Endurance Specialty (ENH) 8-K Endurance Reports Third Quarter 2008 Financial Results

Exhibit 99.2

Endurance Specialty Holdings Ltd.

INVESTOR FINANCIAL SUPPLEMENT

THIRD 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 (Loss) Income - Quarterly	2
b. Consolidated Statements of Income - YTD	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	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 Detail	25
e. Largest Twenty Five Corporate Holdings	26
IV. Loss Reserve Analysis
a. Activity in Reserve for Losses and Loss Expenses	27
b. Activity in Reserve for Losses and Loss Expenses by Segment	28
c. Activity in Reserve for Losses and Loss Expenses by Development Tail	29
d. Analysis of Unpaid Losses and Loss Expense	30
V. Shareholder Return Analysis
a. Weighted Average Dilutive Shares Outstanding	31
b. Operating (Loss) Income Reconciliation	32
c. Dilutive Shares Sensitivity Analysis	33
d. Book Value Per Share Analysis	34
e. Growth in Book Value Per Share Analysis	35
VI. Regulation G	36

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, developments in the world’s financial and capital markets that could adversely affect the performance of Endurance’s investment portfolio or access to capital, changes in the composition of Endurance’s investment portfolio, 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 SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
														Previous Quarter Change			Previous Year to Date Change
		2008			2007			2008			2007
HIGHLIGHTS	Net (loss) income	($	99,392	)	$	131,401		$	81,757		$	368,577			(175.6	)%		(77.8	)%
	Net (loss) income (attributable) available to common shareholders		(103,267	)		127,526			70,132			356,952			(181.0	)%		(80.4	)%
	Operating (loss) income [a]		(56,058	)		133,868			138,011			380,242			(141.9	)%		(63.7	)%
	Operating (loss) income (attributable) available to common shareholders [a]		(59,933	)		129,993			126,386			368,617			(146.1	)%		(65.7	)%
	Operating cash flow		187,860			184,736			457,687			437,102			1.7	%		4.7	%
	Gross premiums written		624,144			423,271			2,010,798			1,503,365			47.5	%		33.8	%
	Net premiums earned		509,629			399,742			1,334,757			1,194,338			27.5	%		11.8	%
	Total assets		7,869,212			7,396,926			7,869,212			7,396,926			6.4	%		6.4	%
	Total shareholders’ equity		2,268,717			2,525,621			2,268,717			2,525,621			(10.2	)%		(10.2	)%
PER SHARE AND SHARES DATA	Basic (losses) earnings per common share
	Net (loss) income (as reported)	($	1.79	)	$	1.98		$	1.20		$	5.45			(190.4	)%		(78.0	)%
	Operating (loss) income (as reported) [a]	($	1.04	)	$	2.02		$	2.17		$	5.63			(151.5	)%		(61.5	)%
	Diluted (losses) earnings per common share
	Net (loss) income (as reported)	($	1.79	)	$	1.81		$	1.10		$	5.02			(198.9	)%		(78.1	)%
	Operating (loss) income (as reported) [a]	($	1.04	)	$	1.85		$	1.99		$	5.18			(156.2	)%		(61.6	)%
As Reported	Weighted average common shares outstanding		57,570			64,468			58,314			65,530			(10.7	)%		(11.0	)%
	Weighted average common shares outstanding and dilutive potential common shares		57,570			70,431			63,633			71,126			(18.3	)%		(10.5	)%
Book Value Per Common Share	Book value [b]	$	36.55		$	36.21		$	36.55		$	36.21			0.9	%		0.9	%
	Diluted book value (treasury stock method) [b]	$	33.68		$	32.81		$	33.68		$	32.81			2.7	%		2.7	%
FINANCIAL RATIOS	Return on average common equity (ROAE), net (loss) income [c]		(4.7	)%		5.7	%		3.2	%		16.1	%		(10.4	)		(12.9	)
	ROAE, operating (loss) income [a] [c]		(2.7	)%		5.8	%		5.8	%		16.7	%		(8.5	)		(10.9	)
	Return on beg. common equity (ROBE), net (loss) income [c]		(4.4	)%		5.9	%		3.0	%		17.0	%		(10.3	)		(14.0	)
	ROBE, operating (loss) income [a]		(2.6	)%		6.0	%		5.5	%		17.6	%		(8.6	)		(12.1	)
	Annualized ROAE, net (loss) income [c]		(18.8	)%		22.6	%		4.3	%		21.5	%		(41.4	)		(17.2	)
	Annualized ROAE, operating (loss) income [a] [c]		(10.9	)%		23.1	%		7.7	%		22.2	%		(34.0	)		(14.5	)
	Annualized ROBE, net (loss) income		(17.7	)%		23.4	%		4.0	%		22.7	%		(41.1	)		(18.7	)
	Annualized ROBE, operating (loss) income [a]		(10.3	)%		23.9	%		7.3	%		23.4	%		(34.2	)		(16.1	)
	Annualized investment yield		2.0	%		4.4	%		3.2	%		5.1	%		(2.4	)		(1.9	)
	Loss ratio		87.4	%		46.6	%		68.2	%		50.6	%		40.8			17.6
GAAP	Acquisition expense ratio		13.8	%		19.2	%		16.5	%		18.2	%		(5.4	)		(1.7	)
	General and administrative expense ratio		11.4	%		13.8	%		12.0	%		12.8	%		(2.4	)		(0.8	)
	Combined ratio		112.6	%		79.6	%		96.7	%		81.6	%		33.0			15.1
STAT	Acquisition expense ratio		16.2	%		23.8	%		15.5	%		19.2	%		(7.6	)		(3.7	)
	General and administrative expense ratio		11.6	%		14.6	%		10.3	%		11.2	%		(3.0	)		(0.9	)
	Combined ratio		115.2	%		85.0	%		94.0	%		81.0	%		30.2			13.0

[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 32 for a reconciliation to net income.
[b]	For detailed calculations please refer to page 34.
[c]	Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated periods, which excludes the $200 million liquidation value of the preferred shares.

1

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME - QUARTERLY

	QUARTER ENDED
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			SEPT. 30, 2006
UNDERWRITING REVENUES
Gross premiums written	$	624,144		$	518,063		$	868,591		$	277,750		$	423,271		$	476,213
Premiums ceded		(130,121	)		(48,678	)		(227,804	)		(62,282	)		(45,655	)		(90,791	)
Net premiums written	$	494,023		$	469,385		$	640,787		$	215,468		$	377,616		$	385,422
Change in unearned premiums		15,606			(16,300	)		(268,744	)		184,994			22,126			22,553
Net premiums earned	$	509,629		$	453,085		$	372,043		$	400,462		$	399,742		$	407,975
Other underwriting (loss) income		(2,712	)		1,933			(740	)		9,044			1,697			(1,837	)
Total underwriting revenues	$	506,917		$	455,018		$	371,303		$	409,506		$	401,439		$	406,138
UNDERWRITING EXPENSES
Losses and loss expenses	$	445,501		$	275,325		$	189,502		$	144,852		$	186,456		$	188,033
Acquisition expenses		70,598			75,636			74,374			89,501			76,604			81,857
General and administrative expenses		57,771			52,493			50,044			64,655			55,121			48,535
Total underwriting expenses	$	573,870		$	403,454		$	313,920		$	299,008		$	318,181		$	318,425
Underwriting (loss) income	($	66,953	)	$	51,564		$	57,383		$	110,498		$	83,258		$	87,713
OTHER OPERATING REVENUE
Net investment income	$	27,410		$	60,482		$	46,878		$	65,310		$	62,605		$	63,581
Interest expense		(7,535	)		(7,534	)		(7,534	)		(7,532	)		(7,533	)		(7,528	)
Amortization of intangibles		(2,588	)		(2,637	)		(2,688	)		(1,905	)		(1,127	)		(1,158	)
Total other operating revenue	$	17,287		$	50,311		$	36,656		$	55,873		$	53,945		$	54,895
(LOSS) INCOME BEFORE OTHER ITEMS	($	49,666	)	$	101,875		$	94,039		$	166,371		$	137,203		$	142,608
OTHER
Net foreign exchange (losses) gains	($	15,477	)	$	5,621		($	3,107	)	($	6,729	)	($	700	)	($	3,633	)
Net realized losses on investments		(30,069	)		(4,013	)		(11,484	)		(4,125	)		(3,055	)		(6,375	)
Income tax expense		(4,180	)		(145	)		(1,637	)		(2,987	)		(2,047	)		(4,370	)
NET (LOSS) INCOME	($	99,392	)	$	103,338		$	77,811		$	152,530		$	131,401		$	128,230
Preferred dividends		(3,875	)		(3,875	)		(3,875	)		(3,875	)		(3,875	)		(3,875	)
NET (LOSS) INCOME (ATTRIBUTABLE) AVAILABLE TO COMMON SHAREHOLDERS	($	103,267	)	$	99,463		$	73,936		$	148,655		$	127,526		$	124,355
KEY RATIOS/PER SHARE DATA
Loss ratio		87.4	%		60.7	%		50.9	%		36.2	%		46.6	%		46.1	%
Acquisition expense ratio		13.8	%		16.7	%		20.0	%		22.3	%		19.2	%		20.1	%
General and administrative expense ratio		11.4	%		11.6	%		13.5	%		16.2	%		13.8	%		11.9	%
Combined ratio		112.6	%		89.0	%		84.4	%		74.7	%		79.6	%		78.1	%
Weighted average basic shares outstanding		57,570			58,558			58,823			62,225			64,468			66,339
Weighted average dilutive shares outstanding		57,570			63,712			64,503			68,326			70,431			71,487
Basic (losses) earnings per common share	($	1.79	)	$	1.70		$	1.26		$	2.39		$	1.98		$	1.87
Diluted (losses) earnings per common share	($	1.79	)	$	1.56		$	1.15		$	2.18		$	1.81		$	1.74
ROAE, net (loss) income [a]		(4.7	)%		4.3	%		3.2	%		6.4	%		5.7	%		6.8	%

