Endurance reports soaring growth, aided by Montpelier acquisition
Re/insurance firm Endurance Specialty Holdings has reported an increase in its net income for the first quarter of 2016 – up to $106.4 million, compared with a net income of $100.3 million for the first quarter of 2015.
The holding company’s gross written premiums (GWP) also increased by 23.8 percent in the quarter to $1.1 billion, compared with $1.3 billion in the same time period in 2015. This included a 13.4 percent increase in its insurance segment and a 37.4 percent increase in GWP in its reinsurance segment for the first quarter of the year.
Endurance’s combined ratio also fared well at 77.9 percent in the first quarter of the year, compared with 82.4 percent in the first three months of 2015. The current period's combined ratio included 11 percentage points of favourable prior year loss reserve development and 0.8 percentage points of net catastrophe losses from 2016 events.
The firm’s net investment income did decrease however, by $30.7 million in the quarter though, down to $11.2 million, compared to results for the same period of 2015.
For its insurance segment, Endurance’s non-agriculture lines of business, which includes casualty and other specialty, professional lines and property, marine/energy and aviation grew 54.5 percent in the quarter, compared to the first quarter of 2015, driven by the continued underwriting and geographic expansion implemented over the last three years as well as the renewal and expansion of business written within the company's Lloyd's syndicate acquired from Montpelier in 2015. The agriculture insurance line of business declined 4 percent, primarily as a result of lower commodity prices compared to a year ago.
In reinsurance, the catastrophe and property lines of business increased $107.2 million, predominantly due to the targeted renewal of acquired Montpelier business. The specialty line of business increased $58.8 million in the quarter, largely due to growth in marine, agriculture and trade credit and surety. The casualty line of business increased $40.6 million, predominantly driven by new business within our international and US offices.
John Charman, chairman and chief executive officer, Endurance, said: "I am delighted with the excellent underwriting profitability that my colleagues in Endurance have generated in the first quarter. Our combined ratio of 77.9 percent reflects both the continuing high quality of our global underwriting activity as well as the very successful integration of our acquisition of Montpelier.
“In addition to retaining nearly all the Montpelier business we had anticipated, our speedy and smooth operational integration has generated the planned expense synergies that are already clearly visible in our financial results."
He added: “Endurance is now able to fully leverage the significant global investments that we have made over the last three years in people, products, geographies, systems and analytics to positively differentiate our underwriting performance and profitability regardless of how challenging market conditions may be."
