|
|
|
|
|
PEMBROKE, Bermuda, Feb 6, 2015 - (ACN Newswire) - Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net income available to common shareholders of $76.4 million and $1.70 per diluted common share for the fourth quarter of 2014 versus net income of $59.0 million and $1.33 per diluted common share for the fourth quarter of 2013.
For the year ended December 31, 2014, Endurance reported net income available to common shareholders of $315.7 million and $7.06 per diluted common share versus net income of $279.2 million and $6.37 per diluted common share for the year ended December 31, 2013. Book value per diluted share was $61.33 at December 31, 2014, up 11.1% from December 31, 2013.
Operating highlights for the quarter ended December 31, 2014 were as follows:
- Gross premiums written of $421.0 million, an increase of 13.5% compared to the same period in 2013;
- Net premiums written of $234.0 million, a decline of 16.5% compared to the same period in 2013;
- Combined ratio of 83.2%, which included 14.6 percentage points of favorable prior year loss reserve development and 2.1 percentage points of catastrophe losses from 2014 events;
- Net investment income of $25.9 million, a decrease of $20.5 million from the same period in 2013;
- Operating income of $78.5 million and $1.75 per diluted common share; and
- Operating return on average common equity for the quarter of 2.9% or 11.5% on an annualized basis.
Operating highlights for the twelve months ended December 31, 2014 were as follows:
- Gross premiums written of $2,894.1 million, an increase of 8.6% over the same period in 2013;
- Net premiums written of $1,934.2 million, a decline of 5.6% over the same period in 2013;
- Combined ratio of 86.0%, which included 12.5 percentage points of favorable prior year loss reserve development, 2.7 percentage points of current year catastrophe losses, and 0.8 percentage points of expenses related to the proposed acquisition of Aspen;
- Net investment income of $131.5 million, a decrease of $34.7 million over the same period in 2013;
- Operating income, excluding $20.3 million of expenses related to the proposed acquisition of Aspen, of $324.3 million and $7.25 per diluted common share; and
- Operating return on average common equity for the year, excluding expenses related to the proposed acquisition of Aspen, of 12.4%.
John R. Charman, Chairman and Chief Executive Officer, commented, "The fourth quarter capped a very strong year for Endurance both financially and strategically; this performance was even more commendable when taking into account the continued root and branch transformation within our company. We generated a strong return on equity and double digit growth in book value per share as well as continuing to profitably grow our underwriting business by products and geographies. Endurance is now firmly established as a leading underwriter with a significantly improved global presence and much broader underwriting capability in the specialty insurance and reinsurance markets. Importantly, we are increasingly relevant to our global clients and broker distribution channels in terms of access, capability and capacity across the board. Our 2014 results were a strong, early confirmation that our efforts over the last couple of years are paying off as company wide gross premiums written, excluding agriculture insurance, grew 18.5%, while accident year loss ratios continued to improve throughout both segments. We are resolute in our determination and commitment to continue the profitable transformation of Endurance during 2015 and beyond and we remain highly focused on generating superior shareholder returns, regardless of how challenging market conditions become."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended December 31, 2014 were as follows:
- Gross premiums written of $322.0 million, an increase of 60.4% from the fourth quarter of 2013;
- Net premiums written of $140.7 million, an increase of 25.7% from the fourth quarter of 2013; and
- Combined ratio of 100.2%, which improved 22.8 percentage points from the fourth quarter of 2013 and included 12.2 percentage points of favorable prior year loss reserve development and 8.5 percentage points of hail losses in the agriculture line of business.
Operating highlights for Endurance's Insurance segment for the year ended December 31, 2014 were as follows:
- Gross premiums written of $1,716.1 million, an increase of 16.3% from the same period in 2013;
- Net premiums written of $860.4 million, a decrease of 7.7% from the same period in 2013; and
- Combined ratio of 100.1%, which improved 5.2 percentage points from full year 2013 and included favorable prior year loss reserve development of 9.7 percentage points, 3.7 percentage points of hail losses in the agriculture line of business and 0.8 percentage point of general and administrative expenses related to the proposed acquisition of Aspen.
Gross premiums written in the Insurance segment, excluding agriculture insurance, increased $109.9 million or 77.1% and $329.1 million or 63.2% for the quarter and year ended December 31, 2014 compared to the same periods in 2013 as recently hired global underwriters within professional lines, casualty and other specialty, and property, marine and energy continued to generate strong premium growth. Within agriculture insurance, gross premiums written increased $11.4 million in the fourth quarter compared to a year ago, driven by increased policy counts related to winter wheat. For the full year, agriculture gross premiums written declined $88.4 million from a year ago driven by declines in spring crop commodity prices, partially offset by increased policy counts. Net premiums written in the Insurance segment, excluding agriculture insurance, increased $25.0 million and $39.5 million for the fourth quarter and year ended December 31, 2014 compared to the same periods in 2013 from growth in gross premiums written in the current periods partially offset for the year from greater levels of reinsurance purchased, including increased quota share protection for both individual lines of business and across the entire portfolio, as well as increased excess of loss reinsurance protection for the agriculture insurance business.
