PEMBROKE, Bermuda - November 4, 2016 -
Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net
income available to common shareholders of $130.1 million and $1.92
per diluted common share for the third quarter of 2016 versus net
income of $43.6 million and $0.73 per diluted common share for the
third quarter of 2015.
For the nine months ended September 30, 2016,
Endurance reported net income available to common shareholders of
$313.1 million and $4.64 per diluted common share versus net income
of $219.9 million and $4.39 per diluted common share for the nine
months ended September 30, 2015. Book value per diluted common
share was $70.00 at September 30, 2016, up 6.9% from December
31, 2015.
Operating Highlights
Operating highlights for the quarter ended
September 30, 2016 were as follows:
-
Gross premiums written of $760.7 million, an
increase of 18.4% compared to the same period in 2015.
-
Net premiums written of $349.0 million, an
increase of 3.7% compared to the same period in 2015.
-
Combined ratio of 87.3% compared to 87.9% for
the same period in 2015.
-
Net loss ratio of 54.3% compared to 47.4% for
the same period in 2015. The net loss ratio for the current quarter
was impacted by favorable prior year loss reserve development of
$54.3 million or 8.9 percentage points compared to $67.3 million or
12.1 percentage points for the third quarter of 2015.
-
Net investment income of $62.2 million, an
increase of $45.7 million from the same period in 2015.
-
Net foreign exchange gains included in net
income were $18.6 million, which were largely offset by foreign
currency translation adjustments included in accumulated other
comprehensive income (loss).
-
Net income available to common shareholders of
$130.1 million and $1.92 per diluted common share versus net income
of $43.6 million and $0.73 per diluted common share for the third
quarter of 2015. Operating income of $102.8 million and $1.52 per
diluted common share, an increase of 116.0% and 90.0%,
respectively, compared to the same period in 2015.
-
Net income return on average common equity for
the quarter of 2.8% or 11.1% on an annualized basis while operating
income return on average common equity for the quarter was 2.2% or
8.8% on an annualized basis.
Operating highlights for the nine months ended
September 30, 2016 were as follows:
-
Gross premiums written of $3,509.3 million, an
increase of 25.1% compared to the same period in 2015.
-
Net premiums written of $2,005.6 million, an
increase of 20.8% compared to the same period in 2015.
-
Combined ratio of 86.1% compared to 85.6% for
the same period in 2015.
-
An overall net negative financial impact from
catastrophe losses in 2016 of $67.6 million, consisting of net loss
expenses of $85.0 million partially offset by $10.3 million in net
reinstatement premiums and $7.1 million of amounts attributable to
non-controlling interests.
-
Net loss ratio of 53.9% compared to 48.1% for
the same period in 2015, which was impacted by 4.5 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 $174.0 million or 9.9 percentage points
compared to $183.3 million or 13.0 percentage points for the same
period in 2015.
-
Net investment income of $117.4 million, an
increase of $26.7 million over the same period in 2015.
-
Net foreign exchange gains included in net
income were $63.1 million, which were offset by foreign currency
translation adjustments included in accumulated other comprehensive
income (loss).
-
Net income available to common shareholders of
$313.1 million and $4.64 per diluted common share versus net income
of $219.9 million and $4.39 per diluted common share for the nine
months ended September 30, 2015. Operating income of $242.0
million and $3.59 per diluted common share, an increase of 10.8%
and a decrease per share of 17.7% compared to the same period in
2015 due to the weighted average impact of common shares issued
related to Endurance's acquisition of Montpelier.
Insurance Segment
Operating highlights for Endurance's Insurance
segment for the quarter ended September 30, 2016:
-
Gross premiums written of $568.3 million, an
increase of $119.7 million or 26.7% from the third 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 42.5% 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 3.0% compared to a year ago primarily as a result of lower
commodity prices.
-
Net premiums written of $202.7 million, an
increase of $27.8 million or 15.9% from the third quarter of
2015.
-
Non-agriculture lines of business increased 5.7%
due to strong growth in gross premiums written partially offset by
increased cessions through whole account quota shares as well as
individual cessions by line of business.
-
The agriculture line of business increased $19.4
million or 65.6% due to the timing of third party reinsurance
contract placements.
-
Combined ratio of 104.6% compared to 83.6% for
the same period in 2015.
-
The net loss ratio increased 14.8 percentage
points to 74.4% compared to 59.6% for the same period in 2015. The
current accident year net loss ratio of 77.9% increased 8.7
percentage points due to increased attritional and large losses,
primarily within the property, marine/energy and aviation line of
business. Five large industry losses estimated at $2.0 billion in
this line of business resulted in net losses of $16.4 million or
6.0 percentage points in the current period. The current
period's net loss ratio included favorable prior year loss reserve
development of $9.6 millionor 3.5 percentage points.
-
The general and administrative expense ratio
increased 1.3 percentage points, reflecting an increase of the
Company's expense base as a result of added underwriting teams
partially offset by a greater amount of ceding commissions
received.
-
The acquisition expense ratio increased 4.9
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 nine months ended September 30, 2016:
-
Gross premiums written of $1,997.1 million, an
increase of $343.5 million or 20.8% over the same period in
2015.
