Exhibit 99.1
[GRAPHIC OMITTED] [LOGO] Endurance
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Endurance Specialty Holdings Ltd.
Wachovia Securities' Fourteenth Annual Nantucket Conference
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June 23rd, 2004
Forward Looking Statements
Statements contained in this presentation that are not based on current or
historical fact are forward-looking in nature. Such forward-looking statements
are based on current plans, estimates and expectations and are made pursuant to
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are based on known and unknown risks, assumptions, uncertainties and other
factors. The Company's actual results, performance, or achievements may differ
materially from any future results, performance, or achievements expressed or
implied by such forward-looking statements. The Company undertakes no obligation
to publicly update or revise any forward-looking statement.
2 [LOGO] Endurance
Overview
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3 [LOGO] Endurance
What We Have Achieved
> Established one of the leading insurance/reinsurance markets in the
industry in two years
o Bermuda-based insurance products
o Property catastrophe reinsurance
o U.S. working layer reinsurance
> Management team with strong execution skills
o Understands the key drivers of financial performance
o Demonstrated ability to build profitable lines of business
o Strong transaction and capital management experience
> Company generated 17% growth in book value in 2003 and is positioned
to generate 15%+ growth in book value throughout the P&C cycle
4 [LOGO] Endurance
What We Have Achieved (cont'd)
> Exceeded all financial objectives
o $1.6 billion in gross premiums
o $3.5 billion in assets
o $1.6 billion in shareholders' equity
o $263 million in net income
o 2003 earnings beat estimates by 54%
> Developed strong, technical, underwriting based culture
> Built strong systems, controls, and infrastructure
> Successfully executed two acquisitions
> One of handful of companies to be upgraded by A.M. Best in 2003
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Proven track record of significant shareholder value
creation
5 [LOGO] Endurance
Our Value Creation Levers
> Specialist underwriting driven culture built around deep
infrastructure, intellectual capital and technical skills
o "Stock Picking versus Index Tracking"
> Portfolio approach achieves capital efficiency and lower volatility
of results
> Scaleable systems
> Proactively allocate capital by line of business to maximize return
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Focus on profit, not revenue
6 [LOGO] Endurance
Underwriting & Strategy
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7 [LOGO] Endurance
Underwriting Philosophy
> Strategy
o Identify business segments with sufficient opportunities to
apply expertise
o Only underwrite those risks that are susceptible to
underwriting and actuarial analysis
o Reallocate capital as different businesses become relatively
less attractive
> Culture
o Understand the risk correlations within each segment and
across portfolio to determine required margins
o Identify risks within each segment that meet return thresholds
o Apply technical resources at the front end to evaluate and
select business
> Control
o Focus on target returns, not premiums
o Monitor underwriting decisions on a live basis
o Monitor emergence of results to corroborate assumptions
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Philosophy that is disciplined, consistent
and embraced by underwriting teams
8 [LOGO] Endurance
The Platforms and Business Lines
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Endurance Specialty Endurance Reinsurance Endurance Worldwide
Insurance Ltd. Corporation of America Insurance Limited
(Bermuda) (U.S.) (U.K.)
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Severity Driven Risks Frequency Driven Risks Non-U.S. Risks
o Property-Cat & Per Risk Treaty o Property Reinsurance o Non-North American Property Treaty
o Severity Driven Casualty Treaty o Casualty Reinsurance o European Direct Property
o Excess Casualty -------------------------------- -------------------------------------
o Professional Liability / E&O o Underwriters: 25 o Underwriters: 16
o Healthcare o Actuaries and Cat modelers: 8 o Actuaries and Cat modelers: 3
o Aviation o Total Staff: 90 o Total Staff: 36
o North American Direct Property
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o Underwriters: 62
o Actuaries and Cat modelers: 17
o Total Staff: 119
[THE FOLLOWING TABLES WERE REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIAL.]
