ENDURANCE SPECIALTY HOLDINGS LTD - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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8-K - FORM 8-K - ENDURANCE SPECIALTY HOLDINGS LTD	c23730e8vk.htm
EX-99.1 - EXHIBIT 99.1 - ENDURANCE SPECIALTY HOLDINGS LTD	c23730exv99w1.htm

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

THIRD QUARTER 2011

Endurance Specialty Holdings Ltd.
Wellesley House, 90 Pitts Bay Rd.
Pembroke HM 08, Bermuda

Investor Relations
Phone: (441) 278-0988
Fax: (441) 278-0493
email: investorrelations@endurance.bm

This report is for information purposes only. It should be read in conjunction with other documents filed by Endurance Specialty Holdings Ltd. pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934.

Financial Supplement Table of Contents


	Page
i. Basis of Presentation		i
I. Consolidated Financial Highlights		1
II. Consolidated Financial Statements
a. Consolidated Statements of (Loss) Income — Quarterly		2
b. Consolidated Statements of (Loss) Income — YTD		3
c. Consolidated Balance Sheets		4
III. Other Financial Information
a. Probable Maximum Loss by Zone and Peril		5
b. Segment Distribution		6
c. Consolidated Segment Data		7
d. Return on Equity Analysis		19
e. ROE Component Analysis — Annualized Premium and Investment Leverage		20
f. Investment Portfolio Information		21
g. Structured Securities Detail		22
h. Largest Twenty-Five Corporate Holdings		23
IV. Loss Reserve Analysis
a. Activity in Reserve for Losses and Loss Expenses		24
b. Prior Year Reserve Development by Segment		25
c. Prior Year Reserve Development by Development Tail		26
d. Analysis of Unpaid Losses and Loss Expenses		27
V. Shareholder Return Analysis
a. Shareholder Return Analysis		28
b. Weighted Average Dilutive Shares Outstanding		29
c. (Losses) Earnings per Share — Two Class Method		30
d. Operating (Loss) Income Reconciliation — Two Class Method		31
e. Dilutive Shares Sensitivity Analysis		32
f. Book Value Per Share Analysis		33

VI. Regulation G		34

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

Some of the statements in this financial supplement may include forward-looking statements which reflect our current views with respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters. Statements which include the words “should,” “expect,” “intend,” “plan,” “believe,” “project,” “anticipate,” “seek,” “will,” and similar statements of a future or forward-looking nature identify forward-looking statements in this financial supplement for purposes of the U.S. federal securities laws or otherwise. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or may be important factors that could cause actual results to differ from those indicated in the forward-looking statements. These factors include, but are not limited to, the effects of competitors’ pricing policies, greater frequency or severity of claims and loss activity, changes in market conditions in the agriculture insurance industry, termination of or changes in the terms of the U.S. multiple peril crop insurance program, a decreased demand for property and casualty insurance or reinsurance, changes in the availability, cost or quality of reinsurance or retrocessional coverage, our inability to renew business previously underwritten or acquired, our inability to maintain our applicable financial strength ratings, our inability to effectively integrate acquired operations, uncertainties in our reserving process, changes to our tax status, changes in insurance regulations, reduced acceptance of our existing or new products and services, a loss of business from and credit risk related to our broker counterparties, assessments for high risk or otherwise uninsured individuals, possible terrorism or the outbreak of war, a loss of key personnel, political conditions, changes in insurance regulation, changes in accounting policies, our investment performance, the valuation of our invested assets, a breach of our investment guidelines, the unavailability of capital in the future, developments in the world’s financial and capital markets and our access to such markets, government intervention in the insurance and reinsurance industry, illiquidity in the credit markets, changes in general economic conditions and other factors described in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010 and in our most recent Quarterly Report on Form 10-Q.

Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation publicly to update or revise any forward looking statement, whether as a result of new information, future developments or otherwise.

ENDURANCE SPECIALTY HOLDINGS LTD.
BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

•		All financial information contained herein is unaudited, except the balance sheet and/or income statement data for the years ended December 31, 2010 and 2009 which was derived from the Company’s audited financial statements.

•		Unless otherwise noted, all data is in thousands, except for per share, percentage and ratio information.

•		As used in this financial supplement, “common shares” refers to our ordinary shares and class A and class B shares, collectively.

•		Endurance Specialty Holdings Ltd., along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of claims and claims adjustment expense to earned premiums. The acquisition expense ratio is the ratio of underwriting expenses (commissions, taxes, licenses and fees, as well as other underwriting expenses) to earned premiums. The general and administrative expense ratio is the ratio of general and administrative expenses to earned premiums. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.

•		NM — Not meaningful.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL HIGHLIGHTS


	QUARTER ENDED						NINE MONTHS ENDED						Previous			Previous
	SEPTEMBER 30,						SEPTEMBER 30,						Quarter			Year to Date
	2011			2010			2011			2010			Change			Change
HIGHLIGHTS
Net (loss) income	$	(20,018	)	$	139,128		$	(66,358	)	$	253,510			(114.4	)%		(126.2	)%
Net (loss) income (attributable) available to common and participating common shareholders		(28,206	)		135,253			(82,296	)		241,885			(120.9	)%		(134.0	)%
Net (loss) income allocated to common shareholders		(28,430	)		132,785			(83,036	)		237,320			(121.4	)%		(135.0	)%
Operating (loss) income [a]		(24,706	)		119,388			(96,875	)		237,276			(120.7	)%		(140.8	)%
Operating (loss) income (attributable) available to common and participating common shareholders [a]		(32,894	)		115,513			(112,813	)		225,651			(128.5	)%		(150.0	)%
Operating (loss) income allocated to common shareholders [a]		(33,118	)		113,404			(113,553	)		221,390			(129.2	)%		(151.3	)%
Operating cash flow		49,247			174,406			337,499			390,580			(71.8	)%		(13.6	)%
Net investment income		14,100			53,654			106,443			143,484			(73.7	)%		(25.8	)%
Gross premiums written		700,866			555,574			2,204,148			1,864,011			26.2	%		18.2	%
Net premiums written		551,327			451,884			1,791,957			1,605,629			22.0	%		11.6	%
Net premiums earned		561,493			469,793			1,430,904			1,291,377			19.5	%		10.8	%
Total assets		8,834,237			8,535,237			8,834,237			8,535,237			3.5	%		3.5	%
Total shareholders’ equity		2,635,950			2,919,685			2,635,950			2,919,685			(9.7	)%		(9.7	)%

PER SHARE AND SHARES DATA
Basic (losses) earnings per common share
Net (loss) income (as reported)	$	(0.71	)	$	2.64		$	(2.07	)	$	4.56			(126.9	)%		(145.4	)%
Operating (loss) income (as reported) [a]	$	(0.83	)	$	2.25		$	(2.83	)	$	4.25			(136.9	)%		(166.6	)%
Diluted (losses) earnings per common share
Net (loss) income (as reported)	$	(0.71	)	$	2.51		$	(2.07	)	$	4.33			(128.3	)%		(147.8	)%
Operating (loss) income (as reported) [a]	$	(0.83	)	$	2.14		$	(2.83	)	$	4.04			(138.8	)%		(170.0	)%
As Reported
Weighted average common shares outstanding		39,765			50,296			40,071			52,061			(20.9	)%		(23.0	)%
Weighted average common shares outstanding and dilutive potential common shares [e]		39,765			52,998			40,071			54,851			(25.0	)%		(26.9	)%
Common dividends paid per share	$	0.30		$	0.25		$	0.90		$	0.75			20.0	%		20.0	%
Book Value Per Common Share
Book value [b]	$	55.47		$	55.83		$	55.47		$	55.83			(0.6	)%		(0.6	)%
Diluted book value (treasury stock method) [b]	$	51.63		$	51.83		$	51.63		$	51.83			(0.4	)%		(0.4	)%

FINANCIAL RATIOS
Return on average common equity (ROAE), net (loss) income [c]		(1.3	)%		5.0	%		(3.4	)%		9.1	%		(6.3	)		(12.5	)
ROAE, operating (loss) income [a] [c]		(1.5	)%		4.3	%		(4.6	)%		8.5	%		(5.8	)		(13.1	)
Return on beg. common equity (ROBE), net (loss) income [d]		(1.3	)%		5.1	%		(3.1	)%		9.3	%		(6.4	)		(12.4	)
ROBE, operating (loss) income [a] [d]		(1.5	)%		4.4	%		(4.3	)%		8.7	%		(5.9	)		(13.0	)
Annualized ROAE, net (loss) income [c]		(5.1	)%		20.2	%		(4.5	)%		12.2	%		(25.3	)		(16.7	)
Annualized ROAE, operating (loss) income [a] [c]		(5.9	)%		17.2	%		(6.2	)%		11.3	%		(23.1	)		(17.5	)
Annualized ROBE, net (loss) income [d]		(5.0	)%		20.5	%		(4.1	)%		12.5	%		(25.5	)		(16.6	)
Annualized ROBE, operating (loss) income [a] [d]		(5.9	)%		17.5	%		(5.7	)%		11.6	%		(23.4	)		(17.3	)
Annualized investment yield		0.4	%		3.6	%		2.6	%		3.2	%		(3.2	)		(0.6	)
GAAP
Loss ratio		81.3	%		56.6	%		85.3	%		61.3	%		24.7			24.0
Acquisition expense ratio		12.9	%		14.4	%		14.4	%		15.3	%		(1.5	)		(0.9	)
General and administrative expense ratio		10.4	%		12.7	%		13.3	%		13.5	%		(2.3	)		(0.2	)

Combined ratio		104.6	%		83.7	%		113.0	%		90.1	%		20.9			22.9


[a]		Operating income (loss) represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses. Please see page 31 for a reconciliation to net income (loss).

