Endurance reports $92.1 million in net income available to shareholders at the close of the year’s first quarter—a $17.7 million increase in net income compared to the first quarter of 2012.
The company credits the first-quarter income jump to lower catastrophe losses, international expansion in its reinsurance segment and the addition of a specialty underwriting team, including several new leaders in its global insurance and reinsurance operations hired in 2012.
“Our results benefited from low levels of catastrophe losses, favorable development of our loss reserves, and strong investment markets,” said Endurance CEO David Cash during an earnings call.
The company’s net written premiums were $908.9 million at the quarter’s close, up 7.8 percent from the same time last year. Operating income was $89.8 million this quarter, versus $53.3 million last year.
Endurance’s combined ratio was also favorable at a low 85.0 percent, compared to 96.5 percent at the first quarter of 2012, attributed to favorable prior-year loss reserve development.
The company’s insurance segment saw a 5.4 percent decrease in first-quarter net premiums compared to the same period a year ago due to the cession of agriculture premiums to the U.S. government and third parties as well as a professional-lines program partnership that Endurance exited in 2012.
The insurance segment’s combined ratio was at 99.0 percent at the quarter’s close, an improvement of 2.7 points from 2012’s first quarter. Prior-year loss reserves developed by 11.4 percent so far this year, while last year the reserve increased by only 4.9 percent in the first quarter.
Endurance’s reinsurance segment saw $504.2 million in first-quarter net premiums, a 21.4 percent increase from last year. This was due to growth in its P&C and specialty-lines of business, such as new business in the London, Zurich and U.S. offices and activity in Endurance’s new credit and surety team. However, results were dampened by some unprofitability in its Bermuda-based businesses.
Reinsurance combined ratio was 77.1 percent, an improvement of 16.1 points from last year. This year the reinsurance net loss ratio included less than one point of catastrophe losses compared to a heavy loss season during the first three months last year from a series of Kentucky tornadoes.
Investments decreased to $49.3 million, a decline of $7.8 million compared to the first quarter last year, mostly because of activity in its fixed maturity investments.
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