[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 - YTD

	NINE MONTHS ENDED									YEAR ENDED
	SEPT. 30, 2008			SEPT. 30, 2007			SEPT. 30, 2006			DEC. 31, 2007			DEC. 31, 2006
UNDERWRITING REVENUES
Gross premiums written	$	2,010,798		$	1,503,365		$	1,498,847		$	1,781,115		$	1,789,642
Premiums ceded		(406,603	)		(143,858	)		(161,738	)		(206,140	)		(204,078	)
Net premiums written	$	1,604,195		$	1,359,507		$	1,337,109		$	1,574,975		$	1,585,564
Change in unearned premiums		(269,438	)		(165,169	)		(102,250	)		19,825			53,010
Net premiums earned	$	1,334,757		$	1,194,338		$	1,234,859		$	1,594,800		$	1,638,574
Other underwriting (loss) income		(1,519	)		(7,442	)		(328	)		1,602			1,390
Total underwriting revenues	$	1,333,238		$	1,186,896		$	1,234,531		$	1,596,402		$	1,639,964
UNDERWRITING EXPENSES
Losses and loss expenses	$	910,328		$	604,229		$	696,210		$	749,081		$	827,630
Acquisition expenses		220,608			218,075			236,302			307,576			317,489
General and administrative expenses		160,308			152,614			138,494			217,269			190,373
Total underwriting expenses	$	1,291,244		$	974,918		$	1,071,006		$	1,273,926		$	1,335,492
Underwriting income	$	41,994		$	211,978		$	163,525		$	322,476		$	304,472
OTHER OPERATING REVENUE
Net investment income	$	134,770		$	215,966		$	185,416		$	281,276		$	257,449
Interest expense		(22,603	)		(22,593	)		(22,513	)		(30,125	)		(30,041	)
Amortization of intangibles		(7,913	)		(3,381	)		(3,474	)		(5,286	)		(4,600	)
Total other operating revenue	$	104,254		$	189,992		$	159,429		$	245,865		$	222,808
INCOME BEFORE OTHER ITEMS	$	146,248		$	401,970		$	322,954		$	568,341		$	527,280
OTHER
Net foreign exchange (losses) gains	($	12,963	)	($	1,241	)	$	11,250		($	7,970	)	$	21,021
Net realized losses on investments		(45,566	)		(14,177	)		(18,434	)		(18,302	)		(20,342	)
Income tax expense		(5,962	)		(17,975	)		(16,454	)		(20,962	)		(29,833	)
NET INCOME	$	81,757		$	368,577		$	299,316		$	521,107		$	498,126
Preferred dividends		(11,625	)		(11,625	)		(11,625	)		(15,500	)		(15,500	)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	70,132		$	356,952		$	287,691		$	505,607		$	482,626
KEY RATIOS/PER SHARE DATA
Loss ratio		68.2	%		50.6	%		56.4	%		47.0	%		50.5	%
Acquisition expense ratio		16.5	%		18.2	%		19.1	%		19.3	%		19.4	%
General and administrative expense ratio		12.0	%		12.8	%		11.2	%		13.6	%		11.6	%
Combined ratio		96.7	%		81.6	%		86.7	%		79.9	%		81.5	%
Weighted average basic shares outstanding		58,314			65,530			66,393			64,697			66,436
Weighted average dilutive shares outstanding		63,633			71,126			71,428			70,540			71,755
Basic earnings per common share	$	1.20		$	5.45		$	4.33		$	7.82		$	7.26
Diluted earnings per common share	$	1.10		$	5.02		$	4.03		$	7.17		$	6.73
ROAE, net income [a]		3.2	%		16.1	%		16.0	%		22.9	%		25.6	%

[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

	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			JUNE 30, 2007
ASSETS
Cash and cash equivalents	$	514,875		$	656,158		$	549,692		$	567,825		$	600,042		$	625,662
Fixed income investments available for sale, at fair value (1)		4,398,816			4,604,653			4,710,467			4,647,590			4,791,313			4,728,942
Short term investments available for sale, at fair value		136,624			—			—			12,646			12,495			—
Other investments		338,151			366,886			369,347			358,128			343,926			281,241
Premiums receivable, net		1,130,184			1,101,610			1,088,998			723,832			768,162			839,106
Deferred acquisition costs		202,912			194,390			184,646			168,968			212,000			198,537
Securities lending collateral		134,256			153,062			241,343			173,041			195,727			173,884
Prepaid reinsurance premiums		205,284			205,454			268,442			122,594			92,466			99,446
Losses recoverable		281,074			270,053			150,665			187,354			96,008			66,377
Accrued investment income		32,893			37,930			33,650			38,543			36,075			40,443
Goodwill and intangible assets		202,682			205,635			208,202			206,632			69,388			70,456
Deferred tax assets		31,978			14,788			17,702			—			46,926			57,993
Receivable on pending investment sales		196,481			2,070			2,131			3,209			81,546			1,323
Other assets		63,002			73,667			50,630			60,791			50,852			43,760
TOTAL ASSETS	$	7,869,212		$	7,886,356		$	7,875,915		$	7,271,153		$	7,396,926		$	7,227,170
LIABILITIES
Reserve for losses and loss expenses	$	3,278,934		$	3,080,274		$	2,928,427		$	2,892,224		$	2,841,810		$	2,767,525
Reserve for unearned premiums		1,201,292			1,222,830			1,269,318			855,085			999,046			1,027,229
Deposit liabilities		85,701			89,718			105,115			108,943			130,272			143,073
Reinsurance balances payable		320,615			272,901			224,223			162,899			153,815			194,012
Securities lending payable		135,853			153,062			241,343			173,041			195,727			173,884
Debt		447,413			448,793			448,978			448,753			447,235			447,213
Payable on penidng investment purchases		44,621			3,902			704			426			28,485			33,090
Deferred tax liability		—			—			—			922			—			—
Other liabilities		86,066			80,981			119,633			116,601			74,915			61,298
TOTAL LIABILITIES	$	5,600,495		$	5,352,461		$	5,337,741		$	4,758,894		$	4,871,305		$	4,847,324
SHAREHOLDERS’ EQUITY
Preferred shares
Series A, non-cumulative	$	8,000		$	8,000		$	8,000		$	8,000		$	8,000		$	8,000
Common shares		57,657			59,642			60,098			60,364			64,081			64,591
Additional paid-in capital		1,042,511			1,107,219			1,127,594			1,165,300			1,355,468			1,378,685
Accumulated other comprehensive (loss) income		(86,146	)		(5,282	)		62,705			57,725			10,652			(47,525	)
Retained earnings		1,246,695			1,364,316			1,279,777			1,220,870			1,087,420			976,095
TOTAL SHAREHOLDERS’ EQUITY	$	2,268,717		$	2,533,895		$	2,538,174		$	2,512,259		$	2,525,621		$	2,379,846
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	7,869,212		$	7,886,356		$	7,875,915		$	7,271,153		$	7,396,926		$	7,227,170
Book value per common share	$	36.55		$	39.97		$	39.83		$	38.94		$	36.21		$	33.67
Diluted book value per common share (treasury stock method)	$	33.68		$	36.72		$	36.00		$	35.05		$	32.81		$	30.56
RATIOS
Debt-to-capital		16.5	%		15.0	%		15.0	%		15.2	%		15.0	%		15.8	%

