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•	Raising approximately $1.0 billion of initial equity capital in December 2005 and underwriting $217.4 million in gross premiums written for the January 2006 renewal season;

•	Building a risk analytics staff comprised of over 50 experts, many of whom have PhDs and Masters degrees in related fields;

•	Developing Validus Capital Allocation and Pricing System (“VCAPS”), a proprietary computer-based system for modeling, pricing, allocating capital and analyzing catastrophe-exposed risks;

•	Acquiring all of the outstanding shares of Talbot Holdings Ltd. ("Talbot") on July 2, 2007;

•	Completing an initial public offering (“IPO”) on July 30, 2007;

•	Acquiring all of the outstanding shares of IPC Holdings Ltd. (“IPC”) on September 4, 2009;

•	Acquiring all of the outstanding shares of Flagstone Reinsurance Holdings, S.A. ("Flagstone") on November 30, 2012;

•	Acquiring all of the outstanding shares of Western World Insurance Group, Inc. ("Western World") on October 2, 2014;

•	Successfully launching a series of AlphaCat sidecars and ILS funds beginning on May 25, 2011 and managing third party capital of $2.1 billion as at January 1, 2016;

•	Delivering a 12.0% compounded annual growth in book value per diluted common share plus accumulated dividends from formation to December 31, 2015;

•	Repurchasing approximately 76.9 million common shares for an aggregate purchase price of approximately $2,531.2 million and paying an aggregate amount of $1,059.9 million in dividends from formation to February 18, 2016.

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(a)

The AlphaCat sidecars and ILS funds are variable interest entities ("VIEs") which are jointly owned by the Company and third parties. The Company is the primary beneficiary and therefore the financial results of the AlphaCat sidecars and ILS funds are included in the Company's Consolidated Financial Statements, with the equity from third parties recorded in the Company's Consolidated Balance Sheets as noncontrolling interest and redeemable noncontrolling interest, respectively. Certain of the BetaCat ILS funds are VIEs and are consolidated by the Company as the primary beneficiary. For further details, refer to Note 9, "Variable Interest Entities," to the Consolidated Financial Statements in Part II, Item 8.

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(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	There are no PaCRe assets under management as at January 1, 2016.

(a)	The investment income from the AlphaCat funds and sidecars is based on equity accounting.

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•	Establish the principles by which the Company can evaluate the risk/reward trade-offs associated with key strategic and tactical decisions.

•	Establish a risk governance structure that, in respect of all activities related to ERM, operates with clearly defines roles and responsibilities.

•	Establish minimum requirements that must be met by each of the Company’s segments.

•	Identify and assess all risks and causes of risks arising out of the Company’s strategic initiatives, internal processes, and external environment.

•	Establish a set of responses to manage the Company’s risks within its stated risk appetite and risk tolerances.

•	Establish procedures through which near-miss and actual incidents, that either have the potential to impact or have impacted the Company, are reported and reviewed in order to inform the risk identification and assessment process.

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•	Absolute maximum limits - these are defined based on the underlying peril or coverage and include measures such as zonal aggregates, which convey the maximum contractual loss exposure.

•	Probable maximum loss - these are defined where probabilistic event sets exist for underlying perils and are established for most natural catastrophe, aviation and upstream energy coverage, and conveys an extreme but likely loss exposure.

•	Realistic disaster scenarios ("RDSs") - these are either prescribed by third parties or developed internally and convey a more intuitive view of potential loss outcome.

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•	lines of business that a particular underwriter is authorized to write;

•	exposure limits by line of business;

•	contractual exposures and limits requiring mandatory referrals; and

•	levels of analysis to be performed by lines of business.

•	seek high quality clients who have demonstrated superior performance over an extended period;

•	evaluate our clients’ exposures and make adjustments where their exposure is not adequately reflected;

•	apply the comprehensive knowledge and experience of our entire underwriting team to make progressive and cohesive decisions about the business they underwrite; and

•	employ our well-founded and carefully maintained market contacts within the Company to enhance our robust distribution capabilities.

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Ceding companies may often report insufficient data and many reinsurers may not be sufficiently critical in their analysis of this data. The Company generally scrutinizes data for anomalies that may indicate insufficient data quality. These circumstances are addressed by either declining the program or, if the variances are manageable, by modifying the model inputs and outputs, and ultimately, pricing to reflect insufficient data quality;

•	Performing independent checks on the accuracy of reported building characteristics through third-party tools and the use of licensed data sources;

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•	Prior to making overall adjustments for changes in variable metrics, the Company carefully examines the adjustment against the latest scientific studies and technology available to ensure its impact to the business is thoroughly evaluated before adopting it into its systems; and

•	To properly quantify risk, the Company frequently adjusts vendor models in advance of their updates based on the latest scientific studies and claims data from recent events.

•

VCAPS takes into account annual limits, event/franchise/annual aggregate deductibles, and reinstatement premiums. This allows for more accurate evaluation of treaties with a broad range of features, including both common (reinstatement premium and annual limits) and complex features (second or third event coverage, aggregate excess of loss, attritional loss components, covers with varying attachment across different geographical zones or lines of businesses and covers with complicated structures); and

•	VCAPS use of 100,000-year simulations enables robust pricing of catastrophe-exposed business. This is possible in real-time operation because the Company has designed a computing hardware platform and software environment to accommodate the significant computing needs.

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•	budgeted underwriting activity for the coming year;

•	loss experience from prior years;

•	loss information from the coming year’s individual capital assessment calculations;

•	expected changes to risk limits and aggregation limits and any other changes to Talbot’s risk tolerance;

•	scenario planning;

•	changes to capital requirements; and

•	RDSs prescribed by Lloyd’s.

