Endurance Specialty (ENH) 8-K Results of Operations and Financial Condition

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

FIRST QUARTER 2008

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 - Prior Years	3
	c.	Consolidated Balance Sheets	4
	d.	Endurance Operating Income Profile	5
	e.	Segment Distribution	7
	f.	Segment Data	8
	g.	Deposit Accounting Adjustment Impacts on Segment Data	14
III.	Other Financial Information
	a.	Return on Equity Analysis	15
	b.	ROE Component Analysis - Operating and Investment Leverage	16
	c.	Investment Portfolio Information	17
	d.	Structured Securities Detail	18
IV.	Loss Reserve Analysis
	a.	Activity in Reserve for Losses and Loss Expenses	19
	b.	Activity in Reserve for Losses and Loss Expenses by Segment	20
	c.	Activity in Reserve for Losses and Loss Expenses by Development Tail	21
	d.	Analysis of Unpaid Losses and Loss Expense	22
V.	Shareholder Return Analysis
	a.	Weighted Average Dilutive Shares Outstanding	23
	b.	Operating Income Reconciliation	24
	c.	Dilutive Shares Sensitivity Analysis	25
	d.	Book Value Per Share Analysis	26
	e.	Growth in Book Value Per Share Analysis	27
VI.	Regulation G		28

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, 2007.

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, 2007, 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.

i

ENDURANCE SPECIALTY HOLDINGS LTD.
CORPORATE ORGANIZATION CHART

ii

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL HIGHLIGHTS

		QUARTER ENDED MARCH 31,							Previous Quarter Change
		2008				2007
HIGHLIGHTS	Net income		$	77,811		$	101,835		(23.6	)%
	Net income available to common shareholders			73,936			97,960		(24.5	)%
	Operating income[a]			89,527			105,196		(14.9	)%
	Operating income available to common shareholders[a]			85,652			101,321		(15.5	)%
	Operating cash flow			142,738			121,805		17.2	%
	Gross premiums written			868,591			573,291		51.5	%
	Net premiums earned			372,043			377,045		(1.3	)%
	Total assets			7,875,211			7,190,463		9.5	%
	Total shareholders’ equity			2,538,174			2,366,546		7.3	%
PER SHARE AND SHARES DATA	Basic earnings per common share
	Net income (as reported)		$	1.26		$	1.47		(14.5	)%
	Operating income (as reported)[a]		$	1.46		$	1.52		(4.3	)%
	Diluted earnings per common share
	Net income (as reported)		$	1.15		$	1.36		(15.7	)%
	Operating income (as reported)[a]		$	1.33		$	1.41		(5.5	)%
As Reported	Weighted average common shares outstanding			58,823			66,613		(11.7	)%
	Weighted average common shares outstanding and dilutive potential common shares			64,503			72,073		(10.5	)%
Book Value Per Common Share	Book value[b]		$	39.83		$	32.77		21.5	%
	Diluted book value (treasury stock method)[b]		$	36.00		$	30.19		19.2	%
FINANCIAL RATIOS	Return on average common equity (ROAE), net income[c]			3.2	%		4.6	%	(1.4	)
	ROAE, operating income[a][c]			3.7	%		4.8	%	(1.1	)
	Return on beg. common equity (ROBE), net income[c]			3.2	%		4.7	%	(1.5	)
	ROBE, operating income[a]			3.7	%		4.8	%	(1.1	)
	Annualized ROAE, net income[c]			12.7	%		18.4	%	(5.7	)
	Annualized ROAE, operating income[a] [c]			14.7	%		19.0	%	(4.3	)
	Annualized ROBE, net income			12.8	%		18.7	%	(5.9	)
	Annualized ROBE, operating income[a]			14.8	%		19.3	%	(4.5	)
	Annualized investment yield			3.4	%		5.5	%	(2.1	)
	Loss ratio			50.9	%		55.9	%	(5.0	)
GAAP	Acquisition expense ratio			20.0	%		17.9	%	2.1
	General and administrative expense ratio			13.5	%		12.9	%	0.6
	Combined ratio			84.4	%		86.7	%	(2.3	)
STAT	Acquisition expense ratio			12.9	%		15.9	%	(3.0	)
	General and administrative expense ratio			7.7	%		9.8	%	(2.1	)
	Combined ratio			71.5	%		81.6	%	(10.1	)

[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 24 for a reconciliation to net income.
[b]	For detailed calculations please refer to page 26.
[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.