-
Net premiums written of $813.3 million, an
increase of 21.5% over the same period in 2015.
-
Combined ratio of 95.6% compared to 88.7% for
the same period in 2015. The combined ratio was impacted by higher
net loss and acquisition expense ratios, partially offset by a
lower general and administrative expense ratio. The current
period's net loss ratio included $57.0 millionor 7.6 percentage
points of favorable prior year loss reserve development and $3.7
million or 0.5 percentage points of catastrophe losses, net of
reinsurance, from 2016 events.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance
segment for the quarter ended September 30, 2016:
-
Gross premiums written of $192.4 million, a
decrease of $1.6 million or 0.8% from the third quarter of
2015.
-
The catastrophe line of business increased $10.4
million due to the targeted renewal of acquired Montpelier
business.
-
The specialty line of business increased $5.2
million largely due to growth in marine, agriculture and aviation,
as global underwriting teams added over the past three years
continue to identify attractive new opportunities.
-
The property line of business decreased $11.4
million, predominantly due to targeted non-renewals and reductions
of signed lines, partially offset by new business and select
renewal of business acquired from Montpelier.
-
The casualty line of business decreased $7.4
million, predominantly driven by a timing difference on its only
two multi-year deals written in the third quarter of 2015,
partially offset by new business written.
-
Net premiums written of $146.3 million, a
decrease of $15.5 million or 9.6% from the third quarter of 2015.
The decrease in net premiums written was driven by a decline in
gross premiums as well as increased third party retrocessional
protection purchased.
-
Combined ratio of 69.7% compared to 68.0% for
the same period in 2015.
-
The current period's net loss ratio of 38.1%
improved 0.4 percentage points compared to 2015. The decrease in
the current quarter accident year net loss ratio of 1.1 percentage
points was predominantly due to improvements within the casualty,
property and specialty lines of business. The current
period's net loss ratio included favorable prior year loss reserve
development of $44.6 million or 13.2 percentage points.
-
The 3.1 percentage point increase in the current
quarter's acquisition expense ratio was largely due to the earning
of premiums acquired from Montpelier that did not have related
acquisition costs in the third quarter of 2015 and a higher
percentage of premiums earned from the casualty and professional
lines in the current quarter which have higher associated
acquisition costs.
-
The general and administrative expense ratio
declined 1.0 percentage point in the third quarter of 2016,
primarily as a result of leveraging higher earned premiums with a
declining expense base that benefited from increased ceding
commissions received.
Operating highlights for Endurance's Reinsurance
segment for the nine months ended September 30, 2016:
-
Gross premiums written of $1,512.2 million, an
increase of $360.6 million or 31.3% over the same period in 2015
largely due to the targeted renewals of acquired Montpelier
business.
-
Net premiums written of $1,192.3 million, an
increase of 20.3% over the same period in 2015.
-
Combined ratio of 75.7%, compared to 71.5% 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 $117.0 millionor 11.5 percentage points of
favorable prior year loss reserve development and 7.7 percentage
points of net catastrophe losses from 2016 events, which amounted
to $81.3 million before reinstatement premiums of $10.3
million.
Investments
Endurance's net investment income for the quarter
and nine months ended September 30, 2016 was $62.2 million and
$117.4 million, an increase of $45.7 million and $26.7 million,
respectively, compared to the same periods in 2015. The total
investment return of Endurance's investment portfolio was 1.11% and
3.14% for the quarter and nine months ended September 30,
2016, respectively, compared to (0.11)% and 0.65% for the quarter
and nine months ended September 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 nine months ended
September 30, 2016 compared to the same periods in 2015 due to
an increase in invested assets. During the quarter and nine months
ended September 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 $22.8 million
and losses of $0.2 million, as compared to gains of $17.7 million
and $1.8 million in the same periods in 2015. The ending book yield
on Endurance's fixed maturity investments at September 30,
2016 was 2.27%, up from 2.03% at September 30, 2015.
At September 30, 2016, Endurance's fixed
maturity and short term investments, which comprises 83.9% of
Endurance's investments, had an average credit quality of AA- and a
duration of 2.66 years. Endurance's available for sale portfolio
was in a net unrealized gain position of $125.1 million at
September 30, 2016, an increase of $137.7 million from
December 31, 2015. Endurance recorded net realized and
unrealized investment gains, net of impairments, of $13.2 million
and $22.9 million during the quarter and nine months ended
September 30, 2016, compared to gains of $5.0 million and
$31.8 million during the quarter and nine months ended
September 30, 2015.
Endurance ended the third quarter of 2016 with
cash and invested assets of $8.8 billion, which represents a 1.3%
decrease from December 31, 2015. Net operating cash inflow was
$59.4 million for the nine months ended September 30, 2016
versus an outflow of $74.0 million for the same period in 2015.
