Endurance Specialty Holdings Ltd
Endurance Specialty — Investor Presentation (August 2016)
29 slides from Endurance Specialty's investor presentation, Aug 9, 2016
Slide 1: Endurance Specialty Holdings Investor Presentation June 30, 2016
Endurance Specialty Holdings Investor Presentation June 30, 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements and Regulation G Disclaimer
Forward-Looking Statements and Regulation G Disclaimer Safe Harbor for Forward-Looking Statements Some of the statements in this presentation may include, and Endurance may make related oral forward-looking statements which reflect our current views with respect to future events and financial perfor
Slide 3: Endurance Has Strong Foundation to Build on
“A” ratings from A.M. Best and S&P $4.8 billion of shareholders’ equity available to the Company of $4.8 billion ($5.5 billion of total capital) as of June 30, 2016. Conservative, short-duration, AA- rated investment portfolio Prudent reserves that have historically developed favorably since our inc
Slide 4: We Have Transformed Our Specialty Insurance and Reinsurance Businesses
Gross premiums written of $3.9 billion for the 12 months ended June 30, 2016, have grown 53% from year end 2012 while accident year net loss ratios (ex catastrophes) have improved We Have Transformed Our Specialty Insurance and Reinsurance Businesses Starting in 2013 we rebalanced our insurance and
Slide 5: We Completed the Acquisition of Montpelier in the Third Quarter of 2015
We Completed the Acquisition of Montpelier in the Third Quarter of 2015 Swift integration and strong results The integration of Montpelier was immediate and completed within weeks of closing the transaction. All employees are externally focused and able to take advantage of our enhanced and more rel
Slide 6: Insurance Strategic Direction – Scale, Balance and Diversification
Insurance Strategic Direction – Scale, Balance and Diversification Expanded underwriting talent, refocused underwriting, rebalanced portfolio and improved positioning and relevance in the global market Insurance Gross Premiums Written Improved market presence over the last 3 and a half years through
Slide 7: Reinsurance Strategic Direction – Portfolio Enhancement
Reinsurance Strategic Direction – Portfolio Enhancement Enhanced profitability by recruiting top flight underwriting talent, developing strategic partnerships with key clients and brokers, and improving underwriting and risk selection Reinsurance Gross Premiums Written Improved balance and profit po
Slide 8: Achieving General and Administrative Expense Efficiency
Achieving General and Administrative Expense Efficiency Improved scalability, expense synergies and ceding commissions improving margins General and Administrative Expenses While we have strategically expanded our global underwriting capability, our increased scalability and efficiency are improving
Slide 9: Portfolio Diversified by Product, Distribution Source and Geography
Portfolio Diversified by Product, Distribution Source and Geography The transformation of Endurance has improved portfolio balance and diversification 2Q16* Gross Premiums Written: $3.9 Billion Reinsurance (41%) Insurance (59%) Americas Property Catastrophe Asia Property Catastrophe Europe Property
Slide 10: Endurance's Financial Results
Endurance’s Financial Results Diluted book value per common share has grown strongly Growth in Diluted Book Value Per Common Share ($) From June 30, 2006 – June 30, 2016
Slide 11: Excellent Financial Strength and Risk Based Capital Position
Excellent Financial Strength and Risk Based Capital Position Strong flexibility to pursue value enhancing growth initiatives Endurance has significantly expanded its risk based capital position through strong results, prudent catastrophe risk management, judicious use of reinsurance and the acquisit
Slide 12: Conservatively Positioned Investment Portfolio
Fixed maturity portfolio duration is 2.57 years in order to balance investment yield and interest rate risk Investment quality (AA- average) has remained high as the portfolio is conservatively managed in a challenging economy 40.6% of investments are cash/short term or US backed Minimal exposure to
Slide 13: Endurance has undergone a fundamental transformation
Endurance has undergone a fundamental transformation to improve profitability and enhance market relevance Since John Charman joined Endurance in 2nd Quarter 2013 as Chairman and CEO, Endurance has meaningfully expanded its global specialty insurance and reinsurance capabilities Endurance has rebala
Slide 14: Endurance
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Slide 15: Overview of ARMtech
—_S— Endurance Overview of ARMtech