1

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME - QUARTERLY

	QUARTER ENDED
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				MAR. 31, 2006
UNDERWRITING REVENUES
Gross premiums written		$	868,591			$	277,750			$	423,271			$	506,803			$	573,291			$	571,381
Premiums ceded			(227,804	)			(62,282	)			(45,655	)			(58,577	)			(39,626	)			(28,372	)
Net premiums written		$	640,787			$	215,468			$	377,616			$	448,226			$	533,665			$	543,009
Change in unearned premiums			(268,744	)			184,994				22,126				(30,675	)			(156,620	)			(122,803	)
Net premiums earned		$	372,043			$	400,462			$	399,742			$	417,551			$	377,045			$	420,206
Other underwriting income (loss)			(740	)			9,044				1,697				(3,203	)			(5,936	)			3,501
Total underwriting revenues		$	371,303			$	409,506			$	401,439			$	414,348			$	371,109			$	423,707
UNDERWRITING EXPENSES
Losses and loss expenses		$	189,502			$	144,852			$	186,456			$	207,179			$	210,594			$	238,732
Acquisition expenses			74,374				89,501				76,604				73,941				67,530				75,248
General and administrative expenses			50,044				64,655				55,121				48,664				48,829				43,891
Total underwriting expenses		$	313,920			$	299,008			$	318,181			$	329,784			$	326,953			$	357,871
Underwriting income		$	57,383			$	110,498			$	83,258			$	84,564			$	44,156			$	65,836
OTHER OPERATING REVENUE/EXPENSES
Net investment income		$	46,878			$	65,310			$	62,605			$	78,548			$	74,813			$	61,544
Interest expense			(7,534	)			(7,532	)			(7,533	)			(7,531	)			(7,529	)			(7,526	)
Amortization of intangibles			(2,688	)			(1,905	)			(1,127	)			(1,127	)			(1,127	)			(1,158	)
Total other operating revenue/expenses		$	36,656			$	55,873			$	53,945			$	69,890			$	66,157			$	52,860
INCOME BEFORE OTHER ITEMS		$	94,039			$	166,371			$	137,203			$	154,454			$	110,313			$	118,696
OTHER
Net foreign exchange (losses) gains		($	3,107	)		($	6,729	)		($	700	)		$	2,072			($	2,613	)		$	2,886
Net realized losses on investments			(11,484	)			(4,125	)			(3,055	)			(9,038	)			(2,084	)			(3,330	)
Income tax expense			(1,637	)			(2,987	)			(2,047	)			(12,147	)			(3,781	)			(11,216	)
NET INCOME		$	77,811			$	152,530			$	131,401			$	135,341			$	101,835			$	107,036
Preferred dividends			(3,875	)			(3,875	)			(3,875	)			(3,875	)			(3,875	)			(3,875	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	73,936			$	148,655			$	127,526			$	131,466			$	97,960			$	103,161
KEY RATIOS/PER SHARE DATA
Loss ratio			50.9	%			36.2	%			46.6	%			49.6	%			55.9	%			56.8	%
Acquisition expense ratio			20.0	%			22.3	%			19.2	%			17.7	%			17.9	%			17.9	%
General and administrative expense ratio			13.5	%			16.2	%			13.8	%			11.7	%			12.9	%			10.5	%
Combined ratio			84.4	%			74.7	%			79.6	%			79.0	%			86.7	%			85.2	%
Weighted average basic shares outstanding			58,823				62,225				64,468				65,531				66,613				66,445
Weighted average dilutive shares outstanding			64,503				68,326				70,431				70,930				72,073				71,295
Basic earnings per common share		$	1.26			$	2.39			$	1.98			$	2.01			$	1.47			$	1.55
Diluted earnings per common share		$	1.15			$	2.18			$	1.81			$	1.85			$	1.36			$	1.45
ROAE, net income[a]			3.2	%			6.4	%			5.7	%			6.0	%			4.6	%			6.1	%

[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.

2

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME - PRIOR YEARS

	YEAR ENDED
	DEC. 31, 2007				DEC. 31, 2006				DEC. 31, 2005
UNDERWRITING REVENUES
Gross premiums written		$	1,781,115			$	1,789,642			$	1,668,877
Premiums ceded			(206,140	)			(204,078	)			(49,528	)
Net premiums written		$	1,574,975			$	1,585,564			$	1,619,349
Change in unearned premiums			19,825				53,010				104,345
Net premiums earned		$	1,594,800			$	1,638,574			$	1,723,694
Other underwriting (loss) income			1,602				1,390				(4,818	)
Total underwriting revenues		$	1,596,402			$	1,639,964			$	1,718,876
UNDERWRITING EXPENSES
Losses and loss expenses		$	749,081			$	827,630			$	1,650,943
Acquisition expenses			307,576				317,489				331,309
General and administrative expenses			217,269				190,373				146,419
Total underwriting expenses		$	1,273,926			$	1,335,492			$	2,128,671
Underwriting income (loss)		$	322,476			$	304,472			($	409,795	)
OTHER OPERATING REVENUE/EXPENSES
Net investment income		$	281,276			$	257,449			$	180,451
Interest expense			(30,125	)			(30,041	)			(24,210	)
Amortization of intangibles			(5,286	)			(4,600	)			(4,694	)
Total other operating revenue/expenses		$	245,865			$	222,808			$	151,547
INCOME (LOSS) BEFORE OTHER ITEMS		$	568,341			$	527,280			($	258,248	)
OTHER
Net foreign exchange (losses) gains		($	7,970	)		$	21,021			($	5,140	)
Net realized losses on investments			(18,302	)			(20,342	)			(8,244	)
Income tax (expense) benefit			(20,962	)			(29,833	)			51,148
NET INCOME (LOSS)		$	521,107			$	498,126			($	220,484	)
Preferred dividends			(15,500	)			(15,500	)		($	2,720	)
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS		$	505,607			$	482,626			($	223,204	)
KEY RATIOS/PER SHARE DATA
Loss ratio			47.0	%			50.5	%			95.8	%
Acquisition expense ratio			19.3	%			19.4	%			19.2	%
General and administrative expense ratio			13.6	%			11.6	%			8.5	%
Combined ratio			79.9	%			81.5	%			123.5	%
Weighted average basic shares outstanding			64,697				66,436				62,029
Weighted average dilutive shares outstanding			70,540				71,755				62,029
Basic earnings (loss) per common share		$	7.82			$	7.26			($	3.60	)
Diluted earnings (loss) per common share		$	7.17			$	6.73			($	3.60	)
ROAE, net income (loss)[a]			22.9	%			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.

