Exhibit 99.2

Validus Holdings, Ltd.

Incorporated in Bermuda

Unaudited Consolidated Interim Financial Statements

As at and for the nine months ended

September 30, 2023

Expressed in thousands of U.S. dollars, except share amounts

 

Page 1 | 34

Table of Contents

 

Consolidated Balance Sheets as at September 30, 2023 (unaudited) and December 31, 2022			3
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the nine months ended September 30, 2023 and 2022 (unaudited)			4
Consolidated Statements of Shareholder’s Equity for the nine months ended September 30, 2023 and 2022 (unaudited)			5
Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)			6 - 7
Notes to the Consolidated Financial Statements (unaudited)			8 – 34

 

Page 2 | 34

Validus Holdings, Ltd.

Consolidated Balance Sheets

As at September 30, 2023 (unaudited) and December 31, 2022

Expressed in thousands of U.S. dollars, except share amounts

 

		September 30, 2023 (unaudited) $				December 31, 2022 $
Assets
Fixed maturity investments trading, at fair value (amortized cost: 2023 - $4,160,850; 2022 - $4,611,442)			3,821,834				4,237,877
Short-term investments trading, at fair value			965,305				114,117
Cash and cash equivalents			417,964				297,206
Restricted cash			241,416				69,135
Total investments and cash			5,446,519				4,718,335
Investments in operating affiliates, equity method			4,881				4,885
Premiums receivable			2,317,552				1,559,292
Deferred acquisition costs			545,749				393,443
Prepaid reinsurance premiums			396,468				88,554
Loss reserves recoverable			1,534,469				1,900,032
Paid losses recoverable			88,439				81,005
Income taxes recoverable			9,498				10,114
Deferred tax assets, net			28,040				27,630
Balances due from affiliates			1,050,291				1,011,985
Accrued investment income			21,197				20,644
Funds withheld			123,227				107,175
Other assets			108,940				40,603
Total assets			11,675,270				9,963,697
Liabilities
Reserve for losses and loss expenses			5,073,580				4,968,249
Unearned premiums			2,507,561				1,518,995
Reinsurance balances payable			315,625				87,423
Income taxes payable			20,815				3,863
Balances due to affiliates			23,945				25,633
Senior notes payable			—				196,397
Funds withheld liability			2,706				2,717
Accounts payable and accrued expenses			26,393				43,262
Other liabilities			114				55
Total liabilities			7,970,739				6,846,594
Shareholder’s equity
Common shares, 100 authorized, par value $0.01 Issued and outstanding (2023 and 2022 – 100)			—				—
Accumulated other comprehensive income			26,672				26,672
Additional paid-in capital			1,292,179				1,008,809
Retained earnings			2,385,680				2,081,622
Total shareholder’s equity			3,704,531				3,117,103
Total liabilities and shareholder’s equity			11,675,270				9,963,697

The accompanying notes are an integral part of these consolidated financial statements.

 

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Validus Holdings, Ltd.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

For the nine months ended September 30, 2023 and 2022 (unaudited)

Expressed in thousands of U.S. dollars

 

		September 30, 2023 (unaudited)				September 30, 2022 (unaudited)
		$				$
Revenues
Gross premiums written			3,477,709				2,856,209
Reinsurance premiums ceded			(742,276	)			(560,980	)
Net premiums written			2,735,433				2,295,229
Change in unearned premiums			(680,652	)			(669,585	)
Net premiums earned			2,054,781				1,625,644
Net investment income			161,471				96,586
Net realized losses on investments, net			(62,452	)			(3,456	)
Net change in unrealized gains (losses) on investments, net			34,443				(406,566	)
Other insurance-related income and other income			14,091				19,547
Foreign exchange losses, net			(27,584	)			(3,877	)
Total revenues			2,174,750				1,327,878
Expenses
Losses and loss expenses			1,144,757				1,081,342
Policy acquisition costs			498,244				426,814
General and administrative expenses			100,527				97,081
Share compensation expenses			6,806				3,418
Finance expenses			107,143				25,365
Transaction expenses			161				463
Total expenses			1,857,638				1,634,483
Income (loss) before taxes and income from operating affiliates and structured notes			317,112				(306,605	)
Tax expense			(14,213	)			(46,714	)
Income from operating affiliates			841				907
Income from structured notes receivable from AlphaCat ILS fund			318				62
Net income (loss) and comprehensive income (loss)			304,058				(352,350	)

The accompanying notes are an integral part of these consolidated financial statements.

 

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Validus Holdings, Ltd.

Consolidated Statements of Shareholder’s Equity

For the nine months ended September 30, 2023 and 2022 (unaudited)

Expressed in thousands of U.S. dollars

 

		September 30, 2023 (unaudited)				September 30, 2022 (unaudited)
		$				$
Common shares
Balance, beginning and end of period			—				—
Accumulated other comprehensive income
Balance, beginning and end of period			26,672				26,672
Additional paid-in capital
Balance, beginning of period			1,008,809				988,977
Distributions to parent company relating to settlement of share-based compensation arrangements			(5,992	)			(2,425	)
Contributions from parent company relating to extinguishment of debt			289,362				22,257
Balance, end of the period			1,292,179				1,008,809
Retained earnings
Balance, beginning of period			2,081,622				2,342,155
Net income (loss) for the period			304,058				(352,350	)
Balance, end of the period			2,385,680				1,989,805
Total shareholder’s equity			3,704,531				3,025,286

The accompanying notes are an integral part of these consolidated financial statements.

