PEMBROKE, Bermuda - August 1, 2016 -
Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net
income available to common shareholders of $76.6 million and $1.14
per diluted common share for the second quarter of 2016 versus net
income of $76.0 million and $1.68 per diluted common share for the
second quarter of 2015.
For the six months ended June 30, 2016,
Endurance reported net income available to common shareholders of
$183.0 million and $2.72 per diluted common share versus net income
of $176.3 million and $3.91 per diluted common share for the six
months ended June 30, 2015. Book value per diluted common
share was $68.20 at June 30, 2016, up 4.2% from December 31,
2015.
John R. Charman, Chairman and Chief Executive
Officer, commented, "Endurance's second quarter results
demonstrated strong underlying underwriting profitability as
reflected by our combined ratio of 92.6%. Our embedded risk
management practices aligned with our comprehensive reinsurance and
retrocessional programs enabled us to achieve underwriting
profitability in both business segments despite a number of severe
global catastrophes and large risk losses across the industry. Our
solid underwriting results benefited from our increased scalability
and focused expense management resulting in a significantly
improved general and administrative expense ratio."
"Strategically, the second quarter reflected our
continued focused and diversified core underwriting expansion as
evidenced by the 32.0% growth in our gross written premiums. In
addition to our targeted growth across our global businesses, our
successful renewal of the Montpelier portfolio also helped drive
our expansion. The quick, effective and successful integration of
Montpelier has enabled us to exceed our expense and capital synergy
objectives; those important benefits are now clearly visible in our
financial results. Endurance is well equipped and very well
positioned to thrive in the current market, which is showing
increasing signs of moderation."
Operating Highlights
Operating highlights for the quarter ended
June 30, 2016 were as follows:
-
Gross premiums written of $1,136.9 million, an
increase of 32.0% compared to the same period in 2015.
-
Net premiums written of $717.8 million, an
increase of 28.4% compared to the same period in 2015.
-
Combined ratio of 92.6% compared to 85.5% for
the same period in 2015.
-
An overall net negative financial impact from
catastrophe losses in the second quarter of 2016, including the
Fort McMurray wildfires in Canada, the convective storms in Texas
and Europe and the Kumamoto earthquake in Japan of $55.5 million,
consisting of net loss expenses of $73.6 million partially offset
by $11.1 million in net reinstatement premiums and $7.0 million of
amounts attributable to non-controlling interests.
-
Net loss ratio of 62.7% compared to 52.2% for
the same period in 2015. The net loss ratio for the current quarter
was impacted by 11.3 percentage points of catastrophe losses from
second quarter 2016 events and also included favorable prior year
loss reserve development of $58.6 million or 9.8 percentage points
compared to $58.8 million or 12.8 percentage points for the second
quarter of 2015.
-
Net investment income of $44.0 million, an
increase of $11.7 million from the same period in 2015.
-
Net foreign exchange gains included in net
income were $32.8 million, while foreign currency translation
adjustments included in accumulated other comprehensive income
(loss) were losses of $37.7 million for the second quarter of
2016.
-
Net income available to common shareholders of
$76.6 million and $1.14 per diluted common share for the second
quarter of 2016 versus net income of $76.0 million and $1.68 per
diluted common share for the second quarter of 2015. Operating
income of $54.8 million and $0.81 per diluted common share, a
decrease of 31.1% and 54.0%, respectively, compared to the same
period in 2015.
-
Net income return on average common equity for
the quarter of 1.7% or 6.7% on an annualized basis. Operating
income return on average common equity for the quarter of 1.2% or
4.8% on an annualized basis.
Operating highlights for the six months ended
June 30, 2016 were as follows:
-
Gross premiums written of $2,748.6 million, an
increase of 27.1% compared to the same period in 2015.
-
Net premiums written of $1,656.6 million, an
increase of 25.1% compared to the same period in 2015.
-
Combined ratio of 85.5% compared to 84.1% for
the same period in 2015.
-
An overall net negative financial impact from
catastrophe losses in 2016 of $61.6 million, consisting of net loss
expenses of $79.9 million partially offset by $11.2 million in net
reinstatement premiums and $7.1 million of amounts attributable to
non-controlling interests.
-
Net loss ratio of 53.7% compared to 48.5% for
the same period in 2015, which was impacted by 6.4 percentage
points of catastrophe losses from 2016 events. The net loss ratio
for the current period also included favorable prior year loss
reserve development of $119.7 million or 10.4 percentage points
compared to $116.0 million or 13.7 percentage points for the same
period in 2015.
-
Net investment income of $55.2 million, a
decrease of $19.0 million over the same period in 2015.
-
Net foreign exchange gains included in net
income were $44.5 million, while foreign currency translation
adjustments included in accumulated other comprehensive income
(loss) were losses of $50.1 million for the six months ended
June 30, 2016.
-
Net income available to common shareholders of
$183.0 million and $2.72 per diluted common share versus net income
of $176.3 million and $3.91 per diluted common share for the six
months ended June 30, 2015. Operating income of $139.2 million
and $2.07 per diluted common share, a decrease of 18.5% and 45.2%
compared to the same period in 2015.
Insurance Segment
Operating highlights for Endurance's Insurance
segment for the quarter ended June 30, 2016:
-
Gross premiums written of $593.7 million, an
increase of $124.8 million or 26.6% from the second quarter of
2015.
-
Non-agriculture lines of business, which include
casualty and other specialty, professional lines and property,
marine/energy and aviation lines of business grew 47.6% from a year
ago driven by the expansion of the Company's underwriting
capabilities by product and geography over the last three years as
well as from the renewal and expansion of business written within
the Company's Lloyd's syndicate acquired from Montpelier in
2015.
-
The agriculture insurance line of business
declined 40.3% compared to a year ago as a result of lower
commodity prices and the timing of premiums written.
-
Net premiums written of $239.6 million, an
increase of $49.3 million or 25.9% from the second quarter of
2015.
-
Non-agriculture lines of business increased
44.7% due to strong growth in gross premiums written combined with
a similar percentage of premiums ceded to third party reinsurers
compared to a year ago.
-
The agriculture line of business decreased
113.1% due to the timing of third party reinsurance contract
placements year over year.
-
Combined ratio of 93.2% compared to 95.2% for
the same period in 2015.
-
The net loss ratio improved 3.8 percentage
points to 68.4% compared to 72.2% for the same period in 2015. The
current period's net loss ratio included favorable prior year loss
reserve development of $24.2 million or 9.5 percentage points and
catastrophe losses of $4.4 million or 1.7 percentage points from
second quarter 2016 events. The current accident year net loss
ratio of 77.9% improved 3.5 percentage points as lower losses
within the agriculture, professional lines, and the property,
marine/energy and aviation lines of business were partially offset
by a higher current accident year net loss ratio within the
casualty and other specialty line of business.
