Validus Holdings Ltd took a $48 million hit from claims related to an oil rig explosion that left four people dead, the Bermuda reinsurer revealed last night.

The platform, which was owned by Mexican state-run oil company Pemex, burst into flames in April this year. A fleet of fire boats was sent out to extinguish the blaze after more than 300 workers were evacuated.

Despite the hefty claims, Validus recorded net income of $64 million for the quarter, 58 per cent down from the April-to-June period last year.

And operating earnings were $98.3 million, or $1.13 per share, falling just short of analysts’ consensus forecast of $1.16.

Validus chairman and chief executive officer Ed Noonan said: “During a quarter with meaningful loss activity in our core classes of business, Validus delivered a 10.7 per cent annualised operating return on average equity, a strong result in the current market.

“Our diversified business model with a focus on short-tail lines continues to provide a strong platform for a thoughtful expansion

into new classes of business and markets. The foundation of our success is our world-class staff and an outstanding set of

proprietary analytical tools that benefit both our own results and those of our clients.

“Above all, we remain committed to underwriting profitability and will continue to adjust our portfolio to maximise results in

the current market conditions.”

Both Bermuda-based reinsurance unit Validus Re and Lloyd’s of London operation Talbot wrote less business. But the group as a whole increased gross premiums written to $727 million, up from $655.7 million in the second quarter of 2014.

Validus said the 10.9 per cent increase was primarily due to the contribution from Western World, the US insurer that the group acquired in October last year, as well as an increase in premiums from AlphaCat, its alternative capital management arm.

Validus’ second-quarter combined ratio — the proportion of premium dollars spent on claims and expenses — was 80.7 per cent, which benefited from 12.3 points, or $70.7 million, of reserve releases.

During the second quarter, the company spent $85.1 million to repurchase nearly two million of its own shares at an average price of $43.23.

At the end of June, total shareholders’ equity was $4.2 billion, including $510 million of non-controlling interest. Book value per diluted share was $41.43, compared to $41.27 three months earlier.

Before the results were announced, Validus shares fell nearly 1.5 per cent in New York trading yesterday to close on $44.62.