A.M. Best Affirms Ratings of Endurance Specialty Insurance Ltd and Debt Ratings of Endurance Specialty Holdings, Ltd.OLDWICK, N.J. -- A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A (Excellent) and the issuer credit ratings of "a" of Endurance Specialty Insurance Ltd. (Endurance) (Hamilton, Bermuda) and its operating affiliates. Concurrently, A.M. Best has assigned an issuer credit rating of "bbb" to Endurance Specialty Holdings, Ltd. (NYSE NYSE See: New York Stock Exchange :ENH ENH Enhancement ENH Evanston Northwestern Healthcare (Illinois) ENH Evanston-Northwestern Hospital ) (Hamilton, Bermuda) and has affirmed the senior debt rating of "bbb" on $250 million 7.0% unsecured notes due 2034, as well as all debt securities filed under a $500 million universal shelf registration. All ratings have a stable outlook. The ratings reflect Endurance's excellent operating results, which stem from the development of a strong broker distribution network, successful implementation of underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and risk management controls and selective acquisitions. The geographically diversified book of business, which includes both short- and long-tail lines, is fully supported by the company's excellent level of risk-based capitalization. Lines of business include property per risk, property catastrophe reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. , casualty treaty reinsurance, casualty individual risks and specialty lines. Endurance produced a combined ratio of 86% in 2004 despite recording approximately $170 million in gross catastrophe losses, while shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. grew to $1.9 billion at December 31, 2004. Since inception, the company has used selective acquisitions to expand its existing book of business. In prior years, Endurance acquired the renewal rights to LaSalle Re Limited's property catastrophe business and selected portions of The Hartford Fire Insurance Company's reinsurance business. In 2004, Endurance acquired the renewal right to XL Re Ltd's surety book and hired Converium Reinsurance (NA) Inc.'s agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. underwriting team. Each acquisition has been complementary to Endurance's profile and did not include the addition of any historical liabilities. Partially offsetting these strengths is the company's short operating history in relation to its casualty business. Due to the long-tail nature of these lines, the consistency and sustainability of Endurance's casualty segment's operating performance has yet to be proven. Furthermore, market pressure on pricing could dampen expected returns Expected Return The average of a probability distribution of possible returns, calculated by using the following formula: along with exposure to low frequency, high severity property catastrophe losses. Despite these concerns, A.M. Best expects Endurance to manage its capital base very conservatively within acceptable ranges to support its current ratings and meet the more stringent capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. for a recently established Bermuda entity. The following debt rating has been affirmed: Endurance Specialty Holdings, Ltd.-- --"bbb" on $250 million 7.0% senior unsecured notes, due 2034 The following debt ratings have been affirmed under the $500 million shelf registration: Endurance Specialty Holdings, Ltd.-- --"bbb" on senior unsecured --"bbb-" on subordinated --"bb+" on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. Endurance Holdings Capital Trust I & II (guaranteed by Endurance Specialty Holdings Ltd.)-- --"bb+" on preferred securities The financial strength rating of A (Excellent) and issuer credit ratings of "a" have been affirmed for Endurance Specialty Insurance Ltd and its following operating affiliates: --Endurance Reinsurance Corporation of America --Endurance Worldwide Insurance Limited An issuer credit rating of "bbb" has been assigned to Endurance Specialty Holdings, Ltd. For Best's Debt Ratings, all other Best's Ratings Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. , an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 330 reinsurance companies, please visit http://www.ambest.com/reinsurance/. 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 http://www.ambest.com. |
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