Endurance Reports Fourth Quarter 2014 Financial Results
(Thomson Reuters ONE) -
PEMBROKE, Bermuda - February 5, 2015 - Endurance Specialty Holdings Ltd.
(NYSE:ENH) today reported net income available to common shareholders of $76.4
million and $1.70 per diluted common share for the fourth quarter of 2014 versus
net income of $59.0 million and $1.33 per diluted common share for the fourth
quarter of 2013.
For the year ended December 31, 2014, Endurance reported net income available to
common shareholders of $315.7 million and $7.06 per diluted common share versus
net income of $279.2 million and $6.37 per diluted common share for the year
ended December 31, 2013. Book value per diluted share was $61.33 at
December 31, 2014, up 11.1% from December 31, 2013.
Operating highlights for the quarter ended December 31, 2014 were as follows:
* Gross premiums written of $421.0 million, an increase of 13.5% compared to
the same period in 2013;
* Net premiums written of $234.0 million, a decline of 16.5% compared to the
same period in 2013;
* Combined ratio of 83.2%, which included 14.6 percentage points of favorable
prior year loss reserve development and 2.1 percentage points of catastrophe
losses from 2014 events;
* Net investment income of $25.9 million, a decrease of $20.5 million from the
same period in 2013;
* Operating income of $78.5 million and $1.75 per diluted common share; and
* Operating return on average common equity for the quarter of 2.9% or 11.5%
on an annualized basis.
Operating highlights for the twelve months ended December 31, 2014 were as
follows:
* Gross premiums written of $2,894.1 million, an increase of 8.6% over the
same period in 2013;
* Net premiums written of $1,934.2 million, a decline of 5.6% over the same
period in 2013;
* Combined ratio of 86.0%, which included 12.5 percentage points of favorable
prior year loss reserve development, 2.7 percentage points of current year
catastrophe losses, and 0.8 percentage points of expenses related to the
proposed acquisition of Aspen;
* Net investment income of $131.5 million, a decrease of $34.7 million over
the same period in 2013;
* Operating income, excluding $20.3 million of expenses related to the
proposed acquisition of Aspen, of $324.3 million and $7.25 per diluted
common share; and
* Operating return on average common equity for the year, excluding expenses
related to the proposed acquisition of Aspen, of 12.4%.
John R. Charman, Chairman and Chief Executive Officer, commented, "The fourth
quarter capped a very strong year for Endurance both financially and
strategically; this performance was even more commendable when taking into
account the continued root and branch transformation within our company. We
generated a strong return on equity and double digit growth in book value per
share as well as continuing to profitably grow our underwriting business by
products and geographies. Endurance is now firmly established as a leading
underwriter with a significantly improved global presence and much broader
underwriting capability in the specialty insurance and reinsurance markets.
Importantly, we are increasingly relevant to our global clients and broker
distribution channels in terms of access, capability and capacity across the
board. Our 2014 results were a strong, early confirmation that our efforts over
the last couple of years are paying off as company wide gross premiums written,
excluding agriculture insurance, grew 18.5%, while accident year loss ratios
continued to improve throughout both segments. We are resolute in our
determination and commitment to continue the profitable transformation of
Endurance during 2015 and beyond and we remain highly focused on generating
superior shareholder returns, regardless of how challenging market conditions
become."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended
December 31, 2014 were as follows:
* Gross premiums written of $322.0 million, an increase of 60.4% from the
fourth quarter of 2013;
* Net premiums written of $140.7 million, an increase of 25.7% from the fourth
quarter of 2013; and
* Combined ratio of 100.2%, which improved 22.8 percentage points from the
fourth quarter of 2013 and included 12.2 percentage points of favorable
prior year loss reserve development and 8.5 percentage points of hail losses
in the agriculture line of business.
Operating highlights for Endurance's Insurance segment for the year ended
December 31, 2014 were as follows:
* Gross premiums written of $1,716.1 million, an increase of 16.3% from the
same period in 2013;
* Net premiums written of $860.4 million, a decrease of 7.7% from the same
period in 2013; and
* Combined ratio of 100.1%, which improved 5.2 percentage points from full
year 2013 and included favorable prior year loss reserve development of 9.7
percentage points, 3.7 percentage points of hail losses in the agriculture
line of business and 0.8 percentage point of general and administrative
expenses related to the proposed acquisition of Aspen.