-
The general and administrative expense ratio
decreased 2.4 percentage points, reflecting earned premium growth
that outpaced the increase of the Company's expense base as a
result of improved scale in the Company's expanding insurance
business and a greater amount of ceding commissions received.
-
The acquisition expense ratio increased 4.2
percentage points in the current quarter as non-agriculture lines
of business with higher acquisition costs accounted for a greater
percentage of earned premiums compared to a year ago.
Operating highlights for Endurance's Insurance
segment for the six months ended June 30, 2016:
-
Gross premiums written of $1,428.8 million, an
increase of $223.7 million or 18.6% over the same period in
2015.
-
Net premiums written of $610.5 million, an
increase of 23.5% over the same period in 2015.
-
Combined ratio of 91.5% compared to 92.2% for
the same period in 2015. The combined ratio was impacted by lower
net loss and general and administrative expense ratios, partially
offset by a higher acquisition expense ratio. The current period's
net loss ratio included $47.4 million or 10.0 percentage points of
favorable prior year loss reserve development and catastrophe
losses, net of reinsurance, from 2016 events of $4.4 million or 0.9
percentage points.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance
segment for the quarter ended June 30, 2016:
-
Gross premiums written of $543.2 million, an
increase of $150.9 million or 38.5% from the second quarter of
2015.
-
The catastrophe and property lines of business
increased $97.2 million, predominantly due to the successful
targeted renewals of acquired Montpelier business, partially offset
by non-renewals and line size reductions.
-
The specialty line of business increased $18.1
million largely due to growth in marine, agriculture and aviation,
as global underwriting teams added over the past three years
continue to identify profitable new opportunities.
-
The casualty line of business increased $34.1
million, predominantly driven by new business within the Company's
international and U.S. offices partially offset by select
non-renewals.
-
Net premiums written of $478.2 million, an
increase of $109.4 million or 29.7% from the second quarter of
2015. The increase in net premiums written was driven by increased
gross written premiums, partially offset by greater third party
retrocessional protection purchased for the catastrophe and
specialty lines of business.
-
Combined ratio of 88.7% compared to 73.0% for
the same period in 2015.
-
The current period's net loss ratio of 58.5%
increased 22.0 percentage points compared to 2015. Net
catastrophe losses from second quarter 2016 events impacted the net
loss ratio by 18.7 percentage points and were $69.1 million before
reinstatement premiums of $11.1 million. The increase in the
current quarter accident year net loss ratio of 16.3 percentage
points was predominantly due to catastrophe losses being 14.8
percentage points higher in the current quarter compared to a year
ago. The current period's net loss ratio included favorable
prior year loss reserve development of $34.4 million or 10.0
percentage points.
-
The 3.3 percentage point improvement in the
current quarter's acquisition expense ratio was largely due to the
earning of premiums acquired from Montpelier that do not have
related acquisition costs as these costs were written off on the
acquisition date.
-
The general and administrative expense ratio
declined 3.0 percentage points in the second quarter of 2016
primarily as a result of leveraging increased earned premiums on an
expense base that benefited from increased ceding commissions
received.
Operating highlights for Endurance's Reinsurance
segment for the six months ended June 30, 2016:
-
Gross premiums written of $1,319.8 million, an
increase of $362.3 million or 37.8% over the same period in
2015.
-
Net premiums written of $1,046.1 million, an
increase of 26.1% over the same period in 2015.
-
Combined ratio of 77.9%, compared to 73.8% for
the same period in 2015. The combined ratio was impacted by a
higher net loss ratio partially offset by lower acquisition and
general and administrative expense ratios. The current period's net
loss ratio included $72.4 million or 10.6 percentage points of
favorable prior year loss reserve development and 10.4 percentage
points of net catastrophe losses from 2016 events, which amounted
to $75.5 million before reinstatement premiums of $11.2
million.
Investments
Endurance's net investment income for the quarter
and six months ended June 30, 2016 was $44.0 million and $55.2
million, an increase of $11.7 million and decrease of $19.0
million, respectively, compared to the same periods in 2015. The
total investment return of Endurance's investment portfolio was
1.14% and 2.07% for the quarter and six months ended June 30,
2016, respectively, compared to (0.39)% and 0.89% for the quarter
and six months ended June 30, 2015, respectively.
Net investment income benefited from increases in
investment income generated from Endurance's trading and available
for sale investments for the quarter and six months ended
June 30, 2016 compared to the same periods in 2015 due to an
increase in invested assets. During the quarter and six months
ended June 30, 2016, Endurance's net investment income on its
alternative investment funds and high yield loan funds, which are
included in other investments, included gains of $5.3 million and
losses of $23.0 million, as compared to gains of $3.6 million and
$16.0 million in the same periods in 2015. The ending book yield on
Endurance's fixed maturity investments at June 30, 2016 was
2.27%, unchanged from June 30, 2015.
At June 30, 2016, Endurance's fixed maturity
and short term investments, which comprises 82.7% of Endurance's
investments, had an average credit quality of AA- and a duration of
2.57 years. Endurance's available for sale portfolio was in a net
unrealized gain position of $104.0 million at June 30, 2016,
an increase of $116.6 million from December 31, 2015.
Endurance recorded net realized and unrealized investment losses,
net of impairments, of $3.5 million and gains of $9.7 million
during the quarter and six months ended June 30, 2016,
compared to gains of $9.3 million and $26.8 million during the
quarter and six months ended June 30, 2015.
Endurance ended the second quarter of 2016 with
cash and invested assets of $8.6 billion, which represents a 3.0%
decrease from December 31, 2015. Net operating cash inflow was
$34.5 million for the six months ended June 30, 2016 versus
$23.5 million for the same period in 2015.
Capitalization and Shareholders'
Equity
At June 30, 2016, Endurance's shareholders'
equity was $5.10 billion or $68.20 per diluted common share versus
$5.12 billion or $65.48 per diluted common share at
December 31, 2015. For the quarter and six months ended
June 30, 2016, Endurance declared and paid common dividends of
$0.38 and $0.76 per share, respectively.
On June 1, 2016, Endurance redeemed all 9,200,000
shares outstanding of its 7.5% Non-Cumulative Preferred Shares,
Series B, for $230.0 million.
Earnings Call
Endurance will host a conference call on
August 2, 2016 at 9:00 a.m. Eastern time to discuss its
financial results. The conference call can be accessed via
telephone by dialing (888) 417-8465 or (719) 325-2323
(international) and entering pass code: 181429. 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 August 16, 2016 by
dialing (888) 203-1112 or (719) 457-0820 (international) and
entering the pass code: 181429.