[b]		For detailed calculations, please refer to page 33.

[c]		Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the $430 million liquidation value of the preferred shares (year to date beginning liquidation value $200 million).

[d]		Beginning common equity for the stated periods excludes the liquidation value of the preferred shares (quarter to date beginning liquidation value $430 million, year to date beginning liquidation value $200 million).

[e]		Warrants and options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Warrants and options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected as additional treasury method repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME — QUARTERLY


	QUARTERS ENDED
	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
UNDERWRITING REVENUES
Gross premiums written	$	700,866		$	502,924		$	1,000,358		$	189,225		$	555,574		$	469,622
Premiums ceded		(149,539	)		(61,166	)		(201,486	)		(31,110	)		(103,690	)		(72,956	)

Net premiums written	$	551,327		$	441,758		$	798,872		$	158,115		$	451,884		$	396,666
Change in unearned premiums		10,166			44,820			(416,039	)		291,621			17,909			30,088

Net premiums earned	$	561,493		$	486,578		$	382,833		$	449,736		$	469,793		$	426,754
Other underwriting (loss) income		(2,141	)		1,088			(1,069	)		410			322			5

Total underwriting revenues	$	559,352		$	487,666		$	381,764		$	450,146		$	470,115		$	426,759

UNDERWRITING EXPENSES
Losses and loss expenses	$	456,691		$	361,970		$	401,853		$	246,424		$	266,132		$	211,683
Acquisition expenses		72,249			67,887			65,618			66,133			67,443			63,026
General and administrative expenses		58,574			65,886			65,961			67,756			59,523			64,436

Total underwriting expenses	$	587,514		$	495,743		$	533,432		$	380,313		$	393,098		$	339,145

Underwriting (loss) income	$	(28,162	)	$	(8,077	)	$	(151,668	)	$	69,833		$	77,017		$	87,614

OTHER OPERATING REVENUE
Net investment income	$	14,100		$	39,842		$	52,501		$	56,874		$	53,654		$	71,559
Interest expense		(9,055	)		(9,057	)		(9,054	)		(9,053	)		(9,051	)		(7,540	)
Amortization of intangibles		(2,976	)		(3,026	)		(2,798	)		(2,696	)		(2,588	)		(2,588	)

Total other operating revenue	$	2,069		$	27,759		$	40,649		$	45,125		$	42,015		$	61,431

(LOSS) INCOME BEFORE OTHER ITEMS	$	(26,093	)	$	19,682		$	(111,019	)	$	114,958		$	119,032		$	149,045
OTHER
Net foreign exchange gains (losses)	$	4,085		$	(3,348	)	$	6,918		$	(3,476	)	$	12,565		$	2,963
Net realized and unrealized investment gains		1,033			21,532			3,775			7,314			8,973			1,396

Total other-than-temporary impairment losses		(168	)		(484	)		(1,256	)		(48	)		(1,140	)		(497	)
Portion of loss recognised in other comprehensive income		(72	)		(448	)		(391	)		(663	)		(240	)		—

Net impairment losses recognised in (losses) earnings [a]		(240	)		(932	)		(1,647	)		(711	)		(1,380	)		(497	)

Income tax benefit (expense)		1,197			4,143			14,556			(6,857	)		(62	)		935

NET (LOSS) INCOME	$	(20,018	)	$	41,077		$	(87,417	)	$	111,228		$	139,128		$	153,842
Preferred dividends		(8,188	)		(3,875	)		(3,875	)		(3,875	)		(3,875	)		(3,875	)


NET (LOSS) INCOME (ATTRIBUTABLE) AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS	$	(28,206	)	$	37,202		$	(91,292	)	$	107,353		$	135,253		$	149,967


KEY RATIOS/PER SHARE DATA

Loss ratio		81.3	%		74.4	%		105.0	%		54.8	%		56.6	%		49.6	%
Acquisition expense ratio		12.9	%		14.0	%		17.1	%		14.7	%		14.4	%		14.8	%
General and administrative expense ratio		10.4	%		13.5	%		17.2	%		15.1	%		12.7	%		15.1	%

Combined ratio		104.6	%		101.9	%		139.3	%		84.6	%		83.7	%		79.5	%


Basic (losses) earnings per common share	$	(0.71	)	$	0.92		$	(2.25	)	$	2.22		$	2.64		$	2.63
Diluted (losses) earnings per common share	$	(0.71	)	$	0.87		$	(2.25	)	$	2.09		$	2.51		$	2.51

ROAE, net (loss) income [b]		(1.3	)%		1.7	%		(3.8	)%		4.0	%		5.0	%		6.3	%


[a]		Effective April 1, 2009, the Company adopted new accounting guidance related to the recognition and presentation of other-than-temporary impairments, which required the Company to identify whether an investment was in an unrealized loss position due to credit or non-credit related factors. Only credit related impairments are recognized in earnings.

[b]		Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares of $430 million.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME — YTD


	NINE MONTHS ENDED									YEAR ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009			DEC. 31, 2010			DEC. 31, 2009
UNDERWRITING REVENUES
Gross premiums written	$	2,204,148		$	1,864,011		$	1,812,083		$	2,053,236		$	2,021,450
Premiums ceded		(412,191	)		(258,382	)		(352,475	)		(289,492	)		(415,400	)

Net premiums written	$	1,791,957		$	1,605,629		$	1,459,608		$	1,763,744		$	1,606,050
Change in unearned premiums		(361,053	)		(314,252	)		(220,359	)		(22,631	)		27,142

Net premiums earned	$	1,430,904		$	1,291,377		$	1,239,249		$	1,741,113		$	1,633,192
Other underwriting (loss) income		(2,122	)		(2,046	)		4,198			(1,636	)		3,914

Total underwriting revenues	$	1,428,782		$	1,289,331		$	1,243,447		$	1,739,477		$	1,637,106

UNDERWRITING EXPENSES
Losses and loss expenses	$	1,220,514		$	791,676		$	702,635		$	1,038,100		$	866,640
Acquisition expenses		205,754			198,095			195,150			264,228			267,971
General and administrative expenses		190,421			174,164			179,222			241,920			237,154

Total underwriting expenses	$	1,616,689		$	1,163,935		$	1,077,007		$	1,544,248		$	1,371,765

Underwriting (loss) income	$	(187,907	)	$	125,396		$	166,440		$	195,229		$	265,341

OTHER OPERATING REVENUE
Net investment income	$	106,443		$	143,484		$	224,943		$	200,358		$	284,200
Interest expense		(27,166	)		(25,709	)		(22,633	)		(34,762	)		(30,174	)
Amortization of intangibles		(8,800	)		(7,764	)		(7,764	)		(10,460	)		(10,463	)

Total other operating revenue	$	70,477		$	110,011		$	194,546		$	155,136		$	243,563

(LOSS) INCOME BEFORE OTHER ITEMS	$	(117,430	)	$	235,407		$	360,986		$	350,365		$	508,904
OTHER
Net foreign exchange gains	$	7,655		$	6,465		$	30,748		$	2,989		$	29,740
Net realized and unrealized investment gains		26,340			15,174			3,137			22,488			6,303
Total other-than-temporary impairment losses		(1,908	)		(2,647	)		(50,432	)		(2,695	)		(50,993	)
Portion of loss recognised in other comprehensive income		(911	)		(586	)		31,165			(1,249	)		30,742

Net impairment losses recognised in (losses) earnings [a]		(2,819	)		(3,233	)		(19,267	)		(3,944	)		(20,251	)
Income tax benefit (expense)		19,896			(303	)		5,675			(7,160	)		11,408

NET (LOSS) INCOME	$	(66,358	)	$	253,510		$	381,279		$	364,738		$	536,104
Preferred dividends		(15,938	)		(11,625	)		(11,625	)		(15,500	)		(15,500	)

NET (LOSS) INCOME (ATTRIBUTABLE) AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS	$	(82,296	)	$	241,885		$	369,654		$	349,238		$	520,604


KEY RATIOS/PER SHARE DATA
Loss ratio		85.3	%		61.3	%		56.7	%		59.6	%		53.1	%
Acquisition expense ratio		14.4	%		15.3	%		15.7	%		15.2	%		16.4	%
General and administrative expense ratio		13.3	%		13.5	%		14.5	%		13.9	%		14.5	%

Combined ratio		113.0	%		90.1	%		86.9	%		88.7	%		84.0	%


Basic (losses) earnings per common share	$	(2.07	)	$	4.56		$	6.46		$	6.73		$	9.14
Diluted (losses) earnings per common share	$	(2.07	)	$	4.33		$	6.15		$	6.38		$	8.69
ROAE, net (loss) income [b]		(3.4	)%		9.1	%		16.4	%		13.3	%		22.7	%


[a]		Effective April 1, 2009, the Company adopted new accounting guidance related to the recognition and presentation of other-than-temporary impairments, which required the Company to identify whether an investment was in an unrealized loss position due to credit or non-credit related factors. Only credit related impairments are recognized in earnings.

[b]		Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares (liquidation value of $200 million as of December 31, 2010 and 2009 and as of September 30, 2010 and 2009, liquidation value of $430 million as of September 30, 2011).

