/x/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the period ended March 31, 2008, or

/ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

ENDURANCE SPECIALTY HOLDINGS LTD.
(Exact Name of Registrant as Specified in Its Charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of ‘‘large accelerated filer,’’ ‘‘accelerated filer’’ and ‘‘smaller reporting company’’ in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

ENDURANCE SPECIALTY HOLDINGS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of United States dollars except share amounts)


	March 31, 2008			December 31, 2007
	(UNAUDITED)
ASSETS
Investments
Fixed maturity investments, available for sale at fair value (amortized cost: $4,671,293 and $4,629,113 at March 31, 2008 and December 31, 2007)		$	4,710,467		$	4,660,236
Other investments			369,347			358,128
Total investments			5,079,814			5,018,364
Cash and cash equivalents			549,692			567,825
Premiums receivable, net			1,088,998			723,832
Deferred acquisition costs			184,646			168,968
Securities lending collateral			241,343			173,041
Prepaid reinsurance premiums			268,442			122,594
Losses recoverable			150,665			187,354
Accrued investment income			33,650			38,543
Intangible assets			208,202			206,632
Deferred tax asset			17,702			—
Other assets			52,057			63,574
Total assets		$	7,875,211		$	7,270,727
LIABILITIES
Reserve for losses and loss expenses		$	2,928,427		$	2,892,224
Reserve for unearned premiums			1,269,318			855,085
Deposit liabilities			105,115			108,943
Reinsurance balances payable			224,223			162,899
Securities lending payable			241,343			173,041
Debt			448,978			448,753
Deferred tax liability			—			922
Other liabilities			119,633			116,601
Total liabilities			5,337,037			4,758,468
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY
Preferred shares
Series A, non-cumulative – 8,000,000 issued and outstanding (2007 – 8,000,000)			8,000			8,000
Common shares
Ordinary – $1.00 par value, 60,097,750 issued and outstanding (2007 – 60,364,488)			60,098			60,364
Additional paid-in capital			1,127,594			1,165,300
Accumulated other comprehensive income			62,705			57,725
Retained earnings			1,279,777			1,220,870
Total shareholders’ equity			2,538,174			2,512,259
Total liabilities and shareholders’ equity		$	7,875,211		$	7,270,727

See accompanying notes to unaudited condensed consolidated financial statements.

ENDURANCE SPECIALTY HOLDINGS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(In thousands of United States dollars, except share and per share amounts)


	Three Months Ended March 31,
	2008				2007
Revenues
Gross premiums written		$	868,591			$	573,291
Ceded premiums written			(227,804	)			(39,626	)
Net premiums written			640,787				533,665
Change in unearned premiums			(268,744	)			(156,620	)
Net premiums earned			372,043				377,045
Net investment income			46,878				74,813
Net realized investment losses			(11,484	)			(2,084	)
Other underwriting loss			(740	)			(5,936	)
Total revenues			406,697				443,838
Expenses
Losses and loss expenses			189,502				210,594
Acquisition expenses			74,374				67,530
General and administrative expenses			50,044				48,829
Amortization of intangibles			2,688				1,127
Net foreign exchange losses			3,107				2,613
Interest expense			7,534				7,529
Total expenses			327,249				338,222
Income before income taxes			79,448				105,616
Income tax expense			(1,637	)			(3,781	)
Net income			77,811				101,835
Preferred dividends			(3,875	)			(3,875	)
Net income available to common shareholders		$	73,936			$	97,960
Comprehensive income
Net income		$	77,811			$	101,835
Other comprehensive income
Net unrealized holding (losses) gains on investments arising during the period (net of applicable deferred income taxes in 2008 – ($1,102) and 2007 – ($1,251))			(4,582	)			12,039
Foreign currency translation adjustments			(1,944	)			189
Reclassification adjustment for net realized losses included in net income			11,484				2,084
Reclassification adjustment for net losses on derivative designated as cash flow hedge included in net income			22				22
Other comprehensive income			4,980				14,334
Comprehensive income		$	82,791			$	116,169
Per share data
Weighted average number of common and common equivalent shares outstanding:
Basic			58,823,353				66,612,980
Diluted			64,503,281				72,073,063
Basic earnings per common share		$	1.26			$	1.47
Diluted earnings per common share		$	1.15			$	1.36

See accompanying notes to unaudited condensed consolidated financial statements.

ENDURANCE SPECIALTY HOLDINGS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY
(In thousands of United States dollars)


	Three Months Ended March 31,
	2008				2007
Preferred shares
Balance, beginning and end of period		$	8,000			$	8,000
Common shares
Balance, beginning of period			60,364				66,480
Issuance of common shares			478				348
Repurchase of common shares			(744	)			(860	)
Balance, end of period			60,098				65,968
Additional paid-in capital
Balance, beginning of period			1,165,300				1,458,063
Issuance of common shares			(20	)			3,290
Repurchase of common shares			(39,775	)			(29,212	)
Issuance of restricted share units in lieu of dividends			5				106
Public offering and registration costs			(44	)			(18	)
Settlement of equity awards			(1,833	)			(1,950	)
Stock-based compensation expense			3,961				1,344
Balance, end of period			1,127,594				1,431,623
Accumulated other comprehensive income (loss)
Cumulative foreign currency translation adjustments:
Balance, beginning of period			33,393				28,852
Foreign currency translation adjustments			(1,944	)			189
Balance, end of period			31,449				29,041
Unrealized holding gains (losses) on investments:
Balance, beginning of period			26,718				(40,841	)
Net unrealized holding gains arising during the period, net of reclassification adjustment			6,902				14,123
Balance, end of period			33,620				(26,718	)
Accumulated derivative loss on cash flow hedging instruments:
Balance, beginning of period			(2,386	)			(2,476	)
Net change from current period hedging transactions, net of reclassification adjustment			22				22
Balance, end of period			(2,364	)			(2,454	)
Total accumulated other comprehensive income (loss)			62,705				(131	)
Retained earnings
Balance, beginning of period			1,220,870				779,796
Net income			77,811				101,835
Issuance of restricted share units in lieu of dividends			(5	)			(106	)
Dividends on preferred shares			(3,875	)			(3,875	)
Dividends on common shares			(15,024	)			(16,564	)
Balance, end of period			1,279,777				861,086
Total shareholders’ equity		$	2,538,174			$	2,366,546

See accompanying notes to unaudited condensed consolidated financial statements.

ENDURANCE SPECIALTY HOLDINGS LTD.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of United States dollars)


	Three Months Ended March 31,
	2008				2007
Cash flows provided by operating activities:
Net income		$	77,811			$	101,835
Adjustments to reconcile net income to net cash provided by operating activities
Amortization of net premium on investments			574				1,823
Depreciation and amortization of other intangibles			6,227				3,823
Net realized investment losses			11,484				2,084
Deferred taxes			(19,726	)			(8,513	)
Stock-based compensation expense			3,961				1,344
Equity in earnings of unconsolidated ventures			16,112				(12,153	)
Premiums receivable, net			(98,219	)			(147,494	)
Deferred acquisition costs			(15,678	)			(17,565	)
Losses recoverable			36,689				(11,335	)
Prepaid reinsurance premiums			(145,848	)			12,336
Accrued investment income			4,893				3,900
Other assets			9,591				1,545
Reserve for losses and loss expenses			36,203				88,497
Reserve for unearned premiums			414,233				144,546
Deposit liabilities			(3,828	)			(5,644	)
Reinsurance balances payable			(205,226	)			(23,399	)
Other liabilities			13,485				(13,825	)
Net cash provided by operating activities			142,738				121,805
Cash flows used in investing activities:
Proceeds from sales of fixed maturity investments			491,542				556,711
Proceeds from maturities and calls on fixed maturity investments			167,229				153,817
Proceeds from the redemption of other investments			219				—
Purchases of fixed maturity investments			(717,245	)			(807,490	)
Purchase of investments in other ventures, under equity method			(27,550	)			(2,500	)
Purchases of fixed assets			(2,615	)			(2,082	)
Change in securities lending collateral received			(68,302	)			9,064
Net cash paid for subsidiary acquisition			(16,608	)			(1,359	)
Net cash used in investing activities			(173,330	)			(93,839	)
Cash flows provided by (used in) financing activities:
Issuance of common shares			425				3,638
Settlement of equity awards			(1,833	)			(1,950	)
Offering and registration costs paid			(380	)			(18	)
Change in securities lending collateral			68,302				(9,064	)
Repurchase of common shares			(40,519	)			(30,072	)
Dividends on preferred shares			(3,875	)			(3,875	)
Dividends on common shares			(15,278	)			(16,564	)
Net cash provided by (used in) financing activities			6,842				(57,905	)
Effect of exchange rate changes on cash and cash equivalents			5,617				967
Net decrease in cash and cash equivalents			(18,133	)			(28,972	)
Cash and cash equivalents, beginning of period			567,825				547,772
Cash and cash equivalents, end of period		$	549,692			$	518,800
Supplemental cash flow information
Net taxes paid		$	3,141			$	45
Interest paid		$	8,772			$	8,750

See accompanying notes to unaudited condensed consolidated financial statements.

