Endurance Reports Third Quarter 2014 Financial Results
(Thomson Reuters ONE) -
Endurance Reports Third Quarter 2014 Financial Results
PEMBROKE, Bermuda - November 3, 2014 - Endurance Specialty Holdings Ltd.
(NYSE:ENH) today reported net income available to common shareholders of $68.0
million and $1.52 per diluted common share for the third quarter of 2014 versus
net income of $75.2 million and $1.70 per diluted common share for the third
quarter of 2013.
For the nine months ended September 30, 2014, Endurance reported net income
available to common shareholders of $239.3 million and $5.36 per diluted common
share versus net income of $220.2 million and $5.04 per diluted common share for
the nine months ended September 30, 2013. Book value per diluted share was
$59.98 at September 30, 2014, up 8.7% from December 31, 2013.
Operating highlights for the quarter ended September 30, 2014 were as follows:
* Gross premiums written of $626.1 million, an increase of 15.0% compared to
the same period in 2013;
* Net premiums written of $390.1 million, a decline of 1.3% compared to the
same period in 2013;
* Combined ratio of 90.2%, which included 11.7 percentage points of favorable
prior year loss reserve development, 2.4 percentage points of hail losses in
the Agriculture line and 2.2 percentage points of property catastrophe
losses from 2014 events;
* Net investment income of $25.4 million, a decrease of $12.7 million from the
same period in 2013;
* Operating income, excluding $6.4 million of expenses related to the proposed
acquisition of Aspen Insurance Holdings Limited ("Aspen"), of $65.5 million
and $1.46 per diluted common share; and
* Operating return on average common equity for the quarter, excluding
expenses related to the proposed acquisition of Aspen, of 2.4% or 9.8% on an
annualized basis.
Operating highlights for the nine months ended September 30, 2014 were as
follows:
* Gross premiums written of $2,473.1 million, an increase of 7.8% over the
same period in 2013;
* Net premiums written of $1,700.2 million, a decline of 3.9% over the same
period in 2013;
* Combined ratio of 87.0%, which included 11.8 percentage points of favorable
prior year loss reserve development, 3.0 percentage points of current year
catastrophe losses, and 1.1 percentage points of expenses related the
proposed acquisition of Aspen;
* Net investment income of $105.6 million, a decrease of $14.2 million over
the same period in 2013;
* Operating income, excluding $20.1 million of expenses related to the
proposed acquisition of Aspen, of $245.6 million and $5.50 per diluted
common share; and
* Operating return on average common equity for the first nine months of the
year, excluding expenses related to the proposed acquisition of Aspen, of
9.5%, or 12.7% on an annualized basis.
John R. Charman, Chairman and Chief Executive Officer, commented, "During the
third quarter, we continued to make strong progress in the transformation of
Endurance. Despite the significant and increasing competition throughout the
global insurance and reinsurance industry that we had anticipated, we have
meaningfully improved the underwriting quality across our lines of business.
The core of our underwriting talent is now largely in place and our market
leading teams of underwriters are successfully growing attractive sustainable
new specialty business for Endurance based on their relevance and their value to
their longstanding client and distribution partner relationships. The
risk/reward characteristics of our underwriting portfolios have been
substantially improved with reduced catastrophe exposures, a more diverse and
better balanced underwriting portfolio backstopped by very strong reinsurance
protection across our businesses. Despite the quarter's headwinds from hail
storm losses within our otherwise profitable agriculture insurance business
coupled with some volatility within our investment portfolio, I am very
comfortable with the underlying performance improvements and direction of
Endurance, especially when taking into account the earnings lag that naturally
occurs following a major transformation."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended
September 30, 2014 were as follows:
* Gross premiums written of $420.3 million, an increase of 21.9% from the
third quarter of 2013;
* Net premiums written of $197.6 million, a decrease of 11.9% from the third
quarter of 2013; and
* Combined ratio of 103.2%, which included 8.0 percentage points of favorable
prior year loss reserve development and 4.8 percentage points of hail losses
in the agriculture line of business.