Slide 16: Multi Peril Crop Insurance (MPCI) and ARMtech
Multi Peril Crop Insurance (MPCI) is an insurance product regulated by the USDA that provides farmers with yield or revenue protection Offered by 17 licensed companies Pricing is set by the government and agent compensation limits are also imposed - no pricing cycle exists Reduced downside risks due
Slide 17: ARMtech is a Leader in Crop Insurance
ARMtech is a Leader in Crop Insurance ARMtech’s focus on technology and service has allowed it to steadily grow its well diversified business Written Premiums and Policy Counts by Crop Year ARMtech has demonstrated its ability to grow market share and premiums over time through its leading edge tech
Slide 18: Stable Results in Volatile Times
While individual states can produce large loss ratios, the U.S. Federal reinsurance program has historically reduced loss ratio volatility. ARMtech’s business has historically produced stable profits over time after reflecting the reinsurance terms set out in the current standard crop reinsurance ag
Slide 19: Overview of ARMtech: Seasonality of MPCI Business
Overview of ARMtech ARMtech’s recognition of premiums and earnings are influenced by growing seasons Seasonality of MPCI Business First Quarter Third Quarter Second Quarter Recognition of annual written premiums 60% - 65% Spring crops 20% - 25% Spring crop acreage report adjustments Winter crops 10%
Slide 20: Geographic Diversification of Crop Insurance Business
1.4% 0.2% 0.4% 0.9% 1.0% 0.6% 6.0% 5.4% 4.2% 2.1% 3.0% 26.1% 2.1% 1.3% 0.7% 3.0% 6.8% 5.6% 0.6% 1.4% 1.0% 3.7% 3.7% 1.1% 2.5% 3.3% 1.4% 4.1% 3.0% 1.6% 0.6% Geographic Diversification of Crop Insurance Business ARMtech maintains a geographically diversified portfolio of risk ARMtech’s 2016 Estimated
Slide 21: Diversification of Crops Within ARMtech's Portfolio
Diversification of Crops Within ARMtech’s Portfolio Underwritten risks diversified by geography and commodity type ARMtech’s 2016 Estimated Crop Year MPCI Net Written Premiums Iowa – 4.7% South Dakota – 3.1% Nebraska – 3.0% Texas – 2.7% Minnesota – 2.5% Indiana – 2.4% North Dakota – 1.8% Missouri –
Slide 22: Agriculture Insurance Contains Four Layers of Risk Mitigation
Agriculture Insurance Contains Four Layers of Risk Mitigation Farmers retention, ceding premiums to the U.S. Federal Government, limitations on losses and gains and purchase of stop loss protection 44.1% of MPCI Premiums Ceded to U.S. Federal Government Assigned Risk Fund “Higher Risk Policies” Comm
Slide 23: ARMtech Has Grown Market Share Over Time
ARMtech Has Grown Market Share Over Time Superior service and technology have driven growth in stable market % Change in Market Share MPCI Certified Companies (Owners) 2015 2014 2013 2012 2011 2010 2009 2008 2007 2007 - 2015 Rain and Hail (ACE) (1) 19.8% 19.9% 20.8% 21.3% 21.8% 22.6% 24.3% 24.1% 25.
Slide 24: Other Miscellaneous Information
Other Miscellaneous Information
Slide 25: Probable Maximum Loss by Zone and Peril
Probable Maximum Loss by Zone and Peril Largest 1 in 100 year PML as of July 1, 2016 is equal to 10.6% of Shareholders’ Equity available to the Company as of June 30, 2016 Estimated Occurrence Net Loss as of July 1, 2016 July 1, 2015 July 1, 2014 Zone Peril 10 Year Return Period 25 Year Return Perio
Slide 26: Second Quarter 2016 Highlights
Diluted book value per common share, adjusted for dividends, grew 2.3% during second quarter 2016 and 5.3% for the first six months of 2016 Second quarter 2016 net income attributable to common shareholders of $76.6 million Combined ratio of 92.6% Net negative financial impact from catastrophe losse
Slide 27: Financial Results for Second Quarter and Year to Date 2016 and 2015
Financial Results for Second Quarter and Year to Date 2016 and 2015 $MM (except per share data and %) 2nd Qtr. 2016 2nd Qtr. 2015 $ Change % Change 2nd Qtr. YTD 2016 2nd Qtr. YTD 2015 $ Change % Change Gross premiums written 1,136.9 861.2 275.7 32.0% 2,748.6 2,162.6 586.0 27.1% Net premiums written
Slide 28: Gross Written Premiums for Second Quarter 2016 and 2015
Gross Written Premiums for Second Quarter 2016 and 2015 In $MM 2nd Qtr. 2016 2nd Qtr. 2015 $ Change % Change 2nd Qtr. YTD 2016 2nd Qtr. YTD 2015 $ Change % Change Casualty and other specialty 178.1 146.1 32.0 21.9% 316.3 246.7 69.6 28.2% Agriculture 66.9 112.0 -45.1 -40.3% 563.1 628.9 -65.8 -10.5% P
Slide 29: Financial Overview: Inception to Date Financial Performance
Financial Overview: Inception to Date Financial Performance In $MM 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2Q16 YTD Inception to date Gross prems written 799 1,602 1,711 1,669 1,790 1,781 2,246 2,021 2,053 2,467 2,549 2,665 2,894 3,321 2,749 32,317 Net prems written 765
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