PEMBROKE, Bermuda - February 24, 2017 -
Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net
income available to common shareholders of $20.1 million and $0.30
per diluted common share for the fourth quarter of 2016 versus net
income of $91.4 million and $1.36 per diluted common share for the
fourth quarter of 2015.
For the year ended December 31, 2016,
Endurance reported net income available to common shareholders of
$333.2 million and $4.93 per diluted common share versus net income
of $311.3 million and $5.73 per diluted common share for the year
ended December 31, 2015. Book value per diluted share
was $68.66 at December 31, 2016, up 4.9% from
December 31, 2015.
Operating Highlights
Operating highlights for the quarter ended
December 31, 2016 were as follows:
-
Gross premiums written of $692.9 million, an
increase of 34.4% compared to the same period in 2015.
-
Net premiums written of $364.3 million, an
increase of 25.7% compared to the same period in 2015.
-
Combined ratio of 93.7% compared to 76.2% for
the same period in 2015.
-
An overall net negative financial impact from
catastrophe losses related to current quarter events of $59.6
million, consisting of net loss expenses of $74.7 million partially
offset by $9.5 million in net reinstatement premiums and $5.6
million of amounts attributable to non-controlling interests.
-
Net loss ratio of 61.7% compared to 42.2% for
the same period in 2015, which was impacted by 11.7 percentage
points of catastrophe losses from current quarter events. The net
loss ratio for the current quarter was impacted by favorable prior
year loss reserve development of $47.6 million or 7.9 percentage
points compared to $60.1 million or 10.5 percentage points for the
fourth quarter of 2015.
-
Net investment income of $59.2 million, an
increase of $36.0 million from the same period in 2015.
-
Net foreign exchange gains included in net
income of $11.6 million, which were largely offset by foreign
currency translation adjustments included in accumulated other
comprehensive loss.
-
Adjusted operating income of $55.8 million
and $0.82 per diluted common share, a decrease of 51.0% and 51.5%,
respectively, compared to the same period in 2015.
-
Net income return on average common equity for
the quarter of 0.4% or 1.7% on an annualized basis while adjusted
operating return on average common equity for the quarter was 1.2%
or 4.8% on an annualized basis.
Operating highlights for the year ended
December 31, 2016:
-
Gross premiums written of $4,202.2 million, an
increase of 26.5% compared to the same period in 2015.
-
Net premiums written of $2,369.9 million, an
increase of 21.5% compared to the same period in 2015.
-
Combined ratio of 88.1% compared to 82.9% for
the same period in 2015.
-
An overall net negative financial impact from
catastrophe losses in 2016 of $140.4 million, consisting of net
loss expenses of $174.9 million partially offset by $21.5 million
in net reinstatement premiums and $13.0 million of amounts
attributable to non-controlling interests.
-
Net loss ratio of 55.9% compared to 46.4% for
the same period in 2015, which was impacted by 9.8 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 $221.6 million or 9.4 percentage points
compared to $243.5 million or 12.3 percentage points for the same
period in 2015.
-
Net investment income of $176.6 million, an
increase of $62.8 million over the same period in 2015.
-
Net foreign exchange gains included in net
income of $74.7 million, which were offset by foreign currency
translation adjustments included in accumulated other comprehensive
loss.
-
Adjusted operating income of $297.8 million and
$4.41 per diluted common share, a decrease of 10.3% and a decrease
per share of 27.8% compared to the same period in 2015 due to the
weighted average impact of common shares issued related to
Endurance's acquisition of Montpelier.
-
Net income return on average common equity for
the year of 7.2%, while adjusted operating return on average common
equity for the year was 6.5%.
Insurance Segment
Operating highlights for Endurance's Insurance
segment for the quarter ended December 31, 2016:
-
Gross premiums written of $573.4 million, an
increase of $141.1 million or 32.7% from the fourth 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 39.9% from a year
ago driven by new business generated from added underwriting teams,
as well as the renewal of business written in the Company's Lloyd's
syndicate.
-
The agriculture insurance line of business
declined 16.5% primarily due to reduced commodity prices and modest
policy count reductions resulting from re-underwriting of the
crop/hail portfolio.
-
Net premiums written of $243.0 million, an
increase of $31.9 million or 15.1% from the fourth quarter of
2015.
-
Non-agriculture lines of business increased
12.5% 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 54.2%
due to timing of reinsurance purchases partially offset by reduced
commodity prices.
-
Combined ratio of 99.3% compared to 84.7% for
the same period in 2015.
-
The net loss ratio increased 14.3 percentage
points to 70.2% compared to 55.9% for the same period in 2015. The
accident year net loss ratio of 77.8% increased 13.9 percentage
points predominantly driven by higher levels of current quarter
catastrophe activity primarily related to Hurricane Matthew and the
New Zealand earthquake, which together impacted the loss ratio by
8.6 percentage points, and higher attritional losses incurred
within the property, marine/energy and aviation lines of
business. Partially offsetting this increase was a lower
accident year loss ratio within the agriculture line of business
due to favorable crop conditions. The current period's net loss
ratio included favorable prior year loss reserve development of
$20.1 million or 7.6 percentage points.
-
The general and administrative expense ratio
decreased 7.9 percentage points, reflecting increased ceding
commission offsets from a larger earned premium base in the current
period and reduced incentive compensation expenses reflecting lower
profitability, partially offset by increases in personnel expenses
attributable to additional teams hired in the year.