ENDURANCE SPECIALTY HOLDINGS LTD.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Amounts in tables expressed in thousands of United States dollars, except
for ratios, share and per share amounts)

Endurance Specialty Holdings Ltd. (‘‘Endurance Holdings’’) was organized as a Bermuda holding company on June 27, 2002. Endurance Holdings writes specialty lines of insurance and reinsurance on a global basis through its seven wholly-owned operating subsidiaries:


Operating Subsidiary			Domicile
Endurance Specialty Insurance Ltd. (‘‘Endurance Bermuda’’)			Bermuda
Endurance Worldwide Insurance Limited (‘‘Endurance U.K.’’)			London
Endurance Reinsurance Corporation of America (‘‘Endurance U.S. Reinsurance’’)			Delaware
Endurance American Insurance Company (‘‘Endurance American’’)			Delaware
Endurance American Specialty Insurance Company (‘‘Endurance American Specialty’’)			Delaware
American Merchants Casualty Company (‘‘American Merchants’’)			Ohio
American Agri-Business Insurance Company and ARMtech Insurance Services, Inc. (together, ‘‘ARMtech’’)			Texas

The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results for the three month period ended March 31, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. The unaudited condensed consolidated financial statements include the accounts of Endurance Holdings and its wholly-owned subsidiaries. All inter-company transactions and balances have be en eliminated on consolidation. Management is required to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying disclosures. Actual results could differ from those estimates. Among other matters, significant estimates and assumptions are used to record premiums written and ceded, and to record reserves for losses and loss expenses and contingencies. Estimates and assumptions are periodically reviewed and the effects of revisions are recorded in the consolidated financial statements in the period that they are determined to be necessary.

The balance sheet at December 31, 2007 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2007 contained in Endurance Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (the ‘‘2007 Annual Report on Form 10-K’’).

Certain reclassifications have been made for 2007 to conform to the 2008 presentation and have no impact on net income previously reported.

ENDURANCE SPECIALTY HOLDINGS LTD.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS — CONTINUED
(Amounts in tables expressed in thousands of United States dollars, except
for ratios, share and per share amounts)

On January 1, 2008, the Company adopted Statement of Financial Accounting Standards (‘‘SFAS’’) No. 157, ‘‘Fair Value Measurement’’ (‘‘SFAS No. 157’’). SFAS No. 157 clarifies the definition of fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

Under SFAS No. 157, a company must determine the appropriate level in the fair value hierarchy for each fair value measurement. The fair value hierarchy in SFAS No. 157 prioritizes the inputs, which refer broadly to assumptions market participants would use in pricing an asset or liability, into three levels, which are described in detail below. It gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Level 1 inputs are unadjusted, quoted prices in active markets for identical assets or liabilities.

Level 2 inputs are inputs other than quoted prices within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies.

In accordance with SFAS No. 157, the Company maximizes the use of observable inputs in its valuation techniques and applies unobservable inputs only to the extent that observable inputs are unavailable. The major classes of assets and liabilities carried at fair value by the Company at March 31, 2008 include fixed maturity investments and securities lending collateral.

The Company’s fixed maturity investments are comprised of a variety of different securities, which are leveled based on the valuation technique and inputs used in their valuation. Valuation of current issue U.S. government securities are generally based on level 1 inputs, which use the market approach valuation technique. The valuation of other fixed maturity investments, including non-current U.S. government treasury securities, corporate debt and U.S. agency and non-agency mortgage and asset-backed securities generally incorporate significant level 2 inputs such as indexes or broker dealer and vendor quotes using the market and income approach techniques. The Company may assign a lower level to inputs typically considered to be level 2 based on its assessment of liquidity and relative level of uncertainty surrounding the inputs. At March 31, 2008, the Company transferred in certain Alt-A, asset-backed and high yield investments to level 3 due t o the lack of liquidity in the market related to these securities.

The following table sets forth the Company’s fixed maturity investments categorized by the level within the SFAS No. 157 hierarchy in which the fair value measurements fall, on a recurring basis at March 31, 2008:


				Fair Value Measurements at March 31, 2008
	Total at March 31, 2008			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
U.S. government and agency securities		$	638,469		$	1,207		$	637,262		$	—
Non-U.S. government securities			323,501			—			323,379			122
Corporate securities			823,840			—			820,385			3,455
Mortgage-backed securities			2,505,182			—			2,437,957			67,225
Asset-backed securities			419,475			—			373,431			46,044
Total		$	4,710,467		$	1,207		$	4,592,414		$	116,846

The following table presents the securities lending collateral reinvested by the Company in connection with its securities lending program, categorized by the level within the SFAS No. 157 hierarchy in which the fair value measurements fall, on a recurring basis at March 31, 2008:

The following table presents a reconciliation of the beginning and ending balances for all investments measured at fair value on a recurring basis using level 3 inputs during the three months ended March 31, 2008:

Total amount of gains and losses for the period included in earnings (net realized investment losses) attributable to the change in unrealized gains or losses related to fixed maturity investments still held at March 31, 2008 were $5.5 million.

Endurance Holdings follows SFAS No. 128, ‘‘Earnings per Share,’’ to account for its weighted average shares. Basic earnings per common share are calculated by dividing net income available to holders of Endurance Holdings’ common shares by the weighted average number of common shares outstanding. In addition to the actual common shares outstanding, the weighted average number of common shares included in the basic earnings per common share calculation also includes the unsettled restricted share units and unreleased restricted shares discussed in detail in the Company’s 2007 Annual Report on Form 10-K. Diluted earnings per common share are based on the weighted average number of common shares and dilutive potential common shares outstanding during the period of calculation using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share:


	Three months ended March 31,
	2008			2007
Numerator:
Net income available to common shareholders		$	73,936		$	97,960
Denominator:
Weighted average shares – basic
Common shares outstanding			58,709,444			66,418,642
Unsettled restricted share units and unreleased restricted shares			113,909			194,338
			58,823,353			66,612,980
Share equivalents
Variable delivery forward			—			—
Unvested restricted share units			329,775			486,394
Warrants			4,240,693			3,795,596
Options			1,109,460			1,178,093
Weighted average shares – diluted			64,503,281			72,073,063
Basic earnings per common share		$	1.26		$	1.47
Diluted earnings per common share		$	1.15		$	1.36

Endurance Holdings declared a dividend of $0.484375 per Series A preferred share on February 13, 2008 (2007 – $0.484375). The preferred share dividend was paid on March 17, 2008 to shareholders of record on March 3, 2008. Endurance Holdings also declared a dividend of $0.25 per common share on February 13, 2008 (2007 – $0.25). The dividend was paid on March 28, 2008 to shareholders of record on March 14, 2008.

The Company has a stock-based employee compensation plan (the ‘‘2007 Equity Plan’’), which provides the Company with the ability to grant options to purchase the Company’s ordinary shares, share appreciation rights, restricted shares, share bonuses and other equity incentive awards to key employees.

No options were granted during the quarters ended March 31, 2008 and 2007. The total intrinsic value of options exercised during the quarter ended March 31, 2008 was $0.3 million (2007 – $3.9 million). The Company received proceeds of $0.4 million (2007 – $3.5 million) from the exercise of options during the quarter ended March 31, 2008. The Company issued new ordinary shares in connection with the exercise of the above options. No options expired during the quarters ended March 31, 2008 and 2007. There were no options vested during the quarter ended March 31, 2008 (2007 – grant date fair value $0.1 million). There were no unrecognized stock-based compensation expenses related to unvested stock options at March 31, 2008 and 2007.

During the quarter ended March 31, 2008, the Company granted an aggregate of 480,168 (2007 – 10,751) restricted shares and restricted share units with weighted average grant date fair values of $18.8 million (2007 – $0.4 million). During the quarter ended March 31, 2008, the aggregate fair value of restricted shares and restricted share units that vested was $3.4 million (2007 – $3.9 million). For the quarter ended March 31, 2008, compensation costs recognized in earnings for all restricted shares and restricted share units were $4.0 million (2007 – $1.3 million). At March 31, 2008, compensation costs not yet recognized related to unvested restricted shares and restricted share units was $28.0 million (2007 – $7.7 million).

Total expenses related to the Company’s Employee share Purchase Plan and Sharesave Scheme were approximately $43,300 (2007 – $33,000) for the quarter ended March 31, 2008.

The determination of the Company’s business segments is based on how the Company monitors the performance of its underwriting operations. The Company has two reportable business segments: Insurance and Reinsurance, which are comprised of the following lines of business:

Because the Company does not manage its assets by segment, investment income and total assets are not allocated to the individual segments. Management measures segment results on the basis of the combined ratio that is obtained by dividing the sum of the losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. General and administrative expenses incurred by the segments are allocated directly. Remaining general and administrative expenses not directly incurred by the segments are allocated primarily based on estimated consumption, headcount and other variables deemed relevant to the allocation of such expenses. Ceded reinsurance and recoveries are recorded within the segment to which they apply. Group reinsurance protection purchased and any subsequent recoveries are allocated to segments based on the underlying exposures covered.