Gross premiums written in the Insurance segment, excluding agriculture
insurance, increased $109.9 million or 77.1% and $329.1 million or 63.2% for the
quarter and year ended December 31, 2014 compared to the same periods in 2013 as
recently hired global underwriters within professional lines, casualty and other
specialty, and property, marine and energy continued to generate strong premium
growth. Within agriculture insurance, gross premiums written increased $11.4
million in the fourth quarter compared to a year ago, driven by increased policy
counts related to winter wheat. For the full year, agriculture gross premiums
written declined $88.4 million from a year ago driven by declines in spring crop
commodity prices, partially offset by increased policy counts. Net premiums
written in the Insurance segment, excluding agriculture insurance, increased
$25.0 million and $39.5 million for the fourth quarter and year ended
December 31, 2014 compared to the same periods in 2013 from growth in gross
premiums written in the current periods partially offset for the year from
greater levels of reinsurance purchased, including increased quota share
protection for both individual lines of business and across the entire
portfolio, as well as increased excess of loss reinsurance protection for the
agriculture insurance business.
The improvement in the Insurance segment combined ratio for the quarter ended
December 31, 2014 compared to the same period in 2013 was driven by an improved
net loss ratio partially offset by higher acquisition and general and
administrative expense ratios. The reduction in the net loss ratio in the
current quarter compared to a year ago was primarily driven by increased
favorable development of prior year reserves and improvements in the accident
year loss ratio within the agriculture line of business. While the absolute
amount of general and administrative expenses declined in the fourth quarter
compared to a year ago, earned premiums declined a greater amount leading to the
modest increase in the general and administrative expense ratio. The current
quarter's increase in the acquisition ratio was driven by a greater portion of
premiums generated from specialty lines, which have higher acquisition related
costs. For the year ended December 31, 2014, the combined ratio improved
compared to the same period a year ago, as a lower net loss ratio was partially
offset by higher acquisition and general and administrative expense ratios.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended
December 31, 2014 were as follows:
* Gross premiums written of $99.0 million, a decrease of 41.8% from the fourth
quarter of 2013;
* Net premiums written of $93.3 million, a decrease of 44.5% from the fourth
quarter of 2013; and
* Combined ratio of 68.6%, which increased 2.5 percentage points from the same
period a year ago and included favorable prior year loss reserve
development of 16.7 percentage points and net catastrophe losses from 2014
events of $10.4 million, or 3.9 percentage points.
Operating highlights for Endurance's Reinsurance segment for the year ended
December 31, 2014 were as follows:
* Gross premiums written of $1,177.9 million, a decrease of 1.0% from the same
period in 2013;
* Net premiums written of $1,073.8 million, a decrease of 3.8% from the same
period in 2013; and
* Combined ratio of 74.6% which improved 2.2 percentage points compared to
full year 2013 and included favorable prior year loss reserve development of
14.9 percentage points, net catastrophe losses from 2014 events of $51.1
million or 4.9 percentage points and 0.9 percentage points of expenses
related to the proposed acquisition of Aspen.
Gross premiums written in the Reinsurance segment decreased $71.0 million and
$11.9 million for the quarter and year ended December 31, 2014 compared to the
same periods in 2013. For the fourth quarter of 2014, the decrease was driven
by declines within the catastrophe, property, casualty and professional lines
partially offset by an increase within the specialty line of business.
Catastrophe and property gross premiums written decreased $7.9 million in the
current quarter compared to a year ago as we continue to non-renew select
contracts due to margins no longer meeting our return targets. Casualty gross
premiums written declined $9.6 million largely due to negative premium
adjustments in the current quarter compared to positive premium adjustments a
year ago. Within professional lines, gross premiums declined $69.7 million as
the renewal for a large contract written a year ago was extended in the second
quarter of 2014. Gross premiums written in the specialty lines of business grew
$16.2 million for the current quarter compared to a year ago principally due to
new business generated by our recently expanded marine, international
agriculture and trade credit and surety teams. For the quarter and year ended
December 31, 2014, net premium growth was predominantly impacted by proportional
and aggregate excess of loss retrocessional purchases in the Company's
catastrophe portfolio.