Operating highlights for Endurance's Insurance segment for the nine months ended
September 30, 2014 were as follows:
* Gross premiums written of $1,394.1 million, an increase of 9.4% from the
same period in 2013;
* Net premiums written of $719.7 million, a decrease of 12.3% from the same
period in 2013; and
* Combined ratio of 100.0%, which included favorable prior year loss reserve
development of 8.8 percentage points, 2.0 percentage points of hail losses
in the agriculture line of business and 1.0 percentage point of general and
administrative expenses related to the proposed acquisition of Aspen.
Gross premiums written in the Insurance segment increased $75.5 million and
$119.4 million for the quarter and nine months ended September 30, 2014 compared
to the same periods in 2013 as our expanded global underwriting capabilities
within professional lines, casualty and other, and property lines of business
continued to generate strong premium growth. Partially offsetting this growth
was a reduction in agriculture insurance premiums driven by commodity price
declines. Net premiums written declined $26.7 million and $100.8 million for
the quarter and nine months ended September 30, 2014, compared to the same
periods in 2013 as greater levels of reinsurance were purchased, including
increased quota share protection for both individual lines of business and
across the entire portfolio and increased excess of loss reinsurance protection
for the agriculture insurance business.
The 6.3 percentage point increase in the Insurance segment combined ratio for
the quarter ended September 30, 2014 compared to the same period in 2013 was
driven by higher acquisition and general and administrative expenses and a lower
earned premium base partially offset by a lower net loss ratio. The third
quarter increase in general and administrative expenses was due to higher
corporate expenses, which included higher performance based incentive
compensation expenses, and strategic investments in underwriting personnel
within our Insurance segment. The reduction in the net loss ratio was driven by
increased favorable development of prior year reserves partially offset by a
higher current accident year loss ratio. The five point increase in the current
accident year loss ratio for the current quarter was driven by our agriculture
line of business, as our hail business generated an underwriting loss and
represented a larger percentage of our overall agriculture line of business. In
addition, the net loss ratio of our multi-peril crop business was impacted by
increased expenditures for excess of loss reinsurance coverage without expected
recoveries. The increase in the current accident year loss ratio for the
current quarter in our agriculture line of business was offset in part by
continued improvements in the accident year loss ratios of our other insurance
business lines. For the nine months ended September 30, 2014, the combined ratio
was 0.6 percentage points higher than the same period a year ago, as higher
acquisition and general and administrative expense ratios were partially offset
by a lower net loss ratio.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended
September 30, 2014 were as follows:
* Gross premiums written of $205.8 million, an increase of 3.1% from the third
quarter of 2013;
* Net premiums written of $192.5 million, an increase of 12.6% from the third
quarter of 2013; and
* Combined ratio of 77.6%, which included favorable prior year loss reserve
development of 15.4 percentage points and net catastrophe losses from 2014
events of $12.2 million or 4.5 percentage points.
Operating highlights for Endurance's Reinsurance segment for the nine months
ended September 30, 2014 were as follows:
* Gross premiums written of $1,078.9 million, an increase of 5.8% from the
same period in 2013;
* Net premiums written of $980.5 million, an increase of 3.4% from the same
period in 2013; and
* Combined ratio of 76.6%, which included favorable prior year loss reserve
development of 14.3 percentage points, net catastrophe losses from 2014
events of $40.8 million or 5.3 percentage points and 1.1 percentage points
of expenses related to the proposed acquisition of Aspen.