3

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS

	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				DEC. 31, 2006
ASSETS
Cash and cash equivalents		$	549,692			$	567,825			$	600,042			$	625,662			$	518,800			$	547,772
Fixed maturity investments available for sale, at fair value			4,710,467				4,660,236				4,803,808				4,728,942				4,838,405				4,714,204
Other investments			369,347				358,128				343,926				281,241				267,721				253,068
Premiums receivable, net			1,088,998				723,832				768,162				839,106				808,064				660,570
Deferred acquisition costs			184,646				168,968				212,000				198,537				186,374				168,809
Securities lending collateral			241,343				173,041				195,727				173,884				217,698				226,762
Prepaid reinsurance premiums			268,442				122,594				92,466				99,446				92,722				105,058
Losses recoverable			150,665				187,354				96,008				66,377				55,579				44,244
Accrued investment income			33,650				38,543				36,075				40,443				36,792				40,692
Intangible assets			208,202				206,632				69,388				70,456				69,415				70,366
Deferred tax assets			17,702				—				46,926				57,993				61,385				54,019
Receivable on pending investment sales, net			1,427				2,783				53,061				—				—				—
Other assets			50,630				60,791				50,852				43,760				37,508				39,990
TOTAL ASSETS		$	7,875,211			$	7,270,727			$	7,368,441			$	7,225,847			$	7,190,463			$	6,925,554
LIABILITIES
Reserve for losses and loss expenses		$	2,928,427			$	2,892,224			$	2,841,810			$	2,767,525			$	2,790,183			$	2,701,686
Reserve for unearned premiums			1,269,318				855,085				999,046				1,027,229				987,748				843,202
Deposit liabilities			105,115				108,943				130,272				143,073				155,380				161,024
Reinsurance balances payable			224,223				162,899				153,815				194,012				147,745				172,328
Securities lending payable			241,343				173,041				195,727				173,884				217,698				226,762
Debt			448,978				448,753				447,235				447,213				447,192				447,172
Investments pending settlement, net			—				—				—				31,767				14,448				—
Deferred tax liability			—				922				—				—				—				—
Other liabilities			119,633				116,601				74,915				61,298				63,523				75,506
TOTAL LIABILITIES		$	5,337,037			$	4,758,468			$	4,842,820			$	4,846,001			$	4,823,917			$	4,627,680
SHAREHOLDERS’ EQUITY
Preferred shares Series A, non-cumulative		$	8,000			$	8,000			$	8,000			$	8,000			$	8,000			$	8,000
Common shares			60,098				60,364				64,081				64,591				65,968				66,480
Additional paid-in capital			1,127,594				1,165,300				1,355,468				1,378,685				1,431,623				1,458,063
Accumulated other comprehensive income (loss)			62,705				57,725				10,652				(47,525	)			(131	)			(14,465	)
Retained earnings			1,279,777				1,220,870				1,087,420				976,095				861,086				779,796
TOTAL SHAREHOLDERS’ EQUITY		$	2,538,174			$	2,512,259			$	2,525,621			$	2,379,846			$	2,366,546			$	2,297,874
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	7,875,211			$	7,270,727			$	7,368,441			$	7,225,847			$	7,190,463			$	6,925,554
Book value per common share		$	39.83			$	38.94			$	36.21			$	33.67			$	32.77			$	31.45
Diluted book value per common share (treasury stock method)		$	36.00			$	35.05			$	32.81			$	30.56			$	30.19			$	28.87
RATIOS
Debt-to-capital			15.0	%			15.2	%			15.0	%			15.8	%			15.9	%			16.3	%

4

ENDURANCE SPECIALTY HOLDINGS LTD.
Endurance Operating Income Profile

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. The operating income depicted excludes the effects of income tax (expenses) benefits, amortization of intangibles and interest expense. Forecasted investment income, acquisition and G&A expenses are held constant across all scenarios. Losses included above are net of reinsurance. 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.

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 10-K for the year ended December 31, 2007.

5

ENDURANCE SPECIALTY HOLDINGS LTD.
Endurance Operating Income Profile

Endurance Operating Income Profile Comparison

													Change from Jan. 1, 2007 - Dec. 31, 2007 to Jan. 1, 2008 - Dec. 31, 2008							Change from July 1, 2007 - June 30, 2008 to Jan. 1, 2008 - Dec. 31, 2008
(in millions)	Jan. 1, 2007 - Dec. 31, 2007				July 1, 2007 - June 30, 2008				Jan. 1, 2008 - Dec. 31, 2008				$ Change				% Change			$ Change				% Change
Median Result		$	381			$	391			$	481			$	100			20.8	%		$	90			18.7	%
Average Result			341				342				421				80			19.0	%			79			18.8	%
1 in 10 year annual gain			91				64				34				(57	)		(167.6	%)			(30	)		(88.2	%)
1 in 25 year annual loss			(66	)			(141	)			(121	)			(55	)		45.5	%			20			(16.5	%)
1 in 50 year annual loss			(172	)			(319	)			(248	)			(76	)		30.6	%			71			(28.6	%)
1 in 100 year annual loss			(287	)			(468	)			(438	)			(151	)		34.5	%			30			(6.8	%)
1 in 250 year annual loss			(396	)			(694	)			(659	)			(263	)		39.9	%			35			(5.3	%)
1 in 500 year annual loss			(500	)			(884	)			(775	)			(275	)		35.5	%			109			(14.1	%)

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 10-K for the year ended December 31, 2007.

6

ENDURANCE SPECIALTY HOLDINGS LTD.
SEGMENT DISTRIBUTION
FOR THE THREE MONTHS ENDED MARCH 31, 2008

Gross Premiums Written = $871 million [a]

Source of Business	Business Segments
Broker Distribution - Insurance	Broker Distribution - Reinsurance

[a]	Prior to deposit accounting adjustments.
[b]	Other specialty includes the agriculture line in the Insurance segment and agriculture, marine, aerospace and surety and other in the Reinsurance segment.