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS


	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			JUNE 30, 2010
ASSETS
Cash and cash equivalents	$	623,944		$	750,844		$	568,770		$	609,852		$	600,227		$	690,761
Fixed maturity investments available for sale, at fair value		4,998,142			4,961,948			5,014,226			5,116,702			5,063,873			4,908,774
Short term investments available for sale, at fair value		323,119			303,895			48,186			70,444			326,846			272,706
Equity securities available for sale, at fair value		49,323			32,322			25,333			13,565			12,773			11,952
Other investments		386,785			395,078			401,450			376,652			360,629			346,938
Premiums receivable, net		1,192,455			1,154,480			1,049,129			827,609			1,039,689			1,086,818
Deferred acquisition costs		203,455			182,870			178,486			154,484			192,194			175,479
Securities lending collateral		—			84,652			72,657			59,886			127,680			281,391
Prepaid reinsurance premiums		204,961			198,708			248,275			107,977			160,070			143,438
Losses recoverable		479,132			369,081			340,908			319,349			324,757			247,888
Accrued investment income		30,851			31,189			29,164			32,934			32,315			30,880
Goodwill and intangible assets		183,857			186,835			189,501			181,954			184,543			186,657
Deferred tax assets		40,253			38,144			49,370			33,684			29,130			25,941
Receivable on pending investment sales		37,947			3,685			128,867			602			372			1,935
Other assets		80,013			66,309			71,859			73,711			80,139			78,880

TOTAL ASSETS	$	8,834,237		$	8,760,040		$	8,416,181		$	7,979,405		$	8,535,237		$	8,490,438


LIABILITIES
Reserve for losses and loss expenses	$	3,910,537		$	3,748,124		$	3,566,198		$	3,319,927		$	3,401,312		$	3,274,637
Reserve for unearned premiums		1,299,864			1,304,146			1,398,610			842,154			1,186,001			1,186,857
Deposit liabilities		28,860			30,300			32,768			32,505			36,952			39,641
Reinsurance balances payable		244,769			209,548			143,305			228,860			209,651			209,533
Securities lending payable		—			84,652			72,657			59,886			127,681			281,391
Debt		528,664			528,540			528,569			528,411			528,425			528,363
Payable on pending investment purchases		56,496			80,532			164,744			—			17,042			39,906
Other liabilities		129,097			103,922			101,066			119,509			108,488			86,005

TOTAL LIABILITIES	$	6,198,287		$	6,089,764		$	6,007,917		$	5,131,252		$	5,615,552		$	5,646,333

SHAREHOLDERS’ EQUITY
Preferred shares
Series A, non-cumulative	$	8,000		$	8,000		$	8,000		$	8,000		$	8,000		$	8,000
Series B, non-cumulative		9,200			9,200			—			—			—			—
Common shares		40,517			40,509			40,325			47,218			49,685			52,664
Additional paid-in capital		512,323			509,165			289,920			613,915			715,834			822,572
Accumulated other comprehensive income		144,004			141,140			132,806			138,571			201,172			138,605
Retained earnings		1,921,906			1,962,262			1,937,213			2,040,449			1,944,994			1,822,264

TOTAL SHAREHOLDERS’ EQUITY	$	2,635,950		$	2,670,276		$	2,408,264		$	2,848,153		$	2,919,685		$	2,844,105

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	8,834,237		$	8,760,040		$	8,416,181		$	7,979,405		$	8,535,237		$	8,490,438


Book value per common share	$	55.47		$	56.35		$	55.91		$	57.25		$	55.83		$	51.17
Diluted book value per common share (treasury stock method)	$	51.63		$	52.20		$	51.52		$	52.74		$	51.83		$	47.78

RATIOS
Debt-to-capital		16.7	%		16.5	%		18.0	%		15.6	%		15.3	%		15.7	%

ENDURANCE SPECIALTY HOLDINGS LTD.

Probable Maximum Loss by Zone and Peril
(in millions of dollars)

Largest 1 in 100 year PML as of July 1, 2011 is equal to 24.3% of Shareholders’ Equity as of September 30, 2011


		Estimated Occurrence Net Loss as of July 1, 2011										July 1, 2010		July 1, 2009
		10 Year		25 Year		50 Year		100 Year		250 Year		100 Year		100 Year
		Return		Return		Return		Return		Return		Return		Return
Zone	Peril	Period		Period		Period		Period		Period		Period		Period
United States	Hurricane*	$	354	$	467	$	547	$	640	$	791	$	578	$	551
Europe	Windstorm		121		253		364		477		618		427		421
California	Earthquake		39		210		342		446		614		439		369
Japan	Windstorm		54		141		212		284		336		369		242
Northwest U.S.	Earthquake		1		14		96		244		456		239		204
Japan	Earthquake		40		86		135		191		251		137		139
United States	Tornado/Hail		29		51		77		109		142		80		71
Australia	Earthquake		3		17		42		98		162		54		34
New Zealand	Earthquake		2		7		18		36		67		39		32
Australia	Windstorm		3		10		23		41		70		28		24
New Madrid	Earthquake		0		0		1		14		128		12		14

The net loss estimates by zone above represent estimated losses related to our property, catastrophe and aerospace and marine lines of business, based upon our catastrophe models and assumptions regarding the location, size, magnitude, and frequency of the catastrophe events utilized to determine the above estimates. The net loss estimates are presented on an occurrence basis, before income tax and net of reinsurance recoveries, if applicable. Return period refers to the frequency with which the related size of a catastrophic event is expected to occur.

Actual realized catastrophic losses could differ materially from our net loss estimates and our net loss estimates should not be considered as representative of the actual losses that we may incur in connection with any particular catastrophic event. The net loss estimates above rely significantly on computer models created to simulate the effect of catastrophes on insured properties based upon data emanating from past catastrophic events. Since comprehensive data collection regarding insured losses from catastrophe events is a relatively recent development in the insurance industry, the data upon which catastrophe models is based is limited, which has the potential to introduce inaccuracies into estimates of losses from catastrophic events, in particular those that occur infrequently. In addition, catastrophe models are significantly influenced by management’s assumptions regarding event characteristics, construction of insured property and the cost and duration of rebuilding after the catastrophe. Lastly, changes in Endurance’s underwriting portfolio risk control mechanisms and other factors, either before or after the date of the above net loss estimates, may also cause actual results to vary considerably from the net loss estimates above. For a listing of risks related to Endurance and its future performance, please see “Risk Factors” in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010 and our most recent Quarterly Report on Form 10-Q.


*		United States Windstorm estimated net losses as of July 1, 2011 are based on RMS version 11.0

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT DISTRIBUTION

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

Net Premiums Written = $1,792 million


[a]		Other specialty includes the agriculture line in the Insurance segment and aerospace and marine and surety and other specialty lines in the Reinsurance segment.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED SEGMENT DATA


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011									SEPT. 30, 2010
	Insurance			Reinsurance			Totals			Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written	$	450,451		$	250,415		$	700,866		$	303,561		$	252,013		$	555,574

Net premiums written	$	303,210		$	248,117		$	551,327		$	204,293		$	247,591		$	451,884

Net premiums earned	$	318,602		$	242,891		$	561,493		$	242,766		$	227,027		$	469,793
Other underwriting (loss) income		(2,875	)		734			(2,141	)		473			(151	)		322

Total underwriting revenues	$	315,727		$	243,625		$	559,352		$	243,239		$	226,876		$	470,115


UNDERWRITING EXPENSES
Losses and loss expenses	$	260,206		$	196,485		$	456,691		$	172,015		$	94,117		$	266,132
Acquisition expenses		18,738			53,511			72,249			17,356			50,087			67,443
General and administrative expenses		29,328			29,246			58,574			29,256			30,267			59,523

Total expenses	$	308,272		$	279,242		$	587,514		$	218,627		$	174,471		$	393,098


UNDERWRITING INCOME (LOSS)	$	7,455		$	(35,617	)	$	(28,162	)	$	24,612		$	52,405		$	77,017


GAAP RATIOS
Loss ratio		81.7	%		81.0	%		81.3	%		70.9	%		41.5	%		56.6	%
Acquisition expense ratio		5.9	%		22.0	%		12.9	%		7.1	%		22.1	%		14.4	%
General and administrative expense ratio		9.2	%		12.0	%		10.4	%		12.1	%		13.3	%		12.7	%

Combined ratio AS REPORTED		96.8	%		115.0	%		104.6	%		90.1	%		76.9	%		83.7	%


Effect of favorable prior accident year reserve development		3.9	%		13.2	%		7.9	%		3.9	%		11.3	%		7.5	%


Combined ratio net of prior accident year reserve development		100.7	%		128.2	%		112.5	%		94.0	%		88.2	%		91.2	%

ENDURANCE SPECIALTY HOLDINGS LTD.
INSURANCE SEGMENT DATA


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
UNDERWRITING REVENUES
Gross premiums written	$	450,451		$	225,750		$	625,831		$	112,664		$	303,561		$	248,673

Net premiums written	$	303,210		$	173,506		$	432,296		$	81,643		$	204,293		$	175,686

Net premiums earned	$	318,602		$	249,397		$	162,492		$	205,528		$	242,766		$	228,290
Other underwriting (loss) income		(2,875	)		—			—			4			473			382

Total underwriting revenues	$	315,727		$	249,397		$	162,492		$	205,532		$	243,239		$	228,672


UNDERWRITING EXPENSES
Losses and loss expenses	$	260,206		$	191,396		$	98,836		$	129,168		$	172,015		$	168,861
Acquisition expenses		18,738			15,861			16,308			12,220			17,356			20,409
General and administrative expenses		29,328			36,227			36,806			36,812			29,256			36,015

