ENDURANCE SPECIALTY HOLDINGS LTD - FORM 8-K - EX-99.2

Attached files

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8-K - FORM 8-K - ENDURANCE SPECIALTY HOLDINGS LTD	enh8-kcoverpageq26302015.htm
EX-99.1 - EX-99.1 - ENDURANCE SPECIALTY HOLDINGS LTD	enh8-kpressreleaseq26302015.htm

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

SECOND QUARTER 2015

Endurance Specialty Holdings Ltd.

Waterloo House, 100 Pitts Bay Rd.

Pembroke HM 08, Bermuda

Investor Relations

Phone: (441) 278-0988

Fax: (441) 278-0493

email: investorrelations@endurance.bm

This report is for information purposes only. It should be read in conjunction

with other documents filed by Endurance Specialty Holdings Ltd. pursuant to

the Securities Act of 1933 and the Securities Exchange Act of 1934.

Financial Supplement Table of Contents



	Page
i. Basis of Presentation	i
I. Consolidated Financial Highlights	1
II. Consolidated Financial Statements
a. Consolidated Statements of Income - Quarterly	2
b. Consolidated Statements of Income - YTD	3
c. Consolidated Balance Sheets	4
III. Other Financial Information
a. Probable Maximum Loss by Zone and Peril	5
b. Segment Distribution	6
c. Consolidated Segment Data	7
d. Return on Equity Analysis	19
e. ROE Component Analysis - Annualized Premium and Investment Leverage	20
f. Investment Portfolio Information	21
g. Largest Twenty-Five Corporate Holdings	22
IV. Loss Reserve Analysis
a. Activity in Reserve for Losses and Loss Expenses	23
b. Prior Year Reserve Development by Segment	24
c. Prior Year Reserve Development by Line of Business	25
d. Losses and Loss Expenses Incurred by Line of Business	26
e. Analysis of Unpaid Losses and Loss Expenses	27
V. Shareholder Return Analysis
a. Shareholder Return Analysis	28
b. Weighted Average Dilutive Shares Outstanding	29
c. Earnings per Share - Two Class Method	30
d. Operating Income Reconciliation - Two Class Method	31
e. Book Value Per Share Analysis	32
VI. Regulation G	33

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

Some of the statements in this financial supplement 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 financial supplement 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.

Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation publicly to update or revise any forward looking statement, whether as a result of new information, future developments or otherwise.

ENDURANCE SPECIALTY HOLDINGS LTD.

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION


•	All financial information contained herein is unaudited, except the balance sheet and/or income statement data for the years ended December 31, 2014 and 2013 which was derived from the Company’s audited financial statements.


•	Unless otherwise noted, all data is in thousands, except for per share, percentage and ratio information.


•	As used in this financial supplement, “common shares” refers to our ordinary shares.

•

Endurance Specialty Holdings Ltd., along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of claims and claims adjustment expense to earned premiums. The acquisition expense ratio is the ratio of underwriting expenses (commissions, taxes, licenses and fees, as well as other underwriting expenses) to earned premiums. The general and administrative expense ratio is the ratio of general and administrative expenses and corporate expenses to earned premiums. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.


•	NM - Not meaningful.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED FINANCIAL HIGHLIGHTS



		QUARTER ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,						Previous Quarter Change		Previous Year to Date Change
		2015			2014			2015			2014			Previous Quarter Change		Previous Year to Date Change
HIGHLIGHTS	Net income		$84,206			$83,163			$192,685			$187,643		1.3	%	2.7	%
	Net income available to common and participating common shareholders	76,018			74,975			176,309			171,267			1.4	%	2.9	%
	Net income allocated to common shareholders	73,745			72,763			171,072			166,279			1.3	%	2.9	%
	Operating income [a]	87,718			80,107			187,105			182,666			9.5	%	2.4	%
	Operating income available to common and participating common shareholders [a]	79,530			71,919			170,729			166,290			10.6	%	2.7	%
	Operating income allocated to common shareholders [a]	77,152			69,797			165,657			161,447			10.5	%	2.6	%
	Operating cash flow	115,791			45,263			23,489			19,667			155.8	%	19.4	%
	Net investment income	32,252			39,302			74,113			80,292			(17.9	)%	(7.7	)%
	Gross premiums written	861,184			689,425			2,162,616			1,846,940			24.9	%	17.1	%
	Net premiums written	559,083			511,427			1,324,037			1,310,132			9.3	%	1.1	%
	Net premiums earned	458,135			481,538			847,994			877,804			(4.9	)%	(3.4	)%
	Total assets	10,715,281			10,178,647			10,715,281			10,178,647			5.3	%	5.3	%
	Total shareholders’ equity	3,302,906			3,115,675			3,302,906			3,115,675			6.0	%	6.0	%

PER SHARE AND SHARES DATA	Basic earnings per common share
	Net income (as reported)		$1.69			$1.68			$3.92			$3.84		0.6	%	2.1	%
	Operating income (as reported) [a]		$1.76			$1.61			$3.80			$3.73		9.3	%	1.9	%
	Diluted earnings per common share
	Net income (as reported)		$1.68			$1.68			$3.91			$3.84		—	%	1.8	%
	Operating income (as reported) [a]		$1.76			$1.61			$3.78			$3.73		9.3	%	1.3	%

As Reported	Weighted average common shares outstanding	43,737			43,351			43,640			43,265			0.9	%	0.9	%
	Weighted average common shares outstanding & dilutive potential common shares [e]	43,897			43,351			43,793			43,266			1.3	%	1.2	%

	Common dividends paid per share	$0.35			$0.34			$0.70			$0.68			2.9	%	2.9	%

Book Value Per Common Share	Book value [b]	$65.53			$61.80			$65.53			$61.80			6.0	%	6.0	%
Book Value Per Common Share	Diluted book value (treasury stock method) [b]	$63.32			$60.00			$63.32			$60.00			5.5	%	5.5	%

FINANCIAL RATIOS	Return on average common equity (ROAE), net income [c]	2.7		%	2.9		%	6.3		%	6.7		%	(0.2	)	(0.4	)
FINANCIAL RATIOS	ROAE, operating income [a] [c]	2.8		%	2.7		%	6.1		%	6.5		%	0.1		(0.4	)
	Return on beg. common equity (ROBE), net income [d]	2.7		%	2.9		%	6.4		%	7.0		%	(0.2	)	(0.6	)
	ROBE, operating income [a] [d]	2.8		%	2.8		%	6.2		%	6.8		%	—		(0.6	)

	Annualized ROAE, net income [c]	10.6		%	11.4		%	12.5		%	13.3		%	(0.8	)	(0.8	)
	Annualized ROAE, operating income [a] [c]	11.1		%	10.9		%	12.1		%	12.9		%	0.2		(0.8	)
	Annualized ROBE, net income [d]	10.7		%	11.7		%	12.8		%	13.9		%	(1.0	)	(1.1	)
	Annualized ROBE, operating income [a] [d]	11.2		%	11.2		%	12.4		%	13.5		%	—		(1.1	)
	Annualized investment yield	2.0		%	2.5		%	2.3		%	2.5		%	(0.5	)	(0.2	)

GAAP	Loss ratio	52.2		%	53.8		%	48.5		%	49.6		%	(1.6	)	(1.1	)
	Acquisition expense ratio	18.5		%	16.3		%	19.7		%	17.2		%	2.2		2.5
	General and administrative expense ratio	14.8		%	18.0		%	15.9		%	18.2		%	(3.2	)	(2.3	)
	Combined ratio	85.5		%	88.1		%	84.1		%	85.0		%	(2.6	)	(0.9	)

[a] 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. Please see page 31 for a reconciliation to net income.

[b] For detailed calculations, please refer to page 32.

[c] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the $430 million liquidation value of the preferred shares.

[d] Beginning common equity for the stated periods excludes the $430 million liquidation value of the preferred shares.

