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(a)	Fixed maturity, short-term and other investments

(a)	Included in the short-term investments and the hedge funds balances are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

(b)	Included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest.

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(a)	Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

(b)	Included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest.

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(b)	Net investment income

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(c)	Net realized gains and change in net unrealized gains (losses) on investments

(a)	Includes change in net unrealized gains (losses) and realized gains on investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and is included in the Consolidated Statements of Comprehensive Income as net (income) loss attributable to noncontrolling interest.

(d)	Pledged investments

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(a)	Classification within the fair value hierarchy

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(a)	Included in the short-term investments and the hedge funds balances are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

(b)	Included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest.

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(a)	Included in the hedge funds balance are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

(b)	Included in the short-term investments balance are investments held by two AlphaCat ILS funds which are consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest.

(b)	Level 1 assets measured at fair value

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(c)	Level 2 assets measured at fair value

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(d)	Level 3 assets measured at fair value

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(a)	Includes Level 3 investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

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(a)	Investment affiliate

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(b)	Operating affiliates

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(a)	Equity ownership in the two funds were 8.6% and 49.0% respectively as at June 30, 2014.

(c)	Notes payable and (income) attributable to operating affiliates

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(a)	Asset and liability derivatives are classified within other assets and accounts payable and accrued expenses respectively on the Consolidated Balance Sheets.

(a)	Classification within the fair value hierarchy

(b)	Derivative instruments designated as a fair value hedge

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(c)	Derivative instruments designated as a cash flow hedge

(d)	Balance sheet offsetting

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(a)	Authorized and issued

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(b)	Warrants

(c)	Deferred share units

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(d)	Dividends

(a)	Long Term Incentive Plan and Short Term Incentive Plan

i.	Options

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ii.	Restricted share awards

iii.	Restricted share units

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iv.	Performance share awards

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(b)	Total share compensation expenses

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(a)	Financing structure

(a)	Indicates utilization of commitment amount, not necessarily drawn borrowings.

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(b)	Senior notes and junior subordinated deferrable debentures

(a)	Variable interest rate is the three-month LIBOR, reset quarterly, plus spread as noted in the table.

(b)	Fixed interest rate.

(a)	Fixed interest rate.

(b)	Interest rate has been fixed as a result of interest rate swap contracts entered into by the Company.

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(c)	Credit facilities

i.	$400,000 syndicated unsecured letter of credit facility and $525,000 syndicated secured letter of credit facility

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ii.	$25,000 Talbot FAL facility

iii.	$40,000 IPC bi-lateral facility

iv.	$200,000 secured bi-lateral letter of credit facility

v.	$10,000 PaCRe senior secured letter of credit facility

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vi.	$30,000 AlphaCat Re secured letter of credit facility

vii.	$375,000 Flagstone bi-lateral facility

(d)	Finance expenses

(a)	Includes finance expenses incurred by AlphaCat Managers, Ltd. in relation to fund raising for the AlphaCat ILS funds, AlphaCat 2014 and AlphaCat 2013.

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(a)	Concentrations of credit risk

(b)	Funds at Lloyd's

(c)	Lloyd's Central Fund

(d)	Aquiline Commitment

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(e)	Western World Insurance Group acquisition

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(a)	Ratios are based on net premiums earned.

(b)	The transaction expenses relate to costs incurred in connection with the proposed acquisition of Western World Insurance Group, Inc. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

(c)	The general and administrative expense ratio includes share compensation expenses.

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(a)	Ratios are based on net premiums earned.

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	Ratios are based on net premiums earned.

(b)	The transaction expenses relate to costs incurred in connection with the proposed acquisition of Western World Insurance Group, Inc. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

(c)	The general and administrative expense ratio includes share compensation expenses.

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(a)	Ratios are based on net premiums earned.

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	Represents risks in two or more geographic zones.

(b)	Represents risks in one geographic zone.

(c)	The other locations non-specific category refers to business for which an analysis of exposure by geographic zone is not applicable, such as marine and aerospace risks, since these exposures can span multiple geographic areas and, in some instances, are not fixed locations.

