10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

for the period ended June 30, 2013,

or

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

Commission file number 1-31599

ENDURANCE SPECIALTY HOLDINGS LTD.

(Exact Name of Registrant as Specified in Its Charter)

Bermuda	98-0392908
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Wellesley House

90 Pitts Bay Road

Pembroke HM 08, Bermuda

(Address of principal executive offices, including postal code)

Registrant’s Telephone Number, Including Area Code: (441) 278-0400

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.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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 definitions of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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

Description of Class	Common Shares Outstanding as of August 2, 2013
Ordinary Shares - $1.00 par value	44,335,493

INDEX

		Page
Part I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at June 30, 2013 (unaudited) and December  31, 2012			2
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2013 and 2012			3
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2013 and 2012			4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June  30, 2013 and 2012			5
Notes to the Unaudited Condensed Consolidated Financial Statements			6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		63
Item 4.	Controls and Procedures		63
Part II. OTHER INFORMATION
Item 1.	Legal Proceedings		64
Item 1A.	Risk Factors		64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		64
Item 3.	Defaults Upon Senior Securities		64
Item 4.	Mine Safety Disclosures		64
Item 5.	Other Information		64
Item 6.	Exhibits		65
SIGNATURES			66

1

ENDURANCE SPECIALTY HOLDINGS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of United States dollars, except share amounts)

	JUNE 30, 2013		DECEMBER 31, 2012
	(UNAUDITED)
ASSETS
Investments
Fixed maturity investments, available for sale at fair value (amortized cost: $4,737,065 and $4,728,596 at June 30, 2013 and December 31, 2012, respectively)	$	4,755,091	$	4,868,150
Short-term investments, available for sale at fair value (amortized cost: $15,382 and $42,224 at June 30, 2013 and December 31, 2012, respectively)		15,382		42,230
Equity securities, available for sale at fair value (cost: $221,870 and $76,997 at June 30, 2013 and December 31, 2012, respectively)		232,919		86,997
Other investments		569,393		517,546
Total investments		5,572,785		5,514,923
Cash and cash equivalents		942,062		1,124,019
Premiums receivable, net		1,271,818		601,952
Insurance and reinsurance balances receivable		111,405		105,663
Deferred acquisition costs		210,740		168,252
Prepaid reinsurance premiums		292,911		166,702
Reinsurance recoverable on unpaid losses		594,020		691,783
Reinsurance recoverable on paid losses		101,753		83,159
Accrued investment income		25,404		27,166
Goodwill and intangible assets		168,621		172,000
Deferred tax asset		52,240		43,501
Net receivable on sales of investments		78,243		9,144
Other assets		128,446		86,708
Total assets	$	9,550,448	$	8,794,972
LIABILITIES
Reserve for losses and loss expenses	$	4,145,581	$	4,240,876
Reserve for unearned premiums		1,500,253		965,244
Deposit liabilities		17,785		22,220
Reinsurance balances payable		262,582		110,843
Debt		527,401		527,339
Net payable on purchases of investments		181,060		81,469
Other liabilities		179,732		136,384
Total liabilities		6,814,394		6,084,375
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY
Preferred shares
Series A and B, total liquidation preference $430,000 (2012 - $430,000)		17,200		17,200
Common shares
Ordinary – 44,331,379 issued and outstanding (2012 – 43,116,394)		44,331		43,116
Additional paid-in capital		556,255		527,915
Accumulated other comprehensive income		31,438		152,463
Retained earnings		2,086,830		1,969,903
Total shareholders’ equity		2,736,054		2,710,597
Total liabilities and shareholders’ equity	$	9,550,448	$	8,794,972

See accompanying notes to unaudited condensed consolidated financial statements.

2

ENDURANCE SPECIALTY HOLDINGS LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE (LOSS) INCOME

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

	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2013			2012			2013			2012
Revenues
Gross premiums written	$	572,710		$	604,076		$	1,750,072		$	1,665,725
Ceded premiums written		(108,089	)		(119,663	)		(376,536	)		(338,256	)
Net premiums written		464,621			484,413			1,373,536			1,327,469
Change in unearned premiums		78,714			34,927			(410,084	)		(396,494	)
Net premiums earned		543,335			519,340			963,452			930,975
Net investment income		32,468			31,766			81,773			88,841
Net realized and unrealized investment gains		10,372			14,958			16,607			20,161
Total other-than-temporary impairment losses		(579	)		(148	)		(1,385	)		(148	)
Portion of loss recognized in other comprehensive (loss) income		—			(259	)		—			(478	)
Net impairment losses recognized in earnings		(579	)		(407	)		(1,385	)		(626	)
Other underwriting income (loss)		888			19			1,637			(316	)
Total revenues		586,484			565,676			1,062,084			1,039,035
Expenses
Net losses and loss expenses		359,058			345,897			578,028			608,664
Acquisition expenses		71,868			72,128			143,504			140,617
General and administrative expenses		81,359			62,609			147,837			128,650
Amortization of intangibles		1,625			2,777			3,726			5,554
Net foreign exchange losses (gains)		3,368			(336	)		6,295			(18,473	)
Interest expense		9,052			9,044			18,090			18,091
Total expenses		526,330			492,119			897,480			883,103
Income before income taxes		60,154			73,557			164,604			155,932
Income tax benefit (expense)		865			(1,074	)		(3,286	)		(907	)
Net income		61,019			72,483			161,318			155,025
Preferred dividends		(8,188	)		(8,188	)		(16,376	)		(16,376	)
Net income available to common and participating common shareholders	$	52,831		$	64,295		$	144,942		$	138,649
Comprehensive (loss) income
Net income	$	61,019		$	72,483		$	161,318		$	155,025
Other comprehensive (loss) income
Net unrealized holding (losses) gains on investments arising during the period (net of other-than-temporary impairment losses recognized in other comprehensive (loss) income, reclassification adjustment and applicable deferred income taxes of $10,831 and $629 for the six months ended June 30, 2013 and 2012, respectively)		(106,249	)		11,495			(111,095	)		22,416
Foreign currency translation adjustments		219			(2,060	)		(9,975	)		(2,600	)
Reclassification adjustment for net losses on derivative designated as cash flow hedge included in net income		29			22			45			44
Other comprehensive (loss) income		(106,001	)		9,457			(121,025	)		19,860
Comprehensive (loss) income	$	(44,982	)	$	81,940		$	40,293		$	174,885
Per share data
Basic earnings per common share	$	1.21		$	1.48		$	3.34		$	3.20
Diluted earnings per common share	$	1.21		$	1.48		$	3.34		$	3.20
Dividend per common share	$	0.32		$	0.31		$	0.64		$	0.62

See accompanying notes to unaudited condensed consolidated financial statements.

3

ENDURANCE SPECIALTY HOLDINGS LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’ EQUITY

(In thousands of United States dollars)

	SIX MONTHS ENDED JUNE 30,
	2013			2012
Preferred shares
Balance, beginning and end of period	$	17,200		$	17,200
Common shares
Balance, beginning of period		43,116			43,087
Issuance of common shares, net of forfeitures		1,533			209
Repurchase of common shares		(318	)		—
Balance, end of period		44,331			43,296
Additional paid-in capital
Balance, beginning of period		527,915			526,910
Issuance of common shares, net of forfeitures		29,598			858
Repurchase of common shares and share equivalents		(14,266	)		—
Settlement of equity awards		(2,923	)		(3,185	)
Stock-based compensation expense		15,931			6,562
Balance, end of period		556,255			531,145
Accumulated other comprehensive income
Cumulative foreign currency translation adjustments:
Balance, beginning of period		12,676			9,609
Foreign currency translation adjustments		(9,975	)		(2,600	)
Balance, end of period		2,701			7,009
Unrealized holding gains on investments, net of deferred taxes:
Balance, beginning of period		141,731			122,815
Net unrealized holding (losses) gains arising during the period, net of other-than-temporary impairment losses and reclassification adjustment		(111,095	)		22,416
Balance, end of period		30,636			145,231
Accumulated derivative loss on cash flow hedging instruments:
Balance, beginning of period		(1,944	)		(2,032	)
Net change from current period hedging transactions, net of reclassification adjustment		45			44
Balance, end of period		(1,899	)		(1,988	)
Total accumulated other comprehensive income		31,438			150,252
Retained earnings
Balance, beginning of period		1,969,903			1,893,576
Net income		161,318			155,025
Dividends on preferred shares		(16,376	)		(16,376	)
Dividends on common shares		(28,015	)		(26,876	)
Balance, end of period		2,086,830			2,005,349
Total shareholders’ equity	$	2,736,054		$	2,747,242

See accompanying notes to unaudited condensed consolidated financial statements.

4

ENDURANCE SPECIALTY HOLDINGS LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of United States dollars)

	SIX MONTHS ENDED JUNE 30,
	2013			2012
Cash flows provided by operating activities
Net income	$	161,318		$	155,025
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of net premium on investments		27,804			10,502
Amortization of other intangibles and depreciation		9,479			12,352
Net realized and unrealized investment gains		(16,607	)		(20,161	)
Net impairment losses recognized in earnings		1,385			626
Deferred taxes		2,092			(4,230	)
Stock-based compensation expense		15,931			6,562
Equity in earnings of other investments		(29,839	)		(23,051	)
Premiums receivable, net		(669,866	)		(745,461	)
Insurance and reinsurance balances receivable		(5,742	)		(23,194	)
Deferred acquisition costs		(42,488	)		(30,644	)
Prepaid reinsurance premiums		(126,209	)		(108,852	)
Reinsurance recoverable on unpaid losses		97,763			59,080
Reinsurance recoverable on paid losses		(18,594	)		(10,599	)
Accrued investment income		1,762			2,325
Other assets		8,540			17,299
Reserve for losses and loss expenses		(95,295	)		160,398
Reserve for unearned premiums		535,009			505,374
Deposit liabilities		(4,435	)		(1,949	)
Reinsurance balances payable		151,739			116,634
Other liabilities		38,965			(7,741	)
Net cash provided by operating activities		42,712			70,295
Cash flows used in investing activities
Proceeds from sales of available for sale investments		1,395,528			1,552,896
Proceeds from maturities and calls on available for sale investments		381,332			464,318
Proceeds from the redemption of other investments		23,406			25,724
Purchases of available for sale investments		(1,894,444	)		(2,038,075	)
Purchases of other investments		(45,414	)		(48,875	)
Net settlements of other assets		(18,584	)		(16,193	)
Purchases of fixed assets		(7,081	)		(9,478	)
Net cash paid for subsidiary acquisition		(347	)		(514	)
Net cash flows used in investing activities		(165,604	)		(70,197	)
Cash flows used in financing activities
Issuance of common shares, net of forfeitures		31,049			978
Repurchase of common shares		(14,584	)		—
Settlement of equity awards		(2,923	)		(3,185	)
Proceeds from issuance of debt		408			602
Repayments and repurchases of debt		(446	)		(1,590	)
Dividends on preferred shares		(16,376	)		(16,376	)
Dividends on common shares		(27,834	)		(26,876	)
Net cash flows used in financing activities		(30,706	)		(46,447	)
Effect of exchange rate changes on cash and cash equivalents		(28,359	)		(2,385	)
Net decrease in cash and cash equivalents		(181,957	)		(48,734	)
Cash and cash equivalents, beginning of period		1,124,019			890,914
Cash and cash equivalents, end of period	$	942,062		$	842,180

See accompanying notes to unaudited condensed consolidated financial statements.

5

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)

1. General

Endurance Specialty Holdings Ltd. (“Endurance Holdings” or the “Company”) 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 wholly-owned operating subsidiaries:

Operating Subsidiaries	Domicile
Endurance Specialty Insurance Ltd.	Bermuda
Endurance Worldwide Insurance Limited	England
Endurance Reinsurance Corporation of America	Delaware
Endurance American Insurance Company	Delaware
Endurance American Specialty Insurance Company	Delaware
Endurance Risk Solutions Assurance Co.	Delaware
American Agri-Business Insurance Company	Texas

2. Summary of significant accounting policies

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 and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The unaudited condensed consolidated financial statements include the accounts of Endurance Holdings and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in 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, to record the fair value of investments 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, 2012 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, 2012 contained in Endurance Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “2012 Form 10-K”).

Certain comparative information has been reclassified to conform to current year presentation.

6

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)

2. Summary of significant accounting policies, cont’d.

There were no material changes in the Company’s significant accounting and reporting policies subsequent to the 2012 Form 10-K.

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-11 “Disclosures About Offsetting Assets and Liabilities” (“ASU 2011-11”). ASU 2011-11 requires additional disclosures about financial instruments and derivative instruments relating to netting arrangements.

ASU 2011-11 was effective for interim and annual periods beginning on or after January 1, 2013, with retrospective presentation required. The Company adopted this standard effective January 1, 2013. This standard did not have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02 “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”). ASU 2013-02 requires entities to report, in one location, information about reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 also requires companies to report changes in AOCI balances. For significant items reclassified out of AOCI into net income in their entirety in the same reporting period, reporting (either on the face of the statement where net income is presented or in the notes to the financial statements) is required about the effect of the reclassifications on the respective line items in the statement where net income is presented. For items that are not reclassified into net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under US GAAP is required in the notes. The above information must be presented in one place (parenthetically on the face of the financial statements by income statement line item or in a note to the financial statements).

ASU 2013-02 was effective for fiscal years and interim periods beginning after December 15, 2012. The Company adopted this standard prospectively on January 1, 2013. This standard resulted in an additional note to the consolidated financial statements (see Note 6).

In July 2013, the FASB issued ASU 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). The objective of ASU 2013-11 is to improve the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 seeks to reduce the diversity in practice by providing guidance on the presentation of unrecognized tax benefits to better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.

ASU 2013-11 will be effective for annual and interim reporting periods beginning after December 15, 2013, with both early adoption and retrospective application permitted. The Company is currently evaluating the impact of this guidance; however, the Company does not expect this standard to have a material impact on the Company’s consolidated financial statements.