Total expenses	$	308,272		$	243,484		$	151,950		$	178,200		$	218,627		$	225,285


UNDERWRITING INCOME	$	7,455		$	5,913		$	10,542		$	27,332		$	24,612		$	3,387


GAAP RATIOS
Loss ratio		81.7	%		76.7	%		60.8	%		62.9	%		70.9	%		74.0	%
Acquisition expense ratio		5.9	%		6.4	%		10.0	%		5.9	%		7.1	%		8.9	%
General and administrative expense ratio		9.2	%		14.5	%		22.7	%		17.9	%		12.1	%		15.8	%


Combined ratio AS REPORTED		96.8	%		97.6	%		93.5	%		86.7	%		90.1	%		98.7	%


Effect of favorable prior accident year reserve development		3.9	%		9.3	%		21.3	%		5.6	%		3.9	%		6.1	%


Combined ratio net of prior accident year reserve development		100.7	%		106.9	%		114.8	%		92.3	%		94.0	%		104.8	%

ENDURANCE SPECIALTY HOLDINGS LTD.
REINSURANCE SEGMENT DATA


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
UNDERWRITING REVENUES
Gross premiums written	$	250,415		$	277,174		$	374,527		$	76,561		$	252,013		$	220,949

Net premiums written	$	248,117		$	268,252		$	366,576		$	76,472		$	247,591		$	220,980

Net premiums earned	$	242,891		$	237,181		$	220,341		$	244,208		$	227,027		$	198,464
Other underwriting income (loss)		734			1,088			(1,069	)		406			(151	)		(377	)

Total underwriting revenues	$	243,625		$	238,269		$	219,272		$	244,614		$	226,876		$	198,087


UNDERWRITING EXPENSES
Losses and loss expenses	$	196,485		$	170,574		$	303,017		$	117,256		$	94,117		$	42,822
Acquisition expenses		53,511			52,026			49,310			53,913			50,087			42,617
General and administrative expenses		29,246			29,659			29,155			30,944			30,267			28,421

Total expenses	$	279,242		$	252,259		$	381,482		$	202,113		$	174,471		$	113,860


UNDERWRITING (LOSS) INCOME	$	(35,617	)	$	(13,990	)	$	(162,210	)	$	42,501		$	52,405		$	84,227


GAAP RATIOS
Loss ratio		81.0	%		71.9	%		137.5	%		48.0	%		41.5	%		21.6	%
Acquisition expense ratio		22.0	%		22.0	%		22.4	%		22.1	%		22.1	%		21.5	%
General and administrative expense ratio		12.0	%		12.5	%		13.2	%		12.7	%		13.3	%		14.3	%

Combined ratio AS REPORTED		115.0	%		106.4	%		173.1	%		82.8	%		76.9	%		57.4	%


Effect of favorable prior accident year reserve development		13.2	%		9.1	%		6.4	%		4.9	%		11.3	%		10.3	%

Combined ratio net of prior accident year reserve development		128.2	%		115.5	%		179.5	%		87.7	%		88.2	%		67.7	%

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011		JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
INSURANCE SEGMENT
Agriculture	$	289,656	$	57,125		$	508,705		$	6,930		$	156,162		$	104,021
Professional lines		39,559		49,181			35,469			36,690			43,381			46,668
Casualty		57,520		63,178			38,882			37,377			40,538			39,671
Property		30,049		35,904			24,690			22,134			30,295			30,307
Healthcare liability		33,652		20,454			18,137			10,811			34,024			30,390
Workers’ compensation		15		(92	)		(52	)		(1,278	)		(839	)		(2,384	)

TOTAL INSURANCE	$	450,451	$	225,750		$	625,831		$	112,664		$	303,561		$	248,673


REINSURANCE SEGMENT
Catastrophe	$	46,275	$	146,249		$	138,247		$	17,896		$	45,513		$	31,637
Casualty		56,293		45,619			116,352			47,970			81,167			61,394
Property		129,203		52,185			70,087			8,628			111,395			115,342
Aerospace and Marine		5,891		26,743			20,838			2,380			4,184			7,185
Surety and other specialty		12,753		6,378			29,003			(313	)		9,754			5,391

TOTAL REINSURANCE	$	250,415	$	277,174		$	374,527		$	76,561		$	252,013		$	220,949


REPORTED TOTALS	$	700,866	$	502,924		$	1,000,358		$	189,225		$	555,574		$	469,622

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011		JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
INSURANCE SEGMENT
Agriculture	$	185,017	$	46,049		$	346,472		$	2,372		$	89,119		$	71,767
Professional lines		30,812		37,624			31,124			33,171			38,522			38,643
Casualty		37,664		43,811			25,759			25,536			23,700			25,025
Property		17,681		25,996			12,585			11,895			21,366			13,467
Healthcare liability		32,021		20,115			16,406			9,946			32,393			29,075
Workers’ compensation		15		(89	)		(50	)		(1,277	)		(807	)		(2,291	)

TOTAL INSURANCE	$	303,210	$	173,506		$	432,296		$	81,643		$	204,293		$	175,686


REINSURANCE SEGMENT
Catastrophe	$	43,868	$	139,337		$	131,123		$	17,896		$	41,154		$	31,637
Casualty		56,292		45,617			115,554			47,965			81,163			61,387
Property		129,203		52,185			70,087			8,628			111,395			115,342
Aerospace and Marine		6,002		24,726			20,839			2,380			4,184			7,170
Surety and other specialty		12,752		6,387			28,973			(397	)		9,695			5,444

TOTAL REINSURANCE	$	248,117	$	268,252		$	366,576		$	76,472		$	247,591		$	220,980


REPORTED TOTALS	$	551,327	$	441,758		$	798,872		$	158,115		$	451,884		$	396,666

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS


	FOR THE QUARTERS ENDED
	SEPT. 30, 2011		JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			SEPT. 30, 2009
INSURANCE SEGMENT
Agriculture	$	215,830	$	142,952		$	59,808		$	100,177		$	134,864		$	107,821
Professional lines		34,343		37,788			36,175			37,167			38,085			39,630
Casualty		32,343		28,735			29,742			28,415			25,682			24,389
Property		16,636		19,566			16,593			20,362			24,000			16,948
Healthcare liability		19,435		20,445			20,224			20,684			20,942			20,347
Workers’ compensation		15		(89	)		(50	)		(1,277	)		(807	)		19,155

TOTAL INSURANCE	$	318,602	$	249,397		$	162,492		$	205,528		$	242,766		$	228,290


REINSURANCE SEGMENT
Catastrophe	$	86,395	$	81,747		$	76,335		$	79,617		$	74,675		$	68,342
Casualty		68,882		70,441			64,953			74,702			71,844			52,694
Property		62,519		58,643			52,452			64,229			56,975			52,448
Aerospace and Marine		12,236		13,154			13,587			11,312			8,602			11,538
Surety and other specialty		12,859		13,196			13,014			14,348			14,931			13,442

TOTAL REINSURANCE	$	242,891	$	237,181		$	220,341		$	244,208		$	227,027		$	198,464


REPORTED TOTALS	$	561,493	$	486,578		$	382,833		$	449,736		$	469,793		$	426,754

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED SEGMENT DATA


	FOR THE NINE MONTHS ENDED
	SEPT. 30, 2011									SEPT. 30, 2010
	Insurance			Reinsurance			Totals			Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written	$	1,302,032		$	902,116		$	2,204,148		$	999,528		$	864,483		$	1,864,011

Net premiums written	$	909,012		$	882,945		$	1,791,957		$	748,221		$	857,408		$	1,605,629

Net premiums earned	$	730,491		$	700,413		$	1,430,904		$	616,300		$	675,077		$	1,291,377
Other underwriting (loss) income		(2,875	)		753			(2,122	)		471			(2,517	)		(2,046	)

Total underwriting revenues	$	727,616		$	701,166		$	1,428,782		$	616,771		$	672,560		$	1,289,331


UNDERWRITING EXPENSES
Losses and loss expenses	$	550,438		$	670,076		$	1,220,514		$	428,872		$	362,804		$	791,676
Acquisition expenses		50,907			154,847			205,754			51,336			146,759			198,095
General and administrative expenses		102,361			88,060			190,421			86,523			87,641			174,164

Total expenses	$	703,706		$	912,983		$	1,616,689		$	566,731		$	597,204		$	1,163,935


UNDERWRITING INCOME (LOSS)	$	23,910		$	(211,817	)	$	(187,907	)	$	50,040		$	75,356		$	125,396


GAAP RATIOS
Loss ratio		75.3	%		95.6	%		85.3	%		69.6	%		53.7	%		61.3	%
Acquisition expense ratio		7.0	%		22.1	%		14.4	%		8.4	%		21.8	%		15.3	%
General and administrative expense ratio		14.0	%		12.6	%		13.3	%		14.0	%		13.0	%		13.5	%

Combined ratio AS REPORTED		96.3	%		130.3	%		113.0	%		92.0	%		88.5	%		90.1	%


Effect of favorable prior accident year reserve development		9.6	%		9.7	%		9.6	%		5.7	%		10.1	%		8.0	%


Combined ratio net of prior accident year reserve development		105.9	%		140.0	%		122.6	%		97.7	%		98.6	%		98.1	%

ENDURANCE SPECIALTY HOLDINGS LTD.
INSURANCE SEGMENT DATA


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009			DEC. 31, 2010			DEC. 31, 2009
UNDERWRITING REVENUES
Gross premiums written	$	1,302,032		$	999,528		$	1,001,679		$	1,112,192		$	1,152,150

Net premiums written	$	909,012		$	748,221		$	651,878		$	829,864		$	740,310

Net premiums earned	$	730,491		$	616,300		$	632,552		$	821,828		$	823,703
Other underwriting (loss) income		(2,875	)		471			3,444			475			3,533