The improvement in the Insurance segment combined ratio for the quarter ended December 31, 2014 compared to the same period in 2013 was driven by an improved net loss ratio partially offset by higher acquisition and general and administrative expense ratios. The reduction in the net loss ratio in the current quarter compared to a year ago was primarily driven by increased favorable development of prior year reserves and improvements in the accident year loss ratio within the agriculture line of business. While the absolute amount of general and administrative expenses declined in the fourth quarter compared to a year ago, earned premiums declined a greater amount leading to the modest increase in the general and administrative expense ratio. The current quarter's increase in the acquisition ratio was driven by a greater portion of premiums generated from specialty lines, which have higher acquisition related costs. For the year ended December 31, 2014, the combined ratio improved compared to the same period a year ago, as a lower net loss ratio was partially offset by higher acquisition and general and administrative expense ratios.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended December 31, 2014 were as follows:
- Gross premiums written of $99.0 million, a decrease of 41.8% from the fourth quarter of 2013;
- Net premiums written of $93.3 million, a decrease of 44.5% from the fourth quarter of 2013; and
- Combined ratio of 68.6%, which increased 2.5 percentage points from the same period a year ago and included favorable prior year loss reserve development of 16.7 percentage points and net catastrophe losses from 2014 events of $10.4 million, or 3.9 percentage points.
Operating highlights for Endurance's Reinsurance segment for the year ended December 31, 2014 were as follows:
- Gross premiums written of $1,177.9 million, a decrease of 1.0% from the same period in 2013;
- Net premiums written of $1,073.8 million, a decrease of 3.8% from the same period in 2013; and
- Combined ratio of 74.6% which improved 2.2 percentage points compared to full year 2013 and included favorable prior year loss reserve development of 14.9 percentage points, net catastrophe losses from 2014 events of $51.1 million or 4.9 percentage points and 0.9 percentage points of expenses related to the proposed acquisition of Aspen.
Gross premiums written in the Reinsurance segment decreased $71.0 million and $11.9 million for the quarter and year ended December 31, 2014 compared to the same periods in 2013. For the fourth quarter of 2014, the decrease was driven by declines within the catastrophe, property, casualty and professional lines partially offset by an increase within the specialty line of business. Catastrophe and property gross premiums written decreased $7.9 million in the current quarter compared to a year ago as we continue to non-renew select contracts due to margins no longer meeting our return targets. Casualty gross premiums written declined $9.6 million largely due to negative premium adjustments in the current quarter compared to positive premium adjustments a year ago. Within professional lines, gross premiums declined $69.7 million as the renewal for a large contract written a year ago was extended in the second quarter of 2014. Gross premiums written in the specialty lines of business grew $16.2 million for the current quarter compared to a year ago principally due to new business generated by our recently expanded marine, international agriculture and trade credit and surety teams. For the quarter and year ended December 31, 2014, net premium growth was predominantly impacted by proportional and aggregate excess of loss retrocessional purchases in the Company's catastrophe portfolio.
The increase in the combined ratio in the Reinsurance segment for the fourth quarter of 2014 compared to the same period in 2013 was due to a higher net loss ratio, partially offset by lower acquisition and general and administrative expense ratios. The current quarter's net loss ratio included 4.0 percentage points of catastrophe losses mainly related to Australian storms and increased estimated losses from other 2014 events, while the fourth quarter of 2013 included 2.8 percentage points of catastrophe losses mainly related to European storms. The net loss ratio in the fourth quarter of 2014 also benefited from $42.3 million, or 16.7 percentage points, of favorable prior year loss reserve development, compared to $56.1 million, or 21.3 percentage points, for the same period a year ago. The favorable development in both periods was predominantly driven by short tail and specialty lines of business as losses have developed better than originally estimated. The decline in the acquisition expense ratio in the current quarter compared to a year ago was due to loss sensitive accrual adjustments. The lower general and administrative expenses for the fourth quarter of 2014 resulted primarily from lower expenses associated with the hiring of new underwriting teams as fewer new underwriters were hired during the fourth quarter compared to a year ago.
For the full year 2014, the Reinsurance segment reported a combined ratio of 74.6% compared to 76.8% for the same period in 2013 principally due to a lower net loss ratio partially offset by higher acquisition and general and administrative expense ratios.
Investments
Endurance's net investment income for the quarter and year ended December 31, 2014 was $25.9 million and $131.5 million, a decrease of $20.5 million and $34.7 million, respectively, compared to the same periods in 2013. The total return of Endurance's investment portfolio was 0.40% and 2.79% for the quarter and year ended December 31, 2014, respectively, compared to 0.74% and 1.43% for the quarter and year ended December 31, 2013, respectively. Investment income generated from Endurance's available for sale investments increased by $4.8 million and $10.7 million for the quarter and year ended December 31, 2014, respectively, compared to the same periods in 2013 due to an increase in the available for sale investment base. During the quarter and year ended December 31, 2014, Endurance's net investment income included losses of $2.9 million and gains of $19.6 million, respectively, on its alternative investment funds and high yield loan funds, which are included in other investments, as compared to gains of $21.2 million and $64.3 million in the quarter and year ended December 31, 2013, respectively. The ending book yield on Endurance's fixed maturity investments at December 31, 2014 was 2.21%, up from 2.05% at December 31, 2013.