The increase in the combined ratio in the Reinsurance segment for the fourth
quarter of 2014 compared to the same period in 2013 was due to a higher net loss
ratio, partially offset by lower acquisition and general and administrative
expense ratios. The current quarter's net loss ratio included 4.0 percentage
points of catastrophe losses mainly related to Australian storms and increased
estimated losses from other 2014 events, while the fourth quarter of 2013
included 2.8 percentage points of catastrophe losses mainly related to European
storms. The net loss ratio in the fourth quarter of 2014 also benefited from
$42.3 million, or 16.7 percentage points, of favorable prior year loss reserve
development, compared to $56.1 million, or 21.3 percentage points, for the same
period a year ago. The favorable development in both periods was predominantly
driven by short tail and specialty lines of business as losses have developed
better than originally estimated. The decline in the acquisition expense ratio
in the current quarter compared to a year ago was due to loss sensitive accrual
adjustments. The lower general and administrative expenses for the fourth
quarter of 2014 resulted primarily from lower expenses associated with the
hiring of new underwriting teams as fewer new underwriters were hired during the
fourth quarter compared to a year ago.
For the full year 2014, the Reinsurance segment reported a combined ratio of
74.6% compared to 76.8% 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 year ended December 31,
2014 was $25.9 million and $131.5 million, a decrease of $20.5 million and $34.7
million, respectively, compared to the same periods in 2013. The total return
of Endurance's investment portfolio was 0.40% and 2.79% for the quarter and year
ended December 31, 2014, respectively, compared to 0.74% and 1.43% for the
quarter and year ended December 31, 2013, respectively. Investment income
generated from Endurance's available for sale investments increased by $4.8
million and $10.7 million for the quarter and year ended December 31, 2014,
respectively, compared to the same periods in 2013 due to an increase in the
available for sale investment base. During the quarter and year ended
December 31, 2014, Endurance's net investment income included losses of $2.9
million and gains of $19.6 million, respectively, on its alternative investment
funds and high yield loan funds, which are included in other investments, as
compared to gains of $21.2 million and $64.3 million in the quarter and year
ended December 31, 2013, respectively. The ending book yield on Endurance's
fixed maturity investments at December 31, 2014 was 2.21%, up from 2.05% at
December 31, 2013.
At December 31, 2014, Endurance's fixed maturity portfolio, which comprises
87.0% of Endurance's investments, had an average credit quality of AA- and a
duration of 2.91 years. Endurance's fixed maturity portfolio was in a net
unrealized gain position of $86.1 million at December 31, 2014, an increase of
$40.2 million from December 31, 2013. Endurance recorded net realized
investment gains, net of investment impairments and excluding intangible asset
impairment, of $1.4 million and $19.1 million during the quarter and year ended
December 31, 2014, compared to net realized investment gains of $5.2 million and
$13.5 million during the quarter and year ended December 31, 2013.
Endurance ended the fourth quarter of 2014 with cash and invested assets of $6.6
billion, which represents a 1.6% increase from December 31, 2013. Net operating
cash inflow was $266.3 million for the year ended December 31, 2014 versus
$157.9 million for the same period in 2013.
Capitalization and Shareholders' Equity
At December 31, 2014, Endurance's shareholders' equity was $3.19 billion or
$61.33 per diluted common share versus $2.89 billion or $55.18 per diluted
common share at December 31, 2013. For the quarter and year ended December 31,
2014, Endurance declared and paid common dividends of $0.34 and $1.36 per share,
respectively.
Earnings Call
Endurance will host a conference call on February 6, 2015 at 9:00 a.m. Eastern
time to discuss its financial results. The conference call can be accessed via
telephone by dialing (888) 715-1394 or (913) 312-1462 (international) and
entering pass code: 8183550. 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
February 20, 2015 by dialing (888) 203-1112 or (719) 457-0820 (international)
and entering the pass code: 8183550.
