Endurance Reports Second Quarter 2013 Financial Results
(Thomson Reuters ONE) -
PEMBROKE, Bermuda - August 5, 2013 - Endurance Specialty Holdings Ltd.
(NYSE:ENH) today reported net income available to common shareholders of $52.8
million and $1.21 per diluted common share for the second quarter of 2013 versus
net income of $64.3 million and $1.48 per diluted common share for the second
quarter of 2012.
For the six months ended June 30, 2013, Endurance reported net income available
to common shareholders of $144.9 million and $3.34 per diluted common share
versus net income of $138.6 million and $3.20 per diluted common share for the
six months ended June 30, 2012. Book value per diluted share was $51.95 at June
30, 2013, a decline of 1.8% from year end 2012.
Operating highlights for the quarter ended June 30, 2013 were as follows:
* Net premiums written of $464.6 million, a decrease of 4.1% compared to the
same period in 2012;
* Combined ratio of 94.3%, which included 11.6 percentage points of favorable
prior year loss reserve development and 8.9 percentage points of catastrophe
losses from 2013 events;
* Net investment income of $32.5 million, an increase of $0.7 million from the
same period in 2012;
* Operating income, which excludes after-tax realized investment gains and
foreign exchange losses and gains, of $47.3 million and $1.09 per diluted
common share; and
* Operating return on average common equity for the quarter of 2.0% or 8.2% on
an annualized basis.
Operating highlights for the six months ended June 30, 2013 were as follows:
* Net premiums written of $1,373.5 million, an increase of 3.5% over the same
period in 2012;
* Combined ratio of 90.2%, which included 11.8 percentage points of favorable
prior year loss reserve development and 5.0 percentage points of current
year catastrophe losses;
* Net investment income of $81.8 million, a decrease of $7.1 million over the
same period in 2012;
* Operating income, which excludes after-tax realized investment gains and
foreign exchange gains, of $137.1 million and $3.16 per diluted common
share; and
* Operating return on average common equity for the first six months of the
year of 6.0%, or 12.0% on an annualized basis.
John R. Charman, Chairman and Chief Executive Officer, commented, "Endurance
generated positive operating results in the second quarter against a backdrop of
volatile investment markets, numerous catastrophe loss events and an
increasingly competitive reinsurance market. We have immediately refocused our
global underwriting and are now adopting a very controlled, coordinated,
disciplined and profit driven approach. As rates have declined we have
deliberately reduced our exposures. I am absolutely committed to Endurance
becoming a leading low expense, medium volatility but very high performance
insurance and reinsurance international carrier."
"During the past month, I have streamlined our Executive leadership team as well
as completely restructured and reduced the overly inflated size of our
organization. The substantial savings arising will be used to fund the very
necessary build out of our global underwriting operations. To protect our
shareholders earnings, we have had to cut hard and deeply from our own resources
in order to finance our future growth. Importantly, we already have a great
pipeline of very high quality market leading underwriters who will join us over
the next twelve months. Market conditions on both sides of the balance sheet
will remain challenging over the next few years and with that scenario in mind,
I will continue to relentlessly drive substantial improvements, effectiveness
and cost efficiency throughout our organization. As well as planning a pan-Asia
joint venture strategy, our new, revitalised specialty Insurance operations in
the US, Bermuda and London will lead the oncoming Endurance revolution."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended
June 30, 2013 were as follows:
* Net premiums written of $191.5 million, an increase of 2.6% from the second
quarter of 2012;
* Combined ratio of 102.4%, an increase of 5.1 percentage points from the
second quarter of 2012; and
* Favorable prior year loss reserve development of 2.1 percentage points
during the current period, compared to 5.1 percentage points of favorable
prior year loss reserve development in the second quarter of 2012.
Operating highlights for Endurance's Insurance segment for the six months ended
June 30, 2013 were as follows:
* Net premiums written of $596.2 million, a decrease of 3.0% from the same
period in 2012;
* Combined ratio of 101.2%, an increase of 2.3 percentage points from the same
period in 2012; and
* Favorable prior year loss reserve development of 5.5 percentage points
during the current period, compared to 5.0 percentage points of favorable
prior year loss reserve development in the same period in 2012.