Total underwriting revenues	$	727,616		$	616,771		$	635,996		$	822,303		$	827,236


UNDERWRITING EXPENSES
Losses and loss expenses	$	550,438		$	428,872		$	433,711		$	558,040		$	553,008
Acquisition expenses		50,907			51,336			66,105			63,556			84,724
General and administrative expenses		102,361			86,523			90,953			123,335			119,766

Total expenses	$	703,706		$	566,731		$	590,769		$	744,931		$	757,498


UNDERWRITING INCOME	$	23,910		$	50,040		$	45,227		$	77,372		$	69,738


GAAP RATIOS
Loss ratio		75.3	%		69.6	%		68.6	%		67.9	%		67.1	%
Acquisition expense ratio		7.0	%		8.4	%		10.4	%		7.7	%		10.3	%
General and administrative expense ratio		14.0	%		14.0	%		14.4	%		15.0	%		14.6	%

Combined ratio AS REPORTED		96.3	%		92.0	%		93.4	%		90.6	%		92.0	%


Effect of favorable prior accident year reserve development		9.6	%		5.7	%		11.2	%		5.7	%		11.2	%

Combined ratio net of prior accident year reserve development		105.9	%		97.7	%		104.6	%		96.3	%		103.2	%

ENDURANCE SPECIALTY HOLDINGS LTD.
REINSURANCE SEGMENT DATA


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009			DEC. 31, 2010			DEC. 31, 2009
UNDERWRITING REVENUES
Gross premiums written	$	902,116		$	864,483		$	810,404		$	941,044		$	869,300

Net premiums written	$	882,945		$	857,408		$	807,730		$	933,880		$	865,740

Net premiums earned	$	700,413		$	675,077		$	606,697		$	919,285		$	809,489
Other underwriting income (loss)		753			(2,517	)		754			(2,111	)		381

Total underwriting revenues	$	701,166		$	672,560		$	607,451		$	917,174		$	809,870


UNDERWRITING EXPENSES
Losses and loss expenses	$	670,076		$	362,804		$	268,924		$	480,060		$	313,632
Acquisition expenses		154,847			146,759			129,045			200,672			183,247
General and administrative expenses		88,060			87,641			88,269			118,585			117,388

Total expenses	$	912,983		$	597,204		$	486,238		$	799,317		$	614,267


UNDERWRITING (LOSS) INCOME	$	(211,817	)	$	75,356		$	121,213		$	117,857		$	195,603


GAAP RATIOS
Loss ratio		95.6	%		53.7	%		44.3	%		52.2	%		38.8	%
Acquisition expense ratio		22.1	%		21.8	%		21.3	%		21.8	%		22.6	%
General and administrative expense ratio		12.6	%		13.0	%		14.5	%		12.9	%		14.5	%

Combined ratio AS REPORTED		130.3	%		88.5	%		80.1	%		86.9	%		75.9	%


Effect of favorable prior accident year reserve development		9.7	%		10.1	%		(6.4	)%		8.7	%		7.3	%

Combined ratio net of prior accident year reserve development		140.0	%		98.6	%		86.5	%		95.6	%		83.2	%

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE NINE MONTHS ENDED								FOR THE YEARS ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009		DEC. 31, 2010			DEC. 31, 2009
INSURANCE SEGMENT
Agriculture	$	855,486		$	560,531		$	538,666	$	567,461		$	572,096
Professional lines		124,209			133,456			143,884		170,146			193,799
Casualty		159,580			130,172			120,900		167,549			152,580
Property		90,643			99,976			98,142		122,110			124,621
Healthcare liability		72,243			76,782			73,305		87,593			82,955
Workers’ compensation		(129	)		(1,389	)		26,782		(2,667	)		26,099

TOTAL INSURANCE	$	1,302,032		$	999,528		$	1,001,679	$	1,112,192		$	1,152,150


REINSURANCE SEGMENT
Catastrophe	$	330,771		$	291,990		$	289,465	$	309,886		$	303,404
Casualty		218,264			246,060			220,599		294,030			255,142
Property		251,475			215,916			205,375		224,544			215,085
Aerospace and Marine		53,472			46,381			42,980		48,761			44,696
Surety and other specialty		48,134			64,136			51,985		63,823			50,973

TOTAL REINSURANCE	$	902,116		$	864,483		$	810,404	$	941,044		$	869,300


REPORTED TOTALS	$	2,204,148		$	1,864,011		$	1,812,083	$	2,053,236		$	2,021,450

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE NINE MONTHS ENDED								FOR THE YEARS ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009		DEC. 31, 2010			DEC. 31, 2009
INSURANCE SEGMENT
Agriculture	$	577,538		$	402,395		$	323,783	$	404,767		$	324,480
Professional lines		99,560			115,546			122,635		148,717			167,091
Casualty		107,234			82,265			71,196		107,801			91,071
Property		56,262			76,404			53,079		88,299			68,011
Healthcare liability		68,542			72,947			69,155		82,893			78,284
Workers’ compensation		(124	)		(1,336	)		12,030		(2,613	)		11,373

TOTAL INSURANCE	$	909,012		$	748,221		$	651,878	$	829,864		$	740,310


REINSURANCE SEGMENT
Catastrophe	$	314,328		$	287,721		$	289,465	$	305,617		$	302,218
Casualty		217,463			245,257			220,361		293,222			254,897
Property		251,475			215,916			205,375		224,544			215,085
Aerospace and Marine		51,567			44,316			40,840		46,696			42,563
Surety and other specialty		48,112			64,198			51,689		63,801			50,977

TOTAL REINSURANCE	$	882,945		$	857,408		$	807,730	$	933,880		$	865,740


REPORTED TOTALS	$	1,791,957		$	1,605,629		$	1,459,608	$	1,763,744		$	1,606,050

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS


	FOR THE NINE MONTHS ENDED								FOR THE YEARS ENDED
	SEPT. 30, 2011			SEPT. 30, 2010			SEPT. 30, 2009		DEC. 31, 2010			DEC. 31, 2009
INSURANCE SEGMENT
Agriculture	$	418,590		$	297,466		$	250,895	$	397,643		$	331,960
Professional lines		108,306			117,317			112,599		154,484			152,547
Casualty		90,820			76,655			65,815		105,070			89,340
Property		52,795			65,946			59,316		86,308			76,245
Healthcare liability		60,104			60,416			60,276		81,100			80,219
Workers’ compensation		(124	)		(1,500	)		83,651		(2,777	)		93,392

TOTAL INSURANCE	$	730,491		$	616,300		$	632,552	$	821,828		$	823,703


REINSURANCE SEGMENT
Catastrophe	$	244,477		$	236,091		$	221,045	$	315,708		$	296,982
Casualty		204,276			198,266			153,060		272,968			208,865
Property		173,614			163,053			151,777		227,282			198,606
Aerospace and Marine		38,977			33,606			37,933		44,918			49,088
Surety and other specialty		39,069			44,061			42,882		58,409			55,948

TOTAL REINSURANCE	$	700,413		$	675,077		$	606,697	$	919,285		$	809,489


REPORTED TOTALS	$	1,430,904		$	1,291,377		$	1,239,249	$	1,741,113		$	1,633,192

ENDURANCE SPECIALTY HOLDINGS LTD.
RETURN ON EQUITY ANALYSIS


	FOR THE NINE MONTHS
	ENDED SEPT. 30, 2011

Average common equity [a]	$	2,427,052

Net premiums earned	$	1,430,904
Combined ratio		113.0	%
Operating margin		(13.0	)%
Premium leverage		0.59	x

Implied ROAE from underwriting activity		(7.7	)%


Average cash and invested assets at amortized cost	$	6,141,817
Investment leverage		2.53	x
Year to date investment income yield, pretax		1.7	%

Implied ROAE from investment activity		4.3	%


Financing Costs [b]		(1.8	)%


Implied Pre-tax Operating ROAE, for period [c]		(5.2	)%


Implied Pre-tax Operating ROAE, annualized [c]		(6.9	)%


[a]		Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares (beginning liquidation value of $200 million, ending liquidation value of $430 million).

[b]		Financing costs include interest expense and preferred dividends.

[c]		Implied pre-tax Operating ROAE considers only the main components of the Company’s return on equity — underwriting and investment returns. As such, it differs from operating ROE primarily due to the exclusion of tax on underwriting, financing and investment activites and the tax-effected impact of amortization expense.

ENDURANCE SPECIALTY HOLDINGS LTD.
ANNUALIZED PREMIUM & INVESTMENT LEVERAGE


	FOR THE QUARTERS ENDED												YEARS ENDED DECEMBER 31,
	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			2010			2009

Average common equity [a]	$	2,223,113		$	2,224,270		$	2,428,209		$	2,683,919		$	2,617,718		$	2,297,283

Net premiums earned	$	561,493		$	486,578		$	382,833		$	449,736		$	1,741,113		$	1,633,192

Premium leverage		0.25	x		0.22x			0.16	x		0.17	x		0.67	x		0.71	x


Annualized premium leverage		1.00	x		0.88	x		0.64	x		0.68	x		0.67	x		0.71	x


Average cash and invested assets at amortized cost	$	6,232,000		$	6,069,548		$	5,979,366		$	6,107,765		$	5,997,489		$	5,716,443


Investment leverage		2.80	x		2.73	x		2.46	x		2.28	x		2.29	x		2.49	x


[a]		Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the liquidation value of the preferred shares outstanding at the beginning and end of each period.