7

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)

3. Investments

Composition of Net Investment Income and of Invested Assets

The components of net investment income for the three and six months ended June 30, 2013 and 2012 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Available for sale investments	$	28,666		$	34,678		$	58,147		$	71,660
Other investments		6,780			(74	)		29,839			23,051
Cash and cash equivalents		840			349			1,291			689
	$	36,286		$	34,953		$	89,277		$	95,400
Investment expenses		(3,818	)		(3,187	)		(7,504	)		(6,559	)
Net investment income	$	32,468		$	31,766		$	81,773		$	88,841

The following table summarizes the composition of the investment portfolio by investment type at June 30, 2013 and December 31, 2012:

	June 30, 2013					December 31, 2012
Type of Investment	Fair Value		Percentage			Fair Value		Percentage
Fixed maturity investments	$	4,755,091		74.2	%	$	4,868,150		74.2	%
Cash and cash equivalents(1)		839,245		13.1	%		1,051,694		16.0	%
Other investments(2)		569,393		8.9	%		517,546		7.9	%
Short-term investments		15,382		0.2	%		42,230		0.6	%
Equity securities		232,919		3.6	%		86,997		1.3	%
Total	$	6,412,030		100.0	%	$	6,566,617		100.0	%

(1) Includes net receivable on sales of investments and net payable on purchases of investments.

(2) Consists of investments in alternative funds and specialty funds.

The following table summarizes the composition by investment rating of the fixed maturity and short-term investments at June 30, 2013 and December 31, 2012. In some cases, where bonds are unrated, the rating of the issuer has been applied.

	June 30, 2013					December 31, 2012
Ratings(1)	Fair Value		Percentage			Fair Value		Percentage
U.S. government and agencies securities	$	671,597		14.1	%	$	737,535		15.0	%
AAA / Aaa		1,017,720		21.3	%		993,277		20.2	%
AA / Aa		1,746,510		36.7	%		1,821,250		37.1	%
A / A		931,561		19.5	%		993,307		20.2	%
BBB		292,820		6.1	%		219,017		4.5	%
Below BBB		105,384		2.2	%		143,198		2.9	%
Not rated		4,881		0.1	%		2,796		0.1	%
Total	$	4,770,473		100.0	%	$	4,910,380		100.0	%

(1) The credit rating for each security reflected above was determined based on the rating assigned to the individual security by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”). If a rating is not supplied by Standard & Poor’s, the equivalent rating supplied by either Moody’s Investors Service, Inc. (“Moody’s”) or Fitch Ratings is used.

8

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)

3. Investments, cont’d.

Contractual maturities of the Company’s fixed maturity and short-term investments are shown below as of June 30, 2013 and December 31, 2012. 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.

	June 30, 2013				December 31, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	158,318	$	159,900	$	136,283	$	137,567
Due after one year through five years		1,675,581		1,677,171		1,725,927		1,765,662
Due after five years through ten years		336,818		334,020		410,755		429,099
Due after ten years		27,465		28,920		29,654		33,803
Residential mortgage-backed securities		1,205,773		1,203,477		1,252,468		1,280,579
Commercial mortgage-backed securities		852,103		866,181		741,178		781,379
Asset-backed securities		496,389		500,804		474,555		482,291
Total	$	4,752,447	$	4,770,473	$	4,770,820	$	4,910,380

In addition to the Company’s fixed maturity, short-term and equity investments, the Company invests in (i) hedge funds and private investment funds that generally invest in senior secured bank debt, high yield credit, distressed debt, distressed real estate, derivatives, equity long/short strategies, currencies and commodities (“alternative funds”) and (ii) high yield loan and convertible debt funds (“specialty funds”). The Company’s alternative funds and specialty funds are recorded on the Company’s balance sheet as “other investments”. At June 30, 2013 and December 31, 2012, the Company had invested, net of capital returned, a total of $426.7 million and $394.5 million, respectively, in other investments. At June 30, 2013 and December 31, 2012, the carrying value of other investments was $569.4 million and $517.5 million, respectively. The following table summarizes the composition and redemption restrictions of other investments as of June 30, 2013 and December 31, 2012:

June 30, 2013	Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
Hedge funds	$	372,450	$	—	$	80,437
Private investment funds		47,458		22,195		47,458
Total alternative funds		419,908		22,195		127,895
Specialty funds
High yield loan funds		107,926		—		—
Convertible debt funds		41,559		—		—
Total specialty funds		149,485		—		—
Total other investments	$	569,393	$	22,195	$	127,895

9

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)

3. Investments, cont’d.

December 31, 2012	Market Value		Unfunded Commitments		Ineligible for Redemption in 2013
Alternative funds
Hedge funds	$	337,200	$	—	$	61,161
Private investment funds		35,219		29,483		35,219
Total alternative funds		372,419		29,483		96,380
Specialty funds
High yield loan funds		105,886		—		—
Convertible debt funds		39,241		—		—
Total specialty funds		145,127		—		—
Total other investments	$	517,546	$	29,483	$	96,380

Hedge funds – The redemption frequency of the hedge funds range from monthly to biennially with notice periods from 30 to 90 days. Over one year, it is estimated that the Company can liquidate approximately 78% of the hedge fund portfolio, with the remainder over the following two years.

Private investment funds – The Company generally has no right to redeem its interest in any private investment funds in advance of dissolution of the applicable partnership. Instead, the nature of these investments is that distributions are received by the Company in connection with the liquidation of the underlying assets of the applicable limited partnership. It is estimated that the majority of the underlying assets of the limited partnerships would liquidate over 5 to 10 years from inception of the limited partnership. A secondary market, with unpredictable liquidity, exists for limited partner interests in private equity funds.

High yield loan funds – There are generally no restrictions on the Company’s right to redeem its interest in high yield loan funds with the exception of certain redemption frequency and notice requirements. The redemption frequency of these funds ranges from monthly to quarterly with notice periods from 30 to 90 days.

Convertible debt funds – There are generally no restrictions on the Company’s right to redeem its interest in convertible debt funds with the exception of certain redemption frequency and notice requirements. The redemption frequency of these funds is monthly with a required notice period of 5 days.

Net Realized and Unrealized Investment Gains

Realized and unrealized investment gains and losses are recognized in earnings using the first in, first out method. The analysis of net realized and unrealized investment gains for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Gross realized gains on investment sales	$	16,591		$	15,613		$	24,011		$	22,861
Gross realized losses on investment sales		(5,283	)		(822	)		(6,746	)		(3,169	)
Change in fair value of derivative financial instruments(1)		(936	)		167			(658	)		469
Net realized and unrealized investment gains	$	10,372		$	14,958		$	16,607		$	20,161

(1) For additional information on the Company’s derivative financial instruments, see Note 7

10

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)

3. Investments, cont’d.

Unrealized Gains and Losses and Other-than-temporary Impairments

The Company classifies its investments in fixed maturity investments, short-term investments and equities as available for sale. The amortized cost, fair value and related gross unrealized gains and losses and non-credit other-than-temporary impairment (“OTTI”) losses on the Company’s securities classified as available for sale at June 30, 2013 and December 31, 2012 are as follows:

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
Fixed maturity investments
U.S. government and agencies securities	$	670,997	$	8,732	$	(8,132	)	$	671,597	$	—
U.S. state and municipal securities		28,116		164		(378	)		27,902		—
Foreign government securities		162,370		1,519		(2,516	)		161,373		—
Government guaranteed corporate securities		49,710		815		(90	)		50,435		—
Corporate securities		1,271,607		17,966		(16,251	)		1,273,322		—
Residential mortgage-backed securities		1,205,773		18,730		(21,026	)		1,203,477		(5,136	)
Commercial mortgage-backed securities(1)		852,103		26,624		(12,546	)		866,181		(47	)
Asset-backed securities		496,389		5,548		(1,133	)		500,804		—
Total fixed maturity investments	$	4,737,065	$	80,098	$	(62,072	)	$	4,755,091	$	(5,183	)
Short-term investments		15,382		—		—			15,382		—
Total fixed income investments	$	4,752,447	$	80,098	$	(62,072	)	$	4,770,473	$	(5,183	)
Equity securities
Equity investments	$	139,470	$	12,784	$	(3,663	)	$	148,591	$	—
Emerging market debt funds		50,000		139		—			50,139		—
Preferred equity investments		7,279		1,791		(2	)		9,068		—
Short-term fixed income fund		25,121		—		—			25,121		—
Total equity securities	$	221,870	$	14,714	$	(3,665	)	$	232,919	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.

(2) Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At June 30, 2013, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.1 million.

11

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)

3. Investments, cont’d.

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
Fixed maturity investments
U.S. government and agencies securities	$	718,992	$	18,596	$	(53	)	$	737,535	$	—
U.S. state and municipal securities		37,952		1,119		(177	)		38,894		—
Foreign government securities		106,218		3,264		(145	)		109,337		—
Government guaranteed corporate securities		62,782		1,682		—			64,464		—
Corporate securities		1,334,451		40,555		(1,335	)		1,373,671		—
Residential mortgage-backed securities		1,252,468		30,426		(2,315	)		1,280,579		(5,884	)
Commercial mortgage-backed securities(1)		741,178		41,737		(1,536	)		781,379		(53	)
Asset-backed securities		474,555		8,435		(699	)		482,291		—
Total fixed maturity investments	$	4,728,596	$	145,814	$	(6,260	)	$	4,868,150	$	(5,937	)
Short-term investments		42,224		6		—			42,230		—
Total fixed income investments	$	4,770,820	$	145,820	$	(6,260	)	$	4,910,380	$	(5,937	)
Equity securities
Equity investments	$	59,736	$	7,194	$	(620	)	$	66,310	$	—
Emerging market debt funds		10,000		576		—			10,576		—
Preferred equity investments		7,261		2,851		(1	)		10,111		—
Total equity securities	$	76,997	$	10,621	$	(621	)	$	86,997	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.

(2) Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2012, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.4 million.

12

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)

3. Investments, cont’d.

The following tables summarize, for all available for sale securities in an unrealized loss position at June 30, 2013 and December 31, 2012, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position.

	Less than 12 months					12 months or greater					Total
June 30, 2013	Unrealized Losses(1)			Fair Value		Unrealized Losses(1)			Fair Value		Unrealized Losses(1)			Fair Value
Fixed maturity investments
U.S. government and agencies securities	$	(8,132	)	$	350,292	$	—		$	—	$	(8,132	)	$	350,292
U.S. state and municipal securities		(378	)		19,910		—			—		(378	)		19,910
Foreign government securities		(2,516	)		108,087		—			—		(2,516	)		108,087
Government guaranteed corporate securities		(90	)		10,870		—			—		(90	)		10,870
Corporate securities		(16,251	)		673,297		—			—		(16,251	)		673,297
Residential mortgage-backed securities		(20,917	)		674,696		(109	)		1,646		(21,026	)		676,342
Commercial mortgage-backed securities		(12,180	)		459,330		(366	)		5,446		(12,546	)		464,776
Asset-backed securities		(915	)		210,342		(218	)		9,041		(1,133	)		219,383
Total fixed maturity investments	$	(61,379	)	$	2,506,824	$	(693	)	$	16,133	$	(62,072	)	$	2,522,957
Equity securities
Equity investments	$	(3,644	)	$	42,190	$	(19	)	$	200	$	(3,663	)	$	42,390
Preferred equity investments		(2	)		400		—			—		(2	)		400
Total equity securities	$	(3,646	)	$	42,590	$	(19	)	$	200	$	(3,665	)	$	42,790

(1) Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at June 30, 2013.

As of June 30, 2013, 865 available for sale securities were in an unrealized loss position aggregating $65.7 million. Of those, 38 securities with aggregated unrealized losses of $0.7 million at June 30, 2013 had been in a continuous unrealized loss position for twelve months or greater.

The unrealized losses on the Company’s available for sale securities at June 30, 2013 were primarily due to an increase in interest rates and widening of credit spreads, rather than any actual credit losses on these securities. Because the Company has the ability and intent to hold these securities until recovery, the Company currently believes it is probable that it will collect all amounts due according to their respective contractual terms. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2013.

13

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)

3. Investments, cont’d.

	Less than 12 months					12 months or greater					Total
December 31, 2012	Unrealized Losses(1)			Fair Value		Unrealized Losses(1)			Fair Value		Unrealized Losses(1)			Fair Value
Fixed maturity investments
U.S. government and agencies securities	$	(53	)	$	48,570	$	—		$	—	$	(53	)	$	48,570
U.S. state and municipal securities		(177	)		6,905		—			—		(177	)		6,905
Foreign government securities		(139	)		23,157		(6	)		4,870		(145	)		28,027
Corporate securities		(1,305	)		245,232		(30	)		1,849		(1,335	)		247,081
Residential mortgage-backed securities		(1,920	)		327,473		(395	)		7,511		(2,315	)		334,984
Commercial mortgage-backed securities		(474	)		79,125		(1,062	)		11,625		(1,536	)		90,750
Asset-backed securities		(94	)		53,471		(605	)		8,123		(699	)		61,594
Total fixed maturity investments	$	(4,162	)	$	783,933	$	(2,098	)	$	33,978	$	(6,260	)	$	817,911
Equity securities
Equity investments	$	(580	)	$	9,183	$	(40	)	$	387	$	(620	)	$	9,570
Preferred equity investments		(1	)		201		—			—		(1	)		201
Total equity securities	$	(581	)	$	9,384	$	(40	)	$	387	$	(621	)	$	9,771

(1) Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2012.

As of December 31, 2012, 403 available for sale securities were in an unrealized loss position aggregating $6.9 million. Of those, 55 securities with aggregated unrealized losses of $2.1 million had been in a continuous unrealized loss position for twelve months or greater.