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•	Gross premiums written for the three months ended June 30, 2014 were $655.7 million compared to $702.3 million for the three months ended June 30, 2013, a decrease of $46.6 million, or 6.6%.

•	Net premiums earned for the three months ended June 30, 2014 were $466.0 million compared to $547.5 million for the three months ended June 30, 2013, a decrease of $81.5 million, or 14.9%.

•	Underwriting income for the three months ended June 30, 2014 was $146.1 million compared to $117.7 million for the three months ended June 30, 2013, an increase of $28.5 million, or 24.2%.

•

Combined ratio for the three months ended June 30, 2014 of 68.6% which included $72.7 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 15.6 percentage points compared to a combined ratio for the three months ended June 30, 2013 of 78.5% which included $41.0 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 7.5 percentage points. The favorable loss reserve development was primarily due to lower than expected development on non-event losses. Included in the loss reserve development for the quarter is adverse movement on Validus’ estimate of losses from Costa Concordia, which increased by $15.9 million.

•	Loss ratio for the three months ended June 30, 2014 of 34.1% compared to 48.4% for the three months ended June 30, 2013 a decrease of 14.3 percentage points.

•	Loss ratios by line of business are as follows:

•	Losses and loss expenses from notable loss events for the three months ended June 30, 2014 and June 30, 2013 were $nil and $77.6 million, respectively. The prior year quarter notable loss event was the European floods.

•	Net investment income for the three months ended June 30, 2014 was $21.3 million compared to $26.2 million for the three months ended June 30, 2013, a decrease of $4.9 million, or 18.8%.

•	Net operating income available to Validus for the three months ended June 30, 2014 was $132.6 million compared to $111.4 million for the three months ended June 30, 2013, an increase of $21.2 million, or 19.0%.

•	Net income available to Validus for the three months ended June 30, 2014 was $153.4 million, or $1.61 per diluted common share compared to $30.7 million or $0.28 per diluted common share for the three months ended June 30, 2013.

•	Transaction expenses for the three months ended June 30, 2014 were $3.3 million compared to $nil for the three months ended June 30, 2013, an increase of $3.3 million. The transaction expenses relate to costs incurred in connection with the proposed acquisition of Western World. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

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(a)	There were no notable loss events for the three months ended June 30, 2014. The notable loss event for the three months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income and operating income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(d)	Other operating expenses and income, net, consists of net investment income, other income, finance expenses, taxes and income (loss) from operating affiliates.

•	A decrease in losses and loss expenses of $106.3 million primarily due to the absence of notable loss events and an increase in favorable prior period loss development of $31.7 million, offset by,

•	A decrease in net premiums earned of $81.5 million, primarily within the Validus Re segment and due to a reduction in gross premiums written, the timing of the purchase of retrocessional coverage and the effect of the tail of the Flagstone run-off business.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the three months ended June 30, 2014. The notable loss event for the three months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses and taxes.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the three months ended June 30, 2014. The notable loss event for the three months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses, taxes and income (loss) from operating affiliates.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the three months ended June 30, 2014. The notable loss event for the three months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses and taxes.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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•	Gross premiums written for the six months ended June 30, 2014 were $1,667.7 million compared to $1,807.1 million for the six months ended June 30, 2013, a decrease of $139.4 million, or 7.7%.

•	Net premiums earned for the six months ended June 30, 2014 were $949.0 million compared to $1,078.5 million for the six months ended June 30, 2013, a decrease of $129.6 million, or 12.0%.

•	Underwriting income for the six months ended June 30, 2014 was $299.2 million compared to $327.7 million for the six months ended June 30, 2013, a decrease of $28.6 million, or 8.7%.

•

Combined ratio for the six months ended June 30, 2014 of 68.5% which included $112.1 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 11.8 percentage points compared to a combined ratio for the six months ended June 30, 2013 of 69.7% which included $106.8 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 9.9 percentage points.

