|
|
|
|
|
PEMBROKE, Bermuda, May 5, 2015 - (ACN Newswire) - Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net income available to common shareholders of $100.3 million and $2.23 per diluted common share for the first quarter of 2015 versus net income of $96.3 million and $2.17 per diluted common share for the first quarter of 2014. Book value per diluted share was $62.79 at March 31, 2015, up 2.4% from December 31, 2014.
Operating highlights for the quarter ended March 31, 2015 were as follows:
- Gross premiums written of $1,301.4 million, an increase of 12.4% compared to the same period in 2014, or an increase of approximately 16.0% when excluding the impact of foreign currency changes;
- Net premiums written of $765.0 million, a decline of 4.2% compared to the same period in 2014;
- Combined ratio of 82.4%, which included 14.7 percentage points of favorable prior year loss reserve development and 1.8 percentage points of net catastrophe losses from 2015 events;
- Net investment income of $41.9 million, an increase of $0.9 million from the same period in 2014;
- Operating income, which excludes after-tax realized investment gains and losses and foreign exchange losses, of $91.2 million and $2.03 per diluted common share; and
- Operating return on average common equity for the quarter of 3.3% or 13.0% on an annualized basis.
John R. Charman, Chairman and Chief Executive Officer, commented, "During the first quarter we generated excellent results with double digit percentage growth in gross premiums written across our specialty businesses, 3.0% growth in book value per share plus dividends, and an annualized operating ROE of 13.0%. In the first quarter we announced our acquisition of Montpelier Re which we expect to significantly accelerate our global transformation, building on the strong growth and momentum that we have achieved over the last two years. The addition of Montpelier's high quality underwriting portfolio along with the added strategic capabilities, breadth of distribution and new underwriting platforms will better enable us to increase our scale and relevance to our clients and distribution partners while aiding us in delivering superior returns to our shareholders."
Insurance Segment
Operating highlights for Endurance's Insurance segment for the quarter ended March 31, 2015 were as follows:
- Gross premiums written of $736.2 million, an increase of 12.9% from the first quarter of 2014;
- Net premiums written of $304.0 million, a decline of 11.4% from the first quarter of 2014; and
- Combined ratio of 90.6%, which included favorable prior year loss reserve development of 15.2 percentage points and net catastrophe losses from 2015 events of $4.4 million or 3.3 percentage points.
Gross premiums written in the Insurance segment increased $83.9 million for the quarter ended March 31, 2015 compared to the same period in 2014 as we achieved strong growth from our expanded global underwriting capabilities within the professional lines, casualty and other specialty, property, marine and energy lines of business. Partially offsetting this growth was a reduction in agriculture insurance premiums driven by lower commodity prices, partially offset by an increase in policy counts and growth within new crop insurance products. Net premiums written declined $39.0 million for the quarter ended March 31, 2015, compared to the same period in 2014, as greater levels of reinsurance were purchased, including increased quota share protection for both individual lines of business and across the entire portfolio and increased protection for the agriculture insurance business including greater cessions to the federal government as well as increased third party reinsurance purchases.
The 8.4 percentage point improvement in the Insurance segment combined ratio for the quarter ended March 31, 2015 compared to the same period in 2014 was driven by lower loss and general and administrative expense ratios partially offset by a higher acquisition expense ratio. The improvement in the net loss ratio reflects higher levels of favorable loss reserve development which improved the current quarter's net loss ratio by 15.2 percentage points compared to 8.1 percentage points in 2014. The accident year net loss ratio increased modestly in the current quarter as catastrophe losses related to U.S. winter storms were higher than a year ago and were partially offset by improved profitability within our expanding specialty and professional lines of business. The current quarter's decline in the general and administrative expense ratio reflects higher ceding commissions received as a result of increased quota share reinsurance purchases. The acquisition expense ratio increased in the current quarter as specialty lines with higher related acquisition costs accounted for a greater percentage of the portfolio than a year ago.
Reinsurance Segment
Operating highlights for Endurance's Reinsurance segment for the quarter ended March 31, 2015 were as follows:
- Gross premiums written of $565.2 million, an increase of 11.9% from the first quarter of 2014;
- Net premiums written of $460.9 million, an increase of 1.1% from the first quarter of 2014; and
- Combined ratio of 78.0%, which included favorable prior year loss reserve development of 14.4 percentage points and net catastrophe losses from 2015 events of $2.7 million or 1.1 percentage points.
