Endurance Reports Third Quarter 2013 Financial Results
(Thomson Reuters ONE) -
PEMBROKE, Bermuda - November 4, 2013 - Endurance Specialty Holdings Ltd.
(NYSE:ENH) today reported net income available to common shareholders of $75.2
million and $1.70 per diluted common share for the third quarter of 2013 versus
net income of $31.9 million and $0.74 per diluted common share for the third
quarter of 2012.
For the nine months ended September 30, 2013, Endurance reported net income
available to common shareholders of $220.2 million and $5.04 per diluted common
share versus net income of $170.6 million and $3.94 per diluted common share for
the nine months ended September 30, 2012. Book value per diluted share was
$54.33 at September 30, 2013, an increase of 4.6% from June 30, 2013 and up
2.7% from December 31, 2012.
Operating highlights for the quarter ended September 30, 2013 were as follows:
* Net premiums written of $395.3 million, a decline of 23.1% compared to the
same period in 2012;
* Combined ratio of 87.7%, which included 8.7 percentage points of favorable
prior year loss reserve development and 3.7 percentage points of catastrophe
losses from 2013 events;
* Net investment income of $38.1 million, a decrease of $7.8 million from the
same period in 2012;
* Operating income, which excludes after-tax realized investment losses and
foreign exchange losses, of $83.9 million and $1.89 per diluted common
share; and
* Operating return on average common equity for the quarter of 3.6% or 14.2%
on an annualized basis.
Operating highlights for the nine months ended September 30, 2013 were as
follows:
* Net premiums written of $1,768.9 million, a decline of 3.9% over the same
period in 2012;
* Combined ratio of 89.3%, which included 10.6 percentage points of favorable
prior year loss reserve development and 4.5 percentage points of current
year catastrophe losses;
* Net investment income of $119.9 million, a decrease of $14.9 million over
the same period in 2012;
* Operating income, which excludes after-tax realized investment gains and
foreign exchange losses, of $221.0 million and $5.06 per diluted common
share; and
* Operating return on average common equity for the first nine months of the
year of 9.4%, or 12.6% on an annualized basis.
John R. Charman, Chairman and Chief Executive Officer, commented, "Endurance had
a good quarter, both financially and strategically. Financially, our strong
operating results were driven by improved underwriting performance and positive
investment returns. Strategically, we have made significant progress driving
substantial improvements in our underwriting capabilities, streamlining our
operations and enhancing our positioning in the global market. These strategies
are accelerating. We continue to attract market leading talent and these new
high quality growth initiatives combined with our more streamlined operations
significantly improves our ability to transform Endurance into a world class
underwriting organization with industry leading profitability."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended
September 30, 2013 were as follows:
* Net premiums written of $224.3 million, an increase of 1.4% from the third
quarter of 2012;
* Combined ratio of 96.9%, an improvement of 24.1 percentage points from the
third quarter of 2012; and
* Favorable prior year loss reserve development of 2.1 percentage points
during the current period, compared to 6.2 percentage points of favorable
prior year loss reserve development in the third quarter of 2012.
Operating highlights for Endurance's Insurance segment for the nine months ended
September 30, 2013 were as follows:
* Net premiums written of $820.5 million, a decrease of 1.8% from the same
period in 2012;
* Combined ratio of 99.4%, an improvement of 8.3 percentage points from the
same period in 2012; and
* Favorable prior year loss reserve development of 4.1 percentage points
during the current period, compared to 5.5 percentage points of favorable
prior year loss reserve development in the same period in 2012.
Net premiums written in the Insurance segment increased $3.1 million for the
third quarter compared to the same period in 2012. Increases within the
agriculture and casualty and other specialty lines of business were partially
offset by declines in the professional and property lines of business. Within
the agriculture line of business, net premiums written increased due to growth
in spring crop policy counts and were partially offset by lower premiums from
fall crops that were impacted by lower commodity prices compared to third
quarter 2012. The increase in casualty and other specialty lines of business
was predominantly driven by the addition of new underwriting teams in ocean and
inland marine and within excess casualty. The decline in net premiums written
in the professional line of business resulted from the termination of a program
relationship in late 2012. The decline in property net premiums written
reflects the nonrenewal of certain working layer property catastrophe contracts
in order to improve the risk characteristics of the portfolio. For the nine
months ended September 30, 2013, net premiums written declined $15.2 million as
a decline in professional insurance was partially offset by growth in
agriculture, property and casualty and other specialty lines of business.