[e] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected as additional treasury

method repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY



	QUARTERS ENDED
	JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			SEPT. 30, 2014			JUNE 30, 2014			JUNE 30, 2013
UNDERWRITING REVENUES
Gross premiums written		$861,184			$1,301,432			$421,026			$626,110			$689,425			$572,710
Premiums ceded	(302,101		)	(536,478		)	(187,058		)	(236,004		)	(177,998		)	(108,089		)
Net premiums written		$559,083			$764,954			$233,968			$390,106			$511,427			$464,621
Change in unearned premiums	(100,948		)	(375,095		)	237,311			124,789			(29,889		)	78,714
Net premiums earned		$458,135			$389,859			$471,279			$514,895			$481,538			$543,335
Other underwriting income (loss)	1,389			2,406			(1,847		)	2,123			(4,824		)	888
Total underwriting revenues		$459,524			$392,265			$469,432			$517,018			$476,714			$544,223
UNDERWRITING EXPENSES
Net losses and loss expenses		$239,122			$171,936			$243,801			$290,269			$259,196			$359,058
Acquisition expenses	84,971			82,093			75,363			93,392			78,601			71,868
General and administrative expenses	54,965			54,890			60,628			68,946			58,312			59,258
Total underwriting expenses		$379,058			$308,919			$379,792			$452,607			$396,109			$490,184
Underwriting income		$80,466			$83,346			$89,640			$64,411			$80,605			$54,039
OTHER OPERATING REVENUE
Net investment income		$32,252			$41,861			$25,894			$25,357			$39,302			$32,468
Corporate expenses [a]	(12,634		)	(12,268		)	(12,383		)	(11,969		)	(28,143		)	(22,101		)
Interest expense	(9,062		)	(9,059		)	(9,058		)	(13,127		)	(9,732		)	(9,052		)
Amortization of intangibles	(1,579		)	(1,599		)	(1,621		)	(1,623		)	(1,623		)	(1,625		)
Total other operating revenue		$8,977			$18,935			$2,832			($1,362	)		($196	)		($310	)
INCOME BEFORE OTHER ITEMS		$89,443			$102,281			$92,472			$63,049			$80,409			$53,729
OTHER
Net foreign exchange (losses) gains		($12,981	)		($7,552	)		$227			($783	)		($319	)		($3,368	)
Net realized and unrealized gains (losses)	9,680			18,189			(3,788		)	9,788			3,411			10,372

Total other-than-temporary impairment losses	(424		)	(649		)	(214		)	(102		)	(198		)	(579		)
Portion of loss recognised in other comprehensive (loss) income	—			—			—			—			—			—
Net impairment losses recognised in earnings	(424		)	(649		)	(214		)	(102		)	(198		)	(579		)
Income tax (expense) benefit	(1,512		)	(3,790		)	(4,124		)	4,282			(140		)	865
NET INCOME		$84,206			$108,479			$84,573			$76,234			$83,163			$61,019
Preferred dividends	(8,188		)	(8,188		)	(8,186		)	(8,188		)	(8,188		)	(8,188		)
NET INCOME AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS		$76,018			$100,291			$76,387			$68,046			$74,975			$52,831

KEY RATIOS/PER SHARE DATA
Loss ratio	52.2		%	44.1		%	51.7		%	56.4		%	53.8		%	66.1		%
Acquisition expense ratio	18.5		%	21.1		%	16.0		%	18.1		%	16.3		%	13.2		%
General and administrative expense ratio [b]	14.8		%	17.2		%	15.5		%	15.7		%	18.0		%	15.0		%
Combined ratio	85.5		%	82.4		%	83.2		%	90.2		%	88.1		%	94.3		%

Basic earnings per common share		$1.69			$2.24			$1.71			$1.52			$1.68			$1.21
Diluted earnings per common share [c]		$1.68			$2.23			$1.70			$1.52			$1.68			$1.21

ROAE, net income [d]	2.7		%	3.6		%	2.8		%	2.5		%	2.9		%	2.3		%

[a] The Company incurred $3.5 million of corporate expenses in relation to the Company's acquisition of Montpelier Re Holdings Ltd. ("Montpelier") for the quarter ended June 30, 2015. For the quarter ended June 30, 2014, the Company incurred $12.1 million of corporate expenses in relation to the Company's proposed acquisition of Aspen Insurance Holdings Limited ("Aspen").

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

[c] Warrants and options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected as additional treasury method repurchases.

[d] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares of $430 million.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME - YTD



	SIX MONTHS ENDED									YEARS ENDED
	JUNE 30, 2015			JUNE 30, 2014			JUNE 30, 2013			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$2,162,616			$1,846,940			$1,750,072			$2,894,076			$2,665,244
Premiums ceded	(838,579		)	(536,808		)	(376,536		)	(959,870		)	(616,311		)
Net premiums written		$1,324,037			$1,310,132			$1,373,536			$1,934,206			$2,048,933
Change in unearned premiums	(476,043		)	(432,328		)	(410,084		)	(70,228		)	(32,449		)
Net premiums earned		$847,994			$877,804			$963,452			$1,863,978			$2,016,484
Other underwriting income (loss)	3,795			(6,062		)	1,637			(5,786		)	(2,046		)
Total underwriting revenues		$851,789			$871,742			$965,089			$1,858,192			$2,014,438
UNDERWRITING EXPENSES
Net losses and loss expenses		$411,058			$436,092			$578,028			$970,162			$1,219,684
Acquisition expenses	167,064			150,758			143,504			319,513			304,430
General and administrative expenses	109,855			117,813			118,454			247,387			236,873
Total underwriting expenses		$687,977			$704,663			$839,986			$1,537,062			$1,760,987
Underwriting income		$163,812			$167,079			$125,103			$321,130			$253,451
OTHER OPERATING REVENUE
Net investment income		$74,113			$80,292			$81,773			$131,543			$166,216
Corporate expenses [a]	(24,902		)	(41,848		)	(29,383		)	(66,200		)	(58,033		)
Interest expense	(18,121		)	(18,783		)	(18,090		)	(40,968		)	(36,188		)
Amortization of intangibles	(3,178		)	(3,240		)	(3,726		)	(6,484		)	(7,012		)
Total other operating revenue		$27,912			$16,421			$30,574			$17,891			$64,983
INCOME BEFORE OTHER ITEMS		$191,724			$183,500			$155,677			$339,021			$318,434
OTHER
Net foreign exchange losses		($20,533	)		($3,283	)		($6,295	)		($3,839	)		($14,214	)
Net realized and unrealized gains	27,869			8,283			16,607			14,283			15,164

Total other-than-temporary impairment losses	(1,073		)	(309		)	(1,385		)	(625		)	(1,616		)
Portion of loss recognised in other comprehensive (loss) income	—			—			—			—			—
Net impairment losses recognised in earnings	(1,073		)	(309		)	(1,385		)	(625		)	(1,616		)
Income tax expense	(5,302		)	(548		)	(3,286		)	(390		)	(5,853		)
NET INCOME		$192,685			$187,643			$161,318			$348,450			$311,915
Preferred dividends	(16,376		)	(16,376		)	(16,376		)	(32,750		)	(32,750		)
NET INCOME AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS		$176,309			$171,267			$144,942			$315,700			$279,165

KEY RATIOS/PER SHARE DATA
Loss ratio	48.5		%	49.6		%	60.0		%	52.1		%	60.5		%
Acquisition expense ratio	19.7		%	17.2		%	14.9		%	17.1		%	15.1		%
General and administrative expense ratio [b]	15.9		%	18.2		%	15.3		%	16.8		%	14.6		%
Combined ratio	84.1		%	85.0		%	90.2		%	86.0		%	90.2		%

Basic earnings per common share		$3.92			$3.84			$3.34			$7.07			$6.37
Diluted earnings per common share [c]		$3.91			$3.84			$3.34			$7.06			$6.37

ROAE, net income [d]	6.3		%	6.7		%	6.3		%	12.1		%	11.8		%

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

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

[c] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected as additional treasury method repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED BALANCE SHEETS



	JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			SEPT. 30, 2014			JUNE 30, 2014
ASSETS
Cash and cash equivalents		$622,642			$657,194			$745,472			$805,716			$801,028
Fixed maturity investments available for sale, at fair value	4,933,776			4,953,893			5,092,581			4,871,420			4,993,099
Short term investments available for sale, at fair value	16,366			2,822			9,014			11,844			24,564
Equity securities available for sale, at fair value	420,411			366,897			331,368			267,728			287,642
Other investments	623,868			575,974			541,454			658,678			648,642
Premiums receivable, net	1,665,990			1,446,205			883,450			1,452,228			1,380,858
Insurance and reinsurance balances receivable	108,162			109,545			122,214			123,432			134,750
Deferred acquisition costs	296,568			258,753			207,368			246,437			257,262
Prepaid reinsurance premiums	668,964			692,466			354,940			414,013			424,133
Reinsurance recoverable on unpaid losses	785,472			605,809			670,795			566,329			606,140
Reinsurance recoverable on paid losses	157,287			136,642			218,291			165,592			145,694
Accrued investment income	25,118			23,165			27,183			23,652			26,385
Goodwill and intangible assets	150,296			151,816			153,405			160,560			162,178
Deferred tax assets	46,779			43,105			48,995			53,403			45,782
Receivable on pending investment sales	21,420			86,367			38,877			84,699			67,578
Other assets	172,162			269,491			199,375			240,087			172,912
TOTAL ASSETS		$10,715,281			$10,380,144			$9,644,782			$10,145,818			$10,178,647