The analysis of OTTI for the three and six months ended June 30, 2013 and 2012 is as follows:

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
Total other-than-temporary impairment losses	$	(579	)	$	(148	)	$	(1,385	)	$	(148	)
Portion of loss recognized in other comprehensive (loss) income		—			(259	)		—			(478	)
Net impairment losses recognized in earnings	$	(579	)	$	(407	)	$	(1,385	)	$	(626	)

14

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)

3. Investments, cont’d.

Of the $0.6 million (2012: $0.4 million) of OTTI losses recognized by the Company in the second quarter of 2013, the majority was related to expected losses on corporate securities following the Company’s decision to liquidate a specific portfolio. At June 30, 2013, the Company did not have the intent to sell any of the remaining securities in an unrealized loss position and determined that it was unlikely that the Company would be required to sell securities in an unrealized loss position.

The following table provides a roll-forward of the amount related to credit losses for the Company’s available for sale investments recognized in earnings for which a portion of an OTTI loss was recognized in accumulated other comprehensive income for the three and six months ended June 30, 2013:

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
Beginning balance	$	(1,883	)	$	(2,187	)	$	(2,000	)	$	(2,225	)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized		—			(3	)		—			(3	)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized		—			(278	)		—			(498	)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security		—			—			—			—
Reductions for securities sold during the period		114			200			231			458
Ending balance	$	(1,769	)	$	(2,268	)	$	(1,769	)	$	(2,268	)

Variable Interest Entities

Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristics of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis.

The Company is involved in the normal course of business with VIEs primarily as a passive investor in residential and commercial mortgage-backed securities and through its interests in other investments in alternative and specialty funds that are structured as limited partnerships considered to be third party VIEs. The Company determined that it was not the primary beneficiary for any of these investments as of June 30, 2013. The Company believes its exposure to loss with respect to these investments is generally limited to the investment carrying amounts reported in the Company’s Condensed Consolidated Balance Sheets and any unfunded investment commitments.

15

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)

4. Fair value measurement

The Company determines the fair value of the fixed maturity investments, short-term investments, equity securities, other investments, debt, and other assets and liabilities in accordance with current accounting guidance, 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 Company determines the estimated fair value of each individual security utilizing the highest level inputs available. Valuation inputs by security type may include the following:

• Government and agencies fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical models which may incorporate option adjusted spreads, daily interest rate data and market/sector news. The Company generally classifies the fair values of government and agencies securities in Level 2. Current issue U.S. government securities are generally valued based on Level 1 inputs, which use the market approach valuation technique.

• Government guaranteed corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing service or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical spread models which may incorporate inputs from the U.S treasury curve or LIBOR. The Company generally classifies the fair values of its government guaranteed corporate securities in Level 2.

• Corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers typically use discounted cash flow models that incorporate benchmark curves for treasury, swap and high issuance credits. Credit spreads are developed from current market observations for like or similar securities. The Company generally classifies the fair values of its corporate securities in Level 2.

• Equity securities – These securities are generally priced by pricing services or index providers. Depending on the type of underlying equity security or equity fund, the securities are priced by pricing services or index providers based on quoted market prices in active markets or through a discounted cash flow model that incorporates benchmark curves for treasury, swap and credits for like or similar securities. The Company generally classifies the fair values of its equity securities in Level 1 or 2.

16

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)

4. Fair value measurement, cont’d.

• Other assets and liabilities – These balances include a variety of derivative instruments used to enhance the efficiency of the investment portfolio and economically hedge certain risks. These instruments are generally priced by pricing services, broker/dealers and/or recent trading activity. The market value approach valuation technique is used to estimate the fair value for these derivatives based on significant observable market inputs. Certain derivative instruments are priced by pricing services based on quoted market prices in active markets. These derivative instruments are generally classified in Level 1. Other derivative instruments are priced using industry valuation models and are considered Level 2, as the inputs to the valuation model are based on observable market inputs. Also included in this line item are proprietary, non-exchange traded derivative-based risk management products primarily used to address weather and energy risks. The trading market for these weather derivatives is generally linked to energy and agriculture commodities, weather and other natural phenomena. In instances where market prices are not available, the Company uses industry or internally developed valuation techniques such as spread option, Black Scholes, quanto and simulation modeling to determine fair value and classifies these in Level 3. These models may reference prices for similar instruments.

• Structured securities including agency and non-agency, residential and commercial, mortgage and asset-backed securities – These securities are generally priced by broker/dealers. Broker/dealers may use current market trades for securities with similar qualities. If no such trades are available, inputs such as bid and offer, prepayment speeds, the U.S. treasury curve, swap curve and cash settlement may be used in a discounted cash flow model to determine the fair value of a security. The Company generally classifies the fair values of its structured securities in Level 2.

• Other investments – Other investments, including alternative funds and specialty funds, are generally priced on net asset values (“NAV”) received from the fund managers or administrators. Due to the timing of the delivery of the final NAV by certain of the fund managers, valuations of certain alternative funds and specialty funds are estimated based on the most recently available information, including period end NAVs, period end estimates, or, in some cases, prior month or prior quarter NAVs. As this valuation technique incorporates both observable and significant unobservable inputs, the Company generally classifies the fair value of its other investments in Level 3.

• Debt – Outstanding debt consists of the Company’s 6.15% Senior Notes due October 15, 2015 and the 7.0% Senior Notes due July 15, 2034 (the “Senior Notes”). The fair values of these securities were obtained from a third party pricing service and pricing was based on the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. As these spreads and the yields for the risk-free yield curve are observable market inputs, the fair values of the Senior Notes are classified in Level 2.

The carrying values of cash and cash equivalents, accrued investment income, net receivable on sales of investments, net payable on purchases of investments and other financial instruments not described above approximated their fair values at June 30, 2013.

Transfers between levels are assumed to occur at the end of each period.

17

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)

4. Fair value measurement, cont’d.

The following table sets forth the Company’s available for sale investments, other investments, other assets and liabilities and debt categorized by the level within the hierarchy in which the fair value measurements fall at June 30, 2013:

	Fair Value Measurements at June 30, 2013
	Total at June 30, 2013		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level  3)
Assets
Fixed maturity investments
U.S. government and agencies securities	$	671,597	$	13,764	$	657,833	$	—
U.S. state and municipal securities		27,902		—		27,902		—
Foreign government securities		161,373		—		161,373		—
Government guaranteed corporate securities		50,435		—		50,435		—
Corporate securities		1,273,322		—		1,272,545		777
Residential mortgage-backed securities		1,203,477		—		1,203,246		231
Commercial mortgage-backed securities		866,181		—		861,072		5,109
Asset-backed securities		500,804		—		499,375		1,429
Total fixed maturity investments	$	4,755,091	$	13,764	$	4,733,781	$	7,546
Equity securities
Equity investments		148,591		107,439		41,152		—
Emerging market debt funds		50,139		—		50,139		—
Preferred equity investments		9,068		—		9,068		—
Short-term fixed income fund		25,121		25,121		—		—
Total equity securities	$	232,919	$	132,560	$	100,359	$	—
Short-term investments		15,382		—		15,382		—
Other investments		569,393		—		—		569,393
Other assets (see Note 7)		72,157		—		72,157		—
Total assets	$	5,644,942	$	146,324	$	4,921,679	$	576,939
Liabilities
Other liabilities (see Note 7)	$	40,914	$	—	$	40,914	$	—
Debt		577,188		—		577,188		—
Total liabilities	$	618,102	$	—	$	618,102	$	—

During the six months ended June 30, 2013, there were net transfers into Level 3 from Level 2 of $3.1 million, excluding other investments. Transfers into Level 3 consisted of corporate securities, commercial mortgage-backed securities and asset-backed securities for which observable inputs were no longer available in the current period.

18

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)

4. Fair value measurement, cont’d.

The following table sets forth the Company’s available for sale investments, other investments, other assets and liabilities and debt categorized by the level within the hierarchy in which the fair value measurements fall at December 31, 2012:

	Fair Value Measurements at December 31, 2012
	Total at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level  3)
Assets
Fixed maturity investments
U.S. government and agencies securities	$	737,535	$	39,889	$	697,646	$	—
U.S. state and municipal securities		38,894		—		38,894		—
Foreign government securities		109,337		—		109,337		—
Government guaranteed corporate securities		64,464		—		64,464		—
Corporate securities		1,373,671		—		1,373,671		—
Residential mortgage-backed securities		1,280,579		—		1,280,223		356
Commercial mortgage-backed securities		781,379		—		777,049		4,330
Asset-backed securities		482,291		—		478,480		3,811
Total fixed maturity investments	$	4,868,150	$	39,889	$	4,819,764	$	8,497
Equity securities
Equity investments		66,310		66,310		—		—
Emerging market debt funds		10,576		—		10,576		—
Preferred equity investments		10,111		—		10,111		—
Total equity securities	$	86,997	$	66,310	$	20,687	$	—
Short-term investments		42,230		—		42,230		—
Other investments		517,546		—		—		517,546
Other assets (see Note 7)		23,649		—		20,688		2,961
Total assets	$	5,538,572	$	106,199	$	4,903,369	$	529,004
Liabilities
Other liabilities (see Note 7)		10,660		—		7,699		2,961
Debt		592,677		—		592,677		—
Total liabilities	$	603,337	$	—	$	600,376	$	2,961

19

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)

4. Fair value measurement, cont’d.

Level 3 assets represented 10.22% and 9.55% of the Company’s total available for sale investments, other investments and derivative instruments at June 30, 2013 and December 31, 2012, respectively. There were no material changes in the Company’s valuation techniques for the six months ended June 30, 2013. No impairment losses on Level 3 securities were recognized in earnings for the three and six months ended June 30, 2013 or 2012.

The following tables present a reconciliation of the beginning and ending balances for all assets and liabilities measured at fair value on a recurring basis using Level 3 inputs during the three and six months ended June 30, 2013 and 2012, respectively:

	Three Months Ended June 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	9,814		$	554,715		$	6		$	564,535		$	12
Total net realized gains included in earnings		43			16,419			—			16,462			—
Total net realized and unrealized losses included in earnings		(2	)		(9,639	)		—			(9,641	)		—
Change in unrealized gains included in other comprehensive (loss) income		243			—			—			243			—
Change in unrealized losses included in other comprehensive (loss) income		(154	)		—			—			(154	)		—
Purchases		—			23,424			—			23,424			—
Sales		(2,276	)		(15,526	)		(6	)		(17,808	)		(12	)
Transfers in to Level 3		383			—			—			383			—
Transfers out of Level 3		(505	)		—			—			(505	)		—
Level 3, end of period	$	7,546		$	569,393		$	—		$	576,939		$	—

	Six Months Ended June 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	8,497		$	517,546		$	2,961		$	529,004		$	2,961
Total net realized gains included in earnings		48			41,902			—			41,950			—
Total net realized and unrealized losses included in earnings		(2	)		(12,063	)		—			(12,065	)		—
Change in unrealized gains included in other comprehensive (loss) income		327			—			—			327			—
Change in unrealized losses included in other comprehensive (loss) income		(208	)		—			—			(208	)		—
Purchases		—			45,414			6			45,420			12
Sales		(4,202	)		(23,406	)		(2,967	)		(30,575	)		(2,973	)
Transfers in to Level 3		3,647			—			—			3,647			—
Transfers out of Level 3		(561	)		—			—			(561	)		—
Level 3, end of period	$	7,546		$	569,393		$	—		$	576,939		$	—

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FINANCIAL STATEMENTS - CONTINUED

(Amounts in tables expressed in thousands of United States dollars, except

for ratios, share and per share amounts)

4. Fair value measurement, cont’d.

	Three Months Ended June 30, 2012
	Fixed maturity investments			Other investments			Other assets		Total assets			Other liabilities
Level 3, beginning of period	$	8,903		$	432,428		$	—	$	441,331		$	—
Total net realized gains included in earnings		5			10,825			—		10,830			—
Total net realized and unrealized losses included in earnings		(13	)		(10,899	)		—		(10,912	)		—
Change in unrealized gains included in other comprehensive (loss) income		568			—			—		568			—
Change in unrealized losses included in other comprehensive (loss) income		(115	)		—			—		(115	)		—
Purchases		(214	)		47,200			—		46,986			—
Sales		(582	)		(694	)		—		(1,276	)		—
Transfers in to Level 3		1,684			—			—		1,684			—
Transfers out of Level 3		(417	)		—			—		(417	)		—
Level 3, end of period	$	9,819		$	478,860		$	—	$	488,679		$	—

	Six Months Ended June 30, 2012
	Fixed maturity investments			Other investments			Other assets		Total assets			Other liabilities
Level 3, beginning of period	$	10,394		$	—		$	—	$	10,394		$	—
Total net realized gains included in earnings		10			10,825			—		10,835			—
Total net realized and unrealized losses included in earnings		(13	)		(10,899	)		—		(10,912	)		—
Change in unrealized gains included in other comprehensive (loss) income		1,162			—			—		1,162			—
Change in unrealized losses included in other comprehensive (loss) income		(229	)		—			—		(229	)		—
Purchases		(40	)		47,200			—		47,160			—
Sales		(1,032	)		(694	)		—		(1,726	)		—
Transfers in to Level 3		2,076			432,428	(1)		—		434,504			—
Transfers out of Level 3		(2,509	)		—			—		(2,509	)		—
Level 3, end of period	$	9,819		$	478,860		$	—	$	488,679		$	—

(1) As required by ASU 2011-04, the fair value of the Company’s other investments was transferred into Level 3 at March 31, 2012.

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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)

5. Earnings per share

The two-class method utilized by the Company is an earnings allocation formula that determines earnings per share for the holders of Endurance Holdings’ ordinary shares (also referred to as “common shares”) and participating common shares, which includes unvested restricted shares that receive cash dividends, according to dividends declared and participation rights in undistributed earnings. Net income available to common and participating common shareholders is reduced by the amount of dividends declared in the current period and by the contractual amount of dividends that must be paid for the current period related to the Company’s common and participating common shares. Any remaining undistributed earnings are allocated to the common and participating common shareholders to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. In periods of loss, no losses are allocated to participating common shareholders. Instead, all such losses are allocated solely to the common shareholders.

Basic earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. The weighted average number of common shares excludes any dilutive effect of outstanding options and convertible securities such as unvested restricted shares.