Gross premiums written in the Reinsurance segment increased $60.0 million for the quarter ended March 31, 2015 compared to the same period in 2014 and grew over $90.0 million when adjusted for year over year changes in foreign currency. For the first quarter of 2015, the increase was driven by the professional lines and specialty line of business, partially offset by declines within the property and casualty lines of business. Gross premiums written in the specialty line of business more than doubled in the current quarter, growing $111.6 million compared to a year ago predominantly driven by new business generated by our recently hired international agriculture and marine teams. Growth in professional lines predominantly resulted from the identification of new quota share opportunities while declines in property and casualty lines were driven by the non-renewal of numerous contracts that no longer met our profitability targets. For the quarter ended March 31, 2015, net premiums written increased $5.2 million from a year ago as gross premiums written growth was largely offset by greater levels of proportional and aggregate excess of loss retrocessional coverage in the Company's catastrophe portfolio and a new whole account quota share retrocession that was initiated for the majority of the Reinsurance segment's specialty line of business.
The combined ratio in the Reinsurance segment for the first quarter of 2015 increased by 6.7 percentage points compared to the same period in 2014, due to higher loss, acquisition and general and administrative expense ratios. The net loss ratio increased by 3.3 percentage points in the current quarter compared to a year ago predominantly due to modestly lower levels of favorable reserve development and a change in expected loss assumptions for the casualty line. The 2.4 percentage point increase in the current quarter's acquisition expense ratio was attributed to reduced premiums written in shorter tail lines of business, which have lower related acquisition expenses, and a greater level of premiums written within the specialty line, which maintain higher acquisition expenses. The general and administrative expense ratio increased 1.0 percentage point in the first quarter of 2015 primarily from higher underwriter expenses related to strategic investments made within our global specialty reinsurance operations.
Investments
Endurance's net investment income for the quarter ended March 31, 2015 was $41.9 million, an increase of $0.9 million compared to the same period in 2014. The total return of Endurance's investment portfolio was 0.88% for the quarter ended March 31, 2015 compared to 1.24% for the quarter ended March 31, 2014. Investment income generated from Endurance's available for sale investments increased by $1.9 million for the three months ended March 31, 2015 compared to the same period in 2014 due to an increase in the underlying available for sale investment base and increased returns. During the quarter ended March 31, 2015, Endurance's net investment income included gains of $12.4 million on its alternative investment funds and high yield loan funds, which are included in other investments, as compared to $13.5 million in the first quarter of 2014. The ending book yield on Endurance's fixed maturity investments at March 31, 2015 was 2.21%, up from 2.04% at March 31, 2014.
At March 31, 2015, Endurance's fixed maturity portfolio, which comprises 84.0% of Endurance's investments, had an average credit quality of AA- and a duration of 2.95 years. Endurance's fixed maturity portfolio was in a net unrealized gain position of $110.6 million at March 31, 2015, an increase of $24.5 million from December 31, 2014. Endurance recorded net realized investment gains of $17.5 million during the first quarter of 2015 compared to $4.8 million during the first quarter of 2014.
Endurance ended the first quarter of 2015 with cash and invested assets of $6.5 billion, which represents a 1.9% decrease from December 31, 2014. Net operating cash outflow was $92.3 million for the three months ended March 31, 2015 versus an outflow of $25.6 million for the same period in 2014.
Capitalization and Shareholders' Equity
At March 31, 2015, Endurance's shareholders' equity was $3.27 billion or $62.79 per diluted common share versus $3.19 billion or $61.33 per diluted common share at December 31, 2014. For the quarter ended March 31, 2015, Endurance declared and paid common dividends of $0.35 per share.
Earnings Call
Endurance will host a conference call on May 5, 2015 at 9:00 a.m. Eastern time to discuss its financial results. The conference call can be accessed via telephone by dialing (888) 221-3894 or (913) 312-1462 (international) and entering pass code: 6977893. 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 May 19, 2015 by dialing (888) 203-1112 or (719) 457-0820 (international) and entering the pass code: 6977893.
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 first quarter of 2015 will be available on Endurance's website at www.endurance.bm shortly after the release of earnings.
Operating income, operating return on average common equity, operating income per diluted common share, operating income allocated to common shareholders and the combined ratio excluding prior year net loss reserve development are non-GAAP measures. Reconciliations of these measures to the appropriate GAAP measures are included in the attached tables.
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a global specialty provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance writes agriculture, casualty and other specialty, professional lines and property, marine and energy lines of insurance and catastrophe, property, casualty, professional lines and specialty lines of reinsurance. We maintain excellent financial strength as evidenced by the ratings of A (Excellent) from A.M. Best (XV size category) and A (Strong) from Standard and Poor's on our principal operating subsidiaries. Endurance's headquarters are located at Waterloo House, 100 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information about Endurance, please visit www.endurance.bm.
