Premiums ceded in both the three month period ended March 31, 2005 and 2004 were negligible. The Company currently does not purchase significant levels of reinsurance protection as part of its overall underwriting strategy.

Net premiums earned increased in 2005 as a result of the earning of net premiums that were written in 2004 and 2003.

Net Investment Income.    Net investment income was derived primarily from interest earned on fixed maturity investments partially offset by investment management fees and other investment expenses. The increase in net investment income was principally due to an increase in invested assets from March 31, 2004 to March 31, 2005 of approximately 36.1% which was invested during a rising interest rate environment. The increase in invested assets resulted from positive net operating cash flows throughout the last twelve months and a general increase in investment yields. Investment expenses for the three months ended March 31, 2005 were $1.4 million compared to investment expenses of $1.0 million for the same period in 2004.

The annualized period book yield (which is the average yield of the invested portfolio after adjusting for accretion and amortization from the purchase price) and total return of the investment portfolio (which includes realized and unrealized gains and losses) for the three months ended March 31, 2005 were 3.98% and (1.00)%, respectively. For the three months ended March 31, 2004, the annualized period book yield and total return were 3.57% and 8.61%, respectively. The yield on the benchmark five year U.S. Treasury bond has fluctuated in a range of 71 basis points from a high of 4.33% to a low of 3.62% during the quarter. The Company has maintained its absolute cash position from December 2004, however this has decreased as a percentage of total assets. Interest rates continue to be volatile but have risen since year end, this rise coupled with continuing investments, have lengthened the portfolios overall duration to 2.91 years from 2.77 years at December 31, 2004 and 2.74 years at March 31, 2004. Overall, the annualized period book yield of the portfolio has increased due to investments made during the last twelve months and the repositioning of some of the Company's portfolio from government securities into higher yielding fixed income investments.

Losses and Loss Expenses.    The reported loss ratio is characterized by various factors. Since the first quarter of 2004 the impact of premium growth in the Treaty Casualty Reinsurance segment and reduced premiums written in the Company's property segments resulted in a higher mix of casualty business. In addition, during the quarter ended March 31, 2005, the Company experienced a moderate amount of property losses from European windstorm Erwin, floods in California, Nevada and Israel and two industrial fires. While this shift in business mix and increase in property losses during the quarter ended March 31, 2005 compared to 2004 has resulted in a slightly higher weighted average loss ratio, some business lines, particularly Property Per Risk Treaty Reinsurance, Property Catastrophe Reinsurance and Casualty Individual Risk experienced lower levels of reported losses than previously anticipated thereby resulting in favorable adjustments to reserves.

In the three month period ended March 31, 2005, loss reserves held by the Company for the 2003 and 2004 accident years proved to be moderately redundant. Consequently, the Company's previously estimated ultimate losses for those accident years were reduced by $46.0 million compared to favorable development of $19.4 million experienced during the three month period ended March 31, 2004. These reductions were net of reserve increases related to the 2004 Florida hurricanes and Japanese typhoons. This reduction in the Company's estimated losses for prior years was experienced most significantly in the Property Per Risk Treaty Reinsurance, Property Catastrophe Reinsurance and the Casualty Individual Risk segments.

The Company participates in lines of business where claims may not be reported for many years. Accordingly, management does not believe that reported claims are the only valid means for estimating ultimate obligations. Ultimate losses and loss expenses may differ materially from the amounts recorded in the Company's consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are recorded in earnings in the period in which they are

16

determined. The overall loss reserves were established by the Company's actuaries and reflect management's best estimate of ultimate losses. See "—Reserve for Losses and Loss Expenses" for further discussion.

Acquisition Expenses.    The decrease in acquisition expense ratio is due to normal variations in business mix.

General and Administrative Expenses.    The general and administrative expense ratio for the three months ended March 31, 2005 is largely unchanged at 7.7% compared to a general and administrative expense ratio of 7.6% for the three months ended March 31, 2004. The growth in the absolute levels of general and administrative expenses principally reflected the continued development of Endurance U.S. and Endurance U.K. At March 31, 2005 the Company had 320 employees compared to 255 employees at March 31, 2004.

Underwriting results by operating segments

The determination of the Company's business segments was based on how the Company monitors the performance of its underwriting operations. For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that a small number of reinsurance contracts written during the period were more appropriately accounted for as deposit liabilities. See "Deposit Accounting" below for further discussion. Management measures segment results on the basis of the combined ratio, which is obtained by dividing the sum of the losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. The Company's historic combined ratios may not be indicative of future underwriting performance. The Company does not manage its assets by segment; accordingly, investment income and total assets are not allocated to the individual segments. General and administrative expenses incurred by segments are allocated directly. Remaining corporate overhead is allocated based on each segment's proportional share of gross premiums written. Group reinsurance protection and recoveries are allocated to segments based on the underlying exposures covered.

The following table summarizes the underwriting results and associated ratios for the Company's six business segments for the three month period ended March 31, 2005.

