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www.validusholdings.com
Investor
Presentation
First Quarter 2017
Validus Holdings, Ltd.
This presentation may include forward-looking statements, both with respect to us and our industry, that reflect our current views with
respect to future events and financial performance. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,”
“anticipate,” “will,” “may” and similar statements of a future or forward-looking nature identify forward-looking statements. All forward-
looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause
actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such
statements. We believe that these factors include, but are not limited to, the following: 1) unpredictability and severity of catastrophic
events; 2) rating agency actions; 3) adequacy of Validus Holdings, Ltd.’s (“Validus” or the “Company”) risk management and loss limitation
methods; 4) cyclicality of demand and pricing in the insurance and reinsurance markets; 5) statutory or regulatory developments including
tax policy, reinsurance and other regulatory matters; 6) Validus’ ability to implement its business strategy during “soft” as well as “hard”
markets; 7) adequacy of Validus’ loss reserves; 8) continued availability of capital and financing; 9) retention of key personnel; 10)
competition; 11) potential loss of business from one or more major insurance or reinsurance brokers; 12) Validus’ ability to implement,
successfully and on a timely basis, complex infrastructure, distribution capabilities, systems, procedures and internal controls, and to develop
accurate actuarial data to support the business and regulatory and reporting requirements; 13) general economic and market conditions
(including inflation, volatility in the credit and capital markets, interest rates and foreign currency exchange rates); 14) the integration of
businesses Validus may acquire or new business ventures Validus may start; 15) the effect on Validus’ investment portfolios of changing
financial market conditions including inflation, interest rates, liquidity and other factors; 16) acts of terrorism or outbreak of war; and 17)
availability of reinsurance and retrocessional coverage, as well as management’s response to any of the aforementioned factors.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary
statements that are included herein and elsewhere, including the Risk Factors included in our most recent reports on Form 10-K and Form 10-
Q and other documents on file with or furnished to the U.S. Securities and Exchange Commission (“SEC”). Any forward-looking statements
made in this presentation are qualified by these cautionary statements, and there can be no assurance that the actual results or
developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects
on, us or our business or operations. Except as required by law, we undertake no obligation to update publicly or revise any forward-looking
statement, whether as a result of new information, future developments or otherwise.
Cautionary Note Regarding Forward-looking Statements
2
• Since its founding in 2005, Validus has expanded its platform to include a U.S.
specialty insurer, Lloyd’s syndicate, third party reinsurance asset manager and global
reinsurer
• The diversified portfolio as measured by gross premium written is comprised of 47%
insurance and 53% reinsurance for the 12 months ended March 31, 2017
• Business plan since formation has been to focus on short-tail lines with strategic
diversification into select longer-tail classes
• Maintained a focus on underwriting profits in conjunction with a strong balance sheet
• Profitable in all 11 years of operation, 2006 through 2016
• Delivered outstanding financial results since 2007 IPO as measured by growth in book
value per diluted common share plus accumulated dividends
• Active capital management, returning $3.92 billion to investors through repurchases
and dividends from Validus’ 2007 IPO through May 3, 2017
Validus – Key Accomplishments
3
Validus Group of Companies
• U.S. specialty property and
casualty underwriter
• Focused on Excess and Surplus
Lines in the U.S. and Agriculture
with the addition of CRS in 2017
• Pioneer in the binding authority
business
• 16% of last 12 months GPW as of
March 31, 2017
• Investment advisor
• Focused on managing capital for
third parties and Validus in ILS and
other property catastrophe and
specialty reinsurance investments
• AUM of $2.9 billion(1) as of April 1,
2017
• 10% of last 12 months GPW as of
March 31, 2017
• Lloyd’s of London Syndicate
• Focused on short-tail specialty
lines in the Lloyd’s of London
market
• Market leader in War & Terror,
Energy and Marine Classes
• 36% of last 12 months GPW as of
March 31, 2017
• Global reinsurer
• Focused primarily on treaty
reinsurance, including property
cat
• Specializing in Property CAT XOL,
Marine, and Specialty, including
Agriculture
• 38% of last 12 months GPW as of
March 31, 2017
Validus Research – Provides Analytical Support Across All Platforms
1) Assets under management (AUM) of $2.9 billion includes $2.7 billion of third party investment and $0.2 billion of related party investment.
• U.S. specialty internal MGA
• Writes brokerage and program business on behalf of Talbot and Western
World
4
Validus Research - Depth of Resources
• Research
– Validus Group’s thought leader in catastrophe risk quantification and model development
– Post-Doctoral expertise in physical and data sciences including seismology, atmospheric
sciences, hydrology, structural engineering, and statistics
– Responsibility for the Validus View of Risk – derived from independent
research/validation with the agility to reflect latest science and experience in a responsive
way
• Catastrophe Modeling
– Rigorous analyses/investigations of insurance/reinsurance transactions with a heavy focus
on exposure data quality
– Over 60 years of combined catastrophe modeling experience applying and evolving
industry best practice
• Software Engineering
– Continuous evolution of our core underwriting, portfolio and risk management systems,
including the Validus Capital Allocation and Pricing System (VCAPS)
5
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
U
SD
M
iil
lio
ns
Total shareholders' equity available to Validus AlphaCat AUM
Validus Market Footprint of $6.7 Billion USD:
Shareholders’ Equity Available to Validus + AlphaCat AUM
Acquisition of
Talbot
07/02/2007
Validus IPO
07/30/2007
Acquisition of
IPC
09/04/2009
Founding of
AlphaCat
07/29/2008
Launch of
AlphaCat
Sidecars
05/23/2011
Acquisition of
Longhorn Re
04/25/2013
Launch of
AlphaCat
Opportunities
Fund
01/01/ 2016
Acquisition of
Western World
10/02/2014
Acquisition of
Flagstone
11/30/2012
Launch of
BetaCat Fund
10/01/2014
6
Acquisition of
Crop Risk
Services
05/01/2017
Launch of
AlphaCat
Advantage
Fund
01/01/2013
Miami
Scottsdale
London
Santiago
New York
Waterloo
Parsippany
Hamilton
Dubai
Singapore
Boston
Sydney
Labuan
Zurich
Atlanta
Decatur
Validus Global Operating Platform
7
Global operations with offices in Bermuda, United States, United Kingdom, Australia,
Canada, Chile, Malaysia, Singapore, Switzerland and United Arab Emirates
11.5% Compound Annual Growth in Diluted BVPS Plus Accumulated
Dividends from Company Formation Through March 31, 2017
Growth in Book Value Per Diluted Share Plus Accumulated Dividends
8
16.93
19.73
24.00 23.78
29.68
32.98 32.28
35.22 36.23
39.65
42.33
44.97 45.88
0.80
1.60
2.48 3.48
4.48
7.68
8.88
10.16
11.56 11.94
16.93
19.73
24.00 24.58
31.28
35.46 35.76
39.70
43.91
48.53
52.49
56.53
57.82
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Diluted BVPS Cumulative Dividends Diluted BVPS plus Accumulated Dividends
9
1) Source: SNL Financial.