Net premiums written in the Insurance segment increased $4.8 million for the
second quarter and declined $18.2 million for the six months ended June
30, 2013, compared to the same periods in 2012. Increases within the
agriculture and property lines of business were offset by a decline in the
professional line of business. Within the agriculture line of business, net
premiums written increased from new business, which was partially offset by
higher cessions to the U.S. Government and third parties. The increase in
property net premiums written reflects a combination of new business and higher
retentions. The decline in net premiums written in the professional line of
business resulted from the termination of a program relationship in late 2012
that was partially offset by new business.
The increase in the Insurance segment combined ratio for the quarter ended June
30, 2013 compared to the same period in 2012 was primarily driven by higher net
loss and general and administrative expense ratios. The net loss ratio
increased as a result of a more difficult start to the crop year with
challenging winter wheat harvests and a higher level of prevented planting
claims, which increased the initial expected loss ratio in the agriculture
insurance line of business. Also impacting the current quarter's loss ratio was
lower levels of prior period favorable reserve development, offset by improved
loss ratios in the non-agriculture lines of business. The general and
administrative expense ratio was higher in the current quarter due to a greater
level of allocated corporate expenses related to the CEO transition and higher
expenses associated with recently added underwriting teams. For the six months
ended June 30, 2013, the combined ratio was 2.3 percentage points higher than
the same period a year ago as a higher general and administrative expense ratio
was partially offset by a lower acquisition expense ratio.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended
June 30, 2013 were as follows:
* Net premiums written of $273.1 million, a decrease of 8.3% from the second
quarter of 2012;
* Combined ratio of 86.4%, an improvement of 1.2 percentage points from the
second quarter of 2012;
* Favorable prior year loss reserve development of 20.8 percentage points
compared to 2.3 percentage points of favorable prior year loss reserve
development in the second quarter of 2012; and
* Net catastrophe losses from 2013 events of $47.4 million or 18.0 percentage
points on the combined ratio compared to net catastrophe losses of $14.4
million or 5.6 points in the second quarter of 2012.
Operating highlights for Endurance's Reinsurance segment for the six months
ended June 30, 2013 were as follows:
* Net premiums written of $777.3 million, an increase of 9.0% from the same
period in 2012;
* Combined ratio of 81.8%, an improvement of 8.6 percentage points from the
same period in 2012;
* Favorable prior year loss reserve development of 16.6 percentage points
during the current period, compared to 3.0 percentage points of favorable
prior year loss reserve development in the same period in 2012; and
* Net catastrophe losses from 2013 events of $47.4 million or 9.0 percentage
points on the combined ratio compared to net catastrophe losses of $36.9
million or 7.5 points in the first six months of 2012.
The $24.6 million decrease in net premiums written within the Reinsurance
segment during the second quarter of 2013 compared to the second quarter of
2012 resulted primarily from decreases in catastrophe and property lines of
business, partially offset by an increase within the casualty line of business.
The decline in catastrophe premiums in the current quarter reflects the impact
of lower pricing and a more competitive market in which the Company chose to
reduce limits deployed in Florida. The property line of business also declined
in the current quarter as the Company non-renewed business and reduced line
sizes where price weakening led to profitability being below target levels.
Growth in the casualty line of business in the second quarter of 2013 compared
to a year ago was primarily driven by a single new treaty written in the
quarter. For the six months ended June 30, 2013, net premiums written increased
$64.3 million due to increases within the property, casualty and other specialty
lines, partially offset by a decline in catastrophe premiums.
The combined ratio in the Reinsurance segment for the second quarter of 2013
improved compared to the same period in 2012, predominantly due to a lower net
loss ratio, partially offset by a higher general and administrative expense
ratio. The net loss ratio in the second quarter of 2013 benefited from $57.2
million, or 20.8 percentage points, of favorable prior year loss reserve
development, compared to $5.9 million, or 2.3 percentage points, for the same
period a year ago. The favorable development in the current quarter was
predominantly driven by short tail lines of business and includes a reduction in
estimated reserves for losses related to prior year catastrophes. The current
quarter's combined ratio included 18.0 percentage points of catastrophe losses
related to flooding in Canada and Europe and various tornadoes occurring in the
United States, while the second quarter 2012 included 5.6 percentage points of
catastrophe losses. The higher general and administrative expenses were
predominantly linked to higher allocated corporate expenses related to costs
associated with the CEO transition.
