A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating (ICR) of “a” of Validus Reinsurance, Ltd. (Validus Re). Additionally, A.M. Best has affirmed the ICR of “bbb” and debt ratings of the parent company, Validus Holdings, Ltd. (Validus Holdings) (both domiciled in Bermuda) [NYSE: VR]. The outlook for all ratings is stable. (See below for a detailed listing of debt ratings.) The ratings reflect Validus Re’s solid risk-adjusted capitalization, favorable operating performance since inception, experienced management team, excellent enterprise risk management program and prudent operating strategies. Validus Re’s ratings are further supported by Validus Holdings, which provides financial flexibility as a publicly traded company on the New York Stock Exchange. Partially offsetting these strengths is Validus Re's susceptibility to low frequency, high severity events as a property catastrophe-focused reinsurer. However, the company's risk-adjusted capital remains at levels that have been stress tested to absorb significant catastrophe losses mitigating this concern. The stable outlook is reflective of A.M. Best's expectation that the group will continue to produce favorable long-term operating results and maintain excellent risk-adjusted capitalization, which is supportive of its current rating level. Since its formation in the fourth quarter of 2005, Validus Holdings has grown through organic growth and acquisitions. In July 2007, Validus Holdings acquired Talbot Holdings Ltd., which enhanced the business profile of the group by diversifying revenues to include other lines of business, spreading risk exposures geographically and expanding its distribution channels. This acquisition has served to complement the organic growth of revenues while also diversifying Validus Holdings’ exposures and enhancing its business profile. In November 2012, Validus Holdings continued its expansion through the acquisition of Flagstone Re, which will further enhance its client base and scale. Validus Holdings has demonstrated its risk management capabilities and prudent risk selection as evidenced by its solid underwriting performance and overall operating results compared to its peers during a very difficult 2008 and again in 2011. This will increasingly become more challenging as the company grows and develops newer operating platforms and expands its business profile.