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				Property Per Risk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance				Property Individual Risk
				(in thousands)
Revenues
Gross premiums written				$	171,290			$	110,690			$	251,543			$	23,374
Net premiums written					171,290				110,690				249,783				23,149
Net premiums earned					118,585				58,899				118,044				27,197
Other underwriting income					—				—				—				—
					118,585				58,899				118,044				27,197
Expenses
Losses and loss expenses					44,531				10,770				79,138				39,332
Acquisition expenses					32,423				7,296				29,753				3,470
General and administrative expenses					6,616				4,806				9,304				2,224
					83,570				22,872				118,195				45,026
Underwriting income				$	35,015			$	36,027			$	(151	)		$	(17,829	)
Loss ratio					37.6	%			18.3	%			67.0	%			144.6	%
Acquisition expense ratio					27.3	%			12.4	%			25.2	%			12.8	%
General and administrative expense ratio					5.6	%			8.2	%			7.9	%			8.2	%
Combined ratio					70.5	%			38.9	%			100.1	%			165.6	%
Reserve for losses and loss expenses				$	382,464			$	69,922			$	538,037			$	100,458

				Casualty Individual Risk				Aerospace and Other Specialty Lines				Company Sub-total				Deposit Accounting(1)				Total
				(in thousands)
Revenues
Gross premiums written				$	47,690			$	183,526			$	788,113			$	(85,622	)		$	702,491
Net premiums written					47,781				182,107				784,800				(85,622	)			699,178
Net premiums earned					60,464				65,065				448,254				(10,656	)			437,598
Other underwriting income					—				—				—				171				171
					60,464				65,065				448,254				(10,485	)			437,769
Expenses
Losses and loss expenses					37,450				45,715				256,936				(5,877	)			251,059
Acquisition expenses					4,625				12,920				90,487				(3,712	)			86,775
General and administrative expenses					3,093				7,503				33,546				—				33,546
					45,168				66,138				380,969				(9,589	)			371,380
Underwriting income (loss)				$	15,296			$	(1,073	)		$	67,285			$	(896	)		$	66,389
Loss ratio					61.9	%			70.3	%			57.3	%			55.2	%			57.4	%
Acquisition expense ratio					7.6	%			19.9	%			20.2	%			34.8	%			19.8	%
General and administrative expense ratio					5.1	%			11.5	%			7.5	%			—				7.7	%
Combined ratio					74.6	%			101.7	%			85.0	%			90.0	%			84.9	%
Reserve for losses and loss expenses				$	337,547			$	284,406			$	1,712,834			$	(5,877	)		$	1,706,957

(1)	This column reconciles the Company's underwriting results by segment to the Company's financial statement presentation. See "Deposit Accounting" below for further discussion.

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The following table summarizes the underwriting results and associated ratios for the Company's six business segments for the three month period ended March 31, 2004.

				Property Per Risk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance
				(in thousands)
Revenues
Gross premiums written				$	206,413			$	128,538			$	187,178
Net premiums written					206,413				128,538				184,428
Net premiums earned					118,125				53,373				106,055
Expenses
Losses and loss expenses					60,616				2,913				69,285
Acquisition expenses					30,040				6,195				28,040
General and administrative expenses					8,123				5,294				8,306
					98,779				14,402				105,631
Underwriting income (loss)				$	19,346			$	38,971			$	424
Loss ratio					51.3	%			5.5	%			65.3	%
Acquisition expense ratio					25.4	%			11.6	%			26.4	%
General and administrative expense ratio					6.9	%			9.9	%			7.8	%
Combined ratio					83.6	%			27.0	%			99.5	%
Reserve for losses and loss expenses				$	227,173			$	63,045			$	301,644

				Property Individual Risk				Casualty Individual Risk				Aerospace and Other Specialty Lines				Total
				(in thousands)
Revenues
Gross premiums written				$	29,534			$	50,091			$	118,877			$	720,631
Net premiums written					28,660				50,091				118,877				717,007
Net premiums earned					22,855				54,675				60,743				415,826
Expenses
Losses and loss expenses					6,154				38,572				44,469				222,009
Acquisition expenses					2,681				6,130				12,432				85,518
General and administrative expenses					2,321				3,855				3,868				31,767
					11,156				48,557				60,769				339,294
Underwriting income (loss)				$	11,699			$	6,118			$	(26	)		$	76,532
Loss ratio					26.9	%			70.5	%			73.2	%			53.4	%
Acquisition expense ratio					11.7	%			11.2	%			20.5	%			20.6	%
General and administrative expense ratio					10.2	%			7.1	%			6.4	%			7.6	%
Combined ratio					48.8	%			88.8	%			100.1	%			81.6	%
Reserve for losses and loss expenses				$	39,756			$	191,045			$	196,655			$	1,019,318

Property per risk treaty reinsurance

The Company's Property Per Risk Treaty Reinsurance business segment reinsures individual property risks of ceding companies on a treaty basis. The Company's property per risk reinsurance contracts cover claims from individual insurance policies written by its ceding company clients and include both personal lines and commercial lines exposures. The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for the Property Per Risk Treaty Reinsurance business segment for the three months ended March 31, 2005 and 2004, respectively.