Gross premiums written in the Reinsurance segment increased $6.2 million and
$59.2 million for the quarter and nine months ended September 30, 2014 compared
to the same periods in 2013. For the third quarter of 2014, the growth was
driven by increases within the specialty and catastrophe lines of business,
partially offset by declines within the property, casualty and professional
lines of business. Gross premiums written in the specialty lines of business
grew $24.0 million for the current quarter compared to a year ago due to new
business generated by our recently expanded international agriculture, marine
and trade credit and surety teams. Catastrophe gross premiums written increased
$8.5 million in the current quarter compared to a year ago as we increased our
share of select contracts at renewal, which more than offset contracts that were
non-renewed due to margins no longer meeting our return targets. For the
quarter and nine months ended September 30, 2014, net premium growth was
impacted by proportional and aggregate excess of loss retrocessional purchases
in the Company's catastrophe portfolio. Retrocessional purchases in 2014 were
for aggregate global protection with ceded premiums spread over multiple
quarters compared to the retrocessional coverage purchased in 2013 that related
only to U.S. wind exposures and was purchased predominately in the third quarter
of 2013.
The combined ratio in the Reinsurance segment for the third quarter of 2014
increased by 0.2 percentage points compared to the same period in 2013,
predominantly due to higher acquisition and general and administrative expense
ratios, partially offset by a lower net loss ratio. The increase in the
acquisition expense ratio was due to reduced premiums written in short tail
lines of business, which have lower related acquisition expenses, and a greater
level of premiums written within the specialty lines, which maintain higher
acquisition expenses. The higher general and administrative expenses for the
third quarter of 2014 resulted primarily from greater allocated corporate
expenses, which included higher performance based incentive compensation
expenses and continued strategic investments within our global specialty
reinsurance operations.
The current Reinsurance segment accident year loss ratio for the three months
ended September 30, 2014 improved 7.1 percentage points from a year ago due to a
lower level of catastrophe losses and an increase in higher margin specialty
business generated by our expanded global underwriting teams. The current
quarter's net loss ratio included 4.7 percentage points of catastrophe losses
mainly related to increased estimated losses from prior 2014 events, while the
third quarter of 2013 included 8.0 percentage points of catastrophe losses
mainly related to hail storms in Germany. The net loss ratio in the third
quarter of 2014 benefited from $40.2 million, or 15.4 percentage points, of
favorable prior year loss reserve development, compared to $41.9 million, or
16.0 percentage points, for the same period a year ago. The favorable
development in both periods was predominantly driven by short tail lines of
business as losses have developed better than originally estimated.
For the first nine months of 2014, the Reinsurance segment reported a combined
ratio of 76.6% compared to 80.4% for the same period in 2013 principally due to
a lower net loss ratio partially offset by higher acquisition and general and
administrative expense ratios.
Investments
Endurance's net investment income for the quarter and nine months ended
September 30, 2014 was $25.4 million and $105.6 million, a decrease of $12.7
million and $14.2 million, respectively, compared to the same periods in 2013.
The total return of Endurance's investment portfolio was (0.39)% and 2.38% for
the quarter and nine months ended September 30, 2014, respectively, compared to
1.32% and 0.68% for the quarter and nine months ended September 30, 2013,
respectively. Investment income generated from Endurance's available for sale
investments increased by $2.1 million and $5.9 million for the three and nine
months ended September 30, 2014, respectively, compared to the same periods in
2013 due to an increase in the available for sale investment base. During the
third quarter and nine months ended September 30, 2014, Endurance's net
investment income included losses of $1.8 million and gains of $22.5 million,
respectively, on its alternative investment funds and high yield loan funds,
which are included in other investments, as compared to gains of $13.2 million
and $43.1 million in the third quarter and the first nine months of 2013,
respectively. The ending book yield on Endurance's fixed maturity investments
at September 30, 2014 was 2.22%, down from 2.28% at September 30, 2013.
At September 30, 2014, Endurance's fixed maturity portfolio, which comprises
86.3% of Endurance's investments, had an average credit quality of AA- and a
duration of 2.77 years. Endurance's fixed maturity portfolio was in a net
unrealized gain position of $72.6 million at September 30, 2014, an increase of
$26.7 million from December 31, 2013. Endurance recorded net realized
investment gains, net of impairments, of $9.7 million and $17.7 million during
the third quarter and first nine months of 2014 compared to net realized
investment losses of $6.8 million and gains of $8.4 million during the third
quarter and first nine months of 2013.
