EX-99.1 2 file2.htm SLIDES FROM PRESENTATION BY MANAGEMENT

Endurance Specialty Holdings Ltd.

Wachovia Nantucket Investor Conference
June 27, 2007

Ken LeStrange
Chairman, President and Chief Executive Officer

Forward Looking Statements

Statements contained in this presentation that are not based on
current or historical fact are forward-looking in nature.  Such
forward-looking statements are based on current plans, estimates
and expectations and are made pursuant to the Private Securities
Litigation Reform Act of 1995.  Forward-looking statements are
based on known and unknown risks, assumptions, uncertainties and
other factors.  The Company’s actual results, performance, or
achievements may differ materially from any future results,
performance, or achievements expressed or implied by such
forward-looking statements.  The Company undertakes no obligation
to publicly update or revise any forward-looking statement.

Philosophy & Strategy

Endurance was built in the aftermath of 9/11 to be an underwriter of
volatile specialty risks – key to our business are the following principles:

Focus on business segments that
reward our specialized knowledge
and relationships

Supported by
investments in enabling
technology and
disciplined, technical
underwriting approach

Portfolio managed with key risk
management concepts –
diversification, value at risk and
data quality

Portfolio
Management

Technology and
Discipline

Specialization

Capital Management

Seasoned Management Team

Years of

Endurance

Experience

Executive Vice President, Endurance Specialty Holdings Ltd.

Tom Bell

Chief Investment Officer

Mark Silverstein

General Counsel

John Del Col

President, Endurance Services Limited

John O’Connor

President and Chief Executive Officer, global insurance operations

Michael Fujii

President and Chief Executive Officer, global reinsurance operations

William Jewett

Chief Operating Officer

Daniel Izard

Chief Actuary and Chief Risk Officer

Michael Angelina

Chief Underwriting Officer

David Cash

Chief Financial Officer

Michael McGuire

Chairman, President & Chief Executive Officer

Kenneth LeStrange

Years of

Industry
Experience

Position

Name

Executive Team has proven its ability to execute challenging strategies

Built a culture focused on risk and capital management

Maintain a Diversified Book of Business

Total Written Premiums of $1.85 Billion*

Insurance

35%

Reinsurance

65%

By Segment

* Includes deposit premiums, based on the twelve months ended March 31, 2007

By Line of Business

Property - Insurance

Property - Reinsurance

Casualty -
Reinsurance

Casualty - Insurance

Healthcare Liability

Workers’ Compensation

Professional Lines

Catastrophe

Agriculture

Marine

Aerospace

Surety and Other Specialty

Reinsurance - Expanding Product Offering

Reinsurance Total Written
Premiums of $1.2 billion*

By Line of Business

Catastrophe

Property

Casualty

Agriculture

Marine

Aerospace

Surety and
Other Specialty

Industry leading tools and
technology

Leader in Bermuda

Covers all perils

Highly specialized relationships

Auto liability, D&O, workers comp
and clash

Non-renewed large proportional
contracts in 1Q07

Multiple peril crop insurance

Industry leading tools and
technology

Covers brown and blue water hull

Provides aviation and space
coverages

Other unique opportunities
including growing surety business

* Includes deposit premiums, based on the twelve months ended March 31, 2007

Catastrophe

25.7%

Property

19.2%

Agriculture

12.4%

Casualty

25.3%

Marine

6.5%

Aerospace

5.0%

Surety and
other specialty

5.8%

Insurance - Our Fastest Growing Segment

Insurance Total Written
Premiums of $644 million*

By Line of Business

Casualty

Professional
Lines

Healthcare
Liability

Property

Workers’
Compensation

Large account excess
liability written in Bermuda

Small account casualty
written in US

Includes E&O and D&O
products

Financial institutions
specialists

Leader in Bermuda

Hospital professional
liability

Strong relationships

Leader in Bermuda market

Written out of US and UK

Growing US specialty
business

Opportunistic strategy

Converted from
reinsurance in 2006

Casualty

20.8%

Professional
Lines

12.1%

Healthcare
Liability

16.3%

Property

26.7%

Workers’
Compensation

24.1%

* Based on the twelve months ended March 31, 2007

Strong Risk Management Focus -
Portfolio Expected Risk Curve (January 1, 2007)

Stated tolerance is to limit
our loss in a 1-in-100 year
to 25% of our capital or
less, our current level is
12.1% of capital