For the first six months of 2013, the Reinsurance segment reported a combined
ratio of 81.8% compared to 90.4% for the same period in 2012 principally due to
a lower loss ratio that included a greater level of favorable prior year loss
reserve development, partially offset by a higher level of catastrophe losses.
Investments
Endurance's net investment income for the quarter and six months ended June
30, 2013 was $32.5 million and $81.8 million, an increase of $0.7 million and a
decrease of $7.1 million, respectively, compared to the same periods in 2012.
The total return of Endurance's investment portfolio was (1.22%) and (0.62%)
for the quarter and six months ended June 30, 2013, respectively, compared to
0.90% and 2.29% for the quarter and six months ended June 30, 2012,
respectively. Investment income generated from Endurance's available for sale
investments declined by $6.0 million and $13.5 million for the three and six
months ended June 30, 2013, respectively, compared to the same period in 2012
due to lower reinvestment rates during 2013 and the short duration of
Endurance's fixed maturity portfolio. During the second quarter and six months
ended June 30, 2013, Endurance's net investment income included gains of $6.8
million and $29.8 million, respectively, on its alternative investment funds and
high yield loan funds, which are included in other investments, as compared to
losses of $0.1 million and gains of $23.1 million in the second quarter and
first six months of 2012, respectively. The ending book yield on Endurance's
fixed maturity investments at June 30, 2013 was 2.15%, down from 2.57% at June
30, 2012.
At June 30, 2013, Endurance's fixed maturity portfolio, which comprises 87.2% of
Endurance's investments, had an average credit quality of AA and a duration of
3.05 years. Endurance's fixed maturity portfolio was in a net unrealized gain
position of $30.6 million at June 30, 2013, a decrease of $111.1 million from
December 31, 2012. Endurance recorded net realized investment gains, net of
impairment losses recognized in earnings, of $9.8 million and $15.2 million
during the second quarter and first six months of 2013 compared to net realized
investment gains of $14.6 million and $19.5 million during the second quarter
and first six months of 2012.
Endurance ended the second quarter of 2013 with cash and invested assets of $6.4
billion, which represents a 2.4% decrease from December 31, 2012. Net operating
cash flow was $42.7 million for the six months ended June 30, 2013 versus $70.3
million for the same period in 2012.
Capitalization and Shareholders' Equity
At June 30, 2013, Endurance's shareholders' equity was $2.74 billion or $51.95
per diluted common share versus $2.71 billion or $52.88 per diluted common share
at December 31, 2012. For the quarter and six months ended June 30, 2013,
Endurance declared and paid common dividends of $0.32 and $0.64 per share,
respectively. During the quarter and six months ended June 30, 2013, the
Company repurchased 95,100 and 318,252 common shares at an average cost of
$48.16 and $45.83, respectively. Total share repurchases amounted to $4.6
million and $14.6 million, respectively, for the quarter and six months ended
June 30, 2013.
Earnings Call
Endurance will host a conference call on August 6, 2013 at 8:30 a.m. Eastern
time to discuss its financial results. The conference call can be accessed via
telephone by dialing (888) 778-8914 or (913) 905-3226 (international) and
entering pass code: 4212284. Those who intend to participate in the conference
call should register at least ten minutes in advance to ensure access to the
call. A telephone replay of the conference call will be available through
August 20, 2013 by dialing (888) 203-1112 or (719) 457-0820 (international) and
entering the pass code: 4212284.
The public may access a live broadcast of the conference call at the "Investors"
section of Endurance's website, www.endurance.bm. Following the live broadcast,
an archived version will continue to be available on Endurance's website.
A copy of Endurance's financial supplement for the second quarter of 2013 will
be available on Endurance's website at www.endurance.bm shortly after the
release of earnings.
Operating income, operating return on average common equity, operating income
per diluted common share, operating income allocated to common shareholders and
the combined ratio excluding prior year net loss reserve development are non-
GAAP measures. Reconciliations of these measures to the appropriate GAAP
measures are included in the attached tables.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global specialty provider of property and
casualty insurance and reinsurance. Through its operating subsidiaries,
Endurance writes agriculture, casualty and other specialty, professional lines
and property lines of insurance and catastrophe, property, casualty, and other
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 Wellesley House, 90 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 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," "expect," "intend," "plan," "believe," "project,"
"anticipate," "seek," "will," 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 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, 2012.