2) VR starting point is Pro Forma diluted BVPS at September 30, 2007 of $20.89 as disclosed in the VR IPO Prospectus.
3) Book value per diluted share calculation includes impact of quarterly and special dividends.
From VR IPO Through March 31, 2017
Compound Growth in Book Value per Diluted Share Versus Peers
14.3% 14.2%
12.3%
11.0% 10.8% 10.6%
8.6%
5.9%
0.0%
5.0%
10.0%
15.0%
20.0%
AWH ACGL RNR VR RE AXS AHL AGII
Validus Common Shareholders’ Equity vs. Selected Peers
10
1) Source: SNL Financial.
Peer Comparison – Q1 2017 Common Shareholders’ Equity in $US Billions
8.3
6.7
5.1
4.9
3.8
3.6
2.9
1.8
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
RE ACGL AXS RNR VR AWH AHL AGII
1) Source: SNL Financial.
2) Peer group includes: AWH, ACGL, AGII, AHL, AXS, RE and RNR.
3) Starting point of chart is January 1, 2007.
From VR IPO Through March 31, 2017
Validus Stock Total Return Versus Peers and S&P 500
11
-50.0%
-25.0%
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
175.0%
200.0%
225.0%
250.0%
275.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Validus Peers S&P 500
Gross Premium Written of $2.7 Billion – Last 12 months to March 31, 2017
1) $2.7 billion consolidated gross premiums written net of $24.0 million of intersegment eliminations.
By Operating SegmentBy Class of Business
Validus Mix of Business
12
Validus Re
38%
Talbot
36%
Western
World
16%
AlphaCat
10%
Specialty
35%
Property Cat
XOL
23%
Other
Property
20%
Marine
13%
Liability
9%
Business Mix Development from 2010 to Today
1) Business mix based on gross premiums written net of intersegment eliminations.
2) All data points are as of December 31, except for 2017 which is for the last 12 months as at March 31, 2017.
Mix Shift = More Specialty, Less Cat XOL and Marine
13
23.4% 23.2% 20.7%
16.8% 18.0% 18.8% 20.0% 20.1%
28.1% 27.8%
27.6%
25.9% 21.2% 16.4% 13.0% 13.5%
0.6% 0.7%
0.6%
5.6%
5.4%
6.9% 9.8% 10.0%
26.4% 26.8% 30.0%
23.8%
24.4%
18.4% 13.7% 13.1%
21.5% 21.4% 21.1%
27.8%
28.7%
30.6%
34.7% 34.3%
2.3%
8.8% 8.6% 9.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017 (2)
Other Property Property Cat XOL AlphaCat Marine Specialty Liability
Validus – Growth and Diversification
Gross Premiums Written in $US Millions – 2006 to Year to Date (“YTD”) 2017
1) 2014 Gross Premiums Written for Western World cover the time period from the acquisition by Validus on October 2, 2014 through
December 31, 2014.
2) The table above excludes inter-segment eliminations.
3) All data points are as of December 31, except for 2017 which is as of March 31.
14
540.8
702.1 687.8 768.1
1,089.4 1,114.5 1,132.0
1,226.7
1,118.5 1,126.8 1,111.1
620.5
286.5
709.0
919.9
981.1 1,014.1
1,078.6
1,091.9
1,101.8 1,018.8 970.7
247.2
11.8
75.7 21.6
131.1
126.8 176.1 270.4
164.9
65.2
278.5
323.2
172.0
$-
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
Validus Re Talbot AlphaCat Western World
Validus - Adapting to Market Demand
1) 2006 was the first full year of operations for Validus.
2) GPW for 2006 is for the full year. GPW for 2017 is for the last 12 months as of March 31, 2017.
3) The acquisition of Crop Risk Services closed on May 1, 2017.
Growth and Diversification in VR’s Business Since Inception
Reinsurance
100%
2006 GPW(1)
$540.8 million
2017 GPW(2)
$2,666.8 million
• Significant growth in GPW through
acquisitions of:
– 2007 – Talbot
– 2009 – 2012: IPCRe, Flagstone,
Longhorn Re
– 2014 – Western World
– 2017 – Crop Risk Services (3)
• Improved portfolio balance in
insurance through Talbot and Western
World acquisitions
• AlphaCat established in 2008 to
capitalize on the insurance linked
securities market
• Access to multiple sources of capital
to respond to business opportunities
as presented
15
Reinsurance
53%
Insurance
47%
Validus Business Mix – Reinsurance and Insurance
1) 2006 was the first full year of operations for Validus.
2) The above table includes inter-segment eliminations.
3) All data points are as of December 31, except for 2017 which is as of March 31.
Gross Premiums Written in $US Millions
16
540.8
725.1 778.6
861.4
1,192.4 1,311.3 1,258.8
1,504.6
1,340.9 1,393.4
1,501.1
823.2
-
263.5
583.9
759.8
798.1
813.4 907.6
896.5
1,017.9
1,164.1
1,147.6
367.7
540.8
988.6
1,362.5
1,621.2
1,990.6
2,124.7 2,166.4
2,401.1
2,358.9
2,557.5
2,648.7
1,190.9
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD
Insurance Reinsurance
Insurance Underwriting Income – Validus vs. Bermuda Peers
1) Source: SEC filings and other public disclosures.
