Profile: Validus Holdings Ltd (VR)
16 Feb 2018
Validus Holdings, Ltd., incorporated on October 19, 2005, is a holding company. The Company operates through four segments: Validus Re, Talbot, Western World and AlphaCat. Validus Re is a Bermuda-based reinsurance segment focused on treaty reinsurance. Talbot is a specialty insurance segment operating within the Lloyd's insurance market through Syndicate 1183. Western World is a specialty excess and surplus lines insurance segment operating within the United States commercial market. AlphaCat is a Bermuda-based investment advisor, managing capital from third parties and the Company in insurance linked securities (ILS) and other investments in the property catastrophe reinsurance space.
Validus Re operates primarily through reinsurance companies, including Validus Reinsurance, Ltd. and Validus Reinsurance (Switzerland) Ltd. (Validus Re Swiss). Validus Re concentrates on first-party property and other reinsurance risks. Validus Re's primary business lines include property, marine and specialty. In the property business line, Validus Re underwrites property catastrophe reinsurance, property per risk reinsurance and property pro rata reinsurance. The property catastrophe reinsurance provides reinsurance for insurance companies' exposures to an accumulation of property and related losses from separate policies, relating to natural disasters or other catastrophic events. The property catastrophe reinsurance is written on an excess of loss basis, which provides coverage to insurance companies when aggregate claims and claim expenses from a single occurrence for a covered peril exceed a certain amount specified in a particular contract. The property per risk reinsurance provides reinsurance for insurance companies' excess retention on individual property and related risks, such as highly valued buildings.
The property pro rata contracts require that the reinsurer share the premiums, as well as the losses and loss expenses in an agreed proportion with the reinsured. In the marine business line, Validus Re underwrites reinsurance on marine risks covering damage to or losses of marine vessels and cargo, third-party liability for marine accidents and physical loss and liability from principally offshore energy properties. Validus Re underwrites other lines of business depending on an evaluation of pricing and market conditions, which include aerospace and aviation, accident and health, agriculture, casualty, composite, contingency, crisis management, financial, life, technical, terrorism, trade credit and workers' compensation lines.
The Talbot segment is focused on a range of marine and energy, political lines, commercial property, financial lines, contingency, accident and health and aviation classes of business on an insurance or facultative reinsurance basis and principally property, aerospace and marine classes of business on a treaty reinsurance basis. Talbot writes primarily short-tail lines of business. It focuses on insurance. In addition, Talbot provides the Company with access to the Lloyd's marketplace. Talbot Underwriting Risk Services, Ltd. (London), Talbot Underwriting Services (U.S.), Ltd. (New York), Talbot Underwriting (MENA) Ltd. (Dubai), Validus Reaseguros, Inc. (Miami), Talbot Underwriting (LATAM) S.A. (Chile), Talbot Risk Services (Labuan) Pte. Ltd. (Malaysia), and Talbot Risk Services Pte. Ltd. (Singapore and Australia), act as approved Lloyd's coverholders for Syndicate 1183. Talbot also writes its premiums on risks outside the United States.
The main sub-classes within the property class are international and North American direct and facultative contracts, 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. The coverage provided includes all risks of direct physical loss or damage, business interruption and natural catastrophe perils. The property business line also includes downstream energy and construction business. Within the downstream energy sector, covered occupancies include oil, gas, petrochemicals, chemical, power generation and utilities, and process industries. Coverage is typically all risks and includes machinery breakdown and business interruption where required. The primary focus within the construction line is on capital projects, placed on a direct or facultative subscription basis.
The main types of business within the marine class are hull, cargo, upstream energy, marine and energy liabilities, yachts and a book of business written on a treaty reinsurance basis. Hull consists primarily of ocean going vessels and cargo and covers risks on an all risks or total loss only basis. Cargo consists of transits with a particular emphasis on oil cargo, project cargo, pre-launch satellite and space risks, specie, fine art and high value motor vehicles. Upstream energy covers various oil and gas industry exploration and production risks. The marine and energy liability account provides cover for protection and indemnity clubs and a range of companies operating in the marine and energy sectors. The specialty business line consists of political lines (comprising marine and aviation war, political risks and political violence, including war on land), aviation direct, aviation treaty, financial lines, accident and health, and contingency. With the exception of aviation treaty, most of the business within the specialty class is written on a direct or facultative basis or under a binding authority through a coverholder. The marine and aviation war account covers physical damage to aircraft and marine vessels caused by acts of war and terrorism. The political risk account deals primarily with expropriation, contract frustration/trade credit, kidnap and ransom, and malicious and accidental product tamper. The political violence account mainly insures physical loss to property or goods anywhere in the world, caused by war, terrorism or civil unrest. This class is written in conjunction with cargo, specie, property, energy, contingency and political risk. The aviation account insures airlines, airport operations, aviation products and airports, general aviation, satellites and a book of business written on a treaty reinsurance basis. The coverage includes excess of loss treaties with medium to high attachment points.