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 fourth 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, marine and energy 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)
December 31, December 31,
2014 2013
--------------- --------------
Assets
Cash and cash equivalents $ 745,472 $ 845,851
Fixed maturity investments, available for sale,
at fair value 5,092,581 4,823,964
Short-term investments, available for sale, at
fair value 9,014 35,028
Equity securities, available for sale, at fair
value 331,368 252,466
Other investments 541,454 617,478
Premiums receivable, net 883,450 669,198
Insurance and reinsurance balances receivable 122,214 127,722
Deferred acquisition costs 207,368 186,027
Prepaid reinsurance premiums 354,940 187,209
Reinsurance recoverable on unpaid losses 670,795 593,755
Reinsurance recoverable on paid losses 218,291 164,220
Accrued investment income 27,183 24,104
Goodwill and intangible assets 153,405 165,378
Deferred tax asset 48,995 51,703
Net receivable on sales of investments 38,877 54,910
Other assets 199,375 179,109
--------------- --------------
Total Assets $ 9,644,782 $ 8,978,122
--------------- --------------
Liabilities
Reserve for losses and loss expenses $ 3,846,859 $ 4,002,259
Reserve for unearned premiums 1,254,519 1,018,851
Deposit liabilities 15,136 19,458
Reinsurance balances payable 375,711 181,061
Debt 527,715 527,478
Net payable on purchases of investments 151,682 129,047
Other liabilities 287,978 213,419
--------------- --------------
Total Liabilities 6,459,600 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
44,765,153 issued and outstanding (2013 -
44,368,742) 44,765 44,369
Additional paid-in capital 598,226 569,116
Accumulated other comprehensive income 76,706 62,731
Retained earnings 2,448,285 2,193,133
--------------- --------------
Total Shareholders' Equity 3,185,182 2,886,549
--------------- --------------
Total Liabilities and Shareholders' Equity $ 9,644,782 $ 8,978,122
--------------- --------------
Book Value per Common Share
Dilutive common shares outstanding 44,920,768 44,518,210
Diluted book value per common share [a] $ 61.33 $ 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)
Quarter Ended Year Ended
--------------------------- ------------------------------
December December
31, 31, December 31, December 31,
2014 2013 2014 2013
------------- ------------- ------------------------------
Revenues
Gross premiums
written $ 421,026 $ 370,809 $ 2,894,076 $ 2,665,244
------------- ------------- --------------- --------------
Net premiums written $ 233,968 $ 280,064 $ 1,934,206 $ 2,048,933
Change in unearned
premiums 237,311 219,423 (70,228 ) (32,449 )
------------- ------------- --------------- --------------
Net premiums earned 471,279 499,487 1,863,978 2,016,484
Other underwriting
loss (1,847 ) (2,740 ) (5,786 ) (2,046 )
Net investment
income 25,894 46,346 131,543 166,216
Net realized and
unrealized (losses)
gains (3,788 ) 5,197 14,283 15,164
Total other-than-
temporary
impairment losses (214 ) (41 ) (625 ) (1,616 )
Portion of loss
recognized in
other
comprehensive
income (loss) - - - -
------------- ------------- --------------- --------------
Net impairment (214) (41 ) (625 ) (1,616 )
losses recognized in
earnings
------------- ------------- --------------- --------------
Total revenues 491,324 548,249 2,003,393 2,194,202
------------- ------------- --------------- --------------
Expenses
Net losses and loss
expenses 243,801 302,620 970,162 1,219,684
Acquisition expenses 75,363 82,151 319,513 304,430
General and
administrative
expenses [a] 73,011 79,599 313,587 294,906
Amortization of
intangibles 1,621 1,634 6,484 7,012
Net foreign exchange
(gains) losses (227 ) 5,718 3,839 14,214
Interest expense [b] 9,058 9,050 40,968 36,188
------------- ------------- --------------- --------------
Total expenses 402,627 480,772 1,654,553 1,876,434
------------- ------------- --------------- --------------
Income before income
taxes 88,697 67,477 348,840 317,768
Income tax expense (4,124 ) (296 ) (390 ) (5,853 )
------------- ------------- --------------- --------------
Net income 84,573 67,181 348,450 311,915
Preferred dividends (8,186 ) (8,186 ) (32,750 ) (32,750 )
------------- ------------- --------------- --------------
Net income available
to common and
participating common
shareholders [c] $ 76,387 $ 58,995 $ 315,700 $ 279,165
------------- ------------- --------------- --------------
Per share data
Basic earnings per
common share $ 1.71 $ 1.33 $ 7.07 $ 6.37
------------- ------------- --------------- --------------
Diluted earnings per
common share $ 1.70 $ 1.33 $ 7.06 $ 6.37
------------- ------------- --------------- --------------
[a] Includes $0.2 million and $15.5 million of general and administrative
expenses for the quarter and year ended December 31, 2014, respectively,
incurred in relation to the Company's proposed acquisition of Aspen.
