QUARTER 1 - Endurance Specialty Insurance Ltd.

2015
QUARTER 1
FINANCIAL UPDATE
The Insurance segment had a very strong first quarter as we continued to generate solid financial results. These results
were primarily driven by the strong underwriting expertise that we have added to the company over the past two years.
This expertise, coupled with the deep client and broker relationships which our underwriters have created, make Endurance
a more relevant market. Our expanded U.S. and London Market insurance teams along with our established Bermuda
platform continue to attract quality specialty business across our diverse product offerings. Looking ahead, we fully expect
this positive momentum to continue as we further expand our capabilities and presence in these markets.
— Jack Kuhn, CEO, Global Insurance, Endurance Specialty Holdings Ltd.
INSURANCE LINES
FINANCIAL HIGHLIGHTS
(in millions of U.S. dollars, except percentages)
Agriculture ARMtech, our U.S. crop
insurance subsidiary, offers multi-peril crop
insurance, crop hail, livestock risk protection
and other agricultural risk management
products through independent agents.
Casualty & Other Specialty
•P
rimary and Excess Casualty
We write primary and excess casualty
insurance for small, middle market and
Fortune 1000 accounts, accessed through
retail and wholesale channels.
•C
ontract Binding Operation
We offer property and general liability
coverages for small to medium-sized
risks through our U.S. contract binding
agency network.
• Healthcare Liability
Our U.S. and Bermuda teams provide
healthcare professional liability coverage to
non-profit and for-profit hospitals and other
healthcare organizations.
• Surety
We provide contract and commercial surety
insurance through a network of dedicated
agents across the U.S.
Professional Lines We offer primary
and excess coverage for directors’ and
officers’ liability, errors and omissions liability,
employment practices liability, and pension
trust liability, underwriting through both retail
and wholesale channels.
• Energy
Our London based team offers coverage
across all aspects of the energy chain
to clients ranging from independents to
multinationals on a global basis.
YEAR ENDED
DEC 31, 2014
YEAR ENDED
DEC 31, 2013
(UNAUDITED)
(UNAUDITED)
(AUDITED)
(AUDITED)
$1,301.4
$1,157.5
$2,894.1
$2,665.2
Net premiums written
765.0
798.7
1,934.2
2,048.9
Net income before
preferred dividends
108.5
104.5
348.5
311.9
Loss ratio
44.1%
44.6%
52.1%
60.5%
Combined ratio
82.4%
81.3%
86.0%
90.2%
Gross premiums written
$10,380.1
$9,794.8
$9,644.8
$8,978.1
Total shareholders’ equity
$3,274.8
$3,001.1
$3,185.2
2,886.5
Debt to total capitalization
13.9%
15.0%
14.2%
15.5%
Annualized ROAE,
Operating income
13.0%
15.0%
11.7%
11.9%
$736.2
$652.3
$1,716.1
$1,475.4
304.0
343.0
860.4
932.5
12.8
1.5
(0.6)
(50.3)
Total assets
ENDURANCE INSURANCE
Gross premiums written
Net premiums written
Underwriting income (loss)
Loss ratio
54.8%
61.5%
71.4%
81.8%
Combined ratio
90.6%
99.0%
100.1%
105.3%
Twelve Months Ending March 31, 2015
Insurance Net Premiums Written = $821.4 Million
13%
Agriculture
Casualty & Other Specialty
16%
46%
Property, Marine & Energy
Professional Lines
25%
Production by Major Brokers on Net Premiums Written*
• Inland Marine
We offer a full portfolio of inland marine
coverage including both mono-line and
marine packages.
• Ocean Marine
Our U.S. team offers marine liabilities,
cargo, blue water hull and brown water hull
coverage.
QUARTER ENDED
MAR 31, 2014
ENDURANCE SPECIALTY HOLDINGS LTD.
Property, Marine & Energy
• Property
Our U.S. and London based teams provide
all risk, named peril and DIC coverage for
physical loss and damage to commercial
property exposures on a primary, excess
and proportional basis. Working through a
broad distribution network, our clients range
from small businesses to multinationals.