ENDURANCE SPECIALTY HOLDINGS LTD.
INVESTMENT PORTFOLIO
AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010


	September 30, 2011					December 31, 2010
Type of Investment	Fair Value		Percentage			Fair Value		Percentage
Cash and equivalents [a]	$	605,395		9.5	%	$	610,454		9.9	%
Short-term investments		323,119		5.1	%		70,444		1.1	%
U.S. government and government agencies notes		1,235,350		19.4	%		1,010,819		16.3	%
Government and agency guaranteed corporates		400,446		6.3	%		671,150		10.8	%
U.S. government agency residential mortgage-backed securities		987,143		15.5	%		883,948		14.3	%
U.S. government agency commercial mortgage-backed securities		33,851		0.5	%		22,889		0.4	%
Municipals		55,100		0.9	%		29,979		0.5	%
Foreign government		77,945		1.2	%		140,461		2.3	%
Corporate securities		1,219,305		19.2	%		1,232,511		19.9	%
Non-agency residential mortgage-backed securities		123,730		1.9	%		246,410		4.0	%
Non-agency commercial mortgage-backed securities		541,131		8.5	%		604,820		9.8	%
Asset-backed securities		324,141		5.1	%		273,715		4.4	%
Equity securities		49,323		0.8	%		13,565		0.2	%
Other investments [b]		386,785		6.1	%		376,652		6.1	%

Total	$	6,362,764		100.0	%	$	6,187,817		100.0	%


Ratings [e]	Fair Value		Percentage			Fair Value		Percentage
U.S. government and government agencies notes	$	1,235,350		21.5	%	$	1,010,819		18.1	%
AAA/Aaa		1,049,638		18.2	%		2,639,682		47.4	%
AA/Aa		1,994,716		34.6	%		465,315		8.3	%
A/A		786,973		13.7	%		793,980		14.2	%
BBB		132,961		2.3	%		50,733		0.9	%
Below BBB		118,942		2.1	%		221,848		4.0	%
Not Rated		2,681		—			4,769		0.1	%
Equity securities		49,323		0.9	%		13,565		0.2	%
Other investments [b]		386,785		6.7	%		376,652		6.8	%

Total	$	5,757,369		100.0	%	$	5,577,363		100.0	%


			September 30,					December 31,
Performance			2011					2010
Yield [c]				0.4	%				3.3	%
Duration in years [d]				2.48					2.39


	Quarter Ended			Quarter Ended		Quarter Ended		Quarter Ended		Quarter Ended
Investment Income	Sept. 30, 2011			June 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sept. 30, 2010
Cash and fixed income securities	$	36,622		$	38,661	$	38,744	$	40,425	$	39,839
Other Investments		(22,522	)		1,181		13,757		16,449		13,815

Total net investment income	$	14,100		$	39,842	$	52,501	$	56,874	$	53,654


Note:	[a]	Cash and equivalents, including operating cash, are shown net of investments pending settlement.

	[b]	Other investments includes investments in alternative and high yield bank loan funds.

	[c]	Annualized earned yield for the quarter ending 9/30/11 and twelve months ending 12/31/10 excludes realized and unrealized gains and losses on fixed maturity investments.

	[d]	Duration excludes other investments and operating cash.

	[e]	Excludes cash and equivalents and equity securities.

ENDURANCE SPECIALTY HOLDINGS LTD.
STRUCTURED SECURITIES DETAIL
AS OF SEPT. 30, 2011


						Percentage of
Securitized (RMBS, CMBS, ABS and CDO) securities ratings	Fair Value		Percentage			Investment Portfolio
U.S. Government and agencies	$	1,020,994		50.8	%		16.0	%
AAA/Aaa		730,564		36.3	%		11.5	%
AA/Aa		79,097		3.9	%		1.2	%
A/A		82,601		4.1	%		1.3	%
BBB		33,277		1.7	%		0.5	%
Below BBB		63,463		3.2	%		1.0	%
Not Rated		—		—			—

Total	$	2,009,996		100.0	%		31.5	%


							Percentage of
Structured securities sectors (RMBS, CMBS, ABS, CDO and CLO)		Fair Value		Percentage			Investment Portfolio
Commercial
Agency		$	33,851		1.7	%		0.5	%
Non Agency			612,049		30.5	%		9.6	%
Residential
Agency			987,143		49.1	%		15.5	%
Non Agency			123,730		6.2	%		1.9	%
Consumer
Non Agency			253,223		12.5	%		4.0	%

Total		$	2,009,996		100.0	%		31.5	%

Spread Duration	3.11 years


							Percentage of
Commercial real estate collateralized debt obligations ( CRE CDO’s)		Fair Value		Percentage			Investment Portfolio
AAA/Aaa		$	12,799		45.3	%		0.2	%
AA/Aa			5,032		17.8	%		0.1	%
A/A			4,916		17.4	%		0.1	%
BBB			1,719		6.1	%		—
Below BBB			3,769		13.4	%		—

Total		$	28,235		100.0	%		0.4	%

Spread Duration	1.99 years

ENDURANCE SPECIALTY HOLDINGS LTD.
LARGEST TWENTY-FIVE CORPORATE HOLDINGS
AS OF SEPT. 30, 2011


	September 30, 2011
	Amortized				Unrealized			Credit
ISSUER (1) (2) (4)	Cost		Fair Value		Gain (Loss)			Quality (3)

METLIFE INC	$	39,539	$	39,936	$	397		A
JPMORGAN CHASE & CO		38,151		38,442		291		A+
MORGAN STANLEY		39,211		36,836		(2,375	)	A
NOVARTIS AG		27,646		29,093		1,447		AA-
AT&T INC		27,224		28,407		1,183		A-
CREDIT SUISSE GROUP AG		27,414		27,366		(48	)	A+
WAL-MART STORES INC		26,375		27,345		970		AA
VERIZON COMMUNICATIONS INC		24,936		26,339		1,403		A-
US BANCORP		21,677		22,330		653		A+
HSBC HOLDINGS PLC		20,715		20,913		198		AA-
PEPSICO INC/NC		18,335		19,879		1,544		A
BANK OF AMERICA CORP		20,185		18,391		(1,794	)	A
EDISON INTERNATIONAL		17,027		17,845		818		A
LOWES COMPANIES INC		16,407		17,758		1,351		A
NEW YORK LIFE INSURANCE COMPANY		15,532		16,057		525		AA+
BANK OF NOVA SCOTIA		15,556		15,803		247		AA-
GOLDMAN SACHS GROUP INC/THE		16,533		15,533		(1,000	)	A
CITIGROUP INC		15,849		15,453		(396	)	A
NATIONAL GRID PLC		13,920		15,317		1,397		A-
PHILIP MORRIS INTERNATIONAL INC		14,437		15,181		744		A
ROYAL DUTCH SHELL PLC		14,272		14,882		610		AA
MEDTRONIC INC		13,399		14,005		606		AA-
BANK OF NEW YORK MELLON CORP/THE		12,206		12,698		492		AA-
TOTAL SA		12,388		12,465		77		AA-
ROYAL BANK OF SCOTLAND GROUP PLC		12,673		12,247		(426	)	A+


(1)		Corporate issuers exclude government-backed, government-sponsored enterprises, covered bonds and cash and cash equivalents.

(2)		Credit exposures represent only direct exposure to fixed maturities and short term investments of the parent issuer and its major subsidiaries.

(3)		Represents weighted average credit quality of underlying issues.

(4)		Includes preferred equity securities.

ENDURANCE SPECIALTY HOLDINGS LTD.
ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES


	THREE MONTHS ENDED SEPT. 30, 2011									NINE MONTHS ENDED SEPT. 30, 2011
	GROSS			RECOVERIES			NET			GROSS			RECOVERIES			NET
Reserve for losses and loss expenses Balance, beginning of period	$	3,748,124		$	(369,081	)	$	3,379,043		$	3,319,927		$	(319,349	)	$	3,000,578

Incurred related to:
Current year		844,752			(343,648	)		501,104			1,856,191			(497,778	)		1,358,413
Prior years		(47,023	)		2,610			(44,413	)		(197,822	)		59,923			(137,899	)

Total Incurred		797,729			(341,038	)		456,691			1,658,369			(437,855	)		1,220,514


Paid related to:
Current year		(496,543	)		245,179			(251,364	)		(592,946	)		271,883			(321,063	)
Prior years		(117,529	)		(14,293	)		(131,822	)		(470,249	)		6,147			(464,102	)

Total Paid		(614,072	)		230,886			(383,186	)		(1,063,195	)		278,030			(785,165	)


Foreign currency translation		(21,244	)		101			(21,143	)		(4,564	)		42			(4,522	)


Balance, end of period	$	3,910,537		$	(479,132	)	$	3,431,405		$	3,910,537		$	(479,132	)	$	3,431,405

ENDURANCE SPECIALTY HOLDINGS LTD.
PRIOR YEAR RESERVE DEVELOPMENT BY SEGMENT

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED SEPT. 30, 2011


							Total
	Insurance			Reinsurance			Company

Incurred related to prior years

Quarter ended March 31, 2011	$	(34,612	)	$	(14,093	)	$	(48,705	)
Quarter ended June 30, 2011		(23,190	)		(21,591	)		(44,781	)
Quarter ended September 30, 2011		(12,411	)		(32,002	)		(44,413	)

Nine months ended September 30, 2011	$	(70,213	)	$	(67,686	)	$	(137,899	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2010


							Total
	Insurance			Reinsurance			Company

Incurred related to prior years
Quarter ended March 31, 2010	$	(17,679	)	$	(20,915	)	$	(38,594	)
Quarter ended June 30, 2010		(8,099	)		(21,379	)		(29,478	)
Quarter ended September 30, 2010		(9,568	)		(25,566	)		(35,134	)
Quarter ended December 31, 2010		(11,525	)		(12,071	)		(23,596	)