Diluted earnings per common share are based on the weighted average number of common shares and assumes the exercise of all dilutive stock options and the vesting or conversion of all convertible securities such as unvested restricted shares using the two-class method described above.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2013 and 2012:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Numerator:
Net income available to common and participating common shareholders	$	52,831		$	64,295		$	144,942		$	138,649
Less amount allocated to participating common shareholders(1)		(1,132	)		(1,085	)		(2,745	)		(2,377	)
Net income allocated to common shareholders	$	51,699		$	63,210		$	142,197		$	136,272
Denominator:
Weighted average shares – basic		42,621,301			42,598,611			42,526,686			42,518,902
Share equivalents:
Options		—			36,093			—			39,693
Restricted share units		229			479			679			3,412
Weighted average shares – diluted		42,621,530			42,635,183			42,527,365			42,562,007
Basic earnings per common share	$	1.21		$	1.48		$	3.34		$	3.20
Diluted earnings per common share	$	1.21		$	1.48		$	3.34		$	3.20

(1) Represents earnings attributable to holders of unvested restricted shares issued by the Company. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

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FINANCIAL STATEMENTS - CONTINUED

(Amounts in tables expressed in thousands of United States dollars, except

for ratios, share and per share amounts)

5. Earnings per share, cont’d.

Endurance Holdings declared a dividend of $0.484375 per Series A preferred share and $0.46875 per Series B preferred share on May 8, 2013 (2012 - Series A: $0.484375, Series B: $0.46875). The Series A and Series B preferred share dividends were paid on June 14, 2013 to shareholders of record on May 31, 2013. Endurance Holdings also declared a dividend of $0.32 per common share on May 8, 2013 (2012 - $0.31). The dividend was paid on June 28, 2013 to shareholders of record on June 14, 2013.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	0.968750	$	0.968750
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	0.937500	$	0.937500
Dividends declared per common share	$	0.32	$	0.31	$	0.64	$	0.62

6. Accumulated other comprehensive income

The following table presents the changes in accumulated other comprehensive income balances by component for the three and six months ended June 30, 2013:

	For the Three Months Ended June 30, 2013
	Gains and  losses on cash flow hedges			Unrealized gains and losses on available-for- sale securities			Foreign currency  items		Total
Beginning balance	$	(1,928	)	$	136,885		$	2,482	$	137,439
Other comprehensive (loss) income before reclassifications		—			(96,457	)		219		(96,238	)
Amounts reclassified from accumulated other comprehensive income(1)		29			(9,792	)		—		(9,763	)
Net current period other comprehensive (loss) income		29			(106,249	)		219		(106,001	)
Ending balance	$	(1,899	)	$	30,636		$	2,701	$	31,438

(1) All amounts are net of tax.

	Six Months Ended June 30, 2013
	Gains and  losses on cash flow hedges			Unrealized gains and losses on available-for- sale securities			Foreign currency  items			Total
Beginning balance	$	(1,944	)	$	141,731		$	12,676		$	152,463
Other comprehensive (loss) income before reclassifications		—			(96,360	)		(9,975	)		(106,335	)
Amounts reclassified from accumulated other comprehensive income(1)		45			(14,735	)		—			(14,690	)
Net current period other comprehensive (loss) income		45			(111,095	)		(9,975	)		(121,025	)
Ending balance	$	(1,899	)	$	30,636		$	2,701		$	31,438

(1) All amounts are net of tax.

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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)

6. Accumulated other comprehensive income, cont’d.

The following table presents the significant items reclassified out of accumulated other comprehensive income during the three and six months ended June 30, 2013:

Three Months Ended June 30, 2013
Details about accumulated other comprehensive income components	Amount reclassified from  accumulated other comprehensive income			Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges - Debt	$	29		Interest expense
		29		Total before income taxes
		—		Income tax expense
	$	29		Total net of income taxes
Unrealized (gains) losses on available-for-sale securities	$	(11,308	)	Net realized and unrealized investment gains
		579		Net impairment losses recognized in earnings
		(10,729	)	Total before income taxes
		937		Income tax expense
	$	(9,792	)	Total net of income taxes
Six Months Ended June 30, 2013
Details about accumulated other comprehensive income components	Amount reclassified from accumulated other comprehensive income			Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges - Debt	$	45		Interest expense
		45		Total before income taxes
		—		Income tax expense
	$	45		Total net of income taxes
Unrealized (gains) losses on available-for-sale securities	$	(17,265	)	Net realized and unrealized investment gains
		1,385		Net impairment losses recognized in earnings
		(15,880	)	Total before income taxes
		1,145		Income tax expense
	$	(14,735	)	Total net of income taxes

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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)

7. Derivatives

The Company’s derivative instruments are recorded in the Condensed Consolidated Balance Sheets at fair value, with changes in fair value and gains and losses recognized in net realized and unrealized investment gains, net foreign exchange losses (gains) and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income.

During 2012, the Company entered into the weather risk management business through its newly formed unit, Endurance Global Weather. Endurance Global Weather regularly transacts in certain derivative-based risk management products primarily to address weather and energy risks. The trading markets for these derivatives are generally linked to energy and agriculture commodities, weather and other natural phenomena. Generally, the Company’s current portfolio of such derivative contracts is of short duration and such contracts are predominantly seasonal in nature.

The Company’s derivatives are not designated as hedges under current accounting guidance. The Company invests a portion of its fixed maturity assets with third party investment managers with investment guidelines that permit the use of derivative instruments. The Company may enter derivative transactions directly or as part of strategies employed by its external investment managers. The Company’s objectives for holding these derivatives are as follows:

Interest Rate Futures, Swaps, Swaptions and Options - to manage exposure to interest rate risk, which can include increasing or decreasing its exposure to this risk through modification of the portfolio composition and duration.

Foreign Exchange Forwards, Futures and Options - as part of overall currency risk management and investment strategies.

Credit Default Swaps - to manage market exposures. The Company may assume or economically hedge credit risk through credit default swaps to replicate or hedge investment positions. The original term of these credit default swaps is generally five years or less.

Commodity Futures and Options - to economically hedge certain underwriting risks.

To-Be-Announced Mortgage-backed Securities (“TBAs”) - to enhance investment performance and as part of overall investment strategy. TBAs represent commitments to purchase or sell a future issuance of agency mortgage-backed securities. For the period between purchase of a TBA and issuance of the underlying securities, the Company’s position is accounted for as a derivative.

Energy and Weather Contracts - to address weather and energy risks. The Company may purchase or sell contracts with financial settlements based on the performance of an index linked to a quantifiable weather element, such as temperature, precipitation, snowfall or wind speed, and structures with multiple risk triggers indexed to a quantifiable weather element and a weather sensitive commodity price, such as temperature and electrical power or natural gas.

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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)

7. Derivatives, cont’d.

The fair values and the related notional values of derivatives at June 30, 2013 and December 31, 2012 are noted below.

	June 30, 2013				December 31, 2012
			Notional				Notional
	Fair		Principal		Fair		Principal
	Value		Amount		Value		Amount
Derivatives recorded in other assets
Foreign exchange forward contracts	$	430	$	11,640	$	23	$	1,652
Credit default swaps		199		4,968		9		410
Interest rate swaps		—		—		76		5,000
Interest rate swaptions		37		1,000		57		2,200
Interest rate futures		—		160,000		—		—
TBAs		71,491		71,000		20,523		19,000
Energy and weather contracts		—		—		2,961		15,573
Total recorded in other assets	$	72,157			$	23,649
Derivatives recorded in other liabilities
Foreign exchange forward contracts	$	320	$	11,589	$	60	$	5,296
Interest rate swaps		753		18,421		—		—
Interest rate swaptions		431		47,866		133		14,500
TBAs		39,410		39,000		7,506		7,000
Energy and weather contracts		—		—		2,961		15,573
Total recorded in other liabilities	$	40,914			$	10,660
Net derivative asset	$	31,243			$	12,989

On January 1, 2013, the Company adopted new guidance that requires disclosure of financial instruments subject to a master netting agreement. At June 30, 2013, derivative assets of $0.7 million and liabilities of $1.5 million were traded under International Swaps and Derivatives Association Master Agreements (“ISDAs”) which provide for the ability to settle the derivative asset and liability with each counterparty on a net basis. TBAs and interest rate futures are not subject to ISDAs. At June 30, 2013 and December 31, 2012, none of the Company’s derivative instruments were netted. See Note 10 for information on collateral pledged.

26

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)

7. Derivatives, cont’d.

The gains and losses on the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income for derivatives for the three and six months ended June 30, 2013 and 2012 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Total gains included in net foreign exchange losses (gains) from foreign exchange forward contracts	$	169		$	270		$	330		$	151
Futures contracts	$	(47	)	$	—		$	(47	)	$	87
Credit default swaps		114			—			116			43
Interest rate swaps		(279	)		(196	)		(161	)		(43	)
Interest rate swaptions		(276	)		37			(101	)		47
TBAs		(448	)		326			(465	)		335
Total (losses) gains included in net realized and unrealized investment gains	$	(936	)	$	167		$	(658	)	$	469
Total losses included in other underwriting income (loss) from commodity put options	$	—		$	(1,300	)	$	—		$	(1,300	)
Total gains included in other underwriting income (loss) from energy and weather contracts	$	6		$	—		$	1,172		$	—
Total (losses) gains from derivatives	$	(761	)	$	(863	)	$	844		$	(680	)

8. Stock-based employee compensation and other stock plans

The Company has a stock-based employee compensation plan, that provides the Company with the ability to grant to employees and non-employee directors restricted shares, restricted share units, stock appreciation rights, share bonuses, options to purchase the Company’s ordinary shares and other forms of equity incentive awards, as determined by the Compensation Committee of the Company’s Board of Directors.

On May 28, 2013, the Board of Directors elected John R. Charman as the Company’s Chairman and Chief Executive Officer. Mr. Charman received a stock option to purchase 800,000 ordinary shares at an exercise price of $48.20 per share, and a grant of 708,890 restricted shares, as an employment inducement pursuant to Rule 303A.08 of the New York Stock Exchange Corporate Governance Standards.

Stock Options

The 800,000 options awarded to Mr. Charman will vest annually, in five equal tranches commencing on May 28, 2013, subject to Mr. Charman’s continued employment, or in the event of certain terminations of employment and other events. Mr. Charman’s option awards have a 10-year contractual life.

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FINANCIAL STATEMENTS - CONTINUED

(Amounts in tables expressed in thousands of United States dollars, except

for ratios, share and per share amounts)

8. Stock-based employee compensation and other stock plans, cont’d.

A summary of option activity, including options held by employees and non-employee directors, during the six months ended June 30, 2013 is presented below:

	Six Months Ended June 30, 2013
					Weighted Average
			Weighted		Remaining
	Number of		Average		Contractual Life		Aggregate
Options Outstanding	Options		Exercise Price		(years)		Intrinsic Value
Beginning, December 31, 2012		39,501	$	27.78
Granted		800,000		48.20
Exercised		24,501		23.88
Forfeited		—		—
Outstanding, June 30, 2013		815,000	$	47.94		9.75	$	2,861
Exercisable and vested options, June 30, 2013		175,000	$	46.98		9.14	$	782

During the three and six months ended June 30, 2013, 800,000 options were granted (2012 – Nil) with a weighted average grant date fair value of $10.2 million (2012 – Nil). The Company uses the Black-Scholes-Merton formula to estimate the value of stock options granted. No options expired during the three and six months ended June 30, 2013 and 2012. During the three and six months ended June 30, 2013, 12,501 (2012 - 13,800) and 24,501 (2012 - 26,800) options were exercised, respectively. During the three and six months ended June 30, 2013, 160,000 options vested (2012 – Nil). The total intrinsic value of options exercised during the three and six months ended June 30, 2013 was $0.3 million (2012 - $0.3 million) and $0.5 million (2012 - $0.6 million), respectively. The Company received proceeds of $0.3 million (2012 - $0.3 million) and $0.6 million (2012 - $0.5 million) from the exercise of options during the three and six months ended June 30, 2013, respectively. The Company issued new ordinary shares in connection with the exercise of the above options.

For the three and six months ended June 30, 2013, compensation costs recognized in earnings for all options totaled $2.4 million (2012 – Nil).

There was unrecognized stock-based compensation expenses of $7.8 million related to unvested stock options at June 30, 2013. This expense is expected to be recognized between 2013 and 2017, with approximately 27.2% expected to be recognized during the remainder of 2013.

Restricted Shares and Restricted Share Units

The 708,890 restricted shares awarded to Mr. Charman, as discussed above, will vest annually, in five equal tranches commencing on May 28, 2013, subject to Mr. Charman’s continued employment, or in the event of certain terminations of employment and other events.

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FINANCIAL STATEMENTS - CONTINUED

(Amounts in tables expressed in thousands of United States dollars, except

for ratios, share and per share amounts)

8. Stock-based employee compensation and other stock plans, cont’d.

A summary of the restricted share and restricted share unit activity during the six months ended June 30, 2013 is presented below:

	Six Months Ended June 30, 2013
	Number of			Aggregate
	Shares/Units			Intrinsic Value
Unvested, December 31, 2012		686,633
Granted		1,070,655
Settled		(403,453	)
Forfeited		(116,508	)
Unvested, June 30, 2013		1,237,327
Outstanding, June 30, 2013		1,237,327		$	63,660

During the three and six months ended June 30, 2013, the Company granted an aggregate of 727,271 (2012 - 23,260) and 1,070,655 (2012 - 400,568) restricted shares and restricted share units with weighted average grant date fair values of $35.1 million (2012 - $0.9 million) and $50.3 million (2012 - $15.4 million), respectively. During the three and six months ended June 30, 2013, the aggregate fair value of restricted shares and restricted share units that vested was $7.8 million (2012 - $1.4 million) and $16.9 million (2012 - $11.6 million), respectively.