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(a)	The reserves for losses and loss expenses of Western World are consolidated from the October 2, 2014 date of acquisition.

(b)	See Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion.

(c)	The impact of foreign currency exchange rate movements is excluded from the re-estimated liability and from paid losses.

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(a)	The reserves for losses and loss expenses of Western World are consolidated from the October 2, 2014 date of acquisition.

(b)	See Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion.

(c)	The impact of foreign currency exchange rate movements is excluded from the re-estimated liability and from paid losses.

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•	communicate and align the Company’s investment philosophy and goals;

•	provide transparency regarding investment policies, procedures and controls;

•	set expectations and priorities of our third party investment managers;

•	establish a framework for integrating investment management into our overall enterprise risk management ("ERM") process;

•	mandate our investment parameters, including permissible asset classes and portfolio constraints, and governance structure for portfolio oversight and management;

•	establish formalized criteria to measure, monitor, and evaluate investment performance and risk exposures on a regular basis; and

•	ensure assets are invested in accordance with the overall financial goals and risk tolerances of the Company.

•	Allied World Assurance Company Holdings, Limited., Arch Capital Group, Limited., Argo Group International Holdings, Ltd., Aspen Insurance Holdings Limited, AXIS Capital Holdings Limited, Endurance Specialty Holdings Ltd., Everest Re Group Limited, PartnerRe Ltd., and RenaissanceRe Holdings Ltd.;

•	Amlin plc, Beazley plc, Brit plc, Hiscox Ltd., Novae Group plc and others in the Lloyd’s market;

•	Scottsdale Insurance Company, Burlington Insurance Company, Nautilus Insurance Company, Essex Insurance Company, Penn-America Group, Inc., Colony Specialty Insurance Company, RSUI Group, Inc., and others in the U.S. excess and surplus market;

•	Asset managers and reinsurers who provide collateralized reinsurance and retrocessional coverage;

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•	Treaty and direct insurers, in not only the London but also the global market, that compete with Lloyd’s on a worldwide basis;

•	Various capital markets participants who access insurance and reinsurance business in securitized form, including through special purpose entities or derivative transactions; and

•	Government-sponsored insurers and reinsurers.

•	premiums charged and other terms and conditions offered;

•	services provided;

•	financial ratings assigned by independent rating agencies;

•	speed of claims payment;

•	reputation;

•	perceived financial strength; and

•	the experience of the underwriter in the line of insurance or reinsurance written.

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•	integrating financial and operational reporting systems;

•	integration into new geographical regions;

•	establishing satisfactory budgetary and other financial controls;

•	funding increased capital needs and overhead expenses;

•	retaining management personnel required for existing operations;

•	obtaining management personnel required for expanded operations;

•	obtaining necessary regulatory permissions;

•	funding cash flow shortages that may occur if anticipated revenues are not realized or are delayed, whether by general economic or market conditions or unforeseen internal difficulties;

•	the value of assets related to acquisitions or new ventures may be lower than expected or may diminish due to credit defaults or changes in interest rates and liabilities assumed may be greater than expected;

•	the assets and liabilities related to acquisitions or new ventures may be subject to foreign currency exchange rate fluctuation; and

•	financial exposures in the event that the sellers of the entities we acquire are unable or unwilling to meet their indemnification, reinsurance and other obligations to us.

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(a)	Share transactions are on a trade date basis through February 18, 2016 and are inclusive of commissions. Average share price is rounded to two decimal places.

(b)	The maximum number of shares that may yet be purchased under the program is calculated using the month end closing price.

(c)	The share repurchase activity during the three months ended March 31 resulted in an accretive impact on book value per diluted share of $0.01. The share repurchase activity during the three months ended June 30, September 30, and December 31 resulted in a dilutive impact on book value per diluted share of $0.03, $0.04, and $0.05, respectively.

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(a)	The summary Consolidated Statements of Comprehensive Income data for the years ended December 31, 2014, 2013, 2012, and 2011 have been restated for the impact of the adoption of ASU 2015-02 “Consolidation.” For further details, refer to Note 2, "Basis of preparation and consolidation," to the Consolidated Financial Statements in Part II, Item 8.

(b)	The gain on bargain purchase, net of expenses, arose from the acquisition of Flagstone on November 30, 2012 and is net of transaction related expenses.

(c)	The transaction expenses related to costs incurred in connection with the Company’s proposed acquisition of Transatlantic Holdings, Inc. during 2011. Transaction expenses incurred during 2014 relate to the acquisition of Western World. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

(d)	The losses and loss expense ratio is calculated by dividing losses and loss expenses by net premiums earned.

(e)	The policy acquisition cost ratio is calculated by dividing policy acquisition costs by net premiums earned.

(f)	The general and administrative expense ratio is calculated by dividing the sum of general and administrative expenses and share compensation expenses by net premiums earned.

(g)	The expense ratio is calculated by combining the policy acquisition cost ratio and the general and administrative expense ratio.

(h)	The combined ratio is calculated by combining the losses and loss expense ratio, the policy acquisition cost ratio and the general and administrative expense ratio.

(i)	Return on average equity is calculated by dividing the net income available to Validus for the period by the average of the beginning, ending and intervening quarter end shareholders’ equity available to Validus balances.

(a)	The summary Consolidated Balance Sheet data as at December 31, 2014, 2013, 2012, and 2011 have been restated for the impact of the adoption of ASU 2015-02 “Consolidation.” For further details, refer to Note 2, "Basis of preparation and consolidation," in Part II, Item 8.

(b)	Book value per common share is defined as total shareholders’ equity available to Validus divided by the number of common shares outstanding as at the end of the period, giving no effect to dilutive securities.

(c)

Book value per diluted common share is calculated based on total shareholders’ equity available to Validus plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of common shares, unvested restricted shares and options and warrants outstanding (assuming their exercise). Book value per diluted common share is a non-GAAP financial measure, which are described in the section entitled “Non-GAAP Financial Measures.”

(d)

Tangible book value per common share is defined as total shareholders’ equity available to Validus, excluding the value of intangible assets and goodwill, divided by the number of common shares outstanding as at the end of the period, giving no effect to dilutive securities. Tangible book value per common share is a non-GAAP financial measure, which are described in the section entitled “Non-GAAP Financial Measures.”

(e)

Tangible book value per diluted common share is calculated based on total shareholders’ equity available to Validus, less intangible assets and goodwill, plus the assumed proceeds from the exercise of outstanding options and warrants, divided by the sum of common shares, unvested restricted shares and options and warrants outstanding (assuming their exercise). Tangible book value per diluted common share is a non-GAAP financial measure, which are described in the section entitled “Non-GAAP Financial Measures."

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(a)	The renewal data above does not include intercompany eliminations between Validus Re and Talbot.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income 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.”

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

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Gross premiums written for the three months ended December 31, 2015 were $309.6 million compared to $336.6 million for the three months ended December 31, 2014, a decrease of $27.0 million, or 8.0%. There has been overall pressure on premium rates in certain classes and in addition, non renewal of certain contracts in conjunction with general market conditions contributed to an overall decrease in gross premiums written.

•	The decrease in gross premiums written for the three months ended December 31, 2015 was primarily due to the decreases in gross premiums written in the Validus Re and Talbot segments, offset by increases in gross premiums written in the Western World and AlphaCat segments.

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Gross premiums written for the three months ended December 31, 2015 in the Validus Re segment were $14.3 million compared to $32.7 million for the three months ended December 31, 2014, a decrease of $18.4 million or 56.2%. This decrease was primarily driven by decreases in the marine and specialty lines of $15.9 million and $4.0 million, respectively. The decrease in the marine lines was primarily driven by an $11.0 million commutation of a Flagstone contract with a Lloyd's counterparty which occurred during the three months ended December 31, 2014. The decrease in the specialty lines was due primarily to a $15.0 million reduction in crop reinsurance premium estimates, partially offset by new casualty business of $7.1 million which was written during the three months ended December 31, 2015.

•

Gross premiums written for the three months ended December 31, 2015 in the Talbot segment were $229.7 million compared to $247.4 million for the three months ended December 31, 2014, a decrease of $17.8 million or 7.2%. This decrease was primarily due to reduced premiums in the cargo line of $9.2 million, due to ongoing market conditions and economic factors which have reduced new business and renewals.

•	The decrease in gross premiums written for the three months ended December 31, 2015 was partially offset by an increase in gross premiums written in the Western World segment of $5.9 million primarily as a result of the addition of new property and flood products to their existing lines, partially offset by a reduction in premiums on other lines which did not meet the Company's risk profile.

•	Underwriting revenues for the three months ended December 31, 2015 were $544.3 million compared to $558.2 million for the three months ended December 31, 2014, a decrease of $13.9 million or 2.5% due to the decrease in gross premiums written described above and the subsequent impact on net premium earned.

•	Losses and loss expenses for the three months ended December 31, 2015 were $214.7 million compared to $223.7 million, a decrease of $9.0 million or 4.0% primarily as a result of no notable or non-notable losses incurred during the three months ended December 31, 2015.

•	Loss ratios by line of business were as follows:

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Combined ratio for the three months ended December 31, 2015 was 78.3% which included $58.1 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 10.7 percentage points compared to a combined ratio for the three months ended December 31, 2014 of 75.6% which included $87.4 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 15.7 percentage points. The favorable development of $58.1 million for the three months ended December 31, 2015 was primarily from non-event reserves in the amount of $47.8

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•	The decrease in the loss ratio in the specialty lines of 11.5 percentage points was primarily due to a large number of losses below the non-notable loss threshold during the three months ended December 31, 2014, primarily in the Talbot segment's political risk class.

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Policy acquisition costs for the three months ended December 31, 2015 increased by $13.0 million or 14.5%, primarily as a result of increases in the Western World and Validus Re segments. Policy acquisition costs in the Western World segment for the three months ended December 31, 2015 were $14.3 million compared to $3.2 million for the three months ended December 31, 2014 primarily due to the impact of the acquisition fair value adjustments. Policy acquisition costs in the Validus Re segment for the three months ended December 31, 2015 were $37.5 million compared to $35.1 million for the three months ended December 31, 2014, an increase of $2.4 million or 6.7%. This increase was primarily driven by profit commissions and a large proportional contract in the specialty lines that carries higher acquisition costs.

•	Underwriting income for the three months ended December 31, 2015 decreased by $18.6 million or 13.5% primarily as a result of the changes in underwriting revenues and deductions as described above.

•	Net operating income available to Validus for the three months ended December 31, 2015 was $105.4 million compared to $121.9 million for the three months ended December 31, 2014, a decrease of $16.5 million, or 13.5%.

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Net income available to Validus for the three months ended December 31, 2015 was $69.0 million compared to $125.9 million for the three months ended December 31, 2014, a decrease of $56.9 million, or 45.2%. The decrease in net income available to Validus was primarily due to an unfavorable movement in the change in unrealized losses of $32.8 million as a result of a rising interest rate environment as compared to the prior year quarter.

•	Annualized return on average equity of 7.6% and annualized net operating return on average equity of 11.6% for the three months ended December 31, 2015 compared to 13.8% and 13.4%, respectively, for the three months ended December 31, 2014.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income 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.”