Endurance ended the third quarter of 2014 with cash and invested assets of $6.5
billion, which represents a 0.6% decrease from December 31, 2013. Net operating
cash inflow was $52.2 million for the nine months ended September 30, 2014
versus an outflow of $16.6 million for the same period in 2013.
Capitalization and Shareholders' Equity
At September 30, 2014, Endurance's shareholders' equity was $3.12 billion or
$59.98 per diluted common share versus $2.89 billion or $55.18 per diluted
common share at December 31, 2013. For the quarter and nine months ended
September 30, 2014, Endurance declared and paid common dividends of $0.34 and
$1.02 per share, respectively.
Earnings Call
Endurance will host a conference call on November 4, 2014 at 8:30 a.m. Eastern
time to discuss its financial results. The conference call can be accessed via
telephone by dialing (888) 455-2263 or (719) 457-2689 (international) and
entering pass code: 2853372. 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 18, 2014 by dialing (888) 203-1112 or (719) 457-0820 (international)
and entering the pass code: 2853372.
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 2014 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,
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,
2013 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.
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,
2014 2013
---------------- --------------
Assets
Cash and cash equivalents $ 805,716 $ 845,851
Fixed maturity investments, available for sale,
at fair value 4,871,420 4,823,964
Short-term investments, available for sale, at
fair value 11,844 35,028
Equity securities, available for sale, at fair
value 267,728 252,466
Other investments 658,678 617,478
Premiums receivable, net 1,452,228 669,198
Insurance and reinsurance balances receivable 123,432 127,722
Deferred acquisition costs 246,437 186,027
Prepaid reinsurance premiums 414,013 187,209
Reinsurance recoverable on unpaid losses 566,329 593,755
Reinsurance recoverable on paid losses 165,592 164,220
Accrued investment income 23,652 24,104
Goodwill and intangible assets 160,560 165,378
Deferred tax asset 53,403 51,703
Net receivable on sales of investments 84,699 54,910
Other assets 240,087 179,109
---------------- --------------
Total Assets $ 10,145,818 $ 8,978,122
---------------- --------------
Liabilities
Reserve for losses and loss expenses $ 3,897,483 $ 4,002,259
Reserve for unearned premiums 1,552,168 1,018,851
Deposit liabilities 17,521 19,458
Reinsurance balances payable 482,093 181,061
Debt 527,732 527,478
Net payable on purchases of investments 238,038 129,047
Other liabilities 310,329 213,419
---------------- --------------
Total Liabilities 7,025,364 6,091,573
---------------- --------------
Shareholders' Equity
Preferred shares
Series A, non-cumulative - 8,000,000 issued
and outstanding (2013 - 8,000,000) 8,000 8,000
Series B, non-cumulative - 9,200,000 issued
and outstanding (2013 - 9,200,000) 9,200 9,200
Common shares
44,751,174 issued and outstanding (2013 -
44,368,742) 44,751 44,369
Additional paid-in capital 590,330 569,116
Accumulated other comprehensive income 81,299 62,731
Retained earnings 2,386,874 2,193,133
---------------- --------------
Total Shareholders' Equity 3,120,454 2,886,549
---------------- --------------
Total Liabilities and Shareholders' Equity $ 10,145,818 $ 8,978,122
---------------- --------------
Book Value per Common Share
Dilutive common shares outstanding 44,852,370 44,518,210
Diluted book value per common share [a] $ 59.98 $ 55.18