Capitalization and Shareholders'
Equity
At September 30, 2016, Endurance's
shareholders' equity was $5.22 billion or $70.00 per diluted common
share versus $5.12 billion or $65.48 per diluted common share at
December 31, 2015. For the quarter and nine months ended
September 30, 2016, Endurance declared and paid common
dividends of $0.38 and $1.14 per share, respectively.
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 and our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2016.
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)
|
|
|
September 30, |
|
December 31, |
|
|
|
2016 |
|
2015 |
Assets |
|
|
|
Cash and cash
equivalents |
$ |
1,323,110 |
|
|
$ |
1,177,750 |
|
Fixed maturity
investments, trading, at fair value |
2,393,352 |
|
|
1,587,160 |
|
Fixed maturity
investments, available for sale, at fair value |
3,596,720 |
|
|
4,359,019 |
|
Short-term
investments, trading, at fair value |
226,454 |
|
|
394,111 |
|
Short-term
investments, available for sale, at fair value |
34,934 |
|
|
25,685 |
|
Equity securities,
trading, at fair value |
23,120 |
|
|
15,229 |
|
Equity securities,
available for sale, at fair value |
496,402 |
|
|
513,585 |
|
Other
investments |
679,007 |
|
|
872,617 |
|
Securities pledged
under repurchase agreements |
124,303 |
|
|
- |
|
Premiums receivable,
net |
2,264,651 |
|
|
1,376,328 |
|
Insurance and
reinsurance balances receivable |
127,849 |
|
|
102,403 |
|
Deferred acquisition
costs |
311,894 |
|
|
255,501 |
|
Prepaid reinsurance
premiums |
825,913 |
|
|
498,574 |
|
Reinsurance
recoverable on unpaid losses |
1,124,976 |
|
|
907,944 |
|
Reinsurance
recoverable on paid losses |
311,324 |
|
|
288,026 |
|
Accrued investment
income |
30,073 |
|
|
30,213 |
|
Goodwill and
intangible assets |
489,522 |
|
|
553,960 |
|
Deferred tax
asset |
57,050 |
|
|
64,164 |
|
Net receivable on
sales of investments |
106,305 |
|
|
31,873 |
|
Other assets |
283,474 |
|
|
187,383 |
|
Total Assets |
$ |
14,830,433 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
Reserve for losses
and loss expenses |
$ |
4,807,868 |
|
|
$ |
4,510,415 |
|
Reserve for unearned
premiums |
2,348,566 |
|
|
1,789,148 |
|
Reinsurance balances
payable |
1,018,618 |
|
|
661,213 |
|
Payable under
repurchase agreements |
120,997 |
|
|
- |
|
Debt |
705,179 |
|
|
717,650 |
|
Net payable on
purchases of investments |
203,592 |
|
|
63,442 |
|
Deferred tax
liability |
12,815 |
|
|
17,315 |
|
Other
liabilities |
389,561 |
|
|
358,270 |
|
Total
Liabilities |
9,607,196 |
|
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 |
|
|
|
|
67,594,088 issued and
outstanding (2015 - 66,797,991) |
67,594 |
|
|
66,798 |
|
Additional paid-in
capital |
1,953,507 |
|
|
2,145,836 |
|
Accumulated other
comprehensive income (loss) |
27,993 |
|
|
(46,634 |
) |
Retained
earnings |
2,917,141 |
|
|
2,681,053 |
|
Total Shareholders'
Equity Available to the Company |
4,966,244 |
|
4,856,262 |
Non-controlling
interests |
256,993 |
|
|
267,810 |
|
Total Shareholders'
Equity |
5,223,237 |
|
|
5,124,072 |
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Equity |
$ |
14,830,433 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Book
Value per Common Share |
|
|
|
Basic common shares
outstanding |
66,185,927 |
|
|
65,440,712 |
|
Dilutive common
shares outstanding |
67,655,803 |
|
|
67,136,986 |
|
Basic book value per
common share [a] |
$ |
71.56 |
|
|
$ |
67.18 |
|
Diluted book value
per common share [a], [b] |
$ |
70.00 |
|
|
$ |
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
September 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 |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Gross premiums
written |
$ |
760,687 |
|
|
$ |
642,597 |
|
|
$ |
3,509,294 |
|
|
$ |
2,805,213 |
|
|
|
|
|
|
|
|
|
|
Net premiums
written |
$ |
348,986 |
|
|
$ |
336,690 |
|
|
$ |
2,005,596 |
|
|
$ |
1,660,727 |
|
Change in unearned
premiums |