•	Loss ratio for the six months ended June 30, 2014 of 33.9% compared to 38.0% for the six months ended June 30, 2013, a decrease of 4.1 percentage points.

•	Loss ratios by line of business are as follows:

•	Losses and loss expenses from notable loss events for the six months ended June 30, 2014 and June 30, 2013 were $nil and $77.6 million, respectively. The prior year notable loss event was the European floods.

•	Net investment income for the six months ended June 30, 2014 was $44.6 million compared to $51.9 million for the six months ended June 30, 2013, a decrease of $7.2 million, or 13.9%.

•	Net operating income available to Validus for the six months ended June 30, 2014 was $278.7 million compared to $327.1 million for the six months ended June 30, 2013, a decrease of $48.4 million, or 14.8%.

•	Net income available to Validus for the six months ended June 30, 2014 was $315.8 million, or $3.27 per diluted common share compared to $254.0 million or $2.21 per diluted common share for the six months ended June 30, 2013.

•	Transaction expenses for the six months ended June 30, 2014 were $3.3 million compared to $nil for the six months ended June 30, 2013, an increase of $3.3 million. The transaction expenses relate to costs incurred in connection with the proposed acquisition of Western World. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

•	Investment yield for the six months ended June 30, 2014 was 1.24% compared to 1.41% for the six months ended June 30, 2013.

•	Annualized return on average equity and annualized net operating return on average equity for the six months ended June 30, 2014 were 17.0% and 15.0%, respectively, compared to 13.2% and 17.0% for the six months ended June 30, 2013.

•	Total investments and cash as at June 30, 2014 was $7.9 billion compared to $8.0 billion at December 31, 2013.

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(a)	There were no notable loss events for the six months ended June 30, 2014. The notable loss event for the six months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income and operating income that is not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(d)	Other operating expenses and income, net, consists of net investment income, other income, finance expenses, taxes and income (loss) from operating affiliates.

•	A decrease in net premiums earned of $129.6 million, primarily due to a reduction in gross premiums written; offset by;

•	A reduction in notable losses of $77.6 million, and

•	A decrease in policy acquisition costs of $16.2 million.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the six months ended June 30, 2014. The notable loss event for the six months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses and taxes.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the six months ended June 30, 2014. The notable loss event for the six months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses, taxes and income (loss) from operating affiliates.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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(a)

Non-GAAP Financial Measures: In presenting the Company's results, management has included and discussed underwriting income and net operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.”

(b)	The general and administrative expense ratio includes share compensation expenses.

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(a)	There were no notable loss events for the six months ended June 30, 2014. The notable loss event for the six months ended June 30, 2013 was the European Floods.

(b)	Other underwriting deductions consist of policy acquisition costs, general & administrative expenses and share compensation expenses.

(c)	Other operating income and expenses, net, consists of net investment income, other income, finance expenses and taxes.

(d)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting and operating income that are not calculated under standards or rules that comprise U.S. GAAP. Such measures are referred to as non-GAAP. Non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. Further discussion of these measures is presented in the section entitled “Non-GAAP Financial Measures.

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(a)	Includes general and administrative expenses and share compensation expenses.

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(a)	Included in the short-term investments and the hedge funds balances are investments held by PaCRe in which the Company has an equity interest of 10%. The remaining 90% interest is held by third party investors and included in the Consolidated Balance Sheets as noncontrolling interest.

(b)	Included in the short-term investments balance are investments held by one AlphaCat ILS fund which is consolidated by the Company but in which the Company has an equity interest of less than 100%. The remaining interests are held by third party investors and included in the Consolidated Balance Sheets as redeemable noncontrolling interest.

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(a)	Issuers exclude government-backed government-sponsored enterprises and cash and cash equivalents.

(b)	Credit exposures represent only direct exposure to fixed maturities and short-term investments of the parent issuer and its major subsidiaries. These exposures exclude asset and mortgage backed securities that were issued, sponsored or serviced by the parent.

