Endurance Reports Second Quarter 2015 Financial Results

PEMBROKE, Bermuda - August 3, 2015 - Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net income available to common shareholders of $76.0 million and $1.68 per diluted common share for the second quarter of 2015 versus net income of $75.0 million and $1.68 per diluted common share for the second quarter of 2014.

For the six months ended June 30, 2015, Endurance reported net income available to common shareholders of $176.3 million and $3.91 per diluted common share versus net income of $171.3 million and $3.84 per diluted common share for the six months ended June 30, 2014.  Book value per diluted share was $63.32 at June 30, 2015, up 3.2% from December 31, 2014.

Operating highlights for the quarter ended June 30, 2015 were as follows:

• Gross premiums written of $861.2 million, an increase of 24.9% compared to the same period in 2014;
• Net premiums written of $559.1 million, an increase of 9.3% compared to the same period in 2014;
• Combined ratio of 85.5%, which included 12.8 percentage points of favorable prior year loss reserve development and 2.2 percentage points of net catastrophe losses from 2015 events, 3.9 percentage points of large property and energy losses, and 0.8 percentage points of corporate expenses related to the acquisition of Montpelier Re Holdings Ltd. ("Montpelier");
• Net investment income of $32.3 million, a decrease of $7.1 million from the same period in 2014;
• Operating income, which excludes after-tax realized investment gains and foreign exchange losses, of $79.5 million and $1.76 per diluted common share; and
• Operating return on average common equity for the quarter of 2.8% or 11.1% on an annualized basis.

Operating highlights for the six months ended June 30, 2015 were as follows:

• Gross premiums written of $2,162.6 million, an increase of 17.1% over the same period in 2014;
• Net premiums written of $1,324.0 million, an increase of 1.1% over the same period in 2014;
• Combined ratio of 84.1%, which included 13.7 percentage points of favorable prior year loss reserve development, 2.1 percentage points of current year catastrophe losses, 2.1 percentage points of large property and energy losses, and 0.5 percentage points of corporate expenses related to the acquisition of Montpelier;
• Net investment income of $74.1 million, a decrease of $6.2 million over the same period in 2014;
• Operating income of $170.7 million and $3.78 per diluted common share; and
• Operating return on average common equity for the first six months of the year of 6.1%, or 12.1% on an annualized basis.

John R. Charman, Chairman and Chief Executive Officer, commented, "During the second quarter we continued to deliver improved profitability by generating an operating ROE of 11.1% in spite of very challenging market conditions.  We were also able to meaningfully expand our global specialty book of business as evidenced by our 25% growth in gross written premiums. These strong results continue to reflect the significant strategic improvements we have implemented over the past 30 months at Endurance. Our globally recognized, market leading underwriters are now firmly established and are attracting high quality, historically profitable business.  Our underwriters' careful risk selection and underwriting discipline remain critical in this very competitive rate environment and I am confident of our ability to continue to deliver strong financial results as well as creating exceptional value for our shareholders.

Last week we announced the completion of our acquisition of Montpelier after both Endurance and Montpelier received overwhelming shareholder support for the transaction.  Having spent the last several months diligently planning, we have already begun to immediately integrate Montpelier into Endurance.  We are confident in our ability to materially exceed our original synergy estimates and to achieve our targeted strategic and financial objectives."

Insurance Segment

Operating highlights for Endurance's Insurance segment for the quarter ended June 30, 2015 were as follows:

• Gross premiums written of $468.9 million, an increase of 45.8% from the second quarter of 2014;
• Net premiums written of $190.3 million, an increase of 6.3% from the second quarter of 2014; and
• Combined ratio of 95.2%, which included favorable prior year loss reserve development of 9.2 percentage points, net catastrophe losses from 2015 events of $1.2 million or 0.6 percentage points and large property and energy losses of $16.2 million or 8.8 percentage points.

Operating highlights for Endurance's Insurance segment for the six months ended June 30, 2015 were as follows:

• Gross premiums written of $1,205.1 million, an increase of 23.8% from the same period in 2014;
• Net premiums written of $494.3 million, a decrease of 5.3% from the same period in 2014; and
• Combined ratio of 92.2%, which included favorable prior year loss reserve development of 11.6 percentage points, net catastrophe losses from 2015 events of $5.7 million or 1.7 percentage points and large property and energy losses of $16.2 million or 5.3 percentage points.

