Endurance Specialty Holdings Ltd. (ENH, Financial) filed Quarterly Report for the period ended 2009-06-30.
Endurance Specialty Holdings Ltd. through its wholly owned operating subsidiaries is a global provider of property and casualty insurance and reinsurance. Through these subsidiaries Endurance currently writes property per risk treaty reinsurance property catastrophe reinsurance casualty treaty reinsurance property individual risks casualty individual risks and other specialty lines. Endurance\'s operating subsidiaries have been assigned a group rating of A- (Excellent) from A.M. Best and headquarters are in Bermuda. Endurance Specialty Holdings Ltd. has a market cap of $1.85 billion; its shares were traded at around $32.21 with a P/E ratio of 8.5 and P/S ratio of 1. The dividend yield of Endurance Specialty Holdings Ltd. stocks is 3.2%.
Net premiums earned for the three months ended June 30, 2009 were $434.2 million, a decrease of $18.9 million, or 4.2%, from the second quarter of 2008 principally driven by the decline in premiums written in more recent periods as a result of the discontinuation of the workers compensation business line in the Insurance segment.
Endurances net investment income of $88.8 million increased 46.9% or $28.4 million for the quarter ended June 30, 2009 as compared to the same period in 2008. Net investment income during the second quarter of 2009 included net mark to market gains of $40.5 million on its alternative investments and high yield loan funds, included in other investments, as compared to a loss of $0.5 million in the second quarter of 2008. Investment income generated from the Companys fixed income investments, which consist of fixed maturity investments, short term investments and preferred equity securities, decreased by $11.8 million in comparison to the same period in 2008 due to lower reinvestment rates during the current period and a higher allocation of investments to cash and cash equivalents and shorter duration securities. Investment expenses for the second quarter of 2009, including investment management fees, were $3.0 million, which was consistent with the same period in 2008.
As of June 30, 2009, the Company continued to maintain an investment portfolio with an average credit rating of AAA. At June 30, 2009, the Companys fixed income investments consisted of both mortgaged-backed and asset-backed securities, which comprised 35.9% of total invested assets, including pending securities transactions, fixed maturity investments, short term investments, preferred equity, cash and cash equivalents and other investments. The Company, along with its investment managers, monitors the nature and type of assets underlying these types of securities. At June 30, 2009, the Companys portfolio held no sub-prime mortgage exposure, and the Companys Alt-A exposure represented 1.7% of the Companys fixed income investments. Of the Companys Alt-A exposure, 84.0% are fixed rate securities. In the second quarter of 2009, the Companys investment portfolio experienced rating downgrades during the quarter on securities with fair values of $207.0 million and amortized costs of $239.8 million as of June 30, 2009, primarily within its non-agency residential mortgage-backed securities holdings.
The Companys investment portfolio is managed to preserve capital and liquidity while generating income and growth in book value. The portfolio is adjusted and rebalanced to meet the Companys objectives, resulting in the realization of net gains or losses which are dependent on movements in financial markets and interest rates and the timing of investment sales. Proceeds from sales of investments classified as available for sale during the three months ended June 30, 2009 were $748.6 million compared to $372.7 million during the three months ended June 30, 2008. Net realized investment (losses) gains on investment sales for the three months ended June 30, 2009 and 2008 were as follows:
The $6.6 million of OTTI recognized by the Company in the second quarter of 2009 relating to specific credit events occurred primarily due to reductions in expected recovery values on structured securities (mortgage and asset-backed) during the period, along with certain credit related downgrades in corporate securities. The $31.2 million of OTTI recognized by the Company in the second quarter of 2009 as relating to all other factors resulted primarily from market and sector related factors, including limited liquidity and credit spreads.
Read the The complete ReportENH is in the portfolios of Richard Perry of Perry Capital, Richard Snow of Snow Capital Management, L.P., Richard Snow of Snow Capital Management, L.P., David Dreman of Dreman Value Management.