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

•	Gross premiums written for the year ended December 31, 2015 were $2,557.5 million compared to $2,358.9 million for the year ended December 31, 2014, an increase of $198.6 million, or 8.4%.

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The increase in gross premiums written for the year ended December 31, 2015 was primarily due to the acquisition of Western World which resulted in an increase in gross written premiums of $213.3 million. Also contributing to this increase was an increase in the gross premiums written in the AlphaCat segment of $49.3 million for the year ended December 31, 2015 primarily due to the increase in assets under management. These increases were offset by a decrease in gross premiums written in the Talbot segment of $82.9 million primarily as a result of a decrease in the upstream energy and cargo lines due to ongoing market conditions and economic factors, including the worldwide reduction in oil prices, which have reduced new business and renewals. For further details of the movements in gross premiums written in the Company's segments, refer to the commentary below in the individual segment discussion.

•	Underwriting revenues for the year ended December 31, 2015 were $2,253.0 million compared to $1,996.5 million for the year ended December 31, 2014, an increase of $256.5 million or 12.8% due to the increase in gross premiums written described above and the subsequent impact on net premium earned.

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The increase in losses and loss expenses of $212.8 million or 27.8% was primarily as a result of the acquisition of Western World which resulted in an increase of $120.8 million during the year ended December 31, 2015. Also contributing to this increase were notable losses incurred for the year ended December 31, 2015 which were $97.0 million compared to $34.9 million for the year ended December 31, 2014, an increase of $62.0 million.

•	Loss ratios by line of business were as follows:

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Combined ratio for the year ended December 31, 2015 was 79.7% which included $306.1 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 13.6 percentage points compared to a combined ratio for the year ended December 31, 2014 of 73.6% which included $259.2 million of favorable loss reserve development on prior accident years, benefiting the loss ratio by 13.0 percentage points.

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The decrease in the loss ratio in the specialty lines of 6.1 percentage points was primarily due to a large number of losses below the non-notable loss threshold during the year ended December 31, 2014, primarily in the Talbot segment's political risk class. For further details of the movements in losses and the loss ratios incurred in the Company's segments, refer to the commentary below in the individual segment discussion.

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The increase in policy acquisition costs during the year ended December 31, 2015 of $70.6 million or 20.8% was primarily as a result of the acquisition of Western World, contributing $38.2 million to this increase. Also contributing to this increase was an increase in the policy acquisition costs in the Validus Re segment of $24.7 million, primarily driven by profit commissions and a large proportional contract in the specialty lines that carries higher acquisition costs. For further details of the movements in policy acquisition costs in the Company's segments, refer to the commentary below in the individual segment discussion.

•	Underwriting income for the year ended December 31, 2015 decreased by $66.5 million or 12.6% primarily as a result of the changes in underwriting revenues and deductions as described above.

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•	Net operating income available to Validus for the year ended December 31, 2015 was $409.7 million compared to $480.8 million for the year ended December 31, 2014, a decrease of $71.0 million, or 14.8%.

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Net income available to Validus for the year ended December 31, 2015 was $374.9 million compared to $480.0 million for the year ended December 31, 2014, a decrease of $105.1 million, or 21.9%. The decrease in net income available to Validus was primarily due to an unfavorable movement in the change in unrealized losses of $29.6 million as a result of a rising interest rate environment as compared to the prior year.

•	Return on average equity of 10.3% and net operating return on average equity of 11.3% for the year ended December 31, 2015 compared to 13.0% and 13.1%, respectively, for the year ended December 31, 2014.

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

(b)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income 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.”

(c)	Other operating expenses and income, net, consists of net investment income, finance expenses, taxes, income (loss) from operating affiliates and (income) loss attributable to AlphaCat investors.

•	An increase in losses and loss expenses of $92.0 million, comprised of:

◦	an increase in incurred current year losses, excluding notable and non-notable losses of $77.6 million; and

◦	an increase in notable loss events of $62.0 million; offset by,

◦	a decrease in non-notable loss events of $12.4 million; and

◦	an increase in favorable prior period development of $35.2 million; and

•	An increase in policy acquisition costs of $32.4 million primarily due to new agricultural business written in the Validus Re segment; offset by,

•	An increase in net premiums earned of $68.2 million, primarily due to new agriculture business written in the Validus Re segment.

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

(b)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting income 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.”

(c)	Other operating expenses and income, net, consists of net investment income, finance expenses, taxes, income (loss) from operating affiliates and (income) loss attributable to AlphaCat investors.

•	A decrease in net premiums earned of $178.7 million, primarily within the Validus Re segment, due to a reduction in gross premiums written, the timing of the purchase of retrocessional coverage and the effect of the Flagstone run-off business; offset by,

•	A decrease in losses and loss expenses of $62.8 million, comprised of:

◦	a decrease in incurred current year losses, excluding notable and non-notable losses of $46.2 million;

◦	a decrease in notable loss events of $25.9 million; and

◦	an increase in favorable prior period development of $25.4 million; offset by,

◦	an increase in non-notable losses of $34.7 million.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting 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.”

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

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Gross premiums written for the three months ended December 31, 2015 were $14.3 million compared to $32.7 million for the three months ended December 31, 2014, a decrease of $18.4 million, or 56.2%. Gross premiums written for the three months ended December 31, 2015 included $15.6 million of property premiums, $(0.7) million of marine premiums and ($0.5) million of specialty premiums, compared to $14.0 million of property premiums, $15.3 million of marine premiums and $3.5 million of specialty premiums for the three months ended December 31, 2014. The decrease in the marine lines of $15.9 million was primarily driven by an $11.0 million commutation of a Flagstone contract with a Lloyd's counterparty which occurred during the three months ended December 31, 2014. The decrease in the specialty lines was due primarily to a $15.0 million reduction in crop reinsurance premium estimates, partially offset by new casualty business of $7.1 million which was written during the three months ended December 31, 2015.