⁽¹⁾ Fixed income investments include fixed maturity securities and preferred equity securities.

4

ENDURANCE SPECIALTY HOLDINGS LTD.
Annual Aggregate Risk Curve

Endurance Operating Income Profile

as of July 1, 2008

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 shareholders’ equity.

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.

Annual Aggregate Risk Curve

Annual Aggregate Risk Curve Comparison

													Change from July 1, 2007 - June 30, 2008 to July 1, 2008 - June 30, 2009						Change from Jan. 1, 2008 - Dec. 31, 2008 to July 1, 2008 - June 30, 2009
(in millions)	July 1, 2007 - June 30, 2008				Jan. 1, 2008 - Dec. 31, 2008				July 1, 2008 - June 30, 2009				$ Change				% Change		$ Change			% Change
Median Result		$	391			$	481			$	380			($	11	)	(2.9	%)		($101	)	(26.6	%)
Average Result			342				421				330				(12	)	(3.6	%)		(91	)	(27.6	%)
1 in 10 year annual gain			64				34				61				(3	)	(4.9	%)		27		44.3	%
1 in 25 year annual loss			(141	)			(121	)			(209	)			(68	)	32.5	%		(88	)	42.1	%
1 in 50 year annual loss			(319	)			(248	)			(330	)			(11	)	3.3	%		(82	)	24.8	%
1 in 100 year annual loss			(468	)			(438	)			(487	)			(19	)	3.9	%		(49	)	10.1	%
1 in 250 year annual loss			(694	)			(659	)			(729	)			(35	)	4.8	%		(70	)	9.6	%
1 in 500 year annual loss			(884	)			(775	)			(882	)			2		(0.2	%)		(107	)	12.1	%

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 NINE MONTHS ENDED SEPTEMBER 30, 2008

Gross Premiums Written = $2,013 million [a]

[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 SEPT. 30, 2008

	Insurance			Reinsurance			Total Company Sub-total			Deposit Accounting Adjustment [a]			Reported Totals
UNDERWRITING REVENUES
Gross premiums written	$	372,936		$	251,228		$	624,164		($	20	)	$	624,144
Net premiums written	$	248,601		$	245,442		$	494,043		($	20	)	$	494,023
Net premiums earned	$	270,298		$	240,975		$	511,273		($	1,644	)	$	509,629
Other underwriting loss		—			—			—			(2,712	)		(2,712	)
Total underwriting revenues	$	270,298		$	240,975		$	511,273		($	4,356	)	$	506,917
UNDERWRITING EXPENSES
Losses and loss expenses	$	194,477		$	257,514		$	451,991		($	6,490	)	$	445,501
Acquisition expenses		24,065			44,529			68,594			2,004			70,598
General and administrative expenses		31,675			26,096			57,771			—			57,771
Total expenses	$	250,217		$	328,139		$	578,356		($	4,486	)	$	573,870
UNDERWRITING INCOME (LOSS)	$	20,081		($	87,164	)	($	67,083	)	$	130		($	66,953	)
GAAP RATIOS
Loss ratio		71.9	%		106.9	%		88.4	%					87.4	%
Acquisition expense ratio		8.9	%		18.5	%		13.4	%					13.8	%
General and administrative expense ratio		11.8	%		10.8	%		11.3	%					11.4	%
Combined ratio		92.6	%		136.2	%		113.1	%					112.6	%
STATUTORY RATIOS
Loss ratio		71.9	%		106.9	%		88.4	%					87.4	%
Acquisition expense ratio		8.8	%		22.7	%		15.7	%					16.2	%
General and administrative expense ratio		12.5	%		10.6	%		11.6	%					11.6	%
Combined ratio		93.2	%		140.2	%		115.7	%					115.2	%

[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 SEPT. 30, 2008

	Insurance			Reinsurance			Total Company Sub-total			Reported Totals [a]
AS REPORTED
GAAP RATIOS
Loss ratio		71.9	%		106.9	%		88.4	%		87.4	%
Acquisition expense ratio		8.9	%		18.5	%		13.4	%		13.8	%
General and administrative expense ratio		11.8	%		10.8	%		11.3	%		11.4	%
Combined ratio		92.6	%		136.2	%		113.1	%		112.6	%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
GAAP RATIOS
Loss ratio		6.4	%		(0.8	)%		3.0	%		3.6	%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
GAAP RATIOS
Loss ratio		78.3	%		106.1	%		91.4	%		91.0	%
Acquisition expense ratio		8.9	%		18.5	%		13.4	%		13.8	%
General and administrative expense ratio		11.8	%		10.8	%		11.3	%		11.4	%
Combined ratio		99.0	%		135.4	%		116.1	%		116.2	%

[a] The difference between “Total Company Sub-total” and “Reported Totals” represents deposit accounted contracts that are excluded for internal management reporting purposes. 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
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			SEPT. 30, 2006
UNDERWRITING REVENUES
Gross premiums written	$	372,936		$	271,973		$	585,134		$	216,510		$	180,046		$	156,781
Net premiums written	$	248,601		$	234,390		$	356,141		$	154,476		$	137,404		$	98,328
Net premiums earned	$	270,298		$	245,383		$	167,982		$	137,060		$	130,640		$	90,062
UNDERWRITING EXPENSES
Losses and loss expenses	$	194,477		$	188,171		$	130,950		$	93,553		$	69,709		$	57,165
Acquisition expenses		24,065			29,000			23,117			22,145			19,542			8,492
General and administrative expenses		31,675			25,071			20,561			27,200			21,988			13,760
Total expenses	$	250,217		$	242,242		$	174,628		$	142,898		$	111,239			79,417
UNDERWRITING INCOME (LOSS)	$	20,081		$	3,141		($	6,646	)	($	5,838	)	$	19,401		$	10,645
GAAP RATIOS
Loss ratio		71.9	%		76.7	%		78.0	%		68.3	%		53.4	%		63.5	%
Acquisition expense ratio		8.9	%		11.8	%		13.8	%		16.2	%		14.9	%		9.4	%
General and administrative expense ratio		11.8	%		10.2	%		12.2	%		19.8	%		16.8	%		15.3	%
Combined ratio		92.6	%		98.7	%		104.0	%		104.3	%		85.1	%		88.2	%
STATUTORY RATIOS
Loss ratio		71.9	%		76.7	%		78.0	%		68.3	%		53.4	%		63.5	%
Acquisition expense ratio		8.8	%		13.8	%		7.7	%		16.9	%		17.4	%		17.0	%
General and administrative expense ratio		12.5	%		13.4	%		5.5	%		18.1	%		15.9	%		12.2	%
Combined ratio		93.2	%		103.9	%		91.2	%		103.3	%		86.7	%		92.7	%

