Endurance Reports 2014 Q3 Financial Results
Bermuda-based Endurance Specialty Holdings Ltd. 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 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.”