The improvement in the Insurance segment combined ratio for the quarter ended
September 30, 2013 compared to the same period in 2012 was primarily driven by
lower net loss and acquisition expense ratios, partially offset by a higher
general and administrative expense ratio. The biggest driver of the improvement
in the net loss ratio resulted from a better crop year in the agriculture
insurance line of business as 2012 was impacted by a severe drought. Also
impacting the current quarter's net loss ratio was improved accident year loss
ratios in the property and casualty and other specialty lines of business that
were partially offset by lower levels of prior period favorable reserve
development. The general and administrative expense ratio was higher in the
current quarter due to a greater level of corporate expenses related to
severance costs, higher expenses associated with recently added underwriting
teams and larger variable compensation expense accruals reflecting the
Company's higher current year profitability. For the nine months ended
September 30, 2013, the combined ratio was 8.3 percentage points lower than the
same period a year ago as lower net loss and acquisition expense ratios were
partially offset by a higher general and administrative ratio.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended
September 30, 2013 were as follows:
* Net premiums written of $171.0 million, a decrease of 41.6% from the third
quarter of 2012;
* Combined ratio of 77.4%, an increase of 0.6 percentage points from the third
quarter of 2012;
* Favorable prior year loss reserve development of 16.0 percentage points
compared to 14.2 percentage points of favorable prior year loss reserve
development in the third quarter of 2012; and
* Net catastrophe losses from 2013 events of $18.1 million or 7.8 percentage
points on the combined ratio compared to net catastrophe losses of $13.2
million or 5.3 points in the third quarter of 2012.
Operating highlights for Endurance's Reinsurance segment for the nine months
ended September 30, 2013 were as follows:
* Net premiums written of $948.3 million, a decrease of 5.7% from the same
period in 2012;
* Combined ratio of 80.4%, an improvement of 5.2 percentage points from the
same period in 2012;
* Favorable prior year loss reserve development of 16.4 percentage points
during the current period, compared to 6.9 percentage points of favorable
prior year loss reserve development in the same period in 2012; and
* Net catastrophe losses from 2013 events of $65.5 million or 8.7 percentage
points on the combined ratio compared to net catastrophe losses of $49.6
million or 6.6 points in the first nine months of 2012.
The $121.8 million decrease in net premiums written within the Reinsurance
segment during the third quarter of 2013 compared to the third quarter of 2012
resulted primarily from declines in property, catastrophe and casualty
reinsurance lines. The $67.2 million decline in property premiums in the
current quarter compared to a year ago reflected a reduced participation on a
few large contracts where pricing and terms were not adequate. The $23.9
million reduction in catastrophe premiums reflected the purchase of peak zone
retrocessional coverage, which reduced net premiums written. Casualty premiums
declined $24.1 million as the Company non-renewed business that no longer met
profitability targets and a smaller level of premium adjustments were realized
in the current quarter compared to a year ago. For the nine months ended
September 30, 2013, net premiums written decreased $57.5 million due to declines
within the property and catastrophe lines of business, partially offset by
modest increases in the casualty and other specialty lines of business.
The combined ratio in the Reinsurance segment for the third quarter of 2013
increased modestly compared to the same period in 2012, predominantly due to a
higher general and administrative expense ratio, partially offset by a lower net
loss ratio. The net loss ratio in the third quarter of 2013 benefited from
$41.9 million, or 16.0 percentage points, of favorable prior year loss reserve
development, compared to $38.2 million, or 14.2 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 as losses have developed
better than original estimates. The current quarter's combined ratio also
included 7.8 percentage points of catastrophe losses mainly related to hail
storms in Germany, while the third quarter of 2012 included 5.3 percentage
points of catastrophe losses relating to Hurricane Isaac and a number of small
loss events. The higher general and administrative expenses were predominantly
due to greater allocated corporate expenses related to severance costs from the
reduction in senior executives previously announced and larger variable
compensation expense accruals reflecting the Company's higher current year
profitability.
For the first nine months of 2013, the Reinsurance segment reported a combined
ratio of 80.4% compared to 85.6% for the same period in 2012 principally due to
a lower net loss ratio that included a greater level of favorable prior year
loss reserve development, partially offset by a higher general and
administrative expense ratio.
Investments
Endurance's net investment income for the quarter and nine months ended
September 30, 2013 was $38.1 million and $119.9 million, a decrease of $7.8
million and $14.9 million, respectively, compared to the same periods in 2012.