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The loss ratio for the three months ended December 31, 2015 was 43.3% compared to 25.8% for the three months ended December 31, 2014, an increase of 17.5 percentage points. The loss ratio for the three months ended December 31, 2015 included favorable loss reserve development on prior accident years of $22.6 million, benefiting the loss ratio by 9.7 percentage points. The favorable development on prior accident years from non-event and event specific reserves were $18.0 million and $4.6 million, respectively. The loss ratio for the three months ended December 31, 2014 included favorable loss reserve development on prior accident years of $30.8 million, benefiting the loss ratio by 13.3 percentage points. The increase in the loss ratio for the three months ended December 31, 2015 was primarily due to increased agriculture business, increased frequency of losses below the non-notable loss threshold and a reduced impact from favorable loss reserve development compared to the prior year quarter.

•	The combined ratio for the three months ended December 31, 2015 was 69.3% compared to 51.3% for the three months ended December 31, 2014, an increase of 18.0 percentage points.

•	Underwriting income for the three months ended December 31, 2015 was $71.3 million compared to $113.1 million for the three months ended December 31, 2014, a decrease of $41.7 million, or 36.9%.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting 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.”

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

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(a)	The general and administrative expense ratio includes 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 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.”

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

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Gross premiums written for the three months ended December 31, 2015 were $229.7 million compared to $247.4 million for the three months ended December 31, 2014, a decrease of $17.8 million, or 7.2%. Gross premiums written for the three months ended December 31, 2015 included $73.9 million of property premiums, $60.6 million of marine premiums and $95.1 million of specialty premiums compared to $76.1 million of property premiums, $72.9 million of marine premiums and $98.4 million of specialty premiums for the three months ended December 31, 2014. The decrease in the marine premiums of $12.2 million was driven by decreases in a number of classes, but primarily due to reduced premiums in the cargo line of $9.2 million, due to ongoing market conditions and economic factors which have reduced new business and renewals, together with the non-recurrence of favorable adjustments in the prior year.

•

The loss ratio for the three months ended December 31, 2015 was 38.7% compared to 53.6% for the three months ended December 31, 2014, a decrease of 14.9 percentage points. The loss ratio for the three months ended December 31, 2015 included favorable loss reserve development on prior accident years of $23.1 million, benefiting the loss ratio by 11.3 percentage points. The favorable development on prior accident years is primarily from non-event reserves in the amount of $19.3 million. Favorable development on prior accident years from event specific reserves was $3.8 million. The loss ratio for the three months ended December 31, 2014 included favorable loss reserve development on prior accident years of $42.0 million, benefiting the loss ratio by 19.0 percentage points.

•	The decrease in the loss ratio excluding notable and non-notable losses and changes in prior accident years was primarily due to a large number of losses below the non-notable loss threshold during the three months ended December 31, 2014, primarily in the Talbot segment's political risk class.

•	The combined ratio for the three months ended December 31, 2015 was 82.5% compared to 96.8% for the three months ended December 31, 2014, a decrease of 14.3 percentage points.

•	Underwriting income for the three months ended December 31, 2015 was $36.1 million compared to $7.9 million for the three months ended December 31, 2014, an increase of $28.2 million.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting 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.”

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

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(a)	The general and administrative expense ratio includes 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 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.”

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

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•

Gross premiums written for the three months ended December 31, 2015 were $71.1 million compared to $65.2 million for the three months ended December 31, 2014, an increase of $5.9 million, or 9.0%. Gross premiums written for the three months ended December 31, 2015 included $13.9 million of property premiums and $57.2 million of liability premiums, compared to $10.0 million of property premiums and $55.3 million of liability premiums for the three months ended December 31, 2014.

•

The loss ratio for the three months ended December 31, 2015 was 54.7% compared to 69.9% for the three months ended December 31, 2014, a decrease of 15.2 percentage points. The loss ratio for the three months ended December 31, 2015 included favorable loss reserve development on prior accident years on non-event reserves in the amount of $7.3 million, benefiting the loss ratio by 11.9 percentage points. Of this, $2.3 million or 3.8 percentage points arose from the amortization of the risk premium adjustment accounted for at the time of the acquisition of Western World. The risk premium adjustment during the three months ended December 31, 2015 represents the last risk premium adjustment related to the acquisition. The loss ratio for the three months ended December 31, 2014 included favorable loss reserve development on prior accident years of $11.2 million, benefiting the loss ratio by 15.4 percentage points. Of this, $4.6 million or 6.3 percentage points arose from the amortization of the risk premium adjustment accounted for at the time of the acquisition of Western World.

•	The combined ratio for the three months ended December 31, 2015 was 94.3% compared to 89.7% for the three months ended December 31, 2014, an increase of 4.6 percentage points.

•	Underwriting income for the three months ended December 31, 2015 was $3.8 million compared to $7.8 million for the three months ended December 31, 2014, a decrease of $4.0 million, or 51.8%.

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(a)

Non-GAAP Financial Measures. In presenting the Company’s results, management has included and discussed underwriting 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.”

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

(c)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	Upon closing the acquisition, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was fully amortized to income through a reduction in losses and loss expenses of $10,979 during the year ended December 31, 2015 (2014: $4,607), benefiting the loss ratio by 4.2 percentage points (2014: 6.3 percentage points).

(b)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

(a)	Upon closing the acquisition, an adjustment of $409 was made to decrease net reserves to reflect fair value. This adjustment was fully amortized to income through an increase in losses and loss expenses of $288 during the year ended December 31, 2015 (2014: $121), increasing the loss ratio by 0.7 percentage points (2014: 1.1 percentage points).