261,170 |
|
|
220,313 |
|
|
(242,641 |
) |
|
(255,730 |
) |
|
|
|
|
|
|
|
|
|
Net premiums earned |
610,156 |
|
557,003 |
|
1,762,955 |
|
|
1,404,997 |
|
Other underwriting
(loss) income |
(466 |
) |
|
227 |
|
|
(1,980 |
) |
|
4,022 |
|
Net investment
income |
62,236 |
|
|
16,533 |
|
|
117,394 |
|
|
90,646 |
|
Net realized and
unrealized gains |
13,405 |
|
|
5,029 |
|
|
33,539 |
|
|
32,898 |
|
Net impairment losses
recognized in earnings |
(183 |
) |
|
(38 |
) |
|
(10,647 |
) |
|
(1,111 |
) |
Total revenues |
685,148 |
|
578,754 |
|
1,901,261 |
|
|
1,531,452 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Net losses and loss
expenses |
331,462 |
|
|
263,993 |
|
|
950,902 |
|
|
675,051 |
|
Acquisition
expenses |
121,391 |
|
|
90,457 |
|
|
337,194 |
|
|
257,521 |
|
General and
administrative expenses |
67,738 |
|
|
60,793 |
|
|
195,042 |
|
|
170,648 |
|
Corporate expenses |
11,952 |
|
|
74,308 |
|
|
35,553 |
|
|
99,210 |
|
Amortization of
intangibles |
21,154 |
|
|
11,318 |
|
|
63,471 |
|
|
14,496 |
|
Net foreign exchange
(gains) losses |
(18,576 |
) |
|
8,621 |
|
|
(63,056 |
) |
|
29,154 |
|
Interest expense |
10,826 |
|
|
12,324 |
|
|
33,053 |
|
|
30,445 |
|
Total expenses |
545,947 |
|
521,814 |
|
1,552,159 |
|
|
1,276,525 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
139,201 |
|
56,940 |
|
349,102 |
|
|
254,927 |
|
Income tax benefit
(expense) |
199 |
|
|
(2,410 |
) |
|
2,570 |
|
|
(7,712 |
) |
Net
income |
139,400 |
|
54,530 |
|
351,672 |
|
|
247,215 |
|
|
|
|
|
|
|
|
|
|
Net income attributable
to non-controlling interests |
(5,679 |
) |
|
(2,707 |
) |
|
(18,456 |
) |
|
(2,707 |
) |
|
|
|
|
|
|
|
|
|
Net
income available to the Company |
133,721 |
|
|
51,823 |
|
|
333,216 |
|
|
244,508 |
|
|
|
|
|
|
|
|
|
|
Preferred dividends |
(3,651 |
) |
|
(8,188 |
) |
|
(20,147 |
) |
|
(24,564 |
) |
|
|
|
|
|
|
|
|
|
Net
income available to common and participating common
shareholders |
$ |
130,070 |
|
|
$ |
43,635 |
|
|
$ |
313,069 |
|
|
$ |
219,944 |
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
Basic earnings per
common share |
$ |
1.93 |
|
|
$ |
0.73 |
|
|
$ |
4.65 |
|
|
$ |
4.41 |
|
Diluted earnings per
common share |
$ |
1.92 |
|
|
$ |
0.73 |
|
|
$ |
4.64 |
|
|
$ |
4.39 |
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Three Months Ended September 30,
2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross premiums written |
|
$ |
568,277 |
|
|
$ |
192,410 |
|
|
$ |
760,687 |
|
|
|
Ceded premiums written |
|
(365,573 |
) |
|
(46,128 |
) |
|
(411,701 |
) |
|
|
Net premiums written |
|
202,704 |
|
|
146,282 |
|
|
348,986 |
|
|
|
Net premiums earned |
|
272,603 |
|
|
337,553 |
|
|
610,156 |
|
|
|
Other underwriting loss |
|
- |
|
|
(466 |
) |
|
(466 |
) |
|
|
Total underwriting revenues |
|
272,603 |
|
|
337,087 |
|
|
609,690 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net losses and loss expenses |
|
202,717 |
|
|
128,745 |
|
|
331,462 |
|
|
|
Acquisition expenses |
|
41,773 |
|
|
79,618 |
|
|
121,391 |
|
|
|
General and administrative
expenses |
|
40,658 |
|
|
27,080 |
|
|
67,738 |
|
|
|
|
|
285,148 |
|
|
235,443 |
|
|
520,591 |
|
|
|
Underwriting (loss) income |
|
$ |
(12,545 |
) |
|
$ |
101,644 |
|
|
89,099 |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
62,236 |
|
|
|
Corporate expenses |
|
|
|
|
|
(11,952 |
) |
|
|
Interest expense |
|
|
|
|
|
(10,826 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(21,154 |
) |
|
|
Net foreign exchange gains |
|
|
|
|
|
18,576 |
|
|
|
Net realized and unrealized
gains |
|
|
|
|
|
13,405 |
|
|
|
Net impairment losses recognized in
earnings |
|
|
|
|
|
(183 |
) |
|
|
Income before income taxes |
|
|
|
|
|
$ |
139,201 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
74.4 |
% |
|
38.1 |
% |
|
54.3 |
% |
|
|
Acquisition expense ratio |
|
15.3 |
% |
|
23.6 |
% |
|
19.9 |
% |
|
|
General and administrative expense
ratio |