-
The acquisition expense ratio increased 8.2
percentage points in the current quarter as lines of business that
incur higher acquisition costs accounted for a higher percentage of
earned premiums compared to a year ago and the absence in the
fourth quarter of 2016 of the earning of premiums acquired from
Montpelier that did not have related acquisition costs in the
fourth quarter of 2015.
Operating highlights for Endurance's Insurance
segment for the year ended December 31, 2016:
-
Gross premiums written of $2,570.5 million, an
increase of $484.6 million or 23.2% over the same period in
2015.
-
Net premiums written of $1,056.3 million, an
increase of 20.0% over the same period in 2015.
-
Combined ratio of 96.6% compared to 87.5% 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 $77.1 million or 7.6 percentage
points of favorable prior year loss reserve development and $31.2
million or 3.1 percentage points of catastrophe losses, net of
reinsurance, from 2016 events.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance
segment for the quarter ended December 31, 2016:
-
Gross premiums written of $119.5 million, an
increase of $36.1 million or 43.3% from the fourth quarter of
2015.
-
The catastrophe line of business increased by
$10.4 million due to reinstatement premiums on current quarter
events and successful renewals of the combined Endurance and
Montpelier portfolios, partially offset by targeted non-renewals
and line size reductions in response to the current competitive
market.
-
The specialty line of business increased $2.8
million largely due to lower negative premium adjustments and the
expansion of new and renewal business for the aviation and trade
credit and surety groups of the specialty line of business,
partially offset by non-renewals in other lines and the timing of
renewals on 2015 contracts that renew in 2017.
-
The property line of business increased $21.7
million, predominantly due the absence of large negative premium
adjustments that were recorded in the fourth quarter of 2015.
-
Net premiums written of $121.3 million, an
increase of $42.7 million or 54.3% from the fourth quarter of 2015.
The increase in net premiums written was driven by an increase in
gross premiums and positive ceded premium adjustments within the
specialty and professional lines of business.
-
Combined ratio of 84.5% compared to 64.7% for
the same period in 2015.
-
The current period's net loss ratio of 54.9%
increased 23.4 percentage points compared to 2015. The increase in
the current quarter accident year net loss ratio of 19.0 percentage
points was predominantly due to catastrophe losses, including
Hurricane Matthew and the New Zealand earthquake, which impacted
the loss ratio by 14.3 percentage points. The current period's net
loss ratio included favorable prior year loss reserve development
of $27.4 million or 8.1 percentage points.
-
The 2.1 percentage point increase in the current
quarter's acquisition expense ratio was largely attributed to a
shift in the mix of business with more earned premiums recorded in
the casualty and professional lines, which maintain higher
acquisition costs, and the absence in the fourth quarter of 2016 of
the earning of premiums acquired from Montpelier that did not have
related acquisition costs in the fourth quarter of 2015.
-
The general and administrative expense ratio
decreased 5.7 percentage points in the fourth quarter of 2016
primarily as a result of larger earned premiums recorded in the
current period, increased ceding commission offsets and lower
compensation expenses.
Operating highlights for Endurance's Reinsurance
segment for the year ended December 31, 2016:
-
Gross premiums written of $1,631.7 million, an
increase of $396.7 million or 32.1% over the same period in
2015.
-
Net premiums written of $1,313.7 million, an
increase of 22.8% over the same period in 2015.
-
Combined ratio of 77.9% compared to 69.6% for
the same period in 2015. The combined ratio was impacted by a
higher net loss ratio partially offset by the lower acquisition and
general and administrative expense ratios. The current period's net
loss ratio included $144.4 million or 10.7 percentage points of
favorable prior year loss reserve development and 20.3 percentage
points of net catastrophe losses from 2016 events, which amounted
to $143.7 million before reinstatement premiums of $21.5
million.
Investments
Endurance's net investment income for the quarter
and year ended December 31, 2016 was $59.2 million and $176.6
million, an increase of $36.0 million and $62.8 million,
respectively, compared to the same periods in 2015. The total
investment return of Endurance's cash and investment portfolio was
(0.57)% and 2.56% for the quarter and year ended December 31,
2016, respectively, compared to (0.29)% and 0.31% for the quarter
and year ended December 31, 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 year ended
December 31, 2016 compared to the same periods in 2015 due to
an increase in invested assets. During the quarter and year
ended December 31, 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 $12.6 million
and $12.4 million, as compared to losses of $11.8 million and $13.6
million during the same periods in 2015. The ending book
yield on Endurance's fixed maturity investments at
December 31, 2016 was 2.38%, up from 2.12% at
December 31, 2015.
At December 31, 2016, Endurance's fixed
maturity and short term investments, which comprises 86.1% of
Endurance's investment portfolio, had an average credit quality of
AA and a duration of 3.04 years. Endurance's available for
sale investment portfolio was in a net unrealized gain position of
$61.5 million at December 31, 2016, an increase of $74.1
million from December 31, 2015. Endurance recorded in
net income, net realized and unrealized investment losses, net of
impairments, of $46.1 million and $23.2 million during the quarter
and year ended December 31, 2016, compared to losses of $22.8
million and gains of $8.9 million during the quarter and year ended
December 31, 2015.
Endurance ended the fourth quarter of 2016 with
cash and invested assets of $8.8 billion, which represents a 0.9%
decrease from December 31, 2015. Net operating cash
inflow was $415.5 million for the year ended December 31, 2016
versus an inflow of $245.5 million for the same period in 2015.