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(a)	Upon closing the acquisition, an adjustment of $15,995 was made to increase net reserves to reflect fair value. This adjustment was fully amortized to income through a reduction in losses and loss expenses of $11,267 during the year ended December 31, 2015 (2014: $4,728), benefiting the loss ratio by 5.3 percentage points (2014: 7.7 percentage points).

(a)	Upon closing the acquisition, an adjustment of $34,736 was made to reduce deferred acquisition costs to reflect fair value. These deferred acquisition costs would otherwise have been expensed in the amount of $21,822 during the year ended December 31, 2015 (2014: $12,914) benefiting the policy acquisition cost ratio by 8.4 percentage points (2014:17.7 percentage points).

(b)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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

(b)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)

In presenting the Company’s results, management has included and discussed the results of AlphaCat, which are presented on an asset manager basis. Validus' share of AlphaCat income is a non-GAAP measure and 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.”

(b)	The investment income from the AlphaCat funds and sidecars is based on equity accounting.

(c)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.

(d)	AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.

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•

AlphaCat's assets under management were $2,386.2 million as at January 1, 2016, compared to $2,238.6 million as at October 1, 2015. Third party assets under management were $2,059.5 million as at January 1, 2016, compared to $1,877.4 million as at October 1, 2015. During the three months ended December 31, 2015, a total of $662.7 million of capital was raised, of which $629.2 million was raised from third parties, while $470.3 million was returned to PaCRe investors, including $423.3 million to third parties, as this entity was off risk as of January 1, 2016.

•	Management fees earned for the three months ended December 31, 2015 were $6.3 million, of which $1.3 million were earned from related parties, compared to $5.9 million for the three months ended December 31, 2014, of which $1.4 million were earned from related parties. The increase of $0.4 million in management fees between periods was driven by an increase in assets under management.

•	Total expenses for the three months ended December 31, 2015 were $3.4 million, compared to $4.0 million for the three months ended December 31, 2014, a decrease of $0.6 million. Included within the expenses for the three months ended December 31, 2015 was $0.1 million of non-recurring finance expenses related to the raising of third party capital.

•	Income before investment income from AlphaCat Funds and Sidecars for the three months ended December 31, 2015 was $2.9 million, compared to $1.9 million for the three months ended December 31, 2014, an increase of $1.0 million.

•	Investment income from AlphaCat Funds and Sidecars for the three months ended December 31, 2015 was $5.9 million, compared to $7.4 million for the three months ended December 31, 2014, a decrease of $1.4 million.

•	Validus' share of PaCRe's net loss for the three months ended December 31, 2015 was $1.7 million, compared to $7.1 million for the three months ended December 31, 2014, a decrease of $5.4 million. As at December 31, 2015, PaCRe was off-risk and being wound down. The underlying investment in the Paulson hedge funds were liquidated effective November 30, 2015.

•

Validus' share of AlphaCat's net income for the three months ended December 31, 2015 was $7.1 million, compared to $2.2 million for the three months ended December 31, 2014, an increase of $4.9 million. Excluding Validus' share of PaCRe's net loss, Validus' share of AlphaCat income for the three months ended December 31, 2015 was $8.8 million, compared to $9.3 million for the three months ended December 31, 2014, a decrease of $0.4 million.

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(a)

In presenting the Company’s results, management has included and discussed the results of AlphaCat, which are presented on an asset manager basis. Validus' share of AlphaCat income is a non-GAAP measure and 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.”

(b)	The investment income from the AlphaCat funds and sidecars is based on equity accounting.

(c)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.

(d)	AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.

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(a)	The Company’s assets under management are represented by investments made by related parties and third parties in the feeder funds and on a direct basis.

(b)	There are no PaCRe assets under management as at January 1, 2016.

(c)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.

(d)	AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.

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(a)	These items exclude the components which are included in the Company's share of AlphaCat and amounts which are consolidated from VIEs.

(b)	The Company acquired Western World on October 2, 2014, therefore the results of Western World have been included in the Company's consolidated results from the date of acquisition. The transaction expenses relate to costs incurred in connection with the acquisition of Western World and are primarily comprised of legal, financial advisory, and audit related services.

•	Net investment income for the three months ended December 31, 2015 was $29.9 million compared to $28.4 million for the three months ended December 31, 2014, an increase of $1.4 million, or 5.1%.

•	General and administrative expenses for the three months ended December 31, 2015, were $24.2 million compared to $19.7 million for the three months ended December 31, 2014, an increase of $4.5 million or 23.0%.

•	Share compensation expenses for the three months ended December 31, 2015 were $3.5 million compared to $3.0 million for the three months ended December 31, 2014, an increase of $0.5 million or 17.1%.

•	Net realized losses on investments for the three months ended December 31, 2015 were $3.4 million compared to gains of $6.2 million for the three months ended December 31, 2014, a decrease of $9.6 million.

•	The change in net unrealized losses on investments for the three months ended December 31, 2015 was $34.5 million compared to $1.5 million for the three months ended December 31, 2014, an unfavorable movement of $33.0 million.

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(a)	These items exclude the components which are included in the Company's share of AlphaCat and amounts which are consolidated from VIEs.

(b)	The Company acquired Western World on October 2, 2014, therefore the results of Western World have been included in the Company's consolidated results from the date of acquisition. The transaction expenses relate to costs incurred in connection with the acquisition of Western World and are primarily comprised of legal, financial advisory, and audit related services.

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(a)	The results of operations for Western World are consolidated from the October 2, 2014 date of acquisition.

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(a)	Weighted average exercise price for those warrants and stock options that have an exercise price lower than book value per share.

