Bermuda reinsurer, Validus reported higher first-quarter earnings as the company’s combined ratio improved thanks in part to lower catastrophe losses. But in an interview with The Royal Gazette, the company’s chairman and CEO, Ed Noonan says the absence of catastrophe losses in the quarter is only part of the story.“It isn’t just lack of catastrophes. Every aspect of our business is performing extremely well,” Mr Noonan said.“The non-catastrophe business had a great quarter as well. Our Lloyd’s Syndicate, Talbot continues to perform spectacularly. Validus Re had a fantastic quarter and AlphaCat, our ILS manager continues to grow and generate really nice income for us.“And so, right now, our business model is firing on all cylinders.”Validus reported 2013 Q1 net income available to the company of $223.2 million, compared to $124.2 million in 2012’s first quarter.Underwriting income was $210.1 million, up from $69.3 million a year ago.The combined ratio improved to 60.5 in 2013’s first quarter, compared to 84.6 in 2012. Net written premiums grew to $917.5 million from $730.2 million a year ago.Net realised gains on investments were $1.7 million, down from $7.5 million in 2012’s first quarter.Validus CFO, Jeff Sangster, said the company’s acquisition of Flagstone Re is going well and that Validus is keeping the business it likes and disposing the parts of the business it doesn’t want.Flagstone, he said, contributed $20 million to Validus’ net income.“We wrote about $48 million in premium in the first quarter on Validus paper that was renewals of Flagstone business, so we’re renewing their business onto Validus paper and that’s going quite well. We’ve pretty much got all the business that we wanted.“We didn’t want to retain all their business, but that that we did want to retain, we’ve been able to at a very high success rate,” Mr Sangster said.“When we looked at their book, what we found most attractive was the catastrophe business that they had written largely out of Bermuda.”“So, on the business side, it’s going exactly according to plan and helped our growth story in the quarter with almost $50 million of additional premium written in the quarter,” Mr Sangster added.Mr Noonan said Validus also closed last week on its acquisition of Longhorn Re, a crop reinsurer, which Validus will use as a broader, well-diversified expansion of its property insurance business.“The crop insurance business fits our business model really nicely.“It’s a short tail class of risk, which is what we do, it’s very data-intensive and it’s a class where research and data analysis can lead to superior results. So it fits very nicely,” Mr Noonan said.“Most importantly, the correlation between landfalling hurricanes and crop yields is virtually nil, so it’s a great diversifying class for us as a catastrophe reinsurer.”The company’s third-party capital segment has proven to be a very profitable segment of Validus’ overall operations so far this year. AlphaCat, which operates both collateralised reinsurance sidecars as well as the AlphaCat ILS funds, contributed about 8 percent of the firm’s total income for the quarter.Net income from AlphaCat was $17.4 million for Q1 2013, while net operating income came to $18.2 million.Mr Noonan said AlphaCat continues to enjoy excellent success and stand out from other third-party funds.“We’ve got a different model than most. We’re not just an independent asset manager — it’s a hybrid model and AlphaCat gets the benefit of Validus Re’s global distribution.“It gets the benefit of our underwriting expertise and maybe most importantly, the benefit of our 29-person research team,” Mr Noonan said.“Our research team is composed of climatologists and PhDs in climate and earthquake sciences as well a group of extremely talented analytical experts.“And that’s a key part of our success as a reinsurer, ValidusRe — it’s a key part in the success of AlphaCat as well.”Mr Noonan says he’s pleased with the company’s results so far this year and gives credit to the company’s staff both here in Bermuda and around the world.“We are unabashedly proud to be a Bermudian company and we’re very bullish on the Island and it’s future,” he said.“We did very well with the prior government and we like the new government and the steps they’re taking in terms of trying to attract business — we think that will be good for the Island.”“We have a great, great workforce here on the Island. Our staff is really as good as anywhere we can find in the world and it’s primarily native Bermudian staff. It’s our home,” Mr Noonan said.“We feel great about it. We’ve looked at every other jurisdiction out of fiduciary responsibility and we don’t see any that come anywhere near Bermuda in terms of its attractiveness.”