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				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	171,290			$	206,413				(17.0	%)
Net premiums written					171,290				206,413				(17.0	%)
Net premiums earned					118,585				118,125				0.4	%
Expenses
Losses and loss expenses					44,531				60,616				(26.5	%)
Acquisition expenses					32,423				30,040				7.9	%
General and administrative expenses					6,616				8,123				(18.6	%)
					83,570				98,779				(15.4	%)
Underwriting income				$	35,015			$	19,346				81.0	%
Loss ratio					37.6	%			51.3	%			(13.7	)
Acquisition expense ratio					27.3	%			25.4	%			1.9
General and administrative expense ratio					5.6	%			6.9	%			(1.3	)
Combined ratio					70.5	%			83.6	%			(13.1	)

(1)	With respect to ratios, changes show increase or decrease in percentage points.

Premiums.    The decrease in gross premiums written was in large part due to the Company's decision to take a reduced line on a national carrier policy due to unfavorable experience in the prior year. The premiums written on this policy in the three months ended March 31, 2005 were reduced by approximately $39 million when compared to the same period in 2004. In addition, business that has not been renewed because terms and conditions have no longer met the Company's requirements outpaced new business by approximately $4 million. Gross premiums written at Endurance U.K. increased by approximately $24 million due to new business and increased premiums on renewed contracts. Gross premiums written at Endurance U.S. were reduced by approximately $70 million due to contracts not renewed and decreased premiums on renewed contracts (including the contract mentioned above), partially offset by $13 million of new business written. Premiums earned were unchanged from the corresponding period in the prior year.

Losses and Loss Expenses.    The loss ratio in the three months ended March 31, 2005 decreased from the corresponding period in the prior year due to favorable overall development of $36.3 million, offset by unfavorable loss development of $7.4 million on the Company's 2004 Florida hurricane reserves.

Acquisition Expenses.    The acquisition expense ratio for 2005 was largely consistent with 2004. The slight increase was due to a moderate shift in the mix of business.

General and Administrative Expenses.    The decrease in general and administrative expenses reflected a reduced allocation of corporate expenses commensurate with the lower level of premiums written.

Property catastrophe reinsurance

The Company's Property Catastrophe Reinsurance business segment reinsures catastrophic perils for ceding companies on a treaty basis. The Company's property catastrophe reinsurance contracts provide protection for most catastrophic losses that are covered in the underlying insurance policies written by its ceding company clients. Protection under property catastrophe treaties is provided on an occurrence basis, allowing the Company's ceding company clients to combine losses that have been incurred in any single event from multiple underlying policies. The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for the Property Catastrophe Reinsurance business segment for the three months ended March 31, 2005 and 2004, respectively.

20

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				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	110,690			$	128,538				(13.9	%)
Net premiums written					110,690				128,538				(13.9	%)
Net premiums earned					58,899				53,373				10.4	%
Expenses
Losses and loss expenses					10,770				2,913				269.7	%
Acquisition expenses					7,296				6,195				17.8	%
General and administrative expenses					4,806				5,294				(9.2	%)
					22,872				14,402				58.8	%
Underwriting income				$	36,027			$	38,971				(7.6	%)
Loss ratio					18.3	%			5.5	%			12.8
Acquisition expense ratio					12.4	%			11.6	%			0.8
General and administrative expense ratio					8.2	%			9.9	%			(1.7	)
Combined ratio					38.9	%			27.0	%			11.9

(1)	With respect to ratios, changes show increase or decrease in percentage points.

Premiums.    The decrease in gross premiums written is due to business that has not been renewed where terms and conditions have no longer met the Company's underwriting requirements. Further, a contract with premiums of $11.3 million written in the three months ended March 31, 2004 was written on an 18 month basis, thus the contract did not renew in the three months ended March 31, 2005 but will come up for renewal later in the year.

Losses and Loss Expenses.    The low loss ratios for the three month periods ended March 31, 2005 and 2004 reflected the generally low level of catastrophic loss emergence during both periods. The increase in 2005 is a result of losses related to the Japanese typhoons amounting to approximately $11 million, offset by $5.1 million of favorable loss reserve development on the 2004 accident year.

Acquisition Expenses.    The increase in acquisition expense ratio is a result of the changing profile of business written.

General and Administrative Expenses.    General and administrative expenses are largely unchanged from the corresponding prior year period. The slight decrease reflected a reduced allocation of corporate expenses commensurate with the lower level of premiums written.

Casualty treaty reinsurance

The Company's Casualty Treaty Reinsurance business segment reinsures third party liability exposures from ceding companies on a treaty basis. The exposures that the Company reinsures include automobile liability, professional liability, directors' and officers' liability, umbrella liability and workers' compensation. The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for the Casualty Treaty Reinsurance business segment for the three months ended March 31, 2005 and 2004, respectively.

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				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	251,543			$	187,178				34.4	%
Net premiums written					249,783				184,428				35.4	%
Net premiums earned					118,044				106,055				11.3	%
Expenses
Losses and loss expenses					79,138				69,285				14.2	%
Acquisition expenses					29,753				28,040				6.1	%
General and administrative expenses					9,304				8,306				12.0	%
					118,195				105,631				11.9	%
Underwriting income (loss)				$	(151	)		$	424				(135.6	%)
Loss ratio					67.0	%			65.3	%			1.7
Acquisition expense ratio					25.2	%			26.4	%			(1.2	)
General and administrative expense ratio					7.9	%			7.8	%			0.1
Combined ratio					100.1	%			99.5	%			0.6

(1)	With respect to ratios, changes show increase or decrease in percentage points.

