More details about these risks and uncertainties can be found in the company’s most recent Annual Report on Form 10-K and quarterly report on Form 10-Q both as filed with the U.S. Securities and Exchange Commission. Management will also refer to certain non-GAAP financial measures when describing the company’s performance. These items are reconciled and explained in our earnings release and financial supplements.In addition, as a reminder to participants, the focus of today’s conference call is a discussion of Validus’ third quarter results not the status of our discussions with Transatlantic or matters relating to Validus’ pending exchange offer and consent solicitation. Therefore, we will not be commenting on the status of discussion between Validus and Transatlantic. With that, I turn the call over to Ed Noonan. Ed Noonan – Chairman and Chief Executive Officer Well, thank you very much, Greg. Good morning and thank you for taking the time to join us today. I will provide an overview of our business. Then Jeff Consolino will give you more detailed look at our results. I will come back and give you some color on the market as we see it and then we’ll be happy to take any questions you may have. I am pleased to report another quarter of strong financial results for Validus. Despite significant industry catastrophe losses, most notably Hurricane Irene, Validus delivered 13.1% annualized operating return on average equity, $1.09 of operating income per share and quarterly growth and dilutive book value per share of 1.8% inclusive of our common share dividend. Validus Re reported a 68% combined ratio for the quarter and Talbot underwriters 83% combined ratio. We believe our business continues to emerge as a leader in our four classes. We have been able to outperform the market by generating undersized losses and territories, where we feel we are not being compensated properly for risk. We have also been able to capitalize on the dislocation that has followed these events. Our premium grew by 13.7% in the quarter with Validus Re showing 28% growth year-over-year and Talbot 9%.
We are growing our business in classes that are achieving attractive rate increases and as we look around we have the sense that we are moving forward while a lot of our competitors are either retrenching or rethinking their business models. We are bullish on our core business, both as a result of current rate increase activity and what we believe our longer term structural drivers on catastrophe pricing.This leading business profile as combined with a rock solid balance sheet. At September 30, Validus had $3.6 billion of shareholders equity and $4.1 billion of capital. These funds are invested extremely conservatively with the goals of maintaining value and providing liquidity. The ability to attract third-party capital is a clear illustration of our market leadership. Last quarter, we announced the formation of AlphaCat Re 2011 or AC Re 2011. A sidecar designed to provide retrosessional and similar coverage. AC Re 2011 provides nearly $150 million on balance sheet third party capital. It has gotten off to a great start adding another $18.8 million in gross written premium in the quarter for a year-to-date figure of $61.4 million. There have been no losses to this vehicle and so earnings for Validus and our third party investors are quite robust so far. We anticipate the ability to have third party capital available to scale the size of this vehicle for the opportunities that we see for 2012. During the quarter we continue to see favorable development on our lost reserves. With normal IBNR burning off attractively and some redundancy from past major event losses, that’s exactly the pattern that we issued for. Towards that end, rather than have very good prior year news flow to the earnings in the quarter, we’ve increased our IBNR for the current year. It’s been a busy year with lots of events and we continue to believe that prudence is the best approach to reserve it. We prefer to always be above the actuarial and indicative loss reserve number and we think this will continue to serve as well. Read the rest of this transcript for free on seekingalpha.com