The public may access a live broadcast of the
conference call at the "Investor Relations" section of Endurance's
website, www.endurance.bm. Following the live broadcast, an
archived version will continue to be available on Endurance's
website.
A copy of Endurance's financial supplement for the
second quarter of 2016 will be available on Endurance's website at
www.endurance.bm shortly after the release of earnings.
Operating income, operating return on average
common equity, operating income per diluted common share, operating
income allocated to common shareholders and the combined ratio
excluding prior year net loss reserve development are non-GAAP
measures. Reconciliations of these measures to the appropriate GAAP
measures are included in the attached tables.
About Endurance Specialty
Holdings
Endurance Specialty Holdings Ltd. is a global
specialty provider of property and casualty insurance and
reinsurance. Through its operating subsidiaries, Endurance writes
agriculture, casualty and other specialty, professional lines and
property, marine/energy and aviation lines of insurance and
catastrophe, property, casualty, professional lines and specialty
lines of reinsurance. We maintain excellent financial strength as
evidenced by the ratings of A (Excellent) from A.M. Best (XV size
category) and A (Strong) from Standard and Poor's on our principal
operating subsidiaries. Endurance's headquarters are located at
Waterloo House, 100 Pitts Bay Road, Pembroke HM 08, Bermuda and its
mailing address is Endurance Specialty Holdings Ltd., Suite No.
784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For
more information about Endurance, please visit
www.endurance.bm.
Safe Harbor for Forward-Looking
Statements
Some of the statements in this press release may
include, and Endurance may make related oral forward-looking
statements which reflect our current views with respect to future
events and financial performance. Such statements may include
forward-looking statements both with respect to us in general and
the insurance and reinsurance sectors specifically, both as to
underwriting and investment matters. Statements which include the
words "should," "would," "expect," "intend," "plan," "believe,"
"project," "target," "anticipate," "seek," "will," "deliver," and
similar statements of a future or forward-looking nature identify
forward-looking statements in this press release for purposes of
the U.S. federal securities laws or otherwise. We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in the Private Securities
Litigation Reform Act of 1995.
All forward-looking statements address matters
that involve risks and uncertainties. Accordingly, there are or may
be important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements.
These factors include, but are not limited to, the effects of
competitors' pricing policies, greater frequency or severity of
claims and loss activity, changes in market conditions in the
agriculture insurance industry, termination of or changes in the
terms of the U.S. multiple peril crop insurance program, a
decreased demand for property and casualty insurance or
reinsurance, changes in the availability, cost or quality of
reinsurance or retrocessional coverage, our inability to renew
business previously underwritten or acquired, our inability to
maintain our applicable financial strength ratings, our inability
to effectively integrate acquired operations, uncertainties in our
reserving process, changes to our tax status, changes in insurance
regulations, reduced acceptance of our existing or new products and
services, a loss of business from and credit risk related to our
broker counterparties, assessments for high risk or otherwise
uninsured individuals, possible terrorism or the outbreak of war, a
loss of key personnel, political conditions, changes in insurance
regulation, changes in accounting policies, our investment
performance, the valuation of our invested assets, a breach of our
investment guidelines, the unavailability of capital in the future,
developments in the world's financial and capital markets and our
access to such markets, government intervention in the insurance
and reinsurance industry, illiquidity in the credit markets,
changes in general economic conditions and other factors described
in our Annual Report on Form 10-K for the year ended
December 31, 2015.
The foregoing review of important factors should
not be construed as exhaustive and should be read in conjunction
with the other cautionary statements that are included herein and
elsewhere, including the risk factors included in Endurance's most
recent Annual report on Form 10-K and other documents of Endurance
on file with the Securities and Exchange Commission. Any
forward-looking statements made in this material are qualified by
these cautionary statements, and there can be no assurance that the
actual results or developments anticipated by Endurance will be
realized or, even if substantially realized, that they will have
the expected consequences to, or effects on, Endurance or its
business or operations. Except as required by law, Endurance
undertakes no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
The contents of any website referenced in this
press release are not incorporated by reference herein.
Contact:
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations@endurance.bm
ENDURANCE
SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars, except share and per share
amounts)
|
|
|
June
30, |
|
December
31, |
|
|
|
2016 |
|
2015 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
1,092,977 |
|
|
$ |
1,177,750 |
|
Fixed maturity investments, trading, at fair value |
2,126,600 |
|
|
1,587,160 |
|
Fixed maturity investments, available for sale, at fair
value |
3,892,479 |
|
|
4,359,019 |
|
Short-term investments, trading, at fair value |
295,442 |
|
|
394,111 |
|
Short-term investments, available for sale, at fair
value |
18,849 |
|
|
25,685 |
|
Equity securities, trading, at fair value |
36,332 |
|
|
15,229 |
|
Equity securities, available for sale, at fair value |
506,010 |
|
|
513,585 |
|
Other investments |
779,810 |
|
|
872,617 |
|
Premiums receivable, net |
2,291,117 |
|
|
1,376,328 |
|
Insurance and reinsurance balances receivable |
129,861 |
|
|
102,403 |
|
Deferred acquisition costs |
363,406 |
|
|
255,501 |
|
Prepaid reinsurance premiums |
885,892 |
|
|
498,574 |
|
Reinsurance recoverable on unpaid losses |
1,105,617 |
|
|
907,944 |
|
Reinsurance recoverable on paid losses |
348,219 |
|
|
288,026 |
|
Accrued investment income |
30,299 |
|
|
30,213 |
|
Goodwill and intangible assets |
511,649 |
|
|
553,960 |
|
Deferred tax asset |
52,722 |
|
|
64,164 |
|
Net receivable on sales of investments |
89,144 |
|
|
31,873 |
|
Other assets |
275,242 |
|
|
187,383 |
|
Total Assets |
$ |
14,831,667 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
Reserve for losses and loss expenses |
$ |
4,727,997 |
|
|
$ |
4,510,415 |
|
Reserve for unearned premiums |
2,670,607 |
|
|
1,789,148 |
|
Deposit liabilities |
12,573 |
|
|
13,674 |
|
Reinsurance balances payable |
1,066,197 |
|
|
661,213 |
|
Debt |
705,261 |
|
|
717,650 |
|
Net payable on purchases of investments |
192,793 |
|
|
63,442 |
|
Deferred tax liability |
15,817 |
|
|
17,315 |
|
Other liabilities |
335,933 |
|
|
344,596 |
|
Total Liabilities |
9,727,178 |
|
8,117,453 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
Preferred shares |
|
|
|
|
Series B, non-cumulative - nil issued and outstanding
(2015 - 9,200,000) |
- |
|
|
9,200 |
|
|
Series C, non-cumulative - 9,200 issued and outstanding
(2015 - 9,200) |
9 |
|
|
9 |
|
Common shares |
|
|
|
|
67,565,483 issued and outstanding (2015 - 66,797,991) |
67,565 |
|
|
66,798 |
|
Additional paid-in capital |
1,944,381 |
|
|
2,145,836 |
|
Accumulated other comprehensive income (loss) |
19,949 |
|
|
(46,634 |
) |
Retained earnings |
2,812,734 |
|
|
2,681,053 |
|
Total Shareholders' Equity Available to the Company |
4,844,638 |
|
4,856,262 |
Non-controlling interests |
259,851 |
|
|
267,810 |
|
Total Shareholders' Equity |
5,104,489 |
|
|
5,124,072 |
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
$ |
14,831,667 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Book Value per Common Share |
|
|
|
Basic common shares outstanding |
66,173,916 |
|
|
65,440,712 |
|
Dilutive common shares outstanding |
67,661,540 |
|
|
67,136,986 |
|
Basic book value per common share [a] |
$ |
69.73 |
|
|
$ |
67.18 |
|
Diluted book value per common share [a],
[b] |
$ |
68.20 |
|
|
$ |
65.48 |
|
Note: All financial information contained herein
is unaudited, except the balance sheet data for the year ended
December 31, 2015, which was derived from Endurance's audited
financial statements.