Gross premiums written in the Insurance segment increased $147.3 million and $231.3 million for the quarter and six months ended June 30, 2015 compared to the same periods in 2014 as we achieved growth across all lines of business.  The underwriting investments we have made over the last 30 months within the professional lines, casualty and other specialty and property, marine and energy lines of business continue to attract new business to Endurance. Non-agriculture net premiums written increased $34.4 million and $74.6 million for the quarter and six months ended June 30, 2015, compared to the same periods in 2014.  Net premiums written were impacted by greater levels of reinsurance, including additional quota share protection for individual lines of business as well as across the entire portfolio.  Within agriculture insurance, greater cessions to the federal government and increased purchases of third party reinsurance led to a decline in net premiums written of $23.1 million and $102.3 million for the quarter and six months ended June 30, 2015 compared to the same periods in 2014.

The 3.4 percentage point increase in the Insurance segment combined ratio for the quarter ended June 30, 2015 compared to the same period in 2014 was driven by higher net loss and acquisition expense ratios partially offset by a lower general and administrative expense ratio.  The increase in the net loss ratio reflects lower levels of favorable loss reserve development which improved the current quarter's net loss ratio by 9.2 percentage points compared to 10.1 percentage points in 2014.  The accident year net loss ratio increased modestly in the current quarter as two large energy losses totaling $16.2 million, or 8.8 percentage points, were partially offset by improved profitability within our expanding professional lines business.  The current quarter's decline in the general and administrative expense ratio reflects higher ceding commissions received as a result of increased quota share reinsurance purchases.  The acquisition expense ratio increased in the current quarter as specialty lines with higher related acquisition costs accounted for a greater percentage of earned premiums than a year ago.  For the six months ended June 30, 2015 compared to the same period in 2014, the combined ratio improved as lower net loss and general and administrative expense ratios were partially offset by a higher acquisition expense ratio.

Reinsurance Segment

Operating highlights for Endurance's Reinsurance segment for the quarter ended June 30, 2015 were as follows:

• Gross premiums written of $392.3 million, an increase of 6.6% from the second quarter of 2014;
• Net premiums written of $368.8 million, an increase of 10.9% from the second quarter of 2014; and
• Combined ratio of 73.0%, which included favorable prior year loss reserve development of 15.7 percentage points and net catastrophe losses from 2015 events of $8.6 million or 3.5 percentage points.

Operating highlights for Endurance's Reinsurance segment for the six months ended June 30, 2015 were as follows:

• Gross premiums written of $957.5 million, an increase of 9.7% from the same period in 2014;
• Net premiums written of $829.7 million, an increase of 5.3% from the same period in 2014; and
• Combined ratio of 73.8%, which included favorable prior year loss reserve development of 15.0 percentage points, and net catastrophe losses from 2015 events of $11.3 million or 2.3 percentage points.

Gross premiums written in the Reinsurance segment increased $24.4 million and $84.4 million for the quarter and six months ended June 30, 2015 compared to the same periods in 2014.  For the second quarter of 2015, the increase was driven by the professional lines and casualty lines of business, partially offset by declines within the property, catastrophe and specialty lines of business.  Growth in professional lines and casualty predominantly resulted from expansion of existing contracts at renewal, some renewal date changes, as well as the entry into new quota share agreements.  Declines in the property and catastrophe lines of business were driven by the non-renewal of numerous contracts that no longer met our profitability targets, while the decline in the specialty line of business resulted primarily from reduced premium estimates on some existing treaties.  For the quarter and six months ended June 30, 2015, net premiums written increased $36.4 million and $41.6 million from a year ago as the growth in gross premiums written was largely offset by the purchase of greater levels of proportional and aggregate excess of loss retrocessional coverage for the Company's catastrophe portfolio and the initiation of a new whole account quota share retrocession for the majority of the specialty line of business.

