Bermuda-based reinsurer Endurance Specialty Holdings Ltd.'s enhanced its underwriting and risk management controls and should benefit from hardening reinsurance rates, according to rating agency AM Best.

Best affirmed all the ratings of Endurance and its subsidiaries, including its financial strength rating of A (excellent), with a stable outlook.

Endurance achieved a combined ratio — the percentage of premium dollars spent on claims and expenses — of 93.5 percent for 2008, despite dealing with claims from hurricanes Gustav and Ike.

The company's net losses from the two storms totalled $145 million, reflecting "a marked improvement" in underwriting controls since "outsized losses" from the devastating hurricane season of 2005, Best said.

The rating agency cited the elimination of business due to excessive correlations, exiting from marine and energy lines and reducing risk tolerances for wind and earthquake exposures.

Best expects that Endurance's operating performance should benefit from hardening reinsurance pricing and "comparatively less volatile investment returns due to Endurance's conservative investment posture".