|
14.9 |
% |
|
8.0 |
% |
|
13.1 |
% |
[a] |
|
Combined ratio |
|
104.6 |
% |
|
69.7 |
% |
|
87.3 |
% |
|
[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 September 30,
2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross premiums written |
|
$ |
448,563 |
|
|
$ |
194,034 |
|
|
$ |
642,597 |
|
|
|
Ceded premiums written |
|
(273,626 |
) |
|
(32,281 |
) |
|
(305,907 |
) |
|
|
Net premiums written |
|
174,937 |
|
|
161,753 |
|
|
336,690 |
|
|
|
Net premiums earned |
|
234,143 |
|
|
322,860 |
|
|
557,003 |
|
|
|
Other underwriting income |
|
- |
|
|
227 |
|
|
227 |
|
|
|
Total underwriting revenues |
|
234,143 |
|
|
323,087 |
|
|
557,230 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net losses and loss expenses |
|
139,603 |
|
|
124,390 |
|
|
263,993 |
|
|
|
Acquisition expenses |
|
24,375 |
|
|
66,082 |
|
|
90,457 |
|
|
|
General and administrative
expenses |
|
31,880 |
|
|
28,913 |
|
|
60,793 |
|
|
|
|
|
195,858 |
|
|
219,385 |
|
|
415,243 |
|
|
|
Underwriting income |
|
$ |
38,285 |
|
|
$ |
103,702 |
|
|
141,987 |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
16,533 |
|
|
|
Corporate expenses |
|
|
|
|
|
(74,308 |
) |
|
|
Interest expense |
|
|
|
|
|
(12,324 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(11,318 |
) |
|
|
Net foreign exchange losses |
|
|
|
|
|
(8,621 |
) |
|
|
Net realized and unrealized
gains |
|
|
|
|
|
5,029 |
|
|
|
Net impairment losses recognized
in earnings |
|
|
|
|
|
(38 |
) |
|
|
Income before income taxes |
|
|
|
|
|
$ |
56,940 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
59.6 |
% |
|
38.5 |
% |
|
47.4 |
% |
|
|
Acquisition expense ratio |
|
10.4 |
% |
|
20.5 |
% |
|
16.2 |
% |
|
|
General and administrative
expense ratio |
|
13.6 |
% |
|
9.0 |
% |
|
24.3 |
% |
[a] |
|
Combined ratio |
|
83.6 |
% |
|
68.0 |
% |
|
87.9 |
% |
|
[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)
|
|
|
Nine Months Ended September 30,
2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross premiums written |
|
$ |
1,997,100 |
|
|
$ |
1,512,194 |
|
|
$ |
3,509,294 |
|
|
|
Ceded premiums written |
|
(1,183,850 |
) |
|
(319,848 |
) |
|
(1,503,698 |
) |
|
|
Net premiums written |
|
813,250 |
|
|
1,192,346 |
|
|
2,005,596 |
|
|
|
Net premiums earned |
|
745,956 |
|
|
1,016,999 |
|
|
1,762,955 |
|
|
|
Other underwriting loss |
|
- |
|
|
(1,980 |
) |
|
(1,980 |
) |
|
|
Total underwriting revenues |
|
745,956 |
|
|
1,015,019 |
|
|
1,760,975 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net losses and loss expenses |
|
499,104 |
|
|
451,798 |
|
|
950,902 |
|
|
|
Acquisition expenses |
|
104,999 |
|
|
232,195 |
|
|
337,194 |
|
|
|
General and administrative
expenses |
|
108,912 |
|
|
86,130 |
|
|
195,042 |
|
|
|
|
|
713,015 |
|
|
770,123 |
|
|
1,483,138 |
|
|
|
Underwriting income |
|
$ |
32,941 |
|
|
$ |
244,896 |
|
|
277,837 |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
117,394 |
|
|
|
Corporate expenses |
|
|
|
|
|
(35,553 |
) |
|
|
Interest expense |
|
|
|
|
|
(33,053 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(63,471 |
) |
|
|
Net foreign exchange gains |
|
|
|
|
|
63,056 |
|
|
|
Net realized and unrealized
gains |
|
|
|
|
|
33,539 |
|
|
|
Net impairment losses recognized in
earnings |
|
|
|
|
|
(10,647 |
) |
|
|
Income before income taxes |
|
|
|
|
|
$ |
349,102 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
66.9 |
% |
|
44.4 |
% |
|
53.9 |
% |
|
|
Acquisition expense ratio |
|
14.1 |
% |
|
22.8 |
% |
|
19.1 |
% |
|
|
General and administrative expense
ratio |
|
14.6 |
% |
|
8.5 |
% |
|
13.1 |
% |
[a] |
|
Combined ratio |
|
95.6 |
% |
|
75.7 |
% |
|
86.1 |
% |
|
[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)
|
|
|
Nine Months Ended September 30,
2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross premiums written |
|
$ |
1,653,647 |
|
|
$ |
1,151,566 |
|
|
$ |
2,805,213 |
|
|
|
Ceded premiums written |
|