[a] Excludes the $230.0 million at
June 30, 2016 (December 31, 2015 - $460.0 million) liquidation
value of the preferred shares.
[b] The Company has included diluted book
value per common share because it takes into account the effect of
dilutive securities; therefore, the Company believes it is a better
measure of calculating shareholder returns than book value per
common share.
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of United States dollars, except share and per share
amounts)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June
30, |
|
June 30, |
|
June
30, |
|
June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Gross premiums written |
$ |
1,136,930 |
|
|
$ |
861,184 |
|
|
$ |
2,748,607 |
|
|
$ |
2,162,616 |
|
|
|
|
|
|
|
|
|
|
Net premiums written |
$ |
717,768 |
|
|
$ |
559,083 |
|
|
$ |
1,656,610 |
|
|
$ |
1,324,037 |
|
Change in unearned premiums |
(118,160 |
) |
|
(100,948 |
) |
|
(503,811 |
) |
|
(476,043 |
) |
|
|
|
|
|
|
|
|
|
Net premiums earned |
599,608 |
|
458,135 |
|
1,152,799 |
|
|
847,994 |
|
Other underwriting income (loss) |
930 |
|
|
1,389 |
|
|
(1,514 |
) |
|
3,795 |
|
Net investment income |
43,977 |
|
|
32,252 |
|
|
55,158 |
|
|
74,113 |
|
Net realized and unrealized gains |
6,347 |
|
|
9,680 |
|
|
20,134 |
|
|
27,869 |
|
Net impairment losses recognized in earnings |
(9,841 |
) |
|
(424 |
) |
|
(10,464 |
) |
|
(1,073 |
) |
Total revenues |
641,021 |
|
501,032 |
|
1,216,113 |
|
|
952,698 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Net losses and loss expenses |
376,112 |
|
|
239,122 |
|
|
619,440 |
|
|
411,058 |
|
Acquisition expenses |
111,961 |
|
|
84,971 |
|
|
215,803 |
|
|
167,064 |
|
General and administrative expenses |
55,079 |
|
|
54,965 |
|
|
127,304 |
|
|
109,855 |
|
Corporate expenses |
11,830 |
|
|
12,634 |
|
|
23,601 |
|
|
24,902 |
|
Amortization of intangibles |
20,943 |
|
|
1,579 |
|
|
42,317 |
|
|
3,178 |
|
Net foreign exchange (gains) losses |
(32,751 |
) |
|
12,981 |
|
|
(44,480 |
) |
|
20,533 |
|
Interest expense |
11,357 |
|
|
9,062 |
|
|
22,227 |
|
|
18,121 |
|
Total expenses |
554,531 |
|
415,314 |
|
1,006,212 |
|
|
754,711 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
86,490 |
|
85,718 |
|
209,901 |
|
|
197,987 |
|
Income tax benefit (expense) |
1,138 |
|
|
(1,512 |
) |
|
2,371 |
|
|
(5,302 |
) |
Net income |
87,628 |
|
84,206 |
|
212,272 |
|
|
192,685 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
(3,714 |
) |
|
- |
|
|
(12,777 |
) |
|
- |
|
|
|
|
|
|
|
|
|
|
Net income available to the Company |
83,914 |
|
|
84,206 |
|
|
199,495 |
|
|
192,685 |
|
|
|
|
|
|
|
|
|
|
Preferred dividends |
(7,293 |
) |
|
(8,188 |
) |
|
(16,496 |
) |
|
(16,376 |
) |
|
|
|
|
|
|
|
|
|
Net income available to common and
participating common shareholders |
$ |
76,621 |
|
|
$ |
76,018 |
|
|
$ |
182,999 |
|
|
$ |
176,309 |
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
1.14 |
|
|
$ |
1.69 |
|
|
$ |
2.72 |
|
|
$ |
3.92 |
|
Diluted earnings per common share |
$ |
1.14 |
|
|
$ |
1.68 |
|
|
$ |
2.72 |
|
|
$ |
3.91 |
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Three Months Ended June 30, 2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
593,706 |
|
|
$ |
543,224 |
|
|
$ |
1,136,930 |
|
|
|
Ceded
premiums written |
|
(354,104 |
) |
|
(65,058 |
) |
|
(419,162 |
) |
|
|
Net
premiums written |
|
239,602 |
|
|
478,166 |
|
|
717,768 |
|
|
|
Net
premiums earned |
|
253,784 |
|
|
345,824 |
|
|
599,608 |
|
|
|
Other
underwriting income |
|
- |
|
|
930 |
|
|
930 |
|
|
|
Total
underwriting revenues |
|
253,784 |
|
|
346,754 |
|
|
600,538 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
173,858 |
|
|
202,254 |
|
|
376,112 |
|
|
|
Acquisition expenses |
|
32,868 |
|
|
79,093 |
|
|
111,961 |
|
|
|
General
and administrative expenses |
|
29,825 |
|
|
25,254 |
|
|
55,079 |
|
|
|
|
|
236,551 |
|
|
306,601 |
|
|
543,152 |
|
|
|
Underwriting income |
|
$ |
17,233 |
|
|
$ |
40,153 |
|
|
57,386 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
43,977 |
|
|
|
Corporate
expenses |
|
|
|
|
|
(11,830 |
) |
|
|
Interest
expense |
|
|
|
|
|
(11,357 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(20,943 |
) |
|
|
Net
foreign exchange gains |
|
|
|
|
|
32,751 |
|
|
|
Net
realized and unrealized gains |
|
|
|
|
|
6,347 |
|
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(9,841 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
86,490 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
68.4 |
% |
|
58.5 |
% |
|
62.7 |
% |
|
|
Acquisition expense ratio |
|
13.0 |
% |
|
22.9 |
% |
|
18.7 |
% |
|
|
General
and administrative expense ratio |
|
11.8 |
% |
|
7.3 |
% |
|
11.2 |
% |
[a] |
|
Combined
ratio |
|
93.2 |
% |
|
88.7 |
% |
|
92.6 |
% |
|
[a] The total general and
administrative expense ratio includes general and administrative
expenses and corporate expenses.