The total return of Endurance's investment portfolio was 1.32% and 0.68% for
the quarter and nine months ended September 30, 2013, respectively, compared to
1.75% and 4.08% for the quarter and nine months ended September 30, 2012,
respectively. Investment income generated from Endurance's available for sale
investments declined by $6.1 million and $19.6 million for the three and nine
months ended September 30, 2013, respectively, compared to the same periods in
2012 due to lower reinvestment rates during 2013 and the short duration of
Endurance's fixed maturity portfolio. During the third quarter and nine months
ended September 30, 2013, Endurance's net investment income included gains of
$13.2 million and $43.1 million, respectively, on its alternative investment
funds and high yield loan funds, which are included in other investments, as
compared to gains of $15.1 million and $38.1 million in the third quarter and
first nine months of 2012, respectively. The ending book yield on Endurance's
fixed maturity investments at September 30, 2013 was 2.28%, down from 2.38% at
September 30, 2012.
At September 30, 2013, Endurance's fixed maturity portfolio, which comprises
86.4% of Endurance's investments, had an average credit quality of AA and a
duration of 3.10 years. Endurance's fixed maturity portfolio was in a net
unrealized gain position of $59.7 million at September 30, 2013, a decrease of
$82.0 million from December 31, 2012. Endurance recorded net realized
investment losses, net of impairment losses recognized in earnings, of $6.8
million and gains of $8.4 million during the third quarter and first nine months
of 2013 compared to net realized investment gains of $10.0 million and $29.5
million during the third quarter and first nine months of 2012.
Endurance ended the third quarter of 2013 with cash and invested assets of $6.4
billion, which represents a 3.2% decrease from December 31, 2012. Net operating
cash outflow was $(16.6) million for the nine months ended September 30, 2013
versus $211.4 million inflow for the same period in 2012. The decline year over
year was primarily due to the payment of claims related to prior years and a
shift in settlement dates for agriculture insurance related receivables from the
U.S. Federal Government.
Capitalization and Shareholders' Equity
At September 30, 2013, Endurance's shareholders' equity was $2.84 billion or
$54.33 per diluted common share versus $2.71 billion or $52.88 per diluted
common share at December 31, 2012. For the quarter and nine months ended
September 30, 2013, Endurance declared and paid common dividends of $0.32 and
$0.96 per share, respectively. During the nine months ended September
30, 2013, the Company repurchased 318,252 common shares at an average cost of
$45.83 per share. Total share repurchases amounted to $14.6 million for the
nine months ended September 30, 2013. No common shares were repurchased during
the third quarter of 2013.
Earnings Call
Endurance will host a conference call on November 5, 2013 at 8:30 a.m. Eastern
time to discuss its financial results. The conference call can be accessed via
telephone by dialing (888) 219-1420 or (913) 312-0420 (international) and
entering pass code: 9454891. 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
November 19, 2013 by dialing (888) 203-1112 or (719) 457-0820 (international)
and entering the pass code: 9454891.
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 third 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)
September 30, December 31,
2013 2012
----------------- -------------------------------
Assets
Cash and cash equivalents $ 789,999 $ 1,124,019
Fixed maturity investments,
available for sale, at fair
value 4,800,838 4,868,150
Short-term investments,
available for sale, at fair
value 11,599 42,230
Equity securities, available
for sale, at fair value 262,866 86,997
Other investments 594,156 517,546
Premiums receivable, net 1,006,227 601,952
Insurance and reinsurance 123,777 105,663
balances receivable
Deferred acquisition costs 197,048 168,252
Prepaid reinsurance premiums 263,499 166,702
Reinsurance recoverable on 513,080 691,783
unpaid losses
Reinsurance recoverable on paid 428,300 83,159
losses
Accrued investment income 21,783 27,166
Goodwill and intangible assets 167,000 172,000
Deferred tax asset 50,148 43,501
Net receivable on sales of 124,236 9,144
investments
Other assets 192,104 86,708
----------------- -------------------------------