(984,372 |
) |
|
(160,114 |
) |
|
(1,144,486 |
) |
|
|
Net premiums written |
|
669,275 |
|
|
991,452 |
|
|
1,660,727 |
|
|
|
Net premiums earned |
|
571,467 |
|
|
833,530 |
|
|
1,404,997 |
|
|
|
Other underwriting income |
|
- |
|
|
4,022 |
|
|
4,022 |
|
|
|
Total underwriting revenues |
|
571,467 |
|
|
837,552 |
|
|
1,409,019 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net losses and loss expenses |
|
359,598 |
|
|
315,453 |
|
|
675,051 |
|
|
|
Acquisition expenses |
|
57,960 |
|
|
199,561 |
|
|
257,521 |
|
|
|
General and administrative
expenses |
|
89,289 |
|
|
81,359 |
|
|
170,648 |
|
|
|
|
|
506,847 |
|
|
596,373 |
|
|
1,103,220 |
|
|
|
Underwriting income |
|
$ |
64,620 |
|
|
$ |
241,179 |
|
|
305,799 |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
90,646 |
|
|
|
Corporate expenses |
|
|
|
|
|
(99,210 |
) |
|
|
Interest expense |
|
|
|
|
|
(30,445 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(14,496 |
) |
|
|
Net foreign exchange losses |
|
|
|
|
|
(29,154 |
) |
|
|
Net realized and unrealized
gains |
|
|
|
|
|
32,898 |
|
|
|
Net impairment losses recognized
in earnings |
|
|
|
|
|
(1,111 |
) |
|
|
Income before income taxes |
|
|
|
|
|
$ |
254,927 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
63.0 |
% |
|
37.8 |
% |
|
48.1 |
% |
|
|
Acquisition expense ratio |
|
10.1 |
% |
|
23.9 |
% |
|
18.3 |
% |
|
|
General and administrative
expense ratio |
|
15.6 |
% |
|
9.8 |
% |
|
19.2 |
% |
[a] |
|
Combined ratio |
|
88.7 |
% |
|
71.5 |
% |
|
85.6 |
% |
|
[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 September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
74.4 |
% |
|
59.6 |
% |
|
38.1 |
% |
|
38.5 |
% |
|
54.3 |
% |
|
47.4 |
% |
|
|
Acquisition expense
ratio |
|
15.3 |
% |
|
10.4 |
% |
|
23.6 |
% |
|
20.5 |
% |
|
19.9 |
% |
|
16.2 |
% |
|
|
General and
administrative expense ratio |
|
14.9 |
% |
|
13.6 |
% |
|
8.0 |
% |
|
9.0 |
% |
|
13.1 |
% |
[a] |
24.3 |
% |
[a] |
|
Combined ratio [b] |
|
104.6 |
% |
|
83.6 |
% |
|
69.7 |
% |
|
68.0 |
% |
|
87.3 |
% |
|
87.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
3.5 |
% |
|
9.6 |
% |
|
13.2 |
% |
|
13.9 |
% |
|
8.9 |
% |
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
of Prior Year Net Loss Reserve Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
77.9 |
% |
|
69.2 |
% |
|
51.3 |
% |
|
52.4 |
% |
|
63.2 |
% |
|
59.5 |
% |
|
|
Acquisition expense
ratio |
|
15.3 |
% |
|
10.4 |
% |
|
23.6 |
% |
|
20.5 |
% |
|
19.9 |
% |
|
16.2 |
% |
|
|
General and
administrative expense ratio |
|
14.9 |
% |
|
13.6 |
% |
|
8.0 |
% |
|
9.0 |
% |
|
13.1 |
% |
[a] |
24.3 |
% |
[a] |
|
Combined ratio [b] |
|
108.1 |
% |
|
93.2 |
% |
|
82.9 |
% |
|
81.9 |
% |
|
96.2 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
66.9 |
% |
|
63.0 |
% |
|
44.4 |
% |
|
37.8 |
% |
|
53.9 |
% |
|
48.1 |
% |
|
|
Acquisition expense
ratio |
|
14.1 |
% |
|
10.1 |
% |
|
22.8 |
% |
|
23.9 |
% |
|
19.1 |
% |
|
18.3 |
% |
|
|
General and
administrative expense ratio |
|
14.6 |
% |
|
15.6 |
% |
|
8.5 |
% |
|
9.8 |
% |
|
13.1 |
% |
[a] |
19.2 |
% |
[a] |
|
Combined ratio [b] |
|
95.6 |
% |
|
88.7 |
% |
|
75.7 |
% |
|
71.5 |
% |
|
86.1 |
% |
|
85.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
7.6 |
% |
|
10.8 |
% |
|
11.5 |
% |
|
14.6 |
% |
|
9.9 |
% |
|
13.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
of Prior Year Net Loss Reserve Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
74.5 |
% |
|
73.8 |
% |
|
55.9 |
% |
|
52.4 |
% |
|
63.8 |
% |
|
61.1 |
% |
|
|
Acquisition expense
ratio |
|
14.1 |
% |
|
10.1 |
% |
|
22.8 |
% |
|
23.9 |
% |
|
19.1 |
% |
|
18.3 |
% |
|
|
General and
administrative expense ratio |
|
14.6 |
% |
|
15.6 |
% |
|
8.5 |
% |
|
9.8 |
% |
|
13.1 |
% |
[a] |
19.2 |
% |
[a] |
|
Combined ratio [b] |
|
103.2 |
% |
|
99.5 |
% |
|
87.2 |
% |
|
86.1 |
% |
|
96.0 |
% |
|