Note: All financial information contained herein is unaudited, except the
balance sheet data for the year ended December 31, 2013, 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)
Three Months Ended Nine Months Ended
--------------------------- ------------------------------
September September
30, 30, September 30, September 30,
2014 2013 2014 2013
------------- ------------- ------------------------------
Revenues
Gross premiums
written $ 626,110 $ 544,363 $ 2,473,050 $ 2,294,435
------------- ------------- --------------- --------------
Net premiums written $ 390,106 $ 395,333 $ 1,700,238 $ 1,768,869
Change in unearned
premiums 124,789 158,212 (307,539 ) (251,872 )
------------- ------------- --------------- --------------
Net premiums earned 514,895 553,545 1,392,699 1,516,997
Other underwriting
income (loss) 2,123 (943 ) (3,939 ) 694
Net investment
income 25,357 38,097 105,649 119,870
Net realized and
unrealized
investment gains
(losses) 9,788 (6,640 ) 18,071 9,967
Total other-than-
temporary
impairment losses (102 ) (190 ) (411 ) (1,575 )
Portion of loss
recognized in
other
comprehensive
(loss) income - - - -
------------- ------------- --------------- --------------
Net impairment (102) (190 ) (411 ) (1,575 )
losses recognized in
earnings
------------- ------------- --------------- --------------
Total revenues 552,061 583,869 1,512,069 1,645,953
------------- ------------- --------------- --------------
Expenses
Net losses and loss
expenses 290,269 339,036 726,361 917,064
Acquisition expenses 93,392 78,775 244,150 222,279
General and
administrative
expenses [a] 80,915 67,470 240,576 215,307
Amortization of
intangibles 1,623 1,652 4,863 5,378
Net foreign exchange
losses 783 2,201 4,066 8,496
Interest expense [b] 13,127 9,048 31,910 27,138
------------- ------------- --------------- --------------
Total expenses 480,109 498,182 1,251,926 1,395,662
------------- ------------- --------------- --------------
Income before income
taxes 71,952 85,687 260,143 250,291
Income tax benefit
(expense) 4,282 (2,271 ) 3,734 (5,557 )
------------- ------------- --------------- --------------
Net income 76,234 83,416 263,877 244,734
Preferred dividends (8,188 ) (8,188 ) (24,564 ) (24,564 )
------------- ------------- --------------- --------------
Net income available
to common and
participating common
shareholders [c] $ 68,046 $ 75,228 $ 239,313 $ 220,170
------------- ------------- --------------- --------------
Per share data
Basic earnings per
common share $ 1.52 $ 1.70 $ 5.36 $ 5.04
------------- ------------- --------------- --------------
Diluted earnings per
common share $ 1.52 $ 1.70 $ 5.36 $ 5.04
------------- ------------- --------------- --------------
[a] Includes $2.3 million and $15.3 million of general and administrative
expenses for the quarter and nine months ended September 30, 2014, respectively,
incurred in relation to the Company's proposed acquisition of Aspen.
[b] Includes $4.1 million and $4.8 million of interest expenses for the quarter
and nine months ended September 30, 2014, respectively, incurred in relation to
the Company's proposed acquisition of Aspen.
[c] Adding back the $6.4 million and $20.1 million of expenses incurred in
relation to the Company's proposed acquisition of Aspen for the quarter and nine
months ended September 30, 2014, respectively, net income available to common
and participating common shareholders would increase to $74.4 million and $259.4
million, respectively, or $1.66 and $5.81, respectively, per diluted common
share. See reconciliation on page 18.