Capitalization and Shareholders'
Equity
At December 31, 2016, Endurance's
shareholders' equity was $5.14 billion or $68.66 per diluted common
share versus $5.12 billion or $65.48 per diluted common share at
December 31, 2015. For the quarter and year ended
December 31, 2016, Endurance declared and paid common
dividends of $0.38 and $1.52 per share, respectively.
Adjusted operating income, adjusted operating
return on average common equity, adjusted operating income per
diluted common share, adjusted 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 Reports on Form 10-Q for
the quarters ended June 30, 2016 and September 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
reports on Form 10-K and Form 10-Q 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)
|
|
|
December
31, |
|
December
31, |
|
|
|
2016 |
|
2015 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
1,149,541 |
|
|
$ |
1,177,750 |
|
Fixed maturity investments, trading, at fair value |
2,740,055 |
|
|
1,587,160 |
|
Fixed maturity investments, available for sale, at fair
value |
3,572,766 |
|
|
4,359,019 |
|
Short-term investments, trading, at fair value |
330,199 |
|
|
394,111 |
|
Short-term investments, available for sale, at fair
value |
78,505 |
|
|
25,685 |
|
Equity securities, trading, at fair value |
16,056 |
|
|
15,229 |
|
Equity securities, available for sale, at fair value |
485,085 |
|
|
513,585 |
|
Other investments |
588,308 |
|
|
872,617 |
|
Premiums receivable, net |
1,657,752 |
|
|
1,376,328 |
|
Insurance and reinsurance balances receivable |
110,183 |
|
|
102,403 |
|
Deferred acquisition costs |
276,639 |
|
|
255,501 |
|
Prepaid reinsurance premiums |
711,695 |
|
|
498,574 |
|
Reinsurance recoverable on unpaid losses |
1,213,129 |
|
|
907,944 |
|
Reinsurance recoverable on paid losses |
273,789 |
|
|
288,026 |
|
Accrued investment income |
35,853 |
|
|
30,213 |
|
Goodwill and intangible assets |
468,374 |
|
|
553,960 |
|
Deferred tax asset |
71,802 |
|
|
64,164 |
|
Net receivable on sales of investments |
54,620 |
|
|
31,873 |
|
Other assets |
288,510 |
|
|
187,383 |
|
Total Assets |
$ |
14,122,861 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
Reserve for losses and loss expenses |
$ |
4,905,138 |
|
|
$ |
4,510,415 |
|
Reserve for unearned premiums |
1,994,676 |
|
|
1,789,148 |
|
Deposit liabilities |
14,013 |
|
|
13,674 |
|
Reinsurance balances payable |
784,162 |
|
|
661,213 |
|
Debt |
705,292 |
|
|
717,650 |
|
Net payable on purchases of investments |
181,337 |
|
|
63,442 |
|
Deferred tax liability |
13,074 |
|
|
17,315 |
|
Other liabilities |
383,036 |
|
|
344,596 |
|
Total Liabilities |
8,980,728 |
|
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 |
|
|
|
|
67,627,901 issued and outstanding (2015 - 66,797,991) |
67,628 |
|
|
66,798 |
|
Additional paid-in capital |
1,961,917 |
|
|
2,145,836 |
|
Accumulated other comprehensive loss |
(58,749 |
) |
|
(46,634 |
) |
Retained earnings |
2,911,634 |
|
|
2,681,053 |
|
Total Shareholders' Equity Available to the Company |
4,882,439 |
|
4,856,262 |
Non-controlling interests |
259,694 |
|
|
267,810 |
|
Total Shareholders' Equity |
5,142,133 |
|
|
5,124,072 |
|
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
$ |
14,122,861 |
|
|
$ |
13,241,525 |
|
|
|
|
|
|
|
Book Value per Common Share |
|
|
|
Dilutive common shares outstanding |
67,759,784 |
|
|
67,136,986 |
|
Diluted book value per common share [a] |
$ |
68.66 |
|
|
$ |
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 million (2015 - $460.0
million) liquidation value of the preferred shares.