LIABILITIES
Reserve for losses and loss expenses		$3,833,525			$3,621,728			$3,846,859			$3,897,483			$3,963,393
Reserve for unearned premiums	2,046,933			1,964,307			1,254,519			1,552,168			1,689,819
Deposit liabilities	13,376			13,722			15,136			17,521			21,987
Reinsurance balances payable	632,457			502,339			375,711			482,093			378,295
Debt	528,123			527,781			527,715			527,732			527,714
Payable on pending investment purchases	82,375			163,891			151,682			238,038			272,696
Other liabilities	275,586			311,530			287,978			310,329			209,068
TOTAL LIABILITIES		$7,412,375			$7,105,298			$6,459,600			$7,025,364			$7,062,972

SHAREHOLDERS’ EQUITY
Preferred shares
Series A, non-cumulative		$8,000			$8,000			$8,000			$8,000			$8,000
Series B, non-cumulative	9,200			9,200			9,200			9,200			9,200
Common shares	45,157			45,121			44,765			44,751			44,706
Additional paid-in capital	610,585			601,986			598,226			590,330			583,691
Accumulated other comprehensive income	36,965			77,759			76,706			81,299			136,038
Retained earnings	2,592,999			2,532,780			2,448,285			2,386,874			2,334,040
TOTAL SHAREHOLDERS’ EQUITY		$3,302,906			$3,274,846			$3,185,182			$3,120,454			$3,115,675
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$10,715,281			$10,380,144			$9,644,782			$10,145,818			$10,178,647

Book value per common share		$65.53			$65.14			$63.38			$61.90			$61.80
Diluted book value per common share (treasury stock method)		$63.32			$62.79			$61.33			$59.98			$60.00

RATIOS
Debt-to-capital	13.8		%	13.9		%	14.2		%	14.5		%	14.5		%

ENDURANCE SPECIALTY HOLDINGS LTD.

Probable Maximum Loss by Zone and Peril

(in millions of dollars)

Largest 1 in 100 year PML as of July 1, 2015 is equal to 8.0% of Shareholders’ Equity as of June 30, 2015.



		Estimated Occurrence Net Loss as of July 1, 2015										July 1, 2014		July 1, 2013
Zone	Peril	10 Year Return Period		25 Year Return Period		50 Year Return Period		100 Year Return Period		250 Year Return Period		100 Year Return Period		100 Year Return Period

United States	Hurricane		$112		$157		$200		$265		$362		$284		$350
Europe	Windstorm	69		109		125		220		343		345		331
California	Earthquake	40		120		171		229		354		250		284
Japan	Windstorm	45		96		118		129		181		158		230
Northwest U.S.	Earthquake	—		5		34		98		166		91		89
Japan	Earthquake	18		88		132		154		222		163		137
United States	Tornado/Hail	30		45		59		74		93		78		89
Australia	Earthquake	1		9		34		77		116		121		87
New Zealand	Earthquake	1		6		15		34		72		35		23
Australia	Windstorm	5		17		35		56		81		88		58
New Madrid	Earthquake	—		—		—		10		84		6		7

The net loss estimates by zone above represent estimated losses related to our property, catastrophe and other specialty lines of business, based upon our catastrophe models and assumptions regarding the location, size, magnitude, and frequency of the catastrophe events utilized to determine the above estimates. The net loss estimates are presented on an occurrence basis, before income tax and net of reinsurance recoveries and reinstatement premiums, if applicable. Return period refers to the frequency with which the related size of a catastrophic event is expected to occur.

Actual realized catastrophic losses could differ materially from our net loss estimates and our net loss estimates should not be considered as representative of the actual losses that we may incur in connection with any particular catastrophic event. The net loss estimates above rely significantly on computer models created to simulate the effect of catastrophes on insured properties based upon data emanating from past catastrophic events. Since comprehensive data collection regarding insured losses from catastrophe events is a relatively recent development in the insurance industry, the data upon which catastrophe models is based is limited, which has the potential to introduce inaccuracies into estimates of losses from catastrophic events, in particular those that occur infrequently. In addition, catastrophe models are significantly influenced by management’s assumptions regarding event characteristics, construction of insured property and the cost and duration of rebuilding after the catastrophe. Lastly, changes in Endurance’s underwriting portfolio risk control mechanisms and other factors, either before or after the date of the above net loss estimates, may also cause actual results to vary considerably from the net loss estimates above. For a listing of risks related to Endurance and its future performance, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT DISTRIBUTION

FOR THE SIX MONTHS ENDED JUNE 30, 2015

Gross Premiums Written = $2,162.6 million

[a] Other specialty includes the agriculture line in the Insurance segment and the specialty line in the Reinsurance segment.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA



	FOR THE QUARTERS ENDED
	JUNE 30, 2015										JUNE 30, 2014
	Insurance			Reinsurance			Totals				Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written		$468,866			$392,318			$861,184				$321,526			$367,899			$689,425
Net premiums written		$190,299			$368,784			$559,083				$179,038			$332,389			$511,427
Net premiums earned		$201,460			$256,675			$458,135				$218,563			$262,975			$481,538
Other underwriting income (loss)	—			1,389			1,389				—			(4,824		)	(4,824		)
Total underwriting revenues		$201,460			$258,064			$459,524				$218,563			$258,151			$476,714

UNDERWRITING EXPENSES
Net losses and loss expenses		$145,483			$93,639			$239,122				$149,567			$109,629			$259,196
Acquisition expenses	17,702			67,269			84,971				15,128			63,473			78,601
General and administrative expenses	28,567			26,398			54,965				35,969			22,343			58,312
Total expenses		$191,752			$187,306			$379,058				$200,664			$195,445			$396,109
UNDERWRITING INCOME		$9,708			$70,758			$80,466				$17,899			$62,706			$80,605

OTHER OPERATING REVENUE
Net investment income								$32,252										$39,302
Corporate expenses							(12,634		)								(28,143		)
Interest expense							(9,062		)								(9,732		)
Amortization of intangibles							(1,579		)								(1,623		)
Net foreign exchange loss							(12,981		)								(319		)
Net realized and unrealized gains							9,680										3,411
Net impairment loss recognized in earnings							(424		)								(198		)
INCOME BEFORE INCOME TAXES								$85,718										$83,303

GAAP RATIOS
Loss ratio	72.2		%	36.5		%	52.2		%		68.5		%	41.7		%	53.8		%
Acquisition expense ratio	8.8		%	26.2		%	18.5		%		6.9		%	24.1		%	16.3		%
General and administrative expense ratio	14.2		%	10.3		%	14.8		%	[a]	16.4		%	8.5		%	18.0		%	[a]
Combined ratio AS REPORTED	95.2		%	73.0		%	85.5		%		91.8		%	74.3		%	88.1		%

Effect of favorable prior accident year reserve development	9.2		%	15.7		%	12.8		%		10.1		%	12.2		%	11.3		%
Combined ratio net of prior accident year reserve development	104.4		%	88.7		%	98.3		%		101.9		%	86.5		%	99.4		%

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

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA



	FOR THE QUARTERS ENDED
	JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			SEPT. 30, 2014			JUNE 30, 2014			JUNE 30, 2013
UNDERWRITING REVENUES
Gross premiums written		$468,866			$736,218			$321,983			$420,343			$321,526			$276,941
Net premiums written		$190,299			$304,039			$140,702			$197,639			$179,038			$191,502
Net premiums earned		$201,460			$135,864			$217,745			$253,583			$218,563			$267,878
Total underwriting revenues		$201,460			$135,864			$217,745			$253,583			$218,563			$267,878

UNDERWRITING EXPENSES
Net losses and loss expenses		$145,483			$74,512			$159,784			$196,677			$149,567			$215,844
Acquisition expenses	17,702			15,883			17,809			20,170			15,128			14,968
General and administrative expenses	28,567			28,842			35,406			40,401			35,969			35,315
Total expenses		$191,752			$119,237			$212,999			$257,248			$200,664			$266,127