Forward-looking statements speak only as of the date on which they are made, and
we undertake no obligation publicly to update or revise any forward-looking
statement, whether as a result of new information, future developments or
otherwise.
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars, except share and per share amounts)
June 30, December 31,
2013 2012
---------------- --------------------------------
Assets
Cash and cash equivalents $ 942,062 $ 1,124,019
Fixed maturity investments,
available for sale, at fair
value 4,755,091 4,868,150
Short-term investments,
available for sale, at fair
value 15,382 42,230
Equity securities, available
for sale, at fair value 232,919 86,997
Other investments 569,393 517,546
Premiums receivable, net 1,271,818 601,952
Insurance and reinsurance 111,405 105,663
balances receivable
Deferred acquisition costs 210,740 168,252
Prepaid reinsurance premiums 292,911 166,702
Reinsurance recoverable on 594,020 691,783
unpaid losses
Reinsurance recoverable on paid 101,753 83,159
losses
Accrued investment income 25,404 27,166
Goodwill and intangible assets 168,621 172,000
Deferred tax asset 52,240 43,501
Net receivable on sales of 78,243 9,144
investments
Other assets 128,446 86,708
---------------- --------------------------------
Total Assets $ 9,550,448 $ 8,794,972
---------------- --------------------------------
Liabilities
Reserve for losses and loss 4,145,581 4,240,876
expenses $ $
Reserve for unearned premiums 1,500,253 965,244
Deposit liabilities 17,785 22,220
Reinsurance balances payable 262,582 110,843
Debt 527,401 527,339
Net payable on purchases of 181,060 81,469
investments
Other liabilities 179,732 136,384
---------------- --------------------------------
Total Liabilities 6,814,394 6,084,375
---------------- --------------------------------
Shareholders' Equity
Preferred shares
Series A, non-cumulative -
8,000,000 issued and
outstanding (2012 -
8,000,000) 8,000 8,000
Series B, non-cumulative -
9,200,000 issued and
outstanding (2012 -
9,200,000) 9,200 9,200
Common shares
44,331,379 issued and
outstanding (2012 -
43,116,394) 44,331 43,116
Additional paid-in capital 556,255 527,915
Accumulated other comprehensive
income 31,438 152,463
Retained earnings 2,086,830 1,969,903
---------------- --------------------------------
Total Shareholders' Equity 2,736,054 2,710,597
---------------- --------------------------------
Total Liabilities and
Shareholders' Equity $ 9,550,448 $ 8,794,972
---------------- --------------------------------
Book Value per Common Share
Dilutive common shares
outstanding 44,387,395 43,130,075
Diluted book value per common
share [a] $ 51.95 $ 52.88
---------------- --------------------------------
Note: All financial information contained herein is unaudited, except the
balance sheet data for the year ended December 31, 2012, which was derived
from Endurance's audited financial statements.
[a] Excludes the $430 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)
Quarter Ended For the Six Months Ended
--------------------------- --------------- --------------
June 30, June 30, June 30, June 30,
2013 2012 2013 2012
------------- ------------- --------------- --------------
Revenues
Gross premiums written $ 572,710 $ 604,076 $ 1,750,072 $ 1,665,725
------------- ------------- --------------- --------------
Net premiums written $ 464,621 $ 484,413 $ 1,373,536 $ 1,327,469
Change in unearned 78,714 34,927 (410,084) (396,494)
premiums
------------- ------------- --------------- --------------
Net premiums earned 543,335 519,340 963,452 930,975
Other underwriting
income (loss) 888 19 1,637 (316)
Net investment income 32,468 31,766 81,773 88,841
Net realized and 10,372 14,958 16,607 20,161
unrealized gains
Total other-than- (579) (148) (1,385) (148)
temporary impairment
losses
Portion of loss - (259) - (478)
recognized in other
comprehensive (loss)
income
------------- ------------- --------------- --------------
Net impairment losses (579) (407) (1,385) (626)
recognized in earnings
------------- ------------- --------------- --------------
Total revenues 586,484 565,676 1,062,084 1,039,035
------------- ------------- --------------- --------------
Expenses
Net losses and loss
expenses 359,058 345,897 578,028 608,664
Acquisition expenses 71,868 72,128 143,504 140,617
General and
administrative
expenses 81,359 62,609 147,837 128,650
Amortization of
intangibles 1,625 2,777 3,726 5,554
