Endurance Specialty Holdings Ltd
Endurance Specialty — Investor Presentation (February 2016)
29 slides from Endurance Specialty's investor presentation, Feb 9, 2016
Slide 1: Endurance Specialty Holdings Investor Presentation December 31, 2015
Endurance Specialty Holdings Investor Presentation December 31, 2015 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 $5.6 billion of total capital and shareholders’ equity available to the Company of $4.9 billion as of December 31, 2015. Conservative, short-duration, AA- rated investment portfolio Prudent reserves that have historically developed favorably since our inception Div
Slide 4: We Have Transformed Our Specialty Insurance and Reinsurance Businesses
2015 Gross premiums written of $3.3 billion have grown 30% 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 reinsurance portfolios while expan
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 The acquisition was immediately accretive to ROE, EPS and book value per share The integration of Montpelier was immediate and completed within weeks of closing the transaction. All employees are externally focused and able to t
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 years through hiring of
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 Expanded specialty focus throu
Slide 8: Portfolio Diversified by Product, Distribution Source and Geography
Portfolio Diversified by Product, Distribution Source and Geography The transformation of Endurance has expanded product and geographic diversification 2015 Gross Premiums Written: $3.3 Billion Reinsurance (37%) Insurance (63%) Casualty Professional Liability Property Per Risk Small Business Surety
Slide 9: Endurance's Financial Results: Diluted Book Value Per Share Growth
Endurance’s Financial Results Diluted book value per common share has grown strongly Growth in Diluted Book Value Per Common Share ($) From December 31, 2005 – December 31, 2015 2008 – Credit crisis and related impact of marking assets to market 2009 – Post crisis asset recovery 2011 – High frequenc
Slide 10: 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 11: Conservative Investment Portfolio
Fixed maturity portfolio duration is 2.74 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 42.4% of investments are cash/short term or US backed Minimal exposure to
Slide 12: 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 mid 2013 as Chairman and CEO, Endurance has meaningfully expanded its global specialty insurance and reinsurance capabilities Endurance has rebalanced its
Slide 13: Endurance
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Slide 14: Overview of ARMtech
—_S— Endurance Overview of ARMtech
Slide 15: Multi Peril Crop Insurance (MPCI) Overview
Multi Peril Crop Insurance (MPCI) is an insurance product regulated by the USDA that provides farmers with yield or revenue protection Offered by 18 licensed companies Pricing is set by the government and agent compensation limits are also imposed - no pricing cycle exists Reduced downside risks due
Slide 16: 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 17: Federal Reinsurance Program Reduces Loss Ratio Volatility
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 18: 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 19: Geographic Diversification of Crop Insurance Business
2.3% 0.2% 0.5% 1.1% 1.1% 0.4% 6.0% 4.1% 5.4% 2.0% 3.3% 20.4% 1.7% 1.3% 0.8% 3.5% 8.9% 6.6% 0.7% 1.9% 0.8% 3.9% 3.3% 1.3% 2.5% 3.5% 1.4% 4.0% 3.4% 1.8% 0.7% Geographic Diversification of Crop Insurance Business ARMtech maintains a geographically diversified portfolio of risk ARMtech’s 2015 Estimated
Slide 20: Diversification of Crops Within ARMtech's Portfolio
Diversification of Crops Within ARMtech’s Portfolio Underwritten risks diversified by geography and commodity type ARMtech’s 2015 Estimated Crop Year MPCI Net Written Premiums Iowa – 6.0% Nebraska – 3.8% Minnesota – 2.7% Indiana – 2.4% South Dakota – 2.2% Missouri – 1.7% Texas – 1.7% North Dakota –
Slide 21: 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 45.0% of MPCI Premiums Ceded to U.S. Federal Government Assigned Risk Fund “Higher Risk Policies” Comm
Slide 22: ARMtech Has Grown Market Share Over Time
ARMtech Has Grown Market Share Over Time Superior service and technology have driven growth in stable market Est. MPCI Certified Companies (Owners) 2015 2014 2013 2012 2011 2010 2009 2008 2007 Rain and Hail (ACE) (1) 19.8% 19.9% 20.8% 21.3% 21.8% 22.6% 24.3% 24.1% 25.0% Rural Community Insurance Com
Slide 23: Other Miscellaneous Information
Other Miscellaneous Information
Slide 24: Probable Maximum Loss by Zone and Peril
Probable Maximum Loss by Zone and Peril Largest 1 in 100 year PML as of January 1, 2016 is equal to 11.4% of Shareholders’ Equity as of December 31, 2015 The net loss estimates by zone above represent estimated losses related to our property, catastrophe and specialty lines of business, based upon o
Slide 25: Fourth Quarter 2015 Highlights
Diluted book value per common share, adjusted for dividends, grew 1.2% during fourth quarter 2015 Net income attributable to common shareholders of $91.4 million which included acquisition and integration expenses related to the Montpelier acquisition of $8.1 million Improved loss ratios in agricult
Slide 26: Full Year 2015 Highlights
Book value per common share, adjusted for dividends, grew 9.0% Net income attributable to common shareholders of $311.3 million which included acquisition and integration expenses related to the Montpelier acquisition of $76.6 million Improved loss ratios in agriculture insurance with relatively sta
Slide 27: Financial Results for Fourth Quarter 2015 and 2014
Financial Results for Fourth Quarter 2015 and 2014 $MM (except per share data and %) Dec. 31, 2015 Dec. 31, 2014 $ Change % Change Net premiums written 289.7 234.0 55.8 23.8% Net premiums earned 573.5 471.3 102.2 21.7% Net investment income 23.2 25.9 (2.7) -10.5% Net underwriting income 144.2 89.6 5
Slide 28: Gross Written Premiums for Fourth Quarter and Full Year 2015 and 2014
Gross Written Premiums for Fourth Quarter and Full Year 2015 and 2014 In $MM 4th Qtr. 2015 4th Qtr. 2014 $ Change % Change Full Year 2015 Full Year 2014 $ Change % Change Casualty and other specialty 139.0 104.5 34.5 33.0% 514.2 396.1 118.1 29.8% Agriculture 55.4 69.6 -14.2 -20.4% 840.4 866.0 -25.6
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 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 29,568 Net prems written 765 1,598 1,697 1,
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