Validus Holdings Ltd.'s profits more than halved to $238.5 million in the third quarter.

The earnings broke down to $2.08 per share, compared with $499.2 million or $5.21 per share for the same period last year.

The company said the 52 percent fall in net income was due to a $303 million one-off gain made last year in association with the acquisition of IPC Holdings Ltd.

The re/insurer suffered a $28.7 million loss from the New Zealand earthquake and a $6.3 million loss from Hurricane Karl, as well as a $5 million loss related to political risk.

Net income for the nine months ended September 30, 2010 was $299.9 million, or $2.42 per share, versus $731.6 million, or $8.65 per share, for the nine months ended September 30, 2009.

Net operating income for the three months ended September 30, 2010 was $173 million, or $1.51 share - trouncing the $1.09 per share expected by analysts polled by Bloomberg.

This compared to operating earnings of $145.6 million, or $1.52 per share, for the three months ended September 30, 2009.

Ed Noonan, chairman and CEO of Validus, said: "I am very pleased with this quarter's result which delivered an 18.8 percent operating return on average equity and 6.4 percent growth in diluted book value per share plus dividends to our shareholders. We formed Validus five years ago and at this time in 2005 we were preparing for our first January renewal season with $1 billion in capital.

"Five years later, our total capital resources are $4.3 billion, we operate worldwide from offices in Bermuda, London, Miami, New York, Singapore, Chile and Dubai and underwrite annual gross premium income of $2 billion. An initial shareholder of Validus has seen a 16 percent annual growth in book value plus accumulated dividends from their initial investment.

"Our accomplishments over the past five years would not have been possible without all of our talented and dedicated staff, including our founding president George Reeth who will be retiring from the company effective November 15, 2010. Looking forward, I continue to believe that we are operating in the best-priced segments of the worldwide re/insurance markets."

Gross premiums written for the quarter were $344 million compared to $331 million in 2009, an increase of $13 million or 3.9 percent, primarily due to new business and increased lines on renewing business.

Underwriting income for the three months ended September 30, 2010 was $150.2 million versus $124.4 million for the three months ended September 30, 2009, up $25.8 million or 20.7 percent.

The company also reported a combined ratio of 65.2 percent, which included $49.8 million of favourable prior year loss reserve development, benefiting the loss ratio by 11.5 percentage points.

For the three months ended September 30, 2010, Validus incurred $47.7 million from notable loss events, representing 11 percentage points of the loss ratio, excluding reserve for potential development on 2010 notable loss events.

The company also announced today that its board of directors has approved a series of share repurchase transactions totalling $300 million. These repurchases will be tendered on Monday November 8, 2010, for up to 7,945,400 of its common shares at a price of $30 per share.

In addition, it has entered into separate repurchase agreements with funds affiliated with or managed by each of Aquiline Capital Partners LLC, New Mountain Capital, LLC and Vestar Capital Partners to purchase 2,054,600 common shares in the aggregate at the same price per share as the tender offer, for an aggregate purchase price of approximately $61.6 million, subject to completion of the tender offer.

As a result of these transactions, Validus expects to repurchase an aggregate of 10.0 million common shares. This amount is in addition to the $629 million of common shares repurchased by the company through November 3, 2010 under its previously authorised share repurchase programme announced in February 2010.