ENDURANCE REPORTS THIRD QUARTER NET INCOME OF $131.4 MILLION AND ANNUALIZED RETURN ON AVERAGE COMMON EQUITY OF 22.6%

PEMBROKE, Bermuda – October 31, 2007 – Endurance Specialty Holdings Ltd. (NYSE:ENH) today reported net income of $131.4 million and $1.81 per diluted common share for the third quarter of 2007 versus net income of $128.2 million and $1.74 per diluted common share in the third quarter of 2006.

For the nine months ended September 30, 2007, net income was $368.6 million and $5.02 per diluted common share versus net income of $299.3 million and $4.03 per diluted common share for the nine months ended September 30, 2006.

Operating highlights for the nine months ended September 30, 2007 were as follows:

Kenneth J. LeStrange, Chairman and Chief Executive Officer, commented ‘‘I am very pleased with the strong financial results that Endurance achieved during the third quarter. Although increased levels of competition appear likely as we move forward into the end of 2007 and 2008, I am confident that our specialty focus, our disciplined underwriting approach and our agile response to market opportunities will serve us well in the face of fluctuating market conditions. During the third quarter, we announced several strategic initiatives, including our pending acquisition of ARMtech Insurance Services Inc., a specialty writer of U.S. federally sponsored crop insurance, the addition of specialty insurance and reinsurance underwriting teams and a variable forward equity transaction. We believe these initiatives will enhance Endurance’s specialty underwriting capabilities and financial flexibility in 2008 and beyond.’’

The 12.2% decrease in total premiums written in the third quarter and the 7.5% decrease in total premiums written in the nine months ended September 30, 2007 over the same periods in 2006 resulted primarily from declines in the Reinsurance business segment partially offset by continued growth in the Insurance business segment. Net premiums earned for the three and nine months ended September 30, 2007 decreased by $8.2 million and $40.5 million or 2.0% and 3.3%, respectively, from the same periods in 2006 principally due to declines in gross premiums written as compared to the same periods in 2006.

The Company’s operating results for the quarter and nine months ended September 30, 2007 were positively impacted by $37.5 million and $121.0 million of favorable prior year loss reserve development compared to favorable prior year loss reserve development for the quarter and nine months ended September 30, 2006 of $10.0 million and $31.0 million, respectively. Partially offsetting the impact of the current period’s favorable prior year loss reserve development were losses during the three months ended September 30, 2007 related to the European floods and, for the nine months ended September 30, 2007, losses related to Windstorm Kyrill and the Australian and European floods.

Gross premiums written in Endurance’s Insurance business segment for the three and nine months ended September 30, 2007 were $180.0 million and $525.0 million, respectively, compared to $156.8 million and $396.2 million in the same periods in 2006. Premium growth for the Insurance business segment was largely driven by the continued expansion of the Company’s workers’ compensation line of business, yielding $45.4 million and $157.7 million of additional gross premiums written for the Insurance business segment in the three and nine months ended September 30, 2007 compared to the same periods in 2006. The Company’s growth in the Insurance business segment was partially offset by declines in premiums in the Company’s healthcare liability and property lines of business of $27.0 million and $45.6 million for the three and nine months ended September 30, 2007 compared to the same periods in 2006. The lower premiums in the healthcare liability and property lines resulted from the Company non-renewing business due to insufficient pricing and shifting its participations to higher insurance layers which carry less risk and produce lower associated premiums.

Endurance’s Insurance business segment combined ratios were 85.1% and 84.7% in the third quarter and nine months ended September 30, 2007 versus combined ratios of 88.2% and 83.9% for the three and nine months ended September 30, 2006. The improvement in the combined ratio in the third quarter was driven by a lower net loss ratio, compared to the same period in 2006, while the combined ratio for the nine months ended September 30, 2007 was relatively consistent with 2006. The lower net loss ratio in the current quarter resulted primarily from favorable prior year loss reserve development of $25.1 million or 19.2 percentage points for the quarter, compared to favorable prior year loss reserve development of $5.9 million or 6.6 percentage points for the same quarter a year ago. The prior year loss reserve development for the three months ended September 30, 2007 was due to favorable claims emergence in both short and long tail lines of business. Partially offsetting the favorable prior year loss reserve development was a large European fire loss during the third quarter of 2007, which added 9.4 percentage points to the net loss ratio.