Premiums.    The increase in gross premiums written was in large part due to several new workers compensation reinsurance contracts written at Endurance U.S. Total new business written at Endurance U.S. for the three months ended March 31, 2005 of approximately $76 million was partially offset by approximately $32 million of premiums not renewed, principally where terms and conditions have no longer met the Company's requirements. The growth in premiums earned is in line with the historical growth of premiums written.

Losses and Loss Expenses.    Claims may not be reported for many years in the lines of business included in this segment. Increased uncertainty exists regarding the development of reserves due to the long tail nature of this business. The slight difference in loss ratio was a result of differences in the mix of business and favorable loss development of $1.9 million which were offset by the establishment of precautionary reserves based on the latest allegations by the New York Attorney General and the Securities and Exchange Commission against certain insurance brokers and companies.

Acquisition Expenses.    The acquisition cost ratio for the three months ended March 31, 2005 is largely consistent compared to the same period in 2004. The slight decrease is due to a moderate shift in the contract mix to business with higher loss attachment points from business with lower loss attachment points.

General and Administrative Expenses. General and administrative expenses have increased in line with the growth in underwriting activity, increased corporate expenses, and higher staffing levels.

Property individual risk

The Company's Property Individual Risk business segment is comprised of the insurance and facultative reinsurance of commercial properties. The policies written in this segment provide coverage for one insured for each policy. The types of risks insured are generally commercial properties with sufficiently large values to require multiple insurers and reinsurers to accommodate their insurance capacity needs. This business is written by Endurance Bermuda and Endurance U.K. The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for the Property Individual Risk business segment for the three months ended March 31, 2005 and 2004, respectively.

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				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	23,374			$	29,534				(20.9	%)
Net premiums written					23,149				28,660				(19.2	%)
Net premiums earned					27,197				22,855				19.0	%
Expenses
Losses and loss expenses					39,332				6,154				539.1	%
Acquisition expenses					3,470				2,681				29.4	%
General and administrative expenses					2,224				2,321				(4.2	%)
					45,026				11,156				303.6	%
Underwriting income				$	(17,829	)		$	11,699				(252.4	%)
Loss ratio					144.6	%			26.9	%			117.7
Acquisition expense ratio					12.8	%			11.7	%			1.1
General and administrative expense ratio					8.2	%			10.2	%			-2.0
Combined ratio					165.6	%			48.8	%			116.8

(1)	With respect to ratios, changes show increase or decrease in percentage points.

Premiums.    This segment has seen decreases in pricing due to increased capacity and competition. This has resulted in reduced premiums recorded on those policies renewed and a portion of policies not being renewed due to less attractive terms. The increase in premiums earned was a result of the earning of premiums that were written over the last twelve months.

Losses and Loss Expenses.    The increased loss ratio resulted from losses on European winter storm Erwin, floods in California, Nevada and Israel and two industrial fires. Further, this segment experienced unfavorable loss development on prior year reserves of $2.5 million including $4.5 million related to the Florida hurricanes, offset in part by favorable development on reserves related to the 2003 and 2004 accident years.

Acquisition Expenses.    The acquisition expense ratio for the three months ended March 31, 2005 was largely consistent with the same period in 2004.

General and Administrative Expenses.    General and administrative expenses were unchanged from the prior year.

Casualty individual risk

The Company's Casualty Individual Risk business segment is comprised of the insurance and facultative reinsurance of third party liability exposures. This includes third party general liability insurance, directors' and officers' liability insurance, errors and omissions insurance and employment practices liability insurance, all written for a wide range of industry groups, as well as medical professional liability insurance which is written for large institutional healthcare providers.

The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for the Casualty Individual Risk business segment for the three months ended March 31, 2005 and 2004, respectively.

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				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	47,690			$	50,091				(4.8	%)
Net premiums written					47,781				50,091				(4.6	%)
Net premiums earned					60,464				54,675				10.6	%
Expenses
Losses and loss expenses					37,450				38,572				(2.9	%)
Acquisition expenses					4,625				6,130				(24.6	%)
General and administrative expenses					3,093				3,855				(19.8	%)
					45,168				48,557				(7.0	%)
Underwriting income				$	15,296			$	6,118				(150.0	%)
Loss ratio					61.9	%			70.5	%			(8.6	)
Acquisition expense ratio					7.6	%			11.2	%			(3.6	)
General and administrative expense ratio					5.1	%			7.1	%			(2.0	)
Combined ratio					74.6	%			88.8	%			(14.2	)

(1)	With respect to ratios, changes show increase or decrease in percentage points.

Premiums.    While this segment's healthcare and excess casualty lines maintained pricing, terms and conditions, this segment's directors and officers insurance lines as well as other professional liability lines experienced erosion of pricing, terms and conditions. As a result, our premium written in this segment declined slightly during the first quarter of 2005 compared to the first quarter of 2004. The decrease in premiums was also due to a large healthcare contract written for a 15 month period in the first quarter of 2004. This contract will come up for renewal during the second quarter of 2005. The increase in premiums earned was a result of higher premiums written in the twelve months ended March 31, 2005 against those written in the corresponding 12 month period ended March 31, 2004. All premiums written by this segment are earned ratably over the terms of the insurance policies, typically a 12-month period.