98.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[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 September 30, 2016
and 2015:
|
|
Three Months Ended |
|
Three Months Ended |
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
151,483 |
|
|
$ |
49,062 |
|
|
$ |
156,145 |
|
|
$ |
29,634 |
|
|
Casualty and other
specialty |
168,644 |
|
|
68,211 |
|
|
128,509 |
|
|
64,490 |
|
|
Professional
lines |
97,432 |
|
|
30,328 |
|
|
80,069 |
|
|
37,479 |
|
|
Property,
marine/energy and
aviation |
150,718 |
|
|
55,103 |
|
|
83,840 |
|
|
43,334 |
|
|
Subtotal Insurance |
$ |
568,277 |
|
|
$ |
202,704 |
|
|
$ |
448,563 |
|
|
$ |
174,937 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
51,040 |
|
|
$ |
32,696 |
|
|
$ |
40,660 |
|
|
$ |
14,814 |
|
|
Property |
41,975 |
|
|
40,882 |
|
|
53,423 |
|
|
52,887 |
|
|
Casualty |
35,438 |
|
|
35,772 |
|
|
42,802 |
|
|
42,802 |
|
|
Professional
lines |
33,289 |
|
|
31,883 |
|
|
31,705 |
|
|
31,705 |
|
|
Specialty |
30,668 |
|
|
5,049 |
|
|
25,444 |
|
|
19,545 |
|
|
Subtotal Reinsurance |
$ |
192,410 |
|
|
$ |
146,282 |
|
|
$ |
194,034 |
|
|
$ |
161,753 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
760,687 |
|
|
$ |
348,986 |
|
|
$ |
642,597 |
|
|
$ |
336,690 |
|
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 nine months ended September 30,
2016 and 2015:
|
|
Nine Months Ended |
|
Nine Months Ended |
|
|
September 30, 2016 |
|
September 30, 2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
714,621 |
|
|
$ |
254,727 |
|
|
$ |
785,073 |
|
|
$ |
254,771 |
|
|
Casualty and other
specialty |
484,980 |
|
|
209,673 |
|
|
375,247 |
|
|
174,850 |
|
|
Professional
lines |
297,526 |
|
|
124,866 |
|
|
231,565 |
|
|
105,153 |
|
|
Property, marine and
energy |
499,973 |
|
|
223,984 |
|
|
261,762 |
|
|
134,501 |
|
|
Subtotal Insurance |
$ |
1,997,100 |
|
|
$ |
813,250 |
|
|
$ |
1,653,647 |
|
|
$ |
669,275 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
488,865 |
|
|
$ |
319,245 |
|
|
$ |
304,900 |
|
|
$ |
190,579 |
|
|
Property |
229,087 |
|
|
222,242 |
|
|
209,683 |
|
|
206,454 |
|
|
Casualty |
216,421 |
|
|
215,412 |
|
|
149,032 |
|
|
149,032 |
|
|
Professional
lines |
217,476 |
|
|
215,134 |
|
|
209,803 |
|
|
209,803 |
|
|
Specialty |
360,345 |
|
|
220,313 |
|
|
278,148 |
|
|
235,584 |
|
|
Subtotal Reinsurance |
$ |
1,512,194 |
|
|
$ |
1,192,346 |
|
|
$ |
1,151,566 |
|
|
$ |
991,452 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
3,509,294 |
|
|
$ |
2,005,596 |
|
|
$ |
2,805,213 |
|
|
$ |
1,660,727 |
|
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 nine months ended September 30,
2016 and 2015:
(amounts
expressed in thousands of United States dollars, except share, per
share amounts and ratios) |
Quarter Ended |
|
Nine Months Ended |
September 30, |
|
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net income available
to the Company |
$ |
133,721 |
|
|
$ |
51,823 |
|
|
$ |
333,216 |
|
|
$ |
244,508 |
|
(Less) add
items: |
|
|
|
|
|
|
|
|
Net foreign exchange (gains)
losses |
(18,576 |
) |
|
8,621 |
|
|
(63,056 |
) |
|
29,154 |
|
|
Net realized and unrealized
gains |
(13,405 |
) |
|
(5,029 |
) |
|
(33,539 |
) |
|
(32,898 |
) |
|
Net impairment losses recognized
in earnings |
183 |
|
|
38 |
|
|
10,647 |
|
|
1,111 |
|
|
Income tax expense (benefit) |
4,508 |
|
|
326 |
|
|
14,880 |
|
|
1,010 |
|
Operating income
before preferred dividends |
$ |
106,431 |
|
|
$ |
55,779 |
|
|
$ |
262,148 |
|
|
$ |
242,885 |
|
|
Preferred dividends |
(3,651 |
) |
|
(8,188 |
) |
|
(20,147 |
) |
|
(24,564 |
) |
Operating income
allocated to common and |
|
|
|
|
|
|
|
|
participating common
shareholders |
$ |
102,780 |
|
|
$ |
47,591 |
|
|
$ |
242,001 |
|
|
$ |
218,321 |
|
|
|
|
|
|
|
|
|
|
Operating income
allocated to common |
|
|
|
|
|
|
|
|
shareholders under the two-class
method |
$ |
100,720 |
|
|
$ |
46,227 |
|
|
$ |
236,851 |
|
|
$ |
211,927 |
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares |
66,241,949 |
|
|
58,046,148 |
|
|
65,982,413 |
|
|
48,592,101 |
|
|
|
|
|
|
|
|
|
|
Operating income per
diluted common share [b] |
$ |
1.52 |
|
|
$ |
0.80 |
|
|
$ |
3.59 |
|
|
$ |
4.36 |
|
|
|
|
|
|
|
|
|
|
Average common equity
[a] |
$ |
4,675,441 |
|
|
$ |
3,619,888 |
|
|
$ |
4,568,083 |
|
|
$ |
2,829,445 |
|
|
|
|
|
|
|
|
|
|
Operating return on
average common equity |
2.2 |
% |
|
1.3 |
% |
|
5.3 |
% |
|
7.1 |
% |
|
|
|
|
|
|
|
|
|
Annualized operating
return on average common equity |
8.8 |
% |
|
5.3 |
% |
|
7.1 |
% |
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
Net income available
to the Company |
$ |
133,721 |
|
|
$ |
51,823 |
|
|
$ |
333,216 |
|
|
$ |
244,508 |
|
|
Preferred dividends |
(3,651 |
) |
|
(8,188 |
) |
|
(20,147 |
) |
|
(24,564 |
) |
Net income available
to common and |
|
|
|
|
|
|
|
|
participating common
shareholders |
$ |
130,070 |
|
|
$ |
43,635 |
|
|
$ |
313,069 |
|
|
$ |
219,944 |
|
|
|
|
|
|
|
|
|
|
Net income allocated
to common shareholders |
|
|
|
|
|
|
|
|
under the two-class method |
$ |
127,463 |
|
|
$ |
42,384 |
|
|
$ |
306,407 |
|
|
$ |
213,502 |
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share [b] |
$ |
1.92 |
|
|
$ |
0.73 |
|
|
$ |
4.64 |
|
|
$ |
4.39 |
|
|
|
|
|
|
|
|
|
|
Return on average
common equity, Net income |
2.8 |
% |
|
1.2 |
% |
|
6.9 |
% |
|
7.1 |
% |
|
|
|
|
|
|
|
|
Annualized return on
average common equity, Net income |
11.1 |
% |
|
4.8 |
% |
|
9.1 |
% |
|
9.5 |
% |
[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 September 30, 2016 (December 31,
2015 - $460.0 million; September 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 third quarter and nine months ended September 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
nine months ended September 30, 2016:
(amounts expressed in thousands
of United States dollars, except ratio) |
|
For the three months ended September 30,
2016 |
For the nine months ended September 30,
2016 |
|
|
Catastrophe Impact |
Net loss ratio impact |
Catastrophe Impact |
Net loss ratio impact |
|
|
|
|
|
|
Net losses and loss expenses |
|
$ |
- |
|
|
$ |
85,037 |
|
|
Less: net reinstatement
premiums |
|
- |
|
|
10,333 |
|
|
Net negative financial impact on
net income |
|
- |
|
- |
% |
74,704 |
|
4.5 |
% |
Less: net negative financial
impact attributable to non-controlling interest |
|
- |
|
|
7,126 |
|
|
Net negative financial impact on
net income available to the Company |
|
$ |
- |
|
|
$ |
67,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months
ended September 30, 2016:
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(amounts expressed in thousands
of United States dollars) |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
Net investment income |
$ |
62,236 |
|
|
$ |
16,533 |
|
|
$ |
117,394 |
|
|
$ |
90,646 |
|
Net realized and unrealized
gains |
13,405 |
|
|
5,029 |
|
|
33,539 |
|
|
32,898 |
|
Net impairment losses recognized in
earnings |
(183 |
) |
|
(38 |
) |
|
(10,647 |
) |
|
(1,111 |
) |
Net increase in unrealized gains
included in other comprehensive income, before deferred tax
offsets |
21,136 |
|
|
(29,906 |
) |
|
137,730 |
|
|
(72,396 |
) |
Total investment income |
$ |
96,594 |
|
|
$ |
(8,382 |
) |
|
$ |
278,016 |
|
|
$ |
50,037 |
|
|
|
|
|
|
|
|
|
Average invested assets and cash at
fair value [a] |
8,722,483 |
|
|
7,730,545 |
|
|
8,856,851 |
|
|
7,756,033 |
|
|
|
|
|
|
|
|
|
Total investment return |
1.11 |
% |
|
(0.11 |
)% |
|
3.14 |
% |
|
0.65 |
% |
[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.
# # #
![](http://thomsonreuterscorporategroup.122.2o7.net/b/ss/trcgclientrs420/1/H.22.1--NS/0?pageName=Endurance%20Reports%20Third%20Quarter%202016%20Financial%20Results%20&c1=2054585&c2=D=Referer)
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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
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