2) Validus insurance underwriting income includes Western World and Talbot’s direct insurance and facultative reinsurance.
3) AGII is excluded as they do not disclose underwriting income as insurance / reinsurance.
4) RNR is excluded as they are deemed to be all reinsurance.
Insurance Underwriting Income in $US Millions: 2012 - 2016
17
396.1
307.8
239.0
189.1
73.0
30.1
(557.5)
-400.0
-300.0
-200.0
-100.0
0.0
100.0
200.0
300.0
400.0
500.0
VR AXS ACGL AWH AHL ENH RE
Underwriting Income – Validus vs. Bermuda Peers
1) Source: SEC filings and other public disclosures.
2) AGII is excluded as they do not disclose underwriting income as insurance / reinsurance.
3) RNR is deemed to be all reinsurance.
Underwriting Income in $US Millions: 2012 - 2016
18
3,836.6
2,487.7
1,735.7 1,722.4
1,426.2
1,279.4
991.7
719.3
(557.5)
396.1
239.0
307.8
30.1
73.0
189.1
-500.0
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
RE RNR VR ACGL AXS ENH AHL AWH
Reinsurance Income Insurance Income
Gross premiums written of
$1.2 billion
(Increase of 169% at Western
World)
10.2% ROAE and
8.3% net operating ROAE
1) Validus diluted book value per share, operating income, operating EPS and operating ROAE are non-GAAP financial measures. Please
refer to notes on non-GAAP and other financial and exposure measures found in the Appendix hereto.
2) ROAE and net operating ROAE calculations are annualized.
83.2% combined ratio
(67.2% at Validus Re, 97.9% at
Talbot and 109.6% at
Western World)
Net income available
to Validus common
shareholders of
$94.6 million and
diluted EPS of $1.17
Book value per
diluted share of $45.88
2.9% growth (including
dividends) in Q1 2017
Q1 2017 Financial Results
Net operating income
available to Validus
common shareholders of
$76.8 million and
diluted operating EPS
of $0.95
19
Validus Reinsurance Highlights
Gross Premium Written - $1.0 Billion
last 12 months to March 31, 2017
Validus Re Overview
1) Validus Re financial information is based on reporting of the Validus Re segment which does not include AlphaCat.
2) YTD figures are as of March 31, 2017.
3) Other Specialty class includes Aerospace & Aviation, Composite, Contingency, Crisis Management, Financial, Life and A&H, Technical Lines,
Terrorism, Trade Credit, and Workers' Compensation. Other Property class includes Per Risk XOL and Proportional.
Net Underwriting Income in $US Millions
• Validus Re formed in October 2005 as the first operating
subsidiary of Validus Holdings, Ltd.
• Headquartered in Bermuda with overseas offices in Asia,
Continental Europe and Latin America
• Global provider focused on treaty reinsurance including
– Property catastrophe
– Marine and energy
– Other specialty lines
• A.M. Best rating of A (Stable); S&P Rating of A (Stable)
20
277.7
91.5
413.2
240.4
15.5
227.8
443.4
387.0
280.6
267.6
71.8
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
YTD
Property
Cat XOL
35%
Other
Property
12%
Other
Specialty
19%
Agriculture
16%
Marine
10%
Casualty
8%
Validus Reinsurance – Business Mix Development
21
1) All data points are as of December 31, except for 2017 which is for the last 12 months as of March 31, 2017.
GPW mix by product line
51.4% 53.0% 52.8% 49.9%
44.6%
37.0%
31.1%
34.5%
20.1% 17.6% 15.3%
10.0%
10.5%
11.2%
11.5%
12.0%
0.3% 0.5%
0.4% 14.4%
13.3% 23.9%
21.9% 16.0%
7.4% 8.1%
8.7%
10.0%
14.5%
13.8%
18.3% 19.5%
20.8% 20.9% 22.7%
15.6% 17.1% 13.5%
9.5% 9.6%
0.6%
7.8% 8.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014 2015 2016 2017 (1)
Property - Cat XOL Other Property Agriculture Other Specialty Marine Casualty
AlphaCat Highlights
AlphaCat Overview
Assets Under Management
Expressed in $US Millions
1) AlphaCat financial information is based on reporting of the AlphaCat segment.
2) AlphaCat began operations in 2008, and became a stand alone segment in 2012.
Q1 2017 Performance
• Generated management fee revenue of $5.3
million
• Validus’ share of AlphaCat income of $6.1
million
• Investment advisor managing capital for third
parties and Validus in ILS and other property
catastrophe and specialty reinsurance
investments
• AlphaCat brand was established in 2008
• In 2011, AlphaCat opened access to external
investors
• As of April 1, 2017, AlphaCat had $2.9 billion in
assets under management
22
1,533.8
2,059.5
2,658.6
346.9
326.6
244.5
$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
1-Jan-15 1-Jan-16 1-Apr-17
Third Party Related Party
Talbot Highlights
Gross Premium Written - $951.6 Million
last 12 months to March 31, 2017
Talbot Overview
Net Underwriting Income in $US Millions
• Founded in 2001 and acquired by Validus in 2007
• Significant competitive position
• Focus is on short-tail business with meaningful market
position in targeted classes
• By design, Talbot is underweight in Casualty, Casualty
Treaty and Property Treaty classes
• Strategically placed offices in international hubs – New
York, Miami, Santiago, Dubai, Labuan, Sydney and
Singapore
1) Talbot financial information is based on reporting of the Talbot segment.
2) YTD 2017 figures are as of March 31, 2017.
3) Energy is Downstream Energy and Power. Other includes Accident & Health and Contingency lines.
