Endurance Specialty 8K Results of Operations and Financial Condition | ENH 31 Oct 07

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

THIRD QUARTER 2007

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
ii.	Organizational Chart of Corporate Structure		ii
I.	Financial Highlights		1
II.	Consolidated Financial Statements
	a. Consolidated Statements of Income — Quarterly		2
	b. Consolidated Statements of Income — Year to date		3
	c. Consolidated Balance Sheets		4
	d. Annual Aggregate Risk Curve		5
	e. Segment Distribution		7
	f. Segment Data		8
	g. Deposit Accounting Adjustment Impacts on Segment Data		20
III.	Other Financial Information
	a. Return on Equity Analysis		22
	b. ROE Component Analysis — Operating and Investment Leverage		23
	c. Investment Portfolio Information		24
	d. Structured Securities Details		25
IV.	Loss Reserve Analysis
	a. Activity in Reserve for Losses and Loss Expenses		26
	b. Activity in Reserve for Losses and Loss Expenses by Segment		27
	c. Activity in Reserve for Losses and Loss Expenses by Development Tail		28
	d. Analysis of Unpaid Losses and Loss Expense		29
V.	Share Analysis
	a. Weighted Average Dilutive Shares Outstanding		30
	b. Operating Income Reconciliation		31
	c. Dilutive Shares Sensitivity Analysis		32
	d. Book Value Per Share Analysis		33
	e. Growth in 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 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 ‘‘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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only to the date on which they are made. We undertake no obligation to publicly update or review any forward looking statement, when as a result of new information, future developments or otherwise.

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, competition, possible terrorism or the outbreak of war, the frequency or severity of unpredictable catastrophic events, changes in demand for insurance or reinsurance, rating agency actions, uncertainties in our reserving process, a change in our tax status, acceptance of our products, the availability of reinsurance or retrocessional coverage, retention of key personnel, political conditions, the impact of current regulatory investigations, changes in accounting policies, changes in general economic conditions and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2006.

ENDURANCE SPECIALTY HOLDINGS LTD.

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION


	•	All financial information contained herein is unaudited, except the balance sheet and income statement data for the years ended December 31, 2006 and December 31, 2005, 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 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.


	•	GAAP combined ratios differ from statutory combined ratios primarily due to the deferral of certain third party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general & administrative expense ratios.


	•	NM – Not meaningful; NA – Not Applicable; LTM – Latest twelve months.

ENDURANCE SPECIALTY HOLDINGS LTD.

CORPORATE ORGANIZATION CHART

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED FINANCIAL HIGHLIGHTS


		QUARTER ENDED SEPT. 30,						NINE MONTHS ENDED SEPT. 30,						Previous Quarter Change			Previous Year to Date Change
		2007			2006			2007			2006			Previous Quarter Change			Previous Year to Date Change
HIGHLIGHTS	Net income		$	131,401		$	128,230		$	368,577		$	299,316	2.5%			23.1%
	Net income available to common shareholders			127,526			124,355			356,952			287,691	2.5%			24.1%
	Operating income^[a]			133,868			137,228			380,242			307,344	(2.4)%			23.7%
	Operating income available to common shareholders^[a]			129,993			133,353			368,617			295,719	(2.5)%			24.7%
	Operating cash flow			184,736			165,991			437,102			539,915	11.3%			(19.0)%
	Gross premiums written			423,271			476,213			1,503,365			1,498,847	(11.1)%			0.3%
	Net premiums earned			399,742			407,975			1,194,338			1,234,859	(2.0)%			(3.3)%
	Total assets			7,368,441			7,067,790			7,368,441			7,067,790	4.3%			4.3%
	Total shareholders’ equity			2,525,621			2,117,174			2,525,621			2,117,174	19.3%			19.3%
PER SHARE	Basic earnings per common share
AND SHARES DATA	Net income (as reported)			$1.98			$1.87			$5.45			$4.33		5.5	%		25.7	%
	Operating income (as reported)^[a]			$2.02			$2.01			$5.63			$4.45		0.3	%		26.3	%
	Diluted earnings per common share
	Net income (as reported)			$1.81			$1.74			$5.02			$4.03		4.1	%		24.6	%
	Operating income (as reported)^[a]			$1.85			$1.87			$5.18			$4.14		(1.1	)%		25.2	%
As Reported	Weighted average common shares outstanding			64,468			66,339			65,530			66,393		(2.8	)%		(1.3	)%
	Weighted average common shares outstanding and dilutive potential common shares			70,431			71,487			71,126			71,428		(1.5	)%		(0.4	)%
Book Value Per	Book value^[b]			$36.21			$28.87			$36.21			$28.87		25.4	%		25.4	%
Common Share	Diluted book value (treasury stock method)^[b]			$32.81			$26.52			$32.81			$26.52		23.7	%		23.7	%
FINANCIAL RATIOS	Return on average common equity (ROAE), net income^[c]	5.7%			6.8%			16.1%			16.0%			(1.1)			0.1
	ROAE, operating income^[a][c]	5.8%			7.3%			16.7%			16.5%			(1.5)			0.2
	Return on beg. common equity (ROBE), net income^[c]	5.9%			7.2%			17.0%			17.2%			(1.3)			(0.2)
	ROBE, operating income^[a]	6.0%			7.7%			17.6%			17.7%			(1.7)			(0.1)
	Annualized ROAE, net income^[c]	22.6%			27.2%			21.5%			21.4%			(4.6)			0.1
	Annualized ROAE, operating income^[a][c]	23.1%			29.2%			22.2%			22.0%			(6.1)			0.3
	Annualized ROBE, net income	23.4%			28.6%			22.7%			22.9%			(5.2)			(0.2)
	Annualized ROBE, operating income^[a]	23.9%			30.7%			23.4%			23.6%			(6.8)			(0.2)
	Annualized investment yield	4.4%			4.8%			5.1%			4.8%			(0.4)			0.3
	Loss ratio	46.6%			46.1%			50.6%			56.4%			0.5			(5.8)
GAAP	Acquisition expense ratio	19.2%			20.1%			18.2%			19.1%			(0.9)			(0.9)
	General and administrative expense ratio	13.8%			11.9%			12.8%			11.2%			1.9			1.6
	Combined ratio	79.6%			78.1%			81.6%			86.7%			1.5			(5.1)
STAT	Acquisition expense ratio	23.8%			26.4%			19.2%			19.5%			(2.6)			(0.3)
	General and administrative expense ratio	14.6%			12.1%			11.2%			10.0%			2.5			1.2
	Combined ratio	85.0%			84.6%			81.0%			85.9%			0.4			(4.9)

[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 31 for a reconciliation to net income.

[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 $200 million liquidation value of the preferred shares.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME — QUARTERLY