 

Page 5 | 34

Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2023 and 2022 (unaudited)

Expressed in thousands of U.S. dollars

 

		September 30, 2023 (unaudited) $				September 30, 2022 (unaudited) $
Cash flows provided by (used in) operating activities
Net income (loss) and comprehensive income (loss)			304,058				(352,350	)
Adjustments to reconcile net income (loss) and comprehensive income (loss) to net cash provided by operating activities:
Amortization of discount on Senior Notes			119				126
Loss on extinguishment of debt			90,150				7,729
Change in net realized and unrealized losses on investments			28,009				410,022
Change in net asset value of structured notes			(299	)			(43	)
Income from operating affiliates			(841	)			(907	)
Foreign exchange gains included in net income			27,584				3,877
(Accretion) Amortization of premium on fixed maturity investments			(9,031	)			9,065
Transaction expenses			161				463
Change in operational balance sheet items:
Premiums receivable			(768,833	)			(686,517	)
Deferred acquisition costs			(152,306	)			(198,564	)
Prepaid reinsurance premiums			(307,914	)			(105,898	)
Loss reserves recoverable			365,563				271,107
Paid losses recoverable			(4,101	)			(81,465	)
Reserve for losses and loss expenses			73,613				99,076
Unearned premiums			988,566				775,483
Reinsurance balances payable			241,236				82,035
Funds withheld			(16,052	)			44,378
Other operational balance sheet items, net			(22,817	)			(22,374	)
Net cash provided by operating activities			836,865				255,243
Cash flows provided by (used in) investing activities
Proceeds on sales of investments			558,832				61,926
Proceeds on maturities of investments			398,985				469,857
Purchases of fixed maturity investments			(653,008	)			(1,069,426	)
(Purchases of) proceeds on sale of short-term investments, net			(844,729	)			294,306
Purchase of shares in operating affiliates			(2	)			(2	)
Redemption of shares from operating affiliates			847				2,709
Net cash used in investment activities			(539,075	)			(240,630	)

The accompanying notes are an integral part of these consolidated financial statements.

 

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Validus Holdings, Ltd.

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2023 and 2022 (unaudited)

Expressed in thousands of U.S. dollars

 

		September 30, 2023 (unaudited) $				September 30, 2022 (unaudited) $
Effect of foreign currency rate changes on cash and cash equivalents and restricted cash			(4,751	)			(21,440	)
Net increase (decrease) in cash and cash equivalents and restricted cash			293,039				(6,827	)
Cash and cash equivalents and restricted cash – beginning of period			366,341				404,294
Cash and cash equivalents and restricted cash – end of the period			659,380				397,467
Supplemental information
Taxes refunded during the period			2,962				2,808
Non-cash information
Deemed capital contribution from parent for senior notes extinguishment			289,362				22,257

The accompanying notes are an integral part of these consolidated financial statements

 

Page 7 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

1.	Nature of the business

Validus Holdings, Ltd. (together with its wholly and majority owned subsidiaries, the “Company” or “Validus”) was incorporated under the laws of Bermuda on October 19, 2005. The Company provides reinsurance coverage and insurance-linked securities (“ILS”) management. As at September 30, 2023, the Company was wholly owned by American International Group, Inc. (“AIG”), which is a company registered with the United States Securities and Exchange Commission and is incorporated in the state of Delaware, United States of America (“U.S.”). Effective November 1, 2023, the Company was sold to RenaissanceRe Holdings Ltd. (“RenaissanceRe”). Refer to Note 16, “Subsequent events”, for further details.

 

2.	Basis of preparation and consolidation

These unaudited consolidated interim financial statements (the “Consolidated Financial Statements”) and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and note disclosures required by U.S. GAAP for complete consolidated financial statements. In addition, the 2022 year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These Consolidated Financial Statements and related notes should be read in conjunction with the Company’s audited annual financial statements and related notes for the year ended December 31, 2022.

In the opinion of management, these Consolidated Financial Statements reflect all adjustments that are normal and recurring in nature necessary for a fair statement of the Company’s financial position as at September 30, 2023, its results of operations for the nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. The results of operations for any interim period are not necessarily indicative of results for the full year.

The Company consolidates in these Consolidated Financial Statements the results of operations and financial position of all voting interest entities (“VOE”) in which the Company has a controlling financial interest and all variable interest entities (“VIE”) in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

All significant intercompany accounts and transactions have been eliminated.

The preparation of these Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While the amounts included in the Consolidated Financial Statements reflect management’s best estimates and assumptions, actual results could differ materially from those estimates. The Company’s principal estimates include:

 

•

the reserve for losses and loss expenses;

 

•

the premium written on a line slip or proportional basis;

 

•

the loss reserves recoverable, including the provision to reflect expected credit losses; and

 

•

the valuation of invested assets and other financial instruments.

 

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Validus Holdings, Ltd.

Consolidated Balance Sheets

As at September 30, 2023 (unaudited) and December 31, 2022

Expressed in thousands of U.S. dollars, except share amounts

The term “ASC” used in these notes refers to Accounting Standard Codification issued by the United States Financial Accounting Standards Board (the “FASB”).

 

3.	Significant accounting policies

Except as described below, there have been no material changes to the significant accounting policies as described in the Company’s audited annual financial statements and related notes for the year ended December 31, 2022.

