Q2 Cat losses totalled $70.5m
Bermuda-based reinsurer Validus made a net profit of $61.4m in the first half of 2010, 74% down on the $232.4m it made in the first half of 2009. Validus’s first-half combined ratio jumped to 105.3% from 73.5%, despite an 8.5 percentage point benefit to the loss ratio from prior year reserve releases.
The reinsurer’s first-half results were hit by the Chilean earthquake, the sinking of the Aban Pearl semi-submersible drilling rig and the destruction and related spillage of the Deepwater Horizon oil rig. Losses and loss expenses jumped 162% to $673.4m from $256.6m.
The results were also impacted by a decrease in net unrealised investment gains of $2.3m and an increase in foreign exchange losses of $17.1m, though these were offset by an increase in net realised investment gains of $49.9m.
However, despite taking $70.49m of catastrophe losses in the second quarter ($44.1m for Deepwater Horizon, $10.5m for the Aban Pearl, $7.5m for the Bangkok riots and $8.4m for the hailstorm in Perth, Australia), Validus’s net profit for the quarter rose 31% to $179.8m from $137.6m. The second-quarter combined ratio increased to 74.9% from 71.9%.
The combined ratio benefited from $46.9m of prior year reserve releases, which improved the loss ratio by 11.3 percentage points.