Risk Exposure: 2003 GPW = $1,602M Lines of Business: 2003 GPW = $1,602M
Property 50% Reinsurance 75%
Casualty 40% Insurance 25%
Other Specialty 10%
9 [LOGO] Endurance
Underwriting - Summary Results
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($ in thousands) Property Property Casualty Aerospace
Per Risk Property Individual Casualty Individual and Other
Treaty Catastrophe Risk Treaty Risk Specialty Total
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Q1 2004 Underwriting Results
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Gross Written Premiums $206,413 $128,538 $29,534 $187,178 $ 50,091 $118,877 $ 720,631
Net Earned Premiums 118,125 53,373 22,855 106,055 54,675 60,743 415,826
Unearned Prem. Reserves 366,615 120,538 53,929 305,397 99,093 183,530 1,129,102
GAAP Combined Ratio 83.6% 27.0% 48.8% 99.5% 88.8% 100.1% 81.6%
Stat. Combined Ratio 81.5 21.9 47.1 92.3 89.6 95.4 77.8
2003 Underwriting Results
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Gross Written Premiums $469,290 $183,594 $85,863 $390,265 $214,392 $258,593 $1,601,997
Net Earned Premiums 296,551 174,158 65,408 284,843 173,266 179,721 1,173,947
GAAP Combined Ratio 93.9% 38.5% 58.6% 97.5% 89.1% 99.5% 84.7%
Stat. Combined Ratio 91.2 37.7 56.7 95.7 87.8 98.2 83.5
2002 Underwriting Results
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Gross Written Premiums $168,054 $178,120 $62,934 $203,566 $106,903 $ 79,183 $ 798,760
Net Earned Premiums 59,453 114,823 33,907 84,355 44,292 32,659 369,489
GAAP Combined Ratio 102.1% 61.7% 60.8% 106.0% 100.8% 98.8% 86.2%
Stat. Combined Ratio 92.3 59.5 56.3 98.6 92.1 90.3 80.8
10 [LOGO] Endurance
Price Monitoring
Review of Expected Underwriting Ratios by Quarter
Direct - Property
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Underwriting Ratio
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U/W Ratio - U/W Ratio -
Price Monitor Price Monitor
Quarter of Inception [Actual] [Smoothed]
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Q1-02 53% 45%
Q2-02 48% 48%
Q3-02 51% 51%
Q4-02 58% 54%
Q1-03 64% 58%
Q2-03 70% 61%
Q3-03 67% 64%
Q4-03 73% 67%
Q1-04 75% 70%
Review of Expected Underwriting Ratios by Quarter
Direct - Excess Casualty
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Underwriting Ratio
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U/W Ratio - U/W Ratio -
Price Monitor Price Monitor
Quarter of Inception [Actual] [Smoothed]
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Q1-02 79% 88%
Q2-02 100% 84%
Q3-02 75% 81%
Q4-02 103% 78%
Q1-03 47% 75%
Q2-03 77% 72%
Q3-03 59% 69%
Q4-03 86% 66%
Q1-04 41% 63%
11 [LOGO] Endurance
Risk Exposures
SEC Segment & Subs. Distribution
2003 Premiums = $1,602 mm
[THE FOLLOWING TABLE WAS REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIAL.]
Property Per Risk 30%
Property Cat 11%
Casualty Treaty 25%
Property Individual Risk 5%
Casualty Individual Risk 13%
Aero & Other Specialty 16%
Bermuda 48%
U.S. 48%
U.K. 4%
Major Lines & Distribution*
2003 Premiums = $1,602 mm
[THE FOLLOWING TABLE WAS REPRESENTED BY PIE CHARTS IN THE PRINTED MATERIAL.]
Property Risk Per Treaty 30%
Property Cat 11%
Casualty/WC Cat 2%
D&O/E&O 5%
Personal Auto 4%
Other Casualty 13%
Property Individual Risk 5%
Aerospace 9%
XGL 5%
Prof. Lines 2%
HPL 6%
Other 8%
Aon 29%
Marsh 27%
Willis 21%
Other 23%
* Broker distribution chart excludes $400 million of gross premiums acquired
from HartRe.