QUARTER ENDED
MAR 31, 2015
Marsh
20%
Aon
Willis
46%
12%
4% 6%
6%
6%
AmWins
R-T Specialty
CRC/Crump
Other**
*Excludes Agriculture, which is distributed by Endurance’s ARMtech operating subsidiary through
independent agents
**Includes multiple brokers with a 3% or less share
EXCELLENT FINANCIAL STRENGTH AND LIQUIDITY
(March 31, 2015)
Strong and Flexible Capital Structure (in millions of U.S. dollars)
4,000
$3,803
$3,713
3,500
$3,238
$3,139
3,000
$430
$430
$430
$430
$430
$528
$528
$527
$527
$528
2,500
$3,414
Endurance Group Financial
Ratings
A.M. Best — A (Excellent)
XV Financial Strength
Stable Outlook
Standard & Poor’s — A (Strong)
Stable Outlook
NYSE: ENH
Endurance’s total capital was
$3.80 billion as of March 31, 2015
2,000
$2,845
$2,755
$2,457
$2,281
1,500
and includes $3.27 billion of
shareholders’ equity.
$2,181
At March 31, 2015, Endurance had
1,000
access to additional capital in the form
500
of a credit facility with approximately
$587 million in remaining capacity.
0
2012
2011
Debt
2014
2013
Preferred Equity
Mar 31, 2015
Endurance maintains significant levels
Common Equity
of liquidity with approximately 33%
of investments in cash, short-term
Investment Portfolio as of March 31, 2015
Fair Value = $6.5 Billion*
investments, U.S. Government, and
U.S. Government backed securities at
Type of Investment
March 31, 2015.
Corporate Securities
5%
5%
9%
22%
6%
6%
16%
7%
U.S. Government Agency Residential
Mortgage-Backed Securities
is comprised of high quality assets
Other Investments
with an average rating of AA- for our
U.S. Government & Agencies Notes
9%
15%
Endurance’s investment portfolio
Non-Agency Commercial
Mortgage-Backed Securities
Asset-Backed Securities
fixed income investments at March
Equity Securities
31, 2015. Our priority is capital
Collateralized loan and debt obligations
Other Fixed Income Securities**
Cash & Equivalents
preservation while achieving attractive
risk adjusted returns.
Endurance’s investment portfolio
13%
24%
Investment Portfolio Ratings***
AAA/Aaa
U.S. Government & Agencies
21%
9%
33%
AA/Aa
A/A
BBB and Below/Not Rated
has been managed to an average
duration of 2.95 years at March 31,
2015 to minimize interest rate risk. We
carefully manage our asset-liability
exposure and ensure that more than
* Investment totals net of investments pending settlement
**Includes multiple types of securities with a 3% or less share
***Excludes cash and cash equivalents, equity securities and other investments
sufficient liquidity is available.
To learn more, visit us at:
www.endurance.bm
ENDURANCE
INSURANCE LOCATIONS
BERMUDA
Waterloo House
100 Pitts Bay Road
Pembroke HM 08
Bermuda
Tel No. +1.441.278.0400
UNITED KINGDOM
London
2 Minster Court
Mincing Lane
London, EC3R 7BB
United Kingdom
Tel No. +44.207.337.2800
Chicago, Illinois
303 West Madison
Suite 1800
Chicago, IL 60606
Tel No. +1.312.980.5300
New Hyde Park, New York
3333 New Hyde Park Road
Suite 210
New Hyde Park, NY 11042
Tel No. +1.212.209.7229
Florham Park, New Jersey
600 Campus Road
Floor 4
Florham Park, NJ 07932
Tel No. +1.908.376.2400
New York, New York
750 Third Avenue
New York, NY 10017
Tel No. +1.212.209.6500
UNITED STATES
Los Angeles, California
725 South Figueroa Street
Suite 2100
Los Angeles, CA 90017
Tel No. +1.213.270.7000
Atlanta, Georgia
3780 Mansell Road, Suite 400
Alpharetta, GA 30022
Tel No. +1.770.799.2660
Lubbock, Texas
7101 82nd Street
Lubbock, TX 79424
Tel No. +1.806.473.0333
St. Louis, Missouri
16052 Swingley Ridge Road
Suite 130
St. Louis, MO 63017
Tel No. +1.636.681.1220
ENDURANCE
INSURANCE LEADERSHIP
John A. Kuhn
Chief Executive Officer,
Global Insurance
[email protected]
Graham Evans
Chief Executive Officer,
International Insurance
[email protected]
Michael Smith
President & Chief Executive Officer,
ARMtech Insurance Services, Inc.
[email protected]
Douglas M. Worman
Chief Executive Officer,
U.S. Insurance
[email protected]