Losses and Loss Expenses.    The Company has received only a limited number of notices of potential losses for this segment, very few of which have yet reached a level that would result in the Company paying a claim. Accordingly, the reserve for losses and loss expenses established by the Company's actuaries was based on historical industry loss data and business segment specific pricing information. This segment is primarily comprised of claims made severity business – while not short tail, this business can generally be expected to report losses within three to seven years. Consequently, in the quarter ended March 31, 2005, the Company reduced expected losses related to prior underwriting periods by $12.3 million largely related to the 2002 underwriting year.

Acquisition Expenses.    The acquisition expense ratio for the three months ended March 31, 2005 decreased due to a reduction of commissions paid to wholesale brokers, specifically on the healthcare and excess general liability lines.

General and Administrative Expenses.    The decreased general and administrative expenses reflected a reduced allocation of corporate expenses commensurate with the lower level of premiums written.

Aerospace and other specialty lines

The Company's Aerospace and Other Specialty Lines business segment is comprised primarily of the insurance and reinsurance of Aerospace lines, and a number of other specialty lines including surety, agriculture, marine, energy and personal accident. Aerospace includes aviation hull, aircraft liability and aircraft products coverage, and satellite launch and in-orbit coverage. The following table summarizes the underwriting results, associated ratios and the reserve for losses and loss expenses for

24

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the Aerospace and other specialty lines business segment for the three months ended March 31, 2005 and 2004, respectively.

				THREE MONTHS ENDED
				March 31, 2005				March 31, 2004				Change(1)
				(in thousands)
Revenues
Gross premiums written				$	183,526			$	118,877				54.4	%
Net premiums written					182,107				118,877				53.2	%
Net premiums earned					65,065				60,743				7.1	%
Expenses
Losses and loss expenses					45,715				44,469				2.8	%
Acquisition expenses					12,920				12,432				3.9	%
General and administrative expenses					7,503				3,868				94.0	%
					66,138				60,769				8.8	%
Underwriting loss				$	(1,073	)		$	(26	)			NM	(2)
Loss ratio					70.3	%			73.2	%			(2.9	)
Acquisition expense ratio					19.9	%			20.5	%			(0.6	)
General and administrative expense ratio					11.5	%			6.4	%			5.1
Combined ratio					101.7	%			100.1	%			1.6

(1)	With respect to ratios, changes show increase or decrease in percentage points.

(2)	Not meaningful.

Premiums.    The increase in gross premiums written was in large part due to the addition of agriculture and surety lines during 2004 which contributed $25.9 million and $27.0 million of gross premiums written for the three months ended March 31, 2005. Other increases in premiums written were generated by an expansion in underwriting staff within the Company's marine and energy and personal accident teams which combined have contributed $35.6 million to premium growth. Offsetting the growth was a decrease of $17.6 million gross premiums written in the aerospace line. This decrease related to the non-renewal of a major contract and a reduction of satellite business written due to unfavorable terms and conditions. The growth in premiums earned was largely due to the increase in premiums written.

Losses and Loss Expenses.    The increased losses reflect reported losses of $4.2 million related to an industrial fire in Canada which impacted a marine and energy contract.

Acquisition Expenses.    The expense ratio for the three months ended March 31, 2005 was largely unchanged from the equivalent period in 2004.

General and Administrative Expenses.    General and administrative expenses have increased in line with the growth in underwriting activity and increased corporate overhead allocation.

Deposit accounting

During the quarter ended March 31, 2005, the Company entered into 15 reinsurance contracts with $85.6 million (2004: nil) of premiums that, in management's judgment, were most appropriately accounted for as deposits under the deposit accounting provisions of SOP 98-7. While not underwritten as finite risk reinsurance, these quota share contracts contain adjustable features, primarily sliding scale ceding commissions and profit share commissions, that may cause the amount or variability of risk assumed by the Company to differ from that of its ceding company counterpart. These quota share contracts often contain significant exposures, particularly catastrophic, start up and other risks, that although they have a low probability of occurrence, could produce material losses. Consequently, these quota share contracts were accounted for as contracts which either transfer only significant timing risk or transfer only significant underwriting risk. The determination of the

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appropriate method of accounting for these quota share contracts requires significant judgment and analysis, particularly with respect to assumptions about the variability and likelihood of potential future losses.

Under the deposit method of accounting, revenues and expenses from reinsurance contracts are not recognized as written premium and incurred losses. Instead, the profits or losses from these contracts are recognized net as other underwriting income or investment income over the contract or expected claim payment periods. Income or loss associated with contracts determined to transfer only significant timing risk is recognized as a component of net investment income over the estimated claim settlement period. Income or loss associated with contracts determined to transfer only significant underwriting risk is recognized as other underwriting income over the contract risk period.

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. The following table reconciles the Company's underwriting results by segment and income before income taxes to the Company's financial statement presentation.