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended March 31, 2008:


	Insurance				Reinsurance				Deposit Accounting⁽¹⁾				Total
Revenues
Gross premiums written		$	585,134			$	285,478			$	(2,021	)		$	868,591
Ceded premiums written			(228,993	)			1,189				—				(227,804	)
Net premiums written			356,141				286,667				(2,021	)			640,787
Net premiums earned			167,982				205,735				(1,674	)			372,043
Other underwriting loss			—				—				(740	)			(740	)
			167,982				205,735				(2,414	)			371,303
Expenses
Net losses and loss expenses			130,950				61,202				(2,650	)			189,502
Acquisition expenses			23,117				51,157				100				74,374
General and administrative expenses			20,561				29,483				—				50,044
			174,628				141,842				(2,550	)			313,920
Underwriting (loss) income		$	(6,646	)		$	63,893			$	136			$	57,383
Net loss ratio			78.0	%			29.7	%			158.3	%			50.9	%
Acquisition expense ratio			13.8	%			24.9	%			(6.0	%)			20.0	%
General and administrative expense ratio			12.2	%			14.3	%			—				13.5	%
Combined ratio			104.0	%			68.9	%			152.3	%			84.4	%
Reserve for losses and loss expenses		$	1,261,637			$	1,766,183			$	(99,393	)		$	2,928,427

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended March 31, 2007:


	Insurance				Reinsurance				Deposit Accounting⁽¹⁾				Total
Revenues
Gross premiums written		$	147,033			$	429,473			$	(3,215	)		$	573,291
Ceded premiums written			(38,944	)			(682	)			—				(39,626	)
Net premiums written			108,089				428,791				(3,215	)			533,665
Net premiums earned			110,324				291,396				(24,675	)			377,045
Other underwriting loss			—				—				(5,936	)			(5,936	)
			110,324				291,396				(30,611	)			371,109
Expenses
Net losses and loss expenses			63,529				169,699				(22,634	)			210,594
Acquisition expenses			13,826				61,417				(7,713	)			67,530
General and administrative expenses			22,217				26,612				—				48,829
			99,572				257,728				(30,347	)			326,953
Underwriting income (loss)		$	10,752			$	33,668			$	(264	)		$	44,156
Net loss ratio			57.6	%			58.2	%			91.7	%			55.9	%
Acquisition expense ratio			12.5	%			21.1	%			31.3	%			17.9	%
General and administrative expense ratio			20.2	%			9.1	%			—				12.9	%
Combined ratio			90.3	%			88.4	%			123.0	%			86.7	%
Reserve for losses and loss expenses		$	918,534			$	2,010,117			$	(138,468	)		$	2,790,183

The following table reconciles total segment results to income before income taxes for the three months ended March 31, 2008 and 2007:

The following table provides gross premiums written, by line of business, for the three months ended March 31, 2008 and 2007:


Business Segment	2008				2007
Insurance
Property		$	31,183			$	27,042
Casualty			25,124				26,796
Healthcare Liability			16,492				18,790
Workers’ Compensation			83,480				61,633
Agriculture			413,419				—
Professional Lines			15,436				12,772
Total Insurance			585,134				147,033
Reinsurance
Casualty			69,301				91,936
Property			36,248				36,701
Catastrophe			105,234				140,499
Agriculture			10,911				93,061
Aerospace and Marine			36,536				39,560
Surety and Other Specialty			27,248				27,716
Total Reinsurance			285,478				429,473
Subtotal		$	870,612			$	576,506
Deposit accounting⁽¹⁾			(2,021	)			(3,215	)
Total		$	868,591			$	573,291

Concentrations of credit risk. The Company’s reinsurance recoverables at March 31, 2008 and December 31, 2007 amounted to $150.7 million and $187.4 million, respectively. At March 31, 2008, substantially all reinsurance recoverables were due from the U.S. government or from reinsurers rated A− or better by A.M. Best or Standard & Poors.

Major production sources. During the three months ended March 31, 2008 and 2007, the Company obtained 28.4% and 67.8% of its gross premiums written before deposit accounting adjustments through four brokers, respectively: Marsh & McLennan Companies, Inc. (including Guy Carpenter) – 9.6% (2007 – 31.7%); Aon Corporation – 8.1% (2007 – 17.0%); Benfield Group – 6.0% (2007 – 9.5%); and Willis Companies – 4.7% (2007 – 9.6%). The decrease in the percentage of gross premiums written through these four brokers was primarily attributable to gross premiums written by ARMtech during the three months ended March 31, 2008, which was produced through various independent agents.

Letters of credit. As of March 31, 2008, the Company had issued letters of credit of $557.2 million (December 31, 2007 – $574.4 million) under its credit facility in favor of certain ceding companies.

Investment commitments. As of March 31, 2008 and December 31, 2007, the Company had pledged cash and cash equivalents and fixed maturity investments of $169.6 million and $223.2 million, respectively, in favor of certain ceding companies to collateralize obligations. As of March 31, 2008 and December 31, 2007, the Company had also pledged $614.0 million and $594.7 million of its fixed maturity investments as collateral for $540.0 million and $532.3 million in letters of credit outstanding under its credit facility, respectively. In addition, at March 31, 2008 and December 31, 2007, cash and fixed maturity investments with fair values of $120.8 million and $120.3 million were on deposit with U.S. state regulators, respectively, and $22.9 million and $33.8 million were on deposit with Canadian regulators, respectively.

The Company is subject to certain commitments with respect to other investments at March 31, 2008 and December 31, 2007. The Company is generally subject to redemption restriction provisions of between one to three years from the date of acquisition. With respect to the balance of the Company’s other investments at March 31, 2008 and December 31, 2007, $161.3 million and $144.3 million were ineligible for redemption, respectively. The remaining other investments may be redeemed by the Company subject to certain notice and limit provisions. In addition, as of March 31, 2008, the Company was committed to investing a further $2.3 million (December 31, 2007 – $29.4 million) in various investment funds classified as other investments.

Reinsurance commitments. In the ordinary course of business, the Company enters into reinsurance agreements which may include terms which could require the Company to collateralize certain of its obligations as a result of certain triggering events, as defined in such agreements.

Employment agreements. The Company has entered into employment agreements with certain officers that provide for awards of the Company’s equity securities, executive benefits and severance payments under certain circumstances.

Operating Leases. The Company leases office space and office equipment under operating leases. Future minimum lease commitments at March 31, 2008 are as follows:

Total lease expense under operating leases for the three months ended March 31, 2008 was $2.7 million (2007 – $2.6 million).

Legal Proceedings. The Company is party to various legal proceedings generally arising in the normal course of its business. While any proceeding contains an element of uncertainty, the Company does not believe that the eventual outcome of any litigation or arbitration proceeding to which it is presently a party could have a material adverse effect on its financial condition or business. Pursuant to the Company’s insurance and reinsurance agreements, disputes are generally required to be finally settled by arbitration.

Statement of Financial Accounting Standards No. 159 ‘‘The Fair Value Option for Financial Assets and Financial Liabilities – Including an amendment of FASB Statement of No. 115’’ was effective January 1, 2008. The Company did not elect the fair value option for any of its financial assets or financial liabilities under this statement.

The following is a discussion and analysis of the financial condition and results of operations for the three month period ended March 31, 2008 of Endurance Specialty Holdings Ltd. (‘‘Endurance Holdings’’) and its wholly-owned subsidiaries (collectively, the ‘‘Company’’). This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q (this ‘‘Form 10-Q’’) as well as the audited consolidated financial statements and related notes for the fiscal year ended December 31, 2007, the discussions of critical accounting policies and the qualitative and quantitative disclosure about market risk contained in Endurance Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2007 (the ‘‘2007 Annual Report on Form 10 - -K’’).

Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to the Company’s plans and strategy for its business, includes forward-looking statements that involve risk and uncertainties. Please see the section ‘‘Cautionary Statement Regarding Forward-Looking Statements’’ below for more information on factors that could cause actual results to differ materially from the results described in or implied by any forward-looking statements contained in this discussion and analysis. You should review the ‘‘Risk Factors’’ set forth in the 2007 Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein.

Endurance Holdings was organized as a Bermuda holding company on June 27, 2002 and has seven wholly-owned operating subsidiaries:

Endurance Holdings and its wholly-owned subsidiaries are collectively referred to in this discussion and analysis as the ‘‘Company’’.

The Company writes specialty lines of property and casualty insurance and reinsurance on a global basis, and seeks to create a portfolio of specialty lines of business that are profitable and have limited correlation with one another. The Company’s portfolio of specialty lines of business is organized into two business segments, Insurance and Reinsurance.

In the Insurance segment, the Company writes property, casualty, healthcare liability, workers’ compensation, agriculture and professional lines insurance. In the Reinsurance segment, the Company writes casualty, property, catastrophe, agriculture, aerospace and marine and surety and other specialty reinsurance.

The Company’s Insurance and Reinsurance segments both include property related coverages which provide insurance or reinsurance of an insurable interest in tangible property for property loss, damage or loss of use. In addition, the Company’s Insurance and Reinsurance segments include various casualty insurance and reinsurance coverages, which are primarily concerned with the losses caused by injuries to third parties, i.e., not the insured, or to property owned by third parties and the legal liability imposed on the insured resulting from such injuries.

The Company’s condensed consolidated financial statements are based on the selection of accounting policies and application of significant accounting estimates, which require management to make significant estimates and assumptions. The Company believes that some of the more critical judgments in the areas of accounting estimates and assumptions that affect its financial condition and results of operations are related to the recognition of premiums written and ceded and reserves for losses and loss expenses. For a detailed discussion of the Company’s critical accounting estimates, please refer to the 2007 Annual Report on Form 10-K. There were no material changes in the application of the Company’s critical accounting estimates subsequent to that report with the exception of the investment policy noted below. Management has discussed the application of these critical accounting estimates with the Company’s Board of Directors and the Audit Committee of the Board of Directors.