23
Marine
26%
Property
24%Political
Lines
20%
Energy
10%
Aviation
8%
Fin. Lines
6%
Other
6%
79.3
45.6
78.7 72.0
10.7
85.3
169.3
108.1
136.4
32.7
4.9
$0.0
$50.0
$100.0
$150.0
$200.0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
YTD
24
Talbot - Lloyd’s Market Share By Class of Business
1) Source: Lloyd’s Franchise Board.
2) Percentages are calculated based on 2016 year of account gross premium written.
3) Talbot’s overall market share in Lloyd’s is 2.3% (2.4% in 2015).
Key Classes of Business Underweight Classes of Business
0.1%
0.1%
0.1%
0.2%
0.2%
0.3%
0.4%
0.5%
0.5%
0.6%
0.6%
0.7%
0.7%
0.8%
0.8%
0.8%
0.9%
1.2%
1.6%
1.6%
1.8%
1.9%
2.0%
2.1%
2.3%
2.3%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5%
Professional Indemnity (US)
Directors & Officers (US)
Cyber
Overseas Motor
Property Risk XS
Legal Expenses
Property D&F (non-US binder)
NM General Liability (non-US direct)
Livestock & Bloodstock
Property D&F (US binder)
Personal Accident XL
NM General Liability (US direct)
Professional Indemnity (non-US)
Property Cat XL (Non-US)
Employers Liability/ WCA (US)
Directors & Officers (non-US)
Property Cat XL (US)
Medical Expenses
Yacht
Difference in Conditions
Accident & Health (direct)
Specie
Power Generation
Marine XL
Energy Onshore Liability
Total
2.3%
2.3%
3.0%
3.2%
3.4%
3.5%
3.6%
3.9%
4.0%
4.0%
4.1%
4.3%
4.4%
5.4%
5.5%
5.6%
6.1%
6.1%
6.9%
8.0%
11.9%
13.8%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Total
Cargo
Nuclear
Property D&F (US open market)
Property D&F (non-US open market)
General Aviation
Marine Liability
Pecuniary
Space
Marine Hull
Financial Institutions (non-US)
Energy Offshore Property
Airline
Political Risks, Credit & Financial Guarantee
Energy Offshore Liability
Engineering
Financial Institutions (US)
Aviation Products/ Airport Liabilities
BBB/ Crime
Terrorism
Aviation XL
Energy Onshore Property
Western World Highlights
Gross Premium Written - $431.3 Million
last 12 months to March 31, 2017
Western World Overview
1) Western World financial information is based on reporting of the Western World segment.
• Founded in 1964 and acquired by Validus in 2014
• Focused on US small enterprise business - E&S
and admitted
• Contract Binding has been the historical focus -
primarily commercial general liability
• Western World Integrated Platform (“WWIP”) is
a technological competitive advantage
• Validus ownership provides the resources for
expansion into short-tail classes of business:
– Property: Contract and Brokerage
– Flood
– Homeowners’ non-admitted
• Meaningful strategic changes have already been
made:
– Expanded relationships with national
wholesalers, e.g. Scottsdale office to service
Western states
– Discontinued lines: Brokerage GL, Commercial
Auto and select Programs
25
Property
25%
Agriculture
19%
Liability
56%
Western World – Class of Business Detail
1) Western World financial information is based on reporting of the Western World segment.
2) YTD 2017 figures are as of March 31, 2017.
Contract
Division
Programs Professional Liability Property Specialty
YTD 2017 GPW
in $US MM
$65 $7 $7 $9 $84
% of Total 38% 4% 4% 5% 49%
Description
• General & Professional
Liability and Property
Coverage on small-to-
medium size commercial
risks offered in 50 states
• Distributed through
exclusive general agents
with binding authority
• General, Professional,
Liability, Property and
Commercial Auto plans
• Distributed through
affinity group program
administrators
• Single-class
relationships, generally
with 50-state binding
authority
• Underwrites larger, more
complex accounts
• Distributed through select
wholesale brokers
• Business accepted from 50
states
• Commercial E&S
Property Insurance
• “Middle Market,”
Catastrophe
exposed business
• Distributed through
select wholesale
brokers
• Business accepted
from 50 states
• Specialty represents
agriculture premiums
written through a quota-
share arrangement
between Crop Risk
Services ("CRS") and
Validus Re Switzerland.
On January 30, 2017, the
Company announced the
acquisition of CRS. The
results of that quota-
share arrangement have
been presented within
the Western World
segment in anticipation
of these premiums being
written by Western
World upon the closing of
the transaction
Coverages
• General & Professional
Liability
• Property (package and
monoline)
• General Liability &
Professional
• Commercial Auto &
APD
• Property
• Flood
• Professional Liability (Claims
Made)
• ISO special, broad
and basic causes of
loss
• Single Peril
(Earthquake, Flood,
Wind)
• Difference in
Conditions (DIC) for
Earthquake and
Flood
Business
Classes
• Manufacturers and
Contractors
• Owners, Landlords and
Tenants
• Professional Services / Misc.
Malpractice
• Spectator Events
• Hospitality &
Habitational
• Contracted Services
• Outdoor / Recreation
& Amusement
• Professional Services
• Residential Flood
• Errors & Omissions
• Management Liability
• Financial Institutions
• Hotel / Motel
• Habitational
• Retail
• Restaurants
• Offices
• Agriculture
26
Estimated Exposures to Peak Zone Property Catastrophe Losses
(Expressed in thousands of U.S. Dollars)
Probable Maximum Losses by Zone and Peril
Consolidated (Validus Re, Talbot and Western World) Estimated Net Loss
Zones Perils
20 year return
period
50 year return
period
100 year return
period
250 year return
period
Validus Re Net
Maximum Zonal
Aggregate
United States Hurricane 274,105 463,689 718,897 1,029,440 1,993,896
California Earthquake 70,449 211,796 284,597 411,784 1,659,730
Europe Windstorm 86,428 203,012 260,460 444,018 1,260,047
Japan Earthquake 55,154 119,637 217,552 280,422 835,615
Japan Typhoon 68,747 144,820 232,619 266,188 749,615
1:100 year PML equal to 15.3% of quarter end capital, 19.1% of shareholders’ equity available to Validus
1) A full explanation and disclaimer is contained in the notes on non-GAAP and other financial and exposure measures found in the Appendix
hereto.