	QUARTER ENDED
	SEPT. 30, 2007		JUNE 30, 2007		MARCH 31, 2007		DEC. 31, 2006		SEPT. 30, 2006		SEPT 30, 2005
UNDERWRITING REVENUES
Gross premiums written		$423,271		$506,803		$573,291		$290,795		$476,213		$370,565
Premiums ceded	(45,655)		(58,577)		(39,626)		(42,340)		(90,791)		(21,921)
Net premiums written		$377,616		$448,226		$533,665		$248,455		$385,422		$348,644
Change in unearned premiums		22,126	(30,675)		(156,620)			155,260		22,553		92,522
Net premiums earned		$399,742		$417,551		$377,045		$403,715		$407,975		$441,166
Other underwriting income (loss)		1,697	(3,203)		(5,936)			1,718	(1,837)			1,386
Total underwriting revenues		$401,439		$414,348		$371,109		$405,433		$406,138		$442,552
UNDERWRITING EXPENSES
Losses and loss expenses		$186,456		$207,179		$210,594		$131,420		$188,033		$784,608
Acquisition expenses		76,604		73,941		67,530		81,187		81,857		75,817
General and administrative expenses		55,121		48,664		48,829		51,879		48,535		41,474
Total underwriting expenses		$318,181		$329,784		$326,953		$264,486		$318,425		$901,899
Underwriting income (loss)		$83,258		$84,564		$44,156		$140,947		$87,713	($459,347)
OTHER OPERATING REVENUE/EXPENSES
Net investment income		$62,605		$78,548		$74,813		$72,033		$63,581		$49,034
Interest expense	(7,533)		(7,531)		(7,529)		(7,528)		(7,528)		(5,806)
Amortization of intangibles	(1,127)		(1,127)		(1,127)		(1,126)		(1,158)		(1,158)
Total other operating revenue/expenses		$53,945		$69,890		$66,157		$63,379		$54,895		$42,070
INCOME (LOSS) BEFORE OTHER ITEMS		$137,203		$154,454		$110,313		$204,326		$142,608		($417,277	)
OTHER
Net foreign exchange (losses) gains	($700)			$2,072	($2,613)			$9,771	($3,633)			$1,809
Net realized losses on investments	(3,055)		(9,038)		(2,084)		(1,908)		(6,375)		(1,073)
Income tax expense	(2,047)		(12,147)		(3,781)		(13,379)		(4,370)		39,552
NET INCOME (LOSS)		$131,401		$135,341		$101,835		$198,810		$128,230	($376,989)
Preferred dividends	(3,875)		(3,875)		(3,875)		(3,875)		(3,875)		—
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS		$127,526		$131,466		$97,960		$194,935		$124,355	($376,989)
KEY RATIOS/PER SHARE DATA
Loss ratio	46.6%		49.6%		55.9%		32.6%		46.1%		177.8%
Acquisition expense ratio	19.2%		17.7%		17.9%		20.1%		20.1%		17.2%
General and administrative expense ratio	13.8%		11.7%		12.9%		12.9%		11.9%		9.4%
Combined ratio	79.6%		79.0%		86.7%		65.6%		78.1%		204.4%
Weighted average basic shares outstanding		64,468		65,531		66,613		66,561		66,339		60,210
Weighted average dilutive shares outstanding		70,431		70,930		72,073		72,261		71,487		60,210
Basic earnings (loss) per common share		$1.98		$2.01		$1.47		$2.93		$1.87	($6.26)
Diluted earnings (loss) per common share		$1.81		$1.85		$1.36		$2.70		$1.74	($6.26)
ROAE, net income (loss)^[a]	5.7%		6.0%		4.6%		9.7%		6.8%		(21.3)%

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

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF INCOME — YTD


	NINE MONTHS ENDED											YEAR ENDED
	SEPT. 30, 2007				SEPT. 30, 2006				SEPT 30, 2005			DEC. 31, 2006				DEC. 31, 2005
UNDERWRITING REVENUES
Gross premiums written		$	1,503,365			$	1,498,847			$	1,476,245		$	1,789,642			$	1,668,877
Premiums ceded	(143,858)				(161,738)				(33,833)			(204,078)				(49,528)
Net premiums written		$	1,359,507			$	1,337,109			$	1,442,412		$	1,585,564			$	1,619,349
Change in unearned premiums	(165,169)				(102,250)				(125,727)			53,010				104,345
Net premiums earned		$	1,194,338			$	1,234,859			$	1,316,685		$	1,638,574			$	1,723,694
Other underwriting (loss) income	(7,442)				(328)				2,675			1,390				(4,818)
Total underwriting revenues		$	1,186,896			$	1,234,531			$	1,319,360		$	1,639,964			$	1,718,876
UNDERWRITING EXPENSES
Losses and loss expenses		$	604,229			$	696,210			$	1,264,583		$	827,630			$	1,650,943
Acquisition expenses			218,075				236,302				251,926			317,489				331,309
General and administrative expenses			152,614				138,494				115,452			190,373				146,419
Total underwriting expenses		$	974,918			$	1,071,006			$	1,631,961		$	1,335,492			$	2,128,671
Underwriting income (loss)		$	211,978			$	163,525		($312,601)				$	304,472		($409,795)
OTHER OPERATING REVENUE/EXPENSES
Net investment income		$	215,966			$	185,416			$	127,478		$	257,449			$	180,451
Interest expense	(22,593)				(22,513)				(16,889)			(30,041)				(24,210)
Amortization of intangibles	(3,381)				(3,474)				(3,536)			(4,600)				(4,694)
Total other operating revenue/expenses		$	189,992			$	159,429			$	107,053		$	222,808			$	151,547
INCOME (LOSS) BEFORE OTHER ITEMS		$	401,970			$	322,954		($205,548)				$	527,280		($258,248)
OTHER
Net foreign exchange (losses) gains	($1,241)					$	11,250		($2,354)				$	21,021		($5,140)
Net realized losses on investments	(14,177)				(18,434)				(4,934)			(20,342)				(8,244)
Income tax (expense) benefit			(17,975	)			(16,454	)			42,123			(29,833	)			51,148
NET INCOME (LOSS)		$	368,577			$	299,316		($170,713)				$	498,126		($220,484)
Preferred dividends	(11,625)				(11,625)				—			(15,500)				($2,720)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS		$	356,952			$	287,691		($170,713)				$	482,626		($223,204)
KEY RATIOS/PER SHARE DATA
Loss ratio	50.6%				56.4%				96.0%			50.5%				95.8%
Acquisition expense ratio	18.2%				19.1%				19.1%			19.4%				19.2%
General and administrative expense ratio	12.8%				11.2%				8.8%			11.6%				8.5%
Combined ratio	81.6%				86.7%				123.9%			81.5%				123.5%
Weighted average basic shares outstanding			65,530				66,393				60,707			66,436				62,029
Weighted average dilutive shares outstanding			71,126				71,428				60,707			71,755				62,029
Basic earnings (loss) per common share		$	5.45			$	4.33		($2.81)				$	7.26		($3.60)
Diluted earnings (loss) per common share		$	5.02			$	4.03		($2.81)				$	6.73		($3.60)
ROAE, net income (loss)^[a]	16.1%				16.0%				(10.0)%			25.6%				(12.6)%

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

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED BALANCE SHEETS


	SEPT. 30, 2007			JUNE 30, 2007			MAR. 31, 2007			DEC. 31, 2006			SEPT. 30, 2006			JUNE 30, 2006
ASSETS
Cash and cash equivalents		$	600,042		$	625,662		$	518,800		$	547,772		$	527,990		$	669,583
Fixed maturity investments available for sale, at fair value			4,803,808			4,728,942			4,838,405			4,714,204			4,652,163			4,323,661
Other Investments			343,926			281,241			267,721			253,068			223,536			204,272
Premiums receivable, net			768,162			839,106			808,064			660,570			769,462			827,239
Deferred acquisition costs			212,000			198,537			186,374			168,809			189,110			169,190
Securities lending collateral			195,727			173,884			217,698			226,762			349,630			371,407
Prepaid reinsurance premiums			92,466			99,446			92,722			105,058			108,251			56,194
Losses recoverable			96,008			66,377			55,579			44,244			37,447			27,452
Accrued investment income			36,075			40,443			36,792			40,692			37,007			36,740
Intangible assets			69,388			70,456			69,415			70,366			70,255			71,436
Deferred tax assets			46,926			57,993			61,385			54,019			65,738			66,545
Receivable on pending investment sales, net			53,061			—			—			—			—			—
Other assets			50,852			43,760			37,508			39,990			37,201			34,693
TOTAL ASSETS		$	7,368,441		$	7,225,847		$	7,190,463		$	6,925,554		$	7,067,790		$	6,858,412
LIABILITIES
Reserve for losses and loss expenses		$	2,841,810		$	2,767,525		$	2,790,183		$	2,701,686		$	2,769,418		$	2,782,803
Reserve for unearned premiums			999,046			1,027,229			987,748			843,202			997,478			967,844
Deposit liabilities			130,272			143,073			155,380			161,024			173,992			173,527
Reinsurance balances payable			153,815			194,012			147,745			172,328			147,218			122,829
Securities lending payable			195,727			173,884			217,698			226,762			349,630			371,407
Debt			447,235			447,213			447,192			447,172			447,151			447,131
Investments pending settlement, net			—			31,767			14,448			—			3,000			7,458
Other liabilities			74,915			61,298			63,523			75,506			62,729			48,878
TOTAL LIABILITIES		$	4,842,820		$	4,846,001		$	4,823,917		$	4,627,680		$	4,950,616		$	4,921,877
SHAREHOLDERS’ EQUITY
Preferred shares
Series A, non-cumulative		$	8,000		$	8,000		$	8,000		$	8,000		$	8,000		$	8,000
Common shares			64,081			64,591			65,968			66,480			66,196			66,096
Additional paid-in capital			1,355,468			1,378,685			1,431,623			1,458,063			1,452,438			1,450,435
Accumulated other comprehensive income (loss)			10,652	(47,525)			(131)			(14,465)			(11,123)			(82,087)
Retained earnings			1,087,420			976,095			861,086			779,796			601,663			494,091
TOTAL SHAREHOLDERS’ EQUITY		$	2,525,621		$	2,379,846		$	2,366,546		$	2,297,874		$	2,117,174		$	1,936,535
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	7,368,441		$	7,225,847		$	7,190,463		$	6,925,554		$	7,067,790		$	6,858,412
Book value per common share		$	36.21		$	33.67		$	32.77		$	31.45		$	28.87		$	26.19
Diluted book value per common share (treasury stock method)		$	32.81		$	30.56		$	30.19		$	28.87		$	26.52		$	24.24
RATIOS
Debt-to-capital	15.0%			15.8%			15.9%			16.3%			17.4%			18.8%

ENDURANCE SPECIALTY HOLDINGS LTD.