UNDERWRITING INCOME (LOSS)		$9,708			$16,627			$4,746			($3,665	)		$17,899			$1,751

GAAP RATIOS
Loss ratio	72.2		%	54.9		%	73.3		%	77.5		%	68.5		%	80.6		%
Acquisition expense ratio	8.8		%	11.7		%	8.2		%	8.0		%	6.9		%	5.6		%
General and administrative expense ratio	14.2		%	21.2		%	16.3		%	15.9		%	16.4		%	13.1		%
Combined ratio AS REPORTED	95.2		%	87.8		%	97.8		%	101.4		%	91.8		%	99.3		%

Effect of favorable prior accident year reserve development	9.2		%	15.2		%	12.2		%	8.0		%	10.1		%	2.1		%

Combined ratio net of prior accident year reserve development	104.4		%	103.0		%	110.0		%	109.4		%	101.9		%	101.4		%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA



	FOR THE QUARTERS ENDED
	JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			SEPT. 30, 2014			JUNE 30, 2014			JUNE 30, 2013
UNDERWRITING REVENUES
Gross premiums written		$392,318			$565,214			$99,043			$205,767			$367,899			$295,769
Net premiums written		$368,784			$460,915			$93,266			$192,467			$332,389			$273,119
Net premiums earned		$256,675			$253,995			$253,534			$261,312			$262,975			$275,457
Other underwriting income (loss)	1,389			2,406			(1,847		)	2,123			(4,824		)	888
Total underwriting revenues		$258,064			$256,401			$251,687			$263,435			$258,151			$276,345

UNDERWRITING EXPENSES
Net losses and loss expenses		$93,639			$97,424			$84,017			$93,592			$109,629			$143,214
Acquisition expenses	67,269			66,210			57,554			73,222			63,473			56,900
General and administrative expenses	26,398			26,048			25,222			28,545			22,343			23,943
Total expenses		$187,306			$189,682			$166,793			$195,359			$195,445			$224,057

UNDERWRITING INCOME		$70,758			$66,719			$84,894			$68,076			$62,706			$52,288

GAAP RATIOS
Loss ratio	36.5		%	38.3		%	33.1		%	35.8		%	41.7		%	52.0		%
Acquisition expense ratio	26.2		%	26.1		%	22.7		%	28.0		%	24.1		%	20.7		%
General and administrative expense ratio	10.3		%	10.3		%	10.0		%	11.0		%	8.5		%	8.6		%
Combined ratio AS REPORTED	73.0		%	74.7		%	65.8		%	74.8		%	74.3		%	81.3		%

Effect of favorable prior accident year reserve development	15.7		%	14.4		%	16.7		%	15.4		%	12.2		%	20.8		%

Combined ratio net of prior accident year reserve development	88.7		%	89.1		%	82.5		%	90.2		%	86.5		%	102.1		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		SEPT. 30, 2014		JUNE 30, 2014		JUNE 30, 2013
INSURANCE SEGMENT
Agriculture		$112,012		$516,916		$69,580		$188,011		$80,540		$131,633
Casualty and other specialty	146,056		100,682		104,535		115,895		108,030		85,272
Professional lines	96,736		54,760		87,477		62,631		74,650		38,296
Property, marine and energy	114,062		63,860		60,391		53,806		58,306		21,740
TOTAL INSURANCE		$468,866		$736,218		$321,983		$420,343		$321,526		$276,941

REINSURANCE SEGMENT
Catastrophe		$139,833		$124,407		$11,020		$47,173		$158,372		$155,431
Property	30,560		125,700		4,219		73,807		42,887		48,384
Casualty	48,132		58,098		20,267		23,409		30,875		54,417
Professional lines	134,241		43,857		43,400		21,520		84,117		12,528
Specialty	39,552		213,152		20,137		39,858		51,648		25,009
TOTAL REINSURANCE		$392,318		$565,214		$99,043		$205,767		$367,899		$295,769

REPORTED TOTALS		$861,184		$1,301,432		$421,026		$626,110		$689,425		$572,710

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		SEPT. 30, 2014		JUNE 30, 2014		JUNE 30, 2013
INSURANCE SEGMENT
Agriculture		$22,677		$202,460		$28,142		$103,536		$45,826		$84,537
Casualty and other specialty	65,302		45,058		51,889		50,750		56,475		61,238
Professional lines	43,443		24,231		29,008		20,216		29,846		27,788
Property, marine and energy	58,877		32,290		31,663		23,137		46,891		17,939
TOTAL INSURANCE		$190,299		$304,039		$140,702		$197,639		$179,038		$191,502

REINSURANCE SEGMENT
Catastrophe		$122,305		$53,460		$9,442		$41,157		$123,411		$138,041
Property	30,118		123,449		4,220		73,807		42,886		44,516
Casualty	48,132		58,098		20,278		23,409		30,868		54,419
Professional lines	134,241		43,857		43,400		21,520		84,117		12,528
Specialty	33,988		182,051		15,926		32,574		51,107		23,615
TOTAL REINSURANCE		$368,784		$460,915		$93,266		$192,467		$332,389		$273,119

REPORTED TOTALS		$559,083		$764,954		$233,968		$390,106		$511,427		$464,621

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		SEPT. 30, 2014		JUNE 30, 2014		JUNE 30, 2013
INSURANCE SEGMENT
Agriculture		$97,270		$39,494		$124,959		$162,710		$127,421		$172,492
Casualty and other specialty	47,712		45,659		45,043		45,134		50,012		55,569
Professional lines	27,000		24,613		24,460		24,795		24,219		27,757
Property, marine and energy	29,478		26,098		23,283		20,944		16,911		12,060
TOTAL INSURANCE		$201,460		$135,864		$217,745		$253,583		$218,563		$267,878

REINSURANCE SEGMENT
Catastrophe		$61,977		$55,995		$58,869		$61,613		$65,705		$86,560
Property	55,866		64,006		75,227		68,481		76,705		90,934
Casualty	33,905		41,593		41,146		44,668		50,102		53,814
Professional lines	50,147		47,295		45,288		39,534		36,325		13,691
Specialty	54,780		45,106		33,004		47,016		34,138		30,458
TOTAL REINSURANCE		$256,675		$253,995		$253,534		$261,312		$262,975		$275,457

REPORTED TOTALS		$458,135		$389,859		$471,279		$514,895		$481,538		$543,335

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA



	FOR THE SIX MONTHS ENDED
	JUNE 30, 2015										JUNE 30, 2014
	Insurance			Reinsurance			Totals				Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written		$1,205,084			$957,532			$2,162,616				$973,802			$873,138			$1,846,940
Net premiums written		$494,338			$829,699			$1,324,037				$522,065			$788,067			$1,310,132
Net premiums earned		$337,324			$510,670			$847,994				$362,584			$515,220			$877,804
Other underwriting income (loss)	—			3,795			3,795				—			(6,062		)	(6,062		)
Total underwriting revenues		$337,324			$514,465			$851,789				$362,584			$509,158			$871,742

UNDERWRITING EXPENSES
Losses and loss expenses		$219,995			$191,063			$411,058				$238,100			$197,992			$436,092
Acquisition expenses	33,585			133,479			167,064				27,389			123,369			150,758
General and administrative expenses	57,409			52,446			109,855				72,668			45,145			117,813
Total expenses		$310,989			$376,988			$687,977				$338,157			$366,506			$704,663

UNDERWRITING INCOME		$26,335			$137,477			$163,812				$24,427			$142,652			$167,079

OTHER OPERATING REVENUE
Net investment income								$74,113										$80,292
Corporate expenses							(24,902		)								(41,848		)
Interest expense							(18,121		)								(18,783		)
Amortization of intangibles							(3,178		)								(3,240		)
Net foreign exchange loss							(20,533		)								(3,283		)
Net realized and unrealized gains							27,869										8,283
Net impairment loss recognized in earnings							(1,073		)								(309		)
INCOME BEFORE INCOME TAXES								$197,987										$188,191

GAAP RATIOS
Loss ratio	65.2		%	37.4		%	48.5		%		65.7		%	38.5		%	49.6		%
Acquisition expense ratio	10.0		%	26.1		%	19.7		%		7.6		%	23.9		%	17.2		%
General and administrative expense ratio	17.0		%	10.3		%	15.9		%	[a]	20.0		%	8.7		%	18.2		%	[a]
Combined ratio AS REPORTED	92.2		%	73.8		%	84.1		%		93.3		%	71.1		%	85.0		%

Effect of favorable prior accident year reserve development	11.6		%	15.0		%	13.7		%		9.3		%	13.7		%	11.9		%
Combined ratio net of prior accident year reserve development	103.8		%	88.8		%	97.8		%		102.6		%	84.8		%	96.9		%