 

4.	Recent accounting pronouncements

Accounting standards adopted in 2023

The Company adopted the following accounting standards on January 1, 2023, none of which have had a material impact on the Company’s financial position and results of operations:

 

•

ASU 2022-01, “Derivatives and Hedging: Fair Value Hedging – Portfolio Layer Method”

 

•

ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326)”

There have been no additional accounting pronouncements issued or adopted during the nine months ended September 30, 2023 that warrant disclosure in the Consolidated Financial Statements.

 

5.	Investments

Fixed maturity investments

The amortized cost and fair value of the Company’s fixed maturity investments as at September 30, 2023 and December 31, 2022 were as follows:

 

		September 30, 2023								December 31, 2022
		Amortized cost				Fair value				Amortized cost				Fair value
		$				$				$				$
U.S. government and government agency			942,173				915,823				696,857				674,824
Non-U.S. government and government agency			224,466				206,281				314,124				289,664
U.S. states, municipalities and political subdivisions			47,520				43,105				164,524				146,103
Agency residential mortgage-backed securities			657,251				530,190				702,000				607,322
Non-agency residential mortgage-backed securities			266,777				228,751				380,011				330,743
Corporate			1,393,025				1,314,228				1,322,323				1,237,546
Asset-backed securities			397,979				368,553				456,658				416,559
Commercial mortgage-backed securities			231,659				214,903				574,945				535,116
Total fixed maturities			4,160,850				3,821,834				4,611,442				4,237,877

 

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Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

5.	Investments (continued)

 

Fixed maturity investments (continued)

 

The following table summarizes the fair value of the Company’s fixed maturity investments by credit rating as issued by a recognized rating agency as at September 30, 2023 and December 31, 2022:

 

		September 30, 2023								December 31, 2022
		Fair value				Percentage of total				Fair value				Percentage of total
		$				%				$				%
AAA			846,596				22.15				2,458,194				58.01
AA			1,744,251				45.64				554,612				13.09
A			737,347				19.29				702,760				16.58
BBB			481,110				12.59				472,563				11.15
Total investment grade fixed maturities			3,809,304				99.67				4,188,129				98.83
BB			915				0.02				21,041				0.49
B			—				0.00				6,853				0.16
CCC			63				0.00				246				0.01
CC			610				0.02				819				0.02
C			1,981				0.05				2,259				0.05
NR			8,961				0.24				18,530				0.44
Total non-investment grade fixed maturities			12,530				0.33				49,748				1.17
Total fixed maturities			3,821,834				100.00				4,237,877				100.00

The amortized cost and fair values for the Company’s fixed maturity investments held at September 30, 2023 and December 31, 2022 are shown below by contractual maturity. Actual maturity may differ from contractual maturity due to prepayment rights associated with certain investments.

 

		September 30, 2023								December 31, 2022
		Amortized cost				Fair value				Amortized cost				Fair value
		$				$				$				$
Due in one year or less			499,609				491,635				458,146				447,021
Due after one year through five years			1,990,197				1,890,830				1,867,536				1,759,793
Due after five years through ten years			92,783				79,264				131,244				110,194
Due after ten years			24,595				17,708				40,902				31,129
			2,607,184				2,479,437				2,497,828				2,348,137
Asset-backed and mortgage-backed securities			1,553,666				1,342,397				2,113,614				1,889,740
Total fixed maturities			4,160,850				3,821,834				4,611,442				4,237,877

 

Page 10 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

5.	Investments (continued)

 

Net investment income

Net investment income during the nine months ended September 30, 2023 and 2022 was derived from the following sources:

 

		September 30, 2023 $				September 30, 2022 $
Fixed maturity investments			107,400				67,461
Short-term investments			9,555				747
Cash and cash equivalents			9,508				127
Loan receivables			37,154				32,182
Investment income			163,617				100,517
Investment expenses			(2,146	)			(3,931	)
Total net investment income			161,471				96,586

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

The following represents an analysis of net realized and net change in unrealized (losses) gains on investments for the nine months ended September 30, 2023 and 2022:

 

		September 30, 2023
		Fixed maturities $				Other investments $				Total $
Gross realized gains			8				—				8
Gross realized losses			(62,460	)			—				(62,460	)
Net realized losses on investments			(62,452	)			—				(62,452	)
Net change in unrealized gains on investments			34,443				—				34,443
Total net realized and unrealized losses on investments			(28,009	)			—				(28,009	)

 

		September 30, 2022
		Fixed maturities $				Other investments $				Total $
Gross realized gains			1,943				2,517				4,460
Gross realized losses			(7,916	)			—				(7,916	)
Net realized (losses) gains on investments			(5,973	)			2,517				(3,456	)
Net change in unrealized losses on investments			(406,566	)			—				(406,566	)
Total net realized and unrealized (losses) gains on investments			(412,539	)			2,517				(410,022	)

 

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Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

5.	Investments (continued)

 

Pledged investments

As at September 30, 2023, the Company had $2,474,777 (December 31, 2022: $2,567,699) of cash and cash equivalents, short-term investments and fixed maturity investments that were pledged and held in trust during the normal course of business. Pledged assets are generally for the benefit of the Company’s cedants and policyholders to facilitate the accreditation of the Company, its Canada branch office, and its operating subsidiary, Validus Reinsurance (Switzerland) Ltd. (“Validus Re Swiss”), as alien reinsurers by certain regulators. This is principally achieved via multi-beneficiary reinsurance trusts.