Year ended December 31, 2010	$	(46,871	)	$	(79,931	)	$	(126,802	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2009


							Total
	Insurance			Reinsurance			Company

Incurred related to prior years
Quarter ended March 31, 2009	$	(36,798	)	$	(2,520	)	$	(39,318	)
Quarter ended June 30, 2009		(19,842	)		(16,132	)		(35,974	)
Quarter ended September 30, 2009		(13,952	)		(20,449	)		(34,401	)
Quarter ended December 31, 2009		(21,486	)		(19,710	)		(41,196	)

Year ended December 31, 2009	$	(92,078	)	$	(58,811	)	$	(150,889	)

ENDURANCE SPECIALTY HOLDINGS LTD.
PRIOR YEAR RESERVE DEVELOPMENT BY DEVELOPMENT TAIL

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT


																FOR THE
	FOR THE QUARTERS ENDED															YEAR ENDED
	SEPT. 30, 2011			JUNE 30, 2011			MAR. 31, 2011			DEC. 31, 2010			SEPT. 30, 2010			DEC. 31, 2010
INSURANCE SEGMENT
Short tail[a]	$	(4,182	)	$	(5,150	)	$	(9,274	)	$	(4,445	)	$	(5,359	)	$	(21,349	)
Long tail[b]		(8,501	)		(5,490	)		(2,560	)		(7,075	)		(3,480	)		(11,649	)
Other[c]		272			(12,550	)		(22,778	)		(5	)		(729	)		(13,873	)

TOTAL INSURANCE		(12,411	)		(23,190	)		(34,612	)		(11,525	)		(9,568	)		(46,871	)


REINSURANCE SEGMENT
Short tail[a]		(19,342	)		(19,245	)		(14,163	)		(10,418	)		(17,743	)		(68,865	)
Long tail[b]		(11,234	)		335			275			(1,628	)		(6,902	)		(7,700	)
Other[c]		(1,426	)		(2,681	)		(205	)		(25	)		(921	)		(3,366	)

TOTAL REINSURANCE		(32,002	)		(21,591	)		(14,093	)		(12,071	)		(25,566	)		(79,931	)


REPORTED TOTALS	$	(44,413	)	$	(44,781	)	$	(48,705	)	$	(23,596	)	$	(35,134	)	$	(126,802	)


[a]		Short tail business is that for which development typically emerges within a period of several quarters. The Company’s short tail line of business in the Insurance segment includes its property line of business. The Company’s short tail lines in its Reinsurance segment include property, catastrophe, aerospace and marine and surety.

[b]		Long tail business is that for which development emerges over many years. The Company’s long tail lines of business in the Insurance segment includes casualty, healthcare liability, workers’ compensation and professional lines. The Company’s long tail line of business in the Reinsurance segment includes its casualty line of business and some units included in its surety and other specialty line of business.

[c]		The Company writes certain specialty lines of business for which the loss emergence is considered to be unique in nature and thus, has been included as other. The Company’s other lines of business included in the Insurance segment is agriculture and in the Reinsurance segment is the agriculture unit included in its surety and other specialty line of business.

ENDURANCE SPECIALTY HOLDINGS LTD.
ANALYSIS OF UNPAID LOSSES AND LOSS EXPENSES


	Insurance												Reinsurance												Reported
	Short Tail			Long Tail			Other			Total			Short Tail			Long Tail			Other			Total			Totals

AT SEPT. 30, 2011
Case reserves	$	28,669		$	387,942		$	370,589		$	787,200		$	488,768		$	268,058		$	573		$	757,399		$	1,544,599
Total reserves	$	53,598		$	1,582,357		$	396,681		$	2,032,636		$	912,592		$	957,963		$	7,346		$	1,877,901		$	3,910,537
Case reserves / Total reserves		53.5	%		24.5	%		93.4	%		38.7	%		53.6	%		28.0	%		7.8	%		40.3	%		39.5	%

IBNR / Total reserves		46.5	%		75.5	%		6.6	%		61.3	%		46.4	%		72.0	%		92.2	%		59.7	%		60.5	%

AT JUNE 30, 2011
Case reserves	$	19,410		$	375,869		$	247,145		$	642,424		$	431,972		$	268,802		$	1,187		$	701,961		$	1,344,385
Total reserves	$	48,268		$	1,568,198		$	276,347		$	1,892,813		$	893,835		$	950,506		$	10,970		$	1,855,311		$	3,748,124
Case reserves / Total reserves		40.2	%		24.0	%		89.4	%		33.9	%		48.3	%		28.3	%		10.8	%		37.8	%		35.9	%

IBNR / Total reserves		59.8	%		76.0	%		10.6	%		66.1	%		51.7	%		71.7	%		89.2	%		62.2	%		64.1	%

AT MAR. 31, 2011
Case reserves	$	18,089		$	378,010		$	73,374		$	469,473		$	322,587		$	255,397		$	455		$	578,439		$	1,047,912
Total reserves	$	45,739		$	1,539,977		$	187,017		$	1,772,733		$	861,084		$	919,839		$	12,542		$	1,793,465		$	3,566,198
Case reserves / Total reserves		39.5	%		24.5	%		39.2	%		26.5	%		37.5	%		27.8	%		3.6	%		32.3	%		29.4	%

IBNR / Total reserves		60.5	%		75.5	%		60.8	%		73.5	%		62.5	%		72.2	%		96.4	%		67.7	%		70.6	%

AT DEC. 31, 2010
Case reserves	$	14,730		$	325,750		$	116,687		$	457,167		$	319,322		$	248,870		$	990		$	569,182		$	1,026,349
Total reserves	$	45,330		$	1,493,398		$	190,865		$	1,729,593		$	670,750		$	907,384		$	12,200		$	1,590,334		$	3,319,927
Case reserves / Total reserves		32.5	%		21.8	%		61.1	%		26.4	%		47.6	%		27.4	%		8.1	%		35.8	%		30.9	%

IBNR / Total reserves		67.5	%		78.2	%		38.9	%		73.6	%		52.4	%		72.6	%		91.9	%		64.2	%		69.1	%

AT SEPT. 30, 2010
Case reserves	$	15,019		$	378,887		$	205,079		$	598,985		$	319,096		$	244,711		$	475		$	564,282		$	1,163,267
Total reserves	$	48,572		$	1,545,195		$	233,189		$	1,826,956		$	674,075		$	889,506		$	10,775		$	1,574,356		$	3,401,312
Case reserves / Total reserves		30.9	%		24.5	%		87.9	%		32.8	%		47.3	%		27.5	%		4.4	%		35.8	%		34.2	%

IBNR / Total reserves		69.1	%		75.5	%		12.1	%		67.2	%		52.7	%		72.5	%		95.6	%		64.2	%		65.8	%

ENDURANCE SPECIALTY HOLDINGS LTD.
SHAREHOLDER RETURN ANALYSIS


	NINE MONTHS ENDED			YEARS ENDED DECEMBER 31,												INCEPTION TO
	SEPT. 30, 2011			2010			2009			2008			2007			SEPT. 30, 2011
(Loss) Income and Return on Equity:
Net (loss) income (attributable) available to common and participating common shareholders	$	(82,296	)	$	349,238		$	520,604		$	83,121		$	505,607		$	2,356,786

Operating (loss) income (attributable) available to common and participating common shareholders		(112,813	)		330,035			505,202			182,539			525,450			2,407,773

Average Shareholders’ equity [a]		2,427,052			2,617,718			2,297,283			2,159,771			2,205,067			1,961,798
Net (loss) income return on average equity		(3.4	)%		13.3	%		22.7	%		3.8	%		22.9	%		12.3	% [c]
Operating return on average equity		(4.6	)%		12.6	%		22.0	%		8.5	%		23.8	%		12.6	% [c]

Book value and dividends per share:
Dilutive book value per common share (treasury stock method)	$	51.63		$	52.74		$	44.61		$	33.06		$	35.05		$	51.63

Dividends paid per share		0.90			1.00			1.00			1.00			1.00			8.03

Change in diluted book value per common share		(2.1	)%		18.2	%		34.9	%		(5.7	)%		21.4	%		17.1	% [c]

Total return to common shareholders [b]		(0.4	)%		20.5	%		38.0	%		(2.8	)%		24.9	%		21.3	% [c]


[a]		Excludes the $430 million (2010 and earlier — $200 million) liquidation value of the preferred shares.

[b]		Total return to common shareholders is calculated as the change in diluted book value per common share plus dividends paid divided by beginning diluted book value per share.

[c]		Represents average non-compounded annual returns since December 31, 2001.

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES FOR EPS CALCULATION — TWO CLASS METHOD


	QUARTERS ENDED						NINE MONTHS ENDED
	SEPT. 30,						SEPT. 30,
	2011			2010			2011			2010
DILUTIVE SHARES OUTSTANDING:
AS REPORTED
Average market price per share	$	37.39		$	37.99		$	42.50		$	37.52

Basic weighted average common shares outstanding [a]		39,765			50,296			40,071			52,061


Add: weighted avg. unvested restricted share units		9			16			11			18
Weighted average exercise price per share		—			—			—			—
Proceeds from unrecognized restricted share unit expense	$	176		$	297		$	176		$	297
Less: restricted share units bought back via treasury method		(9	)		(8	)		(11	)		(9	)

Add: weighted avg. dilutive warrants outstanding		2,896			2,986			2,915			2,992
Weighted average exercise price per share	$	11.97		$	13.12		$	11.97		$	13.12
Less: warrants bought back via treasury method		(2,896	)		(1,031	)		(2,915	)		(1,046	)
Add: weighted avg. dilutive options outstanding		560			1,334			775			1,497
Weighted average exercise price per share	$	14.29		$	16.95		$	14.99		$	16.59
Proceeds from unrecognized option expense		—			—			—			—
Less: options bought back via treasury method		(560	)		(595	)		(775	)		(662	)

Weighted average dilutive shares outstanding [b]		39,765			52,998			40,071			54,851


Notes:	[a]	Excludes unvested restricted shares outstanding which are considered participating securities under the two-class method for calculation of EPS.

