AIG Acquisition Target Validus Reports Q1 Loss

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Validus Holdings reported it lost money during the 2018 first quarter, due partly to more expenses, an underwriting loss in its insurance segment and a drop in income for the carrier’s reinsurance arm.

The downbeat result may be its final earnings disclosure as an independent company before AIG’s $5.6 billion deal to buy the Bermuda-based reinsurer, insurer and asset manager closes in mid-2018.

Specifically, Validus lost $4.1 million, or $0.05 per diluted common share, for the three months ending March 31. That compares to $94.6 million in net income, or $1.17 per common share, over the same period in 2017.

Validus’s combined ratio for the period was 90.9, up from 83.2 over the 2017 first quarter.

Other results:

Gross premiums written were more than $1.8 billion versus just under $1.2 billion in the 2017 first quarter, thanks to increases in all segments.

Reinsurance premiums ceded were $376.3 million compared to $200 million in Q1 2017. Validus said the jump stemmed from rate increases in its Insurance and Reinsurance segments.

Net premiums earned were nearly $619 million for Q1 2018 compared to $575.4 million over the same period last year. Increases in the Asset Management and Insurance segments drove this but were partially offset by a decline in the Reinsurance segment.

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Tax benefits were negative $6.8 million during the quarter, compared to a negative $3.5 million in the 2017 first quarter, due to Insurance segment operating losses and unrealized losses on Validus’ investment portfolio.

Validus booked $7.8 million in expenses during Q1 related to its planned acquisition by AIG.

Validus said its net investment return for Q1 2018 was $9.95 million compared to nearly $57.6 million in the 2017 first quarter.
Source: Validus

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