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

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA



	FOR THE SIX MONTHS ENDED									FOR THE YEAR ENDED
	JUNE 30, 2015			JUNE 30, 2014			JUNE 30, 2013			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$1,205,084			$973,802			$929,884			$1,716,128			$1,475,429
Net premiums written		$494,338			$522,065			$596,196			$860,406			$932,510
Net premiums earned		$337,324			$362,584			$419,030			$833,912			$946,474
Total underwriting revenues		$337,324			$362,584			$419,030			$833,912			$946,474

UNDERWRITING EXPENSES
Losses and loss expenses		$219,995			$238,100			$315,308			$594,561			$774,425
Acquisition expenses	33,585			27,389			29,584			65,368			64,778
General and administrative expenses	57,409			72,668			67,949			148,475			136,588
Total expenses		$310,989			$338,157			$412,841			$808,404			$975,791

UNDERWRITING INCOME (LOSS)		$26,335			$24,427			$6,189			$25,508			($29,317	)

GAAP RATIOS
Loss ratio	65.2		%	65.7		%	75.2		%	71.4		%	81.8		%
Acquisition expense ratio	10.0		%	7.6		%	7.1		%	7.8		%	6.8		%
General and administrative expense ratio	17.0		%	20.0		%	16.2		%	17.7		%	14.5		%
Combined ratio AS REPORTED	92.2		%	93.3		%	98.5		%	96.9		%	103.1		%

Effect of favorable prior accident year reserve development	11.6		%	9.3		%	5.5		%	9.7		%	3.6		%

Combined ratio net of prior accident year reserve development	103.8		%	102.6		%	104.0		%	106.6		%	106.7		%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA



	FOR THE SIX MONTHS ENDED									FOR THE YEARS ENDED
	JUNE 30, 2015			JUNE 30, 2014			JUNE 30, 2013			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$957,532			$873,138			$820,188			$1,177,948			$1,189,815
Net premiums written		$829,699			$788,067			$777,340			$1,073,800			$1,116,423
Net premiums earned		$510,670			$515,220			$544,422			$1,030,066			$1,070,010
Other underwriting income (loss)	3,795			(6,062		)	1,637			(5,786		)	(2,046		)
Total underwriting revenues		$514,465			$509,158			$546,059			$1,024,280			$1,067,964

UNDERWRITING EXPENSES
Losses and loss expenses		$191,063			$197,992			$262,720			$375,601			$445,259
Acquisition expenses	133,479			123,369			113,920			254,145			239,652
General and administrative expenses	52,446			45,145			50,505			98,912			100,285
Total expenses		$376,988			$366,506			$427,145			$728,658			$785,196

UNDERWRITING INCOME		$137,477			$142,652			$118,914			$295,622			$282,768

GAAP RATIOS
Loss ratio	37.4		%	38.5		%	48.3		%	36.4		%	41.6		%
Acquisition expense ratio	26.1		%	23.9		%	20.9		%	24.7		%	22.4		%
General and administrative expense ratio	10.3		%	8.7		%	9.3		%	9.6		%	9.4		%
Combined ratio AS REPORTED	73.8		%	71.1		%	78.5		%	70.7		%	73.4		%

Effect of favorable prior accident year reserve development	15.0		%	13.7		%	16.6		%	14.9		%	17.6		%

Combined ratio net of prior accident year reserve development	88.8		%	84.8		%	95.1		%	85.6		%	91.0		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE SIX MONTHS ENDED						FOR THE YEARS ENDED
	JUNE 30, 2015		JUNE 30, 2014		JUNE 30, 2013		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$628,928		$608,434		$696,107		$866,025		$954,389
Casualty and other specialty	246,738		175,683		141,739		396,113		303,803
Professional lines	151,496		113,430		59,260		263,538		148,537
Property, marine and energy	177,922		76,255		32,778		190,452		68,700
TOTAL INSURANCE		$1,205,084		$973,802		$929,884		$1,716,128		$1,475,429

REINSURANCE SEGMENT
Catastrophe		$264,240		$285,020		$303,297		$343,213		$355,751
Property	156,260		209,300		196,795		287,326		297,806
Casualty	106,230		115,857		183,809		159,533		241,358
Professional lines	178,098		109,736		24,835		174,656		163,594
Specialty	252,704		153,225		111,452		213,220		131,306
TOTAL REINSURANCE		$957,532		$873,138		$820,188		$1,177,948		$1,189,815

REPORTED TOTALS		$2,162,616		$1,846,940		$1,750,072		$2,894,076		$2,665,244

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE SIX MONTHS ENDED						FOR THE YEARS ENDED
	JUNE 30, 2015		JUNE 30, 2014		JUNE 30, 2013		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$225,137		$327,471		$425,667		$459,149		$570,738
Casualty and other specialty	110,360		93,288		104,499		195,927		218,298
Professional lines	67,674		44,416		41,991		93,640		95,101
Property, marine and energy	91,167		56,890		24,039		111,690		48,373
TOTAL INSURANCE		$494,338		$522,065		$596,196		$860,406		$932,510

REINSURANCE SEGMENT
Catastrophe		$175,765		$202,374		$269,439		$252,973		$294,260
Property	153,567		209,208		192,927		287,235		292,872
Casualty	106,230		114,260		182,382		157,947		239,525
Professional lines	178,098		109,736		24,835		174,656		163,594
Specialty	216,039		152,489		107,757		200,989		126,172
TOTAL REINSURANCE		$829,699		$788,067		$777,340		$1,073,800		$1,116,423

REPORTED TOTALS		$1,324,037		$1,310,132		$1,373,536		$1,934,206		$2,048,933

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS



	FOR THE SIX MONTHS ENDED						FOR THE YEARS ENDED
	JUNE 30, 2015		JUNE 30, 2014		JUNE 30, 2013		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$136,764		$183,734		$228,923		$471,403		$573,538
Casualty and other specialty	93,371		101,775		109,692		191,952		220,181
Professional lines	51,613		48,560		58,681		97,815		108,717
Property, marine and energy	55,576		28,515		21,734		72,742		44,038
TOTAL INSURANCE		$337,324		$362,584		$419,030		$833,912		$946,474

REINSURANCE SEGMENT
Catastrophe		$117,972		$128,631		$171,355		$249,113		$305,159
Property	119,872		153,623		177,489		297,331		352,716
Casualty	75,498		98,356		106,862		184,170		229,324
Professional lines	97,442		69,519		27,995		154,341		67,969
Specialty	99,886		65,091		60,721		145,111		114,842
TOTAL REINSURANCE		$510,670		$515,220		$544,422		$1,030,066		$1,070,010

REPORTED TOTALS		$847,994		$877,804		$963,452		$1,863,978		$2,016,484

ENDURANCE SPECIALTY HOLDINGS LTD.

RETURN ON EQUITY ANALYSIS



	FOR THE SIX MONTHS ENDED JUNE 30, 2015

Average common equity [a]		$2,814,044

Net premiums earned		$847,994
Combined ratio	84.1		%
Operating margin	15.9		%
Premium leverage	0.30x

Implied ROAE from underwriting activity	4.8		%

Average cash and invested assets at amortized cost		$6,516,746
Investment leverage	2.32x
Year to date investment income yield, pretax	1.1		%

Implied ROAE from investment activity	2.6		%

Financing Costs [b]	(1.2		)%

Implied Pre-tax Operating ROAE, for period [c]	6.2		%

Implied Pre-tax Operating ROAE, annualized [c]	12.4		%

[a] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares (liquidation value of $430 million).

[b] Financing costs include interest expense and preferred dividends.

[c] Implied pre-tax Operating ROAE considers only the main components of the Company’s return on equity - underwriting and investment returns. As such, it differs from operating ROE primarily due to the exclusion of tax on underwriting, financing and investment activities and the tax-effected impact of amortization expense.

ENDURANCE SPECIALTY HOLDINGS LTD.

ANNUALIZED PREMIUM & INVESTMENT LEVERAGE



	FOR THE QUARTERS ENDED								YEARS ENDED DECEMBER 31,
	JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		SEPT 30, 2014		2014		2013

Average common equity [a]		$2,858,876		$2,800,014		$2,722,818		$2,688,065		$2,605,866		$2,368,573

Net premiums earned		$458,135		$389,859		$471,279		$514,895		$1,863,978		$2,016,484

Premium leverage	0.16x		0.14x		0.17x		0.19x		0.72x		0.85x

Annualized premium leverage	0.64x		0.56x		0.69x		0.77x		0.72x		0.85x

Average cash and invested assets at amortized cost		$6,440,588		$6,444,831		$6,455,205		$6,416,146		$6,487,847		$6,439,797

Investment leverage	2.25x		2.30x		2.37x		2.39x		2.48x		2.72x

ENDURANCE SPECIALTY HOLDINGS LTD.