The decrease in the net loss ratio was partially offset by growth in acquisition and general and administrative expense ratios in the Insurance business segment for the three months ended September 30,2007, compared to the same period in 2006, due to a change in the mix of business, higher direct expense accruals and an increase in allocated corporate expenses.

Total premiums written, which include deposit premiums, in Endurance’s Reinsurance business segment for the three and nine months ended September 30, 2007 were $243.8 million and $1,002.1 million. Total premiums written in the Reinsurance business segment for the three and nine months ended September 30, 2007 decreased 25.2% and 20.1% from the $326.1 million and $1,254.6 million of premiums written in the same periods in 2006. Declines in total premiums written for the casualty, property, marine and surety and other specialty lines of the Reinsurance business segment were primarily driven by non-renewals due to pricing, terms and conditions that no longer met the Company’s underwriting requirements. Additional declines in the casualty and agriculture lines of the Reinsurance business segment resulted from the absence of positive premium adjustments in the current quarter compared to the same period in 2006.

The decline in total premiums written in the Reinsurance business segment for the nine months ended September 30, 2007 compared to the same period in 2006 was primarily due to the non-renewal of certain international property and casualty accounts that no longer met the Company’s underwriting standards, as well as from the absence of positive premium adjustments and policy extension premiums associated with workers’ compensation business, the majority of which, beginning in the second quarter of 2006, is written as direct insurance and therefore recorded in the Insurance business segment. In addition, the Company exited the offshore energy business and non-renewed certain aviation exposures during the nine months ended September 30, 2007. The declines in premiums written in the Reinsurance business segment were partially offset by continued growth in new and renewal business in the Company’s agriculture and catastrophe lines of the Reinsurance business segment during the nine months ended September 30, 2007.

For the three and nine months ended September 30, 2007, the Reinsurance business segment’s combined ratio was 76.7% and 82.4% versus 78.2% and 89.3% during the same periods of 2006, an improvement of 1.5 and 6.9 percentage points, respectively. The combined ratio for the current periods benefited primarily from favorable loss emergence in several lines of business as well as overall low levels of catastrophe losses outside of Europe and Australia. The Reinsurance business segment recorded $8.1 million and $39.6 million of favorable prior year loss reserve development for the three and nine months ended September 30, 2007 compared to $7.4 million of favorable prior period loss reserve development and $17.2 million of unfavorable prior year loss reserve development for the same periods in 2006. Prior year favorable loss reserve development for the current periods was principally related to lower than expected claims emergence in the Reinsurance business segment, primarily from short tail lines.

Endurance’s net investment income decreased 1.5% in the third quarter of 2007 and increased 16.5% for the nine months ended September 30, 2007 as compared to the same periods in 2006. The decrease in the quarter resulted primarily from lower performance of the Company’s alternative investments driven by increased market volatility. The increase for the nine months ended September 30, 2007 resulted from a combination of higher portfolio yields, growth in the Company’s invested assets and strong alternative investment performance during the nine month period. Endurance ended the third quarter with cash and invested assets of $5.7 billion, an increase of 4.2% from December 31, 2006. Net operating cash flow was $437.0 million for the nine months ended September 30, 2007 versus $539.9 million for the same period in 2006.

At September 30, 2007, Endurance’s GAAP shareholders’ equity was $2.5 billion or $32.81 per diluted common share versus $2.3 billion or $28.87 per diluted common share at December 31, 2006.

For the nine months ended September 30, 2007, Endurance repurchased 3.1 million of its common shares in private and open market transactions for an aggregate repurchase price of $112.4 million.

Endurance will host a conference call on November 1, 2007 at 8:30 a.m. Eastern time to discuss its financial results. The conference call can be accessed via telephone by dialing (800) 819-9193 or (913) 981-4911 (international). Those who intend to participate in the conference call should register at least ten minutes in advance to ensure access to the call. A telephone replay of the conference call will be available through November 15, 2007 by dialing (888) 203-1112 or (719) 457-0820 (international) and entering the pass code: 3374283.

