Endurance Reports Q2 Net Income of $58.6 Million; $57.7 Million Operating

Bermuda-based Endurance Specialty Holdings Ltd. reported net income of $58.6 million and $0.97 per diluted common share for the second quarter of 2010, compared to net income of $149.1 million and $2.42 per diluted common share in the second quarter of 2009.

The bulletin also noted that book value per diluted share was $47.78 at June 30, 2010, an increase of 4.1 percent for the quarter.

For the six months ended June 30, 2010, net income was $114.4 million and $1.88 per diluted common share versus net income of $227.4 million and $3.65 per diluted common share for the six months ended June 30, 2009. Year to date, book value per diluted share increased 7.1 percent as a result of earnings and improvements in unrealized investment gains.

Endurance listed the following operating highlights for the second quarter:
— Net premiums written of $450.8 million, a decrease of 6.1 percent over the same period in 2009;
— Combined ratio of 91.0 percent, which included 6.5 percentage points of favorable prior year loss reserve development;
— Net investment income of $33.4 million, a decrease of $55.5 million over the same period in 2009;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $57.7 million and $0.96 per diluted common share;
— Operating return on average common equity for the quarter of 2.0 percent, or 8.2 percent on an annualized basis; and
— Book value of $47.78 per diluted common share, up 4.1 percent from March 31, 2010.

Operating highlights for the six months ended June 30, 2010 were as follows:
— Net premiums written of $1,153.7 million, an increase of 8.5 percent over the same period in 2009;
— Combined ratio of 93.8 percent, which included 8.3 percentage points of favorable prior year loss reserve development;
— Net investment income of $89.8 million, a decrease of $63.6 million over the same period in 2009;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $117.9 million and $1.94 per diluted common share;
— Operating return on average common equity for the first half of the year of 4.2 percent, or 8.4 percent on an annualized basis; and
— Book value of $47.78 per diluted common share, up 7.1 percent from December 31, 2009.

CEO David Cash commented, “Endurance generated solid financial results during a quarter characterized by challenging underwriting and investing conditions. Our diluted book value per common share increased by $1.89 to $47.78 per share during the quarter, a return of 4.7 percent including dividends paid. Our U.S. insurance operations, including our crop insurance business, was a strong contributor to our overall results. Outside our underwriting operations, we experienced a fifth consecutive quarter of strong total returns on our investment portfolio, generating $80 million of combined net investment income and realized and unrealized gains on our portfolio, a strong achievement in an investing environment that remains volatile.”

The complete report and detail on accessing the earnings conference call, held July 28, may be obtained on the Company’s web site at: www.endurance.bm

Source: Endurance Specialty