
6,701

 
7,014

 
7,071

 
7,151

 
7,303

 
7,011

 
7,382

 
Net realized / unrealized gains (losses)on investments
1,067

 
398

 
1,962

 
1,081

 
809

 
747

 
1,302

 
Other (loss) income
(320
)
 
(1,608
)
 
(331
)
 
66

 
(196
)
 
(310
)
 
(407
)
 
Total revenues
83,554


77,501


74,844


71,624


66,503


60,041


57,133

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incurred losses - current year
55,434

 
52,584

 
48,370

 
48,263

 
47,143

 
41,053

 
37,948

 
Change in prior accident year
(3,655
)
 
(3,858
)
 
(3,393
)
 
(6,398
)
 
(6,134
)
 
(4,238
)
 
(3,750
)
 
Losses and loss expenses
51,779


48,726


44,977


41,865


41,009


36,815


34,198

 
Policy acquisition costs
17,681

 
16,556

 
15,233

 
14,046

 
12,615

 
12,427

 
10,530

 
General and administrative expenses
7,211

 
7,671

 
7,426

 
6,391

 
6,713

 
6,551

 
6,896

 
Total expenses
76,671


72,953


67,636


62,302


60,337


55,793


51,624

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before taxes
6,883


4,548


7,208


9,322


6,166


4,248


5,509

 
Tax (expense)
(1,363
)
 
(609
)
 
(1,535
)
 
(1,891
)
 
(1,221
)
 
(612
)
 
(1,012
)
 
Net income (loss)
$
5,520


$
3,939


$
5,673


$
7,431


$
4,945


$
3,636


$
4,497

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net premiums written / Gross premiums written
91.7
 %

90.4
 %

91.4
 %

89.9
 %

90.7
 %

90.1
 %

89.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Incurred losses - current year
72.8
 %

73.3
 %

73.1
 %

76.2
 %

80.5
 %

78.1
 %

77.7
 %
 
Change in prior accident year
(4.8
)%

(5.3
)%

(5.1
)%

(10.1
)%

(10.5
)%

(8.1
)%

(7.7
)%
 
Losses and loss expenses
68.0
 %

68.0
 %

68.0
 %

66.1
 %

70.0
 %

70.0
 %

70.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policy acquisition costs
23.2
 %

23.1
 %

23.0
 %

22.2
 %

21.5
 %

23.6
 %

21.6
 %
 
General and administrative expenses
9.5
 %

10.7
 %

11.2
 %

10.1
 %

11.5
 %

12.5
 %

14.1
 %
 
Expense ratio
32.7
 %

33.8
 %

34.2
 %

32.3
 %

33.0
 %

36.1
 %

35.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Combined ratio
100.7
 %

101.8
 %

102.2
 %

98.4
 %

103.0
 %

106.1
 %

105.7
 %
 


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