 

6.	Fair value measurements

Classification within the fair value hierarchy

Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Under U.S. GAAP, a company must determine the appropriate level in the fair value hierarchy for each fair value measurement. The fair value hierarchy prioritizes the inputs, which refer broadly to assumptions market participants would use in pricing an asset or liability, into three levels. It gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The three levels of the fair value hierarchy are described below:

Level 1 - Fair values are measured based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 - Fair values are measured based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g., interest rates, yield curves, prepayment rates, default rates, loss severities, etc.) or can be corroborated by observable market data.

Level 3 - Fair values are measured based on unobservable inputs that reflect the Company’s own judgments about assumptions where there is little, if any, market activity for that asset or liability that market participants might use.

The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment.

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of the valuation technique (e.g., from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy.

 

Page 12 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Classification within the fair value hierarchy (continued)

 

As at September 30, 2023 and December 31, 2022, the Company’s investments were allocated between Levels 1, 2 and 3 as follows:

 

		September 30, 2023
		Level 1				Level 2				Level 3				Total
		$				$				$				$
U.S. government and government agency			—				915,823				—				915,823
Non-U.S. government and government agency			717				205,564				—				206,281
U.S. states, municipalities and political subdivisions			—				43,105				—				43,105
Agency residential mortgage-backed securities			—				530,190				—				530,190
Non-agency residential mortgage-backed securities			—				201,065				27,686				228,751
Corporate			—				1,314,228				—				1,314,228
Asset-backed securities			—				367,374				1,179				368,553
Commercial mortgage-backed securities			—				214,903				—				214,903
Total fixed maturities			717				3,792,252				28,865				3,821,834
Short-term investments			12,821				952,484				—				965,305
Total investments			13,538				4,744,736				28,865				4,787,139

 

		December 31, 2022
		Level 1				Level 2				Level 3				Total
		$				$				$				$
U.S. government and government agency			—				674,824				—				674,824
Non-U.S. government and government agency			—				289,664				—				289,664
U.S. states, municipalities and political subdivisions			—				146,103				—				146,103
Agency residential mortgage-backed securities			—				607,322				—				607,322
Non-agency residential mortgage-backed securities			—				289,170				41,573				330,743
Corporate			—				1,237,546				—				1,237,546
Asset-backed securities			—				413,912				2,647				416,559
Commercial mortgage-backed securities			—				535,116				—				535,116
Total fixed maturities			—				4,193,657				44,220				4,237,877
Short-term investments			114,117				—				—				114,117
Total investments			114,117				4,193,657				44,220				4,351,994

As at September 30, 2023, Level 3 investments totalled $28,865 (December 31, 2022: $44,220), representing 0.60% (December 31, 2022: 1.02%) of total investments.

 

Page 13 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Valuation techniques

There have been no material changes in the Company’s valuation techniques during the periods presented in these Consolidated Financial Statements. The following methods and assumptions were used in estimating the fair value of each class of financial instrument recorded in the Consolidated Balance Sheets.

Fixed maturity investments

In general, valuation of the Company’s fixed maturity investment portfolio is provided by independent third party valuation service providers, such as index providers and pricing vendors, as well as broker quotations. The pricing vendors provide valuations for a high volume of liquid securities that are actively traded. For securities that do not trade on an exchange, the pricing services generally utilize market data and other observable inputs in matrix pricing models to determine month end prices. Prices are generally verified using third party data. Index providers generally utilize centralized trade reporting networks, available market makers and statistical techniques.

When independent third party valuation service providers are unable to obtain sufficient market observable information upon which to estimate the fair value for a particular security, fair value is determined either through a broker-dealer price quote or by employing market accepted valuation models. In general, broker-dealers value securities through their trading desks based on observable inputs. The methodologies include mapping securities based on trade data, bids or offers, observed spreads, and performance on newly issued securities. Broker-dealers also determine valuations by observing secondary trading of similar securities. Prices obtained from broker quotations are considered non-binding, however, they are based on observable inputs and by observing secondary trading of similar securities obtained from active, non-distressed markets. The techniques generally used to determine the fair value of the Company’s fixed maturity investments are detailed below by asset class.

U.S. government and government agency

U.S. government and government agency securities consist primarily of debt securities issued by the U.S. Treasury and certain mortgage pass-through agencies. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models which incorporate option adjusted spreads and other daily interest rate data. On-the-Run U.S. Treasury issuances are considered Level 1 given the availability of quoted prices in active markets. Off-the-Run and other U.S. Treasuries are classified as Level 2 as the significant inputs used to price these securities are observable.

Non-U.S. government and government agency

Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services who employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap and high issuance credits. The pricing services then apply a credit spread for each security which is developed by in-depth and real time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets. Bills, Bonds and Notes issued from Canada, France, Germany, Italy, Japan, and the United Kingdom within one year of the balance sheet date are considered Level 1 given the availability of quoted prices in active markets. All other instruments are classified as Level 2 as the significant inputs used to price these securities are observable.

 

Page 14 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Valuation techniques (continued)

 

U.S. states, municipalities and political subdivisions

The Company’s U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using available market information such as yields and credit spreads. The availability of observable inputs used to price these securities is contingent on their respective maturity dates. As the significant inputs utilized to determine price are observable, the fair value of these investments are classified as Level 2.