Net foreign exchange
losses (gains) 3,368 (336) 6,295 (18,473)
Interest expense 9,052 9,044 18,090 18,091
------------- ------------- --------------- --------------
Total expenses 526,330 492,119 897,480 883,103
------------- ------------- --------------- --------------
Income before income
taxes 60,154 73,557 164,604 155,932
Income tax benefit
(expense) 865 (1,074) (3,286) (907)
------------- ------------- --------------- --------------
Net income 61,019 72,483 161,318 155,025
Preferred dividends (8,188) (8,188) (16,376) (16,376)
------------- ------------- --------------- --------------
Net income available
to common and
participating common
shareholders $ 52,831 $ 64,295 $ 144,942 $ 138,649
------------- ------------- --------------- --------------
Per share data
Basic earnings per
common share $ 1.21 $ 1.48 $ 3.34 $ 3.20
------------- ------------- --------------- --------------
Diluted earnings per
common share $ 1.21 $ 1.48 $ 3.34 $ 3.20
------------- ------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the quarter ended June 30, 2013
-----------------------------------------
Reported
Insurance Reinsurance Totals
------------- ------------- -------------
Revenues
Gross premiums written $ 276,941 $ 295,769 $ 572,710
Ceded premiums written (85,439) (22,650) (108,089)
------------- ------------- -------------
Net premiums written 191,502 273,119 464,621
------------- ------------- -------------
Net premiums earned 267,878 275,457 543,335
Other underwriting income - 888 888
------------- ------------- -------------
Total underwriting revenues 267,878 276,345 544,223
------------- ------------- -------------
Expenses
Net losses and loss expenses 215,844 143,214 359,058
Acquisition expenses 14,968 56,900 71,868
General and administrative
expenses 43,524 37,835 81,359
------------- ------------- -------------
274,336 237,949 512,285
------------- ------------- -------------
Underwriting (loss) income $ (6,458) $ 38,396 $ 31,938
------------- ------------- -------------
Net loss ratio 80.6 % 52.0 % 66.1 %
Acquisition expense ratio 5.6 % 20.7 % 13.2 %
General and administrative
expense ratio 16.2 % 13.7 % 15.0 %
------------- ------------- -------------
Combined ratio 102.4 % 86.4 % 94.3 %
------------- ------------- -------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the quarter ended June 30, 2012
-----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- ----------------
Revenues
Gross premiums written $ 292,659 $ 311,417 $ 604,076
Ceded premiums written (106,000) (13,663) (119,663)
-------------- ------------- --------------
Net premiums written 186,659 297,754 484,413
-------------- ------------- --------------
Net premiums earned 266,085 253,255 519,340
Other underwriting (loss)
income (1,300) 1,319 19
-------------- ------------- --------------
Total underwriting
revenues 264,785 254,574 519,359
--------------- --------------- ----------------
Expenses
Net losses and loss
expenses 208,504 137,393 345,897
Acquisition expenses 17,545 54,583 72,128
General and administrative
expenses 32,819 29,790 62,609
-------------- ------------- --------------
258,868 221,766 480,634
-------------- ------------- --------------
Underwriting income $ 5,917 $ 32,808 $ 38,725
--------------- --------------- ----------------
Net loss ratio 78.4 % 54.2 % 66.5 %
Acquisition expense ratio 6.6 % 21.6 % 13.9 %
General and administrative
expense ratio 12.3 % 11.8 % 12.1 %
--------------- --------------- ----------------
Combined ratio 97.3 % 87.6 % 92.5 %
--------------- --------------- ----------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the six months ended June 30, 2013
-------------------------------------------
Reported
Insurance Reinsurance Totals
-------------- ------------- --------------
Revenues
Gross premiums written $ 929,884 $ 820,188 $ 1,750,072
Ceded premiums written (333,688) (42,848) (376,536)
-------------- ------------- --------------
Net premiums written 596,196 777,340 1,373,536
-------------- ------------- --------------
Net premiums earned 419,030 544,422 963,452
Other underwriting income - 1,637 1,637
-------------- ------------- --------------
Total underwriting revenues 419,030 546,059 965,089
-------------- ------------- --------------
Expenses
Net losses and loss expenses 315,308 262,720 578,028
Acquisition expenses 29,584 113,920 143,504
General and administrative
expenses 79,151 68,686 147,837
