Bermuda’s Endurance Specialty Holdings Ltd. joined the parade of the island’s insurers who’ve been having a banner year. The company reported third quarter 2003 net income of $56.5 million or $0.83 per diluted share versus net income of $28.9 million or $0.48 per diluted share in the third quarter of 2002.
Operating income for the quarter, which excludes after-tax realized investment gains and losses and foreign exchange gains, was $55.2 million or $0.81 per diluted share, “112% higher than for the third quarter of 2002,” said the bulletin. “For the nine months ended September 30, 2003, net income was $174.5 million or $2.68 per diluted share. Operating income for the nine months ended September 30, 2003 was $161.4 million or $2.48 per diluted share, up 175% from the same period of 2002. Annualized operating return on average equity during the third quarter of 2003 was 14.2% and annualized operating return on average equity for the nine months ended 2003 was 15.5%.”
Chairman and CEO Kenneth J. LeStrange, commented, “Endurance continues to produce outstanding results for our shareholders in 2003. Despite seasonal catastrophe losses, every segment of our business performed well. As a result, during the first nine months of our second year of operation, we have exceeded our annualized return on average equity objective of 14-15%.
“Our broad based strategy continues to show success. During the third quarter, growth from our U.S. operations and casualty lines accelerated, allowing us to benefit from the operating platform which we have assembled. Our acquisition of the Hart Re portfolio continues to perform very well, generating a $17 million underwriting profit in the quarter.”
The announcement also reported that “Gross premiums written were $325.1 million for the quarter ended September 30, 2003, an increase of 42% from the $228.3 million in gross premiums written for the third quarter of 2002. For the nine months ended September 30, 2003, Endurance had gross premiums written and acquired of $1.3 billion. Earned premiums in the quarter were $335.8 million, an increase of 201% from the third quarter of 2002.
“The combined ratio was 88.5% in the third quarter of 2003 compared to 88.4% in the third quarter of 2002. The loss ratio was 59.2% in the quarter compared to 62.1% in the third quarter of 2002, reflecting lower relative levels of catastrophe losses. During the third quarter the company incurred moderate losses from Hurricanes’ Fabian and Isabel as well as the loss of the Telstar Galaxy IV satellite, which adversely affected our aerospace business. These three losses totaled $17 million in the quarter.
“The acquisition expense ratio increased from 16.6% in the third quarter of 2002 to 20.7% in the third quarter of 2003 as a result of an increase in the portion of the Company’s business underwritten as reinsurance. The general and administrative expense ratio decreased to 8.6% in the third quarter of 2003, reflecting a significant increase in premiums earned from business written in prior periods.”
Endurance said it will host a conference call today Wednesday, November 5, 2003 at 8:30 AM Eastern to discuss its financial results. A live broadcast of the conference call will be available at the investor relations section of Endurance’s website, http://www.endurance.bm. The conference call can also be accessed via telephone by dialing 800-289-0730 (toll-free) or 913-981-5509 (international). A telephone replay of the conference call will be available through November 19, 2003 by dialing 888-203-1112 (toll-free) or 719-457-0820 (international) and entering the pass code: 211051.
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