Endurance Q1 Net Income Drops to $96.3 Million on Reserve Increases

April 29, 2005

Bermuda-based Endurance Specialty Holdings Ltd. reported net income of $96.3 million or $1.45 per diluted share for the first quarter of 2005 versus net income of $100.9 million or $1.47 per diluted share in the first quarter of 2004.

The company increased its reserves by $157.296 million from approximately $1.55 billion to $1.7 billion. Operating income (which excludes capital and foreign exchange gains/losses) rose to $102.7 million or $1.55 per diluted share versus $98.7 million or $1.44 per diluted share in the first quarter of 2004. Annualized operating return on average equity was 21.9 percent during the first quarter of 2005.

Chairman and CEO Kenneth J. LeStrange commented: “Endurance produced another strong financial result for our shareholders this quarter. Despite varied and challenging market conditions, we have remained disciplined, focused and opportunistic. We are proud to have generated another outstanding return on equity this quarter that was well ahead of our stated guidance, and to have grown book value significantly year over year. With our diversified book of business, the strength of our balance sheet and our commitment to profitable underwriting, we are well positioned to produce strong returns for our owners over the short and long term.”

Gross premiums written were $702.5 million for the quarter ended March 31, 2005, a decrease of 2.5 percent from the $720.6 million in gross premiums written for the first quarter of 2004. Earned premiums in the quarter were $437.6 million, an increase of 5.2 percent from the first quarter of 2004.

Endurance combined ratio rose slightly during the first quarter to 84.9 percent, compared to 81.6 percent in the first quarter of 2004. “The loss ratio was 57.4 percent in the quarter compared to 53.4 percent in the first quarter of 2004,” said the announcement. “During the first quarter the Company incurred moderate losses from a number of events, including flooding due to winter storm Erwin that struck Northern Europe in early January, landslides in California and an industrial fire in Canada. In particular, these events adversely affected our Property Individual Risk and Aerospace and other Specialty Lines segments and added $21.1 million to losses.”

The full report and other financial information may be obtained on the company’s Website at: http://www.endurance.bm/.

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