Investments. The Company currently classifies all of its fixed maturity investments, including short-term investments, as ‘‘available for sale’’ and, accordingly, they are carried at estimated fair value, with related net unrealized gains or losses excluded from earnings and included in shareholders’ equity as a component of accumulated other comprehensive income. The Company determines the fair value of its fixed maturity securities in accordance with Statement of Financial Accounting Standards (‘‘SFAS’’) No. 157 (‘‘SFAS No. 157’’), which defines fair value and establishes a fair value hierarchy based on inputs to the various valuation techniques used for each fair value measurement. The use of valuation techniques for any given investment requires a significant amount of judgment and consideration of factors specific to the underlying investment. Fair value measurements determined by the Company seek to maximize observable inputs and minimize the use of unobservable inputs. SFAS No. 157 establishes three levels of inputs, which are as follows:

The Company determines the estimated fair value of each individual security utilizing the highest level inputs available. The adoption of SFAS No. 157 by the Company did not materially change the Company’s valuation of its fixed maturity investments. For further discussion of SFAS No. 157, see Note 2 of the notes to the unaudited condensed consolidated financial statements contained herein.

For mortgage-backed and other asset-backed debt securities, fair value includes estimates regarding prepayment assumptions, which are based on current market conditions. Amortized cost in relation to these securities is calculated using a constant effective yield based on anticipated prepayments and the estimated economic life of the security. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date. Changes in estimated yield are recorded on a retrospective basis, resulting in future cash flows determining current book value.

In accordance with SFAS No. 115, ‘‘Accounting for Certain Investments in Debt and Equity Securities’’ and Financial Statement of Position (‘‘FSP’’) 115-1, ‘‘The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments,’’ the Company periodically reviews its fixed maturity investments, including short-term investments, to determine whether a decline in the fair value below the amortized cost basis is other-than-temporary. If such a decline in the fair value is judged to be other-than-temporary, the Company writes-down the investment to fair value, thereby establishing a new cost basis. The amount of the write-down is charged to income as a realized loss. The new cost basis is not changed for subsequent recoveries in fair value.

Other investments are accounted for using the equity method of accounting whereby the initial investment is recorded at cost. The carrying amounts of these investments are increased or decreased to reflect the Company’s share of income or loss, which is included in net investment income, and are decreased for dividends.

Consolidated results of operations — for the three month periods ended March 31, 2008 and 2007

The following is a discussion and analysis of the Company’s results of operations for the three months ended March 31, 2008 and 2007:


	Three Months Ended
	March 31, 2008				March 31, 2007				Change⁽¹⁾
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written		$	868,591			$	573,291			51.5	%
Net premiums written			640,787				533,665			20.1	%
Net premiums earned			372,043				377,045			(1.3	%)
Net investment income			46,878				74,813			(37.3	%)
Net realized investment losses			(11,484	)			(2,084	)		(451.1	%)
Other underwriting loss			(740	)			(5,936	)		87.5	%
Total revenues			406,697				443,838			(8.4	%)
Expenses
Losses and loss expenses			189,502				210,594			(10.0	%)
Acquisition expenses			74,374				67,530			10.1	%
General and administrative expenses			50,044				48,829			2.5	%
Amortization of intangibles			2,688				1,127			138.5	%
Net foreign exchange losses			3,107				2,613			18.9	%
Interest expense			7,534				7,529			0.1	%
Income tax expense			1,637				3,781			(56.7	%)
Net income		$	77,811			$	101,835			(23.6	%)
Net loss ratio			50.9	%			55.9	%		(5.0	)
Acquisition expense ratio			20.0	%			17.9	%		2.1
General and administrative expense ratio			13.5	%			12.9	%		0.6
Combined ratio			84.4	%			86.7	%		(2.3	)

Gross premiums written in the three months ended March 31, 2008 were $868.6 million, an increase of $295.3 million, or 51.5%, compared to the same period in 2007. The increase was attributable primarily to the addition of gross premiums written in the agriculture line of business in the Insurance segment by ARMtech, which was acquired by the Company in the fourth quarter of 2007. Agricultural insurance writings are seasonal in nature and the majority of gross written premiums and ceded written premiums expected to be recorded during 2008 have been recorded during the three months ended March 31, 2008. Consistent with the other lines of the Insurance segment, premiums are earned pro rata over the terms of the applicable risk period specified in the insurance policies. The growth in gross premiums written was partially offset by declines in premiums written within the Reinsurance segment, as the Company saw increased risk retentions b y clients, attrition in its agriculture reinsurance line as a result of the ARMtech acquisition and non-renewals of business which failed to meet the Company’s underwriting standards.

Ceded premiums written increased in the first quarter of 2008 from the same period in 2007 primarily as a result of ceded premiums related to the Insurance segment’s agriculture line. The majority of premiums ceded by the Insurance segment’s agriculture line were through a U.S. government sponsored reinsurance program. The Company’s net written premiums also increased as a result of premiums retained by the Company in relation to the Insurance segment’s agriculture line.

Net premiums earned for the three months ended March 31, 2008 were $372.0 million, a decrease of $5.0 million, or 1.3%, from the first quarter of 2007. The decrease in net premiums earned resulted from decreases in earned premiums in the Reinsurance segment. In addition, agricultural premiums written in the Insurance segment were recorded and began earning late in the first quarter and thus contributed only modestly to earned premiums in the first quarter of 2008.

Endurance’s net investment income of $46.9 million decreased 37.3% or $27.9 million for the quarter ended March 31, 2008 as compared to the same period in 2007. During the first quarter of 2008, the Company realized a mark to market loss of $16.1 million on its alternative investments and high yield funds, included in other investments, as compared to a gain of $12.2 million in the first quarter of 2007. Investment income generated by the Company’s fixed maturity investments was consistent period over period. During the current quarter, the Company’s cash and cash equivalents and investments increased 0.8% over the same period in 2007. The increase in cash and cash equivalents and investments during the period resulted from positive net operating cash flows throughout 2007 and the first quarter of 2008. Investment expenses, including investment management fees, for the first quarter of 2008 w ere $2.3 million compared to $2.7 million for the same period in 2007.

The annualized net earned yield, total return of the investment portfolio for the three months ended March 31, 2008 and 2007 and market yield and portfolio duration as of March 31, 2008 and 2007 were as follows:

During the first quarter of 2008, the yield on the benchmark five year U.S. Treasury bond fluctuated within a 124 basis points range, with a high of 3.44% and a low of 2.20%. Trading activity was light but included a slight reduction in cash, asset backed and residential mortgage exposures from prior periods and increased allocations to U.S. government and agency securities. The duration of the fixed maturity portfolio has increased compared to March 31, 2007 primarily due to the sale of short duration asset backed securities and agencies and subsequent reinvestment in longer duration municipal and structured securities.

Our investment portfolio is managed to generate attractive economic returns and income while providing the Company with liquidity. Movements in financial markets and interest rates influence the timing and recognition of net realized investment gains and losses as the portfolio is adjusted and rebalanced. Proceeds from sales of investments classified as available for sale during the three months ended March 31, 2008 were $491.5 million compared to $556.7 million during the three months ended March 31, 2007. Realized investment gain and losses for the three months ended March 31, 2008 and 2007 were as follows:

During the three months ended March 31, 2008, the Company reviewed its securities in an unrealized loss position. The Company considered how long the securities had been in a loss position, the expected maturity of the investments, the significance of the decline, the financial condition of the issuer and the Company’s intent and ability to hold such investments for a period of time sufficient for the recovery of value. As a result of this review, the Company identified fixed maturity securities that were considered to be other-than-temporarily impaired. The unrealized loss position of these fixed maturities was principally a result of changes in the interest rate environment and changes in spreads. Consequently, the cost of such securities was written down to fair value, and the Company recognized a loss on these securities in the current period of $14.3 million (2007 – $1.6 million). The remaining securities in an unrealized los s position were determined to be temporarily impaired at March 31, 2008 as the Company has the intent and ability to hold these investments for a time sufficient for these securities to recover in value.

As of March 31, 2008, the Company continued to maintain an investment portfolio with an average credit rating of AAA. The Company’s investment portfolio consists of both mortgaged-backed and asset backed securities, which comprise 51.9% of total invested assets, including pending securities transactions, fixed maturity investments, cash and cash equivalents and other investments, at March 31, 2008. The Company, along with its investment managers, monitors the nature and type of assets underlying these types of securities. At March 31, 2008, 0.1% and 2.1% of the Company’s portfolio was collateralized by sub-prime and Alt-A mortgages, respectively. There have been no significant changes to the credit ratings of our securities. See ratings by maturity table included under ‘‘Liquidity and capital resources’’ herein.

The Company’s reported net losses and loss expenses are characterized by various factors and are significantly impacted by the occurrence or absence of catastrophic events and subsequent loss emergence related to such events. For the three months ended March 31, 2008, there were no significant catastrophic events that impacted the Company’s net loss ratio as compared to the same period in 2007 which included the impact of European Windstorm Kyrill. The Company’s combined gross losses from Windstorm Kyrill recorded in the first quarter of 2007 were $40.0 million and were recorded within the marine, property and catastrophe lines of the Reinsurance segment and the property line of the Insurance segment. The Company recorded net losses of $33.9 million, net of reinstatement premiums, other loss sensitive accruals, loss recoveries and taxes, for Windstorm Kyrill during the three months ended March 31, 2007.

Favorable prior year loss reserve development was $41.0 million for the first quarter of 2008 as compared to favorable prior year loss reserve development for the first quarter of 2007 of $55.9 million. In the first quarter of 2008, prior year reserves emerged favorably primarily in the short tail lines of the Reinsurance segment.