Total Assets $ 9,546,660 $ 8,794,972
----------------- -------------------------------
Liabilities
Reserve for losses and loss 4,052,102 4,240,876
expenses $ $
Reserve for unearned premiums 1,314,687 965,244
Deposit liabilities 17,577 22,220
Reinsurance balances payable 347,048 110,843
Debt 527,506 527,339
Net payable on purchases of 224,473 81,469
investments
Other liabilities 224,257 136,384
----------------- -------------------------------
Total Liabilities 6,707,650 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
44,249,622 issued and
outstanding (2012 -
43,116,394) 44,250 43,116
Additional paid-in capital 560,204 527,915
Accumulated other comprehensive
income 69,457 152,463
Retained earnings 2,147,899 1,969,903
----------------- -------------------------------
Total Shareholders' Equity 2,839,010 2,710,597
----------------- -------------------------------
Total Liabilities and
Shareholders' Equity $ 9,546,660 $ 8,794,972
----------------- -------------------------------
Book Value per Common Share
Dilutive common shares
outstanding 44,337,727 43,130,075
Diluted book value per common
share [a] $ 54.33 $ 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 Nine Months Ended
--------------------------- ------------------------------
September September September 30, September 30,
30, 30,
2013 2012 2013 2012
------------- ------------- --------------- --------------
Revenues
Gross premiums written $ 544,363 $ 621,255 $ 2,294,435 $ 2,286,980
------------- ------------- --------------- --------------
Net premiums written $ 395,333 $ 514,080 $ 1,768,869 $ 1,841,549
Change in unearned 158,212 37,792 (251,872) (358,702)
premiums
------------- ------------- --------------- --------------
Net premiums earned 553,545 551,872 1,516,997 1,482,847
Other underwriting
(loss) income (943) (1,347) 694 (1,663)
Net investment income 38,097 45,882 119,870 134,723
Net realized and (6,640) 10,097 9,967 30,258
unrealized (losses)
gains
Total other-than- (190) (126) (1,575) (274)
temporary impairment
losses
Portion of loss - (5) - (483)
recognized in other
comprehensive income
(loss)
------------- ------------- --------------- --------------
Net impairment losses (190) (131) (1,575) (757)
recognized in earnings
------------- ------------- --------------- --------------
Total revenues 583,869 606,373 1,645,953 1,645,408
------------- ------------- --------------- --------------
Expenses
Net losses and loss
expenses 339,036 407,523 917,064 1,016,187
Acquisition expenses 78,775 88,782 222,279 229,399
General and
administrative
expenses 67,470 52,715 215,307 181,365
Amortization of
intangibles 1,652 2,434 5,378 7,988
Net foreign exchange
losses (gains) 2,201 3,774 8,496 (14,699)
Interest expense 9,048 9,041 27,138 27,132
------------- ------------- --------------- --------------
Total expenses 498,182 564,269 1,395,662 1,447,372
------------- ------------- --------------- --------------
Income before income
taxes 85,687 42,104 250,291 198,036
Income tax expense (2,271) (1,986) (5,557) (2,893)
------------- ------------- --------------- --------------
Net income 83,416 40,118 244,734 195,143
Preferred dividends (8,188) (8,188) (24,564) (24,564)
------------- ------------- --------------- --------------
Net income available
to common and
participating common
shareholders $ 75,228 $ 31,930 $ 220,170 $ 170,579
------------- ------------- --------------- --------------
Per share data
Basic earnings per
common share $ 1.70 $ 0.74 $ 5.04 $ 3.94
------------- ------------- --------------- --------------
Diluted earnings per
common share $ 1.70 $ 0.74 $ 5.04 $ 3.94
------------- ------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the quarter ended September 30, 2013
------------------------------------------
Reported
Insurance Reinsurance Totals
-------------- ------------- -------------
Revenues
Gross premiums written $ 344,819 $ 199,544 $ 544,363
Ceded premiums written (120,481) (28,549) (149,030)
-------------- ------------- -------------
Net premiums written 224,338 170,995 395,333
-------------- ------------- -------------
Net premiums earned 291,477 262,068 553,545
Other underwriting loss - (943) (943)
-------------- ------------- -------------
Total underwriting revenues 291,477 261,125 552,602
-------------- ------------- -------------
Expenses
Net losses and loss expenses 228,409 110,627 339,036
Acquisition expenses 18,440 60,335 78,775
General and administrative
expenses 35,641 31,829 67,470
-------------- ------------- -------------