For the three and six months ended June 30, 2013, compensation costs recognized in earnings for all restricted shares and restricted share units were $8.8 million (2012 - $1.6 million) and $13.5 million (2012 - $6.6 million), respectively. At June 30, 2013, compensation costs not yet recognized related to non-vested awards was $38.5 million. This expense is expected to be recognized between 2013 and 2017, with approximately 29.6% expected to be recognized during the remainder of 2013.

Employee Share Purchase Plan

The Company also has an Employee Share Purchase Plan under which employees of Endurance Holdings and certain of its subsidiaries may purchase Endurance Holdings’ ordinary shares. Total expenses related to this plan for the three and six months ended June 30, 2013 was approximately $44,000 (2012 - $45,000) and $82,000 (2012 - $89,000), respectively.

9. Segment reporting

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:

Insurance segment lines of business

• Agriculture

• Casualty and other specialty

• Professional lines

• Property

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(Amounts in tables expressed in thousands of United States dollars, except

for ratios, share and per share amounts)

9. Segment reporting, cont’d.

Reinsurance segment lines of business

• Catastrophe

• Property

• Casualty

• Other specialty

Management measures segment results on the basis of the combined ratio, which is obtained by dividing the sum of the net losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. 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 business segment to which they apply.

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended June 30, 2013:

	Three Months Ended June 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	276,941		$	295,769		$	572,710
Ceded premiums written		(85,439	)		(22,650	)		(108,089	)
Net premiums written		191,502			273,119			464,621
Net premiums earned		267,878			275,457			543,335
Other underwriting income		—			888			888
		267,878			276,345			544,223
Expenses
Net losses and loss expenses		215,844			143,214			359,058
Acquisition expenses		14,968			56,900			71,868
General and administrative expenses		43,524			37,835			81,359
		274,336			237,949			512,285
Underwriting (loss) income	$	(6,458	)	$	38,396		$	31,938
Net loss ratio		80.6	%		52.0	%		66.1	%
Acquisition expense ratio		5.6	%		20.7	%		13.2	%
General and administrative expense ratio		16.2	%		13.7	%		15.0	%
Combined ratio		102.4	%		86.4	%		94.3	%
Reserve for losses and loss expenses	$	2,242,894		$	1,902,687		$	4,145,581

30

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)

9. Segment reporting, cont’d.

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended June 30, 2012:

	Three Months Ended June 30, 2012
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	292,659		$	311,417		$	604,076
Ceded premiums written		(106,000	)		(13,663	)		(119,663	)
Net premiums written		186,659			297,754			484,413
Net premiums earned		266,085			253,255			519,340
Other underwriting (loss) income		(1,300	)		1,319			19
		264,785			254,574			519,359
Expenses
Net losses and loss expenses		208,504			137,393			345,897
Acquisition expenses		17,545			54,583			72,128
General and administrative expenses		32,819			29,790			62,609
		258,868			221,766			480,634
Underwriting income	$	5,917		$	32,808		$	38,725
Net loss ratio		78.4	%		54.2	%		66.5	%
Acquisition expense ratio		6.6	%		21.6	%		13.9	%
General and administrative expense ratio		12.3	%		11.8	%		12.1	%
Combined ratio		97.3	%		87.6	%		92.5	%
Reserve for losses and loss expenses	$	2,113,823		$	1,870,799		$	3,984,622

The following table reconciles total segment results to income before income taxes for the three months ended June 30, 2013 and 2012:

	Three Months Ended
	June 30,
	2013			2012
Total underwriting income	$	31,938		$	38,725
Net investment income		32,468			31,766
Net foreign exchange (losses) gains		(3,368	)		336
Net realized and unrealized investment gains		10,372			14,958
Net impairment losses recognized in earnings		(579	)		(407	)
Amortization of intangibles		(1,625	)		(2,777	)
Interest expense		(9,052	)		(9,044	)
Income before income taxes	$	60,154		$	73,557

31

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)

9. Segment reporting, cont’d.

The following table provides gross and net premiums written by line of business for the three months ended June 30, 2013 and 2012:

	Gross		Net		Gross		Net
	premiums		premiums		premiums		premiums
	written		written		written		written
Business Segment	2013		2013		2012		2012
Insurance
Agriculture	$	131,633	$	84,537	$	133,439	$	67,249
Casualty and other specialty		87,614		63,373		90,019		64,588
Professional lines		38,296		27,788		51,019		42,832
Property		19,398		15,804		18,182		11,990
Total Insurance		276,941		191,502		292,659		186,659
Reinsurance
Catastrophe		155,431		138,041		172,222		158,865
Casualty		67,209		67,211		58,897		58,895
Property		48,384		44,516		54,026		54,033
Other specialty		24,745		23,351		26,272		25,961
Total Reinsurance		295,769		273,119		311,417		297,754
Total	$	572,710	$	464,621	$	604,076	$	484,413

32

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)

9. Segment reporting, cont’d.

The following table provides a summary of the segment revenues and results for the six months ended June 30, 2013:

	Six Months Ended June 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	929,884		$	820,188		$	1,750,072
Ceded premiums written		(333,688	)		(42,848	)		(376,536	)
Net premiums written		596,196			777,340			1,373,536
Net premiums earned		419,030			544,422			963,452
Other underwriting income		—			1,637			1,637
		419,030			546,059			965,089
Expenses
Net losses and loss expenses		315,308			262,720			578,028
Acquisition expenses		29,584			113,920			143,504
General and administrative expenses		79,151			68,686			147,837
		424,043			445,326			869,369
Underwriting (loss) income	$	(5,013	)	$	100,733		$	95,720
Net loss ratio		75.2	%		48.3	%		60.0	%
Acquisition expense ratio		7.1	%		20.9	%		14.9	%
General and administrative expense ratio		18.9	%		12.6	%		15.3	%
Combined ratio		101.2	%		81.8	%		90.2	%

33

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)

9. Segment reporting, cont’d.

The following table provides a summary of the segment revenues and results for the six months ended June 30, 2012:

	Six Months Ended June 30, 2012
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	928,006		$	737,719		$	1,665,725
Ceded premiums written		(313,566	)		(24,690	)		(338,256	)
Net premiums written		614,440			713,029			1,327,469
Net premiums earned		427,715			503,260			930,975
Other underwriting (loss) income		(1,300	)		984			(316	)
		426,415			504,244			930,659
Expenses
Net losses and loss expenses		322,206			286,458			608,664
Acquisition expenses		33,759			106,858			140,617
General and administrative expenses		67,254			61,396			128,650
		423,219			454,712			877,931
Underwriting income	$	3,196		$	49,532		$	52,728
Net loss ratio		75.3	%		57.0	%		65.4	%
Acquisition expense ratio		7.9	%		21.2	%		15.1	%
General and administrative expense ratio		15.7	%		12.2	%		13.8	%
Combined ratio		98.9	%		90.4	%		94.3	%

The following table reconciles total segment results to income (loss) before income taxes for the six months ended June 30, 2013 and 2012, respectively:

	Six Months Ended
	June 30,
	2013			2012
Total underwriting income	$	95,720		$	52,728
Net investment income		81,773			88,841
Net foreign exchange (losses) gains		(6,295	)		18,473
Net realized and unrealized investment gains		16,607			20,161
Net impairment losses recognized in earnings		(1,385	)		(626	)
Amortization of intangibles		(3,726	)		(5,554	)
Interest expense		(18,090	)		(18,091	)
Income before income taxes	$	164,604		$	155,932

34

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)

9. Segment reporting, cont’d.

The following table provides gross and net premiums written by line of business for the six months ended June 30, 2013 and 2012:

	Gross		Net		Gross		Net
	premiums		premiums		premiums		premiums
	written		written		written		written
Business Segment	2013		2013		2012		2012
Insurance
Agriculture	$	696,107	$	425,667	$	667,106	$	422,169
Casualty and other specialty		144,081		106,634		145,510		106,411
Professional lines		59,260		41,991		87,364		73,037
Property		30,436		21,904		28,026		12,823
Total Insurance		929,884		596,196		928,006		614,440
Reinsurance
Catastrophe		303,297		269,439		315,404		292,583
Casualty		218,911		217,484		180,571		179,332
Property		196,795		192,927		160,772		160,779
Other specialty		101,185		97,490		80,972		80,335
Total Reinsurance		820,188		777,340		737,719		713,029
Total	$	1,750,072	$	1,373,536	$	1,665,725	$	1,327,469

10. Commitments and contingencies

Concentrations of credit risk. The Company’s reinsurance recoverables on paid and unpaid losses at June 30, 2013 and December 31, 2012 amounted to $695.8 million and $774.9 million, respectively. At June 30, 2013, substantially all reinsurance recoverables on paid and unpaid losses were due from the U.S. government or from reinsurers rated A- or better by A.M. Best Company Inc. or Standard & Poor’s.

Major production sources. The following table shows the percentage of net premiums written generated through the Company’s largest brokers for the six months ended June 30, 2013 and 2012, respectively:

Broker	2013			2012
Aon Benfield		19.5	%		19.3	%
Marsh & McLennan Companies, Inc.		15.3	%		17.8	%
Willis Companies		9.8	%		9.0	%
Total of largest brokers		44.6	%		46.1	%

Letters of credit. As of June 30, 2013, the Company had issued letters of credit of $269.4 million (December 31, 2012 – $320.4 million) under its credit facility in favor of certain ceding companies to collateralize obligations.

35

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)

10. Commitments and contingencies, cont’d.

Investment commitments. As of June 30, 2013 and December 31, 2012, the Company had pledged cash and cash equivalents and fixed maturity investments of $203.6 million and $224.4 million, respectively, in favor of certain ceding companies to collateralize obligations. As of June 30, 2013 and December 31, 2012, the Company had also pledged $319.1 million and $380.0 million of its cash and fixed maturity investments as required to meet collateral obligations for $269.4 million and $320.4 million in letters of credit outstanding under its credit facility, respectively. In addition, as of June 30, 2013 and December 31, 2012, cash and fixed maturity investments with fair values of $275.1 million and $280.0 million were on deposit with U.S. state regulators, respectively.

The Company is subject to certain commitments with respect to other investments at June 30, 2013 and December 31, 2012. See Note 3.

Reinsurance commitments. In the ordinary course of business, the Company periodically enters into reinsurance agreements that include terms which could require the Company to collateralize certain of its obligations.

Employment agreements. The Company has entered into employment agreements with certain officers that provide for equity incentive awards, 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 June 30, 2013 are as follows:

Twelve months ended June 30,	Amount
2014	$	14,999
2015		13,996
2016		12,166
2017		10,011
2018		9,978
2019 and thereafter		46,853
	$	108,003

Total lease expense under operating leases for the six months ended June 30, 2013 was $7.1 million (2012 – $7.2 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 settled by arbitration.

36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the financial condition and results of operations for the three and six months ended June 30, 2013 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, 2012, 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, 2012 (the “2012 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 2012 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.

Overview

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

• Endurance Specialty Insurance Ltd. (“Endurance Bermuda”), domiciled in Bermuda with branch offices in Switzerland and Singapore;

• Endurance Reinsurance Corporation of America (“Endurance U.S. Reinsurance”), domiciled in Delaware;

• Endurance Worldwide Insurance Limited (“Endurance U.K.”), domiciled in England;

• Endurance American Insurance Company (“Endurance American”), domiciled in Delaware;

• Endurance American Specialty Insurance Company (“Endurance American Specialty”), domiciled in Delaware;

• Endurance Risk Solutions Assurance Co. (“Endurance Risk Solutions”), domiciled in Delaware; and

• American Agri-Business Insurance Company (“American Agri-Business”), domiciled in Texas and managed by ARMtech Insurance Services, Inc. (together with American Agri-Business, “ARMtech”).

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 agriculture, casualty and other specialty, professional lines, and property insurance. In the Reinsurance segment, the Company writes catastrophe, property, casualty, and other specialty reinsurance.

37

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.

Application of Critical Accounting Estimates

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, reserves for losses and loss expenses, other-than-temporary impairments within the investment portfolio and fair value measurements of certain portions of the investment portfolio. For a detailed discussion of the Company’s critical accounting estimates, please refer to the 2012 Form 10-K and the Notes to the Unaudited Condensed Consolidated Financial Statements in this Form 10-Q. There were no material changes in the application of the Company’s critical accounting estimates subsequent to the 2012 Form 10-K. 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.

Consolidated Results of Operations – For the Three Months Ended June 30, 2013 and 2012

Results of operations for the three months ended June 30, 2013 and 2012 were as follows:

	Three Months Ended June 30,
	2013			2012			Change(1)
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	572,710		$	604,076			(5.2	)%
Ceded premiums written		(108,089	)		(119,663	)		(9.7	)%
Net premiums written		464,621			484,413			(4.1	)%
Net premiums earned		543,335			519,340			4.6	%
Net investment income		32,468			31,766			2.2	%
Net realized and unrealized investment gains		10,372			14,958			(30.7	)%
Net impairment losses recognized in earnings		(579	)		(407	)		42.3	%
Other underwriting income		888			19			4,573.7	%
Total revenues		586,484			565,676			3.7	%
Expenses
Net losses and loss expenses		359,058			345,897			3.8	%
Acquisition expenses		71,868			72,128			(0.4	)%
General and administrative expenses		81,359			62,609			29.9	%
Amortization of intangibles		1,625			2,777			(41.5	)%
Net foreign exchange losses (gains)		3,368			(336	)		NM	(2)
Interest expense		9,052			9,044			0.1	%
Income tax (benefit) expense		(865	)		1,074			NM	(2)
Net income	$	61,019		$	72,483			(15.8	)%
Net loss ratio		66.1	%		66.5	%		(0.4	)
Acquisition expense ratio		13.2	%		13.9	%		(0.7	)
General and administrative expense ratio		15.0	%		12.1	%		2.9
Combined ratio		94.3	%		92.5	%		1.8

⁽¹⁾  With respect to ratios, changes show increase or decrease in percentage points.

⁽²⁾  Not meaningful.