The public may access a live broadcast of the conference call at the ‘‘Investors’’ section of Endurance’s website, www.endurance.bm.

A copy of Endurance’s financial supplement for the third quarter of 2007 will be available on Endurance’s website at www.endurance.bm shortly after the release of earnings.

Operating income, operating return on average common equity, operating income per dilutive common share and total premiums written are non-GAAP measures. Reconciliations of these measures to the appropriate GAAP measures are included in the attached tables.

Endurance Specialty Holdings Ltd. is a global provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance writes property, casualty, healthcare liability, workers’ compensation and professional lines of insurance and property, catastrophe, casualty, agriculture, marine, aerospace, and surety and other specialty lines of reinsurance. Endurance’s operating subsidiaries have been assigned a group rating of A (stable outlook) from Standard & Poor’s, A− (positive outlook) (Excellent) from A.M. Best and A2 by Moody’s. Endurance’s headquarters are located at Wellesley House, 90 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information about Endurance, please visit http://www.endurance.bm.

Some of the statements in this press release may include forward-looking statements which reflect our current views with respect to future events and financial performance. Such statements may include forward-looking statements both with respect to us in general and the insurance and reinsurance sectors specifically, both as to underwriting and investment matters. Statements which include the words ‘‘expect,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘believe,’’ ‘‘project,’’ ‘‘anticipate,’’ ‘‘seek,’’ ‘‘will,’’ and similar statements of a future or forward-looking nature identify forward-looking statements in this press release for purposes of the U.S. federal securities laws or otherwise. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or may be important factors that could cause actual results to differ from those indicated in the forward-looking statements. These factors include, but are not limited to, competition, possible terrorism or the outbreak of war, the frequency or severity of unpredictable catastrophic events, changes in demand for insurance or reinsurance, rating agency actions, uncertainties in our reserving process, a change in our tax status, acceptance of our products, the availability of reinsurance or retrocessional coverage, retention of key personnel, political conditions, the impact of current regulatory investigations, changes in accounting policies, changes in general economic conditions and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2006.

Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation publicly to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

CONSOLIDATED BALANCE SHEETS
(in thousands of United States dollars, except share and per share amounts)


	September 30, 2007			December 31, 2006
Assets
Cash and cash equivalents		$	600,042		$	547,772
Fixed maturity investments available for sale, at fair value			4,803,808			4,714,204
Other investments			343,926			253,068
Premiums receivable, net			768,162			660,570
Deferred acquisition costs			212,000			168,809
Securities lending collateral			195,727			226,762
Prepaid reinsurance premiums			92,466			105,058
Losses recoverable			96,008			44,244
Accrued investment income			36,075			40,692
Intangible assets			69,388			70,366
Deferred tax assets			46,926			54,019
Receivable on pending investment sales, net			53,061			—
Other assets			50,852			39,990
Total Assets		$	7,368,441		$	6,925,554
Liabilities
Reserve for losses and loss expenses		$	2,841,810		$	2,701,686
Reserve for unearned premiums			999,046			843,202
Net deposit liabilities			130,272			161,024
Securities lending payable			195,727			226,762
Reinsurance balances payable			153,815			172,328
Debt			447,235			447,172
Other liabilities			74,915			75,506
Total Liabilities			4,842,820			4,627,680
Shareholders’ Equity
Preferred shares
Series A, non-cumulative – 8,000,000 issued and outstanding (2006 – 8,000,000)			8,000			8,000
Common shares
64,080,540 issued and outstanding (2006 – 66,480,381)			64,081			66,480
Additional paid-in capital			1,355,468			1,458,063
Accumulated other comprehensive income (loss)			10,652			(14,465	)
Retained earnings			1,087,420			779,796
Total Shareholders’ Equity			2,525,621			2,297,874
Total Liabilities and Shareholders’ Equity		$	7,368,441		$	6,925,554
Book Value per Common Share
Dilutive common shares outstanding			70,890,537			72,654,109
Diluted book value per common share^[a]		$	32.81		$	28.87

CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of United States dollars, except share and per share amounts)