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Three Months Ended June 30, 2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
468,866 |
|
|
$ |
392,318 |
|
|
$ |
861,184 |
|
|
|
Ceded
premiums written |
|
(278,567 |
) |
|
(23,534 |
) |
|
(302,101 |
) |
|
|
Net
premiums written |
|
190,299 |
|
|
368,784 |
|
|
559,083 |
|
|
|
Net
premiums earned |
|
201,460 |
|
|
256,675 |
|
|
458,135 |
|
|
|
Other
underwriting income |
|
- |
|
|
1,389 |
|
|
1,389 |
|
|
|
Total
underwriting revenues |
|
201,460 |
|
|
258,064 |
|
|
459,524 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
145,483 |
|
|
93,639 |
|
|
239,122 |
|
|
|
Acquisition expenses |
|
17,702 |
|
|
67,269 |
|
|
84,971 |
|
|
|
General and administrative expenses |
|
28,567 |
|
|
26,398 |
|
|
54,965 |
|
|
|
|
|
191,752 |
|
|
187,306 |
|
|
379,058 |
|
|
|
Underwriting income |
|
$ |
9,708 |
|
|
$ |
70,758 |
|
|
80,466 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
32,252 |
|
|
|
Corporate expenses |
|
|
|
|
|
(12,634 |
) |
|
|
Interest expense |
|
|
|
|
|
(9,062 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(1,579 |
) |
|
|
Net
foreign exchange losses |
|
|
|
|
|
(12,981 |
) |
|
|
Net
realized and unrealized gains |
|
|
|
|
|
9,680 |
|
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(424 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
85,718 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss ratio |
|
72.2 |
% |
|
36.5 |
% |
|
52.2 |
% |
|
|
Acquisition expense ratio |
|
8.8 |
% |
|
26.2 |
% |
|
18.5 |
% |
|
|
General and administrative expense ratio |
|
14.2 |
% |
|
10.3 |
% |
|
14.8 |
% |
[a] |
|
Combined ratio |
|
95.2 |
% |
|
73.0 |
% |
|
85.5 |
% |
|
[a] The total general and
administrative expense ratio includes general and administrative
expenses and corporate expenses.
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Six Months Ended June 30, 2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
1,428,823 |
|
|
$ |
1,319,784 |
|
|
$ |
2,748,607 |
|
|
|
Ceded
premiums written |
|
(818,277 |
) |
|
(273,720 |
) |
|
(1,091,997 |
) |
|
|
Net
premiums written |
|
610,546 |
|
|
1,046,064 |
|
|
1,656,610 |
|
|
|
Net
premiums earned |
|
473,353 |
|
|
679,446 |
|
|
1,152,799 |
|
|
|
Other
underwriting loss |
|
- |
|
|
(1,514 |
) |
|
(1,514 |
) |
|
|
Total
underwriting revenues |
|
473,353 |
|
|
677,932 |
|
|
1,151,285 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
301,661 |
|
|
317,779 |
|
|
619,440 |
|
|
|
Acquisition expenses |
|
63,226 |
|
|
152,577 |
|
|
215,803 |
|
|
|
General
and administrative expenses |
|
68,254 |
|
|
59,050 |
|
|
127,304 |
|
|
|
|
|
433,141 |
|
|
529,406 |
|
|
962,547 |
|
|
|
Underwriting income |
|
$ |
40,212 |
|
|
$ |
148,526 |
|
|
188,738 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
55,158 |
|
|
|
Corporate
expenses |
|
|
|
|
|
(23,601 |
) |
|
|
Interest
expense |
|
|
|
|
|
(22,227 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(42,317 |
) |
|
|
Net
foreign exchange gains |
|
|
|
|
|
44,480 |
|
|
|
Net
realized and unrealized gains |
|
|
|
|
|
20,134 |
|
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(10,464 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
209,901 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
63.7 |
% |
|
46.7 |
% |
|
53.7 |
% |
|
|
Acquisition expense ratio |
|
13.4 |
% |
|
22.5 |
% |
|
18.7 |
% |
|
|
General
and administrative expense ratio |
|
14.4 |
% |
|
8.7 |
% |
|
13.1 |
% |
[a] |
|
Combined
ratio |
|
91.5 |
% |
|
77.9 |
% |
|
85.5 |
% |
|
[a] General and
administrative expense ratio includes general and administrative
expenses and corporate expenses.
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Six Months Ended June 30, 2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
1,205,084 |
|
|
$ |
957,532 |
|
|
$ |
2,162,616 |
|
|
|
Ceded
premiums written |
|
(710,746 |
) |
|
(127,833 |
) |
|
(838,579 |
) |
|
|
Net
premiums written |
|
494,338 |
|
|
829,699 |
|
|
1,324,037 |
|
|
|
Net
premiums earned |
|
337,324 |
|
|
510,670 |
|
|
847,994 |
|
|
|
Other
underwriting income |
|
- |
|
|
3,795 |
|
|
3,795 |
|
|
|
Total
underwriting revenues |
|
337,324 |
|
|
514,465 |
|
|
851,789 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
219,995 |
|
|
191,063 |
|
|
411,058 |
|
|
|
Acquisition expenses |
|
33,585 |
|
|
133,479 |
|
|
167,064 |
|
|
|
General and administrative expenses |
|
57,409 |
|
|
52,446 |
|
|
109,855 |
|
|
|
|
|
310,989 |
|
|
376,988 |
|
|
687,977 |
|
|
|
Underwriting income |
|
$ |
26,335 |
|
|
$ |
137,477 |
|
|
163,812 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
74,113 |
|
|
|
Corporate expenses |
|
|
|
|
|
(24,902 |
) |
|
|
Interest expense |
|
|
|
|
|
(18,121 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(3,178 |
) |
|
|
Net
foreign exchange losses |
|
|
|
|
|
(20,533 |
) |
|
|
Net
realized and unrealized gains |
|
|
|
|
|
27,869 |
|
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(1,073 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
197,987 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss ratio |
|
65.2 |
% |
|
37.4 |
% |
|
48.5 |
% |
|
|
Acquisition expense ratio |
|
10.0 |
% |
|
26.1 |
% |
|
19.7 |
% |
|
|
General and administrative expense ratio |
|
17.0 |
% |
|
10.3 |
% |
|
15.9 |
% |
[a] |
|
Combined ratio |
|
92.2 |
% |
|
73.8 |
% |
|
84.1 |
% |
|
[a] General and
administrative expense ratio includes general and administrative
expenses and corporate expenses.