38

Premiums

Gross premiums written in the three months ended June 30, 2013 were $572.7 million, a decrease of $31.4 million, or 5.2%, compared to the same period in 2012. Net premiums written in the three months ended June 30, 2013 were $464.6 million, a decrease of $19.8 million, or 4.1%. The change in net premiums written was driven by the following factors:

• A decrease in the catastrophe line of the Reinsurance segment, reflecting the impact of a more competitive market where pricing declined and reduced limits on certain renewal contracts, particularly on Florida exposures;

• A decline in premiums in the property line of the Reinsurance segment as the Company non-renewed business where price weakening led to profitability being below target levels;

• An increase in the casualty line of the Reinsurance segment driven primarily by two new contracts written in its U.S. based operations;

• An increase in net premiums in the agriculture line of the Insurance segment in the second quarter, primarily due to the net premiums in the comparable period in 2012 being impacted by ceded premium adjustments that did not recur this year; and

• A decrease in professional lines premiums in the Insurance segment, due primarily to the non-renewal of a large program relationship in late 2012.

The decrease in ceded premiums written by the Company in the quarter ended June 30, 2013 as compared to the same period in 2012 was primarily driven by the agriculture line of the Insurance segment as the Company ceded more premiums to the U.S. government in the second quarter of 2012, offset partially by the Company choosing to purchase additional protection in the current period in the catastrophe and property lines of the Reinsurance segment.

Net premiums earned for the three months ended June 30, 2013 were $543.3 million, an increase of $24.0 million, or 4.6%, from the second quarter of 2012. The increase in net premiums earned resulted from the growth in net premiums written, primarily in the property reinsurance line of business over the last twelve months.

Net Investment Income

The Company’s net investment income of $32.5 million increased by 2.2% or $0.7 million for the quarter ended June 30, 2013 as compared to the same period in 2012. Net investment income during the second quarter of 2013 included net mark to market gains of $6.8 million on other investments, comprised of alternative funds and specialty funds, as compared to mark to market losses of $0.1 million in the second quarter of 2012. Investment income generated from the Company’s available for sale investments, which consist of fixed maturity investments, short-term investments and equity securities, declined by $6.0 million for the three months ended June 30, 2013 compared to the same period in 2012. This decline resulted primarily from lower reinvestment rates over the past 12 months. Investment expenses, including investment management fees, for the three months ended June 30, 2013 were $3.8 million compared to $3.2 million for the same period in 2012.

39

The annualized net earned yield and total return of the investment portfolio for the three months ended June 30, 2013 and 2012 and the market yield and portfolio duration as of June 30, 2013 and 2012 were as follows:

	Three Months Ended June 30,
	2013			2012
Annualized net earned yield(1)		2.04	%		2.06	%
Total return on investment portfolio(2)		(1.22	)%		0.90	%
Market yield(3)		2.00	%		1.63	%
Portfolio duration(4)		3.05 years			2.60 years

(1) The actual net earned income from the investment portfolio after adjusting for expenses and accretion of discount and amortization of premium from the purchase price divided by the average book value of assets.

(2) Net of investment manager fees; includes realized and unrealized gains and losses.

(3) The internal rate of return of the investment portfolio based on the given market price or the single discount rate that equates a security price (inclusive of accrued interest) for the portfolio with its projected cash flows. Excludes other investments and operating cash.

(4) Includes only cash and cash equivalents and fixed income investments managed by the Company’s

investment managers.

During the second quarter of 2013, the yield on the benchmark three year U.S. Treasury bond fluctuated within a 46 basis point range, with a high of 0.75% and a low of 0.29%. Trading activity in the Company’s portfolio during the second quarter included reductions in corporates, U.S. government residential mortgage-backed securities, and U.S. government and government agencies securities, and increased allocations to foreign government bonds, commercial mortgage-backed securities, and equity securities. The duration of the fixed income investments increased to 3.05 years at June 30, 2013 from 2.49 years at December 31, 2012, primarily due to the increase in interest rates which reduced the rate of prepayments underlying the Company’s mortgage-backed securities portfolio, causing their average maturity to extend.

Net Realized and Unrealized Investment Gains

The Company’s investment portfolio is actively managed on a fair value basis to generate attractive economic returns and income. 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 June 30, 2013 were $937.4 million compared to $719.6 million during the same period a year ago. Net realized investment gains decreased during the three months ended June 30, 2013 compared to the same period in 2012. Realized investment gains and losses and the change in the fair value of derivative financial instruments for the three months ended June 30, 2013 and 2012 were as follows:

	Three Months Ended June 30,
	2013			2012
	(U.S. dollars in thousands)
Gross realized gains on investment sales	$	16,591		$	15,613
Gross realized losses on investment sales		(5,283	)		(822	)
Change in fair value of derivative financial instruments		(936	)		167
Net realized and unrealized investment gains	$	10,372		$	14,958

Net impairment losses recognized in earnings for the three months ended June 30, 2013 and 2012 were $0.6 million and $0.4 million, respectively.

40

Net Foreign Exchange Gains and Losses

For the three months ended June 30, 2013, the Company remeasured its monetary assets and liabilities denominated in foreign currencies, which resulted in a net foreign exchange loss of $3.4 million compared to a net foreign exchange gain of $0.3 million for the same period of 2012. The current period net foreign exchange loss resulted from offsetting exposures across the Company as the U.S. dollar strengthened against the Japanese Yen, Australian dollar and New Zealand dollar in the period. In the prior year, the minimal gain resulted from the offsetting impact of the U.S. dollar weakening against the Japanese Yen and strengthening against other major currencies, together with Company’s strategy of pursuing a balanced asset liability position by major currency.

Net Losses and Loss Expenses

The Company’s net losses and loss expense ratio for the three months ended June 30, 2013 decreased compared to the same period in 2012 due to increased levels of favorable prior year loss reserve development partially offset by increased levels of catastrophe related activity.

Favorable prior year loss reserve development was $62.8 million for the second quarter of 2013 compared to $19.6 million during the same period in 2012. In the second quarter of 2013, prior year loss reserves emerged favorably across all lines business of the Insurance and Reinsurance segments. Favorable reserve development in the second quarter of 2013 was higher than the second quarter of 2012 principally in the Reinsurance segment due to lower than expected reported losses in the property and catastrophe lines and from reductions in reserve estimates related to the Thailand flood losses of 2011 and Superstorm Sandy losses in 2012. Comparatively, the second quarter of 2012 experienced adverse development on some of the major 2011 loss events.

The following table details the impact of the catastrophe related activity for the three months ended June 30, 2013 and 2012.

Three Months Ended June 30, 2013			Three Months Ended June 30, 2012
Event	Net Loss		Event	Net Loss
(U.S. dollars in millions)
Floods in Canada	$	11.3	Earthquake in Italy	$	6.2
Floods in Europe		23.7	Windstorms in the United States		8.2
Windstorms in the United States		12.4
	$	47.4		$	14.4

For the three months ended June 30, 2013, natural catastrophe related losses added 9.3 percentage points to the Company’s net loss ratio after adjustment for reinstatement premiums and other loss sensitive accruals compared to 2.8 percentage points in the same period in 2012. In addition, the Company recorded a higher expected loss ratio in the second quarter of 2013 in the agriculture line of the Insurance segment reflecting a more challenging winter wheat growing season and a higher level of prevented planting claims for spring crops, which was offset by lower recorded reserves for attritional losses in the Insurance segment’s property, professional and casualty and other lines in the three months ended June 30, 2013 compared to the same period in 2012.

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.

41

Acquisition Expenses

The acquisition expense ratio for the three months ended June 30, 2013 was modestly lower compared with the same period in 2012 due to a higher proportion of net earned premiums attributed to the agriculture line in the Insurance segment, which incurs a lower net acquisition expense rate, and due to the property reinsurance business line that has grown over the last twelve months, exhibiting a lower average acquisition expense rate than in prior periods.

General and Administrative Expenses

The Company’s general and administrative expense ratio for the second quarter of 2013 increased by 2.9 percentage points compared to the same period in 2012 due to an increase in personnel costs related to the addition of new underwriting teams over the last twelve months, current period costs associated with the Company’s senior leadership transition and increased annual incentive costs associated with improved year to date corporate operating results in 2013. At June 30, 2013, the Company had a total of 927 employees compared to 849 employees at June 30, 2012.

Income Tax Benefit (Expenses)

The Company recorded a tax benefit for the quarter ended June 30, 2013 of $0.9 million compared to a tax expense of $1.1 million for the quarter ended June 30, 2012. The current period tax benefit resulted from net losses recorded at the Company’s United States taxable jurisdictions, partially offset by increases recorded on the Company’s deferred tax asset valuation allowance.

Net Income

The Company generated net income of $61.0 million in the three months ended June 30, 2013 compared to net income of $72.5 million in the same period of 2012 primarily as a result of an increase in catastrophe losses and personnel costs partially offset by growth in net premiums earned and increased favorable prior year reserve development during the current period.

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Consolidated Results of Operations – For the Six Months Ended June 30, 2013 and 2012

Results of operations for the six months ended June 30, 2013 and 2012 were as follows:

	Six Months Ended June 30,
	2013			2012			Change(1)
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	1,750,072		$	1,665,725			5.1	%
Ceded premiums written		(376,536	)		(338,256	)		11.3	%
Net premiums written		1,373,536			1,327,469			3.5	%
Net premiums earned		963,452			930,975			3.5	%
Net investment income		81,773			88,841			(8.0	)%
Net realized and unrealized investment gains		16,607			20,161			(17.6	)%
Net impairment losses recognized in earnings		(1,385	)		(626	)		121.2	%
Other underwriting income (loss)		1,637			(316	)		NM	(2)
Total revenues		1,062,084			1,039,035			2.2	%
Expenses
Losses and loss expenses		578,028			608,664			(5.0	)%
Acquisition expenses		143,504			140,617			2.1	%
General and administrative expenses		147,837			128,650			14.9	%
Amortization of intangibles		3,726			5,554			(32.9	)%
Net foreign exchange losses (gains)		6,295			(18,473	)		NM	(2)
Interest expense		18,090			18,091			—	%
Income tax expense		3,286			907			262.3	%
Net income	$	161,318		$	155,025			4.1	%
Net loss ratio		60.0	%		65.4	%		(5.4	)
Acquisition expense ratio		14.9	%		15.1	%		(0.2	)
General and administrative expense ratio		15.3	%		13.8	%		1.5
Combined ratio		90.2	%		94.3	%		(4.1	)

⁽¹⁾  With respect to ratios, changes show increase or decrease in percentage points.

⁽²⁾  Not meaningful.

Premiums

Gross premiums written in the six months ended June 30, 2013 were $1,750.1 million, an increase of $84.3 million, or 5.1%, compared to the same period in 2012. Net premiums written in the six months ended June 30, 2013 were $1,373.5 million, an increase of $46.1 million, or 3.5%, compared to the same period in 2012. The change in net premiums written was driven by the following factors:

• Growth in premiums in the Reinsurance segment, principally due to new property premiums and modest rate increases on renewed business, particularly from the Company’s London, Zurich and Singapore offices;

• An expansion of net written premiums in the other specialty line of the Reinsurance segment, primarily due to new business generated by the trade credit and surety team that joined the Company in late 2012, partially offset by an absence of positive premium adjustments compared to 2012 and clients increasing their retentions upon renewal of certain treaties;

• An increase of premiums in the casualty line of the Reinsurance segment as a result of new business written on international motor and U.S. casualty treaties;

43

• A decrease of premiums in the catastrophe line of the Reinsurance segment reflecting the impact of a more competitive market where pricing declined and the Company chose to selectively reduce limits on some U.S. business, particularly in Florida; and

• A decrease in premiums in the Insurance segment, primarily in professional lines driven by the non-renewal of a large program relationship in late 2012.

Net premiums earned for the six months ended June 30, 2013 were $963.5 million, an increase of $32.5 million, or 3.5%, from the six months ended June 30, 2012 principally due to growth in net premiums written experienced over the last twelve months compared to the same period last year.

Net Investment Income

The Company’s net investment income of $81.8 million decreased by 8.0% or $7.1 million for the six months ended June 30, 2013 as compared to the same period in 2012. Net investment income during the first six months of 2013 included net mark to market gains of $29.8 million on other investments, comprised of alternative funds and specialty funds, as compared to mark to market gains of $23.1 million in the first six months of 2012. Investment income generated from the Company’s available for sale investments, which consist of fixed maturity investments, short-term investments and equity securities, declined by $13.5 million for the six months ended June 30, 2013 compared to the same period in 2012. This decline resulted primarily from lower reinvestment rates over the past 12 months, partly offset by a higher average investment portfolio balance. Investment expenses, including investment management fees, for the six months ended June 30, 2013 were $7.5 million compared to $6.6 million for the same period in 2012.

The annualized net earned yield and total return on the investment portfolio for the six months ended June 30, 2013 and 2012 and the market yield and portfolio duration as of June 30, 2013 and 2012 were as follows:

	Six Months Ended June 30,
	2013			2012
Annualized net earned yield(1)		2.56	%		2.89	%
Total return on investment portfolio(2)		(0.62	)%		2.29	%
Market yield(3)		2.00	%		1.63	%
Portfolio duration(4)		3.05 years			2.60 years

⁽¹⁾  The actual net earned income from the investment portfolio after adjusting for expenses and accretion of discount and amortization of premium from the purchase price divided by the average book value of assets.

⁽²⁾  Net of investment manager fees; includes realized and unrealized gains and losses.

⁽³⁾  The internal rate of return of the investment portfolio based on the given market price or the single discount rate that equates to a security price (inclusive of accrued interest) for the portfolio with its projected cash flows. Excludes Other Investments and operating cash.

⁽⁴⁾  Includes only cash and cash equivalents and fixed income investments held by the Company’s investment managers.