INVESTMENT PORTFOLIO

AS OF JUNE 30, 2015 AND DECEMBER 31, 2014



	June 30, 2015				December 31, 2014
Type of Investment	Fair Value		Percentage		Fair Value			Percentage
Cash and equivalents [a]		$561,687	8.6	%		$632,667		9.6	%
Short-term investments	16,366		0.2	%	9,014			0.1	%
Fixed maturity investments
U.S. government and government agencies notes	483,511		7.4	%	587,411			8.9	%
Government and agency guaranteed corporates	30,569		0.5	%	48,102			0.7	%
U.S. government agency residential mortgage-backed securities	998,678		15.3	%	1,082,142			16.4	%
U.S. government agency commercial mortgage-backed securities	65,334		1.0	%	50,981			0.8	%
Municipals	40,537		0.6	%	39,413			0.6	%
Foreign government	157,633		2.4	%	240,536			3.6	%
Corporate securities	1,419,497		21.7	%	1,361,462			20.5	%
Non-agency residential mortgage-backed securities	78,054		1.2	%	92,864			1.4	%
Non-agency commercial mortgage-backed securities	938,184		14.3	%	928,438			14.1	%
Asset-backed securities	394,137		6.0	%	413,221			6.3	%
Collateralized loan and debt obligations	327,642		5.0	%	248,011			3.8	%
Equity securities
Equity investments	291,352		4.4	%	202,535			3.1	%
Emerging market debt fund	60,037		0.9	%	60,150			0.9	%
Convertible funds	48,571		0.7	%	46,111			0.7	%
Preferred equity investments	15,528		0.2	%	15,836			0.2	%
Short-term fixed income fund	4,923		0.1	%	6,736			0.1	%
Other investments [b]	623,868		9.5	%	541,454			8.2	%
Total		$6,556,108	100.0	%		$6,607,084		100.0	%

Ratings [c]	Fair Value		Percentage		Fair Value			Percentage
U.S. government and government agencies notes		$483,511	9.8	%		$587,411		11.5	%
AAA/Aaa	1,168,977		23.6	%	1,206,252			23.6	%
AA/Aa	1,614,866		32.6	%	1,717,343			33.7	%
A/A	1,051,739		21.3	%	1,045,301			20.5	%
BBB	505,731		10.2	%	427,018			8.4	%
Below BBB	105,825		2.1	%	96,244			1.9	%
Not Rated	19,493		0.4	%	22,026			0.4	%
Total		$4,950,142	100.0	%		$5,101,595		100.0	%

Performance					June 30, 2015			December 31, 2014
Yield [d]					2.0		%	2.0	%
Duration in years [e]					3.08 years			2.91 years



Net Investment Income	Quarter Ended June 30, 2015		Quarter Ended Mar. 31, 2015		Quarter Ended Dec. 31, 2014			Quarter Ended Sept. 30, 2014			Quarter Ended June 30, 2014		Year Ended Dec. 31, 2014
Cash and available for sale securities		$28,682		$29,473		$28,827			$27,142			$28,517		$111,934
Other investments	3,570		12,388		(2,933		)	(1,785		)	10,785		19,609
Total net investment income		$32,252		$41,861		$25,894			$25,357			$39,302		$131,543

[a] Cash and equivalents, including operating cash, are shown net of investments pending settlement.

[b] Other investments includes investments in alternative and specialty funds.

[c] Excludes cash and equivalents, equity securities and other investments.

[d] Earned yield for the quarter ending June 30, 2015 and twelve months ending December 31, 2014 excludes realized and unrealized gains and losses on fixed maturity investments.

[e] Duration excludes equity securities, other investments and operating cash.

ENDURANCE SPECIALTY HOLDINGS LTD.

LARGEST TWENTY-FIVE CORPORATE HOLDINGS

AS OF JUNE 30, 2015



	June 30, 2015
ISSUER (1) (2) (3)	Amortized Cost		Fair Value		Unrealized Gain (Loss)			Credit Quality (4)
MORGAN STANLEY		$50,824		$51,360		$536		A-
JPMORGAN CHASE & CO	44,179		44,010		(169		)	A
GOLDMAN SACHS GROUP INC	39,294		39,490		196			A-
BANK OF AMERICA CORP	37,552		37,630		78			A-
CITIGROUP INC	31,659		31,829		170			A-
CREDIT SUISSE GROUP AG	30,720		30,800		80			A-
UBS GROUP AG	29,697		29,547		(150		)	A
VERIZON COMMUNICATIONS INC	29,373		29,022		(351		)	BBB+
GENERAL ELECTRIC CO	28,054		28,157		103			AA+
COMCAST CORPORATION	27,638		27,940		302			A-
FORD MOTOR COMPANY	23,669		23,691		22			BBB-
HSBC HOLDINGS PLC	20,284		20,327		43			A
BB&T CORP	19,634		19,694		60			A-
BP PLC	18,113		18,085		(28		)	A
NATIONAL GRID PLC	15,849		17,110		1,261			A-
PNC FINANCIAL SERVICES GROUP INC	16,823		16,758		(65		)	A
ALLERGAN PLC	16,716		16,681		(35		)	BBB-
AT&T INC	15,631		15,599		(32		)	BBB+
PORSCHE AUTOMOBIL HOLDING SE	15,369		15,350		(19		)	A
AMERICAN EXPRESS COMPANY	15,313		15,285		(28		)	A-
US BANCORP	14,591		14,587		(4		)	AA-
WELLS FARGO & COMPANY	14,384		14,420		36			A+
CAPITAL ONE FINANCIAL CORPORATION	14,143		14,125		(18		)	BBB-
ABBVIE INC	14,118		14,061		(57		)	A
KEYCORP	13,407		13,316		(91		)	A-


(1)	Corporate issuers exclude government-backed, government-sponsored enterprises, covered bonds and cash and cash equivalents.


(2)	Credit exposures represent only direct exposure to fixed maturities and short term investments of the parent issuer and its major subsidiaries.


(3)	Includes preferred equity securities.


(4)	Represents weighted average credit quality of underlying issues.

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES



	THREE MONTHS ENDED JUNE 30, 2015									SIX MONTHS ENDED JUNE 30, 2015
	GROSS			RECOVERIES			NET			GROSS			RECOVERIES			NET
Reserve for losses and loss expenses
Balance, beginning of period		$3,621,729			($605,809	)		$3,015,920			$3,846,860			($670,795	)		$3,176,065

Incurred related to:
Current year	555,921			(257,963		)	297,958			912,303			(385,251		)	527,052
Prior years	(78,193		)	19,357			(58,836		)	(48,519		)	(67,475		)	(115,994		)
Total Incurred	477,728			(238,606		)	239,122			863,784			(452,726		)	411,058

Paid related to:
Current year	(59,635		)	31,828			(27,807		)	(58,317		)	32,480			(25,837		)
Prior years	(225,012		)	28,278			(196,734		)	(807,123		)	305,771			(501,352		)
Total Paid	(284,647		)	60,106			(224,541		)	(865,440		)	338,251			(527,189		)

Foreign currency translation and other	18,715			(1,163		)	17,552			(11,679		)	(202		)	(11,881		)

Balance, end of period		$3,833,525			($785,472	)		$3,048,053			$3,833,525			($785,472	)		$3,048,053

ENDURANCE SPECIALTY HOLDINGS LTD.

PRIOR YEAR RESERVE DEVELOPMENT BY SEGMENT

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE SIX MONTHS ENDED JUNE 30, 2015



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2015		($20,696	)		($36,462	)		($57,158	)
Quarter ended June 30, 2015	(18,575		)	(40,261		)	(58,836		)
Six months ended June 30, 2015		($39,271	)		($76,723	)		($115,994	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2014



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2014		($11,648	)		($38,664	)		($50,312	)
Quarter ended June 30, 2014	(22,048		)	(32,153		)	(54,201		)
Quarter ended September 30, 2014	(20,311		)	(40,158		)	(60,469		)
Quarter ended December 31, 2014	(26,563		)	(42,270		)	(68,833		)
Year ended December 31, 2014		($80,570	)		($153,245	)		($233,815	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2013



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2013		($17,295	)		($33,373	)		($50,668	)
Quarter ended June 30, 2013	(5,625		)	(57,180		)	(62,805		)
Quarter ended September 30, 2013	(6,210		)	(41,850		)	(48,060		)
Quarter ended December 31, 2013	(4,773		)	(56,086		)	(60,859		)
Year ended December 31, 2013		($33,903	)		($188,489	)		($222,392	)

ENDURANCE SPECIALTY HOLDINGS LTD.