7

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED SEGMENT DATA
FOR THE QUARTER ENDED MARCH 31, 2008

	Insurance				Reinsurance				TotalCompanySub-total				DepositAccountingAdjustment [a]				ReportedTotals
UNDERWRITING REVENUES
Gross premiums written		$	585,134			$	285,478			$	870,612			($	2,021	)		$	868,591
Net premiums written		$	356,141			$	286,667			$	642,808			($	2,021	)		$	640,787
Net premiums earned		$	167,982			$	205,735			$	373,717			($	1,674	)		$	372,043
Other underwriting income			—				—				—			($	740	)		($	740	)
Total underwriting revenues		$	167,982			$	205,735			$	373,717			($	2,414	)		$	371,303
UNDERWRITING EXPENSES
Losses and loss expenses		$	130,950			$	61,202			$	192,152			($	2,650	)		$	189,502
Acquisition expenses			23,117				51,157			$	74,274			$	100			$	74,374
General and administrative expenses		$	20,561			$	29,483			$	50,044				—			$	50,044
Total expenses		$	174,628			$	141,842			$	316,470			($	2,550	)		$	313,920
UNDERWRITING (LOSS) INCOME		($	6,646	)		$	63,893			$	57,247			$	136			$	57,383
GAAP RATIOS
Loss ratio			78.0	%			29.7	%			51.4	%							50.9	%
Acquisition expense ratio			13.8	%			24.9	%			19.9	%							20.0	%
General and administrative expense ratio			12.2	%			14.3	%			13.4	%							13.5	%
Combined ratio			104.0	%			68.9	%			84.7	%							84.4	%
STATUTORY RATIOS
Loss ratio			78.0	%			29.7	%			51.4	%							50.9	%
Acquisition expense ratio			7.7	%			19.4	%			12.9	%							12.9	%
General and administrative expense ratio			5.5	%			10.3	%			7.7	%							7.7	%
Combined ratio			91.2	%			59.4	%			72.0	%							71.5	%

[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.

8

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
FOR THE QUARTER ENDED MARCH 31, 2008

	Insurance		Reinsurance		Total Company Sub-total		Deposit Accounting Adjustment [a]	Reported Totals
AS REPORTED
GAAP RATIOS
Loss ratio	78.0	%	29.7	%	51.4	%		50.9	%
Acquisition expense ratio	13.8	%	24.9	%	19.9	%		20.0	%
General and administrative expense ratio	12.2	%	14.3	%	13.4	%
Combined ratio	104.0	%	68.9	%	84.7	%	NM	84.4	%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
GAAP RATIOS
Loss ratio	2.2	%	17.3	%	10.5	%	NM	11.0	%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
GAAP RATIOS
Loss ratio	80.2	%	47.0	%	61.9	%		61.9	%
Acquisition expense ratio	13.8	%	24.9	%	19.9	%		20.0	%
General and administrative expense ratio	12.2	%	14.3	%	13.4	%		13.5	%
Combined ratio	106.2	%	86.2	%	95.2	%	NM	95.4	%

[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.

9

ENDURANCE SPECIALTY HOLDINGS LTD.
INSURANCE SEGMENT DATA

	FOR THE QUARTERS ENDED
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				MAR. 31, 2006
UNDERWRITING REVENUES
Gross premiums written		$	585,134			$	216,510			$	180,046			$	197,967			$	147,033			$	80,157
Net premiums written		$	356,141			$	154,476			$	137,404			$	152,000			$	108,089			$	56,692
Net premiums earned		$	167,982			$	137,060			$	130,640			$	124,057			$	110,324			$	90,426
UNDERWRITING EXPENSES
Losses and loss expenses		$	130,950			$	93,553			$	69,709			$	63,422			$	63,529			$	41,607
Acquisition expenses			23,117				22,145				19,542				16,528				13,826				6,123
General and administrative expenses			20,561				27,200				21,988				18,592				22,217				7,959
Total expenses			174,628				142,898				111,239				98,542				99,572				55,689
UNDERWRITING (LOSS) INCOME		($	6,646	)		($	5,838	)		$	19,401			$	25,515			$	10,752			$	34,737
GAAP RATIOS
Loss ratio			78.0	%			68.3	%			53.4	%			51.1	%			57.6	%			46.0	%
Acquisition expense ratio			13.8	%			16.2	%			14.9	%			13.3	%			12.5	%			6.8	%
General and administrative expense ratio			12.2	%			19.8	%			16.8	%			15.0	%			20.2	%			8.8	%
Combined ratio			104.0	%			104.3	%			85.1	%			79.4	%			90.3	%			61.6	%
STATUTORY RATIOS
Loss ratio			78.0	%			68.3	%			53.4	%			51.1	%			57.6	%			46.0	%
Acquisition expense ratio			7.7	%			16.9	%			17.4	%			13.9	%			19.2	%			7.7	%
General and administrative expense ratio			5.5	%			18.1	%			15.9	%			12.0	%			23.9	%			12.0	%
Combined ratio			91.2	%			103.3	%			86.7	%			77.0	%			100.7	%			65.7	%

10

ENDURANCE SPECIALTY HOLDINGS LTD.
REINSURANCE SEGMENT DATA

	FOR THE QUARTERS ENDED
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				MAR. 31, 2006
UNDERWRITING REVENUES
Gross premiums written		$	285,478			$	66,039			$	243,787			$	328,815			$	429,473			$	590,373
Net premiums written		$	286,667			$	65,791			$	240,774			$	316,205			$	428,791			$	585,466
Net premiums earned		$	205,735			$	267,772			$	275,776			$	324,318			$	291,396			$	386,537
UNDERWRITING EXPENSES
Losses and loss expenses		$	61,202			$	42,134			$	119,798			$	171,172			$	169,699			$	228,398
Acquisition expenses			51,157				70,641				58,478				64,555				61,417				89,696
General and administrative expenses			29,483				37,455				33,133				30,072				26,612				35,932
Total expenses			141,842				150,230				211,409				265,799				257,728				354,026
UNDERWRITING INCOME (LOSS)		$	63,893			$	117,542			$	64,367			$	58,519			$	33,668			$	32,511
GAAP RATIOS
Loss ratio			29.7	%			15.7	%			43.5	%			52.8	%			58.2	%			59.1	%
Acquisition expense ratio			24.9	%			26.4	%			21.2	%			19.9	%			21.1	%			23.2	%
General and administrative expense ratio			14.3	%			14.0	%			12.0	%			9.3	%			9.1	%			9.3	%
Combined ratio			68.9	%			56.1	%			76.7	%			82.0	%			88.4	%			91.6	%
STATUTORY RATIOS
Loss ratio			29.7	%			15.7	%			43.5	%			52.8	%			58.2	%			59.1	%
Acquisition expense ratio			19.4	%			47.1	%			27.4	%			21.8	%			15.4	%			19.3	%
General and administrative expense ratio			10.3	%			56.9	%			13.8	%			9.5	%			6.2	%			6.1	%
Combined ratio			59.4	%			119.7	%			84.7	%			84.1	%			79.8	%			84.5	%

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 14.

