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

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8-K - FORM 8-K - ENDURANCE SPECIALTY HOLDINGS LTD	enh8-k12312015coverpage.htm
EX-99.1 - EX-99.1 - ENDURANCE SPECIALTY HOLDINGS LTD	enh8-k12312015pressrelease.htm

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

FOURTH QUARTER 2015

Endurance Specialty Holdings Ltd.

Waterloo House, 100 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 Income - Quarterly	2
b. Consolidated Statements of Income - Annual	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
IV. Loss Reserve Analysis
a. Activity in Reserve for Losses and Loss Expenses	22
b. Prior Year Reserve Development by Segment	23
c. Prior Year Reserve Development by Line of Business	24
d. Losses and Loss Expenses Incurred by Line of Business	25
e. Analysis of Unpaid Losses and Loss Expenses	26
V. Shareholder Return Analysis
a. Shareholder Return Analysis	27
b. Weighted Average Dilutive Shares Outstanding	28
c. Earnings per Share - Two Class Method	29
d. Operating Income Reconciliation - Two Class Method	30
e. Earnings per Share and Operating Income Reconciliation Excluding Acquisition Expenses	31
f. Earnings per Share and Operating Income Reconciliation Excluding Proposed Acquisition Expenses	32
g. Financial Statement Impact of Acquisition of Montpelier	33
h. Book Value Per Share Analysis	34
VI. Regulation G	35

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

Some of the statements in this financial supplement may include and Endurance may make related oral 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,” “would,” “expect,” “intend,” “plan,” “believe,” “project,” “target,” “anticipate,” “seek,” “will,” “deliver” 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 materially 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 for the year ended December 31, 2014 and in our most recently filed 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, 2014 and 2013 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.

•

Endurance Specialty Holdings Ltd., along with others in the industry, uses underwriting ratios as measures of performance. The net 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 for the Company is the ratio of general and administrative expenses and corporate expenses to earned premiums. The general and administrative expense ratio for the segments is the ratio of general and administrative expenses to earned premiums. The combined ratio is the sum of the net 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 DECEMBER 31,						YEAR ENDED DECEMBER 31,						Previous Quarter Change		Previous Year to Date Change
		2015			2014			2015			2014			Previous Quarter Change		Previous Year to Date Change
HIGHLIGHTS	Net income		$107,896			$84,573			$355,111			$348,450		27.6	%	1.9	%
	Net income available to common and participating common shareholders	91,401			76,387			311,345			315,700			19.7	%	(1.4	)%
	Net income available to common and participating common shareholders, excluding transaction-related costs [f]	99,546			76,558			387,930			335,960			30.0	%	15.5	%
	Operating income [a]	121,890			86,712			364,775			336,762			40.6	%	8.3	%
	Operating income available to common and participating common shareholders [a]	113,704			78,526			332,025			304,012			44.8	%	9.2	%
	Operating income available to common and participating common shareholders, excluding transaction-related costs [a] [f]	121,849			78,697			408,610			324,272			54.8	%	26.0	%
	Operating cash flow	319,486			214,089			245,457			266,261			49.2	%	(7.8	)%
	Net investment income	23,180			25,894			113,826			131,543			(10.5	)%	(13.5	)%
	Gross premiums written	515,648			421,026			3,320,861			2,894,076			22.5	%	14.7	%
	Net premiums written	289,743			233,968			1,950,470			1,934,206			23.8	%	0.8	%
	Net premiums earned	573,456			471,279			1,978,453			1,863,978			21.7	%	6.1	%
	Total assets	13,241,525			9,640,684			13,241,525			9,640,684			37.4	%	37.4	%
	Total shareholders’ equity	5,124,072			3,185,182			5,124,072			3,185,182			60.9	%	60.9	%

PER SHARE AND SHARES DATA	Basic earnings per common share
	Net income (as reported)		$1.36			$1.71			$5.74			$7.07		(20.5	)%	(18.8	)%
	Operating income (as reported) [a]		$1.69			$1.75			$6.12			$6.80		(3.4	)%	(10.0	)%
	Diluted earnings per common share
	Net income (as reported)		$1.36			$1.70			$5.73			$7.06		(20.0	)%	(18.8	)%
	Operating income (as reported) [a]		$1.69			$1.75			$6.11			$6.80		(3.4	)%	(10.1	)%
	Operating income, excluding transaction-related costs [a] [f]		$1.82			$1.75			$7.52			$7.25		4.0	%	3.7	%

As Reported	Weighted average common shares outstanding	65,331			43,474			52,707			43,368			50.3	%	21.5	%
	Weighted average common shares outstanding & dilutive potential common shares [e]	65,405			43,557			52,829			43,415			50.2	%	21.7	%

	Common dividends paid per share		$0.35			$0.34			$1.40			$1.36		2.9	%	2.9	%

Book Value Per Common Share	Book value [b]		$67.18			$63.38			$67.18			$63.38		6.0	%	6.0	%
Book Value Per Common Share	Diluted book value (treasury stock method) [b]		$65.48			$61.33			$65.48			$61.33		6.8	%	6.8	%

FINANCIAL RATIOS	Return on average common equity (ROAE), net income [c]	2.1		%	2.8		%	9.1		%	12.0		%	(0.7	)	(2.9	)
FINANCIAL RATIOS	ROAE, operating income [a] [c]	2.6		%	2.9		%	9.7		%	11.5		%	(0.3	)	(1.8	)
	Return on average common equity (ROAE), net income, excluding transaction-related costs [c] [f]	2.3		%	2.8		%	11.4		%	12.7		%	(0.5	)	(1.3	)
	ROAE, operating income, excluding transaction-related costs [a] [c] [f]	2.8		%	2.9		%	12.0		%	12.3		%	(0.1	)	(0.3	)

	Annualized ROAE, net income [c]	8.3		%	11.2		%	9.1		%	12.0		%	(2.9	)	(2.9	)
	Annualized ROAE, operating income [a] [c]	10.4		%	11.5		%	9.7		%	11.5		%	(1.1	)	(1.8	)
	Annualized ROAE, net income, excluding transaction-related costs [c] [f]	9.1		%	11.2		%	11.4		%	12.7		%	(2.1	)	(1.3	)
	Annualized ROAE, operating income, excluding transaction-related costs [a] [c] [f]	11.1		%	11.6		%	12.0		%	12.3		%	(0.5	)	(0.3	)
	Annualized investment yield	1.0		%	1.6		%	1.5		%	2.0		%	(0.6	)	(0.5	)

GAAP	Loss ratio	42.2		%	51.7		%	46.4		%	52.1		%	(9.5	)	(5.7	)
	Acquisition expense ratio	15.8		%	16.0		%	17.6		%	17.1		%	(0.2	)	0.5
	General and administrative expense ratio [d]	18.2		%	15.5		%	18.9		%	16.8		%	2.7		2.1
	Combined ratio	76.2		%	83.2		%	82.9		%	86.0		%	(7.0	)	(3.1	)

[a] Operating 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. Please see page 30 for a reconciliation to net income.

[b] For detailed calculations, please refer to page 34.

[c] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances by quarter for the stated periods, which excludes the $460 million (2014: $430 million) liquidation value of the preferred shares.

[d] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

[e] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. 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.

[f] Transaction-related costs incurred related to the acquisition of Montpelier Re Holdings Ltd. ("Montpelier") in 2015 and the proposed acquisition of Aspen Insurance Holdings Limited ("Aspen") in 2014. For detailed calculations, please refer to pages 31 & 32.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY



	QUARTERS ENDED
	DEC. 31, 2015			SEPT. 30, 2015			JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$515,648			$642,597			$861,184			$1,301,432			$421,026			$370,809
Premiums ceded	(225,905		)	(305,907		)	(302,101		)	(536,478		)	(187,058		)	(90,745		)
Net premiums written		$289,743			$336,690			$559,083			$764,954			$233,968			$280,064
Change in unearned premiums	283,713			220,313			(100,948		)	(375,095		)	237,311			219,423
Net premiums earned		$573,456			$557,003			$458,135			$389,859			$471,279			$499,487
Other underwriting (loss) income	(7,716		)	227			1,389			2,406			(1,847		)	(2,740		)
Total underwriting revenues		$565,740			$557,230			$459,524			$392,265			$469,432			$496,747
UNDERWRITING EXPENSES
Net losses and loss expenses		$242,057			$263,993			$239,122			$171,936			$243,801			$302,620
Acquisition expenses	90,364			90,457			84,971			82,093			75,363			82,151
General and administrative expenses	89,143			60,793			54,965			54,890			60,628			66,662
Total underwriting expenses		$421,564			$415,243			$379,058			$308,919			$379,792			$451,433
Underwriting income		$144,176			$141,987			$80,466			$83,346			$89,640			$45,314
OTHER OPERATING (EXPENSE) REVENUE
Net investment income		$23,180			$16,533			$32,252			$41,861			$25,894			$46,346
Corporate expenses [a]	(15,219		)	(74,308		)	(12,634		)	(12,268		)	(12,383		)	(12,937		)
Interest expense	(10,815		)	(12,324		)	(9,062		)	(9,059		)	(9,058		)	(9,050		)
Amortization of intangibles	(16,124		)	(11,318		)	(1,579		)	(1,599		)	(1,621		)	(1,634		)
Total other operating (expense) revenue		($18,978	)		($81,417	)		$8,977			$18,935			$2,832			$22,725
INCOME BEFORE OTHER ITEMS		$125,198			$60,570			$89,443			$102,281			$92,472			$68,039
OTHER
Net foreign exchange gains (losses)		$2,190			($8,621	)		($12,981	)		($7,552	)		$227			($5,718	)
Net realized and unrealized (losses) gains	(20,238		)	5,029			9,680			18,189			(3,788		)	5,197
Net impairment losses recognized in earnings	(2,604		)	(38		)	(424		)	(649		)	(214		)	(41		)
Income tax benefit (expense)	3,350			(2,410		)	(1,512		)	(3,790		)	(4,124		)	(296		)
NET INCOME		$107,896			$54,530			$84,206			$108,479			$84,573			$67,181
Net income attributable to non-controlling interests	(8,309		)	(2,707		)	—			—			—			—
NET INCOME AVAILABLE TO THE COMPANY	99,587			51,823			84,206			108,479			84,573			67,181
Preferred dividends	(8,186		)	(8,188		)	(8,188		)	(8,188		)	(8,186		)	(8,186		)
NET INCOME AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS		$91,401			$43,635			$76,018			$100,291			$76,387			$58,995

KEY RATIOS/PER SHARE DATA
Loss ratio	42.2		%	47.4		%	52.2		%	44.1		%	51.7		%	60.7		%
Acquisition expense ratio	15.8		%	16.2		%	18.5		%	21.1		%	16.0		%	16.4		%
General and administrative expense ratio [b]	18.2		%	24.3		%	14.8		%	17.2		%	15.5		%	15.9		%
Combined ratio	76.2		%	87.9		%	85.5		%	82.4		%	83.2		%	93.0		%

Basic earnings per common share		$1.36			$0.73			$1.69			$2.24			$1.71			$1.33
Diluted earnings per common share [c]		$1.36			$0.73			$1.68			$2.23			$1.70			$1.33

ROAE, net income [d]	2.1		%	1.2		%	2.7		%	3.6		%	2.8		%	2.4		%

[a] The Company incurred $8.1 million of corporate expenses in relation to the Company's acquisition of Montpelier for the quarter ended December 31, 2015. For the quarter ended December 31, 2014, the Company incurred $0.2 million of corporate expenses in relation to the Company's proposed acquisition of Aspen.

[b] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

[c] Warrants and options that are anti-dilutive are not included in the calculation of diluted shares outstanding. 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.

[d] Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances by quarter for the stated period, which excludes the liquidation value of the preferred shares of $460 million (2014 and 2013: $430 million).

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME - ANNUAL



	YEARS ENDED
	DEC. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$3,320,861			$2,894,076			$2,665,244
Premiums ceded	(1,370,391		)	(959,870		)	(616,311		)
Net premiums written		$1,950,470			$1,934,206			$2,048,933
Change in unearned premiums	27,983			(70,228		)	(32,449		)
Net premiums earned		$1,978,453			$1,863,978			$2,016,484
Other underwriting loss	(3,694		)	(5,786		)	(2,046		)
Total underwriting revenues		$1,974,759			$1,858,192			$2,014,438
UNDERWRITING EXPENSES
Net losses and loss expenses		$917,108			$970,162			$1,219,684
Acquisition expenses	347,885			319,513			304,430
General and administrative expenses	259,791			247,387			236,873
Total underwriting expenses		$1,524,784			$1,537,062			$1,760,987
Underwriting income		$449,975			$321,130			$253,451
OTHER OPERATING (EXPENSE) REVENUE
Net investment income		$113,826			$131,543			$166,216
Corporate expenses [a]	(114,429		)	(66,200		)	(58,033		)
Interest expense	(41,260		)	(40,968		)	(36,188		)
Amortization of intangibles	(30,620		)	(6,484		)	(7,012		)
Total other operating (expense) revenue		($72,483	)		$17,891			$64,983
INCOME BEFORE OTHER ITEMS		$377,492			$339,021			$318,434
OTHER
Net foreign exchange losses		($26,964	)		($3,839	)		($14,214	)
Net realized and unrealized gains	12,660			14,283			15,164
Net impairment losses recognized in earnings	(3,715		)	(625		)	(1,616		)
Income tax expense	(4,362		)	(390		)	(5,853		)
NET INCOME		$355,111			$348,450			$311,915
Net income attributable to non-controlling interests	(11,016		)	—			—
NET INCOME AVAILABLE TO THE COMPANY		$344,095			$348,450			$311,915
Preferred dividends	(32,750		)	(32,750		)	(32,750		)
NET INCOME AVAILABLE TO COMMON AND PARTICIPATING COMMON SHAREHOLDERS		$311,345			$315,700			$279,165

KEY RATIOS/PER SHARE DATA
Loss ratio	46.4		%	52.1		%	60.5		%
Acquisition expense ratio	17.6		%	17.1		%	15.1		%
General and administrative expense ratio [b]	18.9		%	16.8		%	14.6		%
Combined ratio	82.9		%	86.0		%	90.2		%

Basic earnings per common share		$5.74			$7.07			$6.37
Diluted earnings per common share [c]		$5.73			$7.06			$6.37

ROAE, net income [d]	9.1		%	12.0		%	11.9		%

[a] The Company incurred $76.6 million of corporate expenses in relation to the Company's acquisition of Montpelier for the year ended December 31, 2015. For the year ended December 31, 2014, the Company incurred $15.5 million of corporate expenses and $4.8 million of interest expense, respectively, in relation to the Company's proposed acquisition of Aspen.

[b] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

[c] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. 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 BALANCE SHEETS



	DEC. 31, 2015			SEPT. 30, 2015			JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014
ASSETS
Cash and cash equivalents		$1,177,750			$1,242,997			$622,642			$657,194			$745,472
Fixed maturity investments trading, at fair value	1,587,160			1,372,030			—			—			—
Fixed maturity investments available for sale, at fair value	4,359,019			4,656,145			4,933,776			4,953,893			5,092,581
Short term investments trading, at fair value	394,111			348,582			—			—			—
Short term investments available for sale, at fair value	25,685			16,356			16,366			2,822			9,014
Equity securities trading, at fair value	15,229			2,150			—			—			—
Equity securities available for sale, at fair value	513,585			496,035			420,411			366,897			331,368
Other investments	872,617			842,446			623,868			575,974			541,454
Premiums receivable, net	1,376,328			2,068,484			1,665,990			1,446,205			883,450
Insurance and reinsurance balances receivable	102,403			115,047			108,162			109,545			122,214
Deferred acquisition costs	255,501			282,975			296,568			258,753			207,368
Prepaid reinsurance premiums	498,574			650,967			668,964			692,466			354,940
Reinsurance recoverable on unpaid losses	907,944			830,116			785,472			605,809			670,795
Reinsurance recoverable on paid losses	288,026			163,137			157,287			136,642			218,291
Accrued investment income	30,213			31,057			25,118			23,165			27,183
Goodwill and intangible assets	553,960			573,956			150,296			151,816			153,405
Deferred tax assets	64,164			54,463			46,779			43,105			48,995
Receivable on pending investment sales	31,873			85,911			21,420			86,367			38,877
Other assets	187,383			195,981			172,162			269,491			195,277
TOTAL ASSETS		$13,241,525			$14,028,835			$10,715,281			$10,380,144			$9,640,684
LIABILITIES
Reserve for losses and loss expenses		$4,510,415			$4,489,836			$3,833,525			$3,621,728			$3,846,859
Reserve for unearned premiums	1,789,148			2,230,552			2,046,933			1,964,307			1,254,519
Deposit liabilities	13,674			13,489			13,376			13,722			15,136
Reinsurance balances payable	661,213			794,935			632,457			502,339			375,711
Debt	717,650			915,147			528,123			527,781			523,617
Payable on pending investment purchases	63,442			157,671			82,375			163,891			151,682
Deferred tax liability	17,315			18,346			—			—			—
Other liabilities	344,596			352,515			275,586			311,530			287,978
TOTAL LIABILITIES		$8,117,453			$8,972,491			$7,412,375			$7,105,298			$6,455,502
SHAREHOLDERS’ EQUITY
Preferred shares, Series A, non-cumulative		$—			$8,000			$8,000			$8,000			$8,000
Preferred shares, Series B, non-cumulative	9,200			9,200			9,200			9,200			9,200
Preferred shares, Series C, non-cumulative	9			—			—			—			—
Common shares	66,798			66,607			45,157			45,121			44,765
Additional paid-in capital	2,145,836			2,108,447			610,585			601,986			598,226
Accumulated other comprehensive (loss) income	(46,634		)	(8,544		)	36,965			77,759			76,706
Retained earnings	2,681,053			2,613,160			2,592,999			2,532,780			2,448,285
TOTAL SHAREHOLDERS' EQUITY AVAILABLE TO THE COMPANY		$4,856,262			$4,796,870			$3,302,906			$3,274,846			$3,185,182
Non-controlling interests	267,810			259,474			—			—			—
TOTAL SHAREHOLDERS’ EQUITY		$5,124,072			$5,056,344			$3,302,906			$3,274,846			$3,185,182
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$13,241,525			$14,028,835			$10,715,281			$10,380,144			$9,640,684