PRIOR YEAR RESERVE DEVELOPMENT BY LINE OF BUSINESS

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT



	FOR THE QUARTERS ENDED															FOR THE SIX MONTHS ENDED
	JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			SEPT. 30, 2014			JUNE 30, 2014			JUNE 30, 2015			JUNE 30, 2014
INSURANCE SEGMENT
Agriculture		($1,547	)		$392			($1,847	)		($1,260	)		($2,188	)		($1,155	)		($4,328	)
Casualty and other specialty	(16,663		)	(18,710		)	(20,184		)	(15,141		)	(12,226		)	(35,373		)	(21,939		)
Professional lines	(119		)	(120		)	(692		)	(866		)	(3,991		)	(239		)	(5,119		)
Property, marine and energy	(246		)	(2,258		)	(3,840		)	(3,044		)	(3,643		)	(2,504		)	(2,310		)
TOTAL INSURANCE		($18,575	)		($20,696	)		($26,563	)		($20,311	)		($22,048	)		($39,271	)		($33,696	)

REINSURANCE SEGMENT
Catastrophe		($13,385	)		($2,236	)		($15,497	)		($16,012	)		($7,713	)		($15,621	)		($15,474	)
Property	(579		)	(8,437		)	(5,100		)	(9,043		)	(9,502		)	(9,016		)	(24,259		)
Casualty	(12,739		)	(6,427		)	(2,528		)	(5,269		)	(2,821		)	(19,166		)	(5,572		)
Professional lines	(6,212		)	(11,123		)	(8,519		)	(3,162		)	(2,551		)	(17,335		)	(4,580		)
Specialty	(7,346		)	(8,239		)	(10,626		)	(6,672		)	(9,566		)	(15,585		)	(20,932		)
TOTAL REINSURANCE		($40,261	)		($36,462	)		($42,270	)		($40,158	)		($32,153	)		($76,723	)		($70,817	)

REPORTED TOTALS		($58,836	)		($57,158	)		($68,833	)		($60,469	)		($54,201	)		($115,994	)		($104,513	)

ENDURANCE SPECIALTY HOLDINGS LTD.

LOSSES AND LOSS EXPENSES INCURRED BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED											FOR THE SIX MONTHS ENDED
	JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014			SEPT. 30, 2014		JUNE 30, 2014		JUNE 30, 2015		JUNE 30, 2014
INSURANCE SEGMENT
Agriculture		$85,584		$34,957		$125,520			$158,564		$111,685		$120,541		$159,901
Casualty and other specialty	15,819		8,693		10,611			15,374		21,597		24,512		36,560
Professional lines	17,492		17,245		16,704			14,509		12,513		34,737		29,425
Property, marine and energy	26,588		13,617		6,949			8,230		3,772		40,205		12,214
TOTAL INSURANCE		$145,483		$74,512		$159,784			$196,677		$149,567		$219,995		$238,100

REINSURANCE SEGMENT
Catastrophe		$3,049		$9,031		($10,236	)		$1,013		$15,907		$12,080		$23,954
Property	31,324		29,311		36,175			24,011		34,127		60,635		63,941
Casualty	11,765		22,888		24,936			23,765		25,636		34,653		51,552
Professional lines	23,888		15,665		17,358			19,797		18,414		39,553		36,350
Specialty	23,613		20,529		15,784			25,006		15,545		44,142		22,195
TOTAL REINSURANCE		$93,639		$97,424		$84,017			$93,592		$109,629		$191,063		$197,992

REPORTED TOTALS		$239,122		$171,936		$243,801			$290,269		$259,196		$411,058		$436,092

ENDURANCE SPECIALTY HOLDINGS LTD.

ANALYSIS OF UNPAID LOSSES AND LOSS EXPENSES



	Insurance															Reinsurance																		Reported Totals
	Agriculture			Casualty and other specialty			Professional lines			Property, marine and energy			Subtotal			Catastrophe			Property			Casualty			Professional lines			Specialty			Subtotal			Total
AT JUNE 30, 2015
Case reserves	$203,303			$266,165			$112,578			$75,914				$657,960		$87,309			$180,630			$240,892			$62,282			$98,301				$669,414			$1,327,374
Total reserves		$323,686			$1,208,710			$525,604			$99,769			$2,157,769			$141,519			$249,659			$748,431			$285,488			$250,659			$1,675,756			$3,833,525
Case reserves/Total reserves	62.8		%	22.0		%	21.4		%	76.1		%	30.5		%	61.7		%	72.4		%	32.2		%	21.8		%	39.2		%	39.9		%	34.6		%

IBNR / Total reserves	37.2		%	78.0		%	78.6		%	23.9		%	69.5		%	38.3		%	27.6		%	67.8		%	78.2		%	60.8		%	60.1		%	65.4		%

AT MAR. 31, 2015
Case reserves		$32,029			$249,507			$148,246			$38,023			$467,805			$93,872			$175,766			$241,073			$58,587			$99,219			$668,517			$1,136,322
Total reserves		$153,215			$1,203,561			$532,660			$62,841			$1,952,277			$149,341			$256,769			$760,752			$268,714			$233,875			$1,669,451			$3,621,728
Case reserves/Total reserves	20.9		%	20.7		%	27.8		%	60.5		%	24.0		%	62.9		%	68.5		%	31.7		%	21.8		%	42.4		%	40.0		%	31.4		%

IBNR / Total reserves	79.1		%	79.3		%	72.2		%	39.5		%	76.0		%	37.1		%	31.5		%	68.3		%	78.2		%	57.6		%	60.0		%	68.6		%

AT DEC. 31, 2014
Case reserves		$222,570			$325,415			$119,453			$33,264			$700,702			$126,837			$178,875			$248,933			$60,915			$99,142			$714,702			$1,415,404
Total reserves		$295,191			$1,258,009			$517,101			$53,471			$2,123,772			$176,610			$272,164			$780,880			$258,840			$234,593			$1,723,087			$3,846,859
Case reserves/Total reserves	75.4		%	25.9		%	23.1		%	62.2		%	33.0		%	71.8		%	65.7		%	31.9		%	23.5		%	42.3		%	41.5		%	36.8		%

IBNR / Total reserves	24.6		%	74.1		%	76.9		%	37.8		%	67.0		%	28.2		%	34.3		%	68.1		%	76.5		%	57.7		%	58.5		%	63.2		%

AT SEPT. 30, 2014
Case reserves		$272,485			$343,537			$110,988			$32,935			$759,945			$139,400			$173,326			$246,483			$58,261			$97,691			$715,161			$1,475,106
Total reserves		$307,994			$1,276,916			$500,457			$49,618			$2,134,985			$213,001			$272,421			$789,713			$249,836			$237,527			$1,762,498			$3,897,483
Case reserves/Total reserves	88.5		%	26.9		%	22.2		%	66.4		%	35.6		%	65.4		%	63.6		%	31.2		%	23.3		%	41.1		%	40.6		%	37.8		%

IBNR / Total reserves	11.5		%	73.1		%	77.8		%	33.6		%	64.4		%	34.6		%	36.4		%	68.8		%	76.7		%	58.9		%	59.4		%	62.2		%

AT JUNE 30, 2014
Case reserves		$213,720			$346,765			$96,271			$20,603			$677,359			$151,530			$183,619			$252,827			$62,612			$88,683			$739,271			$1,416,630
Total reserves		$335,172			$1,285,787			$481,541			$41,421			$2,143,921			$246,809			$298,901			$802,621			$236,771			$234,370			$1,819,472			$3,963,393
Case reserves/Total reserves	63.8		%	27.0		%	20.0		%	49.7		%	31.6		%	61.4		%	61.4		%	31.5		%	26.4		%	37.8		%	40.6		%	35.7		%

IBNR / Total reserves	36.2		%	73.0		%	80.0		%	50.3		%	68.4		%	38.6		%	38.6		%	68.5		%	73.6		%	62.2		%	59.4		%	64.3		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SHAREHOLDER RETURN ANALYSIS



	SIX MONTHS ENDED			YEARS ENDED DECEMBER 31,						INCEPTION TO
	JUNE 30, 2015			2014			2013			JUNE 30, 2015
Income and Return on Equity:
Net income available to common and participating common shareholders		$176,309			$315,700			$279,165			$3,242,320

Operating income available to common and participating common shareholders	170,729			304,012			281,021			3,147,554

Average Shareholders’ equity [a]	2,814,044			2,605,866			2,368,573			2,098,833

Net income return on average equity	6.3		%	12.1		%	11.8		%	11.4		%	[c]
Operating return on average equity	6.1		%	11.7		%	11.9		%	11.1		%	[c]

Book value and dividends per share:
Dilutive book value per common share (treasury stock method)		$63.32			$61.33			$55.18			$63.32

Dividends paid per share	0.70			1.36			1.28			12.91

Change in diluted book value per common share	3.2		%	11.1		%	4.3		%	16.8		%	[c]

Total return to common shareholders [b]	4.4		%	13.6		%	6.8		%	21.7		%	[c]

[a] Excludes the $430 million liquidation value of the preferred shares.