Agency residential mortgage-backed securities

The Company’s agency residential mortgage-backed investments consist primarily of debt securities issued by mortgage-pass through agencies. These securities are primarily priced by pricing services using a mortgage pool specific model which utilizes daily inputs from the active to be announced market which is very liquid, as well as the U.S. Treasury market. The model also utilizes additional information, such as the weighted average maturity, weighted average coupon and other available pool level data which is provided by the sponsoring agency. Valuations are also corroborated with daily active market quotes. As securities with investment grade credit ratings utilize significant observable inputs to determine prices, the fair value of these investments are classified as Level 2. Securities below investment grade credit ratings, or where security holdings are backed by certain collateral types or are residual tranches, utilize an element of significant unobservable inputs, including credit spreads, default rates, prepayment rates, and default projections. Accordingly, the fair value of these investments are classified as Level 3.

Non-agency residential mortgage-backed securities

The Company’s non-agency residential mortgage-backed investments include non-agency prime and sub-prime residential mortgage-backed fixed maturity investments. Securities held in these sectors are primarily priced by pricing services using an option adjusted spread model or discounted cash flow model, which principally utilize inputs including benchmark yields, available trade information or broker quotes, issuer spreads, prepayment and default projections. The pricing services also review collateral prepayment rates, loss severity and delinquencies among other collateral performance indicators for the securities valuation, when applicable. Where significant inputs used to price the securities are observable, the fair value of these investments are classified as Level 2. Where such information is unavailable, or the security credit rating is below AAA, significant unobservable inputs are used to price these securities, which may include constant prepayment rates, loss severity, default rates and yield, resulting in certain securities being classified as Level 3.

Corporate

Corporate debt securities consist primarily of investment-grade debt of a wide variety of corporate issuers and industries. The Company’s corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features which may influence risk. In certain instances, securities are individually evaluated using a spread which is added to the U.S. Treasury curve or a security specific swap curve as appropriate. As the significant inputs used to price these securities are observable, the fair value of these investments are classified as Level 2.

 

Page 15 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Valuation techniques (continued)

 

Asset-backed securities

Asset backed securities include mostly investment-grade debt securities backed by pools of loans with a variety of underlying collateral, including automobile loan receivables, student loans, credit card receivables, and collateralized loan obligations originated by a variety of financial institutions. Securities held in these sectors are primarily priced by pricing services. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment rates which may be adjusted for the underlying collateral or current price data, the U.S. Treasury curve and swap curve as well as cash settlement. The pricing services determine the expected cash flows for each security held in this sector using prepayment and default projections for the underlying collateral and current market data. In addition, a spread is applied to the relevant benchmark and used to discount the cash flows noted above to determine the fair value of the securities held in this sector. The fair value classification of asset-backed securities is based on a combination of collateral type, tranche type and rating, in addition to observable pricing inputs. As the significant inputs used to price the majority of these securities are observable, the fair value of these investments are classified as Level 2. Where such information is unavailable and pricing is sourced by a broker, or the security meets specific criteria, significant unobservable inputs are used to price these securities, which includes yield, resulting in certain securities classified as Level 3.

Commercial mortgage-backed securities

The Company’s commercial mortgage-backed securities consist of primarily investment grade debt securities. The pricing services apply dealer quotes and other available trade information such as bids and offers, prepayment rates which may be adjusted for the underlying collateral or current price data, the U.S. Treasury curve and swap curve as well as cash settlement. The pricing services determine the expected cash flows for each security held in this sector using historical prepayment and default projections for the underlying collateral and current market data. In addition, a spread is applied to the relevant benchmark and used to discount the cash flows noted above to determine the fair value of the securities held in this sector. As securities with investment grade credit ratings utilize significant observable inputs to determine prices, the fair value of these investments are classified as Level 2.

Short-term investments

Short-term investments consist primarily of highly liquid securities, all with maturities of less than one year from the date of purchase. The fair value of the portfolio is generally determined using amortized cost which approximates fair value. As the highly liquid money market-type funds are actively traded, the fair value of these investments are classified as Level 1. To the extent that the remaining securities are not actively traded due to their approaching maturity, the fair values of these investments are classified as Level 2.

 

Page 16 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Level 3 investments

The following tables presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using Level 3 inputs at September 30, 2023 and 2022:

 

		September 30, 2023
		Non-agency residential mortgage- backed securities				Asset-backed securities				Total
		$				$				$
Level 3 investments, beginning of period			41,573				2,647				44,220
Transfers out of Level 3 investments			—				(1,478	)			(1,478	)
Sales			(10,262	)			—				(10,262	)
Settlements			(3,306	)			(30	)			(3,336	)
Realized losses, net			(2,881	)			—				(2,881	)
Change in net unrealized gains, net			2,562				40				2,602
Level 3 investments, end of period			27,686				1,179				28,865

 

		September 30, 2022
		Non-agency residential mortgage- backed securities				Asset-backed securities				Total
		$				$				$
Level 3 investments, beginning of period			64,601				31,927				96,528
Transfers into Level 3 investments			—				22,218				22,218
Transfers out of Level 3 investments			—				(20,711	)			(20,711	)
Sales			—				(328	)			(328	)
Settlements			(9,316	)			(17,353	)			(26,669	)
Realized losses, net			(2	)			(2	)			(4	)
Change in net unrealized losses, net			(6,780	)			(794	)			(7,574	)
Level 3 investments, end of period			48,503				14,957				63,460

During the nine months ended September 30, 2023, there were no transfers into Level 3 investments. During the nine months ended September 30, 2022, transfers into Level 3 investments included investments in asset-backed securities. These transfers were primarily the result of diminished market transparency and liquidity relating to collateralized debt obligations.

During the nine months ended September 30, 2023 and 2022, transfers out of Level 3 investments included investments in asset-backed securities. These transfers were primarily the result of increased market transparency and liquidity for individual security types.