Annual Aggregate Risk Curve

The above chart represents a cumulative analysis of our in-force underwriting portfolio on a full year basis based on thousands of potential scenarios. Loss years are driven largely by the occurrence of natural catastrophes and incorrect pricing of other property and casualty exposures. The operating income depicted includes net premiums earned plus net investment income, acquisition expenses and G&A expenses. Forecasted investment income, acquisition and G&A expenses are held constant across all scenarios. Losses included above are net of reinsurance including collateralized reinsurance and ILW purchases. Our stated objective is to maintain a risk management tolerance that limits our loss in a 1-in-100 year year to be no more than 25% of our equity capital. We base our budget and forecasts on the average result, although the nature of the curve places the median result further to the right.

Changes in Endurance’s underwriting portfolio, investment portfolio, risk control mechanisms, market conditions and other factors may cause actual results to vary considerably from those indicated by our value at risk curve. For a listing of risks related to Endurance and its future performance, please see ‘‘Risk Factors’’ in our Annual Report on Form 10K for the year ended December 31, 2006.

ENDURANCE SPECIALTY HOLDINGS LTD.

Annual Aggregate Risk Curve

Annual Aggregate Risk Curve Comparison


				Change from July 1, 2006 – June 30, 2007 to July 1, 2007 – June 30, 2008		Change from Jan. 1, 2007 – Dec. 31, 2007 to July 1, 2007 – June 30, 2008
(in millions)	July 1, 2006 – June 30, 2007	Jan. 1, 2007 – Dec. 31, 2007	July 1, 2007 – June 30, 2008	$ Change	% Change	$ Change	% Change
Median Result	$ 400	$ 381	$ 391	($9)	(2.3%)	$10	2.6%
Average Result	342	341	342	0	0.0%	1	0.3%
1 in 10 year annual gain	64	91	64	0	0.0%	(27)	(42.2%)
1 in 25 year annual loss	(182)	(66)	(141)	41	(29.1%)	(75)	53.2%
1 in 50 year annual loss	(334)	(172)	(319)	15	(4.7%)	(147)	46.1%
1 in 100 year annual loss	(486)	(287)	(468)	18	(3.8%)	(181)	38.7%
1 in 250 year annual loss	(707)	(396)	(694)	13	(1.9%)	(298)	42.9%
1 in 500 year annual loss	(904)	(500)	(884)	20	(2.3%)	(384)	43.4%

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT DISTRIBUTION
FOR THE NINE MONTHS ENDED SEPT. 30, 2007

Gross Premiums Written = $1,527 million^[a]

[a] Prior to deposit accounting adjustments.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA
FOR THE QUARTER ENDED SEPT. 30, 2007


	Insurance			Reinsurance			Total Company Sub-total			Deposit Accounting Adjustment^[a]		Reported Totals
UNDERWRITING REVENUES
Gross premiums written		$	180,046		$	243,787		$	423,833	($ 562)			$	423,271
Net premiums written		$	137,404		$	240,774		$	378,178	($ 562)			$	377,616
Net premiums earned		$	130,640		$	275,776		$	406,416	($6,674)			$	399,742
Other underwriting income			—			—			—		1,697	1,697
Total underwriting revenues		$	130,640		$	275,776		$	406,416	($4,977)			$	401,439
UNDERWRITING EXPENSES
Losses and loss expenses		$	69,709		$	119,798		$	189,507	($3,051)			$	186,456
Acquisition expenses			19,489			58,531			78,020	(1,416)				76,604
General and administrative expenses			21,988			33,133			55,121		—			55,121
Total expenses			111,186			211,462			322,648	(4,467)				318,181
UNDERWRITING INCOME		$	19,454		$	64,314		$	83,768	($ 510)			$	83,258
GAAP RATIOS
Loss ratio	53.4%			43.5%			46.6%			45.7%		46.6%
Acquisition expense ratio	14.9%			21.2%			19.2%			21.2%		19.2%
General and administrative expense ratio	16.8%			12.0%			13.6%			—		13.8%
Combined ratio	85.1%			76.7%			79.4%			66.9%		79.6%
STATUTORY RATIOS
Loss ratio	53.4%			43.5%			46.6%			45.7%		46.6%
Acquisition expense ratio	17.4%			27.4%			23.8%			6.9%		23.8%
General and administrative expense ratio	15.9%			13.8%			14.5%			—		14.6%
Combined ratio	86.7%			84.7%			84.9%			52.6%		85.0%

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s underwriting results by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED FINANCIAL RATIOS
FOR THE QUARTER ENDED SEPT. 30, 2007


	Insurance	Reinsurance	Total Company Sub-total	Deposit Accounting Adjustment^[a]	Reported Totals
AS REPORTED
GAAP RATIOS
Loss ratio	53.4%	43.5%	46.6%	45.7%	46.6%
Acquisition expense ratio	14.9%	21.2%	19.2%	21.2%	19.2%
General and administrative expense ratio	16.8%	12.0%	13.6%	—	13.8%
Combined ratio	85.1%	76.7%	79.4%	66.9%	79.6%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE/(UNFAVORABLE)
GAAP RATIOS
Loss ratio	19.2%	2.9%	8.2%	(64.1)%	9.4%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
GAAP RATIOS
Loss ratio	72.6%	46.4%	54.8%	(18.4)%	56.0%
Acquisition expense ratio	14.9%	21.2%	19.2%	21.2%	19.2%
General and administrative expense ratio	16.8%	12.0%	13.6%	—	13.8%
Combined ratio	104.3%	79.6%	87.6%	2.8%	89.0%

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s loss ratio by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA


	FOR THE QUARTERS ENDED
	SEPT. 30, 2007			JUNE 30, 2007			MAR. 31, 2007			DEC. 31, 2006			SEPT. 30, 2006			SEPT. 30, 2005
UNDERWRITING REVENUES
Gross premiums written		$	180,046		$	197,967		$	147,033		$	180,584		$	156,781		$	110,983
Net premiums written		$	137,404		$	152,000		$	108,089		$	138,436		$	98,328		$	98,303
Net premiums earned		$	130,640		$	124,057		$	110,324		$	102,921		$	90,062		$	91,525
UNDERWRITING EXPENSES
Losses and loss expenses		$	69,709		$	63,422		$	63,529		$	83,370		$	57,165		$	167,395
Acquisition expenses			19,489			16,528			13,826			11,382			8,492			6,668
General and administrative expenses			21,988			18,592			22,217			13,983			13,760			9,941
Total expenses			111,186			98,542			99,572			108,735			79,417			184,004
UNDERWRITING INCOME (LOSS)		$	19,454		$	25,515		$	10,752	($ 5,814)				$	10,645	($ 92,479)
GAAP RATIOS
Loss ratio	53.4%			51.1%			57.6%			81.0%			63.5%			182.9%
Acquisition expense ratio	14.9%			13.3%			12.5%			11.1%			9.4%			7.3%
General and administrative expense ratio	16.8%			15.0%			20.2%			13.5%			15.3%			10.9%
Combined ratio	85.1%			79.4%			90.3%			105.6%			88.2%			201.1%
STATUTORY RATIOS
Loss ratio	53.4%			51.1%			57.6%			81.0%			63.5%			182.9%
Acquisition expense ratio	17.4%			13.9%			19.2%			18.9%			17.0%			7.6%
General and administrative expense ratio	15.9%			12.0%			23.9%			9.8%			12.2%			8.1%
Combined ratio	86.7%			77.0%			100.7%			109.7%			92.7%			198.6%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA


	FOR THE QUARTERS ENDED
	SEPT. 30, 2007			JUNE 30, 2007			MAR. 31, 2007			DEC. 31, 2006			SEPT. 30, 2006			SEPT. 30, 2005
UNDERWRITING REVENUES
Gross premiums written		$	243,787		$	328,815		$	429,473		$	117,313		$	326,061		$	294,861
Net premiums written		$	240,774		$	316,205		$	428,791		$	117,121		$	293,723		$	285,615
Net premiums earned		$	275,776		$	324,318		$	291,396		$	338,266		$	353,868		$	370,374
UNDERWRITING EXPENSES
Losses and loss expenses		$	119,798		$	171,172		$	169,699		$	69,483		$	158,804		$	630,055
Acquisition expenses			58,531			64,555			61,417			81,883			83,244			75,340
General and administrative expenses			33,133			30,072			26,612			37,896			34,775			31,533
Total expenses			211,462			265,799			257,728			189,262			276,823			736,928
UNDERWRITING INCOME (LOSS)		$	64,314		$	58,519		$	33,668		$	149,004		$	77,045	($366,554)
GAAP RATIOS
Loss ratio	43.5%			52.8%			58.2%			20.6%			44.9%			170.1%
Acquisition expense ratio	21.2%			19.9%			21.1%			24.2%			23.5%			20.3%
General and administrative expense ratio	12.0%			9.3%			9.1%			11.2%			9.8%			8.5%
Combined ratio	76.7%			82.0%			88.4%			56.0%			78.2%			198.9%
STATUTORY RATIOS
Loss ratio	43.5%			52.8%			58.2%			20.5%			44.9%			170.1%
Acquisition expense ratio	27.4%			21.8%			15.4%			31.4%			29.7%			21.2%
General and administrative expense ratio	13.8%			9.5%			6.2%			32.4%			11.8%			11.0%
Combined ratio	84.7%			84.1%			79.8%			84.3%			86.4%			202.3%

Note:

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. For the impact of deposit accounting on segment results, refer to page 20.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE QUARTERS ENDED
	SEPT. 30, 2007			JUNE 30, 2007			MARCH 31, 2007			DEC. 31, 2006				SEPT. 30, 2006			SEPT 30, 2005
INSURANCE SEGMENT
Property		$	28,379		$	40,835		$	27,042		$	44,268			$	47,860		$	27,736
Casualty			30,133			42,343			26,796			35,976				28,294			27,427
Healthcare liability			30,262			28,054			18,790			17,067				37,812			41,972
Workers’ compensation			70,398			57,142			61,633			62,355				24,993			—
Professional lines			20,874			29,593			12,772			20,918				17,822			13,848
TOTAL INSURANCE		$	180,046		$	197,967		$	147,033		$	180,584			$	156,781		$	110,983
REINSURANCE SEGMENT
Casualty		$	66,006		$	27,788		$	91,936		$	50,411			$	86,933		$	89,057
Property			112,407			65,476			36,701			22,170				124,235			70,601
Catastrophe			43,684			147,506			140,499			18,912				49,385			66,127
Agriculture			6,917			24,118			93,061			(2,124	)			16,324	(1,252)
Marine			1,598			12,220			33,080			15,344				16,237			41,608
Aerospace			7,581			20,263			6,480			10,795				17,761			14,932
Surety and other specialty			5,594			31,444			27,716			1,805				15,186			13,788
TOTAL REINSURANCE		$	243,787		$	328,815		$	429,473		$	117,313			$	326,061		$	294,861
TOTAL COMPANY SUBTOTAL		$	423,833		$	526,782		$	576,506		$	297,897			$	482,842		$	405,844
DEPOSIT ACCOUNTING ADJUSTMENT^[a]	(562)			(19,979)			(3,215)			(7,102)				(6,629)			(35,279)
REPORTED TOTALS		$	423,271		$	506,803		$	573,291		$	290,795			$	476,213		$	370,565

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s gross premiums written by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE QUARTERS ENDED
	SEPT. 30, 2007			JUNE 30, 2007			MARCH 31, 2007			DEC. 31, 2006				SEPT. 30, 2006			SEPT. 30, 2005
INSURANCE SEGMENT
Property		$	7,689		$	17,262		$	6,127		$	19,504			$	4,397		$	20,147
Casualty			16,467			26,815			17,761			24,305				16,194			22,341
Healthcare liability			30,262			28,054			18,790			17,067				37,812			41,972
Workers’ compensation			64,131			52,999			54,810			58,607				22,215			—
Professional lines			18,855			26,870			10,601			18,953				17,710			13,848
TOTAL INSURANCE		$	137,404		$	152,000		$	108,089		$	138,436			$	98,328		$	98,308
REINSURANCE SEGMENT
Casualty		$	65,946		$	27,610		$	91,921		$	50,367			$	86,716		$	86,439
Property			112,398			67,074			36,527			22,170				116,146			69,337
Catastrophe			41,025			137,720			140,183			18,912				31,282			62,262
Agriculture			7,028			22,018			93,061			(2,124	)			15,483	(1,251)
Marine			559			12,704			33,016			15,344				12,970			41,608
Aerospace			7,831			18,326			6,375			10,795				15,976			14,932
Surety and other specialty			5,987			30,753			27,708			1,657				15,150			12,288
TOTAL REINSURANCE		$	240,774		$	316,205		$	428,791		$	117,121			$	293,723		$	285,615
TOTAL COMPANY SUBTOTAL		$	378,178		$	468,205		$	536,880		$	255,557			$	392,051		$	383,923
DEPOSIT ACCOUNTING ADJUSTMENT^[a]	(562)			(19,979)			(3,215)			(7,102)				(6,629)			(35,279)
REPORTED TOTALS		$	377,616		$	448,226		$	533,665		$	248,455			$	385,422		$	348,644

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s gross premiums written by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED SEGMENT DATA
FOR THE NINE MONTHS ENDED SEPT. 30, 2007


	Insurance			Reinsurance			Total Company Sub-total			Deposit Accounting Adjustment^[a]	Reported Totals
UNDERWRITING REVENUES
Gross premiums written		$	525,046		$	1,002,075		$	1,527,121	($23,756)		$	1,503,365
Net premiums written		$	397,494		$	985,769		$	1,383,263	($23,756)		$	1,359,507
Net premiums earned		$	365,021		$	891,489		$	1,256,510	($62,172)		$	1,194,338
Other underwriting loss			—			—			—	(7,442)	(7,442)
Total underwriting revenues		$	365,021		$	891,489		$	1,256,510	($69,614)		$	1,186,896
UNDERWRITING EXPENSES
Losses and loss expenses		$	196,660		$	460,670		$	657,330	($53,101)		$	604,229
Acquisition expenses			49,844			184,503			234,347	(16,272)			218,075
General and administrative expenses			62,796			89,818			152,614	—			152,614
Total expenses			309,300			734,991			1,044,291	(69,373)			974,918
UNDERWRITING INCOME		$	55,721		$	156,498		$	212,219	($241)		$	211,978
GAAP RATIOS
Loss ratio	53.9%			51.7%			52.3%			85.4%	50.6%
Acquisition expense ratio	13.6%			20.7%			18.7%			26.2%	18.2%
General and administrative expense ratio	17.2%			10.0%			12.1%			—	12.8%
Combined ratio	84.7%			82.4%			83.1%			111.6%	81.6%
STATUTORY RATIOS
Loss ratio	53.9%			51.7%			52.3%			85.4%	50.6%
Acquisition expense ratio	16.5%			20.4%			19.3%			27.5%	19.2%
General and administrative expense ratio	15.7%			9.1%			11.0%			—	11.2%
Combined ratio	86.1%			81.2%			82.6%			112.9%	81.0%

[a]

ENDURANCE SPECIALTY HOLDINGS LTD.