[b] Includes nil and $4.8 million of interest expenses for the quarter and year
ended December 31, 2014, respectively, incurred in relation to the Company's
proposed acquisition of Aspen.
[c] Adding back the $0.2 million and $20.3 million of expenses incurred in
relation to the Company's proposed acquisition of Aspen for the quarter and year
ended December 31, 2014, respectively, net income available to common and
participating common shareholders would increase to $76.6 million and $336.0
million, respectively, or $1.71 and $7.51, 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)
Quarter Ended December 31, 2014
----------------------------------------
Reported
Insurance Reinsurance Totals
------------- ------------- ------------
Revenues
Gross premiums written $ 321,983 $ 99,043 $ 421,026
Ceded premiums written (181,281 ) (5,777 ) (187,058 )
------------- ------------- ------------
Net premiums written 140,702 93,266 233,968
------------- ------------- ------------
Net premiums earned 217,745 253,534 471,279
Other underwriting loss - (1,847 ) (1,847 )
------------- ------------- ------------
Total underwriting revenues 217,745 251,687 469,432
------------- ------------- ------------
Expenses
Net losses and loss expenses 159,784 84,017 243,801
Acquisition expenses 17,809 57,554 75,363
General and administrative
expenses 40,645 32,366 73,011
------------- ------------- ------------
218,238 173,937 392,175
------------- ------------- ------------
Underwriting (loss) income $ (493 ) $ 77,750 $ 77,257
------------- ------------- ------------
Net loss ratio 73.3 % 33.1 % 51.7 %
Acquisition expense ratio 8.2 % 22.7 % 16.0 %
General and administrative expense
ratio 18.7 % 12.8 % 15.5 %
------------- ------------- ------------
Combined ratio 100.2 % 68.6 % 83.2 %
------------- ------------- ------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
Quarter Ended December 31, 2013
----------------------------------------
Reported
Insurance Reinsurance Totals
------------- ------------- ------------
Revenues
Gross premiums written $ 200,726 $ 170,083 $ 370,809
Ceded premiums written (88,750 ) (1,995 ) (90,745 )
------------- ------------- ------------
Net premiums written 111,976 168,088 280,064
------------- ------------- ------------
Net premiums earned 235,967 263,520 499,487
Other underwriting loss - (2,740 ) (2,740 )
------------- ------------- ------------
Total underwriting revenues 235,967 260,780 496,747
------------- ------------- ------------
Expenses
Net losses and loss expenses 230,708 71,912 302,620
Acquisition expenses 16,754 65,397 82,151
General and administrative
expenses 42,804 36,795 79,599
------------- ------------- ------------
290,266 174,104 464,370
------------- ------------- ------------
Underwriting (loss) income $ (54,299 ) $ 86,676 $ 32,377
------------- ------------- ------------
Net loss ratio 97.8 % 27.3 % 60.7 %
Acquisition expense ratio 7.1 % 24.8 % 16.4 %
General and administrative expense
ratio 18.1 % 14.0 % 15.9 %
------------- ------------- ------------
Combined ratio 123.0 % 66.1 % 93.0 %
------------- ------------- ------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
Year Ended December 31, 2014
----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- --------------
Revenues
Gross premiums written $ 1,716,128 $ 1,177,948 $ 2,894,076
Ceded premiums written (855,722 ) (104,148 ) (959,870 )
--------------- --------------- --------------
Net premiums written 860,406 1,073,800 1,934,206
--------------- --------------- --------------
Net premiums earned 833,912 1,030,066 1,863,978