The combined ratio in the Reinsurance segment for the second quarter of 2015 improved by 1.3 percentage points compared to the same period in 2014, due to a lower net loss ratio that was partially offset by higher acquisition and general and administrative expense ratios.  The net loss ratio improved by 5.2 percentage points in the current quarter compared to a year ago predominantly due to higher levels of favorable reserve development and a lower level of catastrophe losses.  The 2.1 percentage point increase in the current quarter's acquisition expense ratio was attributed to an increase in gross premiums written in the specialty lines of business, which has higher acquisition expenses.  The general and administrative expense ratio increased 1.8 percentage points in the second quarter of 2015 primarily from higher personnel expenses related to strategic investments made within our global specialty reinsurance operations.

Investments

Endurance's net investment income for the quarter and six months ended June 30, 2015 was $32.3 million and $74.1 million, a decrease of $7.1 million and $6.2 million, respectively, compared to the same periods in 2014.  The total return of Endurance's investment portfolio was (0.07)% and 0.81% for the quarter and six months ended June 30, 2015, compared to 1.52% and 2.78% for the quarter and six months ended June 30, 2014.  Investment income generated from Endurance's available for sale investments increased by $0.1 million and $2.0 million for the three and six months ended June 30, 2015, compared to the same periods in 2014 as assets and returns have remained relatively flat.  During the quarter and six months ended June 30, 2015, Endurance's net investment income on its alternative investment funds and high yield loan funds, which are included in other investments, included gains of $3.6 million and $16.0 million, as compared to $10.8 million and $24.3 million in the second quarter and the first six months of 2014.  The ending book yield on Endurance's fixed maturity investments at June 30, 2015 was 2.27%, up from 2.15% at June 30, 2014.

At June 30, 2015, Endurance's fixed maturity portfolio, which comprises 82.6% of Endurance's investments, had an average credit quality of AA- and a duration of 3.08 years.  Endurance's fixed maturity portfolio was in a net unrealized gain position of $43.6 million at June 30, 2015, a decrease of $42.5 million from December 31, 2014.  Endurance recorded net realized investment gains, net of impairments, of $9.3 million and $26.8 million during the second quarter and first six months of 2015, compared to $3.2 million and $8.0 million during the second quarter and first six months of 2014. 

Endurance ended the second quarter of 2015 with cash and invested assets of $6.6 billion, which represents a 0.8% decrease from December 31, 2014.  Net operating cash inflow was $23.5 million for the six months ended June 30, 2015 versus $19.7 million for the same period in 2014.

Capitalization and Shareholders' Equity

At June 30, 2015, Endurance's shareholders' equity was $3.30 billion or $63.32 per diluted common share versus $3.19 billion or $61.33 per diluted common share at December 31, 2014.  For the quarter and six months ended June 30, 2015, Endurance declared and paid common dividends of $0.35 and $0.70 per share, respectively. 

Earnings Call

Endurance will host a conference call on August 4, 2015 at 9:00 a.m. Eastern time to discuss its financial results.  The conference call can be accessed via telephone by dialing [phone] or [phone] (international) and entering pass code: 1577277.  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 August 18, 2015 by dialing [phone] or [phone] (international) and entering the pass code: 1577277.

The public may access a live broadcast of the conference call at the "Investors" section of Endurance's website, www.endurance.bm.  Following the live broadcast, an archived version will continue to be available on Endurance's website.

A copy of Endurance's financial supplement for the second quarter of 2015 will be available on Endurance's website at www.endurance.bm shortly after the release of earnings.

Operating income, operating return on average common equity, operating income per diluted common share, operating income allocated to common shareholders and the combined ratio excluding prior year net loss reserve development are non-GAAP measures.  Reconciliations of these measures to the appropriate GAAP measures are included in the attached tables.

About Endurance Specialty Holdings

Endurance Specialty Holdings Ltd. is a global specialty provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance writes agriculture, casualty and other specialty, professional lines and property, marine and energy lines of insurance and catastrophe, property, casualty, professional lines and specialty lines of reinsurance. We maintain excellent financial strength as evidenced by the ratings of A (Excellent) from A.M. Best (XV size category) and A (Strong) from Standard and Poor's on our principal operating subsidiaries.  Endurance's headquarters are located at Waterloo House, 100 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda.  For more information about Endurance, please visit www.endurance.bm.

Safe Harbor for Forward-Looking Statements

Some of the statements in this press release may include, and Endurance may make related oral forward-looking statements which reflect our current views with respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters. Statements which include the words "should," "would," "expect," "intend," "plan," "believe," "project," "target," "anticipate," "seek," "will," "deliver," and similar statements of a future or forward-looking nature identify forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise.  We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995.

