Endurance’s bid to strengthen its business is well underway and now starting to show some early signs of improvement to both its financial and operating performance, John Charman has claimed.
The chairman and chief executive of the Bermudian insurer and reinsurer made the claim after the company posted its first quarter results, numbers which show a small increase in net profit year on year despite a slight drop in gross premiums written.
Net income for the first three months of 2014 stood at $96.3m, an increase of $4.2m year on year. That was despite a more than $19.4m drop in gross written premium over the 12 months to almost $1.16bn.
“"During the first quarter we generated strong financial results as evidenced by our annualised operating return on equity of 15%,” said Charman.
“The transformation of Endurance began 12 months ago and as we promised, the much improved financial and operating performance is now emerging.”
Insurance makes up the majority of Endurance’s business, with this segment posting $652.3m of gross written premium, a drop of just $667,000 year on year. However, the division’s combined ratio fell by 0.3 percentage points compared with the prior year period and the unit also managed to increase its underwriting income, albeit by only $494,000 over 2013’s first three months.
Gross premiums written by the reinsurance division dropped to $505.2m in the first quarter, down 3.7% year on year. However, its combined ratio decreased by 9.6 percentage points year on year to 71.4%.
“The decrease in gross premiums written within the reinsurance segment during the first quarter of 2014 over the first quarter of 2013 resulted primarily from a continued rebalancing of the portfolio as selected non-renewals and price declines in catastrophe and casualty lines of business were partially offset by growth in property, professional lines and specialty lines of business,” explained Endurance.
“From a strategic perspective we significantly increased our reinsurance purchasing activity across both our Insurance and reinsurance portfolios to optimise the risk/ reward characteristics of our business,” said Charman.
“Whilst we have planned for market conditions on both sides of our balance sheet to remain extremely challenging over the next couple of years, we have deliberately positioned Endurance to outperform in this environment. We remain dedicated to achieving superior returns for our valued shareholders.”
Meanwhile, there are reports that Endurance was considering an increase in its offer for Aspen, which recently rejected out of hand a $47.50 a share bid from Endurance. The reports claimed that Endurance was mulling a bid in the region of $50 a share, with a higher cash component.