2) 1:100 year PML as a % of capital and shareholders’ equity is based on United States Hurricane PML.
3) Validus Re net maximum zonal aggregate includes Validus share of AlphaCat limits, excludes Western World and the limits supported by the
Funds at Lloyd’s provided by Validus Re.
Transparent Risk Disclosure – April 1, 2017 Portfolio
Peak Zone PML
27
Net Probable Maximum Loss (1:100) by Zone and Peril Compared to Total Capitalization
Substantial Capital Margin Above Risk Appetites
1) A full explanation and disclaimer is contained in the notes on non-GAAP and other financial and exposure measures found in the Appendix hereto.
2) Consolidated (Validus Re, Talbot and Western World) estimated net loss 1:100 year PML as a % of total capitalization and shareholder’s equity
available to common shareholders.
3) Total capitalization equals total shareholder's equity less noncontrolling interests plus Senior Notes and Junior Subordinated Deferrable
Debentures.
4) All data points are as at January 1, except 2017 which is as at April 1.
1:100 PML Internal Risk Appetite
28
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2012 2013 2014 2015 2016 2017
United States Hurricane California Earthquake Europe Windstorm Japan Earthquake Japan Typhoon
Realistic Disaster Scenarios
29
Consolidated (Validus Re, Talbot and Western World) Estimated Exposures to Specified Loss Scenarios - As of January 1, 2017
(Expressed in millions of U.S. Dollars, except share and per share information)
Type Catastrophe Scenarios Description
Estimated Consolidated
(Validus Re and Talbot
and Western World)
Net Loss
% of latest 12 Months
Consolidated Net
Premiums Earned
Marine Loss of major complex Total loss to all platforms and bridge links of a major oil complex $ 207.9 9.2%
Marine
Major cruise vessel
incident US-owned cruise vessel sunk or severely damaged 133.3 5.9%
Marine Marine collision Fully laden tanker collides with a cruise vessel in US waters 85.4 3.8%
Political Risks South East Asia
Chinese economy has a "hard landing" with sharp fall in growth rates; regional
contagion 176.8 7.8%
Political Risks Russia
The Russian corporate sector struggles to deal with the effects of crashing commodity
and stock prices 69.7 3.1%
Political Risks Turkey Severe economic crisis in Turkey due to political upheaval 60.4 2.7%
Political Risks Nigeria Severe economic, political and social crisis in Nigeria leads to widespread civil unrest 58.1 2.6%
Political Risks Middle East US and Iran escalate into military confrontation; regional contagion 90.4 4.0%
Aviation Aviation collision Collision of two aircraft over a major city 89.7 4.0%
Satellite Solar flare
Large single or sequence of proton flares results in loss to all satellites in synchronous
orbit 41.3 1.8%
Satellite Generic defect Undetected defect in a number of operational satellites causing major loss 23.6 1.0%
Terrorism Rockefeller Center Midtown Manhattan suffers a 2-tonne conventional bomb blast 62.1 2.8%
Terrorism One World Trade Center Lower Manhattan suffers a 2-tonne conventional bomb blast 19.1 0.8%
Liability Professional lines Failure or collapse of a major corporation 28.8 1.3%
Liability Professional lines UK pensions mis-selling 14.3 0.6%
Cyber
Major data security
breach
Simultaneous cyber-attacks on organizations within one industrial sector; loss of
customer data 61.3 2.7%
1) A full explanation and disclaimer is contained in the notes on non-GAAP and other financial and exposure measures found in the Appendix hereto.
Validus – Active Capital Management
Expressed in millions of U.S. Dollars
1) Inception to date capital management includes $6.7 million of dividends on preferred shares.
2) Inception to date and YTD 2017 capital management actions of $3.92 billion is through May 3, 2017.
Capital Management Inception to
Date of $3.92 Billion(1)
• On Feb 3, 2015 Validus reset the
common share repurchase
authorization to $750.0 million
• Remaining authorization of $320.0
million
• On February 9, 2017 Validus
increased the quarterly dividend to
$0.38 per share
• 2017 YTD capital management of
$32.3 million
― Common share dividends of $30.1
million
― Preferred share dividends of $2.2
million
Capital Management
30
2,704.4
974.9
230.8
Special Dividend
Common Share Dividends
Share Repurchases
Managed Investment Portfolio at March 31, 2017
• Total managed investments, cash and
cash equivalents and restricted cash of
$6.59 billion
– Emphasis on the preservation of
invested assets
– Provision of sufficient liquidity for
prompt payment of claims
– Comprehensive portfolio disclosure
• Average portfolio rating of AA-
• Duration of 2.16 years
• Q1 2017 annualized investment yield:
2.27% (Q1 2016: 1.79%)
1) Validus has $9.40 billion total investments, cash and cash equivalents and restricted cash inclusive of investments supporting AlphaCat
collateralized business.
31
22.6%
11.0%
9.9%
9.4%
8.6%
7.8%
6.7%
6.0%
4.8%
4.0%
3.5%
3.5%
1.4%
0.5%
0.3%
0% 5% 10% 15% 20% 25%
U.S. corporate
U.S. Govt. and Agency
Agency RMBS
Cash
Bank loans
ABS
Other
Non-U.S. corporate
CMBS
Non-U.S. Govt. and Agency
Short term
State and local
Investment affiliates
Restricted cash
Non-Agency RMBS
Validus Invested Asset Strategy and Performance
• In 2014, Validus set out to increase portfolio yield without increasing tail risk. Validus’ Chief Investment
Officer worked with our risk and financial modeling teams to establish a new portfolio allocation
• Our managed portfolio is conservatively positioned and asset allocation is continually evaluated to
balance capital preservation and liquidity needs with reasonable return expectations
32
1.83%
2.02%
1.91%
1.90%
1.79%
2.34% 2.58% 2.25% 2.27%
1.62%
1.80%
1.89% 1.92% 1.91%
1.99%
2.15%
2.24%
2.36%
1.20%
1.40%
1.60%
1.80%
2.00%
2.20%
2.40%
2.60%
2.80%
Mar-31-15 Jun-30-15 Sep-30-15 Dec-31-15 Mar-31-16 Jun-30-16 Sep-30-16 Dec-31-16 Mar-31-17
Quarter Annualized Yield Rolling 4-Quarter Annualized Yield
Validus Loss Reserves at March 31, 2017
• Gross reserves for losses and loss
expenses of $3.05 billion
• $2.60 billion net of reinsurance
• No notable losses in Q1 2017
• Q1 2017 non-notable loss of $20.8 million
• Favorable reserve development during Q1
2017:
– Validus Re: $28.8 million
– AlphaCat: $3.4 million
– Talbot: $28.8 million
– Western World: $0.2 million
Net Favorable Reserve Development
Expressed in $US Millions
Validus Gross Reserve Mix
1) Q1 non-notable loss relates to Validus’ share of net losses and loss expenses inclusive of reinstatement premiums.