				Underwriting Results by Segment				Deposit Accounting				Totals
Underwriting income				(in thousands)
Revenues
Gross premiums written				$	788,113			$	(85,622	)		$	702,491
Net premiums written					784,800				(85,622	)			699,178
Net premiums earned					448,254				(10,656	)			437,598
Other underwriting income					—				171				171
					448,254				(10,485	)			437,769
Expenses
Losses and loss expenses					256,936				(5,877	)			251,059
Acquisition expenses					90,487				(3,712	)			86,775
General and administrative expenses					33,546				—				33,546
					380,969				(9,589	)			371,380
Underwriting income				$	67,285			$	(896	)		$	66,389
Net investment income					39,311				700				40,011
Interest expense					(5,471	)			—				(5,471	)
Amortization of intangibles					(1,220	)			—				(1,220	)
Net foreign exchange gains (losses)					(2,421	)			—				(2,421	)
Net realized gains (losses) on investments					(4,453	)			—				(4,453	)
Income before income taxes				$	93,031			$	(196	)		$	92,835
Loss ratio					57.3	%			55.2	%			57.4	%
Acquisition expense ratio					20.2	%			34.8	%			19.8	%
General and administrative expense ratio					7.5	%			—				7.7	%
Combined ratio					85.0	%			90.0	%			84.9	%

Significant transactions and events

On April 18, 2005, the Company amended its existing Credit Agreement among the Company, various designated subsidiary borrowers, various lending institutions and JPMorgan Chase Bank, N.A. as Administrative Agent (the "Amended Agreement") in order to (i) allow for the issuance of multi-currency letters of credit, (ii) allow for the "fronting" of letters of credit by banks that are participants in the Amended Agreement, (iii) extend the maturity of the facility, and (iv) increase the size of the facility to $925 million from $850 million. The remaining principal terms of the Company's existing Credit Agreement, described previously in the 2004 Annual Report on Form 10-K, as amended, are unchanged.

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Liquidity and capital resources

Endurance Holdings is a holding company that does not have any significant operations or assets other than its ownership of the shares of its direct and indirect subsidiaries, including Endurance Bermuda, Endurance U.K. and Endurance U.S. Endurance Holdings relies primarily on dividends and other permitted distributions from its insurance subsidiaries to pay its operating expenses, interest on debt and dividends, if any, on its ordinary shares. There are restrictions on the payment of dividends by Endurance Bermuda, Endurance U.K. and Endurance U.S. to Endurance Holdings, which are described in more detail below.

The ability of Endurance Bermuda to pay dividends is dependent on its ability to meet the requirements of applicable Bermuda law and regulations. Under Bermuda law, Endurance Bermuda may not declare or pay a dividend if there are reasonable grounds for believing that Endurance Bermuda is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of Endurance Bermuda's assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts. Further, Endurance Bermuda, as a regulated insurance company in Bermuda, is subject to additional regulatory restrictions on the payment of dividends or distributions. As of March 31, 2005, Endurance Bermuda could pay a dividend or return additional paid-in capital totaling approximately $456 million without prior regulatory approval based upon insurance and Bermuda Companies Act regulations.

Endurance U.S. is subject to regulation by the State of New York Insurance Department. Dividends may only be declared or distributed out of earned surplus. At March 31, 2005, Endurance U.S. did not have earned surplus; therefore Endurance U.S. is precluded from declaring or distributing any dividend during 2005 without the prior approval of the Superintendent of the State of New York Insurance Department.

Endurance U.K. is subject to regulation by the United Kingdom Financial Services Authority (the "FSA"). U.K. company law prohibits Endurance U.K. from declaring a dividend to its shareholders unless it has "profits available for distribution." The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses. While the United Kingdom insurance regulatory laws impose no statutory restrictions on a general insurer's ability to declare a dividend, the FSA strictly controls the maintenance of each insurance company's solvency margin within its jurisdiction. Any such payment or proposal could result in regulatory intervention. In addition, the FSA requires authorized insurance companies to notify the FSA in advance of any significant dividend payment. At March 31, 2005, Endurance U.K. did not have profits available for distribution and could not pay a dividend.

On April 18, 2005, the Company amended its existing Credit Agreement among the Company, various designated subsidiary borrowers, various lending institutions and JPMorgan Chase Bank, N.A. as Administrative Agent. See "—Significant transactions and events" above.

The Company's aggregate invested assets as of March 31, 2005 totaled $4.1 billion compared to aggregate invested assets of $3.9 billion as of December 31, 2004. The increase in invested assets since December 31, 2004 resulted from collections of premiums on insurance policies and reinsurance contracts and investment income, offset by loss and loss expenses paid, acquisition expenses paid, reinsurance premiums paid and general and administrative expenses paid.

On an ongoing basis, the Company expects its internally generated funds, together with borrowings available under its credit facilities and capital base established by its initial public offering, its original private placement and its 7% Notes due 2034 to be sufficient to operate its business. However, there can be no assurance that the Company will not incur additional indebtedness or issue additional equity in order to implement its business strategy or pay claims.

Quantitative and qualitative information about market risk

There have been no material changes in market risk from the information provided under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations— Quantitative and Qualitative Information about Market Risk" included in the 2004 Annual Report on Form 10-K, as amended.

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Currency

The Company's functional currency is U.S. dollars for Endurance Bermuda and Endurance U.S. and British Sterling for Endurance U.K. The reporting currency for all entities is U.S. dollars. The Company maintains a portion of its investments and liabilities in currencies other than the U.S. dollar. The Company has made a significant investment in the capitalization of Endurance U.K. Endurance U.K. is subject to the United Kingdom's Financial Services Authority rules concerning the matching of the currency of its assets to the currency of its liabilities. Depending on the profile of Endurance U.K.'s liabilities, it may be required to hold some of its assets in currencies corresponding to the currencies of its liabilities. The Company may, from time to time, experience losses resulting from fluctuations in the values of foreign currencies, which could have a material adverse effect on the Company's results of operations.