282,490 202,791 485,281
-------------- ------------- -------------
Underwriting income $ 8,987 $ 58,334 $ 67,321
-------------- ------------- -------------
Net loss ratio 78.4 % 42.3 % 61.3 %
Acquisition expense ratio 6.3 % 23.0 % 14.2 %
General and administrative
expense ratio 12.2 % 12.1 % 12.2 %
-------------- ------------- -------------
Combined ratio 96.9 % 77.4 % 87.7 %
-------------- ------------- -------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the quarter ended September 30, 2012
-----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- ----------------
Revenues
Gross premiums written $ 324,808 $ 296,447 $ 621,255
Ceded premiums written (103,543) (3,632) (107,175)
-------------- ------------- --------------
Net premiums written 221,265 292,815 514,080
-------------- ------------- --------------
Net premiums earned 283,273 268,599 551,872
Other underwriting (loss)
income (1,384) 37 (1,347)
-------------- ------------- --------------
Total underwriting
revenues 281,889 268,636 550,525
--------------- --------------- ----------------
Expenses
Net losses and loss
expenses 288,750 118,773 407,523
Acquisition expenses 24,506 64,276 88,782
General and administrative
expenses 29,409 23,306 52,715
-------------- ------------- --------------
342,665 206,355 549,020
-------------- ------------- --------------
Underwriting (loss) income $ (60,776) $ 62,281 $ 1,505
--------------- --------------- ----------------
Net loss ratio 101.9 % 44.2 % 73.8 %
Acquisition expense ratio 8.7 % 23.9 % 16.1 %
General and administrative
expense ratio 10.4 % 8.7 % 9.6 %
--------------- --------------- ----------------
Combined ratio 121.0 % 76.8 % 99.5 %
--------------- --------------- ----------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the nine months ended September 30, 2013
----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- --------------
Revenues
Gross premiums written $ 1,274,703 $ 1,019,732 $ 2,294,435
Ceded premiums written (454,169) (71,397) (525,566)
--------------- --------------- --------------
Net premiums written 820,534 948,335 1,768,869
--------------- --------------- --------------
Net premiums earned 710,507 806,490 1,516,997
Other underwriting income - 694 694
--------------- --------------- --------------
Total underwriting revenues 710,507 807,184 1,517,691
--------------- --------------- --------------
Expenses
Net losses and loss expenses 543,717 373,347 917,064
Acquisition expenses 48,024 174,255 222,279
General and administrative
expenses 114,792 100,515 215,307
--------------- --------------- --------------
706,533 648,117 1,354,650
--------------- --------------- --------------
Underwriting income $ 3,974 $ 159,067 $ 163,041
--------------- --------------- --------------
Net loss ratio 76.4 % 46.3 % 60.4 %
Acquisition expense ratio 6.8 % 21.6 % 14.7 %
General and administrative
expense ratio 16.2 % 12.5 % 14.2 %
--------------- --------------- --------------
Combined ratio 99.4 % 80.4 % 89.3 %
--------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
For the nine months ended September 30, 2012
---------------------------------------------------
Reported
Insurance Reinsurance Totals
---------------- ----------------- -----------------
Revenues
Gross premiums written $ 1,252,814 $ 1,034,166 $ 2,286,980
Ceded premiums written (417,109) (28,322) (445,431)
--------------- --------------- ---------------
Net premiums written 835,705 1,005,844 1,841,549
--------------- --------------- ---------------
Net premiums earned 710,988 771,859 1,482,847
Other underwriting
(loss) income (2,684) 1,021 (1,663)
--------------- --------------- ---------------
Total underwriting
revenues 708,304 772,880 1,481,184
---------------- ----------------- -----------------
Expenses
Net losses and loss
expenses 610,956 405,231 1,016,187
Acquisition expenses 58,265 171,134 229,399
General and
administrative
expenses 96,663 84,702 181,365
--------------- --------------- ---------------
765,884 661,067 1,426,951
--------------- --------------- ---------------
Underwriting (loss)
income $ (57,580) $ 111,813 $ 54,233
---------------- ----------------- -----------------
Net loss ratio 85.9 % 52.4 % 68.5 %
Acquisition expense
ratio 8.2 % 22.2 % 15.5 %
General and
administrative expense
ratio 13.6 % 11.0 % 12.2 %
---------------- ----------------- -----------------
Combined ratio 107.7 % 85.6 % 96.2 %
---------------- ----------------- -----------------