	Quarter Ended								For the Nine Months Ended
	September 30, 2007				September 30, 2006				September 30, 2007				September 30, 2006
Revenues
Gross premiums written		$	423,271			$	476,213			$	1,503,365			$	1,498,847
Net premiums written			377,616				385,422				1,359,507				1,337,109
Change in unearned premiums			22,126				22,553				(165,169	)			(102,250	)
Net premiums earned			399,742				407,975				1,194,338				1,234,859
Other underwriting income (loss)			1,697				(1,837	)			(7,442	)			(328	)
Net investment income			62,605				63,581				215,966				185,416
Net realized losses on investments			(3,055	)			(6,375	)			(14,177	)			(18,434	)
Total revenues			460,989				463,344				1,388,685				1,401,513
Expenses
Losses and loss expenses			186,456				188,033				604,229				696,210
Acquisition expenses			76,604				81,857				218,075				236,302
General and administrative expenses			55,121				48,535				152,614				138,494
Amortization of intangibles			1,127				1,158				3,381				3,474
Net foreign exchange losses (gains)			700				3,633				1,241				(11,250	)
Interest expense			7,533				7,528				22,593				22,513
Total expenses			327,541				330,744				1,002,133				1,085,743
Income before income taxes			133,448				132,600				386,552				315,770
Income tax expense			2,047				4,370				17,975				16,454
Net income			131,401				128,230				368,577				299,316
Preferred dividends			3,875				3,875				11,625				11,625
Net income available to common shareholders		$	127,526			$	124,355			$	356,952			$	287,691
Per share data
Weighted average number of common and common equivalent shares outstanding:
Basic			64,468,309				66,338,596				65,529,530				66,393,406
Diluted			70,430,986				71,487,103				71,126,078				71,427,613
Basic earnings per common share		$	1.98			$	1.87			$	5.45			$	4.33
Diluted earnings per common share		$	1.81			$	1.74			$	5.02			$	4.03


	For the quarter ended September 30, 2007
	Insurance				Reinsurance				Total Company Subtotal				Deposit Accounting⁽¹⁾				Reported Totals
Revenues
Gross premiums written		$	180,046			$	243,787			$	423,833			$	(562	)		$	423,271
Ceded premiums written			(42,642	)			(3,013	)			(45,655	)			—				(45,655	)
Net premiums written			137,404				240,774				378,178				(562	)			377,616
Net premiums earned			130,640				275,776				406,416				(6,674	)			399,742
Other underwriting income			—				—				—				1,697				1,697
Total underwriting revenues			130,640				275,776				406,416				(4,977	)			401,439
Expenses
Net losses and loss expenses			69,709				119,798				189,507				(3,051	)			186,456
Acquisition expenses			19,489				58,531				78,020				(1,416	)			76,604
General and administrative expenses			21,988				33,133				55,121				—				55,121
			111,186				211,462				322,648				(4,467	)			318,181
Underwriting income		$	19,454			$	64,314			$	83,768			$	(510	)		$	83,258
Net loss ratio	53.4%				43.5%				46.6%				45.7%				46.6%
Acquisition expense ratio	14.9%				21.2%				19.2%				21.2%				19.2%
General and administrative expense ratio	16.8%				12.0%				13.6%				—				13.8%
Combined ratio	85.1%				76.7%				79.4%				66.9%				79.6%


	For the quarter ended September 30, 2006
	Insurance				Reinsurance				Total Company Subtotal				Deposit Accounting ⁽¹⁾				Reported Totals
Revenues
Gross premiums written		$	156,781			$	326,061			$	482,842			$	(6,629	)		$	476,213
Ceded premiums written			(58,453	)			(32,338	)			(90,791	)			—				(90,791	)
Net premiums written			98,328				293,723				392,051				(6,629	)			385,422
Net premiums earned			90,062				353,868				443,930				(35,955	)			407,975
Other underwriting loss			—				—				—				(1,837	)			(1,837	)
Total underwriting revenues			90,062				353,868				443,930				(37,792	)			406,138
Expenses
Net losses and loss expenses			57,165				158,804				215,969				(27,936	)			188,033
Acquisition expenses			8,492				83,244				91,736				(9,879	)			81,857
General and administrative expenses			13,760				34,775				48,535				—				48,535
			79,417				276,823				356,240				(37,815	)			318,425
Underwriting income		$	10,645			$	77,045			$	87,690			$	23				87,713
Net loss ratio	63.5%				44.9%				48.6%				77.7%				46.1%
Acquisition expense ratio	9.4%				23.5%				20.7%				27.5%				20.1%
General and administrative expense ratio	15.3%				9.8%				10.9%				—				11.9%
Combined ratio	88.2%				78.2%				80.2%				105.2%				78.1%