11

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

	FOR THE QUARTERS ENDED
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				MAR. 31, 2006
INSURANCE SEGMENT
Property		$	31,183			$	37,905			$	28,379			$	40,835			$	27,042			$	28,573
Casualty			25,124				25,851				30,133				42,343				26,796				21,786
Healthcare liability			16,492				15,256				30,262				28,054				18,790				21,062
Workers’ compensation			83,480				73,054				70,398				57,142				61,633				—
Agriculture			413,419				42,242				—				—				—				—
Professional lines			15,436				22,202				20,874				29,593				12,772				8,736
TOTAL INSURANCE		$	585,134			$	216,510			$	180,046			$	197,967			$	147,033			$	80,157
REINSURANCE SEGMENT
Casualty		$	69,301			$	15,301			$	66,006			$	27,788			$	91,936			$	185,578
Property			36,248				14,212				112,407				65,476				36,701				122,480
Catastrophe			105,234				13,499				43,684				147,506				140,499				120,695
Agriculture			10,911				7,230				6,917				24,118				93,061				50,531
Aerospace and Marine			36,536				11,660				9,179				32,483				39,560				79,946
Surety and other specialty			27,248				4,137				5,594				31,444				27,716				31,143
TOTAL REINSURANCE		$	285,478			$	66,039			$	243,787			$	328,815			$	429,473			$	590,373
TOTAL COMPANY SUBTOTAL		$	870,612			$	282,549			$	423,833			$	526,782			$	576,506			$	670,530
DEPOSIT ACCOUNTING ADJUSTMENT [a]			(2,021	)			(4,799	)			(562	)			(19,979	)			(3,215	)			(99,149	)
REPORTED TOTALS		$	868,591			$	277,750			$	423,271			$	506,803			$	573,291			$	571,381

[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.

12

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

	FOR THE QUARTERS ENDED
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				MAR. 31, 2006
INSURANCE SEGMENT
Property		$	15,003			$	16,827			$	7,689			$	17,262			$	6,127			$	10,690
Casualty			15,113				16,144				16,467				26,815				17,761				16,204
Healthcare liability			16,492				15,256				30,262				28,054				18,790				21,062
Workers’ compensation			75,906				66,428				64,131				52,999				54,810				—
Agriculture			222,400				21,115				—				—				—				—
Professional lines			11,227				18,706				18,855				26,870				10,601				8,736
TOTAL INSURANCE		$	356,141			$	154,476			$	137,404			$	152,000			$	108,089			$	56,692
REINSURANCE SEGMENT
Casualty		$	70,503			$	14,908			$	65,946			$	27,610			$	91,921			$	183,575
Property			36,220				14,212				112,398				67,074				36,527				122,480
Catastrophe			105,156				13,499				41,025				137,720				140,183				120,695
Agriculture			10,911				7,230				7,028				22,018				93,061				50,531
Aerospace and Marine			36,626				11,805				8,390				31,030				39,391				79,946
Surety and other specialty			27,251				4,137				5,987				30,753				27,708				28,239
TOTAL REINSURANCE		$	286,667			$	65,791			$	240,774			$	316,205			$	428,791			$	585,466
TOTAL COMPANY SUBTOTAL		$	642,808			$	220,267			$	378,178			$	468,205			$	536,880			$	642,158
DEPOSIT ACCOUNTING ADJUSTMENT [a]			(2,021	)			(4,799	)			(562	)			(19,979	)			(3,215	)			(99,149	)
REPORTED TOTALS		$	640,787			$	215,468			$	377,616			$	448,226			$	533,665			$	543,009

[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.

13

ENDURANCE SPECIALTY HOLDINGS LTD.
DEPOSIT ACCOUNTING ADJUSTMENT IMPACTS ON SEGMENT DATA
FOR THE QUARTER ENDED MARCH 31, 2008

	Includes Deposit Accounting Adjustments									Excludes Deposit Accounting Adjustments
	Insurance			Reinsurance			Total Company			Insurance			Reinsurance			Total Company
UNDERWRITING REVENUES
Gross premiums written	$	585,134		$	283,457		$	868,591		$	585,134		$	285,478		$	870,612
Net premiums written	$	356,141		$	284,646		$	640,787		$	356,141		$	286,667		$	642,808
Net premiums earned	$	167,982		$	204,061		$	372,043		$	167,982		$	205,735		$	373,717
Other underwriting income		—			(740	)		(740	)		—			—			—
Total underwriting revenues		167,982			203,321			371,303			167,982			205,735			373,717
UNDERWRITING EXPENSES
Losses and loss expenses	$	130,950		$	58,551		$	189,501		$	130,950		$	61,202		$	192,152
Acquisition expenses		23,117			51,257			74,374			23,117			51,157			74,274
General and administrative expenses		20,561			29,483			50,044			20,561			29,483			50,044
Total expenses		174,628			139,291			313,919			174,628			141,842			316,470
UNDERWRITING (LOSS) INCOME	($	6,646	)	$	64,030		$	57,384		($	6,646	)	$	63,893		$	57,247
GAAP RATIOS
Loss ratio		78.0	%		28.7	%		50.9	%		78.0	%		29.7	%		51.4	%
Acquisition expense ratio		13.8	%		25.1	%		20.0	%		13.8	%		24.9	%		19.9	%
General and administrative expense ratio		12.2	%		14.5	%		13.5	%		12.2	%		14.3	%		13.4	%
Combined ratio		104.0	%		68.3	%		84.4	%		104.0	%		68.9	%		84.7	%