	[b]	Warrants and options that are anti-dilutive are not included in the calculation of diluted shares outstanding. Warrants and options are anti-dilutive for earnings per share in any period in which there is a net loss and the anti-dilution is reflected in the calculations above as additional treasury method repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.
(LOSSES) EARNINGS PER SHARE INFORMATION — TWO CLASS METHOD


	QUARTERS ENDED SEPT. 30,						NINE MONTHS ENDED SEPT. 30,
	2011			2010			2011			2010
Net (loss) income	$	(20,018	)	$	139,128		$	(66,358	)	$	253,510
Less preferred dividends		(8,188	)		(3,875	)		(15,938	)		(11,625	)

Net (loss) income (attributable) available to common and participating common shareholders	$	(28,206	)	$	135,253		$	(82,296	)	$	241,885
Less amount allocated to participating common shareholders [a]		(224	)		(2,468	)		(740	)		(4,565	)

Net (loss) income (attributable) allocated to common shareholders	$	(28,430	)	$	132,785		$	(83,036	)	$	237,320


Denominator:
Weighted average shares — basic
Outstanding		39,765			50,296			40,071			52,058
Vested restricted share units		—			—			—			3

		39,765			50,296			40,071			52,061


Share Equivalents
Warrants		—			1,955			—			1,946
Options		—			739			—			835
Restricted share units		—			8			—			9

Weighted average shares — diluted		39,765			52,998			40,071			54,851


Basic (losses) earnings per common share	$	(0.71	)	$	2.64		$	(2.07	)	$	4.56


Diluted (losses) earnings per common share [b]	$	(0.71	)	$	2.51		$	(2.07	)	$	4.33


[a]		Represents earnings and dividends allocated to holders of unvested restricted shares issued under the Company’s stock compensation plans that are considered participating securities related to the calculation of (losses) earnings per share under the two-class method. In periods of loss, no losses are allocated to participating common shareholders.

[b]		Represents diluted earnings per share calculated under the two-class method which was the lower of the two-class method and the treasury stock method.

ENDURANCE SPECIALTY HOLDINGS LTD.
OPERATING (LOSS) INCOME RECONCILIATION
(LOSSES) EARNINGS PER SHARE INFORMATION — TWO CLASS METHOD


	Two-Class Method						Two-Class Method
	QUARTERS ENDED SEPT. 30,						NINE MONTHS ENDED SEPT. 30,
	2011			2010			2011			2010
Net (loss) income	$	(20,018	)	$	139,128		$	(66,358	)	$	253,510
(Less) Add after-tax items:
Net foreign exchange gains		(4,153	)		(12,433	)		(7,822	)		(6,463	)
Net realized and unrealized investment gains		(775	)		(8,687	)		(25,514	)		(13,004	)
Net impairment losses recognized in (losses) earnings		240			1,380			2,819			3,233

Operating (loss) income before preferred dividends	$	(24,706	)	$	119,388		$	(96,875	)	$	237,276
Preferred dividends		(8,188	)		(3,875	)		(15,938	)		(11,625	)

Operating (loss) income (attributable) available to common and participating common shareholders	$	(32,894	)	$	115,513		$	(112,813	)	$	225,651
Less amount allocated to participating common shareholders [a]		(224	)		(2,109	)		(740	)		(4,261	)

Operating (loss) income allocated to common shareholders	$	(33,118	)	$	113,404		$	(113,553	)	$	221,390


Weighted average common shares outstanding
Basic		39,765			50,296			40,071			52,061
Dilutive		39,765			52,998			40,071			54,851

Basic per common share data
Net (loss) income allocated to common shareholders	$	(0.71	)	$	2.64		$	(2.07	)	$	4.56
(Less) Add after-tax items:
Net foreign exchange gains		(0.11	)		(0.25	)		(0.20	)		(0.12	)
Net realized and unrealized investment gains		(0.02	)		(0.17	)		(0.63	)		(0.25	)
Net impairment losses recognized in (losses) earnings		0.01			0.03			0.07			0.06

Operating (loss) income allocated to common shareholders	$	(0.83	)	$	2.25		$	(2.83	)	$	4.25


Diluted per common share data
Net (loss) income allocated to common shareholders	$	(0.71	)	$	2.51		$	(2.07	)	$	4.33
(Less) Add after-tax items:
Net foreign exchange gains		(0.11	)		(0.24	)		(0.20	)		(0.12	)
Net realized and unrealized investment gains		(0.02	)		(0.16	)		(0.63	)		(0.23	)
Net impairment losses recognized in (losses) earnings		0.01			0.03			0.07			0.06

Operating (loss) income allocated to common shareholders [b]	$	(0.83	)	$	2.14		$	(2.83	)	$	4.04


[a]		Represents earnings and dividends allocated to holders of unvested restricted shares issued under the Company’s stock compensation plans that are considered participating securities related to the calculation of (losses) earnings per share under the two-class method. In periods of loss, no losses are allocated to participating common shareholders.

[b]		Represents diluted earnings per share calculated under the two-class method which was the lower of the two-class method and the treasury stock method.

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES SENSITIVITY ANALYSIS

DILUTIVE SHARES OUSTANDING


Market Price per Share
$35.00	$36.00		$37.00		$38.00		$39.00		$40.00		$41.00		$42.00		$43.00		$44.00		$45.00
42,760		42,793		42,825		42,856		42,884		42,911		42,938		42,963		42,986		43,008		43,030

ENDURANCE SPECIALTY HOLDINGS LTD.
BOOK VALUE PER SHARE


	SEPT. 30,						DEC. 31,
	2011			2010			2010
DILUTIVE COMMON SHARES OUTSTANDING:
AS-IF CONVERTED [a]
Price per share at period end	$	34.15		$	39.80		$	46.07

Basic common shares outstanding		39,770			48,716			46,259

Add: unvested restricted shares and restricted share units		753			988			980

Add: dilutive warrants outstanding		2,896			2,986			2,986
Weighted average exercise price per share	$	11.97		$	13.12		$	12.87

Add: dilutive options outstanding		559			1,332			1,278
Weighted average exercise price per share	$	14.29		$	16.95		$	16.50

Book Value [b]	$	2,205,950		$	2,719,685		$	2,648,153
Add: proceeds from converted warrants		34,665			39,176			38,430
Add: proceeds from converted options		7,988			22,577			21,087

Pro forma book value	$	2,248,603		$	2,781,438		$	2,707,670

Dilutive shares outstanding		43,978			54,022			51,503


Basic book value per common share	$	55.47		$	55.83		$	57.25
Diluted book value per common share	$	51.13		$	51.49		$	52.57


DILUTIVE COMMON SHARES OUTSTANDING:
TREASURY STOCK METHOD
Price per share at period end	$	34.15		$	39.80		$	46.07

Basic common shares outstanding		39,770			48,716			46,259

Add: unvested restricted shares and restricted share units		753			988			980

Add: dilutive warrants outstanding		2,896			2,986			2,986
Weighted average exercise price per share	$	11.97		$	13.12		$	12.87
Less: warrants bought back via treasury method		(1,015	)		(984	)		(834	)

Add: dilutive options outstanding		559			1,332			1,278
Weighted average exercise price per share	$	14.29		$	16.95		$	16.50
Less: options bought back via treasury method		(234	)		(567	)		(458	)


Dilutive shares outstanding		42,729			52,471			50,211


Basic book value per common share	$	55.47		$	55.83		$	57.25
Diluted book value per common share	$	51.63		$	51.83		$	52.74


[a]		The as-if converted method assumes that the proceeds received upon exercise of options and warrants will be retained by the Company and the resulting common shares from exercise will remain outstanding

[b]		Excludes the $430 million (2010 — $200 million) liquidation value of the preferred shares.

ENDURANCE SPECIALTY HOLDINGS LTD.
REGULATION G

In presenting the Company’s results, management has included and discussed certain non-GAAP measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company’s results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.

Operating (loss) income is an internal performance measure used by the Company in the management of its operations. Operating (loss) income represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. The Company believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations. In addition to presenting net (loss) income determined in accordance with GAAP, the Company believes that showing operating (loss) income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results of operations in a manner similar to how management analyzes the Company’s underlying business performance. Operating (loss) income should not be viewed as a substitute for GAAP net (loss) income. Please see page 31 for a reconciliation of operating (loss) income to net (loss) income.

Return on Average Equity (ROAE) is comprised using the average common equity calculated as the arithmetic average of the beginning and ending common equity balances for stated periods. Return on Beginning Equity (ROBE) is comprised using the beginning common equity for stated periods. The Company presents various measures of Return on Equity that are commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

Investment yield is provided by the Company’s investment managers and is calculated by dividing net investment income by average invested assets at amortized cost. The Company utilizes and presents the investment yield in order to better disclose the performance of the Company’s investments and to show the components of the Company’s ROE.

The Company has included diluted book value per common share because it takes into account the effect of dilutive securities; therefore, the Company believes it is a better measure of calculating shareholder returns than book value per common share. Please see page 33 for a reconciliation of diluted book value per common share to basic book value per common share.

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