Talbot's financial institutions team underwrites bankers blanket bond, commercial crime, computer crime, professional indemnity and directors', and officers' coverage for various types of financial institutions and similar companies. The team also provides professional indemnity and directors' and officers' coverage to a more general selection of clients. Bankers blanket bond and commercial crime insurance products are specifically designed to protect against direct financial loss caused by fraud/criminal actions and mitigate the damage such activities may have on the asset base of the insured. Computer crime insurance protects against the misappropriation of funds and assets through the insured's computer system. Professional indemnity insurance protects businesses in the event that legal action is taken against them by third parties claiming professional negligence. The accident and health account provides insurance in respect of individuals in both their personal and business activity together with corporations where they have an insurable interest relating to death or disability of employees or those under contract. The main types of covers written under the contingency account are event cancellation, non-appearance and prize indemnity business.
Western World insures small to medium size commercial and institutional risks covering general liability, professional liability, products liability, miscellaneous malpractice and property classes through its insurance subsidiaries, including Western World Insurance Company (WWIC), Tudor Insurance Company (Tudor) and Stratford Insurance Company (Stratford). WWIC, Tudor and Stratford are domiciled in New Hampshire. WWIC operates as a surplus lines insurer in all other jurisdictions. Tudor is licensed as a domestic surplus lines insurer in New Hampshire and is authorized to conduct business as a surplus lines insurer in all other jurisdictions. Stratford operates as an admitted insurer. Western World's primary business lines include property and liability. The Property business line consists of building, business personal property and business income (with or without extra expense) coverages, including catastrophe, for small to medium size commercial habitational, industrial, service, and mercantile risks. The Liability business line consists of general liability, professional liability, products liability and miscellaneous malpractice occurrence-based coverage for contractors, dwellings, special events, manufacturers, social workers, drug clinics and exercise and health facilities.
The AlphaCat segment operates through AlphaCat Managers, Ltd. (AlphaCat Managers), an asset manager that leverages the Company's underwriting and analytical solutions primarily for third party investors. AlphaCat leverages the Company's business sourcing, underwriting, research and analytic capabilities to construct ILS portfolios subject to prudent risk constraints. The AlphaCat investors access this uncorrelated asset class through various AlphaCat funds and sidecars that participate in the market through AlphaCat Reinsurance Ltd. (AlphaCat Re), a Bermuda-based provider of collateralized property catastrophe reinsurance and retrocession capacity, and AlphaCat Master Fund Ltd. (AlphaCat Master Fund), a Bermuda-based investment fund investing in reinsurance related capital markets transactions. AlphaCat Re also enters into transactions on behalf of third party investors on a direct basis whereby all of the risks and rewards of the underlying transactions are transferred to the investors using notes payable to AlphaCat investors. BetaCat investors access the market through the BetaCat funds that participate in the market through BetaCat Fund Ltd., a Bermuda investment fund exclusively invested in catastrophe bonds. As of December 31, 2016, the AlphaCat segment included the AlphaCat master funds, the AlphaCat sidecars, the AlphaCat ILS funds and a BetaCat ILS fund.
The Company competes with Allied World Assurance Company Holdings, Limited., Arch Capital Group, Limited., Argo Group International Holdings, Ltd., Aspen Insurance Holdings Limited, AXIS Capital Holdings Limited, Endurance Specialty Holdings Ltd., Everest Re Group Limited, PartnerRe Ltd., RenaissanceRe Holdings Ltd., Amlin plc, Beazley plc, Brit plc, Hiscox Ltd., Novae Group plc, Scottsdale Insurance Company, Burlington Insurance Company, Nautilus Insurance Company, Essex Insurance Company, Penn-America Group, Inc., Colony Specialty Insurance Company and RSUI Group, Inc.
Validus Holdings Ltd
29 Richmond Road
PEMBROKE HM 08
Company Web Links
- BRIEF-Insurer AIG to take more "predictable" approach to 2018 reinsurance-CEO
- BRIEF-Validus Q4 Loss Per Share $0.11
- BRIEF-Validus Holdings Cancels Q4 & Year End 2017 Financial Results Conference Call, Webcast
- AIG to buy reinsurer Validus for $5.56 billion
- UPDATE 6-AIG to buy reinsurer Validus for $5.56 billion