A.M. Best Upgrades Rating of Endurance Specialty Insurance Ltd.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--May 28, 2003

A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from A- (Excellent) of Endurance Specialty Insurance Ltd. (Endurance) (NYSE: ENH) (Bermuda) and its operating affiliates.

The rating outlook is stable.

This action reflects the company's superior operating results which stem from the development of a strong broker distribution network, selective acquisitions and the successful implementation of underwriting and risk management controls. Additionally, Endurance maintains excellent capitalization with $1.5 billion of shareholders equity at March 31, 2003, along with a highly experienced and talented management team.

The company was originally formed in late 2001 in response to the market dislocation in the global insurance and reinsurance markets following the tragic events of September 11 through a private placement equity offering led by Aon, Texas Pacific Group, Thomas H. Lee Company, Perry Capital and Capital Z. During its first year of operation, Endurance's book of business was split evenly between short-tail and long-tail business. The entire book produced a combined ratio of 86% in 2002, benefiting from higher market rates, light catastrophes and an unencumbered balance sheet. Combined results also included conservative reserving methodologies for the company's long-tail casualty lines of business.

Endurance also acquired the renewal rights to LaSalle Re's property catastrophe business and recently acquired the renewal rights to selected portions of Hartford Re's book of business. Each acquisition was complementary to Endurance's existing book of business and did not include the addition of any historical liabilities.

Endurance has established a diversified book of business, both geographically and by line. Its operating strategy focuses on broker-sourced short-tail and long-tail lines, including property per risk, property/catastrophe reinsurance, casualty treaty reinsurance, casualty individual risk and specialty lines.

In 2002, Endurance expanded its operating platform through the formation of affiliated companies in the United Kingdom and the United States. Each affliliate's capital is protected through either quota share, stop loss or excess of loss reinsurance agreements with Endurance. Endurance successfully completed a public offering in February 2003, issuing 9.6 million shares and raising approximately $221 million in additional capital.

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. Endurance also faces the challenge of integrating the Hartford Re book of business along with some degree of uncertainty in regards to the future retention of this book of business. A.M. Best will continue to closely monitor Endurance's operations and performance.

The financial strength rating has been upgraded to A (Excellent) for Endurance Specialty Insurance Ltd. (Bermuda) and its following affiliates:

-- Endurance Reinsurance Corporation of America

-- Endurance Worldwide Insurance Limited

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.