12 [LOGO] Endurance
Risk Review - Portfolio Expected Risk Curve
Endurance - Underwriting Income Curve
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In-Force Portfolio at January 2004
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
Probability
Expected
Result
U/W Ratio U/W Ratio U/W Ratio U/W Ratio U/W Ratio U/W Ratio $312 M
138.9% 130.5% 120.0% 113.9% 105.9% 95.6% Profit
1-in-500 1-in-250 1-in-100 1-in-50 1-in-25 1-in-10
Year Year Year Year Year Year
$692 M $541 M $364 M $243 M $103 M $75 M
Loss Loss Loss Loss Loss Profit
Underwriting Income - Amounts in Millions of USD
13 [LOGO] Endurance
Financial Review
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14 [LOGO] Endurance
Summary Financial Performance
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($ in thousands)
Year Ended Year Ended % Quarter Ended
Income Statement December 31, 2002 December 31, 2003 Change March 31, 2004
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Gross Written Premiums $ 798,760 $1,601,997 101% $ 720,631
Net Earned Premiums 369,489 1,173,947 218 415,826
Operating income 93,024 247,938 167 98,685
Combined Ratio 86.2% 84.7% 81.6%
Operating ROAE 7.8% 17.3% 5.8%
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Balance Sheet
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Total Investments and Cash $1,663,249 $2,674,232 61% $2,980,915
Reserve for Losses & Loss Exp. 200,840 833,158 315 1,019,318
Reserve for Unearned Premiums 403,305 824,685 105 1,129,102
Total Shareholders' Equity 1,217,500 1,644,815 35 1,763,103
Debt / Total Capitalization 13.6% 5.9% 5.5%
15 [LOGO] Endurance
Increasing Operating Leverage
Annualized Quarterly Operating Leverage (a)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
1Q 2003 0.56x
2Q 2003 0.78x
3Q 2003 0.86x
4Q 2003 0.89x
1Q 2004 0.98x
Quarterly Investment Leverage (b)
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[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
1Q 2003 1.27x
2Q 2003 1.34x
3Q 2003 1.46x
4Q 2003 1.55x
1Q 2004 1.63x
(a) Operating leverage is calculated by dividing quarterly net premiums earned
by quarterly average equity.
(b) Investment leverage is calculated by dividing quarterly average invested
assets by quarterly average equity.
16 [LOGO] Endurance
Achieving Our Targets
2004 ROE Component Build-Up Operating Assumptions
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[BAR CHART OMITTED]
15.5% 17.5% Mid to High Teens Returns
5.5% 5.5% 1.5:1.0 Investment Leverage at 3.70% yield
10.0% 12.0% 1.0:1.0 Operating Leverage
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90.0% 88.0%
Combined Combined
Ratio Ratio
Unlevered Return On Capital
17 [LOGO] Endurance
Capital Management Strategy
> Executed several value enhancing transactions
o $100 million Zurich stock and warrant buyback at $17.50 per
share
o $20 million share repurchase of TIAA-CREF at $27.06 per share
o $65 million share repurchase of Lightyear at $31.78 per share
o $2 million share repurchase authorization
> Significant financial flexibility with $500 million credit facility
> Understand levers of capital optimization
o Currently holding AAA level RBC
o 6% debt to capital versus 15% to 20% target
o All capital utilization measured against returning capital
> Return of capital analysis conducted with two to three year payback
o Analysis favors dividends when stock trades above 1.3x to 1.4x
book
18 [LOGO] Endurance
Significant Acquisition Experience
> Strategy
o Accelerated strategic development in property cat and US
reinsurance
o High degree of selectivity. 250+ acquisition opportunities.
o Heavy upfront due diligence.
o No legacy issues
> Fully integrated within 30 days both people and systems
> Financially attractive
o LaSalle property cat portfolio, 24% accretive to 2002 EPS
o Hart Re portfolio acquisition, 12% accretive to 2003 EPS
> Minimal use of outside advisors
19 [LOGO] Endurance
Conclusion
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20 [LOGO] Endurance
Conclusion
> Exceeded all strategic and financial objectives
> Built strong, technical, underwriting based culture
> Created robust controls, systems, and infrastructure
> Value enhancement through capital management and enhancing
acquisitions
> Committed to generating 15%+ growth in book value throughout the
cycle
> Demonstrated ability to create significant shareholder value with
significant future upside
21 [LOGO] Endurance