ENDURANCE
SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
As Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
68.4 |
% |
|
72.2 |
% |
|
58.5 |
% |
|
36.5 |
% |
|
62.7 |
% |
|
52.2 |
% |
|
|
Acquisition expense ratio |
|
13.0 |
% |
|
8.8 |
% |
|
22.9 |
% |
|
26.2 |
% |
|
18.7 |
% |
|
18.5 |
% |
|
|
General and administrative expense ratio |
|
11.8 |
% |
|
14.2 |
% |
|
7.3 |
% |
|
10.3 |
% |
|
11.2 |
% |
[a] |
14.8 |
% |
[a] |
|
Combined ratio [b] |
|
93.2 |
% |
|
95.2 |
% |
|
88.7 |
% |
|
73.0 |
% |
|
92.6 |
% |
|
85.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
9.5 |
% |
|
9.2 |
% |
|
10.0 |
% |
|
15.7 |
% |
|
9.8 |
% |
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
77.9 |
% |
|
81.4 |
% |
|
68.5 |
% |
|
52.2 |
% |
|
72.5 |
% |
|
65.0 |
% |
|
|
Acquisition expense ratio |
|
13.0 |
% |
|
8.8 |
% |
|
22.9 |
% |
|
26.2 |
% |
|
18.7 |
% |
|
18.5 |
% |
|
|
General and administrative expense ratio |
|
11.8 |
% |
|
14.2 |
% |
|
7.3 |
% |
|
10.3 |
% |
|
11.2 |
% |
[a] |
14.8 |
% |
[a] |
|
Combined ratio [b] |
|
102.7 |
% |
|
104.4 |
% |
|
98.7 |
% |
|
88.7 |
% |
|
102.4 |
% |
|
98.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[a] |
The total general and administrative expense ratio includes
general and administrative expenses and corporate expenses. |
|
[b] |
The combined ratio is the sum of the net loss, acquisition
expense and general and administrative expense ratios, and the
total combined ratio includes corporate expenses. Endurance
presents the combined ratio as a measure that is commonly
recognized as a standard of performance by investors, analysts,
rating agencies and other users of its financial information. The
combined ratio, excluding prior year net loss reserve development,
enables investors, analysts, rating agencies and other users of its
financial information to more easily analyze Endurance's results of
underwriting activities in a manner similar to how management
analyzes Endurance's underlying business performance. The combined
ratio, net of prior year net loss reserve development, should not
be viewed as a substitute for the combined ratio. |
|
|
|
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
As Reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
63.7 |
% |
|
65.2 |
% |
|
46.7 |
% |
|
37.4 |
% |
|
53.7 |
% |
|
48.5 |
% |
|
|
Acquisition expense ratio |
|
13.4 |
% |
|
10.0 |
% |
|
22.5 |
% |
|
26.1 |
% |
|
18.7 |
% |
|
19.7 |
% |
|
|
General and administrative expense ratio |
|
14.4 |
% |
|
17.0 |
% |
|
8.7 |
% |
|
10.3 |
% |
|
13.1 |
% |
[a] |
15.9 |
% |
[a] |
|
Combined ratio [b] |
|
91.5 |
% |
|
92.2 |
% |
|
77.9 |
% |
|
73.8 |
% |
|
85.5 |
% |
|
84.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
10.0 |
% |
|
11.6 |
% |
|
10.6 |
% |
|
15.0 |
% |
|
10.4 |
% |
|
13.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
73.7 |
% |
|
76.8 |
% |
|
57.3 |
% |
|
52.4 |
% |
|
64.1 |
% |
|
62.2 |
% |
|
|
Acquisition expense ratio |
|
13.4 |
% |
|
10.0 |
% |
|
22.5 |
% |
|
26.1 |
% |
|
18.7 |
% |
|
19.7 |
% |
|
|
General and administrative expense ratio |
|
14.4 |
% |
|
17.0 |
% |
|
8.7 |
% |
|
10.3 |
% |
|
13.1 |
% |
[a] |
15.9 |
% |
[a] |
|
Combined ratio [b] |
|
101.5 |
% |
|
103.8 |
% |
|
88.5 |
% |
|
88.8 |
% |
|
95.9 |
% |
|
97.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[a] |
The total general and administrative expense ratio includes
general and administrative expenses and corporate expenses. |
|
[b] |
The combined ratio is the sum of the net loss, acquisition
expense and general and administrative expense ratios, and the
total combined ratio includes corporate expenses. Endurance
presents the combined ratio as a measure that is commonly
recognized as a standard of performance by investors, analysts,
rating agencies and other users of its financial information. The
combined ratio, excluding prior year net loss reserve development,
enables investors, analysts, rating agencies and other users of its
financial information to more easily analyze Endurance's results of
underwriting activities in a manner similar to how management
analyzes Endurance's underlying business performance. The combined
ratio, net of prior year net loss reserve development, should not
be viewed as a substitute for the combined ratio. |
|
ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY
SEGMENT
(in thousands of United States dollars)
The following tables show Endurance's gross and
net premiums written for the quarter ended June 30, 2016 and
2015:
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
June 30, 2016 |
|
June 30, 2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
66,922 |
|
|
$ |
(2,962 |
) |
|
$ |
112,012 |
|
|
$ |
22,677 |
|
|
Casualty and other specialty |
178,081 |
|
|
77,965 |
|
|
146,056 |
|
|
65,302 |
|
|
Professional lines |
122,679 |
|
|
51,204 |
|
|
96,736 |
|
|
43,443 |
|
|
Property, marine/energy and
aviation |
226,024 |
|
|
113,395 |
|
|
114,062 |
|
|
58,877 |
|
|
Subtotal
Insurance |
$ |
593,706 |
|
|
$ |
239,602 |
|
|
$ |
468,866 |
|
|
$ |
190,299 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
236,995 |
|
|
$ |
197,681 |
|
|
$ |
139,833 |
|
|
$ |
122,305 |
|
|
Property |
30,646 |
|
|
31,304 |
|
|
30,560 |
|
|
30,118 |
|
|
Casualty |
82,263 |
|
|
80,921 |
|
|
48,132 |
|
|
48,132 |
|
|
Professional lines |
135,638 |
|
|
135,031 |
|
|
134,241 |
|
|
134,241 |
|
|
Specialty |
57,682 |
|
|
33,229 |
|
|
39,552 |
|
|
33,988 |
|
|
Subtotal
Reinsurance |
$ |
543,224 |
|
|
$ |
478,166 |
|
|
$ |
392,318 |
|
|
$ |
368,784 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
1,136,930 |
|
|
$ |
717,768 |
|
|
$ |
861,184 |
|
|
$ |
559,083 |
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY
SEGMENT
(in thousands of United States dollars)
The following tables show Endurance's gross and
net premiums written for the six months ended June 30, 2016
and 2015:
|
|
Six Months
Ended |
|
Six Months
Ended |
|
|
June 30, 2016 |
|
June 30,