10

ENDURANCE SPECIALTY HOLDINGS LTD.
REINSURANCE SEGMENT DATA

	FOR THE QUARTERS ENDED
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			SEPT. 30, 2006
UNDERWRITING REVENUES
Gross premiums written	$	251,228		$	246,386		$	285,478		$	66,039		$	243,787		$	326,061
Net premiums written	$	245,442		$	235,291		$	286,667		$	65,791		$	240,774		$	293,723
Net premiums earned	$	240,975		$	210,001		$	205,735		$	267,772		$	275,776		$	353,868
UNDERWRITING EXPENSES
Losses and loss expenses	$	257,514		$	86,737		$	61,202		$	42,134		$	119,798		$	158,804
Acquisition expenses		44,529			47,499			51,157			70,641			58,478			83,244
General and administrative expenses		26,096			27,422			29,483			37,455			33,133			34,775
Total expenses	$	328,139		$	161,658		$	141,842		$	150,230		$	211,409			276,823
UNDERWRITING (LOSS) INCOME	($	87,164	)	$	48,343		$	63,893		$	117,542		$	64,367		$	77,045
GAAP RATIOS
Loss ratio		106.9	%		41.3	%		29.7	%		15.7	%		43.5	%		44.9	%
Acquisition expense ratio		18.5	%		22.6	%		24.9	%		26.4	%		21.2	%		23.5	%
General and administrative expense ratio		10.8	%		13.1	%		14.3	%		14.0	%		12.0	%		9.8	%
Combined ratio		136.2	%		77.0	%		68.9	%		56.1	%		76.7	%		78.2	%
STATUTORY RATIOS
Loss ratio		106.9	%		41.3	%		29.7	%		15.7	%		43.5	%		44.9	%
Acquisition expense ratio		22.7	%		22.6	%		19.4	%		47.1	%		27.4	%		29.7	%
General and administrative expense ratio		10.6	%		11.7	%		10.3	%		56.9	%		13.8	%		11.8	%
Combined ratio		140.2	%		75.6	%		59.4	%		119.7	%		84.7	%		86.4	%

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.

11

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

	FOR THE QUARTERS ENDED
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			SEPT. 30, 2006
INSURANCE SEGMENT
Property	$	35,574		$	52,360		$	31,183		$	37,905		$	28,379		$	47,860
Casualty		29,196			38,737			25,124			25,851			30,133			28,294
Healthcare liability		28,010			25,485			16,492			15,256			30,262			37,812
Workers’ compensation		41,709			69,888			83,480			73,054			70,398			24,993
Agriculture		195,852			50,921			413,419			42,242			—			—
Professional lines		42,595			34,582			15,436			22,202			20,874			17,822
TOTAL INSURANCE	$	372,936		$	271,973		$	585,134		$	216,510		$	180,046		$	156,781
REINSURANCE SEGMENT
Casualty	$	53,890		$	36,244		$	69,301		$	15,301		$	66,006		$	86,933
Property		113,080			34,886			36,248			14,212			112,407			124,235
Catastrophe		65,825			130,217			105,234			13,499			43,684			49,385
Agriculture		3,452			5,822			10,911			7,230			6,917			16,324
Aerospace and Marine		9,814			24,250			36,536			11,660			9,179			33,998
Surety and other specialty		5,167			14,967			27,248			4,137			5,594			15,186
TOTAL REINSURANCE	$	251,228		$	246,386		$	285,478		$	66,039		$	243,787		$	326,061
TOTAL COMPANY SUBTOTAL	$	624,164		$	518,359		$	870,612		$	282,549		$	423,833		$	482,842
DEPOSIT ACCOUNTING ADJUSTMENT [a]		(20	)		(296	)		(2,021	)		(4,799	)		(562	)		(6,629	)
REPORTED TOTALS	$	624,144		$	518,063		$	868,591		$	277,750		$	423,271		$	476,213

[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
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007			SEPT. 30, 2006
INSURANCE SEGMENT
Property	$	20,901		$	36,641		$	15,003		$	16,827		$	7,689		$	4,397
Casualty		18,141			34,953			15,113			16,144			16,467			16,194
Healthcare liability		27,636			25,169			16,492			15,256			30,262			37,812
Workers’ compensation		37,685			63,482			75,906			66,428			64,131			22,215
Agriculture		109,159			44,193			222,400			21,115			—			—
Professional lines		35,079			29,952			11,227			18,706			18,855			17,710
TOTAL INSURANCE	$	248,601		$	234,390		$	356,141		$	154,476		$	137,404		$	98,328
REINSURANCE SEGMENT
Casualty	$	53,889		$	36,273		$	70,503		$	14,908		$	65,946		$	86,716
Property		113,080			34,886			36,220			14,212			112,398			116,146
Catastrophe		60,699			122,231			105,156			13,499			41,025			31,282
Agriculture		3,769			5,187			10,911			7,230			7,028			15,483
Aerospace and Marine		8,838			21,916			36,626			11,805			8,390			28,946
Surety and other specialty		5,167			14,798			27,251			4,137			5,987			15,150
TOTAL REINSURANCE	$	245,442		$	235,291		$	286,667		$	65,791		$	240,774		$	293,723
TOTAL COMPANY SUBTOTAL	$	494,043		$	469,681		$	642,808		$	220,267		$	378,178		$	392,051
DEPOSIT ACCOUNTING ADJUSTMENT [a]		(20	)		(296	)		(2,021	)		(4,799	)		(562	)		(6,629	)
REPORTED TOTALS	$	494,023		$	469,385		$	640,787		$	215,468		$	377,616		$	385,422

[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.
CONSOLIDATED SEGMENT DATA
FOR THE NINE MONTHS ENDED SEPT. 30, 2008

	Insurance			Reinsurance			Total Company Sub-total			Deposit Accounting Adjustment [a]			Reported Totals
UNDERWRITING REVENUES
Gross premiums written	$	1,230,043		$	783,092		$	2,013,135		($	2,337	)	$	2,010,798
Net premiums written	$	839,132		$	767,400		$	1,606,532		($	2,337	)	$	1,604,195
Net premiums earned	$	683,662		$	656,712		$	1,340,374		($	5,617	)	$	1,334,757
Other underwriting loss		—			—			—			(1,519	)		(1,519	)
Total underwriting revenues	$	683,662		$	656,712		$	1,340,374		($	7,136	)	$	1,333,238
UNDERWRITING EXPENSES
Losses and loss expenses	$	513,598		$	405,451		$	919,049		($	8,721	)	$	910,328
Acquisition expenses		76,182			143,185			219,367			1,241			220,608
General and administrative expenses		77,308			83,000			160,308			—			160,308
Total expenses	$	667,088		$	631,636		$	1,298,724		($	7,480	)	$	1,291,244
UNDERWRITING INCOME	$	16,574		$	25,076		$	41,650		$	344		$	41,994
GAAP RATIOS
Loss ratio		75.1	%		61.7	%		68.6	%					68.2	%
Acquisition expense ratio		11.2	%		21.8	%		16.4	%					16.5	%
General and administrative expense ratio		11.3	%		12.7	%		11.9	%					12.0	%
Combined ratio		97.6	%		96.2	%		96.9	%					96.7	%
STATUTORY RATIOS
Loss ratio		75.1	%		61.7	%		68.6	%					68.2	%
Acquisition expense ratio		9.7	%		21.4	%		15.3	%					15.5	%
General and administrative expense ratio		9.8	%		10.8	%		10.3	%					10.3	%
Combined ratio		94.6	%		93.9	%		94.2	%					94.0	%

[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.

14

ENDURANCE SPECIALTY HOLDINGS LTD.
CONSOLIDATED FINANCIAL RATIOS
FOR THE NINE MONTHS ENDED SEPT. 30, 2008

	Insurance			Reinsurance			Total Company Sub-total			Reported Totals [a]
AS REPORTED
GAAP RATIOS
Loss ratio		75.1	%		61.7	%		68.6	%		68.2	%
Acquisition expense ratio		11.2	%		21.8	%		16.4	%		16.5	%
General and administrative expense ratio		11.3	%		12.7	%		11.9	%		12.0	%
Combined ratio		97.6	%		96.2	%		96.9	%		96.7	%
EFFECT OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT FAVORABLE / (UNFAVORABLE)
GAAP RATIOS
Loss ratio		6.8	%		10.2	%		8.5	%		8.7	%
NET OF PRIOR ACCIDENT YEAR RESERVE DEVELOPMENT
GAAP RATIOS
Loss ratio		81.9	%		71.9	%		77.1	%		76.9	%
Acquisition expense ratio		11.2	%		21.8	%		16.4	%		16.5	%
General and administrative expense ratio		11.3	%		12.7	%		11.9	%		12.0	%
Combined ratio		104.4	%		106.4	%		105.4	%		105.4	%

[a] The difference between “Total Company Sub-total” and “Reported Totals” represents deposit accounted contracts that are excluded for internal management reporting purposes. 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.

