A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of Endurance Specialty Insurance Ltd. (Endurance) and its affiliates. Concurrently, A.M. Best has affirmed the ICR of “bbb” and debt ratings of the publicly traded parent, Endurance Specialty Holdings, Ltd [NYSE: ENH]. The outlook for all ratings is stable. The above companies are domiciled in Bermuda. (See below for a detailed list of the companies and ratings.)

The ratings reflect Endurance’s strong level of risk-adjusted capitalization, solid historical operating performance over the last few years and its specialty focused, diversified business profile. Over the last few years, Endurance has repositioned its book of business by reducing reinsurance premiums, reducing its exposure to workers’ compensation business and targeting agriculture insurance. A substantial portion of Endurance’s current specialty portfolio is agriculture insurance, which is not linked to the property/casualty pricing cycle. In addition, the ratings reflect the group’s solid enterprise risk management framework that has been continually enhanced in recent years, which should help support the organization’s balanced risk taking and limit outsized losses.

Partially offsetting these positive rating factors is Endurance’s exposure to large severe events and the potential for events in excess of modeled expectations. In addition, Endurance, as well as the market, is challenged with managing this soft stage of the underwriting cycle and uneasy financial markets.

The outlook reflects A.M. Best’s expectation that operating performance and risk-adjusted capitalization will continue to support the ratings at the current level, given Endurance’s business strategy and solid risk management framework.

The FSR of A (Excellent) and ICRs of “a” have been affirmed for Endurance Specialty Insurance Ltd and its following affiliates:
  • Endurance Reinsurance Corporation of America
  • Endurance Worldwide Insurance Limited
  • Endurance American Specialty Insurance Company
  • Endurance American Insurance Company
  • Endurance Risk Solutions Assurance Company
  • American Agri-Business Insurance Company

The following debt ratings have been affirmed:

Endurance Specialty Holdings, Ltd—

-- “bbb” on $335 million 7.0% senior unsecured notes, due 2034

-- “bbb” on $200 million 6.15% senior unsecured notes, due 2015

-- “bb+” on $8 million 7.75% Series A non-cumulative preferred shares

The following indicative shelf ratings have been affirmed for debt securities available under the existing shelf registration:

Endurance Specialty Holdings, Ltd—

-- “bbb” on senior unsecured debt

-- “bbb-”on subordinated debt

-- “bb+” on preferred stock

Endurance Holdings Capital Trust I & II (guaranteed by Endurance Specialty Holdings, Ltd)

-- “bb+” on preferred securities

The principal methodology used in determining these ratings is Best’s Credit Rating Methodology -- Global Life and Non-Life Insurance Edition , which provides a comprehensive explanation of A.M. Best’s rating process and highlights the different rating criteria employed. Additional key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Understanding BCAR for Property/Casualty Insurers”; “Understanding Universal BCAR”; “Natural Catastrophe Stress Test Methodology”; “Rating Members of Insurance Groups”; and “A.M. Best’s Ratings & the Treatment of Debt.” Methodologies can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2011 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Copyright Business Wire 2010

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