Median Result
$381 Mil Gain

The above chart represents a cumulative analysis of our in-force underwriting portfolio on a full year basis based on thousands of potential
scenarios.  Loss years are driven largely by the occurrence of natural catastrophes and incorrect pricing of other property and casualty exposures.
The operating income depicted includes net premiums earned plus net investment income, acquisition expenses and G&A expenses.  Forecasted
investment income, acquisition and G&A expenses are held constant across all scenarios.  Losses included above are net of reinsurance including
collateralized reinsurance and ILW purchases.  Our stated objective is to maintain a risk management tolerance that limits our loss in a 1-in-100 year
year to be no more than 25% of our equity capital.  We base our budget and forecasts on the average result, although the nature of the curve places
the median result further to the right.

Changes in Endurance’s underwriting portfolio, investment portfolio, risk control mechanisms, market conditions and other factors may
cause actual results to vary considerably from those indicated by our value at risk curve. For a listing of risks related to Endurance
and its future performance, please see “Risk Factors” in our Annual Report on Form 10K for the year ended December 31, 2006.

Endurance Operating Income Profile

as of January 1, 2007

-1,000

-750

-500

-250

250

500

750

Operating Income - $ Millions

Year

$500 Mil Loss

1-in-250

$396 Mil Loss

1-in-100

$287 Mil Loss

1-in-50

$172 Mil Loss

1-in-25

$66 Mil Loss

1-in-10

$91 Mil Gain

Average

$341 Mil Gain

Year

Result

1-in-500

Impact of 2006 Risk Management Initiatives

Annual Aggregate Risk Curve Comparison

July 1, 2006 to

January 1, 2007 to

(in millions)

June 30, 2007

December 31, 2007

Change

Median Result

$400

$381

($19)

(5.0%)

Average Result

342

341

(1)

(0.3%)

1 in 10 year annual gain

29.7%

1 in 25 year annual loss

(182)

(66)

116

(175.8%)

1 in 50 year annual loss

(334)

(172)

162

(94.2%)

1 in 100 year annual loss

(486)

(287)

199

(69.3%)

1 in 250 year annual loss

(707)

(396)

311

(78.5%)

1 in 500 year annual loss

(904)

(500)

404

(80.8%)

Changes in Endurance’s underwriting portfolio, investment portfolio, risk control mechanisms, market conditions and other factors may cause actual results
to vary considerably from those indicated by our value at risk curve. For a listing of risks related to Endurance and its future performance, please see
“Risk Factors” in our Annual Report on Form 10K for the year ended December 31, 2006.

Portfolio Changes – Property Catastrophe LOB

77,000,000

57,000,000

32,000,000

18,000,000

Florida

1,359,000,000

1,380,000,000

1,434,000,000

1,721,000,000

Total

US Property Catastrophe Portfolio*

158,000,000

36,000,000

104,000,000

173,000,000

642,000,000

906,000,000

2004

140,000,000

33,000,000

75,000,000

220,000,000

551,000,000

663,000,000

2005

42,000,000

54,000,000

National

46,000,000

44,000,000

Regional [ex Florida]

165,000,000

155,000,000

Total

Written Premiums

339,000,000

310,000,000

Florida

710,000,000

692,000,000

Regional [ex Florida]

310,000,000

378,000,000

National

Wind Exposed Limits

2007

2006

Risk

Measure

Portfolio shifted away from higher attaching complex
national account style risks towards lower attaching
smaller regional risks.

Reduced exposure to extreme
tail events, Increased
exposure to smaller events.

* Endurance is exposed to natural catastrophe perils in other portions of its business and the above
amounts do not represent Endurance’s full portfolio at risk to hurricane losses. Endurance’s actual results
may vary considerably from those indicated above. For a listing of risks related to Endurance and its
future performance, please see “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2006.

Catastrophe Risk – 2004 and 2005 “Then and Now”

300,000,000

70,000,000

30,000,000

200,000,000

2007

Portfolio*

966,000,000

107,000,000

162,000,000

61,000,000

304,000,000

332,000,000

Actual

Losses

2005 Hurricanes

2004 Hurricanes

2,000,000

Energy

14,000,000

Fortune 1000 All Risk

75,000,000

Middle Market DIC

500,000,000

204,000,000

Total

Insurance

8,000,000

Marine

75,000,000

111,000,000

Property

350,000,000

69,000,000

Catastrophe

Reinsurance

2007

Portfolio*

Actual

Losses

Business

Unit

The result of the portfolio shift is to reduce the company’s exposure to extreme tail events while
increasing the company’s exposure to smaller personal lines events such as the 2004 hurricanes.