15

ENDURANCE SPECIALTY HOLDINGS LTD.
INSURANCE SEGMENT DATA

	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2008			SEPT. 30, 2007			SEPT. 30, 2006			DEC. 31, 2007			DEC. 31, 2006
UNDERWRITING REVENUES
Gross premiums written	$	1,230,043		$	525,046		$	396,161		$	741,556		$	576,745
Net premiums written	$	839,132		$	397,494		$	278,201		$	551,970		$	416,637
Net premiums earned	$	683,662		$	365,021		$	268,841		$	502,082		$	371,762
UNDERWRITING EXPENSES
Losses and loss expenses	$	513,598		$	196,660		$	168,940		$	290,213		$	252,310
Acquisition expenses		76,182			49,844			21,147			72,044			32,528
General and administrative expenses		77,308			62,796			35,542			89,996			49,524
Total expenses	$	667,088		$	309,300		$	225,629		$	452,253		$	334,362
UNDERWRITING INCOME	$	16,574		$	55,721		$	43,212		$	49,829		$	37,400
GAAP RATIOS
Loss ratio		75.1	%		53.9	%		62.8	%		57.8	%		67.9	%
Acquisition expense ratio		11.2	%		13.6	%		7.9	%		14.4	%		8.7	%
General and administrative expense ratio		11.3	%		17.2	%		13.2	%		17.9	%		13.3	%
Combined ratio		97.6	%		84.7	%		83.9	%		90.1	%		89.9	%
STATUTORY RATIOS
Loss ratio		75.1	%		53.9	%		62.8	%		57.8	%		67.9	%
Acquisition expense ratio		9.7	%		16.5	%		11.4	%		16.6	%		13.9	%
General and administrative expense ratio		9.8	%		15.7	%		10.9	%		16.4	%		10.5	%
Combined ratio		94.6	%		86.1	%		85.1	%		90.8	%		92.3	%

16

ENDURANCE SPECIALTY HOLDINGS LTD.
REINSURANCE SEGMENT DATA

	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2008			SEPT. 30, 2007			SEPT. 30, 2006			DEC. 31, 2007			DEC. 31, 2006
UNDERWRITING REVENUES
Gross premiums written	$	783,092		$	1,002,075		$	1,254,576		$	1,068,114		$	1,371,889
Net premiums written	$	767,400		$	985,769		$	1,210,798		$	1,051,560		$	1,327,919
Net premiums earned	$	656,712		$	891,489		$	1,108,901		$	1,159,261		$	1,447,167
UNDERWRITING EXPENSES
Losses and loss expenses	$	405,451		$	460,670		$	627,479		$	502,804		$	696,962
Acquisition expenses		143,185			184,503			259,310			255,091			341,194
General and administrative expenses		83,000			89,818			102,952			127,273			140,849
Total expenses	$	631,636		$	734,991		$	989,741		$	885,168		$	1,179,005
UNDERWRITING INCOME	$	25,076		$	156,498		$	119,160		$	274,093		$	268,162
GAAP RATIOS
Loss ratio		61.7	%		51.7	%		56.6	%		43.4	%		48.2	%
Acquisition expense ratio		21.8	%		20.7	%		23.4	%		22.0	%		23.6	%
General and administrative expense ratio		12.7	%		10.0	%		9.3	%		11.0	%		9.7	%
Combined ratio		96.2	%		82.4	%		89.3	%		76.4	%		81.5	%
STATUTORY RATIOS
Loss ratio		61.7	%		51.7	%		56.6	%		43.4	%		48.2	%
Acquisition expense ratio		21.4	%		20.4	%		22.8	%		22.1	%		23.5	%
General and administrative expense ratio		10.8	%		9.1	%		8.5	%		12.1	%		10.6	%
Combined ratio		93.9	%		81.2	%		87.9	%		77.6	%		82.3	%

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 21.

17

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

	FOR THE NINE MONTHS ENDED										FOR THE YEARS ENDED
	SEPT. 30, 2008				SEPT. 30, 2007			SEPT. 30, 2006			DEC. 31, 2007			DEC. 31, 2006
INSURANCE SEGMENT
Property	$	119,116			$	96,256		$	129,024		$	134,161		$	173,292
Casualty		107,642				99,273			92,957			125,124			128,933
Healthcare liability		69,987				77,105			89,921			92,361			106,988
Workers’ compensation		195,076				189,173			31,424			262,228			93,779
Agriculture		660,193				—			—			42,242			—
Professional lines		78,029				63,239			52,835			85,440			73,753
TOTAL INSURANCE	$	1,230,043			$	525,046		$	396,161		$	741,556		$	576,745
REINSURANCE SEGMENT
Casualty	$	159,434			$	185,730		$	349,700		$	201,032		$	400,111
Property		184,214				214,584			296,713			228,796			318,883
Catastrophe		301,277				331,689			272,843			345,187			291,755
Agriculture		20,185				124,095			109,228			131,325			107,104
Aerospace and Marine		70,600				81,223			154,064			92,882			180,203
Surety and other specialty		47,382				64,754			72,028			68,892			73,833
TOTAL REINSURANCE	$	783,092	39	%	$	1,002,075		$	1,254,576		$	1,068,114		$	1,371,889
TOTAL COMPANY SUBTOTAL	$	2,013,135			$	1,527,121		$	1,650,737		$	1,809,670		$	1,948,634
DEPOSIT ACCOUNTING ADJUSTMENT [a]		(2,337	)			(23,756	)		(151,890	)		(28,555	)		(158,992	)
REPORTED TOTALS	$	2,010,798			$	1,503,365		$	1,498,847		$	1,781,115		$	1,789,642

[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.

18

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

	FOR THE NINE MONTHS ENDED									FOR THE YEARS ENDED
	SEPT. 30, 2008			SEPT. 30, 2007			SEPT. 30, 2006			DEC. 31, 2007			DEC. 31, 2006
INSURANCE SEGMENT
Property	$	72,545		$	31,078		$	41,786		$	47,905		$	61,290
Casualty		68,207			61,044			65,512			77,188			89,817
Healthcare liability		69,297			77,105			89,921			92,361			106,988
Workers’ compensation		177,072			171,941			28,260			238,369			86,867
Agriculture		375,752			—			—			21,115			—
Professional lines		76,259			56,326			52,722			75,032			71,675
TOTAL INSURANCE	$	839,132		$	397,494		$	278,201		$	551,970		$	416,637
REINSURANCE SEGMENT
Casualty	$	160,664		$	185,478		$	346,295		$	200,385		$	396,663
Property		184,187			215,999			288,624			230,211			310,795
Catastrophe		288,085			318,929			251,215			332,428			270,126
Agriculture		19,867			122,106			108,387			129,337			106,262
Aerospace and Marine		67,381			78,809			147,447			90,613			173,586
Surety and other specialty		47,216			64,448			68,830			68,586			70,487
TOTAL REINSURANCE	$	767,400		$	985,769		$	1,210,798		$	1,051,560		$	1,327,919
TOTAL COMPANY SUBTOTAL	$	1,606,532		$	1,383,263		$	1,488,999		$	1,603,530		$	1,744,556
DEPOSIT ACCOUNTING ADJUSTMENT [a]		(2,337	)		(23,756	)		(151,890	)		(28,555	)		(158,992	)
REPORTED TOTALS	$	1,604,195		$	1,359,507		$	1,337,109		$	1,574,975		$	1,585,564

[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.

