Bermuda


VALIDUS


Gross premiums written


Net premiums written


Net income


2011 2,125


1,835 21


Combined ratio 99.4% (Claims ratio: 69.1% Expense ratio: 30.3%)


Return on average common equity


0.6%


2010 1,991


1,761 403


86.2% (Claims ratio: 56.1%, Expense ratio: 30.1%)


10.8%


2009 1,621


1,388 897


68.9% (Claims ratio: 36.1%, Expense ratio: 32.8%)


31.8% Doing the right thing by your investors and doing the right thing by


your customers do not need to be mutually exclusive, according to Conan Ward, chief executive of Validus.


“A large part of what we do is making sure that our shareholders are


satisfied with the price we are charging our customers, while ensuring that our customers’ needs are also met,” he says.


In terms of what Validus can offer investors in the future, Ward cites


actions taken by the company in 2011 that, he believes, have set it in good stead for the future.


“If you look at all the buyback activities that we’ve engaged in over the


last 18 months, it comes to around $1 billion,” he says. “The buybacks have been done at prices well below our book value, so it has been very accretive to earnings per share and is a great capital management tool for us, particularly if we’re not using the capital in the business.”


Ward says that if the company’s business prospects improve as he anticipates,


then Validus will have the capital to devote to writing more business. “I think that we are very well positioned; we were profitable in 2011


despite a challenging industry landscape,” Ward says. “We are in terrific shape and are one of the bigger companies in Bermuda from a capital base standpoint.”


XL GROUP


Gross premiums written


Net premiums written


Net income


2011 6,898


5,433 -403


Combined ratio 107.5% (Claims ratio: 76.6%, Expense ratio: 30.9%);


Return on average common equity


0.9%


2010 6,261


4,999 643


94.8% (Claims ratio: 63.8%, Expense ratio: 31%);


9%


2009 6,687


5,277 75


93.6% (Claims ratio: 61.5%, Expense ratio: 32.1%)


13.5% As a global entity, XL has been working hard to develop its global


franchise further, in both the insurance and reinsurance spaces. This has involved expanding into new lines of business, according to Greg Hendrick, chief executive of XL’s insurance operations.


“On the insurance side we have moved back into writing political risk


“A large part of what we do is making sure that our shareholders are satisfied with the price we are charging our customers, while ensuring that our customers’ needs are also met.”


24 | INTELLIGENT INSURER | Spring 2012


and surety,” he says. “We have also branched out into construction in the US, and have added an inland marine team as well. All of those are growth areas for us, in the sense that we don’t already have exposure to these lines and view them as enhancing portfolio profitability.”


Hendrick says that as low investment returns are making long-tail


business less profitable, the company is cautious about this type business. “We are just not chasing bad business,” he says.


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