Other underwriting loss - (5,786 ) (5,786 )
--------------- --------------- --------------
Total underwriting revenues 833,912 1,024,280 1,858,192
--------------- --------------- --------------
Expenses
Net losses and loss expenses 594,561 375,601 970,162
Acquisition expenses 65,368 254,145 319,513
General and administrative
expenses 174,575 139,012 313,587
--------------- --------------- --------------
834,504 768,758 1,603,262
--------------- --------------- --------------
Underwriting (loss) income $ (592 ) $ 255,522 $ 254,930
--------------- --------------- --------------
Net loss ratio 71.4 % 36.4 % 52.1 %
Acquisition expense ratio 7.8 % 24.7 % 17.1 %
General and administrative
expense ratio 20.9 % 13.5 % 16.8 %
--------------- --------------- --------------
Combined ratio 100.1 % 74.6 % 86.0 %
--------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)
Year Ended December 31, 2013
----------------------------------------------
Reported
Insurance Reinsurance Totals
--------------- --------------- --------------
Revenues
Gross premiums written $ 1,475,429 $ 1,189,815 $ 2,665,244
Ceded premiums written (542,919 ) (73,392 ) (616,311 )
--------------- --------------- --------------
Net premiums written 932,510 1,116,423 2,048,933
--------------- --------------- --------------
Net premiums earned 946,474 1,070,010 2,016,484
Other underwriting loss - (2,046 ) (2,046 )
--------------- --------------- --------------
Total underwriting revenues 946,474 1,067,964 2,014,438
--------------- --------------- --------------
Expenses
Net losses and loss expenses 774,425 445,259 1,219,684
Acquisition expenses 64,778 239,652 304,430
General and administrative
expenses 157,596 137,310 294,906
--------------- --------------- --------------
996,799 822,221 1,819,020
--------------- --------------- --------------
Underwriting (loss) income $ (50,325 ) $ 245,743 $ 195,418
--------------- --------------- --------------
Net loss ratio 81.8 % 41.6 % 60.5 %
Acquisition expense ratio 6.8 % 22.4 % 15.1 %
General and administrative
expense ratio 16.7 % 12.8 % 14.6 %
--------------- --------------- --------------
Combined ratio 105.3 % 76.8 % 90.2 %
--------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
As Reported
---------------------------------------------------------
Quarter Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 73.3 % 97.8 % 33.1 % 27.3 % 51.7 % 60.7 %
Acquisition
expense ratio 8.2 % 7.1 % 22.7 % 24.8 % 16.0 % 16.4 %
General and
administrative
expense ratio 18.7 % 18.1 % 12.8 % 14.0 % 15.5 % 15.9 %
--------- --------- -------- -------- -------- ----------
Combined ratio 100.2 % 123.0 % 68.6 % 66.1 % 83.2 % 93.0 %
--------- --------- -------- -------- -------- ----------
Effect of Prior Year Net Loss
Reserve Development
Favorable /
(Unfavorable)
---------------------------------------------------------
Quarter Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 12.2 % 2.0 % 16.7 % 21.3 % 14.6 % 12.2 %
--------- --------- -------- -------- -------- ----------
Net of Prior Year Net Loss
Reserve Development
---------------------------------------------------------
Quarter Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 85.5 % 99.8 % 49.8 % 48.6 % 66.3 % 72.9 %
Acquisition
expense ratio 8.2 % 7.1 % 22.7 % 24.8 % 16.0 % 16.4 %
General and
administrative
expense ratio 18.7 % 18.1 % 12.8 % 14.0 % 15.5 % 15.9 %
--------- --------- -------- -------- -------- ----------
Combined ratio 112.4 % 125.0 % 85.3 % 87.4 % 97.8 % 105.2 %
--------- --------- -------- -------- -------- ----------
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.