14

ENDURANCE SPECIALTY HOLDINGS LTD.
RETURN ON EQUITY ANALYSIS

	FOR THE THREE MONTHS ENDED MAR. 31, 2008
Average common equity[a]	$	2,325,217
Net premiums earned	$	372,043
Combined ratio		84.4	%
Operating margin		15.6	%
Premium leverage		0.16	x
Implied ROAE from underwriting activity		2.5	%
Average cash and invested assets at amortized cost	$	5,579,783
Investment leverage		2.40	x
Year to date investment income yield, pretax		0.8	%
Implied ROAE from investment activity		1.9	%
Financing Costs [b]		(0.5	)%
Implied Pre-tax Operating ROAE, for period [c]		3.9	%
Implied Pre-tax Operating ROAE, annualized [c]		15.6	%

[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.
[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 and investment profits and the tax-effected impact of amortization and interest expense.

15

ENDURANCE SPECIALTY HOLDINGS LTD.
ANNUALIZED OPERATING & INVESTMENT LEVERAGE

	FOR THE QUARTERS ENDED																YEARS ENDED DECEMBER 31,
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				2007				2006
Average common equity[a]		$	2,325,217			$	2,318,940			$	2,252,734			$	2,173,196			$	2,218,024			$	1,885,209
Net premiums earned		$	372,043			$	400,462			$	399,742			$	417,551			$	1,594,800			$	1,638,574
Operating leverage			0.16	x			0.17	x			0.18	x			0.19	x			0.72	x			0.87	x
Annualized operating leverage			0.64	x			0.69	x			0.71	x			0.77	x			0.72	x			0.87	x
Avg. cash and invested assets at amortized cost		$	5,579,783			$	5,691,919			$	5,751,342			$	5,659,148			$	5,559,204			$	5,275,481
Investment leverage			2.40	x			2.45	x			2.55	x			2.60	x			2.51	x			2.80	x

[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.

16

ENDURANCE SPECIALTY HOLDINGS LTD.
INVESTMENT PORTFOLIO
AS OF MARCH 31, 2008

Type of Investment	Fair Value			Percentage
Cash and equivalents[a]		$	551,119		9.8	%
U.S. government and agencies			638,469		11.3	%
Corporate securities			823,840		14.6	%
Foreign government			194,568		3.5	%
Municipals			128,934		2.3	%
Asset-backed securities			419,475		7.4	%
Mortgage-backed securities			2,505,182		44.5	%
Other investments[b]			369,348		6.6	%
Total		$	5,630,935		100.0	%

Ratings [e]	Fair Value			Percentage
U.S. Government and agencies notes		$	638,469		12.6	%
AAA/Aaa			3,350,823		66.0	%
AA/Aa			311,203		6.1	%
A/A			322,820		6.4	%
BBB			25,565		0.5	%
Below BBB			61,043		1.2	%
Not Rated			544		0.0	%
Other investments[b]			369,348		7.2	%
Total		$	5,079,815		100.0	%

Performance	MAR. 31, 2008
Yield[c]		3.4	%
Duration[d]		3.0

Investment Income	Quarter Ended Mar. 31, 2008				Quarter Ended Dec. 31, 2007				Quarter Ended Sept. 30, 2007				Quarter Ended June 30, 2007
Other Investments		($	16,112	)		($	898	)		($	3,489	)		$	13,519
Total net investment income		$	46,878			$	65,310			$	62,605			$	78,548

Note:	[a]	Cash and equivalents are shown net of investments pending settlement.
	[b]	Other investments includes investments in alternative and high yield bank loan funds.
	[c]	Annualized earned yield excludes realized and unrealized gains and losses on fixed maturity investments.
	[d]	Duration excludes other investments and operating cash.
	[e]	Excludes cash and equivalents.

17

ENDURANCE SPECIALTY HOLDINGS LTD.
STRUCTURED SECURITIES DETAIL
AS OF MAR. 31, 2008

Securitized (RMBS, CMBS, ABS and CDO) securities ratings		Fair Value		Percentage		Percentage of Investment Portfolio
	U.S. Government and agencies	$	1,277,860	43.7	%	22.7	%
	AAA/Aaa		1,612,246	55.1	%	28.6	%
	AA/Aa		1,482	0.1	%	0.0	%
	A/A		3,010	0.1	%	0.1	%
	BBB		20,849	0.7	%	0.4	%
	Below BBB		9,210	0.3	%	0.2	%
	Total	$	2,924,657	100.0	%	52.0	%

Structured securities sectors (RMBS, CMBS, ABS and CDO)			Fair Value		Percentage		Percentage
	Commercial		$	777,565	26.6	%	13.8	%
	Residential			1,763,523	60.3	%	31.3	%
	Consumer			383,569	13.1	%	6.8	%
	Total		$	2,924,657	100.0	%	51.9	%
	Spread Duration	3.35 years

Subprime collateralized securities			Fair Value		Percentage		Percentage
	AAA		$	3,639	99.8	%	0.1	%
	BBB and below			9	0.2	%	0.0	%
	Total		$	3,648	100.0	%	0.1	%
	Spread Duration	0.39 years

Collateralized debt obligations (CDO’s)		Fair Value		Percentage		Percentage
	AAA/Aaa		—	—		—
	AA/Aa		144	7.2	%	—
	A/A			—		—
	BBB	$	1,329	66.6	%	—
	Below BBB		522	26.2	%	—
	Total	$	1,995	100.0	%	—

Collateralized debt obligations (CDO’s)			Fair Value		Percentage		Percentage
	Commercial		$	1,993	99.9	%	—
	Residential			2	0.1	%	—
	Total		$	1,995	100.0	%	—
	Spread Duration	4.42 years					—