2) Notable loss events are loss events which aggregate to over $30.0 million on a consolidated basis. Non-notable loss events are loss events which
aggregate to over $15.0 million but less than $30.0 million on a consolidated basis.
33
Case
Reserves
40%
IBNR
Reserves
60%
253.9
201.8
56.3 32.6 41.5 50.6
52.2
14.4
6.5
20.3
5.3 10.6
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
2015 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Non-event Event
96.7
47.2 44.8 37.8
3.2
49.3
(10.4) (8.5) (5.6) (1.9)
29.0
89.9
67.5
30.1
20.3
-
95.9
83.3
58.3
19.4
- 72.1
91.1
41.2
- 94.4
43.3
-
90.7
175.0
222.6
259.2
306.1
216.2
-$15.0
$35.0
$85.0
$135.0
$185.0
$235.0
$285.0
$335.0
2012 2013 2014 2015 2016
Before 2010 2010 2011 2012 2013 2014 2015
Development of Prior Period Loss Reserves by Accident Year
Development of Prior Period Loss Reserves in $US Millions – 2012 to 2016
34
• Global insurance and reinsurance business
• Size and scale to compete effectively in targeted markets
• Four distinct yet complementary operating segments
• Focused on short-tail lines with strategic diversification into select longer-tail classes
• Profitable in all 11 years of operation
• Short duration, highly liquid, conservative balance sheet
• Transparent risk disclosure
Conclusion – Continue to be Well Positioned for 2017 and Beyond
35
CRS
Appendix
Validus Holdings, Ltd.
First Quarter 2017
Overview of CRS Acquisition
Transaction Terms
• On May 1, 2017 Validus acquired Crop Risk Services (“CRS”) from Archer Daniels
Midland Company (“ADM”)
• Under the terms of the transaction, ADM received $127.5 million in cash,
subject to certain working capital and balance sheet adjustments, in exchange
for 100% of the outstanding stock of CRS
Other Transaction
Details
• CRS will operate as part of the Western World Insurance Group
• Validus acquired only the managing general agent; all risk-bearing entities to
remain at ADM
• Stratford Insurance Company, a Western World subsidiary, will act as the
Standard Reinsurance Agreement (“SRA”) holder and Approved Insurance
Provider (“AIP”)
37
Marketing Service
Agreement
• The transaction included a seven year marketing services agreement under
which ADM and Validus will continue to work together to offer a full range of
insurance and farm products and services to CRS customers
Corn
48%
Soybean
23%
Wheat
10%
Cotton
7%
Other
12%
IL
13%
TX
12%
MN
7%
WI
7%ND
6%IN
6%
SD
5%
OH
5%
OK
5%
AR
4%
KS
4%
NE
4%
Other
20%
Key Highlights
• #9 ranked U.S. crop writer with 4.5% market
share
• Scaled business with 1,170 agents across 36
states
• Successful joint marketing partnership with
ADM grain division
• Strong value proposition for farmers and
knowledge of their needs
• Strong management team with significant
experience and relationships in the crop
industry
• Operational excellence in claims, marketing and
origination
• Leading technology, data and analytics
integration to improve service and efficiency
1) RY represents Reinsurance Year.
2) Mix figures represent MPCI for RY2016, source ADM CRS Management.
3) CRS #9 US crop writer ranking and market share data represents RY2015, source National Crop Insurance Services.
Crop Mix RY 2016
(2)
Company Overview
• First established in 1982 as ASI Agriserve Inc. (“ASI”)
• In 2010, ADM acquired 100% of the shares of ASI and the
company became ADM Crop Risk Services
• Primary crop insurance general agent headquartered in
Decatur, IL with over 400 employees
• 86% of gross premiums written (“GPW”) is multi-peril crop
insurance (“MPCI”) and 14% private crop insurance
products
• Total 2016 GPW of $555.0 million
Geography Mix RY 2016
(2))
38
Crop Risk Services Profile
Acquisition Enhances Presence in U.S. Specialty Primary Lines
By Product / Class By Insurance / Reinsurance
Year Ended 2016 Standalone GPW: $2,649 million
Year Ended 2016 Pro Forma GPW: $3,204 million
By Operating Segment
1) Note: Financial information in pie charts represent year ended (“YE”) 2016 gross premiums written (“GPW’) data. CRS gross premiums written
represents RY2016, source ADM CRS Management.
Pro
Forma
Business
Mix
Current
Business
Mix
39
Agriculture
9%
Specialty
26%
Property Cat
XOL
23%
Marine
14%
Other
Property
20%
Liability
8%
Agriculture
25%
Specialty
21%
Property Cat
XOL
19%
Marine
12%
Other
Property
16%
Liability
7%
Reinsurance
57%
Insurance
43%
Reinsurance
47%
Insurance
53%
Validus Re
41%
Talbot
37%
Western
World
12%
AlphaCat
10%
Validus Re
34%
Talbot
30%
Western
World
27%
AlphaCat
9%
Transaction Rationale
40
• Primary crop insurance complements Validus’ existing re/insurance portfolio
• Expands Validus presence in U.S. primary specialty lines
• Crop insurance exhibits attractive industry fundamentals
• The addition of a primary crop insurance business has compelling strategic benefits
• Unique opportunity to enter into long-term partnership with ADM
• Significant opportunity for growth and margin improvement
Investor Presentation
Appendix
Validus Holdings, Ltd.
First Quarter 2017
Gross premiums written of
$2,648.7 million
(Increases of 53.5% at
AlphaCat and 16.1% at
Western World)
9.7% ROAE and
8.7% net operating ROAE
1) Validus diluted book value per share, operating income, operating EPS and operating ROAE are non-GAAP financial measures. Please
refer to notes on non-GAAP and other financial and exposure measures found in the Appendix hereto.
84.2% combined ratio
(71.6% at Validus Re, 95.9% at
Talbot and 107.6% at Western
World)
Net income available to
Validus common
shareholders of
$359.4 million and
diluted EPS of $4.36
Book value
per diluted share of $44.97
9.5% growth (including
dividends) in 2016
Full Year 2016 Financial Results
Net operating income
available to Validus common
shareholders of $320.9
million and
diluted operating EPS
of $3.90
42
Selected Market Information at March 31, 2017
Exchange/Ticker:
Share Price:
Primary Shares Outstanding:
Primary Market Capitalization:
Annual Dividend/Yield:
NYSE / “VR”
$56.39
79,137,590
$4.46 billion
$1.52 per share (2.70%)
1) Validus increased its quarterly common share dividend to $0.38 from $0.35 on February 9, 2017. 43
Talbot Composite Rate Index – The Benefits of Cycle Management
1) Rate index reflects the whole account rate change, as adjusted for changes in exposure, inflation, attachment point and terms and conditions.
2) All data points are as of December 31, except for 2017 which is as of March 31.
100%
126%
187%
208% 206% 204%
218%
207%
197%
209% 209%
215%
221% 220%
211%
198%
187%
177%
75%
100%
125%
150%
175%
200%
225%
250%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
44
Abbreviated Balance Sheets
45
(Expressed in thousands of U.S. Dollars)
March 31, 2017 December 31, 2016 December 31, 2015
Assets
Fixed maturities $ 5,365,216 $ 5,543,030 $ 5,510,331
Short-term investments 2,785,226 2,796,170 1,941,635
Other investments 443,004 405,712 336,856
Investment in investment affiliates, equity method 94,697 100,431 87,673
Cash and cash equivalents 623,937 419,976 723,109
Restricted cash 92,547 70,956 73,270
Total investments and cash 9,404,627 9,336,275 8,672,874
Goodwill and Intangible assets 310,934 312,350 318,016
Other assets 2,421,560 1,701,130 1,612,595
Total assets $ 12,137,121 $ 11,349,755 $ 10,515,812
Liabilities
Reserve for losses and loss expenses $ 3,052,745 $ 2,995,195 $ 2,996,567
Unearned premiums 1,612,474 1,076,049 966,210
Other liabilities 342,409 685,452 789,362
Notes payable to AlphaCat investors 446,576 278,202 75,493
Senior notes payable 245,412 245,362 245,161
Debentures payable 537,402 537,226 537,668
Total liabilities $ 6,237,018 $ 5,817,486 $ 5,610,461
Redeemable noncontrolling interests $ 1,657,630 $ 1,528,001 $ 1,111,714
Shareholders' equity
Capital $ 971,742 $ 961,655 $ 1,004,919
Retained earnings 2,940,134 2,876,636 2,634,056
Total shareholders' equity available to Validus 3,911,876 3,838,291 3,638,975
Noncontrolling interests 330,597 165,977 154,662
Total shareholders' equity 4,242,473 4,004,268 3,793,637
Total liabilities, noncontrolling interests and shareholders' equity $ 12,137,121 $ 11,349,755 $ 10,515,812
1) A full explanation and disclaimer is contained in the note on non-GAAP financial and other measures found in the Appendix hereto.
2) Capital as at March 31, 2017 and December 31, 2016 includes $150.0 million of 5.875% Non-Cumulative Preferred Shares, Series A.
Net Operating Income Available to Validus Reconciliation
46
1) 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.
2) Non-GAAP financial measure.
3) 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 of $150,000. 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 of $150,000.
Validus Holdings, Ltd.
Non-GAAP Financial Measure Reconciliation
Net Operating Income available to Validus Common Shareholders, Net Operating Income per diluted share available to Validus Common Shareholders and Annualized Net Operating Return
on Average Equity
(Expressed in thousands of U.S. Dollars, except share and per share information)
Three Months Ended Years Ended
March 31,
2017
March 31,
2016
December 31,
2016
December 31,
2015
Net income available to Validus common shareholders $ 94,561 $ 166,810 $ 359,384 $ 374,893
Non-GAAP Adjustments:
Net realized losses (gains) on investments 1,164 584 (15,757) (2,298)
Change in net unrealized (gains) losses on investments (13,348) (47,444) (16,871) 32,395
(Income) loss from investment affiliates (5,188) 4,113 2,083 (4,281)
Foreign exchange (gains) losses (1,569) (6,245) (10,864) 8,731
Other (income) loss (94) (677) 766 1,002
Net income (loss) attributable to noncontrolling interests 728 237 457 (693)
Tax expense (1) 580 4,127 1,687 384
Net operating income available to Validus common shareholders (2) $ 76,834 $ 121,505 $ 320,885 $ 410,133
Earnings per diluted share available to Validus common shareholders $ 1.17 $ 1.98 $ 4.36 $ 4.34
Non-GAAP Adjustments:
Net realized (gains) losses on investments 0.01 - (0.19) (0.02)
Change in net unrealized losses (gains) on investments (0.17) (0.56) (0.20) 0.38
(Income) loss from investment affiliates (0.06) 0.05 0.03 (0.05)
Foreign exchange (gains) losses (0.02) (0.07) (0.14) 0.10
Other (income) loss - (0.01) 0.01 0.01
Net income (loss) attributable to noncontrolling interests 0.01 - 0.01 (0.01)
Tax expense (1) 0.01 0.05 0.02 -
Net operating income per diluted share available to Validus common shareholders (2) $ 0.95 $ 1.44 $ 3.90 $ 4.75
Average shareholders' equity available to Validus common shareholders (3) $ 3,725,084 $ 3,681,701 $ 3,697,114 $ 3,641,920
Annualized return on average equity 10.2% 18.1% 9.7% 10.3%
Annualized net operating return on average equity (2) 8.3% 13.2% 8.7% 11.3%
1) Per share amounts are calculated by dividing the equity amount by the common shares.