CONSOLIDATED FINANCIAL RATIOS
As Reported
---------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 71.4 % 81.8 % 36.4 % 41.6 % 52.1 % 60.5 %
Acquisition
expense ratio 7.8 % 6.8 % 24.7 % 22.4 % 17.1 % 15.1 %
General and
administrative
expense ratio 20.9 % 16.7 % 13.5 % 12.8 % 16.8 % 14.6 %
--------- --------- -------- -------- -------- ----------
Combined ratio 100.1 % 105.3 % 74.6 % 76.8 % 86.0 % 90.2 %
--------- --------- -------- -------- -------- ----------
Effect of Prior Year Net Loss
Reserve Development
Favorable /
(Unfavorable)
---------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 9.7 % 3.6 % 14.9 % 17.6 % 12.5 % 11.0 %
--------- --------- -------- -------- -------- ----------
Net of Prior Year Net Loss
Reserve Development
---------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------
Insurance Reinsurance Total
------------------- ----------------- -------------------
2014 2013 2014 2013 2014 2013
Net loss ratio 81.1 % 85.4 % 51.3 % 59.2 % 64.6 % 71.5 %
Acquisition
expense ratio 7.8 % 6.8 % 24.7 % 22.4 % 17.1 % 15.1 %
General and
administrative
expense ratio 20.9 % 16.7 % 13.5 % 12.8 % 16.8 % 14.6 %
--------- --------- -------- -------- -------- ----------
Combined ratio 109.8 % 108.9 % 89.5 % 94.4 % 98.5 % 101.2 %
--------- --------- -------- -------- -------- ----------
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
quarter ended December 31, 2014 and 2013:
Quarter Ended Quarter Ended
December 31, 2014 December 31, 2013
------------------------------- ------------------------------
Gross Net Premiums Gross Net Premiums
Premiums Written Premiums Written
Written Written
--------------- --------------- --------------- --------------
Insurance
Agriculture $ 69,580 $ 28,142 $ 58,220 $ 24,454
Casualty and
other
specialty 104,535 51,889 69,590 44,307
Professional
lines 87,477 29,008 55,056 32,138
Property,
marine and
energy 60,391 31,663 17,860 11,077
--------------- --------------- --------------- --------------
Subtotal
Insurance $ 321,983 $ 140,702 $ 200,726 $ 111,976
--------------- --------------- --------------- --------------
Reinsurance
Catastrophe $ 11,020 $ 9,442 13,778 12,270
Property 4,219 4,220 9,358 9,417
Casualty 20,267 20,278 29,900 29,495
Professional
lines 43,400 43,400 113,089 113,089
Specialty 20,137 15,926 3,958 3,817
--------------- --------------- --------------- --------------
Subtotal
Reinsurance $ 99,043 $ 93,266 $ 170,083 $ 168,088
--------------- --------------- --------------- --------------
Total $ 421,026 $ 233,968 $ 370,809 $ 280,064
--------------- --------------- --------------- --------------
ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY SEGMENT
(in thousands of United States dollars)
The following tables show Endurance's gross and net premiums written for the
year ended December 31, 2014 and 2013:
Year Ended Year Ended
December 31, 2014 December 31, 2013
-------------------------------- ------------------------------
Gross Premiums Net Premiums Gross Net Premiums
Written Written Premiums Written
Written
---------------- --------------- --------------- --------------
Insurance
Agriculture $ 866,025 $ 459,149 $ 954,389 $ 570,738
Casualty and
other
specialty 396,113 195,927 303,803 218,298
Professional
lines 263,538 93,640 148,537 95,101
Property,
marine and
energy 190,452 111,690 68,700 48,373
---------------- --------------- --------------- --------------
Subtotal
Insurance $ 1,716,128 $ 860,406 $ 1,475,429 $ 932,510
---------------- --------------- --------------- --------------
Reinsurance
Catastrophe $ 343,213 $ 252,973 $ 355,751 $ 294,260
Property 287,326 287,235 297,806 292,872
Casualty 159,533 157,947 241,358 239,525
Professional
lines 174,656 174,656 163,594 163,594
Specialty 213,220 200,989 131,306 126,172
---------------- --------------- --------------- --------------
Subtotal
Reinsurance $ 1,177,948 $ 1,073,800 $ 1,189,815 $ 1,116,423