During the six months ended June 30, 2013, the yield on the benchmark three year U.S. Treasury bond fluctuated within a 45 basis point range, with a high of 0.75% and a low of 0.29%. Trading activity in the Company’s portfolio for the six months ended June 30, 2013 included reductions in corporate securities, U.S. government residential mortgage-backed securities, and U.S. government and government agencies securities and increased allocations to foreign government bonds, non-agency commercial mortgage-backed securities, asset-backed securities, equity securities and other investments. The duration of the fixed income investments increased to 3.05 years at June 30, 2013 from 2.49 years at December 31, 2012, primarily due to the increase in interest rates which reduced the rate of prepayments underlying the Company’s mortgage-backed securities portfolio causing their average maturity to extend.

44

Net Realized and Unrealized Investment Gains

The Company’s investment portfolio is actively managed on a fair value basis to generate attractive economic returns and income. 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 six months ended June 30, 2013 were $1,395.5 million compared to $1,552.9 million during the same period a year ago. Net realized investment gains decreased during the six months ended June 30, 2013 compared to the same period in 2012.

Realized investment gains and losses and the change in the fair value of derivative financial instruments for the six months ended June 30, 2013 and 2012 were as follows:

	Six Months Ended June 30,
	2013			2012
	(U.S. dollars in thousands)
Gross realized gains on investment sales	$	24,011		$	22,861
Gross realized losses on investment sales		(6,746	)		(3,169	)
Change in fair value of derivative financial instruments		(658	)		469
Net realized and unrealized investment gains	$	16,607		$	20,161

Net impairment losses recognized in earnings for the six months ended June 30, 2013 and 2012 were $1.4 million and $0.6 million, respectively.

Net Foreign Exchange Gains

For the six months ended June 30, 2013, the Company remeasured its monetary assets and liabilities denominated in foreign currencies, which resulted in a net foreign exchange loss of $6.3 million compared to a gain of $18.5 million for the same period in 2012. The current period net foreign exchange loss resulted from offsetting exposures across the Company as the U.S. dollar strengthened against the Japanese Yen, Australian dollar and New Zealand dollar in the period. In the prior year the gain resulted from a decrease in the value of Japanese Yen net liabilities as the U.S. dollar strengthened against the Yen in the first half of the year.

Net Losses and Loss Expenses

The Company’s net losses and loss expense ratio for the six months ended June 30, 2013 decreased compared to the same period in 2012 due to increased levels of favorable prior year loss reserve development partially offset by increased levels of catastrophe related activity.

Favorable prior year loss reserve development was $113.5 million for the six months ended June 30, 2013 as compared to $36.5 million for the same period in 2012. In the six months ended June 30, 2013, prior year loss reserves emerged favorably across all lines of the Insurance segment and Reinsurance segment. In the six months ended June 30, 2012, prior year loss reserves emerged favorably across all lines of the Insurance segment and across the catastrophe, casualty and other specialty lines of the Reinsurance segment. Favorable reserve development in the first six months of 2013 was significantly higher than the first six months of 2012 principally in the Reinsurance segment due to much lower than expected reported losses in the property and catastrophe lines and from reductions in reserve estimates related to the Thailand flood losses of 2011 and Superstorm Sandy losses in 2012. Comparatively, the first half of 2012 included notable adverse development on some of the major 2011 loss events impacting the property line of business.

45

The following table details the impact of the catastrophe related activity for the six months ended June 30, 2013 and 2012.

Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Event	Net Loss		Event	Net Loss
(U.S. dollars in millions)
Floods in Canada		11.3	Windstorms in Kentucky		22.5
Floods in Europe		23.7	Earthquake in Italy		6.2
Windstorms in the United States		12.4	Windstorms in the United States		8.2
	$	47.4		$	36.9

For the six months ended June 30, 2013, catastrophe related losses added 5.2 percentage points to the Company’s net loss ratio after adjustment for reinstatement premiums and other loss sensitive accruals compared to 4.2 percentage points in the same period in 2012. In addition, the Company recorded a higher expected loss ratio in the agriculture line of the Insurance segment reflecting a more challenging winter wheat growing season and a higher level of prevented planting claims for spring crops. The overall increase in current year net losses incurred was partially offset by lower levels of attritional losses in the Insurance segment’s property and casualty and other lines in the six months ended June 30, 2013 compared to the same period in 2012.

The Company participates in lines of business in which 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.

Acquisition Expenses

The acquisition expense ratio for the six months ended June 30, 2013 was comparable to the same period in 2012.

General and Administrative Expenses

The Company’s general and administrative expense ratio for the six months ended June 30, 2013 was higher than the same period in 2012 due to an increase in personnel costs related to the addition of new underwriting teams over the last twelve months, current period costs associated with the Company’s CEO transition and increased annual incentive costs associated with improved year to date corporate operating results in 2013. The comparable period in 2012 also benefited from a lower 2012 payout of the Company’s 2011 annual incentive compensation than was previously accrued.

Income Tax Expense

The Company recorded a tax expense for the six months ended June 30, 2013 of $3.3 million compared to a tax expense of $0.9 million for the same period in 2012 due to adjustments to deferred tax valuation allowances at the Company’s U.S. taxable jurisdictions in 2013.

Net Income

The Company produced net income of $161.3 million for the six months ended June 30, 2013 compared to a net income of $155.0 million in the same period of 2012 primarily due to increased net premiums earned and favorable prior year loss development, partially offset by higher general and administrative expenses and foreign exchange losses.

46

Reserve for Losses and Loss Expenses

As of June 30, 2013, the Company had accrued losses and loss expense reserves of $4.1 billion (December 31, 2012 - $4.2 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 six months ended June 30, 2013 and 2012, the Company’s net paid losses and loss expenses were $549.3 million and $389.9 million, 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 2012 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 2012 Form 10-K.

47

Losses and loss expenses for the three and six months ended June 30, 2013 are summarized as follows:

	Incurred related to:
Three Months Ended						Total incurred
June 30, 2013	Current year		Prior years			losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	158,341	$	(233	)	$	158,108
Casualty and other specialty		40,118		(2,701	)		37,417
Professional lines		19,883		(603	)		19,280
Property		3,127		(2,088	)		1,039
Total Insurance		221,469		(5,625	)		215,844
Reinsurance:
Catastrophe		67,780		(26,439	)		41,341
Property		61,055		(24,783	)		36,272
Casualty		50,942		(805	)		50,137
Other specialty		20,617		(5,153	)		15,464
Total Reinsurance		200,394		(57,180	)		143,214
Totals	$	421,863	$	(62,805	)	$	359,058
	Incurred related to:
Six Months Ended						Total incurred
June 30, 2013	Current year		Prior years			losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	209,033	$	(4,966	)	$	204,067
Casualty and other specialty		78,062		(7,278	)		70,784
Professional lines		44,072		(301	)		43,771
Property		7,061		(10,375	)		(3,314	)
Total Insurance		338,228		(22,920	)		315,308
Reinsurance:
Catastrophe		96,223		(38,350	)		57,873
Property		113,569		(25,988	)		87,581
Casualty		104,690		(14,961	)		89,729
Other specialty		38,791		(11,254	)		27,537
Total Reinsurance		353,273		(90,553	)		262,720
Totals	$	691,501	$	(113,473	)	$	578,028

Losses and loss expenses for the three and six months ended June 30, 2013 included $62.8 million and $113.5 million in favorable development of reserves relating to prior accident years, respectively. The favorable loss reserve development experienced during the three and six months ended June 30, 2013 benefited the Company’s reported loss ratio by approximately 11.6 and 11.8 percentage points, respectively. This net reduction in estimated losses for prior accident years reflects lower than expected claims emergence for the six months ended June 30, 2013 in all lines of business within the Insurance and Reinsurance segments.

For the three and six months ended June 30, 2013, the Company did not materially alter any key inputs utilized to establish reserve for losses and loss expenses (initial expected loss ratios and loss reporting patterns) related to prior years for the insurance and reinsurance segments as the variances in reported losses for those segments were within the range of possible results anticipated by the Company.

48

Losses and loss expenses for the three and six months ended June 30, 2012 are summarized as follows:

	Incurred related to:
Three Months Ended						Total incurred
June 30, 2012	Current year		Prior years			losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	141,602	$	(2,766	)	$	138,836
Casualty and other specialty		43,989		(7,902	)		36,087
Professional lines		27,316		(347	)		26,969
Property		9,230		(2,618	)		6,612
Total Insurance		222,137		(13,633	)		208,504
Reinsurance:
Catastrophe		24,637		(8,485	)		16,152
Property		38,683		5,474			44,157
Casualty		58,667		(1,253	)		57,414
Other specialty		21,325		(1,655	)		19,670
Total Reinsurance		143,312		(5,919	)		137,393
Totals	$	365,449	$	(19,552	)	$	345,897
	Incurred related to:
Six Months Ended						Total incurred
June 30, 2012	Current year		Prior years			losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	194,116	$	(5,835	)	$	188,281
Casualty and other specialty		80,466		(7,050	)		73,416
Professional lines		52,308		(1,530	)		50,778
Property		16,796		(7,065	)		9,731
Total Insurance		343,686		(21,480	)		322,206
Reinsurance:
Catastrophe		69,937		(17,535	)		52,402
Property		81,137		17,504			98,641
Casualty		111,196		(6,313	)		104,883
Other specialty		39,161		(8,629	)		30,532
Total Reinsurance		301,431		(14,973	)		286,458
Totals	$	645,117	$	(36,453	)	$	608,664

Losses and loss expenses for the three and six months ended June 30, 2012 included $19.6 million and $36.5 million in favorable development of reserves relating to prior accident years, respectively. The favorable loss reserve development experienced during the three and six months ended June 30, 2012 benefited the Company’s reported loss ratio by approximately 3.8 and 3.9 percentage points, respectively. This net reduction in estimated losses for prior accident years resulted primarily from lower than expected claims emergence across all lines of business for both the three and six months ended June 30, 2012 included within the Insurance segment and the catastrophe, casualty and other specialty lines of business in the Reinsurance segment for both the three and six months ended June 30, 2012.

For the three and six months ended June 30, 2012, 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 segments as the variances in reported losses for those segments were within the range of possible results anticipated by the Company.

49

Insurance

Agriculture. For the three and six months ended June 30, 2013 and 2012, the Company recorded favorable loss emergence due to lower than anticipated agriculture claims settlements for the 2012 and 2011 crop years.

Casualty and other specialty. For the three and six months ended June 30, 2013, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims activity within the healthcare liability business. This favorable loss emergence was partially offset by adverse development within the U.S. based casualty business. For the three and six months ended June 30, 2012, the Company recorded favorable loss emergence within this line of business primarily due to favorable loss development within the healthcare liability and casualty businesses, partially offset by adverse development within the workers’ compensation business. The Company exited the workers’ compensation insurance line of business in 2009.

Professional lines. For the three and six months ended June 30, 2013, the Company recorded a modest amount of favorable loss emergence within this line of business, primarily due to lower than expected reported claims activity in the U.S. based director and officers’ liability business. For the three and six months ended June 30, 2012, the Company recorded favorable loss emergence in professional lines due to lower than expected claims activity.

Property. For the three and six months ended June 30, 2013 and 2012, the favorable loss emergence within the property line of business was primarily due to lower than expected reported and favorable case reserve development.

Reinsurance

Catastrophe. For the six months ended June 30, 2013 and 2012, the Company recorded significant favorable loss emergence within this line of business primarily due to lower than expected claims activity and favorable case reserve development, primarily related to the Thailand floods of 2011 and Superstorm Sandy in 2012.

Property. For the three and six months ended June 30, 2013, the Company recorded favorable loss emergence in the property line of business due to lower than expected claims activity and favorable case reserve development, primarily related to the Thailand floods of 2011 and Superstorm Sandy in 2012. For the three and six months ended June 30, 2012, the Company recorded unfavorable loss emergence in the property line of business due to higher than expected claims activity related to 2011 catastrophes.

Casualty. For the three and six months ended June 30, 2013 and 2012, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims reported.

Other specialty. For the three and six months ended June 30, 2013 and 2012, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims reported.

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The total reserves for losses and loss expenses recorded on the Company’s balance sheet were comprised of the following at June 30, 2013:

					Reserve for losses
	Case Reserves		IBNR Reserves		and loss expenses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	271,424	$	143,602	$	415,026
Casualty and other specialty		331,791		942,472		1,274,263
Professional lines		127,378		386,497		513,875
Property		25,667		14,063		39,730
Total Insurance		756,260		1,486,634		2,242,894
Reinsurance:
Catastrophe		140,909		153,843		294,752
Property		221,468		153,920		375,388
Casualty		299,194		686,557		985,751
Other specialty		96,262		150,534		246,796
Total Reinsurance		757,833		1,144,854		1,902,687
Totals	$	1,514,093	$	2,631,488	$	4,145,581

The total reserves for losses and loss expenses recorded on the Company’s balance sheet were comprised of the following at December 31, 2012:

					Reserve for losses
	Case Reserves		IBNR Reserves		and loss expenses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	392,457	$	71,586	$	464,043
Casualty and other specialty		308,611		944,289		1,252,900
Professional lines		110,441		386,819		497,260
Property		54,196		18,653		72,849
Total Insurance		865,705		1,421,347		2,287,052
Reinsurance:
Catastrophe		201,105		97,223		298,328
Property		281,681		133,779		415,460
Casualty		296,494		679,982		976,476
Other specialty		119,261		144,299		263,560
Total Reinsurance		898,541		1,055,283		1,953,824
Totals	$	1,764,246	$	2,476,630	$	4,240,876

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Underwriting Results by Business Segments

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 business segment; accordingly, investment income and total assets are not allocated to the individual business segments. General and administrative expenses incurred by the business segments are allocated directly. Remaining general and administrative expenses not directly incurred by the business 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 business segment to which they apply.