	For the nine months ended September 30, 2007
	Insurance				Reinsurance				Total Company Subtotal				Deposit Accounting⁽¹⁾				Reported Totals
Revenues
Gross premiums written		$	525,046			$	1,002,075			$	1,527,121			$	(23,756	)		$	1,503,365
Ceded premiums written			(127,552	)			(16,306	)			(143,858	)			—				(143,858	)
Net premiums written			397,494				985,769				1,383,263				(23,756	)			1,359,507
Net premiums earned			365,021				891,489				1,256,510				(62,172	)			1,194,338
Other underwriting loss			—				—				—				(7,442	)			(7,442	)
Total underwriting revenues			365,021				891,489				1,256,510				(69,614	)			1,186,896
Expenses
Net losses and loss expenses			196,660				460,670				657,330				(53,101	)			604,229
Acquisition expenses			49,844				184,503				234,347				(16,272	)			218,075
General and administrative expenses			62,796				89,818				152,614				—				152,614
			309,300				734,991				1,044,291				(69,373	)			974,918
Underwriting income		$	55,721			$	156,498			$	212,219			$	(241	)		$	211,978
Net loss ratio	53.9%				51.7%				52.3%				85.4%				50.6%
Acquisition expense ratio	13.6%				20.7%				18.7%				26.2%				18.2%
General and administrative expense ratio	17.2%				10.0%				12.1%				—				12.8%
Combined ratio	84.7%				82.4%				83.1%				111.6%				81.6%


	For the nine months ended September 30, 2006
	Insurance				Reinsurance				Total Company Subtotal				Deposit Accounting⁽¹⁾				Reported Totals
Revenues
Gross premiums written		$	396,161			$	1,254,576			$	1,650,737			$	(151,890	)		$	1,498,847
Ceded premiums written			(117,960	)			(43,778	)			(161,738	)			—				(161,738	)
Net premiums written			278,201				1,210,798				1,488,999				(151,890	)			1,337,109
Net premiums earned			268,841				1,108,901				1,377,742				(142,883	)			1,234,859
Other underwriting loss			—				—				—				(328	)			(328	)
Total underwriting revenues			268,841				1,108,901				1,377,742				(143,211	)			1,234,531
Expenses
Net losses and loss expenses			168,940				627,479				796,419				(100,209	)			696,210
Acquisition expenses			21,147				259,310				280,457				(44,155	)			236,302
General and administrative expenses			35,542				102,952				138,494				—				138,494
			225,629				989,741				1,215,370				(144,364	)			1,071,006
Underwriting income		$	43,212			$	119,160			$	162,372			$	1,153			$	163,525
Net loss ratio	62.8%				56.6%				57.8%				70.1%				56.4%
Acquisition expense ratio	7.9%				23.4%				20.4%				30.9%				19.1%
General and administrative expense ratio	13.2%				9.3%				10.0%				—				11.2%
Combined ratio	83.9%				89.3%				88.2%				101.0%				86.7%


	For the quarter ended September 30
	Insurance		Reinsurance		Total
	2007	2006	2007	2006	2007	2006
Loss ratio	53.4%	63.5%	43.5%	44.9%	46.6%	46.1%
Acquisition expense ratio	14.9%	9.4%	21.2%	23.5%	19.2%	20.1%
General and administrative expense ratio	16.8%	15.3%	12.0%	9.8%	13.8%	11.9%
Combined ratio	85.1%	88.2%	76.7%	78.2%	79.6%	78.1%