-------------- ------------- --------------
424,043 445,326 869,369
-------------- ------------- --------------
Underwriting (loss) income $ (5,013) $ 100,733 $ 95,720
-------------- ------------- --------------
Net loss ratio 75.2 % 48.3 % 60.0 %
Acquisition expense ratio 7.1 % 20.9 % 14.9 %
General and administrative
expense ratio 18.9 % 12.6 % 15.3 %
-------------- ------------- --------------
Combined ratio 101.2 % 81.8 % 90.2 %
-------------- ------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the six months ended June 30, 2012
------------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- -----------------
Revenues
Gross premiums written $ 928,006 $ 737,719 $ 1,665,725
Ceded premiums written (313,566) (24,690) (338,256)
-------------- ------------- ---------------
Net premiums written 614,440 713,029 1,327,469
-------------- ------------- ---------------
Net premiums earned 427,715 503,260 930,975
Other underwriting (loss)
income (1,300) 984 (316)
-------------- ------------- ---------------
Total underwriting
revenues 426,415 504,244 930,659
--------------- --------------- -----------------
Expenses
Net losses and loss
expenses 322,206 286,458 608,664
Acquisition expenses 33,759 106,858 140,617
General and
administrative expenses 67,254 61,396 128,650
-------------- ------------- ---------------
423,219 454,712 877,931
-------------- ------------- ---------------
Underwriting income $ 3,196 $ 49,532 $ 52,728
--------------- --------------- -----------------
Net loss ratio 75.3 % 57.0 % 65.4 %
Acquisition expense ratio 7.9 % 21.2 % 15.1 %
General and
administrative expense
ratio 15.7 % 12.2 % 13.8 %
--------------- --------------- -----------------
Combined ratio 98.9 % 90.4 % 94.3 %
--------------- --------------- -----------------
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
As Reported
--------------------------------------------------------------
For the quarter ended June 30,
--------------------------------------------------------------
Insurance Reinsurance Total
--------------------- -------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 80.6 % 78.4 % 52.0 % 54.2 % 66.1 % 66.5 %
Acquisition
expense ratio 5.6 % 6.6 % 20.7 % 21.6 % 13.2 % 13.9 %
General and
administrative
expense ratio 16.2 % 12.3 % 13.7 % 11.8 % 15.0 % 12.1 %
---------- ---------- ---------- --------- ---------- --------
Combined ratio 102.4 % 97.3 % 86.4 % 87.6 % 94.3 % 92.5 %
---------- ---------- ---------- --------- ---------- --------
Effect of Prior Year Net
Loss Reserve Development
Favorable /
(Unfavorable)
--------------------------------------------------------------
For the quarter ended June 30,
--------------------------------------------------------------
Insurance Reinsurance Total
--------------------- -------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 2.1 % 5.1 % 20.8 % 2.3 % 11.6 % 3.8 %
---------- ---------- ---------- --------- ---------- --------
Net of Prior Year Net Loss
Reserve Development
--------------------------------------------------------------
For the quarter ended June 30,
--------------------------------------------------------------
Insurance Reinsurance Total
--------------------- -------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 82.7 % 83.5 % 72.8 % 56.5 % 77.7 % 70.3 %
Acquisition
expense ratio 5.6 % 6.6 % 20.7 % 21.6 % 13.2 % 13.9 %
General and
administrative
expense ratio 16.2 % 12.3 % 13.7 % 11.8 % 15.0 % 12.1 %
---------- ---------- ---------- --------- ---------- --------
Combined ratio 104.5 % 102.4 % 107.2 % 89.9 % 105.9 % 96.3 %
---------- ---------- ---------- --------- ---------- --------
The combined ratio is the sum of the loss, acquisition expense and general and
administrative expense ratios. 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
-------------------------------------------------------------
For the six months ended June 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 75.2 % 75.3 % 48.3 % 57.0 % 60.0 % 65.4 %
Acquisition
expense ratio 7.1 % 7.9 % 20.9 % 21.2 % 14.9 % 15.1 %
General and
administrative
expense ratio 18.9 % 15.7 % 12.6 % 12.2 % 15.3 % 13.8 %
---------- ---------- --------- --------- ---------- --------
Combined ratio 101.2 % 98.9 % 81.8 % 90.4 % 90.2 % 94.3 %
---------- ---------- --------- --------- ---------- --------
Effect of Prior Year Net
Loss Reserve Development
Favorable /
(Unfavorable)