CONSOLIDATED FINANCIAL RATIOS
FOR THE NINE MONTHS ENDED SEPT. 30, 2007


	Insurance	Reinsurance	Total Company Sub-total	Deposit Accounting Adjustment^[a]	Reported Totals
AS REPORTED
GAAP RATIOS
Loss ratio	53.9%	51.7%	52.3%	85.4%	50.6%
Acquisition expense ratio	13.6%	20.7%	18.7%	26.2%	18.2%
General and administrative expense ratio	17.2%	10.0%	12.1%	—	12.8%
Combined ratio	84.7%	82.4%	83.1%	111.6%	81.6%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT			��
FAVORABLE / (UNFAVORABLE)
GAAP RATIOS
Loss ratio	19.3%	4.4%	8.8%	(17.7)%	10.1%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
GAAP RATIOS
Loss ratio	73.2%	56.1%	61.1%	67.7%	60.7%
Acquisition expense ratio	13.6%	20.7%	18.7%	26.2%	18.2%
General and administrative expense ratio	17.2%	10.0%	12.1%	—	12.8%
Combined ratio	104.0%	86.8%	91.9%	93.9%	91.7%

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s loss ratio by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

INSURANCE SEGMENT DATA


	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2007			SEPT. 30, 2006			SEPT. 30, 2005			DEC. 31, 2006			DEC. 31, 2005
UNDERWRITING REVENUES
Gross premiums written		$	525,046		$	396,161		$	323,058		$	576,745		$	421,431
Net premiums written		$	397,494		$	278,201		$	305,168		$	416,637		$	387,654
Net premiums earned		$	365,021		$	268,841		$	269,146		$	371,762		$	364,175
UNDERWRITING EXPENSES
Losses and loss expenses		$	196,660		$	168,940		$	292,368		$	252,310		$	343,577
Acquisition expenses			49,844			21,147			21,064			32,528			27,483
General and administrative expenses			62,796			35,542			26,502			49,524			35,987
Total expenses			309,300			225,629			339,934			334,362			407,047
UNDERWRITING INCOME (LOSS)		$	55,721		$	43,212	($70,788)			$37,400			($42,872)
GAAP RATIOS
Loss ratio	53.9%			62.8%			108.6%			67.9%			94.3%
Acquisition expense ratio	13.6%			7.9%			7.8%			8.7%			7.6%
General and administrative expense ratio	17.2%			13.2%			9.8%			13.3%			9.9%
Combined ratio	84.7%			83.9%			126.2%			89.9%			111.8%
STATUTORY RATIOS
Loss ratio	53.9%			62.8%			108.6%			67.9%			94.3%
Acquisition expense ratio	16.5%			11.4%			6.6%			13.9%			6.7%
General and administrative expense ratio	15.7%			10.9%			8.0%			10.5%			8.5%
Combined ratio	86.1%			85.1%			123.2%			92.3%			109.5%

ENDURANCE SPECIALTY HOLDINGS LTD.

REINSURANCE SEGMENT DATA


	FOR THE NINE MONTHS ENDED			FOR THE YEARS ENDED
	SEPT. 30, 2007	SEPT. 30, 2006	SEPT. 30, 2005	DEC. 31, 2006	DEC. 31, 2005
UNDERWRITING REVENUES
Gross premiums written	$1,002,075	$1,254,576	$1,275,323	$1,371,889	$1,390,737
Net premiums written	$985,769	$1,210,798	$1,259,380	$1,327,919	$1,374,986
Net premiums earned	$891,489	$1,108,901	$1,092,851	$1,447,167	$1,439,266
UNDERWRITING EXPENSES
Losses and loss expenses	$460,670	$627,479	$999,564	$696,962	$1,368,284
Acquisition expenses	184,503	259,310	245,067	341,194	327,236
General and administrative expenses	89,818	102,952	88,950	140,849	110,432
Total expenses	734,991	989,741	1,333,581	1,179,005	1,805,952
UNDERWRITING INCOME (LOSS)	$156,498	$119,160	($240,730)	$268,162	($366,686)
GAAP RATIOS
Loss ratio	51.7%	56.6%	91.5%	48.2%	95.1%
Acquisition expense ratio	20.7%	23.4%	22.4%	23.6%	22.7%
General and administrative expense ratio	10.0%	9.3%	8.1%	9.7%	7.7%
Combined ratio	82.4%	89.3%	122.0%	81.5%	125.5%
STATUTORY RATIOS
Loss ratio	51.7%	56.6%	91.5%	48.2%	95.1%
Acquisition expense ratio	20.4%	22.8%	22.5%	23.5%	23.0%
General and administrative expense ratio	9.1%	8.5%	7.1%	10.6%	8.0%
Combined ratio	81.2%	87.9%	121.1%	82.3%	126.1%

Note:

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. For the impact of deposit accounting on segment results, refer to page 21.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE NINE MONTHS ENDED									FOR THE YEAR ENDED
	SEPT. 30, 2007			SEPT. 30, 2006			SEPT. 30, 2005			DEC. 31, 2006			DEC. 31, 2005
INSURANCE SEGMENT
Property		$	96,256		$	129,024		$	87,042		$	173,292		$	112,736
Casualty			99,273			92,957			94,633			128,933			129,951
Healthcare liability			77,105			89,921			95,964			106,988			117,120
Workers’ compensation			189,173			31,424			—			93,779			—
Professional lines			63,239			52,835			45,419			73,753			61,624
TOTAL INSURANCE		$	525,046		$	396,161		$	323,058		$	576,745		$	421,431
REINSURANCE SEGMENT
Casualty		$	185,730		$	349,700		$	340,249		$	400,111		$	385,604
Property			214,584			296,713			341,233			318,883			361,859
Catastrophe			331,689			272,843			276,489			291,755			300,892
Agriculture			124,095			109,228			33,814			107,104			33,035
Marine			46,898			88,043			97,349			103,387			118,976
Aerospace			34,325			66,021			119,102			76,816			120,501
Surety and other specialty			64,754			72,028			67,086			73,833			69,870
TOTAL REINSURANCE		$	1,002,075		$	1,254,576		$	1,275,322		$	1,371,889		$	1,390,737
TOTAL COMPANY SUBTOTAL		$	1,527,121		$	1,650,737		$	1,598,380		$	1,948,634		$	1,812,168
DEPOSIT ACCOUNTING ADJUSTMENT^[a]	(23,756)			(151,890)			(122,135)			(158,992)			(143,291)
REPORTED TOTALS		$	1,503,365		$	1,498,847		$	1,476,245		$	1,789,642		$	1,668,877

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s gross premiums written by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

SEGMENT NET PREMIUMS WRITTEN BY LINE OF BUSINESS


	FOR THE NINE MONTHS ENDED									FOR THE YEAR ENDED
	SEPT. 30, 2007			SEPT. 30, 2006			SEPT. 30, 2005			DEC. 31, 2006			DEC. 31, 2005
INSURANCE SEGMENT
Property		$	31,078		$	41,786		$	75,707		$	61,290		$	91,774
Casualty			61,044			65,512			87,987			89,817			117,045
Healthcare liability			77,105			89,921			95,964			106,988			117,120
Workers’ compensation			171,941			28,260			—			86,867			—
Professional lines			56,326			52,722			45,510			71,675			61,715
TOTAL INSURANCE		$	397,494		$	278,201		$	305,168		$	416,637		$	387,654
REINSURANCE SEGMENT
Casualty		$	185,478		$	346,295		$	335,170		$	396,663		$	380,303
Property			215,999			288,624			339,895			310,795			360,517
Catastrophe			318,929			251,215			272,626			270,126			297,027
Agriculture			122,106			108,387			33,814			106,262			33,035
Marine			46,277			84,776			97,349			100,120			118,976
Aerospace			32,532			62,671			119,102			73,466			120,501
Surety and other specialty			64,448			68,830			61,424			70,487			64,627
TOTAL REINSURANCE		$	985,769		$	1,210,798		$	1,259,380		$	1,327,919		$	1,374,986
TOTAL COMPANY SUBTOTAL		$	1,383,263		$	1,488,999		$	1,564,548		$	1,744,556		$	1,762,640
DEPOSIT ACCOUNTING ADJUSTMENT^[a]	(23,756)			(151,890)			(122,136)			(158,992)			(143,291)
REPORTED TOTALS		$	1,359,507		$	1,337,109		$	1,442,412		$	1,585,564		$	1,619,349

[a]

For internal management reporting purposes, underwriting results by segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. However, for financial statement presentation purposes, management determined that certain reinsurance contracts written during the period were more appropriately accounted for under the deposit method of accounting specified by AICPA SOP 98-7 whereby net premiums due on such contracts were recorded as deposit liabilities. The adjustment herein reconciles the Company’s gross premiums written by segment to the Company’s financial statement presentation.

ENDURANCE SPECIALTY HOLDINGS LTD.