All forward-looking statements address matters that involve risks and uncertainties.  Accordingly, there are or may be important factors that could cause actual results to differ materially from those indicated in the forward-looking statements.  These factors include, but are not limited to, the effects of competitors' pricing policies, greater frequency or severity of claims and loss activity, changes in market conditions in the agriculture insurance industry, termination of or changes in the terms of the U.S. multiple peril crop insurance program, a decreased demand for property and casualty insurance or reinsurance, changes in the availability, cost or quality of reinsurance or retrocessional coverage, our inability to renew business previously underwritten or acquired, our inability to maintain our applicable financial strength ratings, our inability to effectively integrate acquired operations, uncertainties in our reserving process, changes to our tax status, changes in insurance regulations, reduced acceptance of our existing or new products and services, a loss of business from and credit risk related to our broker counterparties, assessments for high risk or otherwise uninsured individuals, possible terrorism or the outbreak of war, a loss of key personnel, political conditions, changes in insurance regulation, changes in accounting policies, our investment performance, the valuation of our invested assets, a breach of our investment guidelines, the unavailability of capital in the future, developments in the world's financial and capital markets and our access to such markets, government intervention in the insurance and reinsurance industry, illiquidity in the credit markets, changes in general economic conditions and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2014.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the risk factors included in Endurance's most recent report on Form 10-K and other documents of Endurance on file with the Securities and Exchange Commission.  Any forward-looking statements made in this material are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Endurance will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Endurance or its business or operations. Except as required by law, Endurance undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

The contents of any website referenced in this press release are not incorporated by reference herein.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars, except share and per share amounts)

			June 30,				December 31,
			2015				2014
Assets
Cash and cash equivalents			$	622,642			$	745,472
Fixed maturity investments, available for sale, at fair value			4,933,776				5,092,581
Short-term investments, available for sale, at fair value			16,366				9,014
Equity securities, available for sale, at fair value			420,411				331,368
Other investments			623,868				541,454
Premiums receivable, net			1,665,990				883,450
Insurance and reinsurance balances receivable			108,162				122,214
Deferred acquisition costs			296,568				207,368
Prepaid reinsurance premiums			668,964				354,940
Reinsurance recoverable on unpaid losses			785,472				670,795
Reinsurance recoverable on paid losses			157,287				218,291
Accrued investment income			25,118				27,183
Goodwill and intangible assets			150,296				153,405
Deferred tax asset			46,779				48,995
Net receivable on sales of investments			21,420				38,877
Other assets			172,162				199,375
Total Assets			$	10,715,281			$	9,644,782
Liabilities
Reserve for losses and loss expenses			$	3,833,525			$	3,846,859
Reserve for unearned premiums			2,046,933				1,254,519
Deposit liabilities			13,376				15,136
Reinsurance balances payable			632,457				375,711
Debt			528,123				527,715
Net payable on purchases of investments			82,375				151,682
Other liabilities			275,586				287,978
Total Liabilities			7,412,375				6,459,600
Shareholders' Equity
Preferred shares
	Series A, non-cumulative - 8,000,000 issued and outstanding (2014 - 8,000,000)		8,000				8,000
	Series B, non-cumulative - 9,200,000 issued and outstanding (2014 - 9,200,000)		9,200				9,200
Common shares
	45,156,845 issued and outstanding (2014 - 44,765,153)		45,157				44,765
Additional paid-in capital			610,585				598,226
Accumulated other comprehensive income			36,965				76,706
Retained earnings			2,592,999				2,448,285
Total Shareholders' Equity			3,302,906				3,185,182
Total Liabilities and Shareholders' Equity			$	10,715,281			$	9,644,782
Book Value per Common Share
Dilutive common shares outstanding			45,367,976				44,920,768
Diluted book value per common share [a]			$	63.32			$	61.33

Note: All financial information contained herein is unaudited, except the balance sheet data for the year ended December 31, 2014, which was derived from Endurance's audited financial statements.
[a] Excludes the $430 million liquidation value of the preferred shares.
ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of United States dollars, except share and per share amounts)