 

Page 17 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

6.	Fair value measurements (continued)

 

Level 3 investments (continued)

 

Quantitative information about Level 3 investments

The following tables presents information about the significant unobservable inputs used for fair value measurements for certain Level 3 instruments at September 30, 2023 and December 31, 2022:

 

September 30, 2023
Valuation technique		Unobservable inputs		Range		Weighted average
Non-agency residential mortgage-backed securities (fair value of $24,767)
Discounted cash flow		Constant prepayment rate		5.39% - 6.48%		6.06%
Discounted cash flow		Loss severity		21.28% - 68.06%		44.67%
Discounted cash flow		Constant default rate		1.61% - 3.60%		2.53%
Discounted cash flow		Yield		5.87% - 6.65%		6.26%
Asset-backed securities (fair value of $214)
Discounted cash flow		Yield		7.12% - 7.12%		7.12%

 

December 31, 2022
Valuation technique		Unobservable inputs		Range		Weighted average
Non-agency residential mortgage-backed securities (fair value of $31,004)
Discounted cash flow		Constant prepayment rate		7.00% - 10.64%		8.58%
Discounted cash flow		Loss severity		10.48% - 19.84%		15.16%
Discounted cash flow		Constant default rate		0.96% - 3.60%		2.28%
Discounted cash flow		Yield		5.84% - 6.27%		6.06%
Asset-backed securities (fair value of $1,202)
Discounted cash flow		Yield		5.93% - 6.38%		6.08%

The weighted average for fixed maturity securities is based on the estimated fair value of the Level 3 securities.

The table above includes only those instruments for which information about the inputs is reasonably available to the Company, such as data from independent third-party valuation service providers and from internal valuation models. Because input information from third parties with respect to certain Level 3 instruments are not available, balances shown in the table above do not represent the total amounts reported as Level 3 assets.

Financial instruments not carried at fair value

ASC Topic 825 “Financial Instruments” is also applicable to disclosures of financial instruments not carried at fair value, except for certain financial instruments, including insurance contracts and investments in affiliates. The carrying values of accrued investment income, other assets, net payable for investments purchased and accounts payable and accrued expenses approximated their fair values at September 30, 2023 and December 31, 2022, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2.

As at September 30, 2023, AIG had completed the buy back of the Company’s Senior Notes in full. As at December 31, 2022, the Company’s Senior Notes were carried at cost, net of debt issuance costs of $2,718 and had a fair value of $244,920. As the senior notes payable are not actively traded, their respective fair values are classified within Level 2 at December 31, 2022. Refer to Note 13, “Debt and financing arrangements”, for further details.

 

Page 18 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

7.	Investments in operating affiliates and structured notes receivable from AlphaCat ILS fund

Investments in operating affiliates

AlphaCat sidecars

Beginning on May 25, 2011, the Company joined with other investors in capitalizing a series of reinsurance and investment entities, referred to as “sidecars”, for the purpose of investing in collateralized reinsurance and retrocessional contracts. Certain of these sidecars deployed their capital through transactions entered into by AlphaCat Reinsurance Ltd. (“AlphaCat Re”) and OmegaCat Reinsurance Ltd. (“OmegaCat Re”). Each of these entities returns capital once the risk period expires and all losses have been paid out. The AlphaCat sidecars are VIEs and the Company is not the primary beneficiary. Therefore, the Company’s investments in the sidecars have been treated as equity method investments. The Company’s maximum exposure to any of the sidecars is the amount of capital invested at any given time and any remaining capital commitments.

AlphaCat ILS funds

Beginning on December 17, 2012, the Company joined with other investors in capitalizing the AlphaCat ILS funds for the purpose of investing in instruments with returns linked to property catastrophe reinsurance, retrocession and insurance linked securities (“ILS”) contracts. The AlphaCat ILS funds have varying risk profiles and are categorized by the maximum permitted portfolio expected loss of the fund. The maximum permitted portfolio expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit. Lower risk ILS funds are defined as having a maximum permitted portfolio expected loss of less than 7%, whereas higher risk ILS funds have a maximum permitted portfolio expected loss of 7% or greater. The AlphaCat ILS funds primarily deploy their capital through transactions entered into by AlphaCat Re or OmegaCat Re and AlphaCat Master Fund Ltd. The AlphaCat ILS funds are VIEs and the Company is not the primary beneficiary. Therefore, the Company’s investments in the funds have been treated as equity method investments.

The Company’s maximum exposure to any of the AlphaCat ILS funds is the amount of capital invested at any given time and any remaining capital commitments.

 

Page 19 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

7.	Investments in operating affiliates and structured notes receivable from AlphaCat ILS fund (continued)

 

Investments in operating affiliates (continued)

 

AlphaCat Re

The Company utilized AlphaCat Re, a market facing entity, for the purpose of writing collateralized reinsurance on behalf of the AlphaCat sidecars and ILS funds (collectively the “Feeder Funds”) and direct third-party investors. All of the risks and rewards of the underlying transactions are allocated to the Feeder Funds and direct third-party investors using variable funding notes. AlphaCat Re is a VIE and the Company is not the primary beneficiary. Therefore, the Company’s investment in AlphaCat Re has been treated as an equity method investment.