2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
563,138 |
|
|
$ |
205,665 |
|
|
$ |
628,928 |
|
|
$ |
225,137 |
|
|
Casualty and other specialty |
316,336 |
|
|
141,462 |
|
|
246,738 |
|
|
110,360 |
|
|
Professional lines |
200,094 |
|
|
94,538 |
|
|
151,496 |
|
|
67,674 |
|
|
Property, marine and energy |
349,255 |
|
|
168,881 |
|
|
177,922 |
|
|
91,167 |
|
|
Subtotal
Insurance |
$ |
1,428,823 |
|
|
$ |
610,546 |
|
|
$ |
1,205,084 |
|
|
$ |
494,338 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
437,825 |
|
|
$ |
286,549 |
|
|
$ |
264,240 |
|
|
$ |
175,765 |
|
|
Property |
187,112 |
|
|
181,360 |
|
|
156,260 |
|
|
153,567 |
|
|
Casualty |
180,983 |
|
|
179,640 |
|
|
106,230 |
|
|
106,230 |
|
|
Professional lines |
184,187 |
|
|
183,251 |
|
|
178,098 |
|
|
178,098 |
|
|
Specialty |
329,677 |
|
|
215,264 |
|
|
252,704 |
|
|
216,039 |
|
|
Subtotal
Reinsurance |
$ |
1,319,784 |
|
|
$ |
1,046,064 |
|
|
$ |
957,532 |
|
|
$ |
829,699 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
2,748,607 |
|
|
$ |
1,656,610 |
|
|
$ |
2,162,616 |
|
|
$ |
1,324,037 |
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
RECONCILIATIONS OF NON-GAAP MEASURES
In presenting the Company's results, management
has included and discussed certain non-GAAP measures. Management
believes that these non-GAAP measures, which may be defined
differently by other companies, better explain the Company's
results of operations in a manner that allows for a more complete
understanding of the underlying trends in the Company's business.
However, these measures should not be viewed as a substitute for
those determined in accordance with GAAP.
Operating income is an internal performance
measure used by the Company in the management of its operations.
Operating income represents operational results excluding, as
applicable, net realized and unrealized gains, net impairment
losses recognized in earnings and net foreign exchange gains
because the amount of these gains or losses is heavily influenced
by, and fluctuates in part, according to the availability of market
opportunities. The Company believes these amounts are largely
independent of its business and underwriting process and including
them distorts the analysis of trends in its operations. In addition
to presenting net income determined in accordance with GAAP, the
Company believes that showing operating income enables investors,
analysts, rating agencies and other users of its financial
information to more easily analyze the Company's results of
operations in a manner similar to to that used by management to
analyze the Company's underlying business performance. Operating
income should not be viewed as a substitute for GAAP net
income.
Operating income per diluted common share are
internal performance measures used by Endurance in the management
of its operations. Operating income allocated to common
shareholders (which excludes unvested restricted shares outstanding
which are considered participating) per diluted common share
represents operating income divided by weighted average dilutive
common shares, which has been calculated in accordance with the
two-class method under U.S. GAAP. Endurance believes that
showing operating income per dilutive common share enables
investors, analysts, rating agencies and other users of its
financial information to more easily analyze Endurance's results of
operations in a manner similar to that used by management to
analyze the Company's underlying business performance. Operating
income per dilutive common share should not be viewed as
substitutes for GAAP net income per dilutive common share.
Return on Average Equity (ROAE) is comprised using
the average common equity calculated as the arithmetic average of
the beginning and ending common equity balances by quarter for
stated periods. Return on Beginning Equity (ROBE) is comprised
using the beginning common equity for stated periods. The Company
presents various measures of Return on Equity that are commonly
recognized as a standard of performance by investors, analysts,
rating agencies and other users of its financial information.
ENDURANCE
SPECIALTY HOLDINGS LTD.
RECONCILIATIONS OF NON-GAAP MEASURES
The following is a reconciliation of Endurance's
net income, net income per diluted common share, net income
allocated to common shareholders under the two-class method and
annualized return on average common equity to operating income,
operating income per diluted common share, operating income
allocated to common shareholders under the two-class method and
annualized operating return on average common equity (all non-GAAP
measures) for the three and six months ended June 30, 2016 and
2015:
(amounts expressed in
thousands of United States dollars, except share, per share amounts
and ratios) |
Quarter
Ended |
|
Six Months
Ended |
June 30, |
|
June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net income available to the Company |
$ |
83,914 |
|
|
$ |
84,206 |
|
|
$ |
199,495 |
|
|
$ |
192,685 |
|
(Less) add items: |
|
|
|
|
|
|
|
|
Net
foreign exchange (gains) losses |
(32,751 |
) |
|
12,981 |
|
|
(44,480 |
) |
|
20,533 |
|
|
Net
realized and unrealized gains |
(6,347 |
) |
|
(9,680 |
) |
|
(20,134 |
) |
|
(27,869 |
) |
|
Net
impairment losses recognized in earnings |
9,841 |
|
|
424 |
|
|
10,464 |
|
|
1,073 |
|
|
Income
tax expense (benefit) |
7,434 |
|
|
(213 |
) |
|
10,372 |
|
|
683 |
|
Operating income before preferred dividends |
$ |
62,091 |
|
|
$ |
87,718 |
|
|
$ |
155,717 |
|
|
$ |
187,105 |
|
|
Preferred dividends |
(7,293 |
) |
|
(8,188 |
) |
|
(16,496 |
) |
|
(16,376 |
) |
Operating income allocated to common and |
|
|
|
|
|
|
|
|
participating common shareholders |
$ |
54,798 |
|
|
$ |
79,530 |
|
|
$ |
139,221 |
|
|
$ |
170,729 |
|
|
|
|
|
|
|
|
|
|
Operating income allocated to common |
|
|
|
|
|
|
|
|
shareholders under the two-class method |
$ |
53,629 |
|
|
$ |
