Endurance Specialty Gets Upgrade

A.M. Best Co. upgraded the financial strength rating to “A” (Excellent) from “A-” (Excellent) of Endurance Specialty Insurance Ltd. and its operating affiliates. The rating outlook is stable.

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

The company was originally formed in late 2001 in response to the market dislocation in the global insurance and reinsurance markets following the tragic events of Sept. 11 through a private placement equity offering led by Aon, Texas Pacific Group, Thomas H. Lee Company, Perry Capital and Capital Z. During its first year of operation, Endurance’s book of business was split evenly between short-tail and long-tail business.

The entire book produced a combined ratio of 86 percent in 2002, benefiting from higher market rates, light catastrophes and an unencumbered balance sheet. Combined results also included conservative reserving methodologies for the company’s long-tail casualty lines of business. Endurance also acquired the renewal rights to LaSalle Re’s property catastrophe business and recently acquired the renewal rights to selected portions of Hartford Re’s book of business. Each acquisition was complementary to Endurance’s existing book of business and did not include the addition of any historical liabilities.

Endurance has established a diversified book of business, both geographically and by line. In 2002, Endurance expanded its operating platform through the formation of affiliated companies in the United Kingdom and the United States. Each affiliate’s capital is protected through either quota share, stop loss or excess of loss reinsurance agreements with Endurance.

The financial strength rating applies to affiliates Endurance Reinsurance Corp. of America and Endurance Worldwide Insurance Ltd.