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of United States dollars, except share and per share
amounts)
|
|
Three Months
Ended |
|
Twelve Months
Ended |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
Gross premiums written |
$ |
692,876 |
|
|
$ |
515,648 |
|
|
$ |
4,202,170 |
|
|
$ |
3,320,861 |
|
|
|
|
|
|
|
|
|
|
Net premiums written |
$ |
364,339 |
|
|
$ |
289,743 |
|
|
$ |
2,369,935 |
|
|
$ |
1,950,470 |
|
Change in unearned premiums |
236,366 |
|
|
283,713 |
|
|
(6,275 |
) |
|
27,983 |
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
600,705 |
|
|
573,456 |
|
2,363,660 |
|
|
1,978,453 |
|
Other underwriting income (loss) |
1,071 |
|
|
(7,716 |
) |
|
(909 |
) |
|
(3,694 |
) |
Net investment income |
59,196 |
|
|
23,180 |
|
|
176,590 |
|
|
113,826 |
|
Net realized and unrealized (losses) gains |
(45,958 |
) |
|
(20,238 |
) |
|
(12,419 |
) |
|
12,660 |
|
Net impairment losses recognized in earnings |
(122 |
) |
|
(2,604 |
) |
|
(10,769 |
) |
|
(3,715 |
) |
Total revenues |
614,892 |
|
566,078 |
|
2,516,153 |
|
|
2,097,530 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Net losses and loss expenses |
370,150 |
|
|
242,057 |
|
|
1,321,052 |
|
|
917,108 |
|
Acquisition expenses |
123,289 |
|
|
90,364 |
|
|
460,483 |
|
|
347,885 |
|
General and administrative expenses |
53,104 |
|
|
89,143 |
|
|
248,146 |
|
|
259,791 |
|
Corporate expenses |
16,153 |
|
|
15,219 |
|
|
51,706 |
|
|
114,429 |
|
Amortization of intangibles |
21,153 |
|
|
16,124 |
|
|
84,624 |
|
|
30,620 |
|
Net foreign exchange (gains) losses |
(11,628 |
) |
|
(2,190 |
) |
|
(74,684 |
) |
|
26,964 |
|
Interest expense |
10,807 |
|
|
10,815 |
|
|
43,860 |
|
|
41,260 |
|
Total expenses |
583,028 |
|
461,532 |
|
2,135,187 |
|
|
1,738,057 |
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
31,864 |
|
104,546 |
|
380,966 |
|
|
359,473 |
|
Income tax (expense) benefit |
(2,389 |
) |
|
3,350 |
|
|
181 |
|
|
(4,362 |
) |
Net income |
29,475 |
|
107,896 |
|
381,147 |
|
355,111 |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
(5,674 |
) |
|
(8,309 |
) |
|
(24,130 |
) |
|
(11,016 |
) |
|
|
|
|
|
|
|
|
|
Net income available to the Company |
23,801 |
|
|
99,587 |
|
|
357,017 |
|
|
344,095 |
|
|
|
|
|
|
|
|
|
|
Preferred dividends |
(3,652 |
) |
|
(8,186 |
) |
|
(23,799 |
) |
|
(32,750 |
) |
|
|
|
|
|
|
|
|
|
Net income available to common and
participating common shareholders |
$ |
20,149 |
|
|
$ |
91,401 |
|
|
$ |
333,218 |
|
|
$ |
311,345 |
|
|
|
|
|
|
|
|
|
Per share data |
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
0.30 |
|
|
$ |
1.36 |
|
|
$ |
4.94 |
|
|
$ |
5.74 |
|
Diluted earnings per common share |
$ |
0.30 |
|
|
$ |
1.36 |
|
|
$ |
4.93 |
|
|
$ |
5.73 |
|
ENDURANCE
SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
|
|
|
Three Months
Ended December 31, 2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
573,394 |
|
|
$ |
119,482 |
|
|
$ |
692,876 |
|
|
|
Ceded
premiums written |
|
(330,390 |
) |
|
1,853 |
|
|
(328,537 |
) |
|
|
Net
premiums written |
|
243,004 |
|
|
121,335 |
|
|
364,339 |
|
|
|
Net
premiums earned |
|
263,419 |
|
|
337,286 |
|
|
600,705 |
|
|
|
Other
underwriting income |
|
- |
|
|
1,071 |
|
|
1,071 |
|
|
|
Total
underwriting revenues |
|
263,419 |
|
|
338,357 |
|
|
601,776 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
185,074 |
|
|
185,076 |
|
|
370,150 |
|
|
|
Acquisition expenses |
|
44,764 |
|
|
78,525 |
|
|
123,289 |
|
|
|
General
and administrative expenses |
|
31,830 |
|
|
21,274 |
|
|
53,104 |
|
|
|
|
|
261,668 |
|
|
284,875 |
|
|
546,543 |
|
|
|
Underwriting income |
|
$ |
1,751 |
|
|
$ |
53,482 |
|
|
$ |
55,233 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
59,196 |
|
|
|
Corporate
expenses |
|
|
|
|
|
(16,153 |
) |
|
|
Interest
expense |
|
|
|
|
|
(10,807 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(21,153 |
) |
|
|
Net
foreign exchange gains |
|
|
|
|
|
11,628 |
|
|
|
Net
realized and unrealized losses |
|
|
|
|
|
(45,958 |
) |
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(122 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
31,864 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
70.2 |
% |
|
54.9 |
% |
|
61.7 |
% |
|
|
Acquisition expense ratio |
|
17.0 |
% |
|
23.3 |
% |
|
20.5 |
% |
|
|
General
and administrative expense ratio |
|
12.1 |
% |
|
6.3 |
% |
|
11.5 |
% |
[a] |
|
Combined
ratio |
|
99.3 |
% |
|
84.5 |
% |
|
93.7 |
% |
|