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
Three Months Ended September 30, 2014
----------------------------------------
Reported
Insurance Reinsurance Totals
------------- ------------- ------------
Revenues
Gross premiums written $ 420,343 $ 205,767 $ 626,110
Ceded premiums written (222,704 ) (13,300 ) (236,004 )
------------- ------------- ------------
Net premiums written 197,639 192,467 390,106
------------- ------------- ------------
Net premiums earned 253,583 261,312 514,895
Other underwriting income - 2,123 2,123
------------- ------------- ------------
Total underwriting revenues 253,583 263,435 517,018
------------- ------------- ------------
Expenses
Net losses and loss expenses 196,677 93,592 290,269
Acquisition expenses 20,170 73,222 93,392
General and administrative
expenses 44,957 35,958 80,915
------------- ------------- ------------
261,804 202,772 464,576
------------- ------------- ------------
Underwriting (loss) income $ (8,221 ) $ 60,663 $ 52,442
------------- ------------- ------------
Net loss ratio 77.5 % 35.8 % 56.4 %
Acquisition expense ratio 8.0 % 28.0 % 18.1 %
General and administrative expense
ratio 17.7 % 13.8 % 15.7 %
------------- ------------- ------------
Combined ratio 103.2 % 77.6 % 90.2 %
------------- ------------- ------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
Three Months 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)
Nine Months Ended September 30, 2014
----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- --------------
Revenues
Gross premiums written $ 1,394,145 $ 1,078,905 $ 2,473,050
Ceded premiums written (674,441 ) (98,371 ) (772,812 )
--------------- --------------- --------------
Net premiums written 719,704 980,534 1,700,238
--------------- --------------- --------------
Net premiums earned 616,167 776,532 1,392,699
Other underwriting loss - (3,939 ) (3,939 )
--------------- --------------- --------------
Total underwriting revenues 616,167 772,593 1,388,760
--------------- --------------- --------------
Expenses
Net losses and loss expenses 434,777 291,584 726,361
Acquisition expenses 47,559 196,591 244,150
General and administrative
expenses 133,930 106,646 240,576
--------------- --------------- --------------
616,266 594,821 1,211,087
--------------- --------------- --------------
Underwriting (loss) income $ (99 ) $ 177,772 $ 177,673
--------------- --------------- --------------
Net loss ratio 70.6 % 37.6 % 52.2 %
Acquisition expense ratio 7.7 % 25.3 % 17.5 %
General and administrative
expense ratio 21.7 % 13.7 % 17.3 %
--------------- --------------- --------------
Combined ratio 100.0 % 76.6 % 87.0 %
--------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
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.
CONSOLIDATED FINANCIAL RATIOS
As Reported
---------------------------------------------------------
Three Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------ ----------------- --------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 77.5 % 78.4 % 35.8 % 42.3 % 56.4 % 61.3 %
Acquisition
expense ratio 8.0 % 6.3 % 28.0 % 23.0 % 18.1 % 14.2 %
General and
administrative
expense ratio 17.7 % 12.2 % 13.8 % 12.1 % 15.7 % 12.2 %
--------- -------- -------- -------- --------- ----------
Combined ratio 103.2 % 96.9 % 77.6 % 77.4 % 90.2 % 87.7 %
--------- -------- -------- -------- --------- ----------
Effect of Prior Year Net Loss
Reserve Development
Favorable /
(Unfavorable)
---------------------------------------------------------
Three Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------ ----------------- --------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 8.0 % 2.1 % 15.4 % 16.0 % 11.7 % 8.7 %
--------- -------- -------- -------- --------- ----------
Net of Prior Year Net Loss
Reserve Development
---------------------------------------------------------
Three Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------ ----------------- --------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 85.5 % 80.5 % 51.2 % 58.3 % 68.1 % 70.0 %
Acquisition
expense ratio 8.0 % 6.3 % 28.0 % 23.0 % 18.1 % 14.2 %
General and
administrative
expense ratio 17.7 % 12.2 % 13.8 % 12.1 % 15.7 % 12.2 %
--------- -------- -------- -------- --------- ----------
Combined ratio 111.2 % 99.0 % 93.0 % 93.4 % 101.9 % 96.4 %
--------- -------- -------- -------- --------- ----------
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.
