Endurance Specialty Holdings last night posted second quarter 2006 income that was off 41 percent from the previous year as a result of recent claims activity from last year?s record hurricane season.

Second quarter 2006 income was $64.1 million and 85 cents per share compared with income of $110 million and $1.67 per share in the year ago quarter.

Operating income was $62.2 million, or 82 cents a share.

Endurance was expected to make $1.35 a share, according to the average estimate of 11 analysts in a Thomson First Call survey.

The company?s combined ratio of 96.8 percent in the second quarter of 2006 was impacted by $21.6 million in unfavourable prior year loss reserve development due to greater than expected reported losses from Hurricanes Katrina, Rita and Wilma as well as increases to incurred but not reported loss reserves, which resulted in an $84 million increase to Endurance?s estimated ultimate loss from the 2005 Hurricanes.

The changes impacted Endurance?s Property Catastrophe Reinsurance, Property Per Risk Treaty Reinsurance and Aerospace and Other Specialty Lines segments. Endurance?s Property Individual Risk segment also incurred a loss of approximately $19 million from a large industrial fire during the quarter.

Kenneth J. LeStrange, Chairman and Chief Executive Officer, said that despite the negative impact of the recent claims activity in connection with Hurricanes Katrina, Rita and Wilma, the company?s underlying businesses remain strong.

?Endurance saw significant improvements in the U.S. property catastrophe insurance and reinsurance markets this quarter, and we expect to see the benefits from these market improvements through the remainder of this year,? he said.

Endurance shares closed yesterday at $34.32, up 46 cents or 1.36 percent on a volume of 286,900 shares on the New York Stock Exchange.

:

- Net Income: $64.1 million, a 41 percent decline from $110 million during the second quarter 2005

- Net income broken down per share: 85 cents per share compared to $1.67 per share a year ago

- Gross premiums written: $451.3 million, a 12 percent improvement from $403.2 million in the same period a year ago

- Net premiums written: $408.7 million, a 4 percent improvement from $394.6 million in the same period a year ago

- Net investment income: $59.2 million, a 51 percent increase from $39.1 million a year ago

- Combined ratio: 91.5 percent compared to 88.2 percent during the same period a year ago

- Shareholders? equity increased to $1.94 billion at June 30, 2006 compared to $1.87 billion at December 31, 2005