(c)	Investment ratings are the median of Moody's, Standard & Poor's and Fitch, presented in Standard & Poor's equivalent rating. For investments where three ratings are unavailable, the lower of the ratings shall apply, presented in Standard & Poor's equivalent rating.

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(a)	Equity ownership in the two funds were 8.6% and 49.0%, respectively as at June 30, 2014.

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(a)	Includes paid losses, case reserves and IBNR reserves.

(b)	Development other than allocation of RDE.

(c)	Excludes impact of movements in foreign exchange rates.

(d)	Closing Reserve for the period equals Closing Estimate for the period less cumulative Paid Losses.

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(a)

On January 21, 2010, the Company offered and sold $250.0 million of Senior Notes due 2040 (the “2010 Senior Notes”) in a registered public offering. The 2010 Senior Notes mature on January 26, 2040, and are redeemable at the Company’s option in whole any time or in part from time to time at a make-whole redemption price. The net proceeds of $244.0 million from the sale of the 2010 Senior Notes, after the deduction of commissions paid to the underwriters in the transaction and other expenses, was used by the Company for general corporate purposes, which included the repurchase of our outstanding capital stock and dividends to our shareholders.

(b)

$150.0 million of Junior Subordinated Deferrable Debentures (the "2006 Junior Subordinated Deferrable Debentures") were issued on June 15, 2006, mature on June 15, 2036 and have been redeemable at the Company's option at par since June 15, 2011. $200.0 million of Junior Subordinated Deferrable Debentures ("2007 Junior Subordinated Deferrable Debentures") were issued on June 21, 2007, mature on June 15, 2037 and have been redeemable at the Company's option at par since June 15, 2012. During 2008 and 2009, the Company repurchased $60.2 million principal amount of its 2007 Junior Subordinated Deferrable Debentures due 2037 from an unaffiliated financial institution.

(c)

As part of the acquisition of Flagstone Reinsurance Holdings, S.A., the Company assumed $137.2 million of junior subordinated deferrable interest debentures due 2036 (the “Flagstone 2006 Junior Subordinated Deferrable Debentures”). The Flagstone 2006 Junior Subordinated Deferrable Debentures mature on September 15, 2036 and have been redeemable at the Company's option at par since September 15, 2011. In addition, the Company assumed $113.7 million of junior subordinated deferrable interest debentures due 2037 (the “Flagstone 2007 Junior Subordinated Deferrable Debentures”). $88.8 million of the Flagstone 2007 Junior Subordinated Deferrable Debentures mature on July 30, 2037 and have been redeemable at the Company's option at par since July 30, 2012. $25.0 million of the Flagstone 2007 Junior Subordinated Deferrable Debentures mature on September 15, 2037 and have been redeemable at the Company's option at par since September 15, 2012.

(d)	Total capitalization equals total shareholders' equity plus redeemable noncontrolling interest, Senior Notes and Junior Subordinated Deferrable Debentures.

(e)	Total capitalization available to Validus equals total shareholder's equity less noncontrolling interest plus Senior Notes and Junior Subordinated Deferrable Debentures.

(f)	The Company does not include notes payable to operating affiliate investors within total capitalization, since these are issued to some of the Company's operating affiliates specifically for the purpose of purchasing capital market products and writing collateralized reinsurance.

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(a)	Indicates utilization of commitment amount, not necessarily drawn borrowings.

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(a)	The A.M. Best ratings were most recently affirmed on February 25, 2014 for Validus Holdings, Ltd, Validus Reinsurance, Ltd and Validus Reinsurance (Switzerland), Ltd. The A.M. Best rating for Lloyd's was most recently affirmed on July 19, 2013. The A.M. Best rating for Talbot Syndicate 1183 was assigned on June 18, 2014.

(b)	The S&P ratings were most recently affirmed on August 23, 2012 for Validus Holdings, Ltd and Validus Reinsurance, Ltd. The S&P rating for Validus Reinsurance (Switzerland), Ltd. was issued on December 11, 2013. The S&P rating for Lloyd's was most recently affirmed on August 28, 2012.