-------------------------------------------------------------
For the six months ended June 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 5.5 % 5.0 % 16.6 % 3.0 % 11.8 % 3.9 %
---------- ---------- --------- --------- ---------- --------
Net of Prior Year Net Loss
Reserve Development
-------------------------------------------------------------
For the six months ended June 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 80.7 % 80.3 % 64.9 % 60.0 % 71.8 % 69.3 %
Acquisition
expense ratio 7.1 % 7.9 % 20.9 % 21.2 % 14.9 % 15.1 %
General and
administrative
expense ratio 18.9 % 15.7 % 12.6 % 12.2 % 15.3 % 13.8 %
---------- ---------- --------- --------- ---------- --------
Combined ratio 106.7 % 103.9 % 98.4 % 93.4 % 102.0 % 98.2 %
---------- ---------- --------- --------- ---------- --------
The combined ratio is the sum of the loss, acquisition expense and general
and administrative expense ratios. 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
quarters ended June 30, 2013 and 2012:
Quarter Ended June 30, 2013 Quarter Ended June 30, 2012
------------------------------- -----------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
------------------------------- -----------------------------
Insurance
Agriculture $ 131,633 $ 84,537 $ 133,439 $ 67,249
Casualty and 87,614 63,373 90,019 64,588
other
specialty
Professional 38,296 27,788 51,019 42,832
lines
Property 19,398 15,804 18,182 11,990
--------------- --------------- -------------- --------------
Subtotal $ 276,941 $ 191,502 $ 292,659 $ 186,659
Insurance
--------------- --------------- -------------- --------------
Reinsurance
Catastrophe $ 155,431 $ 138,041 $ 172,222 $ 158,865
Property 48,384 44,516 54,026 54,033
Casualty 67,209 67,211 58,897 58,895
Other 24,745 23,351 26,272 25,961
specialty
--------------- --------------- -------------- --------------
Subtotal $ 295,769 $ 273,119 $ 311,417 $ 297,754
Reinsurance
--------------- --------------- -------------- --------------
Total $ 572,710 $ 464,621 $ 604,076 $ 484,413
--------------- --------------- -------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY SEGMENT
(in thousands of United States dollars)
The following tables show Endurance's gross and net premiums written for the
six months ended June 30, 2013 and 2012:
Six Months Ended Six Months Ended
June 30, 2013 June 30, 2012
------------------------------- -------------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
------------------------------- -------------------------------
Insurance
Agriculture $ 696,107 $ 425,667 $ 667,106 $ 422,169
Casualty and 144,081 106,634 145,510 106,411
other
specialty
Professional 59,260 41,991 87,364 73,037
lines
Property 30,436 21,904 28,026 12,823
--------------- --------------- --------------- ---------------
Subtotal $ 929,884 $ 596,196 $ 928,006 $ 614,440
Insurance
--------------- --------------- --------------- ---------------
Reinsurance
Catastrophe $ 303,297 $ 269,439 $ 315,404 $ 292,583
Property 196,795 192,927 160,772 160,779
Casualty 218,911 217,484 180,571 179,332
Other 101,185 97,490 80,972 80,335
specialty
--------------- --------------- --------------- ---------------
Subtotal $ 820,188 $ 777,340 $ 737,719 $ 713,029
Reinsurance
--------------- --------------- --------------- ---------------
Total $ 1,750,072 $ 1,373,536 $ 1,665,725 $ 1,327,469
--------------- --------------- --------------- ---------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RECONCILIATIONS
(in thousands of United States dollars, except share, per share amounts and ratios)
The following is a reconciliation of Endurance's net income, net income per
diluted common share, net income allocated to common shareholders under the two-
class method and annualized return on average common equity to operating income,
operating income per diluted common share, operating income allocated to common
shareholders under the
two-class method and annualized operating return on average common equity (all
non-GAAP measures) for the three and six months ended June 30, 2013 and 2012:
Quarter Ended Six Months Ended
June 30, June 30,
--------------------------------- ---------------------------------
2013 2012 2013 2012
---------------- ---------------- ---------------- ----------------
Net income $ 61,019 $ 72,483 $ 161,318 $ 155,025
Add (less)
after-tax
items:
Net foreign
exchange
losses
(gains) 3,341 (365) 6,250 (16,625)
Net realized
and
unrealized