77,152 |
|
|
$ |
136,171 |
|
|
$ |
165,657 |
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares |
66,057,210 |
|
|
43,896,721 |
|
|
65,875,270 |
|
|
43,792,626 |
|
|
|
|
|
|
|
|
|
|
Operating income per diluted common share [b] |
$ |
0.81 |
|
|
$ |
1.76 |
|
|
$ |
2.07 |
|
|
$ |
3.78 |
|
|
|
|
|
|
|
|
|
|
Average common equity [a] |
$ |
4,568,998 |
|
|
$ |
2,858,876 |
|
|
$ |
4,514,404 |
|
|
$ |
2,829,445 |
|
|
|
|
|
|
|
|
|
|
Operating return on average common equity |
1.2 |
% |
|
2.8 |
% |
|
3.1 |
% |
|
6.0 |
% |
|
|
|
|
|
|
|
|
|
Annualized operating return on average common equity |
4.8 |
% |
|
11.1 |
% |
|
6.2 |
% |
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
Net income available to the Company |
$ |
83,914 |
|
|
$ |
84,206 |
|
|
$ |
199,495 |
|
|
$ |
192,685 |
|
|
Preferred dividends |
(7,293 |
) |
|
(8,188 |
) |
|
(16,496 |
) |
|
(16,376 |
) |
Net income available to common and |
|
|
|
|
|
|
|
|
participating common shareholders |
$ |
76,621 |
|
|
$ |
76,018 |
|
|
$ |
182,999 |
|
|
$ |
176,309 |
|
|
|
|
|
|
|
|
|
|
Net income allocated to common shareholders |
|
|
|
|
|
|
|
|
under
the two-class method |
$ |
74,987 |
|
|
$ |
73,745 |
|
|
$ |
178,991 |
|
|
$ |
171,072 |
|
|
|
|
|
|
|
|
|
|
Net income per diluted common share [b] |
$ |
1.14 |
|
|
$ |
1.68 |
|
|
$ |
2.72 |
|
|
$ |
3.91 |
|
|
|
|
|
|
|
|
|
|
Return on average common equity, Net income |
1.7 |
% |
|
2.7 |
% |
|
4.1 |
% |
|
6.2 |
% |
|
|
|
|
|
|
|
|
Annualized return on average common equity, Net
income |
6.7 |
% |
|
10.6 |
% |
|
8.1 |
% |
|
12.5 |
% |
[a] Average common equity is
calculated as the quarterly weighted average of the beginning and
ending common equity balances for the stated period, which excludes
the $230.0 million at June 30, 2016 (December 31, 2015 -
$460.0 million; June 30, 2015 - $430.0 million) liquidation
value of the preferred shares.
[b] Represents diluted income per share
calculated under the two-class method which was the lower of the
treasury stock method and the two-class method.
ENDURANCE
SPECIALTY HOLDINGS LTD.
RECONCILIATIONS OF NON-GAAP MEASURES
Net negative financial impact includes the sum of
net losses and loss expenses, reinstatement premiums assumed and
ceded and non-controlling interests related to specific catastrophe
events occurring in the current periods. The Company believes
that showing the net negative financial impact of the catastrophe
related events enables investors, analysts, rating agencies and
other users of its financial information to more easily analyze the
Company's results of operations in a manner similar to that used by
management to analyze the Company's underlying business
performance.
The following is a reconciliation of Endurance's
net losses and loss expenses, net reinstatement premiums and
non-controlling interest related to catastrophe events occurring in
the second quarter and six months ended June 30, 2016 to the
net negative financial impact (non-GAAP measure) of these events on
net income available to the Company for the three and six months
ended June 30, 2016:
(amounts expressed in thousands of United States dollars, except
ratio) |
|
For the three months ended June 30,
2016 |
For the six months ended June 30,
2016 |
|
|
Catastrophe
Impact |
Net loss
ratio impact |
Catastrophe
Impact |
Net loss
ratio impact |
|
|
|
|
|
|
Net
losses and loss expenses |
|
$ |
73,583 |
|
|
$ |
79,907 |
|
|
Less:
net reinstatement premiums |
|
11,051 |
|
|
11,155 |
|
|
Net
negative financial impact on net income |
|
62,532 |
|
11.3 |
% |
68,752 |
|
6.4 |
% |
Less:
net negative financial impact attributable to non-controlling
interest |
|
7,017 |
|
|
7,113 |
|
|
Net
negative financial impact on net income available to the
Company |
|
$ |
55,515 |
|
|
$ |
61,639 |
|
|
Total investment return is calculated by dividing
net investment income, net realized and unrealized gains, net
impairment losses recognized in earnings, and net increase in
unrealized gains included in other comprehensive income before
deferred tax offsets by average invested assets at fair value. The
Company utilizes and presents the total investment return in order
to better disclose the performance of the Company's investments and
to show the components of the Company's ROE.
The following is a reconciliation of Endurance's
net investment income, net realized and unrealized gains, net
impairment losses recognized in earnings and net increase in
unrealized gains included in other comprehensive income before
deferred tax offsets to total investment income and total
investment return (non-GAAP measures) for the three and six months
ended June 30, 2016:
(amounts expressed in thousands of United States
dollars) |
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
Net
investment income |
$ |
43,977 |
|
|
$ |
32,252 |
|
|
$ |
55,158 |
|
|
$ |
74,113 |
|
Net
realized and unrealized gains |
6,347 |
|
|
9,680 |
|
|
20,134 |
|
|
27,869 |
|
Net
impairment losses recognized in earnings |
(9,841 |
) |
|
(424 |
) |
|
(10,464 |
) |
|
(1,073 |
) |
Net
increase in unrealized gains included in other comprehensive
income, before deferred tax offsets |
58,837 |
|
|
(66,979 |
) |
|
116,595 |
|
|
(42,490 |
) |
Total
investment income |
$ |
99,320 |
|
|
$ |
(25,471 |
) |
|
$ |
181,423 |
|
|
$ |
58,419 |
|
|
|
|
|
|
|
|
|
Average
invested assets and cash at fair value [a] |
8,746,617 |
|
|
6,517,682 |
|
|
8,779,219 |
|
|
6,581,596 |
|
|
|
|
|
|
|
|
|
Total
investment return |
1.14 |
% |
|
(0.39 |
)% |
|
2.07 |
% |
|
0.89 |
% |
[a] Average invested assets
and cash at fair value includes total trading, available for sale
and other investments, cash and cash equivalents, net receivable on
sales of investments and net payable on purchase of
investments.
# # #
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Endurance Specialty Holdings Ltd via
Globenewswire
HUG#2032400
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