Servizi
Endurance Reports Fourth Quarter 2016 Financial Results
PEMBROKE, Bermuda - February 24, 2017 - Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net income available to common shareholders of $20.1 million and $0.30 per diluted common share for the fourth quarter of 2016 versus net income of $91.4 million and $1.36 per diluted common share for the fourth quarter of 2015.
For the year ended December 31, 2016, Endurance reported net income available to common shareholders of $333.2 million and $4.93 per diluted common share versus net income of $311.3 million and $5.73 per diluted common share for the year ended December 31, 2015. Book value per diluted share was $68.66 at December 31, 2016, up 4.9% from December 31, 2015.
Operating highlights for the quarter ended December 31, 2016 were as follows:
Operating highlights for the year ended December 31, 2016:
Operating highlights for Endurance's Insurance segment for the quarter ended December 31, 2016:
Operating highlights for Endurance's Insurance segment for the year ended December 31, 2016:
Operating highlights for Endurance's Reinsurance segment for the quarter ended December 31, 2016:
Operating highlights for Endurance's Reinsurance segment for the year ended December 31, 2016:
Endurance's net investment income for the quarter and year ended December 31, 2016 was $59.2 million and $176.6 million, an increase of $36.0 million and $62.8 million, respectively, compared to the same periods in 2015. The total investment return of Endurance's cash and investment portfolio was (0.57)% and 2.56% for the quarter and year ended December 31, 2016, respectively, compared to (0.29)% and 0.31% for the quarter and year ended December 31, 2015, respectively.
Net investment income benefited from increases in investment income generated from Endurance's trading and available for sale investments for the quarter and year ended December 31, 2016 compared to the same periods in 2015 due to an increase in invested assets. During the quarter and year ended December 31, 2016, Endurance's net investment income on its alternative investment funds and high yield loan funds, which are included in other investments, included gains of $12.6 million and $12.4 million, as compared to losses of $11.8 million and $13.6 million during the same periods in 2015. The ending book yield on Endurance's fixed maturity investments at December 31, 2016 was 2.38%, up from 2.12% at December 31, 2015.
At December 31, 2016, Endurance's fixed maturity and short term investments, which comprises 86.1% of Endurance's investment portfolio, had an average credit quality of AA and a duration of 3.04 years. Endurance's available for sale investment portfolio was in a net unrealized gain position of $61.5 million at December 31, 2016, an increase of $74.1 million from December 31, 2015. Endurance recorded in net income, net realized and unrealized investment losses, net of impairments, of $46.1 million and $23.2 million during the quarter and year ended December 31, 2016, compared to losses of $22.8 million and gains of $8.9 million during the quarter and year ended December 31, 2015.
Endurance ended the fourth quarter of 2016 with cash and invested assets of $8.8 billion, which represents a 0.9% decrease from December 31, 2015. Net operating cash inflow was $415.5 million for the year ended December 31, 2016 versus an inflow of $245.5 million for the same period in 2015.
At December 31, 2016, Endurance's shareholders' equity was $5.14 billion or $68.66 per diluted common share versus $5.12 billion or $65.48 per diluted common share at December 31, 2015. For the quarter and year ended December 31, 2016, Endurance declared and paid common dividends of $0.38 and $1.52 per share, respectively.
Adjusted operating income, adjusted operating return on average common equity, adjusted operating income per diluted common share, adjusted 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.
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/energy and aviation 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 .
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. 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, 2015 and our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2016 and September 30, 2016.
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 reports on Form 10-K and Form 10-Q and other documents of Endurance on file with the Securities and Exchange Commission. 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, Endurance undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
The contents of any website referenced in this press release are not incorporated by reference herein.
Contact:
Investor Relations
Phone: +1 441 278 0988
Email: investorrelations@endurance.bm
(In thousands of United States dollars, except share and per share amounts)
Note: All financial information contained herein is unaudited, except the balance sheet data for the year ended December 31, 2015, which was derived from Endurance's audited financial statements.
Excludes the $230 million (2015 - $460.0 million) liquidation value of the preferred shares.
(In thousands of United States dollars, except share and per share amounts)
(in thousands of United States dollars, except ratios)
General and administrative expense ratio includes general and administrative expenses and corporate expenses.
