VALIDUS HOLDINGS LTD Reports Operating Results (10-K)
Validus Holdings Ltd. has a market cap of $3.48 billion; its shares were traded at around $31.27 with a P/E ratio of 11 and P/S ratio of 1.8. The dividend yield of Validus Holdings Ltd. stocks is 2.8%.Hedge Fund Gurus that owns VR: Richard Pzena of Pzena Investment Management LLC, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns VR: Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: Property: The main sub-classes within property are international and North American direct and facultative contracts, onshore energy, lineslips and binding authorities together with a book of business written on a treaty reinsurance basis. The business written is mostly commercial and industrial insurance though there is a modest personal lines component. The business is short-tail with premiums for reinsurance and, direct and facultative business, substantially earned within 12 months and premiums for lineslips and binding authorities substantially earned within 12 months of the expiry of the contract. Gross premiums written on property business during the year ended December 31, 2010 was $314.8 million, including $88.5 million of treaty reinsurance.
Marine: The main types of business within marine are hull, cargo, energy, marine and energy liabilities, yachts and marinas and other treaty. Hull consists primarily of ocean going vessels and cargo and covers worldwide risks. Energy covers a variety of oil and gas industry risks. The marine and energy liability account provides cover for protection and indemnity clubs and a wide range of companies operating in the marine and energy sector. Yacht and marina policies are primarily written through Underwriting Risk Services Ltd., an underwriting agency that is a subsidiary of Talbot. Each of the sub-classes within marine has a different profile of contracts written some, such as energy, derive up to 41.7% of their business through writing facultative contracts while others, such as cargo, only derive 15.8% of their business from this method. Each of the sub-classes also has a different geographical risk allocation. Most business written is short-tail enabling a quicker and more accurate picture of expected profitability than is the case for long tail business. The marine and energy liability account, which makes up $41.9 million of the $315.1 million of gross premiums written during the year ended December 31, 2010, is the primary long-tail class in this line. The business written is mainly on a direct and facultative basis with a small element written on a reinsurance basis either as excess of loss reinsurance or proportional reinsurance.
premiums written in 2010 generated in Europe, 9.7% from the U.S and 54.6% from other geographical regions. In addition, Talbot seeks to write regional accounts rather than global financial institutions with exposure in multiple jurisdictions and has only limited participation in exposures to publicly listed U.S. companies. The underwriters actively avoid writing U.S. directors and officers risks. As of December 31, 2010, the Company had gross reserves related to the financial institutions business of $171.5 million, comprised of $83.0 million, or 48.4% of incurred but not reported (IBNR) and $88.5 million, or 51.6% of case reserves. For comparison, as at December 31, 2009 the Company had gross reserves related to the financial institutions business of $143.4 million, comprising $80.8 million, or 56.3% of IBNR and $62.6 million, or 43.7% of case reserves.
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