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Validus Holdings posted net income of $499.2 million, compared with a net loss of $126.3 million for the same period a year ago.
Net operating income improved to $145.6 million, compared with a net operating loss of $53.1 million for the 2008 third quarter.
Gross premiums written rose 23% to $331.0 million. Net premiums earned increased 10.4% to $374.7 million.
The company posted a profitable combined ratio of 66.7, which reflected $32.0 million of favorable prior year loss reserve development.
"This quarter represents the culmination of rather extraordinary time for Validus," said Ed Noonan, chairman and chief executive officer, during a conference call. "In our fourth-quarter call last year, I said that it felt like a pretty good time to be Validus. In retrospect, that may have been an understatement."
The company completed the IPC merger on Sept. 4.
"The acquisition also provided Validus with sufficient scale to be a truly differentiating company in the market. In terms of our capability to clients and brokers, Validus now has the capacity to lead substantial placements and serve as the foundation for many programs," Noonan said.
The Validus/IPC merger was valued at nearly $1.7 billion (BestWire, July 9, 2009). IPC originally had announced plans to merge with Max Capital Group Ltd. before Validus stepped in with an unsolicited counteroffer. The IPC board rejected Validus' proposals and urged shareholders to support the merger with Max, but IPC shareholders voted against the Max plan on June 12. Max withdrew its offer, and Validus continued to pursue its merger plan, urging shareholders to call for a special meeting, where it threatened to replace IPC's board with candidates of its own choosing (BestWire, July 6, 2009).
Then a third company -- Flagstone Reinsurance Holdings Ltd. -- came forward with another unsolicited offer, which IPC rejected.
Validus Reinsurance Ltd. currently has a Best's Financial Strength Rating of A- (Excellent).
In afternoon trading on Nov. 6, shares of Validus Holdings were trading at $24.98, unchanged from the previous close.
(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)
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