Effects of inflation

The effects of inflation could cause the severity of claims to rise in the future. The Company's estimates for losses and loss expenses include assumptions about future payments for settlement of claims and claims handling expenses, such as medical treatments and litigation costs. To the extent inflation causes these costs to increase above reserves established for these claims, the Company will be required to increase the reserve for losses and loss expenses with a corresponding reduction in its earnings in the period in which the deficiency is identified.

Reserve for losses and loss expenses

As of March 31, 2005, the Company had accrued losses and loss expense reserves of $1.7 billion. This amount represents the Company's actuarial best estimate of the ultimate liability for payment of losses and loss expenses related to loss events as of March 31, 2005. During the three month period ended March 31, 2005, the Company paid losses and loss expenses of $89.9 million.

As of March 31, 2005, the Company had been notified of a number of claims and potential claims under its insurance policies and reinsurance contracts. Of these notifications, management expects some of the claims to penetrate layers in which the Company provides coverage and case reserves have been established for these expected losses. The Company participates in lines of business where claims may not be reported for many years. Accordingly, management does not believe that reported claims are currently a valid means for estimating ultimate obligations. Ultimate losses and loss expenses may differ materially from the amounts recorded in the Company's consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Such adjustments, if any, are recorded in earnings in the period in which they are determined. The overall loss reserves were established by the Company's actuaries and reflect management's best estimate of ultimate losses and loss expenses. See "Critical Accounting Policies—Reserve for Losses and Loss Expenses" included in the 2004 Annual Report on Form 10-K, as amended.

Incurred losses for the three months ended March 31, 2005 are summarized as follows:

				Property per Risk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance				Property Individual Risk				Casualty Individual Risk				Aerospace & Other Specialty Lines				Deposit Accounting(1)				Total
				(in thousands)
Incurred related to:
Current year				$	73,431			$	15,916			$	81,067			$	36,855			$	49,715			$	45,953			$	(5,877	)			297,060
Prior years					(28,900	)			(5,146	)			(1,929	)			2,477				(12,265	)			(238	)			—				(46,001	)
Total Incurred Losses				$	44,531			$	10,770			$	79,138			$	39,332			$	37,450			$	45,715			$	(5,877	)		$	251,059

(1)	This column reconciles the Company's incurred losses by segment to the Company's financial statement presentation. See "Deposit Accounting" above for further discussion.

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Incurred losses for the three months ended March 31, 2004 are summarized as follows:

				Property per Risk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance				Property Individual Risk				Casualty Individual Risk				Aerospace & Other Specialty Lines				Total
				(in thousands)
Incurred related to:
Current year				$	63,008			$	10,201			$	71,112			$	12,448			$	38,943			$	45,669			$	241,381
Prior years					(2,392	)			(7,288	)			(1,827	)			(6,294	)			(371	)			(1,200	)			(19,372	)
Total Incurred Losses				$	60,616			$	2,913			$	69,285			$	6,154			$	38,572			$	44,469			$	222,009

Incurred losses for the three months ended March 31, 2005 include approximately $46.0 million in favorable development of reserves relating to the prior accident years. The favorable loss reserve development experienced during the three months ended March 31, 2005 benefited the Company's reported loss ratio by approximately 10.5 percentage points.

During the three months ended March 31, 2005, the reduction in the Company's initial estimated losses for prior accident years was experienced most significantly in the Property per Risk Treaty Reinsurance segment, where the initial estimate was reduced by approximately $28.9 million; the Casualty Individual Risk segment, where the initial estimate was reduced by approximately $12.3 million; and the Property Catastrophe Reinsurance segment, where the initial estimate was reduced by approximately $5.1 million.

The above reduction in estimated losses for prior accident years reflects lower than expected emergence of catastrophic and attritional losses.

Reserves for losses and loss expenses are comprised of the following at March 31, 2005:

				Property perRisk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance				Property Individual Risk				Casualty Individual Risk				Aerospace & Other Specialty Lines				Deposit Accounting(1)				Total
				(in thousands)
Case Reserves				$	166,599			$	41,414			$	90,878			$	56,368			$	5,002			$	87,815			$	(240	)		$	447,836
IBNR					215,865				28,508				447,159				44,090				332,545				196,591				(5,637	)			1,259,121
Reserve for Losses and Loss Expenses				$	382,464			$	69,922			$	538,037			$	100,458			$	337,547			$	284,406			$	(5,877	)		$	1,706,957

(1)	This column reconciles the Company's reserves for losses and loss expenses by segment to the Company's financial statement presentation. See "Deposit Accounting" above for further discussion.

