Endurance Reports $153.8 Million Q3 Net Income; Conference Call Today

Bermuda-based Endurance Specialty Holdings Ltd. reported net income of $153.8 million and $2.51 per diluted common share for the third quarter of 2009, compared to a net loss of $99.4 million and $1.79 per diluted common share in the third quarter of 2008.

For the nine months ended September 30, 2009, net income was $381.3 million and $6.15 per diluted common share, compared to net income of $81.8 million and $1.09 per diluted common share for the nine months ended September 30, 2008.

Operating highlights for the quarter ended September 30, 2009 were as follows:
— Net premiums written of $396.7 million, a decrease of 19.7 percent over the same period in 2008;
— Combined ratio of 79.5 percent, which included 8.1 percentage points of favorable prior year loss reserve development;
— Net investment income of $71.6 million, an increase of $44.1 million over the same period in 2008;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $148.1 million and $2.41 per diluted common share; and
— Operating return on average common equity for the quarter of 6.0 percent, or 24.1 percent on an annualized basis.

Operating highlights for the nine months ended September 30, 2009 were as follows:
— Net premiums written of $1,459.6 million, a decrease of 9.0 percent over the same period in 2008;
— Combined ratio of 86.9 percent, which included 8.9 percentage points of favorable prior year loss reserve development;
— Net investment income of $224.9 million, an increase of $90.2 million over the same period in 2008;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $367.0 million and $5.91 per diluted common share;
— Operating return on average common equity for the first nine months of the year of 15.7 percent, or 21.0 percent on an annualized basis; and
— Book value of $42.09 per diluted common share, up 27.3 percent from December 31, 2008.

Chairman and CEO Kenneth J. LeStrange commented: “I am extremely pleased that Endurance has delivered another quarter of excellent operating results and robust growth in book value per share. Our strong results highlight the quality of our underwriting and investment activities and careful and conscientious risk management practices. Although market conditions remain competitive, we are committed to maintaining our underwriting discipline and we are well positioned strategically and financially to capitalize on attractive underwriting opportunities.”

Endurance report explained that net premiums written declined in the Insurance segment for the current periods compared to the same periods in 2008, “driven by reductions in the workers’ compensation, property and agriculture lines. The reduction in the workers’ compensation and property net premiums written was due to the Company’s strategic exit from the California workers’ compensation and U.K. property insurance markets in the first quarter of 2009.”

The bulletin also noted that net premiums written in the Reinsurance segment had also decreased during the third quarter of 2009. This was primarily due to the “absence of reinstatement premiums in the catastrophe line of business which were recorded in the third quarter of 2008 as a result of Hurricanes Ike and Gustav. This decline was partially offset by an increase in net premiums written in the Reinsurance segment’s casualty line, which was primarily driven by favorable prior period premium adjustments. The remaining lines of business within the Reinsurance segment posted modest net premium changes from a year ago.”

Endurance will host a conference call on today, October 30, 2009 at 8:30 a.m. Eastern time to discuss its financial results. The conference call can be accessed via telephone by dialing (877) 672-9216 or (706) 634-9637 (international) and entering pass code: 68800643. 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 November 13, 2009 by dialing (800) 642-1687 or (706) 645-9291 (international) and entering the pass code: 68800643.

The public may access a live broadcast of the conference call at the “Investors” section of Endurance’s website at www.endurance.bm. Following the live broadcast, an archived version will continue to be available on Endurance’s website. In addition Endurance’s financial supplement for the third quarter of 2009 will also be available on the web site at shortly after the release of earnings.

Source: Endurance Specialty Holdings