Safe Harbor for Forward-Looking Statements
Some of the statements in this press release may include, and Endurance may make related oral forward-looking statements which reflect our current views with respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters. These statements may also include assumptions about our proposed acquisition of Montpelier Re Holdings Ltd. ("Montpelier") (including its benefits, results, effects and timing). Statements which include the words "should," "would," "expect," "intend," "plan," "believe," "project," "target," "anticipate," "seek," "will," "deliver," and similar statements of a future or forward-looking nature identify forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or may be important factors that could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, but are not limited to, the effects of competitors' pricing policies, greater frequency or severity of claims and loss activity, changes in market conditions in the agriculture insurance industry, termination of or changes in the terms of the U.S. multiple peril crop insurance program, a decreased demand for property and casualty insurance or reinsurance, changes in the availability, cost or quality of reinsurance or retrocessional coverage, our inability to renew business previously underwritten or acquired, our inability to maintain our applicable financial strength ratings, our inability to effectively integrate acquired operations, uncertainties in our reserving process, changes to our tax status, changes in insurance regulations, reduced acceptance of our existing or new products and services, a loss of business from and credit risk related to our broker counterparties, assessments for high risk or otherwise uninsured individuals, possible terrorism or the outbreak of war, a loss of key personnel, political conditions, changes in insurance regulation, changes in accounting policies, our investment performance, the valuation of our invested assets, a breach of our investment guidelines, the unavailability of capital in the future, developments in the world's financial and capital markets and our access to such markets, government intervention in the insurance and reinsurance industry, illiquidity in the credit markets, changes in general economic conditions and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2014.
Additionally, the proposed transaction is subject to risks and uncertainties, including: (A) that Endurance and Montpelier may be unable to complete the proposed transaction because, among other reasons, conditions to the closing of the proposed transaction may not be satisfied or waived; (B) uncertainty as to the timing of completion of the proposed transaction; (C) uncertainty as to the actual premium of the Endurance share component of the proposal that will be realized by Montpelier shareholders in connection with the transaction; (D) uncertainty as to the long-term value of Endurance ordinary shares; (E) failure to realize the anticipated benefits and synergies from the proposed transaction, including as a result of failure or delay in integrating Montpelier's businesses into Endurance; (F) the risk that regulatory or other approvals required for the transaction are not obtained or are obtained subject to conditions that are not anticipated; (G) the inability to retain key personnel; (H) any changes in general economic and/or industry specific conditions; and (I) the outcome of any legal proceedings to the extent initiated against Endurance, Montpelier and others following the announcement of the proposed transaction, as well as Endurance and Montpelier management's response to any of the aforementioned factors.
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the risk factors included in Endurance's most recent report on Form 10-K and the risk factors included in Montpelier's most recent report on Form 10-K and other documents of Endurance and Montpelier on file with the Securities and Exchange Commission ("SEC"). Any forward-looking statements made in this material are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Endurance will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Endurance or its business or operations. Except as required by law, the parties undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Additional Information about the Proposed Transaction and Where to Find It
The issuance of Endurance ordinary shares to Montpelier shareholders in the merger will be submitted to shareholders of Endurance for their consideration. The proposed merger will be submitted to shareholders of Montpelier for their consideration. This material is not a solicitation of any vote or approval and is not a substitute for the joint proxy statement/prospectus or any other documents which Endurance or Montpelier may send to their respective shareholders in connection with the proposed merger.
This material does not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a proxy statement/prospectus meeting the requirements of the Securities Act of 1933, as amended.
Endurance and Montpelier shareholders are urged to read the joint proxy statement/prospectus for the proposed Acquisition when it is filed, and any amendment or supplement thereto that may be filed, with the SEC because they will contain important information. All such documents, when filed, are available free of charge at the SEC's website (www.sec.gov) or by directing a request to Endurance's Investor Relations contact at 441-278-0988.
Participants in the Solicitation
Endurance and Montpelier and their directors and executive officers are deemed to be participants in any solicitation of Endurance and Montpelier shareholders in connection with the proposed merger. Information about Endurance's directors and executive officers is available in Endurance's Definitive Proxy Statement, dated April 9, 2015, for its 2015 Annual General Meeting of shareholders. Information about Montpelier's directors and executive officers is available in Amendment No. 1 on Form 10-K/A filed on March 31, 2015, amending Montpelier's Annual Report on Form 10-K, filed on February 25, 2015.
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=2043669
###
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: Earnings
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.
|
|
|
|
|
|
|
|
