Bermuda-based Endurance Specialty Holdings Ltd. reported net income of $107 million or $1.45 per diluted common share for the first quarter of 2006 versus net income of $96.3 million or $1.45 per diluted common share in the first quarter of 2005. In the first quarter of 2006, operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, was $107.9 million or $1.46 per diluted common share versus operating income of $102.7 million or $1.55 per diluted common share in the first quarter of 2005. Annualized operating return on average common equity was 24.5 percent during the first quarter of 2006.
Chairman and CEO Kenneth J. LeStrange commented, “We are pleased to report an excellent financial result for the first quarter of 2006. We are confident that the catastrophe modeling and risk management enhancements that we implemented following the hurricanes of 2005 position us very well to achieve strong returns for our shareholders.”
Further financial details included the following: “Other Gross premiums written were $571.4 million for the quarter ended March 31, 2006 compared to $702.5 million for the first quarter of 2005. This decrease in gross premiums written was largely due to the non-renewal of certain contracts in our Property Per Risk Treaty Reinsurance and Casualty Treaty Reinsurance segments that did not meet our return criteria or our underwriting and claims review recommendations.
“In addition, as expected and disclosed last quarter, in the first quarter of 2006 we did not renew a large contract in the Aerospace and Other Specialty Lines segment that we acquired as part of our renewal rights transaction with Hart Re in 2003, as the remaining pool members exercised their option to assume the Hart Re share upon expiration of the contract.
“Reported gross premiums written in the first quarter of 2006 did not include $99.1 million in premiums accounted for under the deposit method of accounting. In the first quarter of 2005, $85.6 million of gross premiums were accounted for under the deposit method of accounting. Earned premiums in the quarter were $420.2 million, a decrease of 4.0 percent from the first quarter of 2005.
“The combined ratio was 84.9 percent in the first quarter of 2006, equal to the first quarter of 2005. The loss ratio was 56.8 percent in the quarter compared to 57.4 percent in the first quarter of 2005. The Company’s results include reserves for a large number of moderate events that occurred during the first quarter, including tornadoes, hailstorms, flooding and typhoons that affected the U.S., Europe and Australia.
“The Company benefited from $42.5 million in net favorable reserve development in the first quarter of 2006 from business underwritten in prior years compared to $46.0 million of favorable reserve development in the first quarter of 2005. This reduction in the Company’s estimated losses for prior years was largely driven by lower than anticipated reported claims in the Property Per Risk Treaty and Property Individual Risk segments. During the quarter, the Company increased its reserves for ultimate claims from hurricanes Katrina, Rita and Wilma by $35 million, approximately 4 percent, and redistributed some of these reserves among its reporting segments. These increases were more than offset by favorable 2005 accident year reserve development from within the property and specialty segments.
“Investment income was $61.9 million in the first quarter of 2006, an increase of 54.7 percent from the $40.0 million of investment income in the first quarter of 2005, reflecting significant increases in invested assets and improved investment yields over the past year. Alternative investments added $9.3 million to investment income in the first quarter of 2006, or 25 percent on an annualized basis, versus $3.7 million in the first quarter of 2005.”
Endurance will host a conference call today Tuesday, May 2, 2006 at 8:30 AM Eastern to discuss its financial results. The conference call can be accessed via telephone by dialing (800) 289-0528 (toll-free) or (913) 981-5522 (international). Those who intend to participate in the conference call should register at least ten minutes in advance to ensure access to the call. A telephone replay of the conference call will be available through May 16, 2006 by dialing (888) 203-1112 (toll-free) or (719) 457-0820 (international) and entering the pass code: 1477295.
The public may access a live broadcast of the conference call at the “Investors” section of Endurance’s Website, www.endurance.bm.
The Company’s complete financial statement and supplements following tghe conference is also available on the Company’s Website.
Topics Profit Loss Training Development
Was this article valuable?
Here are more articles you may enjoy.
Three Insurers Reject Chevron’s $57 Million Claim for Iran Oil Seizure 
Berkshire’s Jain on Cyber: ‘The Mindset Should Be You’re Not Making Money’ 
Biden Vetoes Bid to Repeal US Labor Board Rule on Contract, Franchise Workers 
The Top 15 U.S. Metros with High Exposure to Wildfire Risk 