Book value per common share		$67.18			$66.90			$65.53			$65.14			$63.38
Diluted book value per common share (treasury stock method)		$65.48			$65.02			$63.32			$62.79			$61.33
RATIOS
Debt-to-capital	12.9		%	16.0		%	13.8		%	13.9		%	14.1		%

ENDURANCE SPECIALTY HOLDINGS LTD.

Probable Maximum Loss by Zone and Peril

(as a percentage of shareholders' equity available to the company)

Largest 1 in 100 year PML as of January 1, 2016 is equal to 11.4% of shareholders’ equity available to the company as of December 31, 2015.



		Estimated Occurrence Net Loss as of January 1, 2016										Jan. 1, 2015		Jan. 1, 2014
Zone	Peril	10 Year Return Period		25 Year Return Period		50 Year Return Period		100 Year Return Period		250 Year Return Period		100 Year Return Period		100 Year Return Period

United States	Hurricane	4.8	%	6.7	%	9.1	%	11.4	%	15.1	%	9.6	%	10.2	%
Europe	Windstorm	1.9	%	3.6	%	4.5	%	7.9	%	13.7	%	10.3	%	11.0	%
California	Earthquake	1.1	%	2.7	%	3.9	%	5.1	%	7.7	%	7.5	%	8.2	%
Japan	Windstorm	0.6	%	2.1	%	3.1	%	4.0	%	4.6	%	4.1	%	5.0	%
Northwest U.S.	Earthquake	—	%	0.1	%	0.8	%	1.8	%	3.1	%	3.3	%	3.3	%
Japan	Earthquake	0.4	%	2.4	%	3.9	%	4.7	%	5.7	%	4.8	%	3.8	%
United States	Tornado/Hail	0.8	%	1.1	%	1.5	%	2.1	%	3.0	%	2.2	%	3.0	%
Australia	Earthquake	—	%	0.2	%	0.6	%	1.1	%	2.6	%	3.1	%	3.0	%
New Zealand	Earthquake	—	%	0.2	%	0.4	%	0.7	%	1.3	%	1.1	%	0.8	%
Australia	Windstorm	0.2	%	0.5	%	0.7	%	0.9	%	1.8	%	2.4	%	1.8	%
New Madrid	Earthquake	—	%	—	%	0.1	%	0.3	%	2.0	%	0.2	%	0.3	%

The net loss estimates by zone above represent estimated losses related to our property, catastrophe and specialty 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 and reinstatement premiums, if applicable. The net loss estimates include Endurance's portion of the exposures assumed through its investment in Blue Capital Global Reinsurance Fund Limited and Blue Capital Reinsurance Holdings Ltd. 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 most recent Annual Report on Form 10-K.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT DISTRIBUTION

FOR THE YEAR ENDED DECEMBER 31, 2015

Gross Premiums Written = $3,320.9 million

[a] Other specialty includes the agriculture line in the Insurance segment and the specialty line in the Reinsurance segment.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA



	FOR THE QUARTERS ENDED
	DEC. 31, 2015										DEC. 31, 2014
	Insurance			Reinsurance			Totals				Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written		$432,254			$83,394			$515,648				$321,983			$99,043			$421,026
Net premiums written		$211,098			$78,645			$289,743				$140,702			$93,266			$233,968
Net premiums earned		$253,085			$320,371			$573,456				$217,745			$253,534			$471,279
Other underwriting loss	—			(7,716		)	(7,716		)		—			(1,847		)	(1,847		)
Total underwriting revenues		$253,085			$312,655			$565,740				$217,745			$251,687			$469,432

UNDERWRITING EXPENSES
Net losses and loss expenses		$144,425			$97,632			$242,057				$159,784			$84,017			$243,801
Acquisition expenses	22,292			68,072			90,364				17,809			57,554			75,363
General and administrative expenses	50,723			38,420			89,143				35,406			25,222			60,628
Total expenses		$217,440			$204,124			$421,564				$212,999			$166,793			$379,792
UNDERWRITING INCOME		$35,645			$108,531			$144,176				$4,746			$84,894			$89,640

OTHER OPERATING REVENUE (EXPENSE)
Net investment income								$23,180										$25,894
Corporate expenses							(15,219		)								(12,383		)
Interest expense							(10,815		)								(9,058		)
Amortization of intangibles							(16,124		)								(1,621		)
Net foreign exchange gains							2,190										227
Net realized and unrealized losses							(20,238		)								(3,788		)
Net impairment loss recognized in earnings							(2,604		)								(214		)
INCOME BEFORE INCOME TAXES								$104,546										$88,697

GAAP RATIOS
Loss ratio	57.1		%	30.5		%	42.2		%		73.3		%	33.1		%	51.7		%
Acquisition expense ratio	8.8		%	21.2		%	15.8		%		8.2		%	22.7		%	16.0		%
General and administrative expense ratio	20.0		%	12.0		%	18.2		%	[a]	16.3		%	10.0		%	15.5		%	[a]
Combined ratio AS REPORTED	85.9		%	63.7		%	76.2		%		97.8		%	65.8		%	83.2		%

Effect of favorable prior accident year reserve development	8.0		%	12.5		%	10.5		%		12.2		%	16.7		%	14.6		%
Combined ratio net of prior accident year reserve development	93.9		%	76.2		%	86.7		%		110.0		%	82.5		%	97.8		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA



	FOR THE QUARTERS ENDED
	DEC. 31, 2015			SEPT. 30, 2015			JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$432,254			$448,563			$468,866			$736,218			$321,983			$200,726
Net premiums written		$211,098			$174,937			$190,299			$304,039			$140,702			$111,976
Net premiums earned		$253,085			$234,143			$201,460			$135,864			$217,745			$235,967
Total underwriting revenues		$253,085			$234,143			$201,460			$135,864			$217,745			$235,967

UNDERWRITING EXPENSES
Net losses and loss expenses		$144,425			$139,141			$145,483			$74,512			$159,784			$230,708
Acquisition expenses	22,292			24,375			17,702			15,883			17,809			16,754
General and administrative expenses	50,723			31,880			28,567			28,842			35,406			38,592
Total expenses		$217,440			$195,396			$191,752			$119,237			$212,999			$286,054

UNDERWRITING INCOME (LOSS)		$35,645			$38,747			$9,708			$16,627			$4,746			($50,087	)

GAAP RATIOS
Loss ratio	57.1		%	59.5		%	72.2		%	54.9		%	73.3		%	97.8		%
Acquisition expense ratio	8.8		%	10.4		%	8.8		%	11.7		%	8.2		%	7.1		%
General and administrative expense ratio	20.0		%	13.6		%	14.2		%	21.2		%	16.3		%	16.4		%
Combined ratio AS REPORTED	85.9		%	83.5		%	95.2		%	87.8		%	97.8		%	121.3		%

Effect of favorable prior accident year reserve development	8.0		%	9.6		%	9.2		%	15.2		%	12.2		%	2.0		%

Combined ratio net of prior accident year reserve development	93.9		%	93.1		%	104.4		%	103.0		%	110.0		%	123.3		%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA



	FOR THE QUARTERS ENDED
	DEC. 31, 2015			SEPT. 30, 2015			JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$83,394			$194,034			$392,318			$565,214			$99,043			$170,083
Net premiums written		$78,645			$161,753			$368,784			$460,915			$93,266			$168,088
Net premiums earned		$320,371			$322,860			$256,675			$253,995			$253,534			$263,520
Other underwriting (loss) income	(7,716		)	227			1,389			2,406			(1,847		)	(2,740		)
Total underwriting revenues		$312,655			$323,087			$258,064			$256,401			$251,687			$260,780

