Well, this was working out. Like many other reinsurance companies, Endurance Specialty
Simply put, operating earnings were weak. The company reported $0.82 per share in operating earnings, while the Street wanted something closer to $1.35. Though earnings were hurt by above-normal catastrophe (or "cat") losses tied to last year, insurance companies like Endurance are nonetheless responsible for managing and minimizing the risks of such occurrences.
There were some positives, though. Gross premiums rose about 12%, and total written premiums jumped about 23% from last year. Not only is the company taking advantage of very favorable pricing in the property cat market (where gross premiums were up about 49%), but it continues to build out the onshore specialty business as well; its "aerospace and other" line grew about 55%.
Furthermore, the adjusted combined ratio wasn't that bad when you account for negative developments this quarter and positive developments last quarter. Strip those out, and you're looking at 91.5 versus 88.2 -- worse, yes, but not terribly so.
Endurance Specialty still isn't my favorite name in the space, and I'll always suggest that prospective investors at least check out names like Arch Capital
I truly have no idea what this upcoming hurricane season will look like, or whether Endurance (or any other company) has sufficiently rejiggered its risk modeling to avoid the bite of more years like 2005. Investors who are more worried about that question might want to consider a more diversified option like AIG
For more Foolish reassurance:
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).