(b)	Using the "as-if-converted" method, assuming all proceeds received upon exercise of warrants and stock options will be retained by the Company and the resulting common shares from exercise remain outstanding.

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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)	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 (Recovery).

(e)	As at September 30, 2014, the initial estimate for Tripoli Airport was below the $30.0 million notable loss event threshold; however, during the fourth quarter of 2014 adverse development caused this event to exceed the notable loss event threshold.

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(a)	Validus Reinsurance, Ltd. (excluding capital supporting FAL) includes capital of $640,684 relating to Western World Insurance Group, Inc.

(b)	Validus Reinsurance, Ltd. (excluding capital supporting FAL) excludes capital of $586,393 which supports Talbot's FAL. This capital was included in Talbot Holdings, Ltd. (including capital supporting FAL).

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(a)	The results of operations for Western World are consolidated from the October 2, 2014 date of acquisition.

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(a)	Refer to Part II, Item 8, Note 20, “Debt and financing arrangements," to the Consolidated Financial Statements for further details and discussion on the debt and financing arrangements of the Company.

(b)	Total capitalization available to Validus equals total capitalization less noncontrolling interests.

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(a)	The arrangement is indicated as evergreen if, unless written notice to the contrary is given, it automatically renews on a regular basis.

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

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(a)

The reserve for losses and loss expenses represents an estimate, including actuarial and statistical projections at a given point in time of an insurer’s or reinsurer’s expectations of the ultimate settlement and administration costs of claims incurred. As such, the actual payment of the reserve for losses and loss expenses will differ from estimated payouts. Refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” for further details and discussion on the Company’s reserve for losses and loss expenses.

(b)

Refer to Part II, Item 8, Note 20, “Debt and financing arrangements," to the Consolidated Financial Statements for further details and discussion on the debt and financing arrangements of the Company. The Company has entered into interest rate swaps which fix the rates of interest on the Junior Subordinated Deferrable Debentures (“JSDs”). The terms of the swaps are matched to the maturity date of the JSDs. The interest payments in the table above reflects the Company's contractual obligations with respect to the swaps.

(c)	Refer to Part II, Item 8, Note 9, “Variable Interest Entities,” to the Consolidated Financial Statements for further details describing the notes payable to AlphaCat investors.

(d)	Refer to Part II, Item 8, Note 18. "Retirement and pension plans,” to the Consolidated Financial Statements for further details describing the projected pension benefit obligation.

(e)

Refer to Part II, Item 8, Note 23 “Commitments and contingencies,” to the Consolidated Financial Statements for further details describing these commitments and obligations. There are no defined contractual commitment dates for the Aquiline fund, fixed maturity and other investment commitments as well as the structured settlement obligations, therefore these are included in the less than one year category.

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(a)	The results of operations for Western World are consolidated from the October 2, 2014 date of acquisition.

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•	unpredictability and severity of catastrophic events;

•	our ability to obtain and maintain ratings, which may affect by 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;

•	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;

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•	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 herein 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 this Annual Report on Form 10-K for the year ended December 31, 2015, 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)	Financial Statements and Financial Statement Schedules are included as pages F-1 to F-102.

(b)	The exhibits numbers followed by an asterisk (*) indicate exhibits physically filed with this Annual Report on Form 10-K. All other exhibit numbers indicate exhibits filed by incorporation by reference.

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(a)	Premiums

(b)	Policy acquisition costs

(c)	Reserve for losses and loss expenses

(d)	Reinsurance

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(e)	Investments

(f)	Fair value of financial instruments

(g)	Derivative instruments

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(h)	Cash and cash equivalents

(i)	Foreign exchange

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(j)	Stock plans

(k)	Warrants

(l)	Earnings per share

(m)	Income taxes and uncertain tax provisions

(n)	Goodwill and other intangible assets

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(o)	Investments in affiliates

(p)	Variable interest entities

(q)	Noncontrolling interests

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(a)	Adoption of New Accounting Standards

(b)	Recently Issued Accounting Standards Not Yet Adopted

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(a)	During the year ended December 31, 2015, measurement period adjustments of $861 were made to certain other assets, net of taxes.

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(a)	Fixed maturity investments

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(b)	Other investments

(a)	The redemption frequency and notice periods only apply to investments without redemption restrictions.

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(a)	The redemption frequency and notice periods only apply to investments without redemption restrictions.

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(c)	Net investment income

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

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(e)	Pledged investments

(f)	Securities lending

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(a)	Classification within the fair value hierarchy

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(b)	Valuation techniques

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(c)	Level 3 Investments

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(d)	Financial Instruments Not Carried at Fair Value

(a)	Consolidated VIEs

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(a)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.

(b)	Non-Consolidated VIEs

(a)	Investment affiliate

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(b)	Operating affiliate

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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. The net impact on earnings, recognized in income within foreign exchange gains (losses) and other income (loss), relating to the foreign currency forward contracts that were not designated as hedging instruments during the year ended December 31, 2015 was $(610) and $139, respectively (2014: $nil and $(133), respectively).

(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)	Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was fully amortized to income through a reduction in losses and loss expenses of $10,979 and $4,607 during the years ended December 31, 2015 and 2014, respectively.

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(a)	Upon closing the acquisition of Western World, an adjustment of $15,586 was made to increase net reserves to reflect fair value. This adjustment was fully amortized to income through a reduction in losses and loss expenses of $10,979 and $4,607 during the years ended December 31, 2015 and 2014, respectively.