DEPOSIT ACCOUNTING ADJUSTMENT IMPACTS ON SEGMENT DATA
FOR THE QUARTER ENDED SEPT. 30, 2007


	Includes Deposit Accounting Adjustments									Excludes Deposit Accounting Adjustments
	Insurance			Reinsurance			Total Company			Insurance			Reinsurance			Total Company
UNDERWRITING REVENUES
Gross premiums written		$	180,046		$	243,225		$	423,271		$	180,046		$	243,787		$	423,833
Net premiums written		$	137,404		$	240,212		$	377,616		$	137,404		$	240,774		$	378,178
Net premiums earned		$	130,640		$	269,102		$	399,742		$	130,640		$	275,776		$	406,416
Other underwriting income			—		$	1,697			1,697			—			—			—
Total underwriting revenues			130,640			270,799			401,439			130,640			275,776			406,416
UNDERWRITING EXPENSES
Losses and loss expenses		$	69,709		$	116,747		$	186,455		$	69,709		$	119,798		$	189,507
Acquisition expenses			19,489			57,115			76,604			19,489			58,531			78,020
General and administrative expenses			21,988			33,133			55,121			21,988			33,133			55,121
Total expenses			111,186			206,995			318,181			111,186			211,462			322,648
UNDERWRITING INCOME		$	19,454		$	63,804		$	83,258		$	19,454		$	64,314		$	83,768
GAAP RATIOS
Loss ratio	53.4%			43.4%			46.6%			53.4%			43.5%			46.6%
Acquisition expense ratio	14.9%			21.2%			19.2%			14.9%			21.2%			19.2%
General and administrative expense ratio	16.8%			12.3%			13.8%			16.8%			12.0%			13.6%
Combined ratio	85.1%			76.9%			79.6%			85.1%			76.7%			79.4%

ENDURANCE SPECIALTY HOLDINGS LTD.

DEPOSIT ACCOUNTING ADJUSTMENT IMPACTS ON SEGMENT DATA
FOR THE NINE MONTHS ENDED SEPT. 30, 2007


	Includes Deposit Accounting Adjustments									Excludes Deposit Accounting Adjustments
	Insurance			Reinsurance			Total Company			Insurance			Reinsurance			Total Company
UNDERWRITING REVENUES
Gross premiums written		$	525,046		$	978,319		$	1,503,365		$	525,046		$	1,002,075		$	1,527,121
Net premiums written		$	397,494		$	962,013		$	1,359,507		$	397,494		$	985,769		$	1,383,263
Net premiums earned		$	365,021		$	829,317		$	1,194,338		$	365,021		$	891,489		$	1,256,510
Other underwriting loss			—	($7,442)			(7,442)					—			—			—
Total underwriting revenues			365,021			821,875			1,186,896			365,021			891,489			1,256,510
UNDERWRITING EXPENSES
Losses and loss expenses		$	196,660		$	407,569		$	604,229		$	196,660		$	460,670		$	657,330
Acquisition expenses			49,844			168,231			218,075			49,844			184,503			234,347
General and administrative expenses			62,796			89,818			152,614			62,796			89,818			152,614
Total expenses			309,300			665,618			974,918			309,300			734,991			1,044,291
UNDERWRITING INCOME		$	55,721		$	156,257		$	211,978		$	55,721		$	156,498		$	212,219
GAAP RATIOS
Loss ratio	53.9%			49.2%			50.6%			53.9%			51.7%			52.3%
Acquisition expense ratio	13.6%			20.3%			18.2%			13.6%			20.7%			18.7%
General and administrative expense ratio	17.2%			10.8%			12.8%			17.2%			10.0%			12.1%
Combined ratio	84.7%			80.3%			81.6%			84.7%			82.4%			83.1%

ENDURANCE SPECIALTY HOLDINGS LTD.

RETURN ON EQUITY ANALYSIS


			FOR THE NINE MONTHS ENDED SEPT. 30, 2007
Average common equity^[a]			$2,211,748
Net premiums earned			$1,194,338
Combined ratio			81.6%
Operating margin			18.4%
Premium leverage			0.54x
Implied ROAE from underwriting activity			9.9%
Average cash and invested assets at amortized cost			$5,688,869
Investment leverage			2.57x
Year to date investment income yield, pretax			3.8%
Implied ROAE from investment activity			9.8%
Financing Costs^[b]			(1.5)%
Implied Pre-tax Operating ROAE, for period			18.2%
Implied Pre-tax Operating ROAE, annualized			24.2%

[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 $200 million liquidation value of the preferred shares.

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

ENDURANCE SPECIALTY HOLDINGS LTD.

ANNUALIZED OPERATING & INVESTMENT LEVERAGE


	FOR THE QUARTERS ENDED												YEARS ENDED DECEMBER 31,
	SEPT. 30, 2007			JUNE 30, 2007			MAR. 31, 2007			DEC. 31, 2006			2006			2005
Average common equity^[a]		$	2,252,734		$	2,173,196		$	2,132,210		$	2,007,524		$	1,885,209		$	1,767,499
Net premiums earned		$	399,742		$	417,551		$	377,045		$	403,715		$	1,638,574		$	1,723,694
Operating leverage			0.18x			0.19x			0.18x			0.20x			0.87x			0.98x
Annualized operating leverage			0.71x			0.77x			0.71x			0.80x			0.87x			0.98x
Avg. cash and invested assets at amortized cost		$	5,751,342		$	5,659,148		$	5,596,675		$	5,496,389		$	5,275,481		$	4,463,908
Investment leverage			2.55x			2.60x			2.62x			2.74x			2.80x			2.53x

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

ENDURANCE SPECIALTY HOLDINGS LTD.

INVESTMENT PORTFOLIO
AS OF SEPT. 30, 2007


Type of Investment	Fair Value			Percentage
Cash and equivalents^[a]		$	653,103	11.3%
U.S. government and agencies			527,452	9.1%
Corporate securities			917,957	15.8%
Foreign government			215,155	3.7%
Municipals			15,538	0.3%
Asset-backed securities			537,425	9.3%
Mortgage-backed securities			2,590,281	44.6%
Other investments^[b]			343,926	5.9%
Total		$	5,800,837	100.0%


Ratings	Fair Value			Percentage
U.S. Government and agencies		$	527,452	10.2%
AAA/Aaa and agency RMBS			3,465,948	67.3%
AA/Aa			352,782	6.9%
A/A			360,750	7.0%
BBB			30,369	0.6%
Below BBB			66,297	1.3%
Not Rated			210	0.0%
Other investments			343,926	6.7%
Total		$	5,147,734	100.0%


Performance			Sept. 30, 2007
Yield^[c]			5.1%
Duration^[d]			2.8


Investment Income	Quarter Ended Sept. 30, 2007				Quarter Ended June 30, 2007			Quarter Ended Mar. 31, 2007			Quarter Ended Dec. 31, 2006
Other Investments			($3,489	)		$	13,519		$	12,153		$	11,170
Total net investment income		$	62,605			$	78,548		$	74,813		$	72,033

Note:

[a]	Cash and equivalents are shown net of investments pending settlement.

[b]	Other investments includes investments in alternative and high yield fixed maturity security funds.

[c]	Annualized earned yield excludes realized and unrealized gains and losses on fixed maturity investments.

[d]	Duration excludes other investments and operating cash

ENDURANCE SPECIALTY HOLDINGS LTD.

STRUCTURED SECURITIES DETAIL
AS OF SEPT. 30, 2007


Securitized (RMBS, CMBS, ABS and CDO) securities ratings	Fair Value			Percentage	Percentage of Investment Portfolio
U.S. Government and agencies		$	1,349,159	43.1%	23.3%
AAA/Aaa			1,763,991	56.4%	30.4%
AA/Aa			745	0.0%	0.0%
A/A			496	0.0%	0.0%
BBB			5,073	0.2%	0.1%
Below BBB			8,258	0.3%	0.1%
Total		$	3,127,722	100.0%	53.9%


Structured securities sectors (RMBS, CMBS, ABS and CDO)	Fair Value			Percentage	Percentage
Commercial		$	850,131	27.2%	14.7%
Residential			1,800,772	57.6%	31.0%
Consumer			476,819	15.2%	8.2%
Total		$	3,127,722	100.0%	53.9%
Spread Duration 3.48 years


Subprime collateralized securities	Fair Value			Percentage	Percentage
AAA		$	13,554	99.0%	0.2%
BBB and below			132	1.0%	0.0%
Total		$	13,686	100.0%	0.2%
Spread Duration 0.72 years


Collateralized debt obligations (CDO’s)	Fair Value			Percentage	Percentage
AAA/Aaa			—	—	0.0%
AA/Aa			—	—	0.0%
A/A			—	—	0.0%
BBB		$	1,128	56.2%	0.0%
Below BBB			879	43.8%	0.0%
Total		$	2,007	100.0%	0.0%