UNDERWRITING EXPENSES
Net losses and loss expenses		$97,632			$124,852			$93,639			$97,424			$84,017			$71,912
Acquisition expenses	68,072			66,082			67,269			66,210			57,554			65,397
General and administrative expenses	38,420			28,913			26,398			26,048			25,222			28,070
Total expenses		$204,124			$219,847			$187,306			$189,682			$166,793			$165,379

UNDERWRITING INCOME		$108,531			$103,240			$70,758			$66,719			$84,894			$95,401

GAAP RATIOS
Loss ratio	30.5		%	38.6		%	36.5		%	38.3		%	33.1		%	27.3		%
Acquisition expense ratio	21.2		%	20.5		%	26.2		%	26.1		%	22.7		%	24.8		%
General and administrative expense ratio	12.0		%	9.0		%	10.3		%	10.3		%	10.0		%	10.7		%
Combined ratio AS REPORTED	63.7		%	68.1		%	73.0		%	74.7		%	65.8		%	62.8		%

Effect of favorable prior accident year reserve development	12.5		%	13.9		%	15.7		%	14.4		%	16.7		%	21.3		%

Combined ratio net of prior accident year reserve development	76.2		%	82.0		%	88.7		%	89.1		%	82.5		%	84.1		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	DEC. 31, 2015			SEPT. 30, 2015		JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$55,372			$156,145		$112,012		$516,916		$69,580		$58,220
Casualty and other specialty	138,956			128,509		146,056		100,682		104,535		69,590
Professional lines	112,917			80,069		96,736		54,760		87,477		55,056
Property, marine/energy and aviation	125,009			83,840		114,062		63,860		60,391		17,860
TOTAL INSURANCE		$432,254			$448,563		$468,866		$736,218		$321,983		$200,726

REINSURANCE SEGMENT
Catastrophe		$7,014			$40,660		$139,833		$124,407		$11,020		$13,778
Property	(291		)	53,423		30,560		125,700		4,219		9,358
Casualty	27,474			42,802		48,132		58,098		20,267		29,900
Professional lines	38,807			31,705		134,241		43,857		43,400		113,089
Specialty	10,390			25,444		39,552		213,152		20,137		3,958
TOTAL REINSURANCE		$83,394			$194,034		$392,318		$565,214		$99,043		$170,083

REPORTED TOTALS		$515,648			$642,597		$861,184		$1,301,432		$421,026		$370,809

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	DEC. 31, 2015			SEPT. 30, 2015		JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$13,119			$29,634		$22,677		$202,460		$28,142		$24,454
Casualty and other specialty	73,704			64,490		65,302		45,058		51,889		44,307
Professional lines	51,765			37,479		43,443		24,231		29,008		32,138
Property, marine/energy and aviation	72,510			43,334		58,877		32,290		31,663		11,077
TOTAL INSURANCE		$211,098			$174,937		$190,299		$304,039		$140,702		$111,976

REINSURANCE SEGMENT
Catastrophe		$4,083			$14,814		$122,305		$53,460		$9,442		$12,270
Property	(455		)	52,887		30,118		123,449		4,220		9,417
Casualty	27,455			42,802		48,132		58,098		20,278		29,495
Professional lines	38,807			31,705		134,241		43,857		43,400		113,089
Specialty	8,755			19,545		33,988		182,051		15,926		3,817
TOTAL REINSURANCE		$78,645			$161,753		$368,784		$460,915		$93,266		$168,088

REPORTED TOTALS		$289,743			$336,690		$559,083		$764,954		$233,968		$280,064

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED
	DEC. 31, 2015		SEPT. 30, 2015		JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$74,912		$85,106		$97,270		$39,494		$124,959		$143,876
Casualty and other specialty	65,955		57,160		47,712		45,659		45,043		55,657
Professional lines	39,836		32,976		27,000		24,613		24,460		25,816
Property, marine/energy and aviation	72,382		58,901		29,478		26,098		23,283		10,618
TOTAL INSURANCE		$253,085		$234,143		$201,460		$135,864		$217,745		$235,967

REINSURANCE SEGMENT
Catastrophe		$87,913		$79,973		$61,977		$55,995		$58,869		$66,026
Property	63,488		72,367		55,866		64,006		75,227		87,032
Casualty	41,753		46,062		33,905		41,593		41,146		61,218
Professional lines	58,392		57,178		50,147		47,295		45,288		24,793
Specialty	68,825		67,280		54,780		45,106		33,004		24,451
TOTAL REINSURANCE		$320,371		$322,860		$256,675		$253,995		$253,534		$263,520

REPORTED TOTALS		$573,456		$557,003		$458,135		$389,859		$471,279		$499,487

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA



	FOR THE YEARS ENDED
	DEC. 31, 2015										DEC. 31, 2014
	Insurance			Reinsurance			Totals				Insurance			Reinsurance			Totals
UNDERWRITING REVENUES
Gross premiums written		$2,085,901			$1,234,960			$3,320,861				$1,716,128			$1,177,948			$2,894,076
Net premiums written		$880,373			$1,070,097			$1,950,470				$860,406			$1,073,800			$1,934,206
Net premiums earned		$824,552			$1,153,901			$1,978,453				$833,912			$1,030,066			$1,863,978
Other underwriting loss	—			(3,694		)	(3,694		)		—			(5,786		)	(5,786		)
Total underwriting revenues		$824,552			$1,150,207			$1,974,759				$833,912			$1,024,280			$1,858,192

UNDERWRITING EXPENSES
Losses and loss expenses		$503,561			$413,547			$917,108				$594,561			$375,601			$970,162
Acquisition expenses	80,252			267,633			347,885				65,368			254,145			319,513
General and administrative expenses	140,012			119,779			259,791				148,475			98,912			247,387
Total expenses		$723,825			$800,959			$1,524,784				$808,404			$728,658			$1,537,062

UNDERWRITING INCOME		$100,727			$349,248			$449,975				$25,508			$295,622			$321,130

OTHER OPERATING REVENUE (EXPENSE)
Net investment income								$113,826										$131,543
Corporate expenses							(114,429		)								(66,200		)
Interest expense							(41,260		)								(40,968		)
Amortization of intangibles							(30,620		)								(6,484		)
Net foreign exchange losses							(26,964		)								(3,839		)
Net realized and unrealized gains							12,660										14,283
Net impairment loss recognized in earnings							(3,715		)								(625		)
INCOME BEFORE INCOME TAXES								$359,473										$348,840

GAAP RATIOS
Loss ratio	61.1		%	35.8		%	46.4		%		71.4		%	36.4		%	52.1		%
Acquisition expense ratio	9.7		%	23.2		%	17.6		%		7.8		%	24.7		%	17.1		%
General and administrative expense ratio	17.0		%	10.4		%	18.9		%	[a]	17.7		%	9.6		%	16.8		%	[a]
Combined ratio AS REPORTED	87.8		%	69.4		%	82.9		%		96.9		%	70.7		%	86.0		%

Effect of favorable prior accident year reserve development	9.9		%	14.0		%	12.3		%		9.7		%	14.9		%	12.5		%
Combined ratio net of prior accident year reserve development	97.7		%	83.4		%	95.2		%		106.6		%	85.6		%	98.5		%

[a] General and administrative expense ratio includes general and administrative expenses and corporate expenses.

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA



	FOR THE YEARS ENDED
	DEC. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$2,085,901			$1,716,128			$1,475,429
Net premiums written		$880,373			$860,406			$932,510
Net premiums earned		$824,552			$833,912			$946,474
Total underwriting revenues		$824,552			$833,912			$946,474

UNDERWRITING EXPENSES
Losses and loss expenses		$503,561			$594,561			$774,425
Acquisition expenses	80,252			65,368			64,778
General and administrative expenses	140,012			148,475			136,588
Total expenses		$723,825			$808,404			$975,791

UNDERWRITING INCOME (LOSS)		$100,727			$25,508			($29,317	)

GAAP RATIOS
Loss ratio	61.1		%	71.4		%	81.8		%
Acquisition expense ratio	9.7		%	7.8		%	6.8		%
General and administrative expense ratio	17.0		%	17.7		%	14.5		%
Combined ratio AS REPORTED	87.8		%	96.9		%	103.1		%

Effect of favorable prior accident year reserve development	9.9		%	9.7		%	3.6		%

Combined ratio net of prior accident year reserve development	97.7		%	106.6		%	106.7		%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA



	FOR THE YEARS ENDED
	DEC. 31, 2015			DEC. 31, 2014			DEC. 31, 2013
UNDERWRITING REVENUES
Gross premiums written		$1,234,960			$1,177,948			$1,189,815
Net premiums written		$1,070,097			$1,073,800			$1,116,423
Net premiums earned		$1,153,901			$1,030,066			$1,070,010
Other underwriting loss	(3,694		)	(5,786		)	(2,046		)
Total underwriting revenues		$1,150,207			$1,024,280			$1,067,964

UNDERWRITING EXPENSES
Losses and loss expenses		$413,547			$375,601			$445,259
Acquisition expenses	267,633			254,145			239,652
General and administrative expenses	119,779			98,912			100,285
Total expenses		$800,959			$728,658			$785,196

UNDERWRITING INCOME		$349,248			$295,622			$282,768

GAAP RATIOS
Loss ratio	35.8		%	36.4		%	41.6		%
Acquisition expense ratio	23.2		%	24.7		%	22.4		%
General and administrative expense ratio	10.4		%	9.6		%	9.4		%
Combined ratio AS REPORTED	69.4		%	70.7		%	73.4		%

Effect of favorable prior accident year reserve development	14.0		%	14.9		%	17.6		%

Combined ratio net of prior accident year reserve development	83.4		%	85.6		%	91.0		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE YEARS ENDED
	DEC. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$840,445		$866,025		$954,389
Casualty and other specialty	514,203		396,113		303,803
Professional lines	344,482		263,538		148,537
Property, marine/energy and aviation	386,771		190,452		68,700
TOTAL INSURANCE		$2,085,901		$1,716,128		$1,475,429

REINSURANCE SEGMENT
Catastrophe		$311,914		$343,213		$355,751
Property	209,392		287,326		297,806
Casualty	176,506		159,533		241,358
Professional lines	248,610		174,656		163,594
Specialty	288,538		213,220		131,306
TOTAL REINSURANCE		$1,234,960		$1,177,948		$1,189,815

REPORTED TOTALS		$3,320,861		$2,894,076		$2,665,244

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS



	FOR THE YEARS ENDED
	DEC. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$267,890		$459,149		$570,738
Casualty and other specialty	248,554		195,927		218,298
Professional lines	156,918		93,640		95,101
Property, marine/energy and aviation	207,011		111,690		48,373
TOTAL INSURANCE		$880,373		$860,406		$932,510

REINSURANCE SEGMENT
Catastrophe		$194,662		$252,973		$294,260
Property	205,999		287,235		292,872
Casualty	176,487		157,947		239,525
Professional lines	248,610		174,656		163,594
Specialty	244,339		200,989		126,172
TOTAL REINSURANCE		$1,070,097		$1,073,800		$1,116,423

REPORTED TOTALS		$1,950,470		$1,934,206		$2,048,933

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS EARNED BY LINE OF BUSINESS



	FOR THE YEARS ENDED
	DEC. 31, 2015		DEC. 31, 2014		DEC. 31, 2013
INSURANCE SEGMENT
Agriculture		$296,782		$471,403		$573,538
Casualty and other specialty	216,486		191,952		220,181
Professional lines	124,425		97,815		108,717
Property, marine/energy and aviation	186,859		72,742		44,038
TOTAL INSURANCE		$824,552		$833,912		$946,474

REINSURANCE SEGMENT
Catastrophe		$285,858		$249,113		$305,159
Property	255,727		297,331		352,716
Casualty	163,313		184,170		229,324
Professional lines	213,012		154,341		67,969
Specialty	235,991		145,111		114,842
TOTAL REINSURANCE		$1,153,901		$1,030,066		$1,070,010

REPORTED TOTALS		$1,978,453		$1,863,978		$2,016,484

ENDURANCE SPECIALTY HOLDINGS LTD.

RETURN ON EQUITY ANALYSIS



	FOR THE YEAR ENDED
	DECEMBER 31, 2015

Average common equity [a]		$3,415,086

Net premiums earned		$1,978,453
Combined ratio	82.9		%
Operating margin	17.1		%
Premium leverage	0.58x

Implied ROAE from underwriting activity	9.9		%

Average cash and invested assets		$7,434,542
Investment leverage	2.18x
Year to date investment income yield, pretax	1.5		%

Implied ROAE from investment activity	3.3		%

Financing costs and amortization of intangible assets [b]	(3.1		)%

Implied Pre-tax Operating ROAE, for period [c]	10.1		%

[a] Average common equity is calculated as the average of the beginning and ending common equity balances by quarter for the stated period, which excludes the liquidation value of the preferred shares of $460 million (2014: $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 activities.

ENDURANCE SPECIALTY HOLDINGS LTD.

ANNUALIZED PREMIUM & INVESTMENT LEVERAGE



	FOR THE QUARTERS ENDED								YEARS ENDED DECEMBER 31,
	DEC. 31, 2015		SEPT. 30, 2015		JUNE 30, 2015		MAR. 31, 2015		2015		2014

Average common equity [a]		$4,381,566		$3,619,888		$2,858,876		$2,800,014		$3,415,086		$2,638,276

Net premiums earned		$573,456		$557,003		$458,135		$389,859		$1,978,453		$1,863,978

Premium leverage	0.13x		0.15x		0.16x		0.14x		0.58x		0.72x

Annualized premium leverage	0.52x		0.62x		0.64x		0.56x		0.58x		0.72x

Average cash and invested assets		$8,909,284		$7,730,545		$6,517,687		$6,580,658		$7,434,542		$6,515,156

Investment leverage	2.03x		2.13x		2.25x		2.30x		2.18x		2.48x

[a] Average common equity is calculated as the arithmetric average of the beginning and ending common equity balances by quarter 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 DECEMBER 31, 2015 AND 2014



	December 31, 2015				December 31, 2014
Type of Investment	Fair Value		Percentage		Fair Value			Percentage
Cash and equivalents [a]		$1,146,181	12.9	%		$632,667		9.6	%
Short-term investments	419,796		4.7	%	9,014			0.1	%
Fixed maturity investments
U.S. government and government agencies notes	818,468		9.2	%	587,411			8.9	%
Government and agency guaranteed corporates	57,753		0.6	%	48,102			0.7	%
U.S. government agency residential mortgage-backed securities	1,236,040		13.9	%	1,082,142			16.4	%
U.S. government agency commercial mortgage-backed securities	99,638		1.1	%	50,981			0.8	%
Municipals	22,406		0.3	%	39,413			0.6	%
Foreign government	160,976		1.8	%	240,536			3.6	%
Corporate securities	1,849,934		20.8	%	1,361,462			20.5	%
Non-agency residential mortgage-backed securities	75,333		0.8	%	92,864			1.4	%
Non-agency commercial mortgage-backed securities	713,248		8.0	%	928,438			14.1	%
Asset-backed securities	507,255		5.7	%	413,221			6.3	%
Collateralized loan and debt obligations	405,128		4.5	%	248,011			3.8	%
Equity securities
Equity investments	393,829		4.4	%	202,535			3.1	%
Emerging market debt fund	56,421		0.6	%	60,150			0.9	%
Convertible funds	46,185		0.5	%	46,111			0.7	%
Preferred equity investments	17,623		0.2	%	15,836			0.2	%
Short-term fixed income fund	14,756		0.2	%	6,736			0.1	%
Other investments [b]	872,617		9.8	%	541,454			8.2	%
Total		$8,913,587	100.0	%		$6,607,084		100.0	%

Ratings [c]	Fair Value		Percentage		Fair Value			Percentage
U.S. government and government agencies notes		$818,468	12.9	%		$587,411		11.5	%
AAA/Aaa	1,204,763		18.9	%	1,206,252			23.6	%
AA/Aa	2,237,707		35.1	%	1,717,343			33.7	%
A/A	1,094,590		17.2	%	1,045,301			20.5	%
BBB	703,817		11.1	%	427,018			8.4	%
Below BBB	268,030		4.2	%	96,244			1.9	%
Not Rated	38,600		0.6	%	22,026			0.4	%
Total		$6,365,975	100.0	%		$5,101,595		100.0	%

Performance					December 31, 2015			December 31, 2014
Yield [d]					1.5		%	2.0	%
Duration in years [e]					2.74			2.91



	Year Ended			Quarter Ended			Quarter Ended			Quarter Ended		Quarter Ended		Year Ended
Net Investment Income	Dec. 31, 2015			Dec. 31, 2015			Sept. 30, 2015			June 30, 2015		Mar. 31, 2015		Dec. 31, 2014
Cash and available for sale securities		$127,379			$34,975			$34,249			$28,682		$29,473		$111,934
Other investments	(13,553		)	(11,795		)	(17,716		)	3,570		12,388		19,609
Total net investment income		$113,826			$23,180			$16,533			$32,252		$41,861		$131,543

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

[b] Other investments includes investments in alternative and specialty funds.