gains (9,435) (13,050) (15,427) (18,018)
Net
impairment
losses
recognized in
earnings 579 387 1,351 606
---------------- ---------------- ---------------- ----------------
Operating
income before
preferred
dividends $ 55,504 $ 59,455 $ 153,492 $ 120,988
Preferred
dividends (8,188) (8,188) (16,376) (16,376)
---------------- ---------------- ---------------- ----------------
Operating
income
allocated to
common and
participating
common
shareholders $ 47,316 $ 51,267 $ 137,116 $ 104,612
---------------- ---------------- ---------------- ----------------
Operating
income
allocated to
common
shareholders
under the
two-class
method $ 46,302 $ 50,402 $ 134,519 $ 102,818
---------------- ---------------- ---------------- ----------------
Weighted
average diluted
common 42,621,530 42,635,182 42,527,365 42,562,007
---------------- ---------------- ---------------- ----------------
Operating
income per
diluted common
share [b] $ 1.09 $ 1.18 $ 3.16 $ 2.42
---------------- ---------------- ---------------- ----------------
Average common
equity [a] $ 2,321,152 $ 2,285,890 $ 2,293,326 $ 2,249,204
Operating
return on
average common
equity 2.0 % 2.2 % 6.0 % 4.7 %
---------------- ---------------- ---------------- ----------------
Annualized
operating
return on
average common
equity 8.2 % 9.0 % 12.0 % 9.3 %
---------------- ---------------- ---------------- ----------------
Net income $ 61,019 $ 72,483 $ 161,318 $ 155,025
Preferred
dividends (8,188) (8,188) (16,376) (16,376)
---------------- ---------------- ---------------- ----------------
Net income
available to
common and
participating
common
shareholders $ 52,831 $ 64,295 $ 144,942 $ 138,649
---------------- ---------------- ---------------- ----------------
Net income
available to
common
shareholders
under
the two-class
method $ 51,699 $ 63,210 $ 142,197 $ 136,272
---------------- ---------------- ---------------- ----------------
Net income per
diluted common
share $ 1.21 $ 1.48 $ 3.34 $ 3.20
---------------- ---------------- ---------------- ----------------
Return on
average common
equity, Net
income 2.3 % 2.8 % 6.3 % 6.2 %
---------------- ---------------- ---------------- ----------------
Annualized
return on
average common
equity, Net
income 9.1 % 11.3 % 12.6 % 12.3 %
---------------- ---------------- ---------------- ----------------
[a] Average common equity is calculated as the arithmetic average of the
beginning and ending common equity balances for the stated period, which excludes
the $430 million liquidation value of the preferred shares (2012: $430 million)
[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.
Operating income and 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 (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. Operating income represents after-tax operational results excluding, as
applicable, after-tax net realized capital gains or losses and after-tax net
foreign exchange gains or losses because the amount of these gains or losses is
heavily influenced by, and fluctuates in part, according to the availability of
market opportunities. Endurance 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 and
net income per dilutive common share determined in accordance with the two-class
method under GAAP, Endurance believes that showing operating income and
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 how management analyzes
Endurance's underlying business performance. Operating income and operating
income per dilutive common share should not be viewed as substitutes for GAAP
net income and net income per dilutive common share, respectively.
Endurance presents return on equity as a measure that is commonly recognized as
a standard of performance by investors, analysts, rating agencies and other
users of its financial information.
Contact:
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations(at)endurance.bm
# # #
This announcement is distributed by Thomson Reuters on behalf of
Th
Unternehmensinformation / Kurzprofil:
Datum: 05.08.2013 - 22:15 Uhr
Sprache: Deutsch
News-ID 284814
Anzahl Zeichen: 65598
contact information:
Town:
Pembroke
Kategorie:
Business News
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Die Pressemitteilung mit dem Titel:
"Endurance Reports Second Quarter 2013 Financial Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Endurance Specialty Holdings Ltd (Nachricht senden)
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