Bermuda reinsurer Validus Holdings Ltd. posted an 81 percent rise in second-quarter net income, thanks to revenue growth, a lack of catastrophe claims and an increase in the market value of its investments.

The company, which is aiming to complete its agreed merger with fellow Bermuda reinsurer IPC Holdings within the next six weeks, achieved net earnings of $137.6 million, or $1.74 per share for the April through June period.

That compared to net income of $75.9 million, or $0.98 per share, for the same period in 2008.

Validus's operating earnings of $1.40 per share exceeded the $1.20 expectations of analysts tracked by Bloomberg.

This was despite a loss of $11 million in claims and expenses related to the Air France airliner crash in the Atlantic Ocean off Brazil in June.

"We are very pleased with our financial, strategic and operational achievements in the quarter," chairman and chief executive officer Ed Noonan said in Wednesday's earnings statement.

"We produced an annualised operating return on average shareholders' equity of 21.2 percent, diluted earnings per share of $1.74 and diluted operating earnings per share of $1.40.

"Our diluted book value per common share at June 30, 2009 reached $26.08 and, inclusive of our $0.20 quarterly dividend, we increased diluted book value per common share by 6.6 percent.

"We benefited from favourable investment markets, continued strong premium growth and a near absence of notable worldwide catastrophes and other loss events."

Although operating income fell slightly, the improvement in the financial markets during the quarter allowed Validus to book an unrealised increase $80.2 million in the value of investments.

Gross premiums written (GPW) grew by 11.9 percent year on year to $425 million compared to $379.9 million for the same quarter last year. And for the first six months of the year, GPW were up by 14.8 percent to $1.03 billion.

Expenses related to the IPC agreement cost Validus $15.9 million during the quarter, while the company experienced an increase in foreign exchange gains of $7.5 million

Combined ratio — the percentage of premium dollars spent on claims and expenses — was 71.9 percent, compared to 71 percent last year.

Talbot, Validus's Lloyd's underwriting platform, achieved a 19.2 percent rise in GPW to $235.1 million, while the Validus Re reinsurance segment boosted its GPW by 6.3 percent to $199.6 million.

The company also announced yesterday that Conan Ward had been promoted to the role of chief executive officer of reinsurance unit Validus Re.

And Kean Driscoll will take Mr. Ward's former role as chief underwriting officer of Validus Re. Both appointments are effective immediately, subject to approval by the Bermuda Department of Immigration.

Net income: $137.6 million compared to $75.9 million in 2008.

Gross premiums written: $425 million compared to $379.9 million in 2008.

Combined ratio: 71.9 percent compared to 71 percent in 2008.