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2015				2014				2015				2014
Revenues
Gross premiums written		$	861,184			$	689,425			$	2,162,616			$	1,846,940
Net premiums written		$	559,083			$	511,427			$	1,324,037			$	1,310,132
Change in unearned premiums		(100,948		)		(29,889		)		(476,043		)		(432,328		)
Net premiums earned		458,135				481,538				847,994				877,804
Other underwriting income (loss)		1,389				(4,824		)		3,795				(6,062		)
Net investment income		32,252				39,302				74,113				80,292
Net realized and unrealized gains		9,680				3,411				27,869				8,283
	Total other-than-temporary impairment losses	(424		)		(198		)		(1,073		)		(309		)
	Portion of loss recognized in other comprehensive (loss) income	-				-				-				-
Net impairment losses recognized in earnings		(424		)		(198		)		(1,073		)		(309		)
Total revenues		501,032				519,229				952,698				960,008
Expenses
Net losses and loss expenses		239,122				259,196				411,058				436,092
Acquisition expenses		84,971				78,601				167,064				150,758
General and administrative expenses		54,965				58,312				109,855				117,813
Corporate expenses [a]		12,634				28,143				24,902				41,848
Amortization of intangibles		1,579				1,623				3,178				3,240
Net foreign exchange losses		12,981				319				20,533				3,283
Interest expense		9,062				9,732				18,121				18,783
Total expenses		415,314				435,926				754,711				771,817
Income before income taxes		85,718				83,303				197,987				188,191
Income tax expense		(1,512		)		(140		)		(5,302		)		(548		)
Net income		84,206				83,163				192,685				187,643
Preferred dividends		(8,188		)		(8,188		)		(16,376		)		(16,376		)
Net income available to common and participating common shareholders		$	76,018			$	74,975			$	176,309			$	171,267
Per share data
Basic earnings per common share		$	1.69			$	1.68			$	3.92			$	3.84
Diluted earnings per common share		$	1.68			$	1.68			$	3.91			$	3.84

[a] The Company incurred $3.5 million and $4.5 million of corporate expenses in relation to the Company's acquisition of Montpelier for the quarter and six months ended June 30, 2015.  For the quarter and six months ended June 30, 2014, the Company incurred $12.1 million and $13.0 million of corporate expenses in relation to the Company's proposed acquisition of Aspen Insurance Holdings Limited.

ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)

			Three Months Ended June 30, 2015
			Insurance				Reinsurance				Reported Totals
	Revenues
	Gross premiums written		$	468,866			$	392,318			$	861,184
	Ceded premiums written		(278,567		)		(23,534		)		(302,101		)
	Net premiums written		190,299				368,784				559,083
	Net premiums earned		201,460				256,675				458,135
	Other underwriting income		-				1,389				1,389
	Total underwriting revenues		201,460				258,064				459,524
	Expenses
	Net losses and loss expenses		145,483				93,639				239,122
	Acquisition expenses		17,702				67,269				84,971
	General and administrative expenses		28,567				26,398				54,965
			191,752				187,306				379,058
	Underwriting income		$	9,708			$	70,758			80,466
	Net investment income										32,252
	Corporate expenses										(12,634		)
	Interest expense										(9,062		)
	Amortization of intangibles										(1,579		)
	Net foreign exchange losses										(12,981		)
	Net realized and unrealized gains										9,680
	Net impairment losses recognized in earnings										(424		)
	Income before income taxes										$	85,718
	Net loss ratio		72.2		%		36.5		%		52.2		%
	Acquisition expense ratio		8.8		%		26.2		%		18.5		%
	General and administrative expense ratio		14.2		%		10.3		%		14.8		%	[a]
	Combined ratio		95.2		%		73.0		%		85.5		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)