The Company participates in lines of business where claims may not be reported for many years. Accordingly, management does not believe that reported claims are the only valid means for estimating ultimate obligations. Ultimate losses and loss expenses may differ materially from the amounts recorded in the Company’s consolidated financial statements. These estimates are reviewed regularly and, as experience develops and new information becomes known, the reserves are adjusted as necessary. Reserve adjustments, if any, are recorded in earnings in the period in which they are determined. The overall loss reserves were established by the Company’s actuaries and reflect management’s best estimate of ultimate losses. See ‘‘Reserve for losses and loss expenses’’ below for further discussion.

The increase in the acquisition expense ratio for the three months ended March 31, 2008 compared to the same period of 2007 was primarily due to more premiums earned in the Insurance segment’s workers’ compensation line, which typically has higher associated acquisition expenses, and less premiums earned in the Reinsurance segment’s agriculture and catastrophe lines, which typically have lower associated acquisition expenses.

The Company’s general and administrative expense ratio for the first quarter of 2008 increased as compared to the same period in 2007 primarily due to declines in premiums earned by the Company. At March 31, 2008, the Company had a total of 733 employees as compared to 484 employees at March 31, 2007. The increase in the number of employees was principally due to the acquisition of ARMtech in the fourth quarter of 2007.

The Company produced net income of $77.8 million in the three months ended March 31, 2008, compared to net income of $101.8 million in the same period of 2007. The decrease in net income for the current period of 2008 compared to 2007 was primarily due to declines in the Company’s net investment income as a result of mark to market reductions in the value of its alternative investments and high yield funds in the first quarter of 2008.

In order to capture the key dynamics of loss development and expected volatility that may arise within the Company’s reserve for losses and loss expenses, the key lines of business within each segment are aggregated based on their potential expected length of loss emergence. The period over which loss emergence occurs is typically referred to as the tail. The Company has classified its lines of business as either having a ‘‘short,’’ ‘‘long’’ or ‘‘other’’ tail pattern. The Company views short tail business as that for which development typically emerges within a period of several calendar quarters while long tail business would emerge over many years. Within the Company’s Insurance and Reinsurance segments, the Company writes certain specialty lines of business for which the loss emergence is considered unique in nature and thus, has been included as ‘‘other’&rsq uo; in the tables below.

As of March 31, 2008, the Company had accrued losses and loss expenses reserves of $2.9 billion (December 31, 2007 – $2.9 billion). This amount represents management’s best estimate of the ultimate liability for payment of losses and loss expenses related to loss events. During the three month periods ended March 31, 2008 and 2007, the Company paid losses and loss expenses of $127.9 million and $138.7 million, including deposit accounting adjustments, respectively.

As more fully described under ‘‘Reserving Process’’ in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2007 Annual Report on Form 10-K, the Company incorporates a variety of actuarial methods and judgments in its reserving process. Two key inputs in the various actuarial methods employed by the Company are initial expected loss ratios and expected loss reporting patterns. These key inputs impact the potential variability in the estimate of the reserve for losses and loss expenses and are applicable to each of the Company’s business segments. The Company’s loss and loss expense reserves consider and reflect, in part, deviations resulting from differences between expected loss and actual loss reporting as well as judgments relating to the weights applied to the reserve levels indicated by the actuarial methods. Expected loss reporting patterns are based upon internal and external historical data and assumptions regarding claims reporting trends over a period of time that extends beyond the Company’s own operating history.

Differences between actual reported losses and expected losses are anticipated to occur in any individual period and such deviations may influence future initial expected loss ratios and/or expected loss reporting patterns as the recent actual experience becomes part of the historical data utilized as part of the ongoing reserve estimation process. The Company has demonstrated the impact of changes in the

speed of the loss reporting patterns, as well as changes in the expected loss ratios, within the table under the heading ‘‘Potential Variability in Reserves for Losses and Loss Expenses’’ in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2007 Annual Report on Form 10-K.

Losses and loss expenses for the three months ended March 31, 2008 are summarized as follows:

Losses and loss expenses for the three months ended March 31, 2008 included $41.0 million in favorable development of reserves relating to prior accident years. The favorable loss reserve development experienced during the three months ended March 31, 2008 benefited the Company’s reported loss ratio by approximately 11.0 percentage points. This net reduction in estimated losses for prior accident years resulted primarily from lower than expected claims emergence within the short tail lines of business included within the Reinsurance segment. For the three months ended March 31, 2008, the Company did not materially alter the two key inputs utilized to establish its reserve for losses and loss expenses (initial expected loss ratios and loss reporting patterns) for business related to prior years for the insurance and reinsurance reserve categories as the variances in reported losses for those reserve categories were within the range of possible results anticipated by the Company.

Short Tail Insurance. For the three months ended March 31, 2008, prior year favorable loss reserve development for this tail was relatively modest. The lower than expected losses and loss expenses were primarily a result of favorable claims emergence in the property line of business.

Long Tail Insurance. For the three months ended March 31, 2008, the Company recorded a modest reduction in prior year estimated losses and loss expenses in the long tail insurance category due to lower than expected claims reported in the healthcare liability line partially offset by increases to IBNR reserves within professional lines.

Other Insurance. There was an immaterial amount of prior year loss reserve development related to this reserve category for the three months ended March 31, 2008.

Short Tail Reinsurance. For the three months ended March 31, 2008, the favorable loss emergence in the short tail reinsurance reserve category was due to lower than expected claims reported within the treaty catastrophe, treaty property and aerospace lines of business.

Long Tail Reinsurance. There was an immaterial amount of prior year loss reserve development related to this reserve category for the three months ended March 31, 2008.

Other Reinsurance. There was a modest amount of favorable prior year loss reserve development related to this reserve category for the three months ended March 31, 2008 primarily due to favorable loss settlement activity within self-insured and special accounts lines of business within this reserve category.

Losses and loss expenses for the three months ended March 31, 2007 are summarized as follows:

Losses and loss expenses for the three months ended March 31, 2007 included $55.9 million in favorable development of reserves relating to prior accident years. The favorable loss reserve development experienced during the three months ended March 31, 2007 benefited the Company’s reported loss ratio by approximately 14.8 percentage points. The net reduction in estimated losses for prior accident years reflects lower than expected emergence of catastrophic and attritional losses. Favorable development of prior year reserves for the three months ended March 31, 2007 relates primarily to the Company’s short and long tail lines included in its Insurance segment, as well as the short tail line of business in the Reinsurance segment. The favorable development of reserves related to prior years was primarily due to lower than expected claims across the Company’s reserve categories. For the three months ended March&nb sp;31, 2007, the Company did not materially alter the two key inputs it utilizes to establish its reserve for losses and loss expenses, initial expected loss ratios or loss reporting patterns, for business related to prior years for the insurance and reinsurance reserve categories as the variances in reported losses for those reserve categories were within the range of possible results anticipated by the Company.

Short Tail Insurance. The lower than expected losses and loss expenses related to prior years in short tail insurance were principally a result of better than anticipated property claims settlements in the first quarter of 2007 related to the 2004 and 2005 catastrophes, among other claims, and overall favorable claims emergence in the Company’s property line. As a result, the Company reduced its estimated losses and loss expenses related to prior years in this reserve category during the three months ended March 31, 2007.

Long Tail Insurance. The absence of significant claims with respect to prior years resulted in a reduction in estimated losses and loss expenses related to prior years primarily in relation to the Company’s healthcare liability, casualty and professional lines, offset modestly by unfavorable development in the Company’s workers’ compensation line for the three months ended March 31, 2007.

Short Tail Reinsurance. The lower than anticipated claims activity within the treaty catastrophe, aviation and surety lines resulted in favorable prior year reserve development, which was offset by a modest amount of unfavorable development in the Company’s marine line of business.

Long Tail Reinsurance. The lower than expected losses and loss expenses related to prior years in the long tail reinsurance reserve category were principally due to favorable development in the Company’s casualty line. Previously, the Company had been relying more on expected loss methods due to the relative immaturity of the loss activity along with the inherent uncertainty surrounding loss reporting for this line. As actual claims emergence was better than anticipated for these lines, the Company reduced its estimated losses and loss expenses related to prior years in the three months ended March 31, 2007.

Other Reinsurance. There was a modest amount of favorable prior year loss reserve development related to this reserve category for the three months ended March 31, 2007 primarily due to lower than expected claims activity within the special accounts and personal accident lines of business.

Reserves for losses and loss expenses were comprised of the following at March 31, 2008:


	Case Reserves				IBNR Reserves				Reserve for losses and loss expenses
	(U.S. dollars in thousands)
Insurance:
Short tail		$	91,447			$	36,313			$	127,760
Long tail			75,515				975,088				1,050,603
Other			21,520				61,754				83,274
Total Insurance			188,482				1,073,155				1,261,637
Reinsurance:
Short tail			476,650				274,316				750,966
Long tail			245,327				592,080				837,407
Other			8,199				169,611				177,810
Total Reinsurance			730,176				1,036,007				1,766,183
Deposit accounting⁽¹⁾			(51,541	)			(47,852	)			(99,393	)
Totals		$	867,117			$	2,061,310			$	2,928,427

Reserves for losses and loss expenses were comprised of the following at March 31, 2007:

The determination of the Company’s business segments is based on the manner in which management monitors the performance of the Company’s underwriting operations. As a result, we report two business segments – Insurance and Reinsurance.

