5 November 2013

Endurance focuses in on insurance

Endurance’s new CEO, John Charman, has signalled his intent to shift the strategic focus of the re/insurer to a greater emphasis on primary lines.

Third quarter operating results provide some indication of the realignment underway at Endurance. While net premiums written in the company’s insurance segment fell by 1.8 percent compared with 2012, underwriting on the reinsurance side of Endurance’s book fell by 41.6 percent during the third quarter of 2013 and by 5.7 percent for the first three quarters of the year. Net premiums written across the whole group declined by 3.9 percent to $1,769 million, as the company has sought to pep up its underwriting profitability.

The re/insurer indicated that it has chosen to walk away from business that does not adequately meet its return expectations. Such business has predominantly been in its reinsurance segment, which is facing an increasing squeeze as a result of the influx of alternative sources of capital. Charman said that the company has “made significant progress driving substantial improvements in our underwriting capabilities, streamlining our operations and enhancing our positioning in the global market”.

The company’s combined ratio strengthened to 89.3 percent—a marked improvement on its year-end combined ratio of 102.3 percent in 2012, although admittedly during a benign loss year. Endurance did however face a further decrease in investment income, down to $119.9 million, as the industry continues to struggle to resuscitate troubled investment returns.