[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)
|
|
|
Three Months
Ended December 31, 2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
432,254 |
|
|
$ |
83,394 |
|
|
$ |
515,648 |
|
|
|
Ceded
premiums written |
|
(221,156 |
) |
|
(4,749 |
) |
|
(225,905 |
) |
|
|
Net
premiums written |
|
211,098 |
|
|
78,645 |
|
|
289,743 |
|
|
|
Net
premiums earned |
|
253,085 |
|
|
320,371 |
|
|
573,456 |
|
|
|
Other
underwriting loss |
|
- |
|
|
(7,716 |
) |
|
(7,716 |
) |
|
|
Total
underwriting revenues |
|
253,085 |
|
|
312,655 |
|
|
565,740 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
141,269 |
|
|
100,788 |
|
|
242,057 |
|
|
|
Acquisition expenses |
|
22,292 |
|
|
68,072 |
|
|
90,364 |
|
|
|
General and administrative expenses |
|
50,723 |
|
|
38,420 |
|
|
89,143 |
|
|
|
|
|
214,284 |
|
|
207,280 |
|
|
421,564 |
|
|
|
Underwriting income |
|
$ |
38,801 |
|
|
$ |
105,375 |
|
|
$ |
144,176 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
23,180 |
|
|
|
Corporate expenses |
|
|
|
|
|
(15,219 |
) |
|
|
Interest expense |
|
|
|
|
|
(10,815 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(16,124 |
) |
|
|
Net
foreign exchange gains |
|
|
|
|
|
2,190 |
|
|
|
Net
realized and unrealized losses |
|
|
|
|
|
(20,238 |
) |
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(2,604 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
104,546 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss ratio |
|
55.9 |
% |
|
31.5 |
% |
|
42.2 |
% |
|
|
Acquisition expense ratio |
|
8.8 |
% |
|
21.2 |
% |
|
15.8 |
% |
|
|
General and administrative expense ratio |
|
20.0 |
% |
|
12.0 |
% |
|
18.2 |
% |
[a] |
|
Combined ratio |
|
84.7 |
% |
|
64.7 |
% |
|
76.2 |
% |
|
[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)
|
|
|
Twelve Months
Ended December 31, 2016 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
2,570,494 |
|
|
$ |
1,631,676 |
|
|
$ |
4,202,170 |
|
|
|
Ceded
premiums written |
|
(1,514,240 |
) |
|
(317,995 |
) |
|
(1,832,235 |
) |
|
|
Net
premiums written |
|
1,056,254 |
|
|
1,313,681 |
|
|
2,369,935 |
|
|
|
Net
premiums earned |
|
1,009,375 |
|
|
1,354,285 |
|
|
2,363,660 |
|
|
|
Other
underwriting loss |
|
- |
|
|
(909 |
) |
|
(909 |
) |
|
|
Total
underwriting revenues |
|
1,009,375 |
|
|
1,353,376 |
|
|
2,362,751 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
684,178 |
|
|
636,874 |
|
|
1,321,052 |
|
|
|
Acquisition expenses |
|
149,763 |
|
|
310,720 |
|
|
460,483 |
|
|
|
General
and administrative expenses |
|
140,742 |
|
|
107,404 |
|
|
248,146 |
|
|
|
|
|
974,683 |
|
|
1,054,998 |
|
|
2,029,681 |
|
|
|
Underwriting income |
|
$ |
34,692 |
|
|
$ |
298,378 |
|
|
$ |
333,070 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
176,590 |
|
|
|
Corporate
expenses |
|
|
|
|
|
(51,706 |
) |
|
|
Interest
expense |
|
|
|
|
|
(43,860 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(84,624 |
) |
|
|
Net
foreign exchange gains |
|
|
|
|
|
74,684 |
|
|
|
Net
realized and unrealized losses |
|
|
|
|
|
(12,419 |
) |
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(10,769 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
380,966 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
ratio |
|
67.9 |
% |
|
47.1 |
% |
|
55.9 |
% |
|
|
Acquisition expense ratio |
|
14.8 |
% |
|
22.9 |
% |
|
19.5 |
% |
|
|
General
and administrative expense ratio |
|
13.9 |
% |
|
7.9 |
% |
|
12.7 |
% |
[a] |
|
Combined
ratio |
|
96.6 |
% |
|
77.9 |
% |
|
88.1 |
% |
|
[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)
|
|
|
Twelve Months
Ended December 31, 2015 |
|
|
|
|
Insurance |
|
Reinsurance |
|
Reported Totals |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Gross
premiums written |
|
$ |
2,085,901 |
|
|
$ |
1,234,960 |
|
|
$ |
3,320,861 |
|
|
|
Ceded
premiums written |
|
(1,205,528 |
) |
|
(164,863 |
) |
|
(1,370,391 |
) |
|
|
Net
premiums written |
|
880,373 |
|
|
1,070,097 |
|
|
1,950,470 |
|
|
|
Net
premiums earned |
|
824,552 |
|
|
1,153,901 |
|
|
1,978,453 |
|
|
|
Other
underwriting loss |
|
- |
|
|
(3,694 |
) |
|
(3,694 |
) |
|
|
Total
underwriting revenues |
|
824,552 |
|
|
1,150,207 |
|
|
1,974,759 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Net
losses and loss expenses |
|
500,867 |
|
|
416,241 |
|
|
917,108 |
|
|
|
Acquisition expenses |
|
80,252 |
|
|
267,633 |
|
|
347,885 |
|
|
|
General and administrative expenses |
|
140,012 |
|
|
119,779 |
|
|
259,791 |
|
|
|
|
|
721,131 |
|
|
803,653 |
|
|
1,524,784 |
|
|
|