(in thousands of United States dollars, except ratios)
General and administrative expense ratio includes general and administrative expenses and corporate expenses.
(in thousands of United States dollars, except ratios)
General and administrative expense ratio includes general and administrative expenses and corporate expenses.
(in thousands of United States dollars, except ratios)
General and administrative expense ratio includes general and administrative expenses and corporate expenses.
(in thousands of United States dollars)
The following tables show Endurance's gross and net premiums written for the quarter ended December 31, 2016 and 2015:
(in thousands of United States dollars)
The following tables show Endurance's gross and net premiums written for the year ended December 31, 2016 and 2015:
In presenting the Company's results, management has included and discussed certain non-GAAP measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.
Adjusted operating income is an internal performance measure used by the Company in the management of its operations. Adjusted operating income represents operational results excluding, as applicable, net realized and unrealized (losses) gains, net impairment losses recognized in earnings and net foreign exchange (gains) losses because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. The Company believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations. In addition to presenting net income determined in accordance with GAAP, the Company believes that showing adjusted operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company's results of operations in a manner similar to to that used by management to analyze the Company's underlying business performance. Adjusted operating income should not be viewed as a substitute for GAAP net income.
Adjusted operating income per diluted common share are internal performance measures used by Endurance in the management of its operations. Adjusted operating income allocated to common shareholders (which excludes unvested restricted shares outstanding which are considered participating) per diluted common share represents adjusted operating income divided by weighted average dilutive common shares, which has been calculated in accordance with the two-class method under U.S. GAAP. Endurance believes that showing adjusted operating income per dilutive common share enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Endurance's results of operations in a manner similar to that used by management to analyze the Company's underlying business performance. Adjusted operating income per dilutive common share should not be viewed as substitutes for GAAP net income per dilutive common share.
Return on Average Equity (ROAE) is comprised using the average common equity calculated as the arithmetic average of the beginning and ending common equity balances by quarter for stated periods. Return on Beginning Equity (ROBE) is comprised using the beginning common equity for stated periods. The Company presents various measures of Return on Equity that are commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.
The following is a reconciliation of Endurance's net income, net income per basic or diluted common share, net income allocated to common shareholders under the two-class method and annualized return on average common equity to adjusted operating income, adjusted operating income per basic or diluted common share, adjusted operating income allocated to common shareholders under the two-class method and annualized adjusted operating return on average common equity (all non-GAAP measures) for the three and twelve months ended December 31, 2016 and 2015:
Average common equity is calculated as the quarterly weighted average of the beginning and ending common equity balances for the stated period, which excludes the $230 million (December 31, 2015 - $460 million) liquidation value of the preferred shares.
Represents diluted income per share calculated under the two-class method which was the lower of the treasury stock method and the two-class method.
Net negative financial impact includes the sum of net losses and loss expenses, reinstatement premiums assumed and ceded and non-controlling interests related to specific catastrophe events occurring in the current periods. The Company believes that showing the net negative financial impact of the catastrophe related events enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company's results of operations in a manner similar to that used by management to analyze the Company's underlying business performance.
The following is a reconciliation of Endurance's net losses and loss expenses, net reinstatement premiums and non-controlling interest related to catastrophe events occurring in the three and twelve months ended December 31, 2016 to the net negative financial impact (non-GAAP measure) of these events on net income available to the Company for the three and twelve months ended December 31, 2016:
Total investment return is calculated by dividing net investment income, net realized and unrealized (losses) gains, net impairment losses recognized in earnings, and net decrease in unrealized gains (losses) included in other comprehensive income after deferred tax offsets by average invested assets at fair value. The Company utilizes and presents the total investment return in order to better disclose the performance of the Company's investments and to show the components of the Company's ROE.
The following is a reconciliation of Endurance's net investment income, net realized and unrealized (losses) gains, net impairment losses recognized in earnings and net decrease in unrealized gains (losses) included in other comprehensive income before deferred tax offsets to total investment income and total investment return (non-GAAP measures) for the three and twelve months ended December 31, 2016 and 2015:
Average invested assets and cash at fair value includes total trading, available for sale and other investments, cash and cash equivalents, net receivable on sales of investments and net payable on purchase of investments.
# # #
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti