Endurance Reports $99.4 Million Q3 Loss; Conference Call Details

Bermuda-based Endurance Specialty Holdings Ltd. reported a net loss of $99.4 million and $1.79 per diluted common share for the third quarter of 2008 versus net income of $131.4 million and $1.81 per diluted common share in the third quarter of 2007.

For the nine months ended September 30, 2008, net income was $81.8 million and $1.10 per diluted common share versus net income of $368.6 million and $5.02 per diluted common share for the nine months ended September 30, 2007.

Endurance listed the following “operating highlights” for the third quarter:
— Gross premiums written of $624.1 million, an increase of 47.5 percent over the same period in 2007;
— Ceded premiums of $130.1 million versus $45.7 million in the third quarter of 2007;
— Combined ratio of 112.6 percent, which included 28.1 percentage points of net losses from Hurricanes Gustav and Ike and 3.6 percentage points of favorable prior year loss reserve development;
— Net investment income of $27.4 million, a decrease of $35.2 million over the same period in 2007; and
— Operating loss, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $56.1 million or $1.04 per diluted common share.

Operating highlights for the nine months ended September 30, 2008 were as follows:
— Gross premiums written of $2,010.8 million, an increase of 33.8 percent over the same period in 2007; — Ceded premiums of $406.6 million versus $143.9 million in the first nine months of 2007;
— Combined ratio of 96.7 percent, which included 10.7 percentage points of net losses from Hurricanes Gustav and Ike and 8.7 percentage points of favorable prior year loss reserve development;
— Net investment income of $134.8 million, a decrease of $81.2 million over the same period in 2007;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $138.0 million or $1.99 per diluted common share;
— Operating return on average common equity for the first nine months of the year of 5.8 percent, or 7.7 percent on an annualized basis; and
— Book value of $33.68 per diluted common share, down 1.8 percent, excluding dividends paid, from December 31, 2007.

Chairman and CEO Kenneth J. LeStrange commented: “While Endurance’s results this quarter were negatively impacted by Hurricanes Gustav and Ike, our performance was within our expected tolerance level for events of this size demonstrating the effectiveness of our underwriting and risk management techniques.

“Likewise, although our investment portfolio was adversely impacted by the continued unprecedented turmoil in the global financial markets, we believe Endurance performed very well on a relative basis.

“Our prudent investment and capital management strategies have allowed us to maintain a secure balance sheet and excellent liquidity, and we are very well positioned to take advantage of the opportunities we expect to emerge from the current market environment.”

Endurance will host a conference call today, November 7, 2008 at 8:30 a.m. Eastern time to discuss its financial results. The conference call can be accessed via telephone by dialing (877) 672-9216 or (706) 634-9637 (international) and entering pass code: 28045051. 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 21, 2008 by dialing (800) 642-1687 or (706) 645-9291 (international) and entering the pass code: 28045051.

The public may access a live broadcast of the conference call at the “Investors” section of Endurance’s web site at: www.endurance.bm.

The full financial report, as well as a copy of Endurance’s financial supplement, for the third quarter of 2008 is available on its web site.

Source: Endurance Specialty