The following tables present a reconciliation of the beginning and ending investments in operating affiliates at September 30, 2023 and 2022:

 

		September 30, 2023
		AlphaCat sidecars $				AlphaCat ILS Funds - Lower Risk $				AlphaCat ILS Funds - Higher Risk $				AlphaCat Re $				Total $
Balance, beginning of period			1,605				5				3,155				120				4,885
Purchase of shares			—				—				2				—				2
Redemption of shares / distributions			—				(2	)			(845	)			—				(847	)
Income from operating affiliates			32				—				809				—				841
Balance, end of period			1,637				3				3,121				120				4,881

 

		September 30, 2022
		AlphaCat sidecars $				AlphaCat ILS Funds - Lower Risk $				AlphaCat ILS Funds - Higher Risk $				AlphaCat Re $				Total $
Balance, beginning of period			1,557				5				5,118				120				6,800
Purchase of shares			—				2				—				—				2
Redemption of shares / distributions			—				(2	)			(2,707	)			—				(2,709	)
Income from operating affiliates			47				—				860				—				907
Balance, end of period			1,604				5				3,271				120				5,000

 

Page 20 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

7.	Investments in operating affiliates and structured notes receivable from AlphaCat ILS fund (continued)

 

Investments in operating affiliates (continued)

 

The following tables present the Company’s investments in operating affiliates as at September 30, 2023 and December 31, 2022:

 

		September 30, 2023
		Voting ownership %				Equity ownership %				Carrying value $
AlphaCat sidecars			40.00				20.00				1,637
AlphaCat ILS Funds – Lower Risk			n/a				(a	)			3
AlphaCat ILS Funds – Higher Risk			n/a				(b	)			3,121
AlphaCat Re			100.00				100.00				120
Total											4,881

 

(a)	Equity ownerships in the lower risk AlphaCat ILS funds were less than 1.00%

(b)	Equity ownerships in the higher risk AlphaCat ILS funds were between 0.00% and 3.97%

 

		December 31, 2022
		Voting ownership %				Equity ownership %				Carrying value $
AlphaCat sidecars			40.00				20.00				1,605
AlphaCat ILS Funds – Loser Risk			n/a				(a	)			5
AlphaCat ILS Funds – Higher Risk			n/a				(b	)			3,155
AlphaCat Re			100.00				100.00				120
Total											4,885

 

(a)	Equity ownerships in the lower risk AlphaCat ILS funds were less than 1.00%

(b)	Equity ownerships in the higher risk AlphaCat ILS funds were between 0.00% and 3.86%

Structured notes receivable from AlphaCat ILS fund

In 2021, one of the AlphaCat ILS funds (the “Fund”) issued both common shares and structured notes to the Company in order to capitalize the Fund. The structured notes do not have a stated maturity date since repayment is dependent on the settlement and income or loss of the underlying transactions. These structured notes rank senior to the common shares of the Fund and earn an interest rate of 7% per annum (December 31, 2022: 7%), payable on a cumulative basis in arrears. Structured notes receivable are classified within “Other assets” on the Consolidated Balance Sheets.

The following table presents a reconciliation of the beginning and ending structured notes receivable from the Fund as at September 30, 2023 and 2022:

 

		September 30, 2023 $				September 30, 2022 $
Structured notes receivable from the Fund, beginning of period			66				12
Increase in net asset value of structured notes receivable			299				43
Structured notes receivable from the Fund, end of period			365				55

 

Page 21 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

8.	Derivative instruments

Derivatives not designated as hedging instruments

The following tables summarize information on the classification and amount of the fair value of derivatives not designated as hedging instruments within the Company’s Consolidated Balance Sheets as at September 30, 2023 and December 31, 2022:

 

		September 30, 2023
		Asset derivative at fair value (a) $				Liability derivative at fair value (a) $
Foreign exchange contracts			1,361				1,761
Commodity derivative contracts			3,030				—
Total			4,391				1,761

 

		December 31, 2022
		Asset derivative at fair value (a) $				Liability derivative at fair value (a) $
Foreign exchange contracts			17,405				5,312
Commodity derivative contracts			9,167				34
Total			26,572				5,346

 

(a)

Asset and liability derivatives are classified within “Other assets” and “Accounts payable and accrued expenses”, respectively, on the Consolidated Balance Sheets. Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral. Margin call asset for foreign exchange contract derivative transactions as at September 30, 2023 was $6,840 (December 31, 2022: margin call liability of $10,420).

There have been no material changes in our derivatives strategies during the nine months ended September 30, 2023.

The foreign exchange contracts are valued on the basis of standard industry valuation models. The inputs to these models are based on observable market inputs, and as such the fair values of these contracts are classified as Level 2.

The commodity derivative contracts are exchange traded instruments and are valued on the basis of standard industry valuation models. The inputs to these models are based on observable market inputs, and as such the fair values of these contracts are classified as Level 2.

The following table summarizes information on the classification and net impact on earnings, recognized in the Company’s Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) relating to derivatives that were not designated as hedging instruments during the nine months ended September 30, 2023 and 2022:

 

Derivatives not designated as hedging instruments		Classification of gains (losses) recognized in earnings		September 30, 2023 $				September 30, 2022 $
Foreign exchange contracts		Foreign exchange gains (losses)			3,140				(1,527	)
Commodity derivative contracts		Foreign exchange (losses) gains			(6,543	)			3,281

 

Page 22 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

8.	Derivative instruments (continued)

Balance sheet offsetting

There was no balance sheet offsetting activity as at September 30, 2023 and December 31, 2022.