	For the quarter ended September 30
	Insurance		Reinsurance		Total
	2007	2006	2007	2006	2007	2006
Loss ratio	72.6%	70.1%	46.4%	47.0%	56.0%	48.6%
Acquisition expense ratio	14.9%	9.4%	21.2%	23.5%	19.2%	20.1%
General and administrative expense ratio	16.8%	15.3%	12.0%	9.8%	13.8%	11.9%
Combined ratio	104.3%	94.8%	79.6%	80.3%	89.0%	80.6%


	For the nine months ended September 30
	Insurance		Reinsurance		Total
	2007	2006	2007	2006	2007	2006
Loss ratio	53.9%	62.8%	51.7%	56.6%	50.6%	56.4%
Acquisition expense ratio	13.6%	7.9%	20.7%	23.4%	18.2%	19.1%
General and administrative expense ratio	17.2%	13.2%	10.0%	9.3%	12.8%	11.2%
Combined ratio	84.7%	83.9%	82.4%	89.3%	81.6%	86.7%


	For the nine months ended September 30
	Insurance		Reinsurance		Total
	2007	2006	2007	2006	2007	2006
Loss ratio	73.2%	80.2%	56.1%	55.0%	60.7%	58.9%
Acquisition expense ratio	13.6%	7.9%	20.7%	23.4%	18.2%	19.1%
General and administrative expense ratio	17.2%	13.2%	10.0%	9.3%	12.8%	11.2%
Combined ratio	104.0%	101.3%	86.8%	87.7%	91.7%	89.2%

The following is a reconciliation of Endurance’s total premiums written including gross premiums written and deposit premiums (a non-GAAP measure) to gross premiums written for the quarter and nine months ended September 30, 2007 and 2006:


	Quarter Ended September 30, 2007										Quarter Ended September 30, 2006
	Gross Premiums Written			Deposit Premiums				Total Premiums Written			Gross Premiums Written			Deposit Premiums				Total Premiums Written
Insurance
Property		$	28,379			—			$	28,379		$	47,860			—			$	47,860
Casualty			30,133			—				30,133			28,294			—				28,294
Healthcare liability			30,262			—				30,262			37,812			—				37,812
Workers’ compensation			70,398			—				70,398			24,993			—				24,993
Professional lines			20,874			—				20,874			17,822			—				17,822
Subtotal Insurance			180,046			—				180,046			156,781			—				156,781
Reinsurance
Casualty			64,744			1,262				66,006			78,861			8,072				86,933
Property			112,483			(76	)			112,407			125,224			(989	)			124,235
Catastrophe			43,684			—				43,684			50,340			(955	)			49,385
Agriculture			6,917			—				6,917			16,324			—				16,324
Marine			1,702			(104	)			1,598			15,736			501				16,237
Aerospace			7,581			—				7,581			17,761			—				17,761
Surety and other specialty			6,114			(520	)			5,594			15,186			—				15,186
Subtotal Reinsurance			243,225			562				243,787			319,432			6,629				326,061
Total		$	423,271		$	562			$	423,833		$	476,213		$	6,629			$	482,842


	Nine Months Ended September 30, 2007										Nine Months Ended September 30, 2006
	Gross Premiums Written			Deposit Premiums				Total Premiums Written			Gross Premiums Written			Deposit Premiums				Total Premiums Written
Insurance
Property		$	96,256			—			$	96,256		$	129,024			—			$	129,024
Casualty			99,273			—				99,273			92,957			—				92,957
Healthcare liability			77,105			—				77,105			89,921			—				89,921
Workers’ compensation			189,173			—				189,173			31,424			—				31,424
Professional lines			63,239			—				63,239			52,835			—				52,835
Subtotal Insurance			525,046			—				525,046			396,161			—				396,161
Reinsurance
Casualty			176,447			9,283				185,730			240,316		$	109,384				349,700
Property			201,080			13,504				214,584			268,826			27,887				296,713
Catastrophe			331,689			—				331,689			273,798			(955	)			272,843
Agriculture			123,896			199				124,095			102,654			6,574				109,228
Marine			45,822			1,076				46,898			83,016			5,027				88,043
Aerospace			34,325			—				34,325			66,021			—				66,021
Surety and other specialty			65,060			(306	)			64,754			68,055			3,973				72,028
Subtotal Reinsurance			978,319			23,756				1,002,075			1,102,686			151,890				1,254,576
Total		$	1,503,365		$	23,756			$	1,527,121		$	1,498,847		$	151,890			$	1,650,737

