Validus Holdings Ltd. boosted its profits by more than 30 percent during the second quarter of 2010 on investment gains and foreign exchange losses, despite taking a $70.5 million hit from the Deepwater Horizon and Aban Pearl oil rigs, the Perth hailstorms and the riots in Bangkok.

Posting a net income of $179.8 million, or $1.44 per share, for the quarter compared to $137.6 million, or $1.74 per share, for the same period last year, the re/insurer also reported profits of $61.4 million, or 48 cents per share, for the first half of 2010 versus $232.5 million for last year's first half.

The profit rise reflected an increase in net unrealised investment gains of $4.4 million and an increase in foreign exchange losses of $12.5 million, offset by an increase in net realised investment gains of $15.1 million.

The class of 2005 reinsurer, which acquired IPC Holdings Ltd. last year, recorded a net operating income for the three months ended June 30, 2010 of $129.8 million, or $1.04 per share, compared with $110.4 million, or $1.40 per share, for the three months ended June 30, 2009.

But it made a net operating loss for the first six months of this year of $6.6 million, or five cents per share, versus a net operating income of $210.8 million or $2.67 per share for the same period last year.

Ed Noonan, chairman and CEO of Validus, said: "In the second quarter of 2010, we were able to grow our diluted book value per share including dividends by 6.5 percent. We also completed the re-underwriting and optimisation of the reinsurance portfolio acquired from IPC in the second half of 2009.

"We are following through on our commitment to shareholders to manage capital actively and in the second quarter repurchased approximately $315 million of our common shares, which included 12 million common shares purchased pursuant to our modified Dutch auction tender offer.

"We close the quarter with a very strong balance sheet, including loss reserves with a high component of IBNR against our short-tail portfolio."

Validus reported gross premiums written for the quarter of $516.9 million compared to $425 million in the same period last year - an increase of $91.8 million or 21.6 percent - primarily due to the acquisition of IPC, which closed in September 2009.

Validus posted a combined ratio of 74.9 percent, which included $49.6 million of favourable prior year loss reserve development, benefiting the loss ratio by 11.3 percentage points.

Net operating income for the three months ended June 30, 2010 was $129.8 million compared to $110.4 million for the same period last year, up 17.6 percent or $19.4 million, reflecting increased underwriting and investment income.

The company also boosted its net income for the second quarter by 30.7 percent or $42.2 million to $179.8 million compared to net income of $137.6 million for the three months ended June 30, 2009, an increase of $42.2 million, or 30.7%, reflecting an increase in net unrealised investment gains of $4.4 million, an increase in foreign exchange losses of $12.5 million, offset by an increase in net realised investment gains of $15.1 million.