Endurance Specialty Holdings Ltd. through its wholly owned operating subsidiaries is a global provider of property and casualty insurance and reinsurance. Through these subsidiaries Endurance currently writes property per risk treaty reinsurance property catastrophe reinsurance casualty treaty reinsurance property individual risks casualty individual risks and other specialty lines. Endurance\'s operating subsidiaries have been assigned a group rating of A- (Excellent) from A.M. Best and headquarters are in Bermuda. Endurance Specialty Holdings Ltd. has a market cap of $1.85 billion; its shares were traded at around $32.21 with a P/E ratio of 8.5 and P/S ratio of 1. The dividend yield of Endurance Specialty Holdings Ltd. stocks is 3.2%.
Highlight of Business Operations:
Gross premiums written in the three months ended June 30, 2009 were $559.2 million, an increase of $41.1 million, or 7.9%, compared to the same period in 2008. Net premiums written in the three months ended June 30, 2009 were $480.0 million, an increase of $10.6 million, or 2.3% compared to the same period in 2008. The growth in net premiums written was driven by the following factors:Net premiums earned for the three months ended June 30, 2009 were $434.2 million, a decrease of $18.9 million, or 4.2%, from the second quarter of 2008 principally driven by the decline in premiums written in more recent periods as a result of the discontinuation of the workers compensation business line in the Insurance segment.
Endurances net investment income of $88.8 million increased 46.9% or $28.4 million for the quarter ended June 30, 2009 as compared to the same period in 2008. Net investment income during the second quarter of 2009 included net mark to market gains of $40.5 million on its alternative investments and high yield loan funds, included in other investments, as compared to a loss of $0.5 million in the second quarter of 2008. Investment income generated from the Companys fixed income investments, which consist of fixed maturity investments, short term investments and preferred equity securities, decreased by $11.8 million in comparison to the same period in 2008 due to lower reinvestment rates during the current period and a higher allocation of investments to cash and cash equivalents and shorter duration securities. Investment expenses for the second quarter of 2009, including investment management fees, were $3.0 million, which was consistent with the same period in 2008.
As of June 30, 2009, the Company continued to maintain an investment portfolio with an average credit rating of AAA. At June 30, 2009, the Companys fixed income investments consisted of both mortgaged-backed and asset-backed securities, which comprised 35.9% of total invested assets, including pending securities transactions, fixed maturity investments, short term investments, preferred equity, cash and cash equivalents and other investments. The Company, along with its investment managers, monitors the nature and type of assets underlying these types of securities. At June 30, 2009, the Companys portfolio held no sub-prime mortgage exposure, and the Companys Alt-A exposure represented 1.7% of the Companys fixed income investments. Of the Companys Alt-A exposure, 84.0% are fixed rate securities. In the second quarter of 2009, the Companys investment portfolio experienced rating downgrades during the quarter on securities with fair values of $207.0 million and amortized costs of $239.8 million as of June 30, 2009, primarily within its non-agency residential mortgage-backed securities holdings.
The Companys investment portfolio is managed to preserve capital and liquidity while generating income and growth in book value. The portfolio is adjusted and rebalanced to meet the Companys objectives, resulting in the realization of net gains or losses which are dependent on movements in financial markets and interest rates and the timing of investment sales. Proceeds from sales of investments classified as available for sale during the three months ended June 30, 2009 were $748.6 million compared to $372.7 million during the three months ended June 30, 2008. Net realized investment (losses) gains on investment sales for the three months ended June 30, 2009 and 2008 were as follows:
The $6.6 million of OTTI recognized by the Company in the second quarter of 2009 relating to specific credit events occurred primarily due to reductions in expected recovery values on structured securities (mortgage and asset-backed) during the period, along with certain credit related downgrades in corporate securities. The $31.2 million of OTTI recognized by the Company in the second quarter of 2009 as relating to all other factors resulted primarily from market and sector related factors, including limited liquidity and credit spreads.
Read the The complete ReportENH is in the portfolios of Richard Perry of Perry Capital, Richard Snow of Snow Capital Management, L.P., Richard Snow of Snow Capital Management, L.P., David Dreman of Dreman Value Management.
