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Bermuda reinsurer's profit up 27.6% in 2015 fourth quarter


Endurance Specialty Holdings Ltd. reported net income of $107.9 million for the fourth quarter of 2015, a 27.6% increase over the prior-year period as underwriting profitability improved.

Net premiums written for the fourth quarter of 2015 were $289.7 million, an increase of 23.8% over the prior-year quarter, the Pembroke, Bermuda-based insurer and reinsurer said Wednesday in an earnings statement.

The company's fourth-quarter results benefitted from improved underwriting profitability, primarily due to a lower loss ratio in the agricultural insurance business and light catastrophe losses in the reinsurance segment, Michael J. McGuire, the company's chief financial officer, said Thursday during a conference call with analysts.

Endurance's total combined ratio improved to 76.2% from 83.2% in the fourth quarter of 2015, and the insurance and reinsurance segment's combined ratios improved to 85.9% from 97.8% and 63.7% from 65.8%, respectively.

“Endurance delivered exceptional fourth-quarter and full-year 2015 financial results despite the backdrop of increasing global competition and an extremely challenging investment environment,” Chairman and CEO John R. Charman said during Thursday's call.

Net income for the year was $355.1 million, an increase of 1.9% from 2014, the statement said.

For the year, net premiums written were $1.95 billion, a 0.8% increase over 2014. Revenue for the reinsurer increased 4.7% to $2.10 billion.

Meanwhile, the total combined ratio for the year improved to 82.9% from 86.0%.

Strong underwriting results “clearly show the benefits of the investments and improvements we've made at Endurance over the last three years,” including the acquisition of Montpelier Re Holdings Ltd., which provides “great strategic and financial benefits,” such as “a good size and scalable Lloyd's syndicate, a high quality enforced catastrophe portfolio and an established third party capital platform,” Mr. Charman said in the earnings call.

Endurance announced the deal in March and its completion in July.

While net income generated included $8.1 million of expenses related to the acquisition and integration of Montpelier, “we expect to recoup these expenses in full through annual expense synergies starting this year,” said Mr. McGuire.