Collateralized dept obligations (CDO’s)	Fair Value			Percentage	Percentage
Commercial		$	1,932	96.3%	0.0%
Residential			75	3.7%	0.0%
Total		$	2,007	100.0%	0.0%
Spread Duration 3.76 years

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES


	QUARTER ENDED SEPT. 30, 2007	QUARTER ENDED JUNE 30, 2007	QUARTER ENDED MAR. 31, 2007	QUARTER ENDED DEC. 31, 2006	QUARTER ENDED SEPT. 30, 2006
Incurred related to:
Current year	$ 223,946	$ 234,768	$ 266,501	$ 158,160	$ 198,073
Prior years	(37,490)	(27,589)	(55,907)	(26,740)	(10,040)
Total incurred	$ 186,456	$ 207,179	$ 210,594	$ 131,420	$ 188,033
Paid related to:
Current year	($ 24,416)	($ 15,896)	($ 205)	($ 34,706)	($ 19,698)
Prior years	(134,212)	(232,921)	(138,492)	(183,233)	(194,221)
Total paid	($ 158,628)	($ 248,817)	($ 138,697)	($ 217,939)	($ 213,919)

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES BY SEGMENT

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE NINE MONTHS ENDED SEPT. 30, 2007


	Insurance	Reinsurance	Total Company Sub-total	Deposit Accounting Adjustment^[a]	Total Company
Incurred related to prior years
Quarter ended March 31, 2007	($ 26,507)	($ 23,072)	($ 49,579)	$ 6,328	($55,907)
Quarter ended June 30, 2007	(18,725)	(8,441)	(27,166)	423	(27,589)
Quarter ended Sept. 30, 2007	(25,101)	(8,112)	(33,213)	4,277	(37,490)
Nine months ended Sept, 30, 2007	($ 70,333)	($ 39,625)	($ 109,958)	$ 11,028	($ 120,986)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DECEMBER 31, 2006


	Insurance	Reinsurance	Total Company Sub-total	Deposit Accounting Adjustment^[a]	Total Company
Incurred related to prior years
Quarter ended March 31, 2006	($ 27,855)	($ 16,946)	($ 44,801)	($ 2,260)	($ 42,541)
Quarter ended June 30, 2006	(13,068)	41,537	28,469	6,887	21,582
Quarter ended September 30, 2006	(5,941)	(7,376)	(13,317)	(3,277)	(10,040)
Quarter ended December 31, 2006	(7,523)	(22,204)	(29,727)	(2,987)	(26,740)
Year ended December 31, 2006	($ 54,387)	($ 4,989)	($ 59,376)	($ 1,637)	($ 57,739)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DECEMBER 31, 2005


	Insurance	Reinsurance	Total Company Sub-total	Deposit Accounting Adjustment^[a]	Total Company
Incurred related to prior years
Quarter ended March 31, 2005	($ 9,788)	($ 36,213)	($ 46,001)	—	($ 46,001)
Quarter ended June 30, 2005	(16,149)	(11,599)	(27,748)	—	(27,748)
Quarter ended September 30, 2005	(2,789)	(21,087)	(23,876)	—	(23,876)
Quarter ended December 31, 2005	(29,270)	(35,567)	(64,837)	—	(64,837)
Year ended December 31, 2005	($ 57,996)	($ 104,466)	($ 162,462)	—	($ 162,462)

[a]

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES BY DEVELOPMENT TAIL

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT


	FOR THE QUARTERS ENDED				FOR THE YEAR ENDED DEC. 31, 2006
	SEPT. 30, 2007	JUNE 30, 2007	MAR. 31, 2007	DEC. 31, 2006	FOR THE YEAR ENDED DEC. 31, 2006
INSURANCE SEGMENT
Short tail^[a]	($ 1,003)	($ 15,172)	($ 16,098)	$ 6,508	($ 20,198)
Long Tail^[b]	(24,098)	(3,553)	(10,409)	(14,031)	(34,189)
TOTAL INSURANCE	(25,101)	(18,725)	(26,507)	(7,523)	(54,387)
REINSURANCE SEGMENT
Short tail^[a]	(12,953)	(10,114)	(15,583)	(20,330)	29,409
Long Tail^[b]	(2,269)	1,106	(5,198)	444	(20,118)
Other^[c]	7,110	567	(2,291)	(2,318)	(14,280)
TOTAL REINSURANCE	(8,112)	(8,441)	(23,072)	(22,204)	(4,989)
TOTAL COMPANY SUBTOTAL	(33,213)	(27,166)	(49,579)	(29,727)	(59,376)
DEPOSIT ACCOUNTING ADJUSTMENT^[d]	4,277	423	6,328	(2,987)	(1,637)
REPORTED TOTALS	($ 37,490)	($ 27,589)	($ 55,907)	($ 26,740)	($ 57,739)

[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 business segment includes its property line of business. The Company’s short tail lines in its Reinsurance business segment include property, catastrophe, marine, aerospace 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 business segment includes casualty, healthcare liability, workers’ compensation and professional lines. The Company’s long tail line of business in the Reinsurance business segment includes casualty.

[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 Reinsurance business segment are agriculture, personal accident, and other.

[d]

ENDURANCE SPECIALTY HOLDINGS LTD.

ANALYSIS OF UNPAID LOSSES AND LOSS EXPENSE


	Insurance									Reinsurance
	Short Tail			Long Tail			Total			Short Tail			Long Tail			Other			Total			Total Company			Deposit Accounting Adjustment^[a]	Reported Totals
AT SEPT. 30, 2007
Case reserves		$	116,106		$	46,092		$	162,198		$	577,103		$	244,289		$	18,260		$	839,652		$	1,001,850	($ 67,709)		$	934,141
Total reserves		$	145,657		$	899,080		$	1,044,737		$	923,945		$	837,817		$	161,607		$	1,923,369		$	2,968,106	($126,296)		$	2,841,810
Case reserves / Total reserves	79.7%			5.1%			15.5%			62.5%			29.2%			11.3%			43.7%			33.8%			53.6%	32.9%
IBNR / Total reserves	20.3%			94.9%			84.5%			37.5%			70.8%			88.7%			56.3%			66.2%			46.4%	67.1%
AT JUNE 30, 2007
Case reserves		$	100,339		$	49,928		$	150,267		$	614,638		$	234,964		$	9,267		$	858,869		$	1,009,136	($ 65,639)		$	943,497
Total reserves		$	134,405		$	832,868		$	967,273		$	974,941		$	833,779		$	126,404		$	1,935,124		$	2,902,397	($134,872)		$	2,767,525
Case reserves / Total reserves	74.7%			6.0%			15.5%			63.0%			28.2%			7.3%			44.4%			34.8%			48.7%	34.1%
IBNR / Total reserves	25.3%			94.0%			84.5%			37.0%			71.8%			92.7%			55.6%			65.2%			51.3%	65.9%
AT MAR. 31, 2007
Case reserves		$	121,095		$	32,998		$	154,093		$	645,790		$	217,718		$	9,760		$	873,268		$	1,027,361	($ 58,030)		$	969,331
Total reserves		$	164,454		$	754,080		$	918,534		$	1,029,414		$	815,327		$	165,376		$	2,010,117		$	2,928,651	($138,468)		$	2,790,183
Case reserves / Total reserves	73.6%			4.4%			16.8%			62.7%			26.7%			5.9%			43.4%			35.1%			41.9%	34.7%
IBNR / Total reserves	26.4%			95.6%			83.2%			37.3%			73.3%			94.1%			56.6%			64.9%			58.1%	65.3%
AT DEC. 31, 2006
Case reserves		$	146,138		$	25,941		$	172,079		$	683,118		$	211,940		$	9,031		$	904,089		$	1,076,168	($ 52,760)		$	1,023,408
Total reserves		$	182,196		$	683,151		$	865,347		$	1,022,475		$	793,556		$	148,930		$	1,964,961		$	2,830,308	($128,622)		$	2,701,686
Case reserves / Total reserves	80.2%			3.8%			19.9%			66.8%			26.7%			6.1%			46.0%			38.0%			41.0%	37.9%
IBNR / Total reserves	19.8%			96.2%			80.1%			33.2%			73.3%			93.9%			54.0%			62.0%			59.0%	62.1%
AT SEPT. 30, 2006
Case reserves		$	152,447		$	8,303		$	160,750		$	745,512		$	205,928		$	8,764		$	960,204		$	1,120,954	($ 52,630)		$	1,068,324
Total reserves		$	193,275		$	615,947		$	809,222		$	1,147,159		$	796,003		$	139,649		$	2,082,811		$	2,892,033	($122,615)		$	2,769,418
Case reserves / Total reserves	78.9%			1.3%			19.9%			65.0%			25.9%			6.3%			46.1%			38.8%			42.9%	38.6%
IBNR / Total reserves	21.1%			98.7%			80.1%			35.0%			74.1%			93.7%			53.9%			61.2%			57.1%	61.4%

[a]

ENDURANCE SPECIALTY HOLDINGS LTD.