[b] Total return to common shareholders is calculated as the change in diluted book value per common share plus dividends paid divided by beginning diluted book value per share.

[c] Represents average non-compounded annual returns since December 31, 2001.

ENDURANCE SPECIALTY HOLDINGS LTD.

DILUTIVE SHARES FOR EPS CALCULATION - TWO CLASS METHOD



		QUARTERS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
		2015			2014			2015			2014
DILUTIVE SHARES OUTSTANDING: AS REPORTED	Average market price per share		$62.19			$51.99			$62.40			$52.56

	Basic weighted average common shares outstanding [a]	43,737			43,351			43,640			43,265

	Add: weighted avg. unvested restricted shares	52			—			34			—
	Weighted average exercise price per share	—			—			—			—
	Proceeds from unrecognized restricted shares expense		$2,822		—				$1,920		—
	Less: restricted shares bought back via treasury method	(42		)	—			(29		)	—

	Add: weighted avg. dilutive options outstanding	800			812			800			814
	Weighted average exercise price per share		$48.20			$47.99			$48.20			$47.96
	Proceeds from unrecognized option expense		$1,837			$3,730			$2,113			$3,730
	Less: options bought back via treasury method	(650		)	(812		)	(652		)	(813		)
	Weighted average dilutive shares outstanding [b]	43,897			43,351			43,793			43,266

[a] Excludes unvested restricted shares outstanding which are considered participating securities under the two-class method for calculation of EPS.

[b] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected in the calculations above as additional treasury method repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.

EARNINGS PER SHARE INFORMATION - TWO CLASS METHOD



	QUARTERS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2015			2014			2015			2014

Net income		$84,206			$83,163			$192,685			$187,643
Less 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
Less amount allocated to participating common shareholders [a]	(2,273		)	(2,212		)	(5,237		)	(4,988		)
Net income allocated to common shareholders		$73,745			$72,763			$171,072			$166,279

Denominator:
Weighted average shares - basic	43,737			43,351			43,640			43,265

Share Equivalents
Options	150			—			148			1
Restricted shares	10			—			5			—
Weighted average shares - diluted	43,897			43,351			43,793			43,266

Basic earnings per common share		$1.69			$1.68			$3.92			$3.84

Diluted earnings per common share [b]		$1.68			$1.68			$3.91			$3.84

[a] Represents earnings and dividends allocated to holders of unvested restricted shares issued under the Company’s stock compensation plans that are considered participating securities related to the calculation of earnings per share under the two-class method. In periods of loss, no losses are allocated to participating common shareholders.

[b] Represents diluted earnings per share calculated under the two-class method which was the lower of the two-class method and the treasury stock method.

ENDURANCE SPECIALTY HOLDINGS LTD.

OPERATING INCOME RECONCILIATION

EARNINGS PER SHARE INFORMATION - TWO CLASS METHOD



	Two-Class Method						Two-Class Method
	QUARTERS ENDED JUNE 30,						SIX MONTHS ENDED 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 available to common and participating common shareholders		$79,530			$71,919			$170,729			$166,290
Less amount allocated to participating common shareholders [a]	(2,378		)	(2,122		)	(5,072		)	(4,843		)
Operating income allocated to common shareholders		$77,152			$69,797			$165,657			$161,447

Weighted average common shares outstanding
Basic	43,737			43,351			43,640			43,265
Dilutive	43,897			43,351			43,793			43,266

Basic per common share data
Net income allocated to common shareholders		$1.69			$1.68			$3.92			$3.84
Add (less) after-tax items:
Net foreign exchange losses	0.29			0.01			0.47			0.08
Net realized and unrealized gains	(0.23		)	(0.08		)	(0.61		)	(0.20		)
Net impairment losses recognized in earnings	0.01			—			0.02			0.01
Operating income allocated to common shareholders [b]		$1.76			$1.61			$3.80			$3.73

Diluted per common share data
Net income allocated to common shareholders		$1.68			$1.68			$3.91			$3.84
Add (less) after-tax items:
Net foreign exchange losses	0.29			0.01			0.47			0.08
Net realized and unrealized gains	(0.22		)	(0.08		)	(0.62		)	(0.20		)
Net impairment losses recognized in earnings	0.01			—			0.02			0.01
Operating income allocated to common shareholders [b]		$1.76			$1.61		3.78			3.73

[b] Represents diluted earnings per share calculated under the two-class method which was the lower of the two-class method and the treasury stock method.

ENDURANCE SPECIALTY HOLDINGS LTD.

BOOK VALUE PER SHARE



		JUNE 30,						DEC. 31,
		2015			2014			2014
DILUTIVE COMMON SHARES OUTSTANDING: AS-IF CONVERTED [a]	Price per share at period end	$65.70				$51.59			$59.84

	Basic common shares outstanding	43,839			43,456			43,474
	Add: unvested restricted shares and restricted share units	1,316			1,250			1,291
	Add: dilutive options outstanding	800			800			800
	Weighted average exercise price per share	$48.20				$48.20			$48.20

	Book Value [b]		$2,872,906			$2,685,675			$2,755,182
	Add: proceeds from converted options	38,560			38,560			38,560
	Pro forma book value		$2,911,466			$2,724,235			$2,793,742
	Dilutive shares outstanding	45,955			45,506			45,565
	Basic book value per common share		$65.53			$61.80			$63.38
	Diluted book value per common share		$63.35			$59.87			$61.31

DILUTIVE COMMON SHARES OUTSTANDING: TREASURY STOCK METHOD	Price per share at period end	$65.70				$51.59			$59.84

	Basic common shares outstanding	43,839			43,456			43,474
	Add: unvested restricted shares and restricted share units	1,316			1,250			1,291
	Add: dilutive options outstanding	800			800			800
	Weighted average exercise price per share	$48.20				$48.20			$48.20
	Less: options bought back via treasury method	(587		)	(747		)	(644		)
	Dilutive shares outstanding	45,368			44,759			44,921
	Basic book value per common share		$65.53			$61.80			$63.38
	Diluted book value per common share	$63.32				$60.00			$61.33

[a] The as-if converted method assumes that the proceeds received upon exercise of options will be retained by the Company and the resulting common shares from exercise will remain outstanding.

[b] Excludes the $430 million liquidation value of the preferred shares.

ENDURANCE SPECIALTY HOLDINGS LTD.

REGULATION G

In presenting the Company’s results, management has included and discussed certain non-GAAP measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company’s results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.

Operating income is an internal performance measure used by the Company in the management of its operations. 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. The Company 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 determined in accordance with GAAP, the Company believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results of operations in a manner similar to to that used by management to analyze the Company’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 31 for a reconciliation of operating income to net income.

Return on Average Equity (ROAE) is comprised using the average common equity calculated as the arithmetic average of the beginning and ending common equity balances for stated periods. Return on Beginning Equity (ROBE) is comprised using the beginning common equity for stated periods. The Company presents various measures of Return on Equity that are commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

Investment yield is provided by the Company’s investment managers and is calculated by dividing net investment income by average invested assets at amortized cost. The Company utilizes and presents the investment yield in order to better disclose the performance of the Company’s investments and to show the components of the Company’s ROE.

The Company has included diluted book value per common share because it takes into account the effect of dilutive securities; therefore, the Company believes it is a better measure of calculating shareholder returns than book value per common share. Please see page 32 for a reconciliation of diluted book value per common share to basic book value per common share.

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