2) 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 of $150 million.
3) Using the "as-if-converted" method, assuming all proceeds received upon exercise of stock options will be retained by the Company and the resulting
common shares from exercise remain outstanding.
4) At March 31, 2017, the weighted average exercise price for those stock options that had an exercise price lower than book value per share was $23.48
(December 31, 2016: $23.48).
5) Non-GAAP financial measure.
Diluted Book Value Per Share Reconciliation
47
(Expressed in thousands of U.S. Dollars, except share and per share information)
March 31, 2017
Equity amount Shares Per Share Amount (1)
Book value per common share (2) $ 3,761,876 79,137,590 $ 47.54
Non-GAAP Adjustments:
Assumed exercise of outstanding stock options (3) (4) 614 26,136
Unvested restricted shares - 2,837,888
Book value per diluted common share (5) 3,762,490 82,001,614 $ 45.88
Goodwill $ (196,758) -
Intangible assets (114,176) -
Tangible book value per diluted common share (5) 3,451,556 82,001,614 $ 42.09
Book value per diluted common share (5) $ 45.88
Accumulated dividends $ 11.94
Book value per diluted common share plus accumulated dividends (5) $ 57.82
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 can be found on page 47.
In addition to presenting net income available to Validus common shareholders determined in accordance with U.S. GAAP, the Company believes that showing net operating income
available to Validus common shareholders, a non-GAAP financial measure, provides investors with a valuable measure of profitability and enables investors, analysts, rating agencies
and other users of its financial information to more easily analyze the Company’s results in a manner similar to how management analyzes the Company’s underlying business
performance.
Net operating income available to Validus common shareholders, a non-GAAP financial measure, is calculated by the addition or subtraction of certain Consolidated Statement of
Income line items from net income available to Validus common shareholders, the most directly comparable GAAP financial measure, and measures the performance of the
Company’s operations without the influence of gains or losses on investments and foreign currencies and other items as noted in the reconciliation below. The Company excludes
these items from its calculation of net operating income available to Validus common shareholders because the amount of these gains and losses is heavily influenced by, and
fluctuates in part, according to availability of investment market opportunities and other factors. The Company believes these amounts are largely independent of its core
underwriting activities and including them distorts the analysis of trends in its operations. The Company believes the reporting of net operating income available to Validus common
shareholders enhances the understanding of results by highlighting the underlying profitability of the Company’s core (re)insurance operations. This profitability is influenced
significantly by earned premium growth, adequacy of the Company’s pricing, as well as loss frequency and severity. Over time it is also influenced by the Company’s underwriting
discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance and its ability to manage its
expense ratio, which it accomplishes through its management of acquisition costs and other underwriting expenses. A reconciliation of net income available to Validus common
shareholders to net operating income available to Validus common shareholders, can be found on page 46.
Notes on Non-GAAP and Other Financial and Exposure Measures
48
Net Loss Estimates
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 herein
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, there can be no assurance that such third party models are free of defects in the modeling logic or in the
software code. Commencing in January 2012, the Company incorporated RMS version 11 as part of its vendor models.
The Company has presented the Company Realistic Disaster Scenarios for non-natural catastrophe events. Twice yearly, Lloyds' syndicates, including the Company's Talbot Syndicate
1183, are required to provide details of their potential exposures to specific disaster scenarios. Lloyds' makes its updated Realistic Disaster Scenarios (RDS) guidance available to the
market annually. The RDS scenario specification document for 2012 can be accessed at the RDS part of the Lloyd's public website:
http://www.lloyds.com/The-Market/Tools-and-Resources/Research/Exposure-Management/Realistic-Disaster-Scenarios
The Consolidated Net Premiums Earned used in the calculation represents the latest 12 months of net premiums earned up to March 31, 2017.
Modeling catastrophe threat scenarios is a complex exercise involving numerous variables and is inherently subject to significant uncertainties and contingencies. These
uncertainties and contingencies can affect actual losses and could cause actual losses incurred by the Company to differ materially from those expressed above. Should an event
occur, the modeled outcomes may prove inadequate, possibly materially so. This may occur for a number of reasons including, legal requirements, model deficiency, non-modeled
risks or data inaccuracies.
A modeled outcome of net loss from a single event also relies in significant part on the reinsurance and retrocession arrangements in place, or expected to be in place at the time of
the analysis, and may change during the year. Modeled outcomes assume that the reinsurance and retrocession in place responds as expected with minimal reinsurance failure or
dispute. Reinsurance is purchased to match the original exposure as far as possible, but it is possible for there to be a mismatch or gap in cover which could result in higher than
modeled losses to the Company. In addition, many parts of the reinsurance program are purchased with limited reinstatements and, therefore, the number of claims or events which
may be recovered from second or subsequent events is limited. It should also be noted that renewal dates of the reinsurance program do not necessarily coincide with those of the
inwards business written. Where original business is not protected by risks attaching reinsurance or retrocession programs, the programs could expire resulting in an increase in the
possible net loss retained by the Company.
Investors should not rely on the information set forth in this presentation when considering an 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 herein 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.
Notes on Non-GAAP and Other Financial and Exposure Measures –
Continued
49
Street Address: 29 Richmond Road
Pembroke, Bermuda HM 08
Mailing Address: Suite 1790 48 Par-la-Ville Road
Hamilton, Bermuda HM 11
Telephone: +1-441-278-9000
Email: investor.relations@validusholdings.com
For more information on our company, products and
management team please visit our website at:
www.validusholdings.com