Management measures the Company’s results on the basis of the combined ratio, which is obtained by dividing the sum of the losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. The Company’s historic combined ratios may not be indicative of future underwriting performance. When purchased within a single line of business, ceded reinsurance and recoveries are accounted for within that line of business. When purchased across multiple lines of business, ceded reinsurance and recoveries are allocated to the lines of business in proportion to the related risks assumed. The Company does not manage its assets by segment; accordingly, investment income and total assets are not allocated to the individual business segments. General and administrative expenses incurred by the segments are allocated directly. Remaining general and administrative expenses not directly incurred by the segments are allocated primarily based on estimated consumption, headcount and other variables deemed relevant to the allocation of such expenses. Ceded reinsurance and recoveries are recorded within the segment to which they apply.

The following table summarizes the underwriting results and associated ratios for the Company’s Insurance segment for the three months ended March 31, 2008 and 2007.


	Three Months Ended
	March 31, 2008				March 31, 2007				Change⁽¹⁾
	(U.S. dollars in thousands)
Revenues
Gross premiums written		$	585,134			$	147,033			298.0	%
Ceded premiums written			(228,993	)			(38,944	)		488.0	%
Net premiums written			356,141				108,089			229.5	%
Net premiums earned			167,982				110,324			52.3	%
Expenses
Losses and loss expenses			130,950				63,529			106.1	%
Acquisition expenses			23,117				13,826			67.2	%
General and administrative expenses			20,561				22,217			(7.5	%)
			174,628				99,572			75.4	%
Underwriting (loss) income		$	(6,646	)		$	10,752			NM	⁽²⁾
Net loss ratio			78.0	%			57.6	%		20.4
Acquisition expense ratio			13.8	%			12.5	%		1.3
General and administrative expense ratio			12.2	%			20.2	%		(8.0	)
Combined ratio			104.0	%			90.3	%		13.7

Premiums. Gross premiums written for the first quarter of 2008 in the Insurance segment increased by $438.1 million over the first quarter of 2007. Gross and net premiums written for each line of business in the Insurance segment for the three months ended March 31, 2008 and 2007 were as follows:

The increase in the Insurance segment’s gross premiums written for the three months ended March 31, 2008 compared to 2007 was largely driven by the addition of $413.4 million of gross agricultural premiums written by ARMtech. In addition, the Company underwrote $21.8 million more workers’ compensation premiums in the first quarter of 2008 as compared to the same period in 2007 and modestly more premiums in its property and professional lines of business. The Insurance segment’s growth in these lines of business was partially offset by modest declines in gross premiums written in the healthcare liability and casualty lines of business in the first quarter of 2008 as compared to the first quarter of 2007.

Ceded premiums written by the Company in the Insurance segment increased in the first quarter of 2008 compared to the same period in 2007 primarily as a result of ceded premiums related to the agriculture line. The majority of premiums ceded by the agriculture line were through a U.S. government sponsored reinsurance program.

The net premiums earned by the Company in the Insurance segment in the three months ended March 31, 2008 also increased compared to 2007, primarily due to the addition of agricultural premiums. The increase in premiums earned was not as great as the increase in gross premiums written because the new agricultural premiums were written and began earning late in the first quarter of 2008.

Net Losses and Loss Expenses. The increase in the net loss ratio in the Company’s Insurance segment for the three months ended March 31, 2008 compared to the same period in 2007 reflected lower levels of favorable prior year loss reserve development. During the first quarter of 2008, the Company’s previously estimated losses and loss expense reserve for the Insurance segment for prior accident years was reduced by $3.7 million, which decreased the net loss ratio by 2.2 percentage points, as compared to reductions of $26.5 million, which decreased the net loss ratio by 24.0 percentage points, for the three months ended March 31, 2007. Of the lines of business in the Company’s Insurance segment, both the short and long tail lines experienced modest net reductions in the Company’s estimated losses f or prior accident years in the three months ended March 31, 2008 as claims have not materialized as originally estimated by the company. In addition, in the current quarter, the Insurance segment’s net loss ratio was adversely impacted by a $6.5 million international property risk loss that added 3.9 percentage points to the segment’s net loss ratio.

Acquisition Expenses. The Company’s acquisition expenses and acquisition expense ratio in the Insurance segment increased for the three months ended March 31, 2008 compared to 2007 due to more premium being earned on the Insurance segment’s workers’ compensation line of business, which typically has higher associated acquisition expenses. During the current quarter, earned acquisition costs related to workers’ compensation business totaled $16.2 million compared to $7.7 million in the first quarter of 2007. Additionally, decreased earnings in business lines that generally yield lower acquisition expenses, such as healthcare liability, property and professional lines contributed to the period to period increase.

General and Administrative Expenses. The decrease in general and administrative expenses in the Insurance segment for the first quarter of 2008 as compared to 2007 principally resulted from third party expense reimbursements related to the agricultural line that offset certain general and administrative expenses.

The following table summarizes the underwriting results and associated ratios for the Company’s Reinsurance segment for the three months ended March 31, 2008 and 2007. All amounts are presented applying reinsurance accounting to all reinsurance contracts written.


	Three Months Ended
	March 31, 2008			March 31, 2007				Change⁽¹⁾
	(U.S. dollars in thousands)
Revenues
Gross premiums written		$	285,478		$	429,473			(33.5	%)
Ceded premiums written			1,189			(682	)	NM⁽²⁾
Net premiums written			286,667			428,791			(33.1	%)
Net premiums earned			205,735			291,396			(29.4	%)
Expenses
Losses and loss expenses			61,202			169,699			(63.9	%)
Acquisition expenses			51,157			61,417			(16.7	%)
General and administrative expenses			29,483			26,612			10.8	%
			141,842			257,728			(45.0	%)
Underwriting income		$	63,893		$	33,668			89.8	%
Ratios
Loss ratio	29.7%			58.2%					(28.5	)
Acquisition expense ratio	24.9%			21.1%					3.8
General and administrative expense ratio	14.3%			9.1%					5.2
Combined ratio	68.9%			88.4%					(19.5	)

Premiums. Gross premiums written, including deposit premiums, in the Reinsurance segment decreased in the first quarter of 2008 by 33.5% over the first quarter of 2007. Gross and net premiums written, including deposit premiums, for each line of business in the Reinsurance segment for the three months ended March 31, 2008 and 2007 were as follows:

Gross premiums written, including deposit premiums, in Endurance’s Reinsurance segment for the first quarter of 2008 were $285.5 million compared to $429.5 million of premiums written in the same period in 2007. The decline in gross premiums written in the Reinsurance segment for the current quarter compared to the same period in 2007 was primarily due to declines in agriculture premiums, due to expected attrition stemming from the Company’s acquisition of ARMtech and increased risk retentions by clients. In addition, the Company experienced declines in its catastrophe, casualty, aerospace and marine, and surety and other specialty lines of business due to increased risk retentions by clients and the non-renewal of contracts that no longer met the Company’s internal pricing and underwriting requirements.

Net premiums earned by the Company in the Reinsurance segment for the three months ended March 31, 2008 decreased compared to the first quarter of 2007, due to the decrease in gross premiums written in this business segment in more recent periods. The rate of decrease in net premiums earned was less than the decline in gross premiums written due to the continued earning of gross premiums written by the Company in prior years.

Losses and Loss Expenses. The loss ratio in the Company’s Reinsurance segment for the three months ended March 31, 2008 decreased compared to the first quarter of 2007 as a result of the low level of catastrophe losses. The three months ended March 31, 2007 included net losses of $33.1 million resulting from Windstorm Kyrill. In addition, the Company recorded $35.5 million of favorable prior year loss reserve development in the first quarter of 2008 compared to $23.1 million in the same quarter last year. During the first quarter of 2008, the majority of the favorable loss reserve development emanated from this segment’s short tail lines of business, as claims emergence has been less than originally estimated by the Company.

Acquisition Expenses. The Company’s acquisition expense ratio in the Reinsurance segment increased for the first quarter of 2008 as compared to the first quarter of 2007. The increase in the acquisition expense ratio for the first quarter was generally due to a decrease in premium earnings in the agriculture and catastrophe lines, which typically have lower associated acquisition expenses as compared to the same period in 2007.

General and Administrative Expenses. The general and administrative expense ratio experienced by the Reinsurance segment in the three months ended March 31, 2008 increased from the same period in 2007 as a result of declines in overall premiums earned.

For internal management reporting purposes, underwriting results by business segment are presented on the basis of applying reinsurance accounting to all reinsurance contracts written. The following table presents the activity related to deposit accounted contracts included in the Company’s segment results above, which reconciles the Company’s underwriting results to the Company’s consolidated financial statement presentation for the three months ended March 31, 2008 and 2007.


