S&P Rates Endurance Sub TPIC ‘A-‘

December 21, 2005

Standard & Poor’s Ratings Services announced that it has assigned its “A-” counterparty credit and financial strength ratings to Traders & Pacific Insurance Co. (TPIC) based on the company’s core status to Endurance Specialty Insurance Ltd. (ESIL). The outlook is positive.

“TPIC, a previously dormant, non-admitted shell company, is considered core to ESIL based on the quota share agreement between them by which TPIC cedes 90 percent of all business underwritten to ESIL,” S&P explained. “Though the companies do not currently share the same name, it is expected that TPIC will incorporate the Endurance name.”

“Other criteria for classifying the company as core were considered, such as the companies’ aligned business model, corporate strategy, management team, and an initial statutory capital contribution of about $50 million to ESIL, which is expected to increase over time,” explained S&P credit analyst Damien Magarelli.

S&P noted: “Endurance is expected to maintain strong earnings in 2006. In addition, the group’s capital adequacy ratio is expected to remain strong at more than 155 percent. In addition, the company is expected to exhibit the risk-management skills and underwriting discipline to control the volume and profitability of business. Endurance is expected to maintain debt leverage at less than 20 percent and interest coverage of more than 10x in support of nonstandard notching. If Endurance maintains strong earnings in 2006, the rating could be raised. In contrast, if hurricane loss estimates are revised upward, if capital expectations are not met, or if strong earnings are not maintained, the outlook could be revised to stable.”

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