(c)	The Moody’s ratings were most recently affirmed on June 25, 2014 for Validus Holdings, Ltd and Validus Reinsurance, Ltd.

(d)	The Fitch ratings were most recently affirmed on February 5, 2014 for Validus Holdings, Ltd. and Validus Reinsurance, Ltd. The Fitch rating for Lloyds was upgraded on June 10, 2014.

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•	Reserve for losses and loss expenses;

•	Premium estimates for business written on a line slip or proportional basis;

•	The valuation of goodwill and intangible assets;

•	Reinsurance premiums ceded and reinsurance recoverable balances including the provision for uncollectible amounts; and

•	Investment valuation of financial assets.

•	unpredictability and severity of catastrophic events;

•	our ability to obtain and maintain ratings, which may affect our ability to raise additional equity or debt financings, , as well as other factors described herein;

•	adequacy of the Company’s risk management and loss limitation methods;

•	cyclicality of demand and pricing in the insurance and reinsurance markets;

•	the Company’s ability to implement its business strategy during “soft” as well as “hard” markets;

•	adequacy of the Company’s loss reserves;

•	continued availability of capital and financing;

•	the Company’s ability to identify, hire and retain, on a timely and unimpeded basis and on anticipated economic and other terms, experienced and capable senior management, as well as underwriters, claims professionals and support staff;

•	acceptance of our business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and (re)insureds;

•	competition, including increased competition, on the basis of pricing, capacity, coverage terms or other factors;

•	potential loss of business from one or more major insurance or reinsurance brokers;

•	the Company’s ability to implement, successfully and on a timely basis, complex infrastructure, distribution capabilities, systems, procedures and internal controls, and to develop accurate actuarial data to support the business and regulatory and reporting requirements;

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•	general economic and market conditions (including inflation, volatility in the credit and capital markets, interest rates and foreign currency exchange rates) and conditions specific to the insurance and reinsurance markets in which we operate;

•	the integration of businesses we may acquire or new business ventures, including overseas offices, we may start and the risk associated with implementing our business strategies and initiatives with respect to the new business ventures;

•

accuracy of those estimates and judgments used in the preparation of our financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, taxes, contingencies, litigation and any determination to use the deposit method of accounting, which, for a relatively new insurance and reinsurance company like our company, are even more difficult to make than those made in a mature company because of limited historical information;

•	the effect on the Company’s investment portfolio of changing financial market conditions including inflation, interest rates, liquidity and other factors;

•	acts of terrorism, political unrest, outbreak of war and other hostilities or other non-forecasted and unpredictable events;

•	availability and cost of reinsurance and retrocession coverage;

•	the failure of reinsurers, retrocessionaires, producers or others to meet their obligations to us;

•	the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by us;

•	changes in domestic or foreign laws or regulations, or their interpretations;

•	changes in accounting principles or the application of such principles by regulators;

•	statutory or regulatory or rating agency developments, including as to tax policy and reinsurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers; and

•

the other factors set forth under Part I Item 1A "Risk Factors" and under Part II Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the other sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2013, as well as the risk and other factors set forth in the Company's other filings with the SEC, as well as management's response to any of the aforementioned factors.

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•	interest rate risk;

•	foreign currency risk;

•	credit risk;

•	liquidity risk; and

•	inflation risk.

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(a)	Share transactions are on a trade date basis through August 5, 2014 and are inclusive of commissions.  Average share price is rounded to two decimal places.

(b)	As the average price per share repurchased during the periods from 2009 at the inception of the share repurchase program through to 2013 was lower than the book value per common share, the repurchase of shares increased the ending book value per share.

(c)

The estimated impact on earnings per diluted share was calculated by comparing reported results versus i) net income per share plus an estimate of lost net investment income on the cumulative share repurchases divided by ii) weighted average diluted shares outstanding excluding the weighted average impact of cumulative share repurchases. The impact of cumulative share repurchases was accretive to earnings per diluted share.

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