19

ENDURANCE SPECIALTY HOLDINGS LTD.
DEPOSIT ACCOUNTING ADJUSTMENT IMPACTS ON SEGMENT DATA
FOR THE QUARTER ENDED SEPT. 30, 2008

	Includes Deposit Accounting Adjustments									Excludes Deposit Accounting Adjustments
	Insurance			Reinsurance			Total Company			Insurance			Reinsurance			Total Company
UNDERWRITING REVENUES
Gross premiums written	$	372,936		$	251,208		$	624,144		$	372,936		$	251,228		$	624,164
Net premiums written	$	248,601		$	245,422		$	494,023		$	248,601		$	245,442		$	494,043
Net premiums earned	$	270,298		$	239,331		$	509,629		$	270,298		$	240,975		$	511,273
Other underwriting loss		—			(2,712	)		(2,712	)		—			—			—
Total underwriting revenues	$	270,298		$	236,619		$	506,917		$	270,298		$	240,975		$	511,273
UNDERWRITING EXPENSES
Losses and loss expenses	$	194,477		$	251,024		$	445,501		$	194,477		$	257,514		$	451,991
Acquisition expenses		24,065			46,533			70,598			24,065			44,529			68,594
General and administrative expenses		31,675			26,096			57,771			31,675			26,096			57,771
Total expenses	$	250,217		$	323,653		$	573,870		$	250,217		$	328,139		$	578,356
UNDERWRITING INCOME (LOSS)	$	20,081		($	87,034	)	($	66,953	)	$	20,081		($	87,164	)	($	67,083	)
GAAP RATIOS
Loss ratio		71.9	%		104.9	%		87.4	%		71.9	%		106.9	%		88.4	%
Acquisition expense ratio		8.9	%		19.4	%		13.9	%		8.9	%		18.5	%		13.4	%
General and administrative expense ratio		11.8	%		10.9	%		11.3	%		11.8	%		10.8	%		11.3	%
Combined ratio		92.6	%		135.2	%		112.6	%		92.6	%		136.2	%		113.1	%

20

ENDURANCE SPECIALTY HOLDINGS LTD.
DEPOSIT ACCOUNTING ADJUSTMENT IMPACTS ON SEGMENT DATA
FOR THE NINE MONTHS ENDED SEPT. 30, 2008

	Includes Deposit Accounting Adjustments									Excludes Deposit Accounting Adjustments
	Insurance			Reinsurance			Total Company			Insurance			Reinsurance			Total Company
UNDERWRITING REVENUES
Gross premiums written	$	1,230,043		$	780,755		$	2,010,798		$	1,230,043		$	783,092		$	2,013,135
Net premiums written	$	839,132		$	765,063		$	1,604,195		$	839,132		$	767,400		$	1,606,532
Net premiums earned	$	683,662		$	651,095		$	1,334,757		$	683,662		$	656,712		$	1,340,374
Other underwriting loss		—			(1,519	)		(1,519	)		—			—			—
Total underwriting revenues	$	683,662		$	649,576		$	1,333,238		$	683,662		$	656,712		$	1,340,374
UNDERWRITING EXPENSES
Losses and loss expenses	$	513,598		$	396,730		$	910,328		$	513,598		$	405,451		$	919,049
Acquisition expenses		76,182			144,426			220,608			76,182			143,185			219,367
General and administrative expenses		77,308			83,000			160,308			77,308			83,000			160,308
Total expenses	$	667,088		$	624,156		$	1,291,244		$	667,088		$	631,636		$	1,298,724
UNDERWRITING INCOME	$	16,574		$	25,420		$	41,994		$	16,574		$	25,076		$	41,650
GAAP RATIOS
Loss ratio		75.1	%		60.9	%		68.2	%		75.1	%		61.7	%		68.6	%
Acquisition expense ratio		11.2	%		22.2	%		16.5	%		11.2	%		21.8	%		16.4	%
General and administrative expense ratio		11.3	%		12.7	%		12.0	%		11.3	%		12.7	%		11.9	%
Combined ratio		97.6	%		95.8	%		96.7	%		97.6	%		96.2	%		96.9	%

21

ENDURANCE SPECIALTY HOLDINGS LTD.
RETURN ON EQUITY ANALYSIS

	FOR THE NINE MONTHS ENDED SEPT. 30, 2008
Average common equity [a]	$	2,190,488
Net premiums earned	$	1,334,757
Combined ratio		96.7	%
Operating margin		3.3	%
Premium leverage		0.61	x
Implied ROAE from underwriting activity		2.0	%
Average cash and invested assets at amortized cost	$	5,654,259
Investment leverage		2.56	x
Year to date investment income yield, pretax		2.4	%
Implied ROAE from investment activity		6.2	%
Financing Costs [b]		(1.6	)%
Implied Pre-tax Operating ROAE, for period [c]		6.6	%
Implied Pre-tax Operating ROAE, annualized [c]		8.8	%

[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.

22

ENDURANCE SPECIALTY HOLDINGS LTD.
ANNUALIZED OPERATING & INVESTMENT LEVERAGE

	FOR THE QUARTERS ENDED												YEARS ENDED DECEMBER 31,
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			2007			2006
Average common equity [a]	$	2,201,306		$	2,336,035		$	2,325,217		$	2,318,940		$	2,083,296		$	1,885,209
Net premiums earned	$	509,629		$	453,085		$	372,043		$	400,462		$	1,594,800		$	1,638,574
Operating leverage		0.23	x		0.19	x		0.16	x		0.17	x		0.77	x		0.87	x
Annualized operating leverage		0.92	x		0.78	x		0.64	x		0.69	x		0.77	x		0.87	x
Avgerage cash and invested assets at amortized cost	$	5,604,765		$	5,593,901		$	5,579,783		$	5,691,919		$	5,559,204		$	5,275,481
Investment leverage		2.55	x		2.39	x		2.40	x		2.45	x		2.67	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.

23

ENDURANCE SPECIALTY HOLDINGS LTD.

INVESTMENT PORTFOLIO

AS OF SEPTEMBER 30, 2008

Type of Investment	Fair Value		Percentage
Cash and equivalents [a]	$	666,736		12.0	%
U.S. government and government agencies notes [f]		981,789		17.7	%
Corporate securities [g]		668,164		12.0	%
Foreign government		171,623		3.1	%
Municipals		103,489		1.9	%
Asset-backed securities		296,830		5.4	%
U.S. government agency mortgage-backed securities		1,224,327		22.1	%
Non-agency mortgage-backed securities		1,089,217		19.7	%
Other investments [b]		338,151		6.1	%
Total	$	5,540,326		100.0	%

Ratings [e]	Fair Value		Percentage
U.S. government and government agencies notes	$	981,789		20.1	%
AAA/Aaa		2,903,482		59.6	%
AA/Aa		291,579		6.0	%
A/A		277,105		5.7	%
BBB		23,879		0.5	%
Below BBB		56,840		1.2	%
Not Rated		766		—
Other investments [b]		338,151		6.9	%
Total	$	4,873,591		100.0	%

Performance	Sept. 30, 2008
Yield [c]		3.2	%
Duration [d]		3.17

Investment Income	Quarter Ended Sept. 30, 2008			Quarter Ended June 30, 2008			Quarter Ended Mar. 31, 2008			Quarter Ended Dec. 31, 2007
Other Investments	($	32,789	)	($	519	)	($	16,112	)	($	898	)
Total net investment income	$	27,410		$	60,482		$	46,878		$	65,310

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.
	[f] Includes short term investments.
	[g] Includes corporate debt and fixed income preferred securities.

24

ENDURANCE SPECIALTY HOLDINGS LTD.