[c] Excludes cash and equivalents, equity securities and other investments.

[d] Earned yield for the years ending December 31, 2015 and 2014 excludes realized and unrealized gains and losses on fixed maturity investments.

[e] Duration excludes equity securities, other investments and operating cash.

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES



	THREE MONTHS ENDED DEC. 31, 2015									YEAR ENDED DEC. 31, 2015
	GROSS			RECOVERIES			NET			GROSS			RECOVERIES			NET
Reserve for losses and loss expenses
Balance, beginning of period		$4,489,836			($830,116	)		$3,659,720			$3,846,859			($670,795	)		$3,176,064

Incurred related to:
Current year	514,148			(211,968		)	302,180			1,944,335			(783,763		)	1,160,572
Prior years	(63,697		)	3,574			(60,123		)	(193,555		)	(49,909		)	(243,464		)
Total Incurred	450,451			(208,394		)	242,057			1,750,780			(833,672		)	917,108

Paid related to:
Current year	(246,132		)	119,174			(126,958		)	(561,162		)	295,264			(265,898		)
Prior years	(174,582		)	11,052			(163,530		)	(1,212,269		)	344,530			(867,739		)
Total Paid	(420,714		)	130,226			(290,488		)	(1,773,431		)	639,794			(1,133,637		)

Amounts acquired⁽¹⁾	—			—			—			719,922			(44,903		)	675,019
Foreign currency translation and other	(9,158		)	340			(8,818		)	(33,715		)	1,632			(32,083		)

Balance, end of period		$4,510,415			($907,944	)		$3,602,471			$4,510,415			($907,944	)		$3,602,471

(1) Represents the fair value of Montpelier's reserve for losses and loss expenses and reinsurance recoverable acquired at July 31, 2015.

ENDURANCE SPECIALTY HOLDINGS LTD.

PRIOR YEAR RESERVE DEVELOPMENT BY SEGMENT

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2015



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2015		($20,696	)		($36,462	)		($57,158	)
Quarter ended June 30, 2015	(18,575		)	(40,261		)	(58,836		)
Quarter ended September 30, 2015	(22,556		)	(44,791		)	(67,347		)
Quarter ended December 31, 2015	(20,174		)	(39,949		)	(60,123		)
Year ended December 31, 2015		($82,001	)		($161,463	)		($243,464	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2014



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2014		($11,648	)		($38,664	)		($50,312	)
Quarter ended June 30, 2014	(22,048		)	(32,153		)	(54,201		)
Quarter ended September 30, 2014	(20,311		)	(40,158		)	(60,469		)
Quarter ended December 31, 2014	(26,563		)	(42,270		)	(68,833		)
Year ended December 31, 2014		($80,570	)		($153,245	)		($233,815	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 2013



	Insurance			Reinsurance			Total Company
Incurred related to prior years
Quarter ended March 31, 2013		($17,295	)		($33,373	)		($50,668	)
Quarter ended June 30, 2013	(5,625		)	(57,180		)	(62,805		)
Quarter ended September 30, 2013	(6,210		)	(41,850		)	(48,060		)
Quarter ended December 31, 2013	(4,773		)	(56,086		)	(60,859		)
Year ended December 31, 2013		($33,903	)		($188,489	)		($222,392	)

ENDURANCE SPECIALTY HOLDINGS LTD.

PRIOR YEAR RESERVE DEVELOPMENT BY LINE OF BUSINESS

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT



	FOR THE QUARTERS ENDED												FOR THE YEARS ENDED
	DEC. 31, 2015			SEPT. 30, 2015			JUNE 30, 2015			MAR. 31, 2015			DEC. 31, 2015			DEC. 31, 2014
INSURANCE SEGMENT
Agriculture		$36			($212	)		($1,547	)		$392			($1,331	)		($7,435	)
Casualty and other specialty	(6,640		)	(12,581		)	(16,663		)	(18,710		)	(54,594		)	(57,264		)
Professional lines	(300		)	345			(119		)	(120		)	(194		)	(6,677		)
Property, marine/energy and aviation	(13,270		)	(10,108		)	(246		)	(2,258		)	(25,882		)	(9,194		)
TOTAL INSURANCE		($20,174	)		($22,556	)		($18,575	)		($20,696	)		($82,001	)		($80,570	)

REINSURANCE SEGMENT
Catastrophe		($4,905	)		($11,734	)		($13,385	)		($2,236	)		($32,260	)		($46,983	)
Property	(12,247		)	(8,101		)	(579		)	(8,437		)	(29,364		)	(38,402		)
Casualty	(5,777		)	(9,787		)	(12,739		)	(6,427		)	(34,730		)	(13,369		)
Professional lines	(2,159		)	(6,614		)	(6,212		)	(11,123		)	(26,108		)	(16,261		)
Specialty	(14,861		)	(8,555		)	(7,346		)	(8,239		)	(39,001		)	(38,230		)
TOTAL REINSURANCE		($39,949	)		($44,791	)		($40,261	)		($36,462	)		($161,463	)		($153,245	)

REPORTED TOTALS		($60,123	)		($67,347	)		($58,836	)		($57,158	)		($243,464	)		($233,815	)

ENDURANCE SPECIALTY HOLDINGS LTD.

LOSSES AND LOSS EXPENSES INCURRED BY LINE OF BUSINESS



	FOR THE QUARTERS ENDED									FOR THE YEARS ENDED
	DEC. 31, 2015			SEPT. 30, 2015		JUNE 30, 2015		MAR. 31, 2015		DEC. 31, 2015		DEC. 31, 2014
INSURANCE SEGMENT
Agriculture		$54,785			$64,933		$85,584		$34,957		$240,259		$443,985
Casualty and other specialty	46,739			21,714		15,819		8,693		92,965		62,545
Professional lines	22,910			22,325		17,492		17,245		79,972		60,638
Property, marine/energy and aviation	19,991			30,169		26,588		13,617		90,365		27,393
TOTAL INSURANCE		$144,425			$139,141		$145,483		$74,512		$503,561		$594,561

REINSURANCE SEGMENT
Catastrophe		($3,190	)		$4,827		$3,049		$9,031		$13,717		$14,731
Property	20,843			39,875		31,324		29,311		121,353		124,127
Casualty	18,152			24,603		11,765		22,888		77,408		100,253
Professional lines	33,318			25,062		23,888		15,665		97,933		73,505
Specialty	28,509			30,485		23,613		20,529		103,136		62,985
TOTAL REINSURANCE		$97,632			$124,852		$93,639		$97,424		$413,547		$375,601

REPORTED TOTALS		$242,057			$263,993		$239,122		$171,936		$917,108		$970,162

ENDURANCE SPECIALTY HOLDINGS LTD.

ANALYSIS OF UNPAID LOSSES AND LOSS EXPENSES



		Insurance															Reinsurance																		Reported Totals
		Agriculture			Casualty and other specialty			Professional lines			Property, marine/energy and aviation			Subtotal			Catastrophe			Property			Casualty			Professional lines			Specialty			Subtotal			Total
AT	DEC. 31, 2015
Case reserves		$226,753			$271,234			$116,920				$226,894			$841,801		$109,374			$229,283			$244,445			$70,301			$142,217				$795,620			$1,637,421
Total reserves			$284,552			$1,291,427			$581,558			$349,824			$2,507,361			$199,108			$341,309			$774,231			$355,993			$332,413			$2,003,054			$4,510,415
Case reserves/Total reserves		79.7		%	21.0		%	20.1		%	64.9		%	33.6		%	54.9		%	67.2		%	31.6		%	19.7		%	42.8		%	39.7		%	36.3		%

IBNR/Total reserves		20.3		%	79.0		%	79.9		%	35.1		%	66.4		%	45.1		%	32.8		%	68.4		%	80.3		%	57.2		%	60.3		%	63.7		%

AT	SEPT. 30, 2015
Case reserves			$245,070			$271,553			$114,158			$221,570			$852,351			$125,099			$242,323			$247,649			$63,203			$125,773			$804,047			$1,656,398
Total reserves			$274,583			$1,263,971			$551,637			$352,630			$2,442,821			$233,936			$370,123			$791,395			$333,228			$318,333			$2,047,015			$4,489,836
Case reserves/Total reserves		89.3		%	21.5		%	20.7		%	62.8		%	34.9		%	53.5		%	65.5		%	31.3		%	19.0		%	39.5		%	39.3		%	36.9		%

IBNR/Total reserves		10.7		%	78.5		%	79.3		%	37.2		%	65.1		%	46.5		%	34.5		%	68.7		%	81.0		%	60.5		%	60.7		%	63.1		%