18

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

	QUARTER ENDED MAR. 31, 2008				QUARTER ENDED DEC. 31, 2007				QUARTER ENDED SEPT. 30, 2007				QUARTER ENDED JUNE 30, 2007				QUARTER ENDED MAR. 31, 2007
Incurred related to:
Current year		$	230,456			$	183,253			$	223,946			$	234,768			$	266,501
Prior years			(40,954	)			(38,401	)			(37,490	)			(27,589	)			(55,907	)
Total incurred		$	189,502			$	144,852			$	186,456			$	207,179			$	210,594
Paid related to:
Current year		($	587	)		($	42,814	)		($	24,416	)		($	15,896	)		($	205	)
Prior years			(127,272	)			(172,362	)			(134,212	)			(232,921	)			(138,492	)
Total paid		($	127,859	)		($	215,176	)		($	158,628	)		($	248,817	)		($	138,697	)

19

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

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT FOR THE PERIOD ENDED MAR. 31, 2008

	Insurance				Reinsurance				Total Company Sub-total			Deposit Accounting Adjustment [a]			Total Company
Incurred related to prior years
Quarter ended March 31, 2008		($	3,743	)		($	35,498	)	($	39,241	)		$	1,713	($	40,954	)

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE YEAR ENDED DEC. 31, 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	)
Quarter ended Dec. 31, 2007			(10,080	)			(34,783	)		(44,863	)			(6,462	)		(38,401	)
Year ended December 31, 2007		($	80,413	)		($	74,408	)	($	154,821	)		$	4,566		($	159,387	)

(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	)

[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.

20

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
	MAR. 31, 2008				DEC. 31, 2007				SEPT. 30, 2007				JUNE 30, 2007				MAR. 31, 2007				DEC. 31, 2007
INSURANCE SEGMENT
Short tail[a]		($	1,896	)		$	1,340			($	1,003	)		($	15,172	)		($	16,098	)		($	30,933	)
Long tail[b]			(1,847	)			(11,420	)			(24,098	)			(3,553	)			(10,409	)			(49,480	)
Other[c]			—				—				—				—				—				—
TOTAL INSURANCE			(3,743	)			(10,080	)			(25,101	)			(18,725	)			(26,507	)			(80,413	)
REINSURANCE SEGMENT
Short tail[a]			(31,880	)			(30,577	)			(12,953	)			(10,114	)			(15,583	)			(69,227	)
Long tail[b]			(101	)			(89	)			(2,269	)			1,106				(5,198	)			(6,450	)
Other[c]			(3,517	)			(4,117	)			7,110				567				(2,291	)			1,269
TOTAL REINSURANCE			(35,498	)			(34,783	)			(8,112	)			(8,441	)			(23,072	)			(74,408	)
TOTAL COMPANY SUBTOTAL			(39,241	)			(44,863	)			(33,213	)			(27,166	)			(49,579	)			(154,821	)
DEPOSIT ACCOUNTING ADJUSTMENT[d]			1,713				(6,462	)			4,277				423				6,328				4,566
REPORTED TOTALS		($	40,954	)		($	38,401	)		($	37,490	)		($	27,589	)		($	55,907	)		($	159,387	)

[a]	Short tail business is that for which development typically emerges within a period of several quarters. The Company’s short tail line of business in the Insurance segment includes its property line of business. The Company’s short tail lines in its Reinsurance segment include property, catastrophe, 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 segment includes casualty, healthcare liability, workers’ compensation and professional lines. The Company’s long tail line of business in the Reinsurance 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 Insurance segment is agriculture and in the Reinsurance segment are agriculture, personal accident, and other.
[d]	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.

21

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

	Insurance												Reinsurance												Total Company			Deposit Accounting Adjustment [a]			Reported Totals
	Short Tail			Long Tail			Other			Total			Short Tail			Long Tail			Other			Total
AT MAR. 31, 2008
Case reserves	$	91,447		$	75,515		$	21,520		$	188,482		$	476,650		$	245,327		$	8,199		$	730,176		$	918,658		($	51,541	)	$	867,117
Total reserves	$	127,760		$	1,050,603		$	83,274		$	1,261,637		$	750,966		$	837,407		$	177,810		$	1,766,183		$	3,027,820		($	99,393	)	$	2,928,427
Case reserves / Total reserves		71.6	%		7.2	%		25.8	%		14.9	%		63.5	%		29.3	%		4.6	%		41.3	%		30.3	%		51.9	%		29.6	%
IBNR / Total reserves		28.4	%		92.8	%		74.2	%		85.1	%		36.5	%		70.7	%		95.4	%		58.7	%		69.7	%		48.1	%		70.4	%
AT DEC. 31, 2007
Case reserves	$	88,197		$	57,282		$	64,259		$	209,738		$	507,230		$	244,276		$	8,784		$	760,290		$	970,028		($	52,131	)	$	917,897
Total reserves	$	122,643		$	968,891		$	91,092		$	1,182,626		$	794,983		$	839,744		$	177,835		$	1,812,562		$	2,995,188		($	102,964	)	$	2,892,224
Case reserves / Total reserves		71.9	%		5.9	%		70.5	%		17.7	%		63.8	%		29.1	%		4.9	%		41.9	%		32.4	%		50.6	%		31.7	%
IBNR / Total reserves		28.1	%		94.1	%		29.5	%		82.3	%		36.2	%		70.9	%		95.1	%		58.1	%		67.6	%		49.4	%		68.3	%
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	%

[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.

22

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES FOR EPS CALCULATION

		QUARTERS ENDED MAR. 31,
		2008				2007
DILUTIVE SHARES	Average market price per share		$	39.42			$	35.14
OUTSTANDING:
AS REPORTED	Basic weighted average common shares outstanding			58,823				66,613
	Add: weighted avg. unvested restricted share units			1,165				738
	Weighted average exercise price per share			—				—
	Proceeds from unrecognized restricted share unit expense		$	32,937			$	8,842
	Less: restricted share units bought back via treasury method			(835	)			(252	)
	Add: weighted avg. dilutive warrants outstanding			7,023				7,202
	Weighted average exercise price per share		$	15.62			$	16.62
	Less: warrants bought back via treasury method			(2,783	)			(3,407	)
	Add: weighted avg. dilutive options outstanding			2,041				2,469
	Weighted average exercise price per share		$	17.96			$	18.35
	Proceeds from unrecognized option expense		$	59			$	58
	Less: options bought back via treasury method			(931	)			(1,291	)
	Weighted average dilutive shares outstanding			64,503				72,073

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 periods be included as proceeds for purposes of the treasury stock repurchases.