STRUCTURED SECURITIES DETAIL

AS OF SEPTEMBER 30, 2008

Securitized (RMBS, CMBS, ABS and CDO) securities ratings	Fair Value		Percentage			Percentage of Investment Portfolio
U.S. Government and agencies	$	1,224,327		46.9	%		22.1	%
AAA/Aaa		1,331,020		50.9	%		24.0	%
AA/Aa		12,408		0.5	%		0.2	%
A/A		12,516		0.5	%		0.2	%
BBB		20,492		0.8	%		0.4	%
Below BBB		9,611		0.4	%		0.2	%
Total	$	2,610,374		100.0	%		47.1	%

Structured securities sectors (RMBS, CMBS, ABS and CDO)			Fair Value		Percentage			Percentage of Investment Portfolio
Commercial
Agency			$	37,756		1.4	%		0.7	%
Non Agency				634,016		24.3	%		11.4	%
Residential
Agency				1,186,571		45.5	%		21.4	%
Non Agency				480,263		18.4	%		8.7	%
Consumer				271,768		10.4	%		4.9	%
Total			$	2,610,374		100.0	%		47.1	%
	Spread Duration	3.58 years

Commercial real estate collateralized debt obligations (CRE CDO’s)			Fair Value		Percentage			Percentage of Investment Portfolio
AAA/Aaa			$	570		10.8	%		0.0	%
AA/Aa				569		10.7	%		0.0	%
A/A				1,591		30.0	%		0.0	%
BBB				1,747		33.0	%		0.0	%
Below BBB				823		15.5	%		0.0	%
Total			$	5,300		100.0	%		0.1	%
	Spread Duration	3.50 years

25

ENDURANCE SPECIALTY HOLDINGS LTD.

TWENTY-FIVE LARGEST CORPORATE HOLDINGS

AS OF SEPTEMBER 30, 2008

	September 30, 2008
ISSUER (1) (2) (4)	Amortized Cost		Fair Value		Unrealized Gain (Loss)			Credit Quality (3)
CITIGROUP INC	$	35,519	$	33,416	($	2,032	)		AA
JPMORGAN CHASE & CO		25,767		24,620		(1,147	)		A
WELLS FARGO & COMPANY		23,077		22,766		(311	)		AA
PRUDENTIAL FINANCIAL INC		20,969		20,653		(316	)		A
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED		19,150		18,323		(1,113	)		A
ORACLE CORPORATION		17,634		17,128		(506	)		A
ING GROEP NV		15,909		14,673		(1,236	)		A
GENERAL ELECTRIC CO		15,434		14,297		(1,349	)		AAA
HBOS PLC		15,714		13,573		(1,965	)		A
ROYAL BANK OF SCOTLAND GROUP PLC		15,951		13,507		(2,390	)		A
VERIZON COMMUNICATIONS INC.		13,715		13,397		(318	)		A
HSBC HOLDINGS PLC		13,933		13,291		(643	)		AA
AT&T INC		12,909		12,798		(111	)		A
VODAFONE GROUP PLC		12,595		12,459		(136	)		A
BANK OF AMERICA CORP		11,329		10,940		(513	)		AA
SIEMENS AG		9,412		9,436		24			AA
MIDAMERICAN ENERGY COMPANY		8,622		8,586		(37	)		A
METLIFE INC		8,519		8,315		(231	)		AA
DEERE & CO		8,046		8,162		116			A
ASTRAZENECA PLC		8,164		8,083		(77	)		AA
CISCO SYSTEMS, INC.		8,216		8,033		(183	)		A
GENWORTH FINANCIAL INC.		9,000		7,920		(1,080	)		A
GOLDMAN SACHS GROUP INC/THE		8,743		7,784		(959	)		AA
TOTAL SA		6,848		6,942		22			AA
HARTFORD FINANCIAL SERVICES GROUP		6,478		6,399		(79	)		A

(1)	Corporate issuers exclude government-backed, government-sponsored enterprises, covered bonds and cash and cash equivalents.
(2)	Credit exposures represent only direct exposure to fixed maturities and short term investments of the parent issuer and its major subsidiaries. These exposures exclude asset and mortgage-backed securities that were issued, sponsored or serviced by the parent.
(3)	Represents weighted average credit quality of underlying issues.
(4)	Excludes fixed income preferred securities.

26

ENDURANCE SPECIALTY HOLDINGS LTD.

ACTIVITY IN RESERVE FOR LOSSES AND LOSS EXPENSES

	Three months ended September 30, 2008									Nine months ended September 30, 2008
	Gross			Recoveries			Net			Gross			Recoveries			Net
Reserve for losses and loss expenses
Balance, beginning of period	$	3,080,274		($	270,053	)	$	2,810,221		$	2,892,224		($	187,354	)	$	2,704,870
Incurred
Current year		634,198			(170,252	)		463,946			1,420,386			(394,476	)		1,025,910
Prior years		(12,814	)		(5,631	)		(18,445	)		(117,044	)		1,461			(115,583	)
Total Incurred		621,384			(175,883	)		445,501			1,303,342			(393,015	)		910,327
Paid
Current year		(276,079	)		159,907			(116,172	)		(416,077	)		283,000			(133,077	)
Prior years		(122,963	)		4,012			(118,951	)		(480,548	)		13,927			(466,621	)
Total Paid		(399,042	)		163,919			(235,123	)		(896,625	)		296,927			(599,698	)
Foreign Exchange (gains) losses		(23,682	)		943			(22,739	)		(20,007	)		2,368			(17,639	)
Balance, end of period	$	3,278,934		($	281,074	)	$	2,997,860		$	3,278,934		($	281,074	)	$	2,997,860

27

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

(FAVORABLE) ADVERSE PRIOR ACCIDENT YEAR DEVELOPMENT DURING THE PERIODS ENDED SEPTEMBER 30, 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	)
Quarter ended June 30, 2008		(25,583	)		(33,025	)		(58,608	)		(2,426	)		(56,182	)
Quarter ended September 30, 2008		(17,242	)		1,849			(15,393	)		3,051			(18,444	)
Nine months ended September 30, 2008	($	46,568	)	($	66,674	)	($	113,242	)	$	2,338		($	115,580	)
(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.

28

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
	SEPT. 30, 2008			JUNE 30, 2008			MAR. 31, 2008			DEC. 31, 2007			SEPT. 30, 2007
INSURANCE SEGMENT
Short tail[a]	($	1,009	)	($	7,423	)	($	1,896	)	$	1,340		($	1,003	)
Long tail[b]		(16,233	)		(18,160	)		(1,847	)		(11,420	)		(24,098	)
Other[c]		—			—			—			—			—
TOTAL INSURANCE		(17,242	)		(25,583	)		(3,743	)		(10,080	)		(25,101	)
REINSURANCE SEGMENT
Short tail[a]		1,884			(10,316	)		(31,880	)		(30,577	)		(12,953	)
Long tail[b]		3,140			1,187			(101	)		(89	)		(2,269	)
Other[c]		(3,175	)		(23,896	)		(3,517	)		(4,117	)		7,110
TOTAL REINSURANCE		1,849			(33,025	)		(35,498	)		(34,783	)		(8,112	)
TOTAL COMPANY SUBTOTAL		(15,393	)		(58,608	)		(39,241	)		(44,863	)		(33,213	)
DEPOSIT ACCOUNTING ADJUSTMENT [d]		3,051			(2,426	)		1,713			(6,462	)		4,277
REPORTED TOTALS	($	18,444	)	($	56,182	)	($	40,954	)	($	38,401	)	($	37,490	)

[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.

29

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 SEPT. 30, 2008
Case reserves	$	69,794		$	137,169		$	227,372		$	434,335		$	466,306		$	249,167		$	6,137		$	721,610		$	1,155,945		($	39,574	)	$	1,116,371
Total reserves	$	106,050		$	1,194,845		$	302,317		$	1,603,212		$	841,468		$	840,556		$	76,441		$	1,758,465		$	3,361,677		($	82,743	)	$	3,278,934
Case reserves / Total reserves		65.8	%		11.5	%		75.2	%		27.1	%		55.4	%		29.6	%		8.0	%		41.0	%		34.4	%		47.8	%		34.0	%
IBNR / Total reserves		34.2	%		88.5	%		24.8	%		72.9	%		44.6	%		70.4	%		92.0	%		59.0	%		65.6	%		52.2	%		66.0	%
AT JUNE 30, 2008
Case reserves	$	76,961		$	100,219		$	253,067		$	430,247		$	445,073		$	257,920		$	6,338		$	709,331		$	1,139,578		($	41,900	)	$	1,097,678
Total reserves	$	112,960		$	1,129,238		$	271,389		$	1,513,587		$	729,039		$	839,848		$	83,252		$	1,652,139		$	3,165,725		($	85,451	)	$	3,080,274
Case reserves / Total reserves		68.1	%		8.9	%		93.2	%		28.4	%		61.0	%		30.7	%		7.6	%		42.9	%		36.0	%		49.0	%		35.6	%
IBNR / Total reserves		31.9	%		91.1	%		6.8	%		71.6	%		39.0	%		69.3	%		92.4	%		57.1	%		64.0	%		51.0	%		64.4	%
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	%

[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.

