Endurance Reports Q2 Net Income of $76M, Versus $75M in Q2 2014

August 6, 2015

Bermuda-based Endurance Specialty Holdings Ltd. reported net income available to common shareholders of $76.0 million and $1.68 per diluted common share for the second quarter of 2015 versus net income of $75.0 million and $1.68 per diluted common share for the second quarter of 2014.

For the six months ended June 30, 2015, Endurance reported net income available to common shareholders of $176.3 million and $3.91 per diluted common share versus net income of $171.3 million and $3.84 per diluted common share for the six months ended June 30, 2014. Book value per diluted share was $63.32 at June 30, 2015, up 3.2 percent from December 31, 2014.

Operating highlights for the quarter and six months ended June 30, 2015 were as follows:

  • Gross premiums written of $861.2 million were reported for the second quarter, an increase of 24.9 percent, compared to the same period in 2014. During the first six months, gross premiums written of $2.2 billion, an increase of 17.1 percent over the same period in 2014.
  • Net premiums written of $559.1 million were reported for the second quarter, an increase of 9.3 percent compared to the same period in 2014. Net premiums written of $1.3 billion were reported for the first half, an increase of 1.1 percent over the same period in 2014.
  • Combined ratio of 85.5 percent was reported for the second quarter. This included 12.8 percentage points of favorable prior year loss reserve development and 2.2 percentage points of net catastrophe losses from 2015 events, 3.9 percentage points of large property and energy losses, and 0.8 percentage points of corporate expenses related to the acquisition of Montpelier Re Holdings Ltd.
  • During the first six months, the company reported a combined ratio of 84.1 percent, which included 13.7 percentage points of favorable prior year loss reserve development, 2.1 percentage points of current year catastrophe losses, 2.1 percentage points of large property and energy losses, and 0.5 percentage points of corporate expenses related to the acquisition of Montpelier.
  • Net investment income of $32.3 million was reported for the second quarter, a decrease of $7.1 million from the same period in 2014. During the first half, net investment income came to $74.1 million, a decrease of $6.2 million over the same period in 2014.
  • During the second quarter, operating income, which excludes after-tax realized investment gains and foreign exchange losses, was reported at $79.5 million and $1.76 per diluted common share. During the first half, the company reported operating income of $170.7 million and $3.78 per diluted common share.
  • Operating return on average common equity of 2.8 percent was reported for the second quarter (or 11.1 percent on an annualized basis). Operating return on average common equity for the first six months of the year was 6.1 percent, or 12.1 percent on an annualized basis.

“During the second quarter we continued to deliver improved profitability by generating an operating ROE of 11.1 percent in spite of very challenging market conditions,” according to John R. Charman, chairman and chief executive officer.

“We were also able to meaningfully expand our global specialty book of business as evidenced by our 25 percent growth in gross written premiums,” he said. “These strong results continue to reflect the significant strategic improvements we have implemented over the past 30 months at Endurance.”

He said Endurance’s underwriters’ “careful risk selection and underwriting discipline remain critical in this very competitive rate environment….”

On July 31, the company announced the completion of “its acquisition of Montpelier after both Endurance and Montpelier received overwhelming shareholder support for the transaction,” Charman continued.

After months of careful planning, he indicated that the integration of Montpelier into Endurance has already begun. “We are confident in our ability to materially exceed our original synergy estimates and to achieve our targeted strategic and financial objectives.”

Source: Endurance Specialty Holdings

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