*These columns represent estimates of expected losses with our current portfolio were the 2004 and 2005
hurricane seasons to be experienced in 2007. There are numerous factors that could impact this estimate
and cause Endurance’s actual results to be significantly different from the results listed above. For a listing of
risks related to Endurance and its future performance, please see “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2006.

Diversification Has Led to Stable Premium Growth

$798.8

$1,602.0

$1,711.4

$1,812.2

$1,948.6

$576.5

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2002

2003

2004

2005

2006

1Q07

Gross Written Premiums*

Net Earned Premiums*

(in millions)

$369.5

$1,173.9

$1,632.6

$1,818.9

$401.7

$1,803.4

$500

$1,000

$1,500

$2,000

2002

2003

2004

2005

2006

1Q07

(in millions)

* Includes deposit premiums

Overall Underwriting Has Been Strong

90.3%

93.7%

94.1%

95.8%

162.4%

67.4%

63.9%

71.0%

84.3%

79.9%

74.4%

73.0%

25%

50%

75%

100%

125%

150%

175%

Inception to Date Underwriting Ratio*

* Underwriting ratio is defined as losses and acquisition expenses
divided by earned premium, as of 3/31/07.

Inception to Date Underwriting
Ratio is 85.1%*

Strong Financial Performance

$102.1

$263.4

$355.6

($220.5)

$498.1

$101.8

86.7%

84.7%

85.8%

81.5%

123.5%

86.2%

-$300

-$200

-$100

$100

$200

$300

$400

$500

$600

2002

2003

2004

2005

2006

1Q07

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

Net Income

Combined Ratio

Net Income and Combined Ratio

(in millions)

7.8%

17.3%

19.9%

-11.9%

25.7%

19.0%

-15%

-10%

-5%

10%

15%

20%

25%

30%

2002

2003

2004

2005

2006

1Q07

Annualized Operating
Return on Average Equity

Inception to 12/31/06 combined ratio of 94.4%

Inception to 12/31/06 ROE of 12%

Efficient Capital Management

$1,115

$1,300

$1,213

$1,309

$1,318

$1,306

$102

$345

$650

$364

$780

$861

$200

$192

$103

$391

$447

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2002

2003

2004

2005

2006

1Q07

Common Share Capital

Retained Earnings

Preferred Equity

Debt

Strong and Flexible
Capital Structure

$, Millions

$1,409

$1,748

$2,254

$2,320

$2,745

$100

$20

$92

$52

$10

$30

$21

$50

$62

$66

$17

$20

$40

$60

$80

$100

$120

$140

$160

2002

2003

2004

2005

2006

1Q07

Repurchases

Dividends

$, Millions

$520 Million of
Capital Returned
to Shareholders

$100

$41

$142

$113

$76

$47

$2,814

Sensitivity of ROE

* The Return on Equity Sensitivity Analysis is purely illustrative and should not be construed

as guidance for future performance. Changes in Endurance’s underwriting portfolio, investment portfolio, risk
control mechanisms, market conditions and other factors may cause our actual results to vary considerably from
those indicated above. For a listing of risks related to Endurance, please see “Risk Factors” in our Annual Report
on Form 10-K for the year ended December 31, 2006.

Operating Assumptions

2.8:1.0 Investment Leverage at
4.75% yield

0.85:1.0 Operating Leverage

Interest expense and preferred
dividends of 2.2% of common
equity

ROE = 11.1%

ROE = 19.6%

ROE = 23.9%

ROE = 17.5%

ROE from Underwriting Activity

ROE from Investing Activity

Financing Costs

Return On Equity Sensitivity Analysis*

2.2%

13.3%

6.4%

8.5%

12.8%

13.3%

100%

Combined

Ratio

92.5%

Combined

Ratio

90%

Combined

Ratio

85%

Combined

Ratio

Conclusion

Disciplined technical underwriting culture with focus on
underwriting margin and risk adjusted returns

Well positioned with strong management team, diversified
portfolio, and excellent financial strength

Committed to generate 15%+ ROE through cycles with
demonstrated ability to generate shareholder value