Endurance Quarterly Net Up 72%

Endurance Quarterly Net Up 72%

By Mark E. Ruquet

NU Online News Service, July 26, 4:14 p.m. EDT?Endurance Specialty Holdings Ltd, reported net income increased 72 percent in the second quarter based on strong underwriting discipline and risk selection, the company's management said.[@@]

However, executives said the market is going through changes, as competition heats up and primary insurers seek changes in terms and conditions.

Endurance said it refused to renew some business because cedents wanted changes to terms and conditions the carrier refused to make. Without identifying the carriers or lines, executives said, out of 12 renewals the company retained 10 after getting the terms they wanted, but let the other two go.

"We know a soft market was inevitable, and we are prepared for that," said Steven Carlsen, president-specialty services. "Underwriting profit is our goal."

Kenneth J. LeStrange, chairman and chief executive officer, Endurance, called second-quarter results "superb," adding, "Our diversified business mix, strong risk selection and our commitment to disciplined underwriting continue to drive strong returns on equity and growth in book value per share."

For the second quarter of this year, the Pembroke, Bermuda-based insurance and reinsurance carrier reported net income increased slightly less than $48 million, going from $66.8 million, or 99 cents a share, to $114.8 million, or $1.69 per share. Revenues grew 36 percent, or $111.7 million, from $312.6 million to $424.3 million. The company writes direct insurance in the Bermuda market only.

For the six months, net income rose 83 percent, or $97.6 million, going from $118 million, or $1.85 a share, to $215.6 million, or $3.16 per share. Revenues were up 67 percent, or less than $350 million, going from $521 million to $870 million.

Gross premiums written during the second quarter dropped 46 percent from $652.7 million in 2003 to $350.7 million this quarter, the company said.

Endurance said the decrease in gross premiums written was due to the fact that the business obtained from the Hart Re portfolio in the second quarter of 2003 was renewed during the first quarter of 2004. For the first half of 2004, the carrier's gross premium written increased $100 million, going from $1 billion in 2003 to $1.1 billion.

Benefiting from a low level of catastrophe loss, the second-quarter combined ratio stood at 76.9 percent compared to 84.2 percent in 2003.

On the issue of losses, Mr. Carlsen noted that the period was "unusual" because there have not been any major cat losses, but "rest assured that it will come along."