AT	JUNE 30, 2015
Case reserves			$203,303			$266,165			$112,578			$75,914			$657,960			$87,309			$180,630			$240,892			$62,282			$98,301			$669,414			$1,327,374
Total reserves			$323,686			$1,208,710			$525,604			$99,769			$2,157,769			$141,519			$249,659			$748,431			$285,488			$250,659			$1,675,756			$3,833,525
Case reserves/Total reserves		62.8		%	22.0		%	21.4		%	76.1		%	30.5		%	61.7		%	72.4		%	32.2		%	21.8		%	39.2		%	39.9		%	34.6		%

IBNR/Total reserves		37.2		%	78.0		%	78.6		%	23.9		%	69.5		%	38.3		%	27.6		%	67.8		%	78.2		%	60.8		%	60.1		%	65.4		%

AT	MAR. 31, 2015
Case reserves			$32,029			$249,507			$148,246			$38,023			$467,805			$93,872			$175,766			$241,073			$58,587			$99,219			$668,517			$1,136,322
Total reserves			$153,215			$1,203,561			$532,660			$62,841			$1,952,277			$149,341			$256,769			$760,752			$268,714			$233,875			$1,669,451			$3,621,728
Case reserves/Total reserves		20.9		%	20.7		%	27.8		%	60.5		%	24.0		%	62.9		%	68.5		%	31.7		%	21.8		%	42.4		%	40.0		%	31.4		%

IBNR/Total reserves		79.1		%	79.3		%	72.2		%	39.5		%	76.0		%	37.1		%	31.5		%	68.3		%	78.2		%	57.6		%	60.0		%	68.6		%

AT	DEC. 31, 2014
Case reserves			$222,570			$325,415			$119,453			$33,264			$700,702			$126,837			$178,875			$248,933			$60,915			$99,142			$714,702			$1,415,404
Total reserves			$295,191			$1,258,009			$517,101			$53,471			$2,123,772			$176,610			$272,164			$780,880			$258,840			$234,593			$1,723,087			$3,846,859
Case reserves/Total reserves		75.4		%	25.9		%	23.1		%	62.2		%	33.0		%	71.8		%	65.7		%	31.9		%	23.5		%	42.3		%	41.5		%	36.8		%

IBNR/Total reserves		24.6		%	74.1		%	76.9		%	37.8		%	67.0		%	28.2		%	34.3		%	68.1		%	76.5		%	57.7		%	58.5		%	63.2		%

ENDURANCE SPECIALTY HOLDINGS LTD.

SHAREHOLDER RETURN ANALYSIS



	YEARS ENDED DECEMBER 31,									INCEPTION TO
	2015			2014			2013			DEC. 31, 2015
Income and Return on Equity:
Net income available to common and participating common shareholders		$311,345			$315,700			$279,165			$3,377,356

Operating income available to common and participating common shareholders	332,025			304,012			281,021			3,306,871

Average Shareholders’ equity [a]	3,415,086			2,638,276			2,354,972			2,178,782

Net income return on average equity	9.1		%	12.0		%	11.9		%	11.1		%	[c]
Operating return on average equity	9.7		%	11.5		%	11.9		%	10.8		%	[c]

Book value and dividends per share:
Dilutive book value per common share (treasury stock method)		$65.48			$61.33			$55.18			$65.48

Dividends paid per share	1.40			1.36			1.28			13.61

Change in diluted book value per common share	6.8		%	11.1		%	4.3		%	17.0		%	[c]

Total return to common shareholders [b]	9.0		%	13.6		%	6.8		%	22.0		%	[c]

[a] Excludes the $460 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						YEARS ENDED
		DEC. 31,						DEC. 31,
		2015			2014			2015			2014
DILUTIVE SHARES OUTSTANDING: AS REPORTED	Average market price per share		$64.29			$57.49			$63.60			$54.52

	Basic weighted average common shares outstanding [a]	65,331			43,474			52,707			43,368

	Add: weighted avg. unvested restricted shares	46			—			35			—
	Weighted average exercise price per share	—			—			—			—
	Proceeds from unrecognized restricted shares expense	2,255			—			2,290			—
	Less: restricted shares bought back via treasury method	(34		)	—			(32		)	—

	Add: weighted avg. dilutive options outstanding	320			800			607			807
	Weighted average exercise price per share		$48.20			$48.20			$48.20			$48.08
	Proceeds from unrecognized option expense		$1,156			$2,624			$1,815			$2,624
	Less: options bought back via treasury method	(258		)	(717		)	(488		)	(760		)
	Weighted average dilutive shares outstanding [b]	65,405			43,557			52,829			43,415

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

[b] Options that are anti-dilutive are not included in the calculation of diluted shares outstanding. 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.

EARNINGS PER SHARE INFORMATION - TWO CLASS METHOD



	QUARTERS ENDED						YEARS ENDED
	DEC. 31,						DEC. 31,
	2015			2014			2015			2014

Net income available to common and participating common shareholders		$91,401			$76,387			$311,345			$315,700
Less amount allocated to participating common shareholders [a]	(2,328		)	(2,212		)	(8,749		)	(9,118		)
Net income allocated to common shareholders		$89,073			$74,175			$302,596			$306,582

Denominator:
Weighted average shares - basic	65,331			43,474			52,707			43,368

Share Equivalents
Options	62			83			119			47
Restricted shares	12			—			3			—
Weighted average shares - diluted	65,405			43,557			52,829			43,415

Basic earnings per common share		$1.36			$1.71			$5.74			$7.07

Diluted earnings per common share [b]		$1.36			$1.70			$5.73			$7.06

[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 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 INCOME RECONCILIATION

EARNINGS PER SHARE INFORMATION - TWO CLASS METHOD



	Two-Class Method						Two-Class Method
	QUARTERS ENDED						YEARS ENDED
	DEC. 31,						DEC. 31,
	2015			2014			2015			2014

Net income available to Endurance Holdings		$99,587			$84,573			$344,095			$348,450
(Less) add after-tax items:
Net foreign exchange (gains) losses	(354		)	(246		)	28,892			3,672
Net realized and unrealized losses (gains)	20,052			2,187			(11,807		)	(15,969		)
Net impairment losses recognized in earnings	2,605			198			3,595			609
Operating income before preferred dividends		$121,890			$86,712			$364,775			$336,762
Preferred dividends	(8,186		)	(8,186		)	(32,750		)	(32,750		)
Operating income available to common and participating common shareholders		$113,704			$78,526			$332,025			$304,012
Less amount allocated to participating common shareholders [a]	(2,896		)	(2,274		)	(9,329		)	(8,780		)
Operating income allocated to common shareholders		$110,808			$76,252			$322,696			$295,232

Weighted average common shares outstanding
Basic	65,331			43,474			52,707			43,368
Dilutive	65,405			43,557			52,829			43,415

Basic per common share data
Net income allocated to common shareholders		$1.36			$1.71			$5.74			$7.07
(Less) add after-tax items:
Net foreign exchange (gains) losses	(0.02		)	(0.01		)	0.54			0.09
Net realized and unrealized losses (gains)	0.31			0.05			(0.22		)	(0.37		)
Net impairment losses recognized in earnings	0.04			—			0.06			0.01
Operating income allocated to common shareholders [b]		$1.69			$1.75			$6.12			$6.80

Diluted per common share data
Net income allocated to common shareholders		$1.36			$1.70			$5.73			$7.06
(Less) add after-tax items:
Net foreign exchange (gains) losses	(0.02		)	—			0.54			0.09
Net realized and unrealized losses (gains)	0.31			0.05			(0.22		)	(0.36		)
Net impairment losses recognized in earnings	0.04			—			0.06			0.01
Operating income allocated to common shareholders [b]		$1.69			$1.75			$6.11			$6.80

[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.