			Three Months Ended June 30, 2014
			Insurance				Reinsurance				Reported Totals
	Revenues
	Gross premiums written		$	321,526			$	367,899			$	689,425
	Ceded premiums written		(142,488		)		(35,510		)		(177,998		)
	Net premiums written		179,038				332,389				511,427
	Net premiums earned		218,563				262,975				481,538
	Other underwriting loss		-				(4,824		)		(4,824		)
	Total underwriting revenues		218,563				258,151				476,714
	Expenses
	Net losses and loss expenses		149,567				109,629				259,196
	Acquisition expenses		15,128				63,473				78,601
	General and administrative expenses		35,969				22,343				58,312
			200,664				195,445				396,109
	Underwriting income		$	17,899			$	62,706			80,605
	Net investment income										39,302
	Corporate expenses										(28,143		)
	Interest expense										(9,732		)
	Amortization of intangibles										(1,623		)
	Net foreign exchange losses										(319		)
	Net realized and unrealized gains										3,411
	Net impairment losses recognized in earnings										(198		)
	Income before income taxes										$	83,303
	Net loss ratio		68.5		%		41.7		%		53.8		%
	Acquisition expense ratio		6.9		%		24.1		%		16.3		%
	General and administrative expense ratio		16.4		%		8.5		%		18.0		%	[a]
	Combined ratio		91.8		%		74.3		%		88.1		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)

			Six Months Ended June 30, 2015
			Insurance				Reinsurance				Reported Totals
	Revenues
	Gross premiums written		$	1,205,084			$	957,532			$	2,162,616
	Ceded premiums written		(710,746		)		(127,833		)		(838,579		)
	Net premiums written		494,338				829,699				1,324,037
	Net premiums earned		337,324				510,670				847,994
	Other underwriting income		-				3,795				3,795
	Total underwriting revenues		337,324				514,465				851,789
	Expenses
	Net losses and loss expenses		219,995				191,063				411,058
	Acquisition expenses		33,585				133,479				167,064
	General and administrative expenses		57,409				52,446				109,855
			310,989				376,988				687,977
	Underwriting income		$	26,335			$	137,477			163,812
	Net investment income										74,113
	Corporate expenses										(24,902		)
	Interest expense										(18,121		)
	Amortization of intangibles										(3,178		)
	Net foreign exchange losses										(20,533		)
	Net realized and unrealized gains										27,869
	Net impairment losses recognized in earnings										(1,073		)
	Income before income taxes										$	197,987
	Net loss ratio		65.2		%		37.4		%		48.5		%
	Acquisition expense ratio		10.0		%		26.1		%		19.7		%
	General and administrative expense ratio		17.0		%		10.3		%		15.9		%	[a]
	Combined ratio		92.2		%		73.8		%		84.1		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.
RESULTS BY SEGMENT
(in thousands of United States dollars, except ratios)

			Six Months Ended June 30, 2014
			Insurance				Reinsurance				Reported Totals
	Revenues
	Gross premiums written		$	973,802			$	873,138			$	1,846,940
	Ceded premiums written		(451,737		)		(85,071		)		(536,808		)
	Net premiums written		522,065				788,067				1,310,132
	Net premiums earned		362,584				515,220				877,804
	Other underwriting loss		-				(6,062		)		(6,062		)
	Total underwriting revenues		362,584				509,158				871,742
	Expenses
	Net losses and loss expenses		238,100				197,992				436,092
	Acquisition expenses		27,389				123,369				150,758
	General and administrative expenses		72,668				45,145				117,813
			338,157				366,506				704,663
	Underwriting income		$	24,427			$	142,652			167,079
	Net investment income										80,292
	Corporate expenses										(41,848		)
	Interest expense										(18,783		)
	Amortization of intangibles										(3,240		)
	Net foreign exchange losses										(3,283		)
	Net realized and unrealized gains										8,283
	Net impairment losses recognized in earnings										(309		)
	Income before income taxes										$	188,191
	Net loss ratio		65.7		%		38.5		%		49.6		%
	Acquisition expense ratio		7.6		%		23.9		%		17.2		%
	General and administrative expense ratio		20.0		%		8.7		%		18.2		%	[a]
	Combined ratio		93.3		%		71.1		%		85.0		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS

As Reported
				Three Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			72.2	%		68.5	%		36.5	%		41.7	%		52.2	%		53.8	%
	Acquisition expense ratio			8.8	%		6.9	%		26.2	%		24.1	%		18.5	%		16.3	%
	General and administrative expense ratio			14.2	%		16.4	%		10.3	%		8.5	%		14.8	%		18.0	%
	Combined ratio			95.2	%		91.8	%		73.0	%		74.3	%		85.5	%		88.1	%
Effect of Prior Year Net Loss Reserve Development
Favorable / (Unfavorable)
				Three Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			9.2	%		10.1	%		15.7	%		12.2	%		12.8	%		11.3	%
Net of Prior Year Net Loss Reserve Development
				Three Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			81.4	%		78.6	%		52.2	%		53.9	%		65.0	%		65.1	%
	Acquisition expense ratio			8.8	%		6.9	%		26.2	%		24.1	%		18.5	%		16.3	%
	General and administrative expense ratio			14.2	%		16.4	%		10.3	%		8.5	%		14.8	%		18.0	%
	Combined ratio			104.4	%		101.9	%		88.7	%		86.5	%		98.3	%		99.4	%
	The combined ratio is the sum of the loss, acquisition expense and general and administrative expense ratios.  Endurance presents the combined ratio as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.  The combined ratio, excluding prior year net loss reserve development, enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Endurance's results of underwriting activities in a manner similar to how management analyzes Endurance's underlying business performance.  The combined ratio, net of prior year net loss reserve development, should not be viewed as a substitute for the combined ratio.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS

As Reported
				Six Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			65.2	%		65.7	%		37.4	%		38.5	%		48.5	%		49.6	%
	Acquisition expense ratio			10.0	%		7.6	%		26.1	%		23.9	%		19.7	%		17.2	%
	General and administrative expense ratio			17.0	%		20.0	%		10.3	%		8.7	%		15.9	%		18.2	%
	Combined ratio			92.2	%		93.3	%		73.8	%		71.1	%		84.1	%		85.0	%
Effect of Prior Year Net Loss Reserve Development
Favorable / (Unfavorable)
				Six Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			11.6	%		9.3	%		15.0	%		13.7	%		13.7	%		11.9	%
Net of Prior Year Net Loss Reserve Development
				Six Months Ended June 30,
				Insurance						Reinsurance						Total
				2015			2014			2015			2014			2015			2014
	Net loss ratio			76.8	%		75.0	%		52.4	%		52.2	%		62.2	%		61.5	%
	Acquisition expense ratio			10.0	%		7.6	%		26.1	%		23.9	%		19.7	%		17.2	%
	General and administrative expense ratio			17.0	%		20.0	%		10.3	%		8.7	%		15.9	%		18.2	%
	Combined ratio			103.8	%		102.6	%		88.8	%		84.8	%		97.8	%		96.9	%
	The combined ratio is the sum of the loss, acquisition expense and general and administrative expense ratios.  Endurance presents the combined ratio as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.  The combined ratio, excluding prior year net loss reserve development, enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Endurance's results of underwriting activities in a manner similar to how management analyzes Endurance's underlying business performance.  The combined ratio, net of prior year net loss reserve development, should not be viewed as a substitute for the combined ratio.

ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY SEGMENT
(in thousands of United States dollars)

The following tables show Endurance's gross and net premiums written for the three months ended June 30, 2015 and 2014:

		Three Months Ended								Three Months Ended
		June 30, 2015								June 30, 2014
		Gross Premiums Written				Net Premiums Written				Gross Premiums Written				Net Premiums Written
Insurance
	Agriculture	$	112,012			$	22,677			$	80,540			$	45,826
	Casualty and other specialty	146,056				65,302				108,030				56,475
	Professional lines	96,736				43,443				74,650				29,846
	Property, marine and energy	114,062				58,877				58,306				46,891
	Subtotal Insurance	468,866				190,299				321,526				179,038
Reinsurance
	Catastrophe	139,833				122,305				158,372				123,411
	Property	30,560				30,118				42,887				42,886
	Casualty	48,132				48,132				30,875				30,868
	Professional lines	134,241				134,241				84,117				84,117
	Specialty	39,552				33,988				51,648				51,107
	Subtotal Reinsurance	392,318				368,784				367,899				332,389
Total		$	861,184			$	559,083			$	689,425			$	511,427

ENDURANCE SPECIALTY HOLDINGS LTD.
GROSS AND NET PREMIUMS WRITTEN BY SEGMENT
(in thousands of United States dollars)

The following tables show Endurance's gross and net premiums written for the six months ended June 30, 2015 and 2014:

		Six Months Ended								Six Months Ended
		June 30, 2015								June 30, 2014
		Gross Premiums Written				Net Premiums Written				Gross Premiums Written				Net Premiums Written
Insurance
	Agriculture	$	628,928			$	225,137			$	608,434			$	327,471
	Casualty and other specialty	246,738				110,360				175,683				93,288
	Professional lines	151,496				67,674				113,430				44,416
	Property, marine and energy	177,922				91,167				76,255				56,890
	Subtotal Insurance	$	1,205,084			$	494,338			$	973,802			$	522,065
Reinsurance
	Catastrophe	$	264,240			$	175,765			$	285,020			$	202,374
	Property	156,260				153,567				209,300				209,208
	Casualty	106,230				106,230				115,857				114,260
	Professional lines	178,098				178,098				109,736				109,736
	Specialty	252,704				216,039				153,225				152,489
	Subtotal Reinsurance	$	957,532			$	829,699			$	873,138			$	788,067
Total		$	2,162,616			$	1,324,037			$	1,846,940			$	1,310,132

ENDURANCE SPECIALTY HOLDINGS LTD.
RECONCILIATIONS
(in thousands of United States dollars, except share, per share amounts and ratios)

The following is a reconciliation of Endurance's net income, net income per basic or diluted common share, net income allocated to common shareholders under the two-class method and annualized return on average common equity to operating income, operating income per basic or diluted common share, operating income allocated to common shareholders under the two-class method and annualized operating return on average common equity (all non-GAAP measures) for the three and six months ended June 30, 2015 and 2014:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2015				2014				2015				2014
Net income		$	84,206			$	83,163			$	192,685			$	187,643
Add (less) after-tax items:
	Net foreign exchange losses	12,910				305				20,484				3,277
	Net realized and unrealized gains	(9,707		)		(3,559		)		(27,021		)		(8,563		)
	Net impairment losses recognized in earnings	309				198				957				309
Operating income before preferred dividends		87,718				80,107				$	187,105			$	182,666
	Preferred dividends	(8,188		)		(8,188		)		(16,376		)		(16,376		)
Operating income allocated to common and
	participating common shareholders	$	79,530			$	71,919			$	170,729			$	166,290
Operating income allocated to common
	shareholders under the two-class method	$	77,152			$	69,797			$	165,657			$	161,447
Weighted average diluted common shares		43,896,721				43,350,911				43,792,626				43,265,626
Operating income per diluted common share [b]		$	1.76			$	1.61			$	3.78			$	3.73
Average common equity [a]		$	2,858,876			$	2,628,392			$	2,814,044			$	2,571,112
Operating return on average common equity		2.8		%		2.7		%		6.1		%		6.5		%
Annualized operating return on average common equity		11.1		%		10.9		%		12.1		%		12.9		%
Net income		$	84,206			$	83,163			$	192,685			$	187,643
	Preferred dividends	(8,188		)		(8,188		)		(16,376		)		(16,376		)
Net income available to common and
	participating common shareholders	$	76,018			$	74,975			$	176,309			$	171,267
Net income allocated to common shareholders
	under the two-class method	$	73,745			$	72,763			$	171,072			$	166,279
Net income per diluted common share [b]		$	1.68			$	1.68			$	3.91			$	3.84
Return on average common equity, Net income		2.7		%		2.9		%		6.3		%		6.7		%
Annualized return on average common equity, Net income		10.6		%		11.4		%		12.5		%		13.3		%

[a] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated period, which excludes the $430 million liquidation value of the preferred shares.
[b] Represents diluted income per share calculated under the two-class method which was the lower of the treasury stock method and the two-class method.

Operating income and operating income per basic or diluted common share are internal performance measures used by Endurance in the management of its operations.  Operating income allocated to common shareholders (excludes unvested restricted shares outstanding which are considered participating) per diluted common share represents operating income divided by weighted average dilutive common shares, which has been calculated in accordance with the two-class method under U.S. GAAP.  Operating income represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities.  Endurance believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations.  In addition to presenting net income and net income per dilutive common share determined in accordance with the two-class method under GAAP, Endurance believes that showing operating income and operating income per dilutive common share enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Endurance's results of operations in a manner similar to that used by management to analyze the Company's underlying business performance.  Operating income and operating income per dilutive common share should not be viewed as substitutes for GAAP net income and net income per dilutive common share, respectively.

Endurance presents return on equity as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

Contact:
Investor Relations
Phone: [phone]
Email: [e-mail]

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Endurance Specialty Holdings Ltd via Globenewswire

HUG#1943359