	Three Months Ended
	March 31, 2008				March 31, 2007				Change⁽¹⁾
	(U.S. dollars in thousands)
Revenues
Gross premiums written		$	(2,021	)		$	(3,215	)		(37.1	%)
Net premiums written			(2,021	)			(3,215	)		(37.1	%)
Net premiums earned			(1,674	)			(24,675	)		(93.2	%)
Other underwriting loss			(740	)			(5,936	)		(87.5	%)
			(2,414	)			(30,611	)		(92.1	%)
Expenses
Losses and loss expenses			(2,650	)			(22,634	)		(88.3	%)
Acquisition expenses			100				(7,713	)	NM⁽²⁾
General and administrative expenses			—				—			—
			(2,550	)			(30,347	)		(91.6	%)
Underwriting income (loss)		$	136			$	(264	)	NM⁽²⁾

During the three months ended March 31, 2008 and 2007, the Company recorded $2.0 million and $3.2 million, respectively, of premiums that, in management’s judgment, were most appropriately accounted for as deposits under the deposit accounting provisions of SOP 98-7. While not underwritten as finite risk reinsurance, these contracts contain adjustable features, primarily sliding scale ceding commissions and profit share commissions, that may cause the amount or variability of risk assumed by the Company to differ from that of its ceding company counterpart. These contracts often contain significant exposures, particularly catastrophic, start-up and other risks, that although having a low probability of occurrence, could produce material losses. Consequently, these contracts were accounted for as contracts which either transfer only significant timing risk or transfer only significant underwriting risk. The determination of the appropria te method of accounting for these contracts requires significant judgment and analysis, particularly with respect to assumptions about the variability and likelihood of potential future losses.

Under the deposit method of accounting, revenues and expenses from reinsurance contracts are not recognized as gross premium written and losses and loss expenses. Instead, the profits or losses from these contracts are recognized net as other underwriting income or loss over the contract or expected claim payment periods. Income or loss associated with contracts determined to transfer only significant timing risk or only significant underwriting risk are included as a component of net other underwriting income (loss) and recognized over the estimated claim settlement period or contract risk period, respectively.

The following table reconciles total segment results including Insurance, Reinsurance and Deposit Accounting detailed above to consolidated income before income taxes for the three months ended March 31, 2008 and 2007:

Endurance Holdings is a holding company that does not have any significant operations or assets other than its ownership of the shares of its direct and indirect subsidiaries, including Endurance Bermuda, Endurance U.K., Endurance U.S. Reinsurance, Endurance American, Endurance American Specialty, American Merchants and ARMtech. Endurance Holdings relies primarily on dividends and other permitted distributions from its insurance subsidiaries to pay its operating expenses, interest on debt and dividends, if any, on its ordinary shares and Series A Preferred Shares. There are restrictions on the payment of dividends by Endurance Bermuda, Endurance U.K., Endurance U.S. Reinsurance, Endurance American, Endurance American Specialty, American Merchants and ARMtech to Endurance Holdings, which are described in more detail below.

The ability of Endurance Bermuda to pay dividends is dependent on its ability to meet the requirements of applicable Bermuda law and regulations. Under Bermuda law, Endurance Bermuda may not declare or pay a dividend if there are reasonable grounds for believing that Endurance Bermuda is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of Endurance Bermuda’s assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts. Further, Endurance Bermuda, as a regulated insurance company in Bermuda, is subject to additional regulatory restrictions on the payment of dividends or distributions. As of March 31, 2008, Endurance Bermuda could pay a dividend or return additional paid-in capital totaling

approximately $1,033 million (December 31, 2007 – $1,042 million) without prior regulatory approval based upon the Bermuda insurance and Companies Act regulations.

Endurance U.K. is subject to regulation by the United Kingdom Financial Services Authority (the ‘‘FSA’’). U.K. company law prohibits Endurance U.K. from declaring a dividend to its shareholders unless it has ‘‘profits available for distribution.’’ The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses. While the U.K. insurance regulatory laws impose no statutory restrictions on a general insurer’s ability to declare a dividend, the FSA strictly controls the maintenance of each insurance company’s solvency margin within its jurisdiction. Any such payment or proposal could result in regulatory intervention. In addition, the FSA requires authorized insurance companies to notify the FSA in advance of any significant dividend payment. At March 31, 2008, Endurance U.K. did not have profits availa ble for distribution and could not pay a dividend.

Endurance U.S. Reinsurance, Endurance American and Endurance American Specialty are subject to regulation by the State of Delaware Department of Insurance. American Merchants is subject to regulation by the Ohio Department of Insurance, and ARMtech is subject to regulation by the Texas Department of Insurance. Dividends for each U.S. operating subsidiary are generally limited to the greater of 10% of policyholders’ surplus or statutory net income, excluding realized capital gains. In addition, dividends may only be declared or distributed out of earned surplus. Endurance U.S. Reinsurance, Endurance American and Endurance American Specialty do not currently have earned surpluses; therefore, these companies are precluded from declaring or distributing dividends at March 31, 2008 without the prior approval of the applicable insurance regulator. At March 31, 2008, American Merchants and ARMtech (with notice to the Texas Department of Insura nce) could pay dividends of $5.4 million and $6.3 million, respectively, without prior regulatory approval from the applicable regulators, during 2008. In addition, any dividends paid by Endurance American, Endurance American Specialty and American Merchants would be subject to the dividend limitation of their respective parent insurance companies.

The Company’s aggregate cash and invested assets as of March 31, 2008 totaled $5.6 billion compared to $5.6 billion as of December 31, 2007. There has been a modest increase in cash and invested assets since December 31, 2007 which resulted from collections of premiums on insurance policies and reinsurance contracts, and investment income, offset by losses and loss expenses paid, acquisition expenses paid, reinsurance premiums paid, general and administrative expenses paid and repurchases of the Company’s ordinary shares. The increase in cash flows from operations for the three months ended March 31, 2008 as compared to the same period in 2007 was primarily a result of the timing of paid loss disbursements during the three months ended March 31, 2008.

Historically, the operating subsidiaries of the Company have generated sufficient cash flows to meet all of their obligations. Because of the inherent volatility of the business written by the Company, the seasonality in the timing of payments by ceding companies, the irregular timing of loss payments, the impact of a change in interest rates on the Company’s investment returns as well as seasonality in coupon payment dates for fixed maturity securities, cash flows from the Company’s operating activities may vary significantly between periods. The Company expects to continue to generate positive operating cash flows through 2008, absent the occurrence of one or more significant catastrophic events. In the event that paid losses accelerate beyond the ability to fund such payments from operating cash flows, the Company would use its cash balances available, liquidate a portion of its investment portfolio, access its existing credit facility or arrange for additional financing.

The following table summarizes the fair value composition of the fixed maturity portfolio by investment ratings assigned by S&P, Moody’s or other rating agencies and by contractual maturity at March 31, 2008. In some cases, where bonds are unrated, the rating of the issuer has been applied. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


Ratings	Due within one year			Due after one year through five years			Due after five years through ten years			Due after ten years			Mortgage back securities⁽¹⁾			Asset Back securities⁽¹⁾			Total
	(U.S. dollars in thousands)
U.S. government and agency securities		$	56,010		$	345,188		$	187,183		$	50,088		$	—		$	—		$	638,469
AAA/Aaa			45,601			312,620			53,362			50,424			2,485,744			403,072			3,350,823
AA/Aa			44,327			218,308			44,720			2,366			1,482			—			311,203
A/A			29,196			193,794			45,597			50,516			3,043			674			322,820
BBB			1,403			2,279			939			427			5,315			15,202			25,565
Below BBB			—			11,053			38,158			2,251			9,054			527			61,043
Not rated			—			—			—			—			544			—			544
Total		$	176,537		$	1,083,242		$	369,959		$	156,072		$	2,505,182		$	419,475		$	4,710,467

Under the Company’s amended and restated syndicated credit facility, the Company and its subsidiaries have access to a revolving line of credit of up to $1.175 billion. As of March 31, 2008, there were no borrowings under this line of credit and letters of credits outstanding under the facility of $557.2 million.

Interest Rate Risk. The Company’s primary market risk exposure is to changes in interest rates. The Company’s fixed maturity portfolio is exposed to interest rate risk. Fluctuations in interest rates have a direct impact on the market valuation of these securities. As interest rates rise, the market value of our fixed maturity portfolio falls, and the converse is also true. The Company manages its interest rate risk through an asset liability strategy that involves the selection, by our managers, of investments with appropriate characteristics, such as duration, yield, currency and liquidity that are tailored to the anticipated cash outflow characteristics of our liabilities. The duration of assets is managed versus liabilities (including reserves for losses and loss expenses) to minimize any asset liability gap. The asset portfolio ha d a duration of approximately three years at March 31, 2008. A significant portion of the investment portfolio matures each year, allowing for reinvestment at current market rates. As of March 31, 2008, assuming parallel shifts in interest rates, the impact of these interest rate shifts in basis points on the Company’s cash and cash equivalents and fixed maturity securities of $5,260.2 million at March 31, 2008 would have been as follows:

Another method used by the Company to evaluate portfolio risk is Value-at-Risk (‘‘VaR’’). VaR is a probabilistic method of measuring the potential loss in portfolio value over a given time period and for a given distribution of historical returns. Portfolio risk, as measured by VaR, is affected by four primary risk factors: asset concentration, asset volatility, asset correlation and systematic risk. Assuming the risks

taken into account in the VaR model perform per their historical tendencies, there is a 95% chance that the loss on the portfolio will be less than 6.63% over a one-year time horizon at March 31, 2008.

The Company’s investments in alternative funds are exposed to interest rate risk. To the extent that the securities underlying these investments are fixed maturities, fluctuations in interest rates have a direct impact on the market valuation of these investments.

Excluding interest rate risk described above, there have been no other material changes in market risk from the information provided under the caption ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Information about Market Risk’’ included in the Company’s 2007 Annual Report on Form 10-K.