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
As Reported
------------------------------------------------------------
For the quarter ended September 30,
------------------------------------------------------------
Insurance Reinsurance Total
-------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 78.4 % 101.9 % 42.3 % 44.2 % 61.3 % 73.8 %
Acquisition
expense ratio 6.3 % 8.7 % 23.0 % 23.9 % 14.2 % 16.1 %
General and
administrative
expense ratio 12.2 % 10.4 % 12.1 % 8.7 % 12.2 % 9.6 %
--------- ---------- --------- --------- --------- ---------
Combined ratio 96.9 % 121.0 % 77.4 % 76.8 % 87.7 % 99.5 %
--------- ---------- --------- --------- --------- ---------
Effect of Prior Year Net
Loss Reserve Development
Favorable /
(Unfavorable)
------------------------------------------------------------
For the quarter ended September 30,
------------------------------------------------------------
Insurance Reinsurance Total
-------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 2.1 % 6.2 % 16.0 % 14.2 % 8.7 % 10.1 %
--------- ---------- --------- --------- --------- ---------
Net of Prior Year Net Loss
Reserve Development
------------------------------------------------------------
For the quarter ended September 30,
------------------------------------------------------------
Insurance Reinsurance Total
-------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 80.5 % 108.1 % 58.3 % 58.4 % 70.0 % 83.9 %
Acquisition
expense ratio 6.3 % 8.7 % 23.0 % 23.9 % 14.2 % 16.1 %
General and
administrative
expense ratio 12.2 % 10.4 % 12.1 % 8.7 % 12.2 % 9.6 %
--------- ---------- --------- --------- --------- ---------
Combined ratio 99.0 % 127.2 % 93.4 % 91.0 % 96.4 % 109.6 %
--------- ---------- --------- --------- --------- ---------
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 nine months ended September 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 76.4 % 85.9 % 46.3 % 52.4 % 60.4 % 68.5 %
Acquisition
expense ratio 6.8 % 8.2 % 21.6 % 22.2 % 14.7 % 15.5 %
General and
administrative
expense ratio 16.2 % 13.6 % 12.5 % 11.0 % 14.2 % 12.2 %
---------- ---------- --------- --------- --------- ---------
Combined ratio 99.4 % 107.7 % 80.4 % 85.6 % 89.3 % 96.2 %
---------- ---------- --------- --------- --------- ---------
Effect of Prior Year Net
Loss Reserve Development
Favorable /
(Unfavorable)
-------------------------------------------------------------
For the nine months ended September 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 4.1 % 5.5 % 16.4 % 6.9 % 10.6 % 6.2 %
---------- ---------- --------- --------- --------- ---------
Net of Prior Year Net Loss
Reserve Development
-------------------------------------------------------------
For the nine months ended September 30,
-------------------------------------------------------------
Insurance Reinsurance Total
--------------------- ------------------- -------------------
2013 2012 2013 2012 2013 2012
Net loss ratio 80.5 % 91.4 % 62.7 % 59.3 % 71.0 % 74.7 %
Acquisition
expense ratio 6.8 % 8.2 % 21.6 % 22.2 % 14.7 % 15.5 %
General and
administrative
expense ratio 16.2 % 13.6 % 12.5 % 11.0 % 14.2 % 12.2 %
---------- ---------- --------- --------- --------- ---------
Combined ratio 103.5 % 113.2 % 96.8 % 92.5 % 99.9 % 102.4 %
---------- ---------- --------- --------- --------- ---------
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 September 30, 2013 and 2012:
Quarter Ended September Quarter Ended September
30, 2013 30, 2012
------------------------------- -----------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
------------------------------- -----------------------------
Insurance
Agriculture $ 200,062 $ 120,617 $ 171,826 $ 106,180
Casualty and 95,862 72,431 90,873 66,686
other
specialty
Professional 34,221 20,972 43,209 34,804
lines
Property 14,674 10,318 18,900 13,595
--------------- --------------- -------------- --------------
Subtotal $ 344,819 $ 224,338 $ 324,808 $ 221,265
Insurance
--------------- --------------- -------------- --------------
Reinsurance
Catastrophe $ 38,676 $ 12,551 $ 38,871 $ 36,484
Property 91,653 90,528 157,742 157,742
Casualty 53,691 53,690 77,781 77,781
Other 15,524 14,226 22,053 20,808
specialty
--------------- --------------- -------------- --------------
Subtotal $ 199,544 $ 170,995 $ 296,447 $ 292,815
Reinsurance
--------------- --------------- -------------- --------------
Total $ 544,363 $ 395,333 $ 621,255 $ 514,080
--------------- --------------- -------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY SEGMENT