DILUTIVE SHARES FOR EPS CALCULATION


		QUARTER ENDED SEPT. 30,		NINE MONTHS ENDED SEPT. 30,
		2007	2006	2007	2006
DILUTIVE SHARES	Average market price per share	$39.53	$32.62	$37.61	$32.09
OUTSTANDING: AS REPORTED	Basic weighted average common shares outstanding	64,468	66,339	65,530	66,393
	Add: weighted avg. unvested restricted share units	1,090	868	879	802
	Weighted average exercise price per share	—	—	—	—
	Proceeds from unrecognized restricted share unit expense	$22,283	$12,396	$22,283	$12,396
	Less: restricted share units bought back via treasury method	(564)	(380)	(592)	(386)
	Add: weighted avg. dilutive warrants outstanding	7,202	7,202	7,202	7,202
	Weighted average exercise price per share	$16.12	$17.12	$16.12	$17.12
	Less: warrants bought back via treasury method	(2,937)	(3,781)	(3,087)	(3,843)
	Add: weighted avg. dilutive options outstanding	2,174	2,885	2,314	2,984
	Weighted average exercise price per share	$18.19	$18.57	$18.15	$18.52
	Proceeds from unrecognized option expense	$ 80	$ 108	$ 80	$ 108
	Less: options bought back via treasury method	(1,002)	(1,646)	(1,119)	(1,724)
	Weighted average dilutive shares outstanding	70,431	71,487	71,126	71,428

Note:

Warrants, options and unvested restricted share units that are anti-dilutive are not included in the calculation of diluted shares outstanding. Warrants, options and unvested restricted share units 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. Restricted share units are included in the calculation of basic and diluted weighted shares outstanding. The treasury stock method assumes that the proceeds received from the exercise of options or warrants will be used to repurchase the Company’s common shares at the average market price during the period of calculation. SFAS No. 123R also requires that any unrecognized stock based compensation expense that will be recorded in future perio ds be included as proceeds for purposes of the treasury stock repurchases.

ENDURANCE SPECIALTY HOLDINGS LTD.

OPERATING INCOME RECONCILIATION
EARNINGS PER SHARE INFORMATION — AS REPORTED, GAAP


	QUARTER ENDED SEPT. 30,								NINE MONTHS ENDED SEPT. 30,
	2007				2006				2007				2006
Net income		$	131,401			$	128,230			$	368,577			$	299,316
Add (Less) after-tax items:
Net foreign exchange losses (gains)			(546	)			2,918				(918	)			(8,183	)
Net realized losses on investments			3,013				6,080				12,583				16,211
Operating income before preferred dividends		$	133,868			$	137,228			$	380,242			$	307,344
Preferred dividends			(3,875	)			(3,875	)			(11,625	)			($11,625	)
Operating income available to common shareholders		$	129,993			$	133,353			$	368,617			$	295,719
Weighted average common shares outstanding
Basic			64,468				66,339				65,530				66,393
Dilutive			70,431				71,487				71,126				71,428
Basic per common share data
Net income available to common shareholders		$	1.98			$	1.87			$	5.45			$	4.33
Add (Less) after-tax items:
Net foreign exchange losses (gains)			(0.01	)			0.05				(0.01	)			(0.12	)
Net realized losses on investments			0.05				0.09				0.19				0.24
Operating income available to common shareholders		$	2.02			$	2.01			$	5.63			$	4.45
Diluted per common share data
Net income available to common shareholders		$	1.81			$	1.74			$	5.02			$	4.03
Add (Less) after-tax items:
Net foreign exchange losses (gains)			0.00				0.04				(0.01	)			(0.12	)
Net realized losses on investments			0.04				0.09				0.17				0.23
Operating income available to common shareholders		$	1.85			$	1.87			$	5.18			$	4.14

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
70,190	70,313	70,430	70,541	70,646	70,745	70,840	70,931	71,017	71,099	71,178

ENDURANCE SPECIALTY HOLDINGS LTD.

BOOK VALUE PER SHARE


		SEPT. 30,								DECEMBER 31, 2006
		2007				2006				DECEMBER 31, 2006
DILUTIVE COMMON	Price per share at period end		$	41.55			$	35.26			$	36.58
SHARES OUTSTANDING:
AS-IF CONVERTED^[a]	Basic common shares outstanding^[b]			64,223				66,416				66,702
	Add: unvested restricted share units			1,039				814				790
	Add: dilutive warrants outstanding			7,202				7,202				7,202
	Weighted average exercise price per share		$	16.12			$	17.12			$	16.87
	Add: dilutive options outstanding			2,169				2,853				2,591
	Weighted average exercise price per share		$	18.18			$	18.59			$	18.50
	Book Value^[c]		$	2,325,621			$	1,917,174			$	2,097,874
	Add: proceeds from converted warrants			116,102				123,304				121,504
	Add: proceeds from converted options			39,439				53,031				47,937
	Pro forma book value		$	2,481,162			$	2,093,509			$	2,267,315
	Dilutive shares outstanding			74,634				77,285				77,285
	Basic book value per common share		$	36.21			$	28.87			$	31.45
	Diluted book value per common share		$	33.24			$	27.09			$	29.34
DILUTIVE COMMON	Price per share at period end		$	41.55			$	35.26			$	36.58
SHARES OUTSTANDING:
TREASURY STOCK METHOD	Basic common shares outstanding^[b]			64,223				66,416				66,702
	Add: unvested restricted share units			1,039				814				790
	Add: dilutive warrants outstanding			7,202				7,202				7,202
	Weighted average exercise price per share		$	16.12			$	17.12			$	16.87
	Less: warrants bought back via treasury method			(2,794	)			(3,497	)			(3,322	)
	Add: dilutive options outstanding			2,169				2,853				2,591
	Weighted average exercise price per share		$	18.18			$	18.59			$	18.50
	Less: options bought back via treasury method			(950	)			(1,503	)			(1,309	)
	Dilutive shares outstanding			70,891				72,285				72,654
	Basic book value per common share		$	36.21			$	28.87			$	31.45
	Diluted book value per common share		$	32.81			$	26.52			$	28.87

[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]	Basic common shares include vested restricted share units.

[c]	Excludes the $200 million liquidation value of the preferred shares.

ENDURANCE SPECIALTY HOLDINGS LTD.

SHAREHOLDER RETURN ANALYSIS


	NINE MONTHS ENDED SEPT. 30, 2007	YEARS ENDED DECEMBER 31,
	NINE MONTHS ENDED SEPT. 30, 2007	2006	2005	2004	2003
Net income (loss) available to common shareholders	$356,952	$482,626	($223,204)	$355,584	$263,437
Dividends paid to common shareholders	(49,135)	(66,262)	(61,695)	(50,346)	(20,505)
Shareholders’ equity^[a]	2,325,621	2,097,874	1,672,543	1,862,455	1,644,815
Return on beginning equity	17.0%	28.9%	(12.0)%	21.6%	21.6%
Dividend payout ratio^[b]	2.3%	4.0%	3.3%	3.1%	1.7%
Dilutive common shares outstanding	70,891	72,654	72,173	66,729	68,445
Diluted book value per common share (treasury stock method)	$32.81	$28.87	$23.17	$27.91	$24.03
Change in diluted book value per common share	13.6%	24.6%	(17.0)%	16.1%	10.6%
Total return to common shareholders^[c]	15.9%	28.6%	(13.7)%	19.2%	12.3%

[a]	Excludes the $200 million liquidation value of the preferred shares.

[b]	Dividend payout ratio is calculated as dividends paid divided by beginning shareholders’ equity.

[c]	Total return to common shareholders is calculated as the sum of the change in diluted book value per common share and the dividend payout ratio.

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 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 how management analyzes the Company’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 31 for a reconciliation of operating income to net 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.

Endurance Specialty (ENH) Inactive 8-KResults of Operations and Financial Condition