The Company’s functional currencies are U.S. dollars for Endurance Bermuda, Endurance U.S. Reinsurance, Endurance American, Endurance American Specialty, American Merchants and ARMtech and British Sterling for Endurance U.K. The reporting currency for all entities is U.S. dollars. The Company maintains a portion of its investments and liabilities in currencies other than the U.S. dollar. The Company has made a significant investment in the capitalization of Endurance U.K. Endurance U.K. is subject to the United Kingdom’s Financial Services Authority rules concerning the matching of the currency of its assets to the currency of its liabilities. Depending on the profile of Endurance U.K.’s liabilities, it may be required to hold some of its assets in currencies corresponding to the currencies of its liabilities. The Company may, from time to time, experience losses resulting from fluctuations in the values of foreign currencies, which could have a material adverse effect on the Company’s results of operations.

Assets and liabilities of foreign operations whose functional currency is not the U.S. dollar are translated at exchange rates in effect at the balance sheet date. Revenues and expenses of such foreign operations are translated at average exchange rates during the year. The effect of the translation adjustments for foreign operations is included in accumulated other comprehensive income.

Other monetary assets and liabilities denominated in foreign currencies are revalued at the exchange rates in effect at the balance sheet date with the resulting foreign exchange gains and losses included in earnings. Revenues and expenses denominated in foreign currencies are translated at the prevailing exchange rate on the transaction date.

The effects of inflation could cause the severity of claims to rise in the future. The Company’s estimates for losses and loss expenses include assumptions about future payments for settlement of claims and claims handling expenses, such as medical treatments and litigation costs. To the extent inflation causes these costs to increase above reserves established for these claims, the Company will be required to increase the reserve for losses and loss expenses with a corresponding reduction in its earnings in the period in which the deficiency is identified.

Some of the statements contained herein, and certain statements that the Company may make in press releases or that Company officials may make orally, may include forward-looking statements which reflect the Company’s current views with respect to future events and financial performance. Such statements 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 for purposes of the federal securities laws or otherwise.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements. We believe that these factors include, but are not limited to, the following:

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the 2007 Annual Report on

Form 10-K. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.

(b) Internal Control Over Financial Reporting: There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s first fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting (see Item 4(b) above).

We are party to various legal proceedings generally arising in the normal course of our business. While any proceeding contains an element of uncertainty, we do not believe that the eventual outcome of any litigation or arbitration proceeding to which we are presently a party could have a material adverse effect on our financial condition or business. Pursuant to our insurance and reinsurance agreements, disputes are generally required to be finally settled by arbitration.

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2007.


Period	(a) Total Number of Shares Purchased⁽¹⁾		(b) Average Price Paid per Share			(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾⁽²⁾		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾⁽²⁾
January 1, 2008 – January 31, 2008		580,600		$	40.12		580,600		9,585,001
February 1, 2008 – February 28, 2008		163,500		$	41.09		163,500		9,421,501
March 1, 2008 – March 31, 2008		286,821		$	36.64		286,821		9,134,680
Total		1,030,921		$	39.30		1,030,921		9,134,680


Exhibit Number			Description
10.1			Warrant Purchase Agreement, dated as of March 18, 2008, among the Company and Aon Alexander & Alexander U.K. Pension Scheme; Aon Bain Hogg Pension Scheme; Aon Minet Pension Scheme; Aon U.K. Pension Scheme and Jenner Fenton Slade 1980 Scheme, incorporated herein by reference to the Current Report on Form 8-K filed on March 20, 2008.
31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32			Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Large accelerated filer / X /			Accelerated filer / /			Non-accelerated filer / /			Smaller reporting company / /


Description of Class						Common Shares Outstanding as of May 6, 2008
Ordinary Shares – $1.00 par value						60,121,867


		Page
Part I.	FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets at March 31, 2008 (Unaudited) and December 31, 2007		2
	Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2008 and 2007		3
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2008 and 2007		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007		5
	Notes to the Unaudited Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 4.	Controls and Procedures		35
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings		36
Item 1A.	Risk Factors		36
Item 2.	Changes in Securities and Issuer Purchases of Equity Securities		36
Item 3.	Defaults Upon Senior Securities		36
Item 4.	Submission of Matters to a Vote of Security Holders		36
Item 5.	Other Information		36
Item 6.	Exhibits		37
SIGNATURES			38


	Fixed maturity Investments
Level 3 as of January 1, 2008		$	23,795
Total realized and unrealized gains (losses):
Included in earnings			(1,614	)
Included in other comprehensive income			(1,184	)
Purchases, issuances and settlements			5,266
Net transfers in of level 3			90,583
Level 3 as of March 31, 2008		$	116,846


Twelve Months Ended March 31,	Amount
2009		$	10,648
2010			10,542
2011			10,520
2012			10,641
2013			10,512
2014 and thereafter			28,777
		$	81,640


Bermuda (State or other jurisdiction of incorporation or organization)			98-0392908 (I.R.S. Employer Identification No.)
Wellesley House 90 Pitts Bay Road Pembroke HM 08, Bermuda (Address of principal executive offices, including postal code)


	2008				2007
Total underwriting income		$	57,383			$	44,156
Net investment income			46,878				74,813
Net foreign exchange losses			(3,107	)			(2,613	)
Net realized investment losses			(11,484	)			(2,084	)
Amortization of intangibles			(2,688	)			(1,127	)
Interest expense			(7,534	)			(7,529	)
Income before income taxes		$	79,448			$	105,616


	•	Level 1 – unadjusted, quoted prices in active markets for identical assets or liabilities;


	•	Level 2 – inputs other than quoted prices within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies; and


	•	Level 3 – unobservable inputs for the asset or liability.


	Incurred related to:								Total incurred losses
	Current year				Prior years				Total incurred losses
	(U.S. dollars in thousands)
Insurance:
Short tail		$	16,360			$	(1,896	)		$	14,464
Long tail			89,225				(1,847	)			87,378
Other			29,108				—				29,108
Total Insurance			134,693				(3,743	)			130,950
Reinsurance:
Short tail			61,020				(31,880	)			29,140
Long tail			31,742				(101	)			31,641
Other			3,938				(3,517	)			421
Total Reinsurance			96,700				(35,498	)			61,202
Deposit accounting⁽¹⁾			(937	)			(1,713	)			(2,650	)
Totals		$	230,456			$	(40,954	)		$	189,502


	Three Months Ended
	March 31, 2008						March 31, 2007
	Gross Premiums Written			Net Premiums Written			Gross Premiums Written			Net Premiums Written
	(U.S. dollars in thousands)
Property		$	31,183		$	15,003		$	27,042		$	6,127
Casualty			25,124			15,113			26,796			17,761
Healthcare Liability			16,492			16,492			18,790			18,790
Workers’ Compensation			83,480			75,906			61,633			54,810
Agriculture			413,419			222,400			—			—
Professional Lines			15,436			11,227			12,772			10,601
Total		$	585,134		$	356,141		$	147,033		$	108,089


	Interest Rate Shift in Basis Points
	−100				−50				0			50				100
	(U.S. dollars in millions)
March 31, 2008
Total market value		$	5,406.4			$	5,334.5			$	5,260.2		$	5,183.6			$	5,104.9
Market value change from base			2.78	%			1.41	%			—			(1.46	%)			(2.95	%)
Change in unrealized value		$	146.2			$	74.3				—			($76.6	)			($155.3	)


	•	the effects of competitors’ pricing policies, and of changes in laws and regulations on competition, including those regarding contingent commissions, industry consolidation and development of competing financial products;


	•	greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than our underwriting, reserving or investment practices have anticipated;


2.	Investments, cont’d.


	•	changes in market conditions in the agriculture industry, which may vary depending upon demand for agricultural products, weather, natural disasters, technological advances in agricultural practices, changes in U.S. and foreign legislation and policies related to agricultural products, producers, agents and insurers;


	•	decreased demand for property and casualty insurance or reinsurance or increased competition due to an increase in capacity of property and casualty insurers and reinsurers;


	•	changes in the availability, cost or quality of reinsurance or retrocessional coverage;


	•	the inability to renew business previously underwritten or acquired;


	•	the inability to obtain or maintain financial strength or claims-paying ratings by one or more of our subsidiaries;


	•	our ability to effectively integrate acquired operations and to continue to expand our business;


	•	uncertainties in our reserving process, including the potential for adverse development of our loss reserves or failure of our loss limitation methods;


	•	Endurance Holdings or Endurance Bermuda becomes subject to income taxes in the United States or the United Kingdom;


	•	changes in tax regulations or laws applicable to us, our subsidiaries, brokers or customers;


	•	state, federal and foreign regulations that impede our ability to charge adequate rates and efficiently allocate capital;


	•	termination of or changes in the terms of the U.S. multiple peril crop insurance program;


	•	reduced acceptance of our existing or new products and services;


	•	loss of business provided by any one of a few brokers on whom we depend for a large portion of our revenue, and our exposure to the credit risk of our brokers;


	•	assessments by states for high risk or otherwise uninsured individuals;


	•	the effects of terrorist related insurance legislation and laws;


	•	the need for additional capital in the future which may not be available or only available on unfavorable terms;


	•	continued illiquidity in the credit markets worldwide and in the United States in particular; and


	•	changes in general economic conditions, including inflation, foreign currency exchange rates, interest rates, and other factors.


(a)	The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:


Date: May 9, 2008	By:	/s/ Kenneth J. LeStrange
		Kenneth J. LeStrange
		Chairman of the Board, Chief Executive Officer,
		President

Date: May 9, 2008	By:	/s/ Michael J. McGuire
		Michael J. McGuire
		Chief Financial Officer (Principal Financial Officer)