At December 31, 2014, Endurance's fixed maturity portfolio, which comprises 87.0% of Endurance's investments, had an average credit quality of AA- and a duration of 2.91 years. Endurance's fixed maturity portfolio was in a net unrealized gain position of $86.1 million at December 31, 2014, an increase of $40.2 million from December 31, 2013. Endurance recorded net realized investment gains, net of investment impairments and excluding intangible asset impairment, of $1.4 million and $19.1 million during the quarter and year ended December 31, 2014, compared to net realized investment gains of $5.2 million and $13.5 million during the quarter and year ended December 31, 2013.
Endurance ended the fourth quarter of 2014 with cash and invested assets of $6.6 billion, which represents a 1.6% increase from December 31, 2013. Net operating cash inflow was $266.3 million for the year ended December 31, 2014 versus $157.9 million for the same period in 2013.
Capitalization and Shareholders' Equity
At December 31, 2014, Endurance's shareholders' equity was $3.19 billion or $61.33 per diluted common share versus $2.89 billion or $55.18 per diluted common share at December 31, 2013. For the quarter and year ended December 31, 2014, Endurance declared and paid common dividends of $0.34 and $1.36 per share, respectively.
Earnings Call
Endurance will host a conference call on February 6, 2015 at 9:00 a.m. Eastern time to discuss its financial results. The conference call can be accessed via telephone by dialing (888) 715-1394 or +1-913-312-1462 (international) and entering pass code: 8183550. Those who intend to participate in the conference call should register at least ten minutes in advance to ensure access to the call. A telephone replay of the conference call will be available through February 20, 2015 by dialing (888) 203-1112 or +1-719-457-0820 (international) and entering the pass code: 8183550.
The public may access a live broadcast of the conference call at the "Investors" section of Endurance's website, www.endurance.bm. Following the live broadcast, an archived version will continue to be available on Endurance's website.
A copy of Endurance's financial supplement for the fourth quarter of 2014 will be available on Endurance's website at www.endurance.bm shortly after the release of earnings.
Operating income, operating return on average common equity, operating income per diluted common share, operating income allocated to common shareholders and the combined ratio excluding prior year net loss reserve development are non-GAAP measures. Reconciliations of these measures to the appropriate GAAP measures are included in the attached tables.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global specialty provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance writes agriculture, casualty and other specialty, professional lines and property, marine and energy lines of insurance and catastrophe, property, casualty, professional lines and specialty lines of reinsurance. We maintain excellent financial strength as evidenced by the ratings of A (Excellent) from A.M. Best (XV size category) and A (Strong) from Standard and Poor's on our principal operating subsidiaries. Endurance's headquarters are located at Waterloo House, 100 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information about Endurance, please visit www.endurance.bm.
Safe Harbor for Forward-Looking Statements
Some of the statements in this press release may include, and Endurance may make related oral forward-looking statements which reflect our current views with respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters. Statements which include the words "should," "would," "expect," "intend," "plan," "believe," "project," "target," "anticipate," "seek," "will," "deliver," and similar statements of a future or forward-looking nature identify forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or may be important factors that could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, but are not limited to, the effects of competitors' pricing policies, greater frequency or severity of claims and loss activity, changes in market conditions in the agriculture insurance industry, termination of or changes in the terms of the U.S. multiple peril crop insurance program, a decreased demand for property and casualty insurance or reinsurance, changes in the availability, cost or quality of reinsurance or retrocessional coverage, our inability to renew business previously underwritten or acquired, our inability to maintain our applicable financial strength ratings, our inability to effectively integrate acquired operations, uncertainties in our reserving process, changes to our tax status, changes in insurance regulations, reduced acceptance of our existing or new products and services, a loss of business from and credit risk related to our broker counterparties, assessments for high risk or otherwise uninsured individuals, possible terrorism or the outbreak of war, a loss of key personnel, political conditions, changes in insurance regulation, changes in accounting policies, our investment performance, the valuation of our invested assets, a breach of our investment guidelines, the unavailability of capital in the future, developments in the world's financial and capital markets and our access to such markets, government intervention in the insurance and reinsurance industry, illiquidity in the credit markets, changes in general economic conditions and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 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.
Contact:
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations@endurance.bm
Press release: http://ir.endurance.bm/phoenix.zhtml?c=137754&p=irol-newsArticle&ID=2014298
###
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Endurance Specialty Holdings Ltd via Globenewswire
Topic: Press release summary
Source: Endurance Specialty Holdings Ltd.
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
|
|
|
|
|
|
|
|