(in thousands of United States dollars)
The following tables show Endurance's gross and net premiums written for the
nine months ended September 30, 2013 and 2012:
Nine Months Ended Nine Months Ended
September 30, 2013 September 30, 2012
------------------------------- -------------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
------------------------------- -------------------------------
Insurance
Agriculture $ 896,169 $ 546,284 $ 838,932 $ 528,349
Casualty and 239,943 179,065 236,383 173,097
other
specialty
Professional 93,481 62,963 130,573 107,841
lines
Property 45,110 32,222 46,926 26,418
--------------- --------------- --------------- ---------------
Subtotal $ 1,274,703 $ 820,534 $ 1,252,814 $ 835,705
Insurance
--------------- --------------- --------------- ---------------
Reinsurance
Catastrophe $ 341,973 $ 281,990 $ 354,275 $ 329,067
Property 288,448 283,455 318,514 318,521
Casualty 272,602 271,174 258,352 257,113
Other 116,709 111,716 103,025 101,143
specialty
--------------- --------------- --------------- ---------------
Subtotal $ 1,019,732 $ 948,335 $ 1,034,166 $ 1,005,844
Reinsurance
--------------- --------------- --------------- ---------------
Total $ 2,294,435 $ 1,768,869 $ 2,286,980 $ 1,841,549
--------------- --------------- --------------- ---------------
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 nine months ended September 30, 2013 and
2012:
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
2013 2012 2013 2012
---------------- ---------------- ---------------- ----------------
Net income $ 83,416 $ 40,118 $ 244,734 $ 195,143
Add (less)
after-tax
items:
Net foreign
exchange
losses
(gains) 2,395 3,767 8,645 (12,857)
Net realized
and
unrealized
losses
(gains) 6,056 (9,691) (9,371) (27,708)
Net
impairment
losses
recognized in
earnings 190 131 1,541 737
---------------- ---------------- ---------------- ----------------
Operating
income before
preferred
dividends $ 92,057 $ 34,325 $ 245,549 $ 155,315
Preferred
dividends (8,188) (8,188) (24,564) (24,564)
---------------- ---------------- ---------------- ----------------
Operating
income
allocated to
common and
participating
common
shareholders $ 83,869 $ 26,137 $ 220,985 $ 130,751
---------------- ---------------- ---------------- ----------------
Operating
income
allocated to
common
shareholders
under the
two-class
method $ 81,643 $ 25,733 $ 216,225 $ 128,583
---------------- ---------------- ---------------- ----------------
Weighted
average diluted
common 43,100,139 42,657,906 42,720,431 42,594,293
---------------- ---------------- ---------------- ----------------
Operating
income per
diluted common
share [b] $ 1.89 $ 0.60 $ 5.06 $ 3.02
---------------- ---------------- ---------------- ----------------
Average common
equity [a] $ 2,357,532 $ 2,349,058 $ 2,344,804 $ 2,281,020
Operating
return on
average common
equity 3.6 % 1.1 % 9.4 % 5.7 %
---------------- ---------------- ---------------- ----------------
Annualized
operating
return on
average common
equity 14.2 % 4.5 % 12.6 % 7.6 %
---------------- ---------------- ---------------- ----------------
Net income $ 83,416 $ 40,118 $ 244,734 $ 195,143
Preferred
dividends (8,188) (8,188) (24,564) (24,564)
---------------- ---------------- ---------------- ----------------
Net income
available to
common and
participating
common
shareholders $ 75,228 $ 31,930 $ 220,170 $ 170,579
---------------- ---------------- ---------------- ----------------
Net income
available to
common
shareholders
under
the two-class
method $ 73,231 $ 31,436 $ 215,428 $ 167,751
---------------- ---------------- ---------------- ----------------
Net income per
diluted common
share $ 1.70 $ 0.74 $ 5.04 $ 3.94
---------------- ---------------- ---------------- ----------------
Return on
average common
equity, Net
income 3.2 % 1.4 % 9.4 % 7.5 %
---------------- ---------------- ---------------- ----------------
Annualized
return on
average common
equity, Net
income 12.8 % 5.4 % 12.5 % 10.0 %
---------------- ---------------- ---------------- ----------------
[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
Unternehmensinformation / Kurzprofil:
Datum: 04.11.2013 - 22:16 Uhr
Sprache: Deutsch
News-ID 312564
Anzahl Zeichen: 65598
contact information:
Town:
Pembroke
Kategorie:
Business News
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"Endurance Reports Third Quarter 2013 Financial Results"
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