Underwriting income |
|
$ |
103,421 |
|
|
$ |
346,554 |
|
|
$ |
449,975 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income |
|
|
|
|
|
113,826 |
|
|
|
Corporate
expenses |
|
|
|
|
|
(114,429 |
) |
|
|
Interest
expense |
|
|
|
|
|
(41,260 |
) |
|
|
Amortization of intangibles |
|
|
|
|
|
(30,620 |
) |
|
|
Net
foreign exchange losses |
|
|
|
|
|
(26,964 |
) |
|
|
Net
realized and unrealized gains |
|
|
|
|
|
12,660 |
|
|
|
Net
impairment losses recognized in earnings |
|
|
|
|
|
(3,715 |
) |
|
|
Income
before income taxes |
|
|
|
|
|
$ |
359,473 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss ratio |
|
60.8 |
% |
|
36.0 |
% |
|
46.4 |
% |
|
|
Acquisition expense ratio |
|
9.7 |
% |
|
23.2 |
% |
|
17.6 |
% |
|
|
General and administrative expense ratio |
|
17.0 |
% |
|
10.4 |
% |
|
18.9 |
% |
[a] |
|
Combined ratio |
|
87.5 |
% |
|
69.6 |
% |
|
82.9 |
% |
|
[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 December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
70.2 |
% |
|
55.9 |
% |
|
54.9 |
% |
|
31.5 |
% |
|
61.7 |
% |
|
42.2 |
% |
|
|
Acquisition expense ratio |
|
17.0 |
% |
|
8.8 |
% |
|
23.3 |
% |
|
21.2 |
% |
|
20.5 |
% |
|
15.8 |
% |
|
|
General and administrative expense ratio |
|
12.1 |
% |
|
20.0 |
% |
|
6.3 |
% |
|
12.0 |
% |
|
11.5 |
% |
[a] |
18.2 |
% |
[a] |
|
Combined ratio [b] |
|
99.3 |
% |
|
84.7 |
% |
|
84.5 |
% |
|
64.7 |
% |
|
93.7 |
% |
|
76.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
7.6 |
% |
|
8.0 |
% |
|
8.1 |
% |
|
12.5 |
% |
|
7.9 |
% |
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
77.8 |
% |
|
63.9 |
% |
|
63.0 |
% |
|
44.0 |
% |
|
69.6 |
% |
|
52.7 |
% |
|
|
Acquisition expense ratio |
|
17.0 |
% |
|
8.8 |
% |
|
23.3 |
% |
|
21.2 |
% |
|
20.5 |
% |
|
15.8 |
% |
|
|
General and administrative expense ratio |
|
12.1 |
% |
|
20.0 |
% |
|
6.3 |
% |
|
12.0 |
% |
|
11.5 |
% |
[a] |
18.2 |
% |
[a] |
|
Combined ratio [b] |
|
106.9 |
% |
|
92.7 |
% |
|
92.6 |
% |
|
77.2 |
% |
|
101.6 |
% |
|
86.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
67.9 |
% |
|
60.8 |
% |
|
47.1 |
% |
|
36.0 |
% |
|
55.9 |
% |
|
46.4 |
% |
|
|
Acquisition expense ratio |
|
14.8 |
% |
|
9.7 |
% |
|
22.9 |
% |
|
23.2 |
% |
|
19.5 |
% |
|
17.6 |
% |
|
|
General and administrative expense ratio |
|
13.9 |
% |
|
17.0 |
% |
|
7.9 |
% |
|
10.4 |
% |
|
12.7 |
% |
[a] |
18.9 |
% |
[a] |
|
Combined ratio [b] |
|
96.6 |
% |
|
87.5 |
% |
|
77.9 |
% |
|
69.6 |
% |
|
88.1 |
% |
|
82.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Favorable / (Unfavorable) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
7.6 |
% |
|
9.9 |
% |
|
10.7 |
% |
|
14.0 |
% |
|
9.4 |
% |
|
12.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net of Prior Year Net Loss Reserve
Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, |
|
|
|
|
|
Insurance |
|
Reinsurance |
|
Total |
|
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss ratio |
|
75.5 |
% |
|
70.7 |
% |
|
57.8 |
% |
|
50.0 |
% |
|
65.3 |
% |
|
58.7 |
% |
|
|
Acquisition expense ratio |
|
14.8 |
% |
|
9.7 |
% |
|
22.9 |
% |
|
23.2 |
% |
|
19.5 |
% |
|
17.6 |
% |
|
|
General and administrative expense ratio |
|
13.9 |
% |
|
17.0 |
% |
|
7.9 |
% |
|
10.4 |
% |
|
12.7 |
% |
[a] |
18.9 |
% |
[a] |
|
Combined ratio [b] |
|
104.2 |
% |
|
97.4 |
% |
|
88.6 |
% |
|
83.6 |
% |
|
97.5 |
% |
|
95.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[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 December 31, 2016
and 2015:
|
|
Three Months
Ended |
|
Three Months
Ended |
|
|
December 31,
2016 |
|
December 31,
2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
46,256 |
|
|
$ |
20,225 |
|
|
$ |
55,372 |
|
|
$ |
13,119 |
|
|
Casualty and other specialty |
172,578 |
|
|
71,583 |
|
|
138,956 |
|
|
73,704 |
|
|
Professional lines |
164,026 |
|
|
66,730 |
|
|
112,917 |
|
|
51,765 |
|
|
Property,
marine/energy and aviation |
190,534 |
|
|
84,466 |
|
|
125,009 |
|
|
72,510 |
|
|
Subtotal
Insurance |
$ |
573,394 |
|
|
$ |
243,004 |
|
|
$ |
432,254 |
|
|
$ |
211,098 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
17,435 |
|
|
$ |
17,168 |
|
|
7,014 |
|
|
4,083 |
|
|
Property |
21,360 |
|
|
21,455 |
|
|
(291 |
) |
|
(455 |
) |
|
Casualty |
28,671 |
|
|
27,742 |
|
|
27,474 |
|
|
27,455 |
|
|
Professional lines |
38,861 |
|
|
39,014 |
|
|
38,807 |
|
|
38,807 |
|
|
Specialty |
13,155 |
|
|
15,956 |
|
|
10,390 |
|
|
8,755 |
|
|
Subtotal
Reinsurance |
$ |
119,482 |
|
|
$ |
