Validus Holdings saw its income plunge in the 2015 fourth quarter Chairman and CEO Ed Noonan said, however, that the Bermuda-based insurance and reinsurance holding enjoyed premium gains in some areas as it worked hard to diversify its underwriting mix.

Net income hit $69 million, or $0.81 per diluted common share for the last three months of 2015. That’s a big drop compared to $125.9 million, or $1.38 per diluted common share over the same period in 2014.

Noonan said that the company’s 12-month performance was strong, where results included an 11.3 percent net operating return on average equity. Validus booked $409.7 million in net operating income, or $4.34 per diluted common share for 2015. In 2014, both numbers were much higher, when net income landed at $480 million, or $5.07 per diluted share.

“These strong results, despite competitive pressures, reflect the diversification of Validus’ business as we have shifted our mix to 46 percent insurance and 54 percent reinsurance during 2015,” Noonan said in prepared remarks.

For the 2015 fourth quarter, gross premiums written hit $309.6 million, a dip of 8 percent over $336.6 million produced during the 2014 fourth quarter. Validus blamed the drop on decreases at its Validus Re and Talbot divisions, but noted they were partially offset by increases at Western World and AlphaCat.

The combined ratio for Q4 was 78.3, a number that included $58.1 million of favorable loss reserve development on prior accident years. This benefited the loss ratio by 10.7 points. In Q4 of 2014, the combined ratio was 75.6, including $87.4 million of favorable loss reserve development on prior accident years, a factor that benefited the loss ratio by 15.7 percentage points.

Validus said that the $58.1 million favorable loss reserve development mostly comes from $47.8 million in non-event reserves. The rest, about $10.3 million, comes from event specific reserves.

Validus said its combined ratio for 2015 was 79.7, versus 73.6 in the previous year.

Source: Validus Holdings Ltd.