Bermuda re/insurer Validus Holdings Ltd last night reported second-quarter profit of $153.4 million.

The company’s net income surged fivefold from the second quarter of 2013 when significant catastrophe claims related to European floods impacted results.

Net operating income was $132.6 million, or $1.39 per share, falling short of the $1.48 consensus forecast of analysts tracked by Yahoo Finance, but well ahead of the $1.03 per share earned in the corresponding period last year.

Book value per diluted common share stands at $38.55, reflecting quarterly growth of 3.4 percent, inclusive of dividends.

Validus chairman and chief executive officer Ed Noonan said diversification in the firm’s underwriting book strengthened results.

“Validus reported another solid quarter delivering $153.4 million of net income and a 16.5 percent annualised return on average equity. Strong underwriting and good diversification between insurance and reinsurance continued to drive our results as Validus posted an overall combined ratio of 68.6 percent. Despite competitive pressures in the marketplace and more loss activity than the market may have appreciated, all three of our segments — Validus Re, Talbot and AlphaCat — performed well.

“Earlier in the quarter Validus announced an important strategic development, an agreement to acquire Western World Insurance Group. Western World is a leader in the US excess and surplus lines market and adds a key pillar to our existing global platform for the distribution of short tail insurance and reinsurance.”

Validus, which launched operations in 2005 in the wake of Hurricane Katrina, wrote less business during the quarter than in 2013, with gross written premiums totalling $655.7 million compared to $702.3 million last year. But underwriting income rose to $146.1 million from $117.7 million.

The combined ratio of 68.6 percent — reflecting the proportion of premium dollars spent on claims and expenses — improved from last year’s 78.5 percent, and benefited from $72.7 million of favourable loss reserve development on prior accident years.

The company said general and administrative expenses for the quarter rose $4.5 million, or 31.3 percent, to $18.8 million. In addition there were $3.3 million of one-off expenses related to the proposed acquisition of US insurer Western World Insurance Group, which Validus last month agreed to buy for $690 million in cash.

As at June 30, 2014, total shareholders’ equity was $4.4 billion, including $575.3 million of non-controlling interest. Book value per diluted common share was $38.55 at June 30, 2014, compared to $37.58 at March 31, 2014.

In New York Stock Exchange trading yesterday, Validus shares fell 68 cents, or 1.8 percent, to close on $37.61.