---------------- --------------- --------------- --------------
Total $ 2,894,076 $ 1,934,206 $ 2,665,244 $ 2,048,933
---------------- --------------- --------------- --------------
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
quarters and years ended December 31, 2014 and 2013:
Quarter Ended Year Ended
------------------------------- ------------------------------
December 31, December 31,
------------------------------- ------------------------------
2014 2013 2014 2013
--------------- --------------- --------------- --------------
Net income $ 84,573 $ 67,181 $ 348,450 $ 311,915
(Less) add
after-tax items:
Net foreign
exchange
(gains) losses (246 ) 5,708 3,672 14,352
Net realized
and unrealized
losses (gains) 2,187 (4,808 ) (15,969 ) (14,064 )
Net impairment
losses
recognized in
earnings 198 26 609 1,568
--------------- --------------- --------------- --------------
Operating income
before preferred
dividends $ 86,712 $ 68,107 $ 336,762 $ 313,771
Preferred
dividends (8,186 ) (8,186 ) (32,750 ) (32,750 )
--------------- --------------- --------------- --------------
Operating income
allocated to
common and
participating
common
shareholders $ 78,526 $ 59,921 $ 304,012 $ 281,021
--------------- --------------- --------------- --------------
Operating income
allocated to
common
shareholders
under the two-
class method $ 76,252 $ 58,267 $ 295,232 $ 274,534
--------------- --------------- --------------- --------------
Weighted average
diluted common
shares 43,557,332 43,120,449 43,415,244 42,818,207
--------------- --------------- --------------- --------------
Operating income
per diluted
common share [b] $ 1.75 $ 1.35 $ 6.80 $ 6.41
--------------- --------------- --------------- --------------
Average common
equity [a] $ 2,722,818 $ 2,432,780 $ 2,605,866 $ 2,368,573
Operating return
on average
common equity 2.9 % 2.5 % 11.7 % 11.9 %
--------------- --------------- --------------- --------------
Annualized
operating return
on average
common equity 11.5 % 9.9 % 11.7 % 11.9 %
--------------- --------------- --------------- --------------
Net income $ 84,573 $ 67,181 $ 348,450 $ 311,915
Preferred
dividends (8,186 ) (8,186 ) (32,750 ) (32,750 )
--------------- --------------- --------------- --------------
Net income
available to
common and
participating
common
shareholders $ 76,387 $ 58,995 $ 315,700 $ 279,165
--------------- --------------- --------------- --------------
Net income
allocated to
common
shareholders
under the two-
class method $ 74,175 $ 57,367 $ 306,582 $ 272,721
--------------- --------------- --------------- --------------
Net income per
diluted common
share [b] $ 1.70 $ 1.33 $ 7.06 $ 6.37
--------------- --------------- --------------- --------------
Return on
average common
equity, Net
income 2.8 % 2.4 % 12.1 % 11.8 %
--------------- --------------- --------------- --------------
Annualized
return on
average common
equity, Net
income 11.2 % 9.7 % 12.1 % 11.8 %
--------------- --------------- --------------- --------------
[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 quarter and year ended December 31, 2014:
Quarter Ended Year Ended
December 31, 2014 December 31, 2014
---------------------------------------- ----------------------------------------
Expenses Excluding Expenses Excluding
Incurred Expenses Incurred Expenses
Related to Incurred Related to Incurred
the Related to the Related to
Proposed the Proposed the
Acquisition Proposed Acquisit
Unternehmensinformation / Kurzprofil:
Datum: 05.02.2015 - 22:15 Uhr
Sprache: Deutsch
News-ID 369675
Anzahl Zeichen: 65604
contact information:
Town:
Pembroke
Kategorie:
Business News
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"Endurance Reports Fourth Quarter 2014 Financial Results"
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Endurance Specialty Holdings Ltd (Nachricht senden)
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