Commencing in 2019, the Company engaged in foreign exchange contracts with an affiliated AIG entity under International Swaps and Derivatives Association, Inc. Master Agreements, which establish terms that apply to all transactions. As part of the agreements, collateral is provided as security for the foreign exchange contracts. On a periodic basis, the amounts receivable from or payable to the counterparties are settled in cash on a net basis.

 

9.	Premiums receivable and funds withheld

Premiums receivable

Premiums receivable is composed of premiums in the course of collection and premiums accrued but unbilled, both of which are presented net of commissions and brokerage. It is common practice in the reinsurance industry for premiums to be paid on an instalment basis, therefore significant amounts will be considered unbilled and will not become due until a future date, which is typically no later than expiration of the underlying coverage period.

The following is a breakdown of the components of premiums receivable as at September 30, 2023 and December 31, 2022:

 

		September 30, 2023
		Premiums in course of collection $				Premiums accrued but unbilled $				Total $
Premiums receivable, beginning of period			84,995				1,474,297				1,559,292
Change during the period			14,706				743,554				758,260
Premiums receivable, end of period			99,701				2,217,851				2,317,552

 

		December 31, 2022
		Premiums in course of collection $				Premiums accrued but unbilled $				Total $
Premiums receivable, beginning of period			76,537				1,150,752				1,227,289
Change during the period			8,458				323,545				332,003
Premiums receivable, end of period			84,995				1,474,297				1,559,292

Funds withheld

The Company writes and cedes certain business on a funds withheld basis. Under these contractual arrangements, the Company and the cedants withhold premiums for the purpose of paying claims. The remaining net funds will be remitted or settled after all policies have expired and all claims have been paid.

Funds withheld assumed and ceded as at September 30, 2023 were $123,227 and $2,706, respectively (December 31, 2022: $107,175 and $2,717, respectively).

 

Page 23 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 and 2022 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

10.	Reserves for losses and loss expenses

The following table summarizes the Company’s reserve for losses and loss expenses as at September 30, 2023 and December 31, 2022:

 

		September 30, 2023				December 31, 2022
		$				$
Case reserves			1,348,483				1,402,082
IBNR			3,725,097				3,566,167
Reserve for losses and loss expenses			5,073,580				4,968,249

The following table presents a rollforward of activity in net reserves for losses and loss expenses for the nine months ended September 30, 2023 and 2022:

 

		September 30, 2023				September 30, 2022
		$				$
Reserve for losses and loss expenses, beginning of period			4,968,249				4,733,761
Loss reserves recoverable, beginning of period			(1,900,032	)			(2,140,746	)
Net reserves for losses and loss expenses, beginning of period			3,068,217				2,593,015
Net incurred losses and loss expenses in respect of losses occurring in:
Current periods			1,151,121				1,101,212
Prior periods			(6,364	)			(19,870	)
Total incurred losses and loss expenses			1,144,757				1,081,342
Foreign exchange losses (gains)			31,717				(51,760	)
Net losses and loss expenses paid in respect of losses occurring in:
Current periods			(144,692	)			(149,464	)
Prior periods			(560,888	)			(561,695	)
Total net paid losses			(705,580	)			(711,159	)
Net reserve for losses and loss expenses, end of period			3,539,111				2,911,438
Loss reserves recoverable, end of period			1,534,469				1,924,442
Reserve for losses and loss expenses, end of period			5,073,580				4,835,880

Total incurred losses and loss expenses for the nine months ended September 30, 2023 and 2022 is comprised of:

 

		September 30, 2023				September 30, 2022
		$				$
Gross losses and loss expenses			1,062,896				955,781
Reinsurance recoveries			81,861				125,561
Net incurred losses and loss expenses			1,144,757				1,081,342

 

Page 24 | 34

Validus Holdings, Ltd.

Notes to the Consolidated Financial Statements

For the nine months ended September 30, 2023 (unaudited)

Expressed in thousands of U.S. dollars, except share amounts

 

10.	Reserves for losses and loss expenses (continued)

 

The net favourable development on prior accident periods by line of business is as follows:

 

		Line of Business
		Property $				Specialty - Short-tail $				Specialty - Other $				Total $
Nine months ended September 30, 2023			(1,636	)			(1,396	)			(3,332	)			(6,364	)
Nine months ended September 30, 2022			(9,518	)			(4,735	)			(5,617	)			(19,870	)

The net favourable development on prior accident periods for the nine months ended September 30, 2023 and 2022 were primarily driven by favourable development on attritional losses, offset by adverse development on events.

 

11.	Reinsurance

The Company’s reinsurance balances recoverable as at September 30, 2023 and December 31, 2022 were as follows:

 

		September 30, 2023				December 31, 2022
		$				$
Loss reserves recoverable on unpaid:
Case reserves			395,853				423,369
IBNR			1,138,616				1,476,663
Total loss reserves recoverable			1,534,469				1,900,032
Paid losses recoverable			88,439				81,005
Total reinsurance recoverable			1,622,908				1,981,037

Effects of reinsurance on premiums written and earned

The effects of reinsurance on net premiums written and earned, and on losses and loss expenses for the nine months ended September 30, 2023 and 2022 were as follows:

 

		September 30, 2023				September 30, 2022
		$				$
Premiums written
Assumed			3,477,709				2,856,209
Ceded			(742,276	)			(560,980	)
Net premiums written			2,735,433				2,295,229
Premiums earned
Assumed			2,489,143				2,080,726
Ceded			(434,362	)			(455,082	)
Net premiums earned			2,054,781				1,625,644

 

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