A.M. Best Affirms Rating of Endurance Specialty Insurance Ltd and Its Affiliates.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--May 6, 2004

A.M. Best Co. has affirmed the financial strength rating of A (Excellent) of Endurance Specialty Insurance Ltd (Endurance) and its affiliated companies. (See list below.) Endurance is the primary operating company of Endurance Specialty Holdings Ltd (NYSE: ENH) (both of Hamilton, Bermuda). The outlook for all ratings is stable.

The rating reflects Endurance's superior risk-based capitalization, excellent operating performance, highly experienced management team and strong broker relationships. Since commencing operations, Endurance has established a diversified book of business, both geographically and by line of business, which focuses on providing reinsurance and direct insurance coverage for short and long-tail lines, principally property per risk, property catastrophe, casualty, aviation, healthcare and professional liability. Business is conducted almost exclusively through reinsurance and insurance brokers throughout the world.

Since its inception, Endurance has successfully expanded its operating platform through the selective purchasing of complementary books of business. In 2002, the company acquired the renewal rights to LaSalle Re's property catastrophe business, while in 2003 portions of Hartford Re's book of business were acquired. Neither acquisition included historic liabilities. In addition, Endurance expanded operations through the formation of affiliated companies in the United States and United Kingdom. Each affiliate's capital is protected by combinations of quota share, stop loss and excess of loss agreements with Endurance.

Original capitalization of $1.2 billion in 2001 has grown to $1.8 billion at March 31, 2004. This growth is primarily attributable to earnings but also includes approximately $221 million of proceeds from a successful initial public offering in February 2003. In 2003, Endurance achieved a 17% return on equity (ROE). This level of return was attributable to favorable market rates, light catastrophes and an unencumbered balance sheet, as well as a focused underwriting strategy and risk management controls.

Partially offsetting these strengths is potential market pressure on pricing, which could dampen expected returns and exposure to low frequency, high severity property catastrophe losses. A.M. Best will continue to closely monitor Endurance's operations and performance.

The financial strength rating of A (Excellent) has been affirmed with a stable outlook for the following companies of Endurance Specialty Holdings Ltd:

-- Endurance Specialty Insurance Ltd

-- Endurance Reinsurance Corporation of America

-- Endurance Worldwide Insurance Ltd.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.