121,335 |
|
|
$ |
83,394 |
|
|
$ |
78,645 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
692,876 |
|
|
$ |
364,339 |
|
|
$ |
515,648 |
|
|
$ |
289,743 |
|
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 year ended December 31, 2016 and
2015:
|
|
Twelve Months
Ended |
|
Twelve Months
Ended |
|
|
December 31,
2016 |
|
December 31,
2015 |
|
|
Gross Premiums Written |
|
Net Premiums Written |
|
Gross Premiums Written |
|
Net Premiums Written |
Insurance |
|
|
|
|
|
|
|
|
Agriculture |
$ |
760,877 |
|
|
$ |
274,952 |
|
|
$ |
840,445 |
|
|
$ |
267,890 |
|
|
Casualty and other specialty |
657,558 |
|
|
281,256 |
|
|
514,203 |
|
|
248,554 |
|
|
Professional lines |
461,552 |
|
|
191,596 |
|
|
344,482 |
|
|
156,918 |
|
|
Property,
marine/energy and aviation |
690,507 |
|
|
308,450 |
|
|
386,771 |
|
|
207,011 |
|
|
Subtotal
Insurance |
$ |
2,570,494 |
|
|
$ |
1,056,254 |
|
|
$ |
2,085,901 |
|
|
$ |
880,373 |
|
|
|
|
|
|
|
|
|
|
Reinsurance |
|
|
|
|
|
|
|
|
Catastrophe |
$ |
506,300 |
|
|
$ |
336,413 |
|
|
$ |
311,914 |
|
|
$ |
194,662 |
|
|
Property |
250,447 |
|
|
243,697 |
|
|
209,392 |
|
|
205,999 |
|
|
Casualty |
245,092 |
|
|
243,154 |
|
|
176,506 |
|
|
176,487 |
|
|
Professional lines |
256,337 |
|
|
254,148 |
|
|
248,610 |
|
|
248,610 |
|
|
Specialty |
373,500 |
|
|
236,269 |
|
|
288,538 |
|
|
244,339 |
|
|
Subtotal
Reinsurance |
$ |
1,631,676 |
|
|
$ |
1,313,681 |
|
|
$ |
1,234,960 |
|
|
$ |
1,070,097 |
|
|
|
|
|
|
|
|
|
|
Total |
$ |
4,202,170 |
|
|
$ |
2,369,935 |
|
|
$ |
3,320,861 |
|
|
$ |
1,950,470 |
|
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.
Adjusted operating income is an internal
performance measure used by the Company in the management of its
operations. Adjusted operating income represents operational
results excluding, as applicable, net realized and unrealized
(losses) gains, net impairment losses recognized in earnings and
net foreign exchange (gains) losses 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 adjusted 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. Adjusted operating income should
not be viewed as a substitute for GAAP net income.
Adjusted operating income per diluted common share
are internal performance measures used by Endurance in the
management of its operations. Adjusted operating income allocated
to common shareholders (which excludes unvested restricted shares
outstanding which are considered participating) per diluted common
share represents adjusted 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 adjusted 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. Adjusted 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 basic or diluted common share, net
income allocated to common shareholders under the two-class method
and annualized return on average common equity to adjusted
operating income, adjusted operating income per basic or diluted
common share, adjusted operating income allocated to common
shareholders under the two-class method and annualized adjusted
operating return on average common equity (all non-GAAP measures)
for the three and twelve months ended December 31, 2016 and
2015:
|
(amounts expressed in thousands of United States dollars,
except share, per share amounts and ratios) |
Three Months
Ended |
|
Twelve Months
Ended |
|
December
31, |
|
December
31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net income available to the Company |
$ |
23,801 |
|
|
$ |
99,587 |
|
|
$ |
357,017 |
|
|
$ |
344,095 |
|
(Less) add after-tax items: |
|
|
|
|
|
|
|
|
Net
foreign exchange (gains) losses |
(11,628 |
) |
|
(2,190 |
) |
|
(74,684 |
) |
|
26,964 |
|
|
Net
realized and unrealized losses (gains) |
45,958 |
|
|
20,238 |
|
|
12,419 |
|
|
(12,660 |
) |
|
Net
impairment losses recognized in earnings |
122 |
|
|
2,604 |
|
|
10,769 |
|
|
3,715 |
|
|
Income
tax expense |
1,150 |
|
|
1,651 |
|
|
16,029 |
|
|
2,661 |
|
Adjusted operating income before preferred dividends |
$ |
59,403 |
|
|
$ |
121,890 |
|
|
$ |
321,550 |
|
|
$ |
364,775 |
|
|
Preferred dividends |
(3,652 |
) |
|
(8,186 |
) |
|
(23,799 |
) |
|
(32,750 |
) |
Adjusted operating income allocated to common and |
|
|
|
|
|
|
|
|
participating common shareholders |
$ |
55,751 |
|
|
$ |
113,704 |
|
|
$ |
297,751 |
|
|
$ |
332,025 |
|
|
|
|
|
|
|
|
|
|
Adjusted operating income allocated to common |
|
|
|
|
|
|
|
|
shareholders under the two-class method |
$ |
54,640 |
|
|
$ |
110,808 |
|
|
$ |
291,520 |
|
|
$ |
322,696 |
|
|
|
|
|
|
|
|
|
|
Weighted average diluted common shares |
66,382,373 |
|
|
65,404,645 |
|
|
66,135,372 |
|
|
52,828,503 |
|
|
|
|
|
|
|
|
|
|
Adjusted operating income per diluted common share
[b] |
$ |
0.82 |
|
|
$ |
1.69 |
|
|
$ |
4.41 |
|
|
$ |
6.11 |
|
|
|
|
|
|
|
|
|
|
Average common equity [a] |
$ |
4,694,342 |
|
|
$ |
4,381,566 |
|
|
$ |
4,599,647 |
|
|
$ |
3,415,086 |
|
|
|
|
|
|
|
|
|
|
Adjusted operating return on average common equity |
1.2 |
% |
|
2.6 |
% |
|
6.5 |
% |
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
Annualized adjusted operating return on average common
equity |
4.8 |
% |
|
10.4 |
% |
|
6.5 |
% |
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
Net income available to the Company |
$ |
23,801 |
|
|
$ |
99,587 |
|
|
$ |
357,017 |
|
|
$ |
344,095 |
|
|
Preferred dividends |
(3,652 |
) |
|
(8,186 |
) |
|
(23,799 |
) |
|
(32,750 |
) |
Net income available to common and |
|
|
|
|
|
|
|
|
participating common shareholders |
$ |
20,149 |
|
|
$ |
91,401 |
|
|
$ |
333,218 |
|
|
$ |
311,345 |
|
|
|
|
|
|
|
|
|
|
Net income allocated to common shareholders |
|
|
|
|
|
|
|
|
under
the two-class method |
$ |
20,149 |
|
|
$ |
89,073 |
|
|
$ |
326,245 |
|
|
$ |
302,596 |
|
|
|
|
|
|
|
|
|
|
Net income per diluted common share [b] |
$ |
0.30 |
|
|
$ |
1.36 |
|
|
$ |
4.93 |
|
|
$ |
5.73 |
|
|
|
|
|
|
|
|
|
|
Return on average common equity, Net income |
0.4 |
% |
|
2.1 |
% |
|
7.2 |
% |
|
9.1 |
% |
|
|
|
|
|
|
|
|
Annualized return on average common equity, Net
income |
1.7 |
% |
|
8.3 |
% |
|
7.2 |
% |
|
9.1 |
% |
[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 million (December 31, 2015 - $460 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 three and twelve months ended December 31, 2016 to the net
negative financial impact (non-GAAP measure) of these events on net
income available to the Company for the three and twelve months
ended December 31, 2016:
(amounts expressed in thousands of United States dollars, except
ratio) |
|
Three Months
Ended December 31, 2016 |
Twelve Months
Ended December 31, 2016 |
|
|
Catastrophe Impact |
Net loss ratio impact |
Catastrophe Impact |
Net loss ratio impact |
|
|
|
|
|
|
Net
losses and loss expenses |
|
$ |
74,743 |
|
|
$ |
174,899 |
|
|
Less:
net reinstatement premiums |
|
9,454 |
|
|
21,490 |
|
|
Net
negative financial impact on net income |
|
65,289 |
|
11.7 |
% |
153,409 |
|
9.8 |
% |
Less:
net negative financial impact attributable to non-controlling
interest |
|
5,640 |
|
|
13,020 |
|
|
Net
negative financial impact on net income available to the
Company |
|
$ |
59,649 |
|
|
$ |
140,389 |
|
|
Total investment return is calculated by dividing
net investment income, net realized and unrealized (losses) gains,
net impairment losses recognized in earnings, and net decrease in
unrealized gains (losses) included in other comprehensive income
after 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 (losses) gains,
net impairment losses recognized in earnings and net decrease in
unrealized gains (losses) included in other comprehensive
income before deferred tax offsets to total investment income and
total investment return (non-GAAP measures) for the three and
twelve months ended December 31, 2016 and 2015:
|
Three Months
Ended December 31, |
|
Twelve Months
Ended December 31, |
(amounts expressed in thousands of United States dollars) |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
Net
investment income |
$ |
59,196 |
|
|
$ |
23,180 |
|
|
$ |
176,590 |
|
|
$ |
113,826 |
|
Net
realized and unrealized (losses) gains |
(45,958 |
) |
|
(20,238 |
) |
|
(12,419 |
) |
|
12,660 |
|
Net
impairment losses recognized in earnings |
(122 |
) |
|
(2,604 |
) |
|
(10,769 |
) |
|
(3,715 |
) |
Net
(decrease) increase in unrealized gains (losses) included in other
comprehensive income, after deferred tax offsets |
(63,610 |
) |
|
(26,342 |
) |
|
74,121 |
|
|
(98,738 |
) |
Total
investment income |
$ |
(50,494 |
) |
|
$ |
(26,004 |
) |
|
$ |
227,523 |
|
|
$ |
24,033 |
|
|
|
|
|
|
|
|
|
Average
invested assets and cash at fair value [a] |
8,816,957 |
|
|
8,909,284 |
|
|
8,873,693 |
|
|
7,760,336 |
|
|
|
|
|
|
|
|
|
Total
investment return |
(0.57 |
)% |
|
(0.29 |
)% |
|
2.56 |
% |
|
0.31 |
% |
[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 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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