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(a)	Effects of reinsurance on premiums written and earned

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(b)	Credit risk

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(a)	Authorized and issued

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(b)	Warrants

(c)	Deferred share units

(d)	Dividends

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(a)	Defined benefit plans

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(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

(b)	Other pension plans

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(a)	Long Term Incentive Plan

i.	Options

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(a)	The total intrinsic value in the tables above represent the amount by which the market price of the Company's common stock is greater than the option strike price multiplied by the number of options exercised during the year.

ii.	Restricted share awards

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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)	Fixed interest rate for 5 years, floating interest rate of three-month LIBOR plus 3.550% thereafter, reset quarterly.

(b)	Floating interest rate of three-month LIBOR plus amount stated, reset quarterly.

(c)	Fixed interest rate for 5 years, floating interest rate of three-month LIBOR plus 2.950% thereafter, reset quarterly.

(d)	Fixed interest rate.

(e)	Fixed interest rate as a result of interest rate swap contracts entered into by the Company.

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(c)	Credit facilities

i.	$85,000 syndicated unsecured letter of credit facility and $300,000 syndicated secured letter of credit facility

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ii.	Talbot FAL facility

iii.	$25,000 IPC bi-lateral facility

iv.	$24,000 secured bi-lateral letter of credit facility

vi.	$236,000 Flagstone bi-lateral facility

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(d)	Finance expenses

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

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(a)	Concentrations of credit risk

(b)	Employment agreements

(c)	Operating leases

(d)	Funds at Lloyd’s

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(e)	Lloyd’s Central Fund

(f)	Investment affiliate commitments

(g)	AlphaCat commitments

(h)	Fixed maturity commitments

(i)	Other investment commitments

(j)	Structured settlements

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

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

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

(b)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	The results of AlphaCat are presented on an asset manager basis, which is non-GAAP. A reconciliation of segmental income to net income available to Validus is included in the tables below.

(b)	The investment income from the AlphaCat funds and sidecars is based on equity accounting.

(c)	Lower risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of less than 7%, whereas higher risk AlphaCat ILS funds have a maximum permitted portfolio expected loss of greater than 7%. Expected loss represents the average annual loss over the set of simulation scenarios divided by the total limit.

(d)	AlphaCat Direct includes direct investments from third party investors in AlphaCat Re.

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(a)	These items exclude the components which are included in Validus' share of AlphaCat and amounts which are consolidated from VIEs.

(b)	The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

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(a)	Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).

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(a)	Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).

(b)	The transaction expenses relate to costs incurred in connection with the acquisition of Western World, which was completed on October 2, 2014. Transaction expenses are primarily comprised of legal, financial advisory and audit related services.

(c)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)	Other items includes finance expenses, tax expenses, foreign exchange gains (losses), net realized and change in net unrealized gains (losses) on investments, income from investment and operating affiliates and other income (loss).

(a)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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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.

(d)	The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

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(a)

The Company's Bermuda based insurance subsidiaries are required to maintain minimum statutory capital and surplus equal to the greater of a minimum solvency margin ("MSM") and the Enhanced Capital Requirement ("ECR") where applicable. The ECR is equal to the higher of each insurer's MSM or the Bermuda Solvency Capital Requirement ("BSCR") model or approved internal capital model. The BSCR for the relevant insurers for the year ended December 31, 2015 will not be filed with the BMA until April 2016. As a result, the required statutory capital and surplus as at December 31, 2015, as set out above, is based on the MSM of all relevant insurers, whereas the required statutory capital and surplus as at December 31, 2014 is based on the MSM and ECR where applicable for all relevant insurers. Required statutory capital and surplus includes Validus Reinsurance, Ltd., IPCRe Limited, AlphaCat Reinsurance Ltd., Mont Fort Re Ltd, and Talbot Insurance (Bermuda), Ltd. Actual statutory capital and surplus includes Validus Reinsurance, Ltd., AlphaCat Reinsurance Ltd., and Talbot Insurance (Bermuda), Ltd., as Validus Reinsurance, Ltd. is the parent company of the other two Bermuda based insurance subsidiaries. Talbot Insurance (Bermuda), Ltd. is only included in the required and actual statutory capital and surplus calculations as at December 31, 2014 as it was no longer a Bermuda based insurer as at December 31, 2015. Actual statutory capital and surplus includes capital held in support of FAL which is not available for distribution to the Company. Refer to Note 23, "Commitments and Contingencies," for further details.

(b)	Required statutory capital and surplus is based on the Risk-Based Capital ("RBC") requirements and includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. Actual statutory capital and surplus includes Western World Insurance Company. Western World Insurance Company is the parent Company of the other two U.S. based insurance subsidiaries.

(c)	Required statutory capital and surplus is based on the Target Capital ("TC") requirements calculated under the Swiss Solvency Test ("SST"). Required and actual statutory capital and surplus includes Validus Reinsurance (Switzerland) Ltd. and its Bermuda branch.

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(a)	Statutory net income includes Validus Reinsurance, Ltd., IPCRe Limited, AlphaCat Reinsurance Ltd., Mont Fort Re Ltd. and Talbot Insurance (Bermuda), Ltd. The results of Talbot Insurance (Bermuda), Ltd. were included through September 30, 2015.

(b)	Statutory net income includes Western World Insurance Company, Tudor Insurance Company and Stratford Insurance Company. The results of Western World have been included in the Company's consolidated results from the October 2, 2014 date of acquisition.

(c)	Statutory net income (loss) includes Validus Reinsurance (Switzerland) Ltd. and its Bermuda branch.

(a)	Bermuda

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(b)	United Kingdom

(c)	United States

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(d)	Switzerland

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Amounts include an aggregation of the non-guarantor subsidiaries and include consolidating adjustments between these subsidiaries.

(b)	Amounts include consolidating adjustments between the Parent Guarantor, the Subsidiary Issuer and the non-guarantor subsidiaries.

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(a)	Quarterly dividend

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