RECONCILIATIONS
(in thousands of United States dollars, except share and per share amounts)

The following is a reconciliation of Endurance’s net income and net income per diluted common share to operating income, operating income per diluted common share and annualized operating return on average common equity (all non-GAAP measures) for the quarter and nine months ended September 30, 2007 and 2006:


	Quarter Ended								Nine Months Ended
	September 30, 2007				September 30, 2006				September 30, 2007				September 30, 2006
Net income		$	131,401			$	128,230			$	368,577			$	299,316
Add (Less) after-tax items:
Net foreign exchange (gains) losses			(546	)			2,918				(918	)			(8,183	)
Net realized losses on investments			3,013				6,080				12,583				16,211
Operating income before preferred dividends			133,868				137,228				380,242				307,344
Preferred dividends			(3,875	)			(3,875	)			(11,625	)			(11,625	)
Operating income available to common shareholders		$	129,993			$	133,353			$	368,617			$	295,719
Weighted average dilutive common shares			70,430,986				71,487,103				71,126,078				71,427,613
Operating income per diluted share		$	1.85			$	1.87			$	5.18			$	4.14
Average common equity ^[a]		$	2,252,734			$	1,826,855			$	2,211,748			$	1,794,859
Operating return on average common equity	5.8%				7.3%				16.7%				16.5%
Annualized operating return on average common equity	23.1%				29.2%				22.2%				22.0%
Diluted per common share data
Net income		$	131,401			$	128,230			$	368,577			$	299,316
Preferred dividends			(3,875	)			(3,875	)			(11,625	)			(11,625	)
Net income available to common shareholders		$	127,526			$	124,355			$	356,952			$	287,691
Return on average common equity, Net income	5.7%				6.8%				16.1%				16.0%
Annualized return on average common equity, Net income	22.6%				27.2%				21.5%				21.4%

Operating income and operating income per diluted common share are internal performance measures used by Endurance in the management of its operations. Operating income per diluted common share represents operating income divided by weighted average dilutive common shares. Operating income represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Endurance believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations. In addition to presenting net income and net income per dilutive common share determined in accordance with GAAP, Endurance believes that showing operating income and operating income per dilutive common share enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Endurance’s results of operations in a manner similar to how management analyzes Endurance’s underlying business performance. Operating income and operating income per dilutive common share should not be viewed as substitutes for GAAP net income and net income per dilutive common share, respectively.


	•	Total premiums written of $423.8 million, which include gross premiums written and deposit premiums, decreased 12.2% over the same period in 2006;


	•	Total ceded premiums of $45.7 million versus $90.8 million in the third quarter of 2006;


	•	A combined ratio of 79.6% which included 9.4 percentage points of favorable prior year loss reserve development;


	•	Net investment income of $62.6 million, a decrease of 1.5% over the same period in 2006;


	•	Operating income, which excluded after-tax realized investment gains and losses and foreign exchange gains and losses, of $133.9 million and $1.85 per diluted common share; and


	•	Total premiums written of $1,527.1 million, which included gross premiums written and deposit premiums, decreased 7.5% over the same period in 2006;


	•	Total ceded premiums of $143.9 million versus $161.7 million for the nine months ended September 30, 2006;


	•	A combined ratio of 81.6% which included 10.1 percentage points of favorable prior year loss reserve development;


	•	Net investment income of $216.0 million, an increase of 16.5% over the same period in 2006;


Note:	All financial information contained herein is unaudited, except the balance sheet data for the year ended December 31, 2006, which was derived from Endurance’s audited financial statements.


[a]	Excludes the $200 million liquidation value of the preferred shares.


(1)	Reconciles the Company’s underwriting results by segment to the Company’s financial statement presentation.


[a]	Average common equity is calculated as the arithmetic average of the beginning and ending common equity balances for the stated period, which excludes the $200 million liquidation value of the preferred shares.