CONSOLIDATED FINANCIAL RATIOS
As Reported
---------------------------------------------------------
Nine Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 70.6 % 76.4 % 37.6 % 46.3 % 52.2 % 60.4 %
Acquisition
expense ratio 7.7 % 6.8 % 25.3 % 21.6 % 17.5 % 14.7 %
General and
administrative
expense ratio 21.7 % 16.2 % 13.7 % 12.5 % 17.3 % 14.2 %
--------- --------- -------- -------- -------- ----------
Combined ratio 100.0 % 99.4 % 76.6 % 80.4 % 87.0 % 89.3 %
--------- --------- -------- -------- -------- ----------
Effect of Prior Year Net Loss
Reserve Development
Favorable /
(Unfavorable)
---------------------------------------------------------
Nine Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 8.8 % 4.1 % 14.3 % 16.4 % 11.8 % 10.6 %
--------- --------- -------- -------- -------- ----------
Net of Prior Year Net Loss
Reserve Development
---------------------------------------------------------
Nine Months Ended September 30,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 79.4 % 80.5 % 51.9 % 62.7 % 64.0 % 71.0 %
Acquisition
expense ratio 7.7 % 6.8 % 25.3 % 21.6 % 17.5 % 14.7 %
General and
administrative
expense ratio 21.7 % 16.2 % 13.7 % 12.5 % 17.3 % 14.2 %
--------- --------- -------- -------- -------- ----------
Combined ratio 108.8 % 103.5 % 90.9 % 96.8 % 98.8 % 99.9 %
--------- --------- -------- -------- -------- ----------
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
three months ended September 30, 2014 and 2013:
Three Months Ended Three Months Ended
September 30, 2014 September 30, 2013
------------------------------- ------------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
--------------- --------------- --------------- --------------
Insurance
Agriculture $ 188,011 $ 103,536 $ 200,062 $ 120,617
Casualty and
other
specialty 144,706 58,390 95,862 72,431
Professional
lines 62,631 20,216 34,221 20,972
Property 24,995 15,497 14,674 10,318
--------------- --------------- --------------- --------------
Subtotal
Insurance $ 420,343 $ 197,639 $ 344,819 $ 224,338
--------------- --------------- --------------- --------------
Reinsurance
Catastrophe $ 47,173 $ 41,157 38,676 12,551
Property 73,807 73,807 91,653 90,528
Casualty 23,409 23,409 27,649 27,648
Professional
lines 21,520 21,520 25,670 25,670
Specialty 39,858 32,574 15,896 14,598
--------------- --------------- --------------- --------------
Subtotal
Reinsurance $ 205,767 $ 192,467 $ 199,544 $ 170,995
--------------- --------------- --------------- --------------
Total $ 626,110 $ 390,106 $ 544,363 $ 395,333
--------------- --------------- --------------- --------------
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, 2014 and 2013:
Nine Months Ended Nine Months Ended
September 30, 2014 September 30, 2013
-------------------------------- ------------------------------
Gross Premiums Net Premiums Gross Net Premiums
Written Written Premiums Written
Written
---------------- --------------- --------------- --------------
Insurance
Agriculture $ 796,445 $ 431,007 $ 896,169 $ 546,284
Casualty and
other
specialty 366,329 189,876 239,943 179,065
Professional
lines 176,061 64,632 93,481 62,963
Property 55,310 34,189 45,110 32,222
---------------- --------------- --------------- --------------
Subtotal
Insurance $ 1,394,145 $ 719,704 $ 1,274,703 $ 820,534
---------------- --------------- --------------- --------------
Reinsurance
Catastrophe $ 332,193 $ 243,531 $ 341,973 $ 281,990
Property 283,107 283,015 288,448 283,455
Casualty 139,266 137,669 211,458 210,030
Professional
lines 131,256 131,256 50,505 50,505
Specialty 193,083 185,063 127,348 122,355
---------------- --------------- --------------- --------------
Subtotal
Reinsurance $ 1,078,905 $ 980,534 $ 1,019,732 $ 948,335
---------------- --------------- --------------- --------------
Total $ 2,473,050 $ 1,700,238 $ 2,294,435 $ 1,768,869
---------------- --------------- --------------- --------------
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
basic or 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 basic or 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, 2014 and 2013:
Three Months Ended Nine Months Ended
------------------------------- ------------------------------
September 30, September 30,
------------------------------- ------------------------------
2014 2013 2014 2013
--------------- --------------- --------------- --------------
Net income $ 76,234 $ 83,416 $ 263,877 $ 244,734
Add (less)
after-tax items:
Net foreign
exchange
losses 641 2,395 3,918 8,645
Net realized
and unrealized
(losses) gains (9,593 ) 6,056 (18,156 ) (9,371 )
Net impairment
losses
recognized in
earnings 102 190 411 1,541
--------------- --------------- --------------- --------------
Operating income
before preferred
dividends $ 67,384 $ 92,057 $ 250,050 $ 245,549
Preferred
dividends (8,188 ) (8,188 ) (24,564 ) (24,564 )
--------------- --------------- --------------- --------------
Operating income
allocated to
common and
participating
common
shareholders $ 59,196 $ 83,869 $ 225,486 $ 220,985
--------------- --------------- --------------- --------------
Operating income
allocated to
common
shareholders
under the two-
class method $ 57,517 $ 81,643 $ 218,978 $ 216,225
--------------- --------------- --------------- --------------
Weighted average
diluted common
shares 43,510,416 43,100,139 43,355,793 42,720,431
--------------- --------------- --------------- --------------
Operating income
per diluted
common share [b] $ 1.32 $ 1.89 $ 5.05 $ 5.06
--------------- --------------- --------------- --------------
Average common
equity [a] $ 2,688,065 $ 2,357,532 $ 2,573,502 $ 2,344,804
Operating return
on average
common equity 2.2 % 3.6 % 8.8 % 9.4 %
--------------- --------------- --------------- --------------
Annualized
operating return
on average
common equity 8.8 % 14.2 % 11.7 % 12.6 %
--------------- --------------- --------------- --------------
Net income $ 76,234 $ 83,416 $ 263,877 $ 244,734
Preferred
dividends (8,188 ) (8,188 ) (24,564 ) (24,564 )
--------------- --------------- --------------- --------------
Net income
available to
common and
participating
common
shareholders $ 68,046 $ 75,228 $ 239,313 $ 220,170
--------------- --------------- --------------- --------------
Net income
allocated to
common
shareholders
under the two-
class method $ 66,116 $ 73,231 $ 232,406 $ 215,428
--------------- --------------- --------------- --------------
Net income per
diluted common
share [b] $ 1.52 $ 1.70 $ 5.36 $ 5.04
--------------- --------------- --------------- --------------
Return on
average common
equity, Net
income 2.5 % 3.2 % 9.3 % 9.4 %
--------------- --------------- --------------- --------------
Annualized
return on
average common
equity, Net
income 10.1 % 12.8 % 12.4 % 12.5 %
--------------- --------------- --------------- --------------
[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.
[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
(in thousands of United States dollars, except share, per share amounts and
ratios)
The following is a reconciliation of Endurance's net income available to common
and participating common shareholders, 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 net income, operating income
available to common and participating common shareholders, operating income per
basic or diluted common share, operating income allocated to common shareholders
under the two-class method and annualized operating return on average common
equity excluding expenses incurred related to the proposed acquisition of Aspen
(all non-GAAP measures) for the three and nine months ended September 30, 2014:
Three Months Ended Nine Months Ended
Unternehmensinformation / Kurzprofil:
Datum: 03.11.2014 - 22:16 Uhr
Sprache: Deutsch
News-ID 349268
Anzahl Zeichen: 65599
contact information:
Town:
Pembroke
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 162 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Endurance Reports Third Quarter 2014 Financial Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Endurance Specialty Holdings Ltd (Nachricht senden)
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