ENDURANCE Q4

REPORT CARD

Net income: $16.9 million compared to $152.5 million in 2007.

Combined ratio: 83.5 percent compared to 74.7 percent in 2007.

Gross premiums written: $235.6 million compared to $277.8 million in 2007.

Endurance Specialty Holdings Ltd. last night reported full-year net income of nearly $100 million for 2008, despite the dual impact of catastrophe losses and reduced investment income.

For the fourth quarter the Bermuda insurer and reinsurer made net income of $16.9 million, or 22 cents per share, compared to $152.5 million, or $2.18 per share, in the same period in 2007.

Full-year net income was $98.6 million, or $1.32 per share, versus $521.1 million, or $7.17 per share for 2007.

Endurance chairman and chief executive officer Kenneth LeStrange said: "The past year was a challenging one as catastrophe losses exceeded $20 billion for the insurance industry and global financial market turmoil created significant losses across all investment classes.

"Despite these challenges, Endurance performed well on an absolute and relative basis. Our prudent underwriting, investment and capital management strategies have allowed us to preserve our strong balance sheet and excellent liquidity, positioning us well to meet the needs of our clients and take advantage of market opportunities that emerge in 2009."

Gross premiums written (GPW) fell 15 percent for the quarter to $235.6 million compared to the same three months in 2007, as the company opted not to renew some business that did not meet its underwriting requirements.

For the year, GPW rose 26 percent for the year to $2.25 billion, driven by the addition of agricultural premiums written by ARMtech Insurance Services, which Endurance acquired at the end of 2007.

Underwriting profitability was maintained, as the company achieved a combined ratio — the percentage of premium dollars spent on claims and expenses — of 83.5 percent for the quarter, which included 9.5 percentage points of favourable prior-year loss development.

Full-year results included $148 million in claims from hurricanes Gustav and Ike. The company said it was also impacted by a higher frequency of severe weather events, worse than expected crop growing conditions and losses due to declines in agricultural commodity prices.

Endurance made a net investment loss of $4.6 million for the quarter, a decrease of nearly $70 million from the same period a year earlier. The quarter's loss was driven by mark-to-market losses of $62.2 million on alternative investments.

Shareholders' equity was $33.06 per share at the end of 2008, down 5.7 percent compared to a year earlier.