Endurance posts growth despite profit fall

04-11-2014

Bermuda-based Endurance Specialty saw growth of 15 percent in the third quarter of 2014, despite a fall in profits.

The company’s gross written premiums (GWP) increased 15 percent to $626.1 million, compared with $544.4 million the same period in 2013.

In the insurance segment, GWP hiked 21.9 percent to $420.3 million, compared with $344.8 million in the same period of the prior year. Endurance said this was driven by expanded global underwriting capabilities within professional lines, casualty and other, and property lines of business continued to generate strong premium growth.  Partially offsetting this growth was a reduction in agriculture insurance premiums driven by commodity price declines.

Endurance’s reinsurance segment saw GWP of $205.8 million, an increase of 3.1 percent from the third quarter of 2013 where GWP hit $199.5 million. The growth was driven by increases within the specialty and catastrophe lines of business, partially offset by declines within the property, casualty and professional lines of business.

Its profits hit $68 million in the third quarter of 2014, a deterioration compared with $75.2 million in the third quarter of 2013.

Endurance’s combined ratio deteriorated to 90.2 percent, compared with 87.7 percent in the prior year quarter. This included 11.7 percentage points of favourable prior year loss reserve development, 2.4 percentage points of hail losses in the Agriculture line and 2.2 percentage points of property catastrophe losses from 2014 events.

John Charman, chairman and chief executive officer, said: "During the third quarter, we continued to make strong progress in the transformation of Endurance. Despite the significant and increasing competition throughout the global insurance and reinsurance industry that we had anticipated, we have meaningfully improved the underwriting quality across our lines of business.

“The core of our underwriting talent is now largely in place and our market leading teams of underwriters are successfully growing attractive sustainable new specialty business for Endurance based on their relevance and their value to their longstanding client and distribution partner relationships.

“The risk/reward characteristics of our underwriting portfolios have been substantially improved with reduced catastrophe exposures, a more diverse and better balanced underwriting portfolio backstopped by very strong reinsurance protection across our businesses.

“Despite the quarter's headwinds from hail storm losses within our otherwise profitable agriculture insurance business coupled with some volatility within our investment portfolio, I am very comfortable with the underlying performance improvements and direction of Endurance, especially when taking into account the earnings lag that naturally occurs following a major transformation."

Endurance, John Charman, Third Quarter 2014 Results, Bermuda

Bermuda Re