30

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES FOR EPS CALCULATION

		QUARTERS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
		2008			2007			2008			2007
DILUTIVE SHARES OUTSTANDING:	Average market price per share	$	31.41		$	39.53		$	35.23		$	37.61
AS REPORTED	Basic weighted average common shares outstanding		57,570			64,468			58,314			65,530
	Add: weighted avg. unvested restricted share units		1,198			1,090			1,241			879
	Weighted average exercise price per share		—			—			—			—
	Proceeds from unrecognized restricted share unit expense	$	22,352		$	22,283		$	22,352		$	22,283
	Less: restricted share units bought back via treasury method		(1,198	)		(564	)		(634	)		(592	)
	Add: weighted avg. dilutive warrants outstanding		6,019			7,202			6,483			7,202
	Weighted average exercise price per share	$	15.12		$	16.12		$	15.12		$	16.12
	Less: warrants bought back via treasury method		(6,019	)		(2,937	)		(2,782	)		(3,087	)
	Add: weighted avg. dilutive options outstanding		2,017			2,174			2,031			2,314
	Weighted average exercise price per share	$	17.68		$	18.19		$	17.68		$	18.15
	Proceeds from unrecognized option expense	$	64		$	80		$	64		$	80
	Less: options bought back via treasury method		(2,017	)		(1,002	)		(1,020	)		(1,119	)
	Weighted average dilutive shares outstanding		57,570			70,431			63,633			71,126

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.

31

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

	QUARTERS ENDED SEPTEMBER 30,						NINE MONTHS ENDED SEPTEMBER 30,
	2008			2007			2008			2007
Net (loss) income	($	99,392	)	$	131,401		$	81,757		$	368,577
Add (Less) after-tax items:
Net foreign exchange losses (gains)		15,400			(546	)		12,798			(918	)
Net realized losses on investments		27,934			3,013			43,456			12,583
Operating (loss) income before preferred dividends	($	56,058	)	$	133,868		$	138,011		$	380,242
Preferred dividends		(3,875	)		(3,875	)		(11,625	)		(11,625	)
Operating (loss) income (attributable) available to common shareholders	($	59,933	)	$	129,993		$	126,386		$	368,617
Weighted average common shares outstanding
Basic		57,570			64,468			58,314			65,530
Dilutive		57,570			70,431			63,633			71,126
Basic per common share data
Net (loss) income available to common shareholders	($	1.79	)	$	1.98		$	1.20		$	5.45
Add (Less) after-tax items:
Net foreign exchange losses (gains)		0.27			(0.01	)		0.22			(0.01	)
Net realized losses on investments		0.48			0.05			0.75			0.19
Operating (loss) income (attributable) available to common shareholders	($	1.04	)	$	2.02		$	2.17		$	5.63
Diluted per common share data
Net (loss) income (attributable) available to common shareholders	($	1.79	)	$	1.81		$	1.10		$	5.02
Add (Less) after-tax items:
Net foreign exchange losses (gains)		0.27			—			0.20			(0.01	)
Net realized losses on investments		0.48			0.04			0.69			0.17
Operating (loss) income (attributable) available to common shareholders	($	1.04	)	$	1.85		$	1.99		$	5.18

32

ENDURANCE SPECIALTY HOLDINGS LTD.
DILUTIVE SHARES SENSITIVITY ANALYSIS

DILUTIVE SHARES OUSTANDING
Market Price per Share
$	24.00	$	25.00	$	26.00	$	27.00	$	28.00	$	29.00	$	30.00	$	31.00	$	32.00	$	33.00	$	34.00
	60,294		60,494		60,679		60,851		61,010		61,157		61,295		61,425		61,545		61,659		61,767

33

ENDURANCE SPECIALTY HOLDINGS LTD.
BOOK VALUE PER SHARE

		SEPTEMBER 30,
								DEC. 31, 2007
		2008			2007
DILUTIVE COMMON SHARES OUTSTANDING:	Price per share at period end	$	30.92		$	41.55		$	41.73
AS-IF CONVERTED [a]	Basic common shares outstanding [b]		56,597			64,223			59,384
	Add: unvested restricted shares and restricted share units		1,098			1,039			1,041
	Add: dilutive warrants outstanding		5,595			7,202			7,095
	Weighted average exercise price per share	$	15.12		$	16.12		$	15.87
	Add: dilutive options outstanding		2,012			2,169			2,045
	Weighted average exercise price per share	$	17.68		$	18.18		$	18.12
	Book Value [c]	$	2,068,717		$	2,325,621		$	2,312,259
	Add: proceeds from converted warrants		84,596			116,102			112,593
	Add: proceeds from converted options		35,572			39,439			37,059
	Pro forma book value	$	2,188,885		$	2,481,162		$	2,461,911
	Dilutive shares outstanding		65,302			74,634			69,564
	Basic book value per common share	$	36.55		$	36.21		$	38.94
	Diluted book value per common share	$	33.52		$	33.24		$	35.39
DILUTIVE COMMON SHARES OUTSTANDING:	Price per share at period end	$	30.92		$	41.55		$	41.73
TREASURY STOCK METHOD	Basic common shares outstanding [b]		56,597			64,223			59,384
	Add: unvested restricted shares and restricted share units		1,098			1,039			1,041
	Add: dilutive warrants outstanding		5,595			7,202			7,095
	Weighted average exercise price per share	$	15.12		$	16.12		$	15.87
	Less: warrants bought back via treasury method		(2,736	)		(2,794	)		(2,698	)
	Add: dilutive options outstanding		2,012			2,169			2,045
	Weighted average exercise price per share	$	17.68		$	18.18		$	18.12
	Less: options bought back via treasury method		(1,151	)		(950	)		(889	)
	Dilutive shares outstanding		61,415			70,891			65,978
	Basic book value per common share	$	36.55		$	36.21		$	38.94
	Diluted book value per common share	$	33.68		$	32.81		$	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.

34

ENDURANCE SPECIALTY HOLDINGS LTD.
SHAREHOLDER RETURN ANALYSIS

				YEARS ENDED DECEMBER 31,
	NINE MONTHS
	SEPT. 30, 2008			2007			2006			2005			2004			2003
Net income (loss) available (attributable) to common shareholders	$	70,132		$	505,607		$	482,626		($	223,204	)	$	355,584		$	263,437
Dividends paid to common shareholders		(44,403	)		(64,353	)		(66,262	)		(61,695	)		(50,346	)		(20,505	)
Shareholders’ equity [a]		2,068,717			2,312,259			2,097,874			1,672,543			1,862,455			1,644,815
Return on beginning equity		3.0	%		24.1	%		28.9	%		(12.0	)%		21.6	%		21.6	%
Dividend payout ratio [b]		1.9	%		3.1	%		4.0	%		3.3	%		3.1	%		1.7	%
Dilutive common shares outstanding		61,415			65,978			72,654			72,173			66,729			68,445
Diluted book value per common share (treasury stock method)	$	33.68		$	35.05		$	28.87		$	23.17		$	27.91		$	24.03
Change in diluted book value per common share		(3.9	)%		21.4	%		24.6	%		(17.0	)%		16.1	%		10.6	%
Total return to common shareholders [c]		(2.0	)%		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.

35

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 (loss) income is an internal performance measure used by the Company in the management of its operations. Operating (loss) 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 (loss) income determined in accordance with GAAP, the Company believes that showing operating (loss) 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 (loss) income should not be viewed as a substitute for GAAP net (loss) income. Please see page 32 for a reconciliation of operating (loss) income to net (loss) 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 34 for a reconciliation of diluted book value per common share to basic book value per common share.

36