NET INCOME AND OPERATING INCOME EXCLUDING EXPENSES

INCURRED RELATED TO THE ACQUISITON OF MONTPELIER



	QUARTER ENDED DEC. 31, 2015									YEAR ENDED DEC. 31, 2015
	As reported			Expenses Incurred Related to the Acquisition of Montpelier [a]			Excluding Expenses Incurred Related to the Acquisition of Montpelier			As reported			Expenses Incurred Related to the Acquisition of Montpelier [a]			Excluding Expenses Incurred Related to the Acquisition of Montpelier
Net income available to common and participating common shareholders		$91,401			$8,145			$99,546			$311,345			$76,585			$387,930
Less amount allocated to participating common shareholders [b]	(2,328		)	(207		)	(2,535		)	(8,749		)	(2,150		)	(10,899		)
Net income allocated to common shareholders		$89,073			$7,938			$97,011			$302,596			$74,435			$377,031

Basic earnings per common share		$1.36			$0.12			$1.48			$5.74			$1.41			$7.15
Diluted earnings per common share [c]		$1.36			$0.12			$1.48			$5.73			$1.41			$7.14

ROAE, net income [d]	2.1		%	0.2		%	2.3		%	9.1		%	2.3		%	11.4		%
Annualized ROAE, net income [d]	8.3		%	0.8		%	9.1		%	9.1		%	2.3		%	11.4		%

Operating income available to common and participating common shareholders		$113,704			$8,145			$121,849			$332,025			$76,585			$408,610
Less amount allocated to participating common shareholders [b]	(2,896		)	(207		)	(3,103		)	(9,329		)	(2,150		)	(11,479		)
Operating income allocated to common shareholders		$110,808			$7,938			$118,746			$322,696			$74,435			$397,131

Basic operating income per common share		$1.69			$0.13			$1.82			$6.12			$1.41			$7.53
Diluted operating income per common share [c]		$1.69			$0.13			$1.82			$6.11			$1.41			$7.52

ROAE, operating income [d]	2.6		%	0.2		%	2.8		%	9.7		%	2.3		%	12.0		%
Annualized ROAE, operating income [d]	10.4		%	0.7		%	11.1		%	9.7		%	2.3		%	12.0		%

[a] The Company incurred $8.1 million of transaction and integration expenses in relation to the Company's acquisition of Montpelier for the quarter ended December 31, 2015. For the year ended December 31, 2015, the Company incurred $76.6 million of transaction and integration expenses in relation to the Company's acquisition of Montpelier.

[b] 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 earnings per share under the two-class method. In periods of loss, no losses are allocated to participating common shareholders.

[c] 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.

[d] Average common equity is calculated as the quarterly weighted average of the beginning and ending common equity balances for the stated period, which excludes the $460 million liquidation value of the preferred shares.

ENDURANCE SPECIALTY HOLDINGS LTD.

NET INCOME AND OPERATING INCOME EXCLUDING EXPENSES

INCURRED RELATED TO THE PROPOSED ACQUISITON OF ASPEN



	QUARTER ENDED DEC. 31, 2014									YEAR ENDED DEC. 31, 2014
	As reported			Expenses Incurred Related to the Proposed Acquisition of Aspen [a]			Excluding Expenses Incurred Related to the Proposed Acquisition of Aspen			As reported			Expenses Incurred Related to the Proposed Acquisition of Aspen [a]			Excluding Expenses Incurred Related to the Proposed Acquisition of Aspen
Net income available to common and participating common shareholders		$76,387			$171			$76,558			$315,700			$20,260			$335,960
Less amount allocated to participating common shareholders [b]	(2,212		)	(5		)	(2,217		)	(9,118		)	(585		)	(9,703		)
Net income allocated to common shareholders		$74,175			$166			$74,341			$306,582			$19,675			$326,257

Basic earnings per common share		$1.71			$—			$1.71			$7.07			$0.44			$7.51
Diluted earnings per common share [c]		$1.70			$0.01			$1.71			$7.06			$0.45			$7.51

ROAE, net income [d]	2.8		%	—		%	2.8		%	12.0		%	0.7		%	12.7		%
Annualized ROAE, net income [d]	11.2		%	—		%	11.2		%	12.0		%	0.7		%	12.7		%

Operating income available to common and participating common shareholders		$78,526			$171			$78,697			$304,012			$20,260			$324,272
Less amount allocated to participating common shareholders [b]	(2,274		)	(5		)	(2,279		)	(8,780		)	(585		)	(9,365		)
Operating income allocated to common shareholders		$76,252			$166			$76,418			$295,232			$19,675			$314,907

Basic operating income per common share		$1.75			$—			$1.75			$6.80			$0.45			$7.25
Diluted operating income per common share [c]		$1.75			$—			$1.75			$6.80			$0.45			$7.25

ROAE, operating income [d]	2.9		%	—		%	2.9		%	11.5		%	0.8		%	12.3		%
Annualized ROAE, operating income [d]	11.5		%	0.1		%	11.6		%	11.5		%	0.8		%	12.3		%

[a] The Company incurred $0.2 million and nil of corporate expenses and interest expense, respectively, in relation to the Company's proposed acquisition of Aspen for the quarter ended December 31, 2014. For the year ended December 31, 2014, the Company incurred $15.5 million and $4.8 million of corporate expenses and interest expense, respectively, in relation to the Company's proposed acquisition of Aspen.

[c] 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.

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

ENDURANCE SPECIALTY HOLDINGS LTD.

PROJECTED FINANCIAL STATEMENT IMPACT OF SELECTED ITEMS

RELATED TO THE ACQUISITION OF MONTPELIER




	BALANCE SHEET AMOUNT AT JULY 31, 2015			INCOME STATEMENT IMPACT FOR THE YEAR ENDED DECEMBER 31,
				2015 [c]			2016			2017			2018			2019			THEREAFTER



Finite lived intangibles		$293,200			($24,334	)		($79,195	)		($58,103	)		($31,760	)		($21,484	)		($78,324	)
Indefinite lived intangibles [a]	57,600			—			—			—			—			—			—
Goodwill [a]	87,625			—			—			—			—			—			—
Total goodwill and intangible assets	438,425			(24,334		)	(79,195		)	(58,103		)	(31,760		)	(21,484		)	(78,324		)

Deferred acquisition costs [b]	91,715			(42,411		)	(35,001		)	(4,673		)	(2,651		)	(2,067		)	(4,912		)

Unearned premiums	(430,490		)	220,623			165,976			12,381			9,358			6,690			15,462


[a] Indefinite lived intangibles and goodwill are not amortized but are subject to annual impairment testing.
[b] Deferred acquisition costs are written off under purchase GAAP. Income statement impact shown above represents the acquisition expenses that would have been recognized by Montpelier as the related premiums were earned.

[c] Amounts shown above for 2015 are for the period subsequent to the closing of the acquisition of Montpelier from August 1, 2015 through December 31, 2015.

ENDURANCE SPECIALTY HOLDINGS LTD.

BOOK VALUE PER SHARE



		DECEMBER 31,
		2015			2014
DILUTIVE COMMON SHARES OUTSTANDING: AS-IF CONVERTED [a]	Price per share at period end		$63.99			$59.84

	Basic common shares outstanding	65,441			43,474
	Add: unvested restricted shares and restricted share units	1,617			1,291
	Add: dilutive options outstanding	320			800
	Weighted average exercise price per share		$48.20			$48.20

	Book Value [b]		$4,396,262			$2,755,182
	Add: proceeds from converted options	15,424			38,560
	Pro forma book value		$4,411,686			$2,793,742
	Dilutive shares outstanding	67,378			45,565
	Basic book value per common share		$67.18			$63.38
	Diluted book value per common share		$65.48			$61.31

DILUTIVE COMMON SHARES OUTSTANDING: TREASURY STOCK METHOD	Price per share at period end		$63.99			$59.84

	Basic common shares outstanding	65,441			43,474
	Add: unvested restricted shares and restricted share units	1,617			1,291
	Add: dilutive options outstanding	320			800
	Weighted average exercise price per share		$48.20			$48.20
	Less: options bought back via treasury method	(241		)	(644		)
	Dilutive shares outstanding	67,137			44,921
	Basic book value per common share		$67.18			$63.38
	Diluted book value per common share		$65.48			$61.33

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

[b] Excludes the $460 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.

Net income available to common and participating common shareholders, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, or net income per basic or diluted common share, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, reflect the current period impact of those costs incurred by the Company and reflects the results of operations in a manner similar to that used by management to analyze the Company’s underlying business performance. Net income available to common and participating common shareholders, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, or net income per basic or diluted common share, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, should not be viewed as a substitute for GAAP net income available to common and participating common shareholders, or basic or diluted earnings per common share, respectively. Please see pages 31 and 32 for reconciliations.

Operating income is an internal performance measure used by the Company in the management of its operations. Operating 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 income determined in accordance with GAAP, the Company believes that showing operating 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 that used by management to analyze the Company’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 30 for a reconciliation of operating income to net income.

Operating income available to common and participating common shareholders, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, or net operating per basic or diluted common share, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, reflect the current period impact of those costs incurred by the Company and reflects the results of operations in a manner similar to that used by management to analyze the Company’s underlying business performance. Operating income available to common and participating common shareholders, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, or or net operating per basic or diluted common share, excluding expenses incurred related to the acquisition of Montpelier or the proposed acquisition of Aspen, should not be viewed as a substitute for GAAP net income available to common and participating common shareholders, or basic or diluted earnings per common share, respectively. Please see pages 31 and 32 for reconciliations.

Return on Average Equity (ROAE) is comprised using the average common equity calculated as the 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 34 for a reconciliation of diluted book value per common share to basic book value per common share.

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