Reserves for losses and loss expenses are comprised of the following at March 31, 2004:

				Property perRisk Treaty Reinsurance				Property Catastrophe Reinsurance				Casualty Treaty Reinsurance				Property Individual Risk				Casualty Individual Risk				Aerospace & Other Specialty Lines				Total
				(in thousands)
Case Reserves				$	66,083			$	29,322			$	40,926			$	14,081			$	—			$	44,782			$	195,194
IBNR					161,090				33,723				260,718				25,675				191,045				151,873				824,124
Reserve for Losses and Loss Expenses				$	227,173			$	63,045			$	301,644			$	39,756			$	191,045			$	196,655			$	1,019,318

Cautionary statement regarding forward-looking statements

Some of the statements contained herein, and certain statements that the Company may make in a press release or that Company officials may make orally may include forward-looking statements

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which reflect the Company's current views with respect to future events and financial performance. Such statements 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 "expect," "intend," "plan," "believe," "project," "anticipate," "seek," "will," and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements. The Company believes that these factors include, but are not limited to, the following:

—	the effects of competitors' pricing policies, and of changes in laws and regulations on competition, including those regarding contingent commissions, industry consolidation and development of competing financial products;

—	the impact of acts of terrorism and acts of war;

—	the effects of terrorist related insurance legislation and laws;

—	greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than the Company's underwriting, reserving or investment practices have anticipated;

—	decreased level of demand for property and casualty insurance or reinsurance or increased competition due to an increase in capacity of property and casualty reinsurers;

—	the inability to obtain or maintain financial strength or claims-paying ratings by one or more of the Company's subsidiaries;

—	uncertainties in the Company's reserving process;

—	Endurance Holdings or Endurance Bermuda becomes subject to income taxes in the United States or the United Kingdom;

—	changes in regulations or tax laws applicable to us, the Company's subsidiaries, brokers or customers;

—	acceptance of the Company's products and services, including new products and services;

—	the inability to renew business previously underwritten or acquired;

—	changes in the availability, cost or quality of reinsurance or retrocessional coverage;

—	loss of key personnel;

—	political stability of Bermuda;

—	changes in accounting policies or practices;

—	the impact of the investigations of the New York Attorney General and other regulators on the industry and the Company in particular; and

—	changes in general economic conditions, including inflation, foreign currency exchange rates and other factors which could affect the Company's investment portfolio.

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 in the 2004 Annual Report on Form 10-K, as amended. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Item 4.    Controls and Procedures

a)    Disclosure Controls and Procedures.    The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the

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Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

b)    Internal Control Over Financial Reporting.    There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company's first fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

We are party to various legal proceedings generally arising in the normal course of our business. While any proceeding contains an element of uncertainty, we do not believe that the eventual outcome of any litigation or arbitration proceeding to which we are presently a party could have a material adverse effect on our financial condition or business. Pursuant to our insurance and reinsurance agreements, disputes are generally required to be finally settled by arbitration.

Endurance Holdings, Endurance U.S. and three employees of one of Endurance Holdings' subsidiaries have been named in a lawsuit filed on November 18, 2004 in the Court of Common Pleas in Hamilton County, Ohio. The suit alleges misappropriation of trade secrets from the employees' former employer, Great American Insurance Company, and related entities and asserts other related claims. On December 22, 2004, we and the other defendants filed motions to dismiss the lawsuit for lack of personal jurisdiction over the defendants. These motions are pending.

On January 5, 2005, Endurance U.S. received a subpoena from the Office of the Attorney General of the State of New York (the "NYAG") in connection with its investigation into contingent commission arrangements with brokers. Although the subpoena was addressed to Endurance U.S., it called for the production of documents from all affiliates of Endurance Holdings. Among other things, the subpoena seeks documents concerning efforts by any insurance broker to exclude or limit an insurance company's access to the insurance market and documents concerning efforts or requests by any insurance broker to manipulate bids or price quotes, or submit false or inflated bids or price quotes in insurance markets. We have provided the NYAG with an initial set of documents responsive to the subpoena.

Item 2.    Changes in Securities

(e)    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

ISSUER PURCHASES OF EQUITY SECURITIES

Period				(a) Total Number of Shares (or Units) Purchased (1)				(b) Average Price Paid per Share (or Unit)				(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)(2)				(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)(2)
January 1, 2005 – January 31, 2005					—			$	—				—				3,193,200
February 1, 2005 – February 28, 2005					138,400				35.85				138,400				3,054,800
March 1, 2005 – March 31, 2005 (3)					617,414				35.25				617,414				2,437,386
Total					755,814			$	35.36				755,814				2,437,386

(1)	Ordinary shares or share equivalents.

(2)

On May 24, 2004, the Company initiated a share repurchase program. Under this program, the Company will repurchase up to 2,000,000 of its ordinary shares and share equivalents. The repurchases will be accomplished in open market or privately negotiated transactions, from time to time, depending on market conditions. On February 17, 2005 the Company extended this program by a further 2,000,000 shares and authorized the program through February 2007.

(3)	Includes the purchase of 350,000 ordinary shares from an initial investor at a price of $34.6775 per share on March 4, 2005.

Item 3.    Defaults Upon Senior Securities

None

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Item 4.    Submissions of Matters to a Vote of Security Holders

None

Item 5.    Other Information

None

Item 6.    Exhibits

(a)    The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:

Exhibit Number				Description
31.1				Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.
31.2				Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32				Certification Pursuant to 18 O.K. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:    May 9, 2005				By:				/s/ Kenneth J. LeStrange
				Kenneth J. LeStrange Chairman of the Board, Chief Executive Officer, President
Date:    May 9, 2005				By:				/s/ James R. Kroner
				James R. Kroner Chief Financial Officer (Principal Financial Officer)

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