23

ENDURANCE SPECIALTY HOLDINGS LTD.
OPERATING INCOME RECONCILIATION
EARNINGS PER SHARE INFORMATION - AS REPORTED, GAAP

	QUARTERS ENDED MAR. 31,
	2008			2007
Net income	$	77,811		$	101,835
Add (Less) after-tax items:
Net foreign exchange losses (gains)		(10	)		1,541
Net realized losses on investments		11,726			1,820
Operating income before preferred dividends	$	89,527		$	105,196
Preferred dividends		(3,875	)		(3,875	)
Operating income available to common shareholders	$	85,652		$	101,321
Weighted average common shares outstanding
Basic		58,823			66,613
Dilutive		64,503			72,073
Basic per common share data
Net income available to common shareholders	$	1.26		$	1.47
Add (Less) after-tax items:
Net foreign exchange losses (gains)		(0.00	)		0.02
Net realized losses on investments		0.20			0.03
Operating income available to common shareholders	$	1.46		$	1.52
Diluted per common share data
Net income available to common shareholders	$	1.15		$	1.36
Add (Less) after-tax items:
Net foreign exchange losses (gains)		(0.00	)		0.02
Net realized losses on investments		0.18			0.03
Operating income available to common shareholders	$	1.33		$	1.41

24

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES SENSITIVITY ANALYSIS

DILUTIVE SHARES OUSTANDING
Market Price per Share
$	36.00	$	37.00	$	38.00	$	39.00	$	40.00	$	41.00	$	42.00	$	43.00	$	44.00	$	45.00	$	46.00
	64,880		64,984		65,084		65,178		65,267		65,352		65,433		65,510		65,584		65,655		65,722

25

ENDURANCE SPECIALTY HOLDINGS LTD.
BOOK VALUE PER SHARE

		MAR. 31,
								DEC. 31,
		2008			2007			2007
DILUTIVE COMMON SHARES OUTSTANDING:	Price per share at period end	$	36.60		$	35.74		$	41.73
AS-IF CONVERTED [a]	Basic common shares outstanding[b]		58,709			66,110			59,384
	Add: unvested restricted shares and restricted share units		1,420			642			1,041
	Add: dilutive warrants outstanding		6,595			7,202			7,095
	Weighted average exercise price per share	$	15.62		$	16.62		$	15.87
	Add: dilutive options outstanding		2,030			2,377			2,045
	Weighted average exercise price per share	$	17.96		$	18.47		$	18.12
	Book Value[c]	$	2,338,174		$	2,166,546		$	2,312,259
	Add: proceeds from converted warrants		103,010			119,703			112,593
	Add: proceeds from converted options		36,459			43,897			37,059
	Pro forma book value	$	2,477,643		$	2,330,146		$	2,461,911
	Dilutive shares outstanding		68,754			76,331			69,564
	Basic book value per common share	$	39.83		$	32.77		$	38.94
	Diluted book value per common share	$	36.04		$	30.53		$	35.39
DILUTIVE COMMON SHARES OUTSTANDING:	Price per share at period end	$	36.60		$	35.74		$	41.73
TREASURY STOCK METHOD	Basic common shares outstanding[b]		58,709			66,110			59,384
	Add: unvested restricted shares and restricted share units		1,420			642			1,041
	Add: dilutive warrants outstanding		6,595			7,202			7,095
	Weighted average exercise price per share	$	15.62		$	16.62		$	15.87
	Less: warrants bought back via treasury method		(2,814	)		(3,349	)		(2,698	)
	Add: dilutive options outstanding		2,030			2,377			2,045
	Weighted average exercise price per share	$	17.96		$	18.47		$	18.12
	Less: options bought back via treasury method		(997	)		(1,228	)		(889	)
	Dilutive shares outstanding		64,943			71,754			65,978
	Basic book value per common share	$	39.83		$	32.77		$	38.94
	Diluted book value per common share	$	36.00		$	30.19		$	35.05

[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 includes vested restricted share units.
[c]	Excludes the $200 million liquidation value of the preferred shares.

26

ENDURANCE SPECIALTY HOLDINGS LTD.
SHAREHOLDER RETURN ANALYSIS

				YEARS ENDED DECEMBER 31,
	QUARTER ENDED MAR. 31, 2008
				2007			2006			2005			2004			2003
Net income (loss) available to common shareholders	$	73,936		$	505,607		$	482,626		$	(223,204	)	$	355,584		$	263,437
Dividends paid to common shareholders		(15,024	)		(64,353	)		(66,262	)		(61,695	)		(50,346	)		(20,505	)
Shareholders’ equity[a]		2,338,174			2,312,259			2,097,874			1,672,543			1,862,455			1,644,815
Return on beginning equity		3.2	%		24.1	%		28.9	%		(12.0	)%		21.6	%		21.6	%
Dividend payout ratio[b]		0.6	%		3.1	%		4.0	%		3.3	%		3.1	%		1.7	%
Dilutive common shares outstanding		64,943			65,978			72,654			72,173			66,729			68,445
Diluted book value per common share (treasury stock method)	$	36.00		$	35.05		$	28.87		$	23.17		$	27.91		$	24.03
Change in diluted book value per common share		2.7	%		21.4	%		24.6	%		(17.0	)%		16.1	%		10.6	%
Total return to common shareholders [c]		3.3	%		24.5	%		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.

27

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 24 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 26 for a reconciliation of diluted book value per common share to basic book value per common share.

28