Insurance

The following table summarizes the underwriting results and associated ratios for the Company’s Insurance segment for the three and six months ended June 30, 2013 and 2012.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	276,941		$	292,659		$	929,884		$	928,006
Ceded premiums written		(85,439	)		(106,000	)		(333,688	)		(313,566	)
Net premiums written		191,502			186,659			596,196			614,440
Net premiums earned		267,878			266,085			419,030			427,715
Other underwriting loss		—			(1,300	)		—			(1,300	)
		267,878			264,785			419,030			426,415
Expenses
Losses and loss expenses		215,844			208,504			315,308			322,206
Acquisition expenses		14,968			17,545			29,584			33,759
General and administrative expenses		43,524			32,819			79,151			67,254
		274,336			258,868			424,043			423,219
Underwriting (loss) income	$	(6,458	)	$	5,917		$	(5,013	)	$	3,196
Net loss ratio		80.6	%		78.4	%		75.2	%		75.3	%
Acquisition expense ratio		5.6	%		6.6	%		7.1	%		7.9	%
General and administrative expense ratio		16.2	%		12.3	%		18.9	%		15.7	%
Combined ratio		102.4	%		97.3	%		101.2	%		98.9	%

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Premiums. Gross premiums written for the three months ended June 30, 2013 in the Insurance segment decreased by 5.4% over the same period in 2012. Insurance segment gross premiums written were flat for the six months ended June 30, 2013 compared to 2012. Gross and net premiums written for each line of business in the Insurance segment were as follows:

	Three Months Ended June 30,
	2013				2012
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Agriculture	$	131,633	$	84,537	$	133,439	$	67,249
Casualty and other specialty		87,614		63,373		90,019		64,588
Professional lines		38,296		27,788		51,019		42,832
Property		19,398		15,804		18,182		11,990
Total	$	276,941	$	191,502	$	292,659	$	186,659

	Six Months Ended June 30,
	2013				2012
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Agriculture	$	696,107	$	425,667	$	667,106	$	422,169
Casualty and other specialty		144,081		106,634		145,510		106,411
Professional lines		59,260		41,991		87,364		73,037
Property		30,436		21,904		28,026		12,823
Total	$	929,884	$	596,196	$	928,006	$	614,440

The increase in the Insurance segment net premiums written for the three months ended June 30, 2013 and the decrease for the six months ended June 30, 2013 compared to the same periods in 2012 were driven by the following factors:

• An increase in net premiums written within the agriculture line of business, as strong growth in policy counts driven by attracting new business was partially offset by higher cessions to the U.S. Government and third parties;

• A decrease in premiums in professional lines driven by the non-renewal of a large program relationship in late 2012; and

• Growth in premiums in the property line emanating from the Company’s contract binding authority business where new agents have been added, partially offset by business curtailed in several product lines in an effort to reallocate capital to more profitable lines of business.

Net premiums earned by the Company in the Insurance segment decreased in the six months ended June 30, 2013 compared to the same period in 2012 primarily due to the decrease in net premiums written in professional lines. Net premiums earned by the Company in the Insurance segment in the three months ended June 30, 2013 were comparable to the same period in 2012.

Losses and Loss Expenses. The net loss ratio in the Company’s Insurance segment increased by 2.2 percentage points for the three month period ended June 30, 2013 compared to the same period in 2012 and was

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comparable for the six month periods ended June 30, 2013 and 2012. During the three and six months ended June 30, 2013, the Company’s previously estimated loss and loss expense reserve for the Insurance segment for prior accident years was reduced by $5.6 million and $22.9 million, respectively, which decreased the net loss ratio by 2.1 and 5.5 percentage points, as compared to reductions of $13.6 million and $21.5 million, which decreased the net loss ratio by 5.1 and 5.0 percentage points for the three and six months ended June 30, 2012. The lower level of favorable loss development in the second quarter of 2013 compared to 2012 was driven by the agriculture and casualty and other lines of business which experienced lower than expected claims activity in 2012.

Partially offsetting the decreased level of current period favorable prior year loss reserve releases in the three months ended June 30, 2013 was a decrease in certain current period accident quarter loss ratios compared to the three month period ended June 30, 2012. The current accident quarter loss ratio decreased by 0.8 percentage points for the three months ended June 30, 2013 compared to the same period in 2012 due to lower loss ratios in the Company’s property, professional and casualty and other lines from decreased levels of attritional loss activity in the current quarter. These improvements were offset by a higher expected loss ratio in the agriculture line to reflect a more challenging start to the growing season in 2013 compared to 2012 resulting from a more challenging winter wheat growing season and excess moisture prevented planting claims for spring crops.

Acquisition Expenses. The Company’s acquisition expense ratios in the Insurance segment in the second quarter and first six months of 2013 decreased compared to the same periods in 2012. The change in the acquisition expense ratio over both periods was driven by a higher proportion of net earned premiums attributed to the agriculture line which incurs a lower net acquisition expense rate and the decline in professional lines premiums over the periods which conversely incurs higher commissions.

General and Administrative Expenses. The increase in general and administrative expenses and expense ratios in the Insurance segment in the second quarter and first six months of 2013 compared to the same periods in 2012 was a result of an increase in personnel costs related to the addition of new underwriting teams over the last twelve months, higher annual incentive costs and increased levels of allocated expenses primarily from increased personnel expenses associated with the Company’s senior leadership transition.

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Reinsurance

The following table summarizes the underwriting results and associated ratios for the Company’s Reinsurance business segment for the three and six months ended June 30, 2013 and 2012.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	295,769		$	311,417		$	820,188		$	737,719
Ceded premiums written		(22,650	)		(13,663	)		(42,848	)		(24,690	)
Net premiums written		273,119			297,754			777,340			713,029
Net premiums earned		275,457			253,255			544,422			503,260
Other underwriting income		888			1,319			1,637			984
		276,345			254,574			546,059			504,244
Expenses
Losses and loss expenses		143,214			137,393			262,720			286,458
Acquisition expenses		56,900			54,583			113,920			106,858
General and administrative expenses		37,835			29,790			68,686			61,396
		237,949			221,766			445,326			454,712
Underwriting income	$	38,396		$	32,808		$	100,733		$	49,532
Net loss ratio		52.0	%		54.2	%		48.3	%		57.0	%
Acquisition expense ratio		20.7	%		21.6	%		20.9	%		21.2	%
General and administrative expense ratio		13.7	%		11.8	%		12.6	%		12.2	%
Combined ratio		86.4	%		87.6	%		81.8	%		90.4	%

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Premiums. In the second quarter of 2013, net premiums written in the Reinsurance segment decreased by 8.3% over the same period of 2012. In the six months ended June 30, 2013, net premiums written in the Reinsurance segment increased by 9.0% over the same period in 2012. Gross and net premiums written for each line of business in the Reinsurance segment for the three and six months ended June 30, 2013 and 2012 were as follows:

	Three Months Ended June 30,
	2013				2012
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Catastrophe	$	155,431	$	138,041	$	172,222	$	158,865
Casualty		67,209		67,211		58,897		58,895
Property		48,384		44,516		54,026		54,033
Other specialty		24,745		23,351		26,272		25,961
Total	$	295,769	$	273,119	$	311,417	$	297,754

	Six Months Ended June 30,
	2013				2012
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Catastrophe	$	303,297	$	269,439	$	315,404	$	292,583
Casualty		218,911		217,484		180,571		179,332
Property		196,795		192,927		160,772		160,779
Other specialty		101,185		97,490		80,972		80,335
Total	$	820,188	$	777,340	$	737,719	$	713,029

The movements in net premiums written in the Reinsurance segment for the second quarter and six months ended June 30, 2013 compared to the same periods in 2012 were primarily due to the following factors:

• Growth in property premiums which were higher due to new premiums and modest rate increases on renewed business, particularly from the Company’s London, Zurich and Singapore offices;

• Expansion of net written premiums in the other specialty line, primarily due to new business generated by the trade credit and surety team that joined the Company in late 2012, partially offset by an absence of positive premium adjustments compared to 2012 and clients increasing their retentions upon renewal of certain treaties;

• Increased net written premiums within the casualty line as a result of new business written on international motor and U.S. casualty treaties; and

• A decrease in the catastrophe line reflecting the impact of a more competitive market where pricing declined and the Company chose to selectively reduce limits on certain U.S. business, particularly in Florida.

Ceded premiums written by the Company increased in the three and six months ended June 30, 2013 as compared to the same period in 2012 as the Company has chosen to purchase increased levels of protection in the catastrophe and property lines of business.

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Net premiums earned by the Company in the Reinsurance segment for the three and six months ended June 30, 2013 increased compared to the same period in 2012 due to the growth in gross premiums written in more recent periods.

Losses and Loss Expenses. The net loss ratio in the Company’s Reinsurance segment for the three and six months ended June 30, 2013 decreased compared to the same periods in 2012 as a result of higher levels of prior year reserve development in 2013 compared to 2012. The Company recorded $57.2 million and $90.6 million of favorable prior year loss reserve development in the three and six months ended June 30, 2013 compared to $5.9 million and $15.0 million in the three and six months ended June 30, 2012. During the three and six months ended June 30, 2013, the majority of the favorable loss reserve development emanated from the property and catastrophe lines, driven by reductions in the Thailand flood losses of 2011 and Superstorm Sandy losses in 2012, and from much lower than expected attritional losses. The same periods in 2012 experienced adverse development on some of the major 2011 loss events.

Partially offsetting the increased levels of favorable prior year loss reserve development in the current periods, the Company recorded losses, net of reinstatement premiums and other loss sensitive accruals, of $47.4 million and $47.4 million in the quarter and six months ended June 30, 2013 in relation to European floods, Canadian floods and various U.S. tornado and storm losses. The net losses from these events added 18.8 and 9.5 percentage points to the Reinsurance segment’s net loss ratio for the second quarter and six months ended June 30, 2013, respectively. During the second quarter and six months ended June 30, 2012, the Company incurred losses of $14.4 million and $36.9 million related to the Kentucky and other Midwest windstorms and an Italian earthquake. The net losses from those events added 5.8 and 7.8 percentage points to the Reinsurance segment’s net loss ratio for the second quarter and six months ended June 30, 2012, respectively.

Three Months Ended June 30, 2013			Three Months Ended June 30, 2012
Event	Net Loss		Event	Net Loss
(U.S. dollars in millions)
Floods in Canada		11.3	Earthquake in Italy		6.2
Floods in Europe		23.7	Windstorms in the United States		8.2
Windstorms in the United States		12.4
	$	47.4		$	14.4
Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Event	Net Loss		Event	Net Loss
(U.S. dollars in millions)
Floods in Canada		11.3	Windstorms in Kentucky		22.5
Floods in Europe		23.7	Earthquake in Italy		6.2
Windstorms in the United States		12.4	Windstorms in the United States		8.2
	$	47.4		$	36.9

Acquisition Expenses. The Company’s acquisition expense ratio in the Reinsurance segment for the three months ended June 30, 2013 was lower than in the same period in 2012. The change in acquisition ratio for the three month period was due primarily to the growth of the property reinsurance business lines over the last twelve months exhibiting a lower average acquisition expense rate than in prior periods. In the six month period ended June 30, 2013, the acquisition ratio was comparable to the same period in 2012.

General and Administrative Expenses. The general and administrative expense ratios in the Reinsurance segment for the three and six months ended June 30, 2013 increased compared to those in the same periods in 2012 due to an increase in allocated current period costs associated with higher annual incentive costs and the Company’s senior leadership transition, offset partially by the impact of higher earned premiums.

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Liquidity and Capital Resources

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. Endurance Holdings relies primarily on dividends and other permitted distributions from its subsidiaries to pay its operating expenses, interest on debt and dividends, if any, on its ordinary shares, its 7.75% Non-Cumulative Preferred Shares, Series A (“Series A Preferred Shares”) and its 7.5% Non-Cumulative Preferred Shares, Series B (“Series B Preferred Shares”). There are restrictions on the payment of dividends by the Company’s operating subsidiaries to Endurance Holdings, which are described in more detail below.

Ability of Subsidiaries to Pay Dividends. 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 June 30, 2013, Endurance Bermuda could pay a dividend or return additional paid-in capital totaling approximately $574.9 million (December 31, 2012 – $623.1 million) without prior regulatory approval based upon the Bermuda insurance and corporate regulations. In 2011, Endurance Holdings loaned Endurance Bermuda $200.0 million, which remains outstanding and is callable on demand.

Endurance U.S. Reinsurance, Endurance American, Endurance American Specialty and Endurance Risk Solutions are subject to regulation by the State of Delaware Department of Insurance and American Agri-Business is subject to regulation by the Texas Department of Insurance. Dividends for each U.S. operating subsidiary are 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. At December 31, 2012, Endurance U.S. Reinsurance, Endurance American, Endurance Risk Solutions and Endurance American Specialty did not have earned surplus; therefore, these companies are precluded from declaring or distributing dividends at June 30, 2013 without the prior approval of the applicable insurance regulator. At June 30, 2013, American Agri-Business (with notice to the Texas Department of Insurance) could pay dividends of $4.3 million without prior regulatory approval from the applicable regulators. In addition, any dividends paid by Endurance American, Endurance American Specialty and Endurance Risk Solutions would be subject to the dividend limitation of their respective parent insurance companies.

Under the jurisdiction of the United Kingdom’s Prudential Regulation Authority (“PRA”), Endurance U.K. must maintain a margin of solvency at all times, which is determined based on the type and amount of insurance business written. The PRA regulatory requirements impose no explicit restrictions on Endurance U.K.’s ability to pay a dividend, but Endurance U.K. would have to notify the PRA 28 days prior to any proposed dividend payment. Dividends may only be distributed from profits available for distributions. At June 30, 2013, Endurance U.K. did not have profits available for distributions.

Cash and Invested Assets. The Company’s aggregate invested assets, including fixed maturity investments, short-term investments, equity securities, other investments, cash and cash equivalents and pending securities transactions, as of June 30, 2013 totaled $6.4 billion, which is consistent with the aggregate invested assets of $6.6 billion as of December 31, 2012.

At June 30, 2013, the unrealized losses on the Company’s available for sale securities were primarily due to an increase in interest rates and widening of credit spreads, rather than any actual credit losses on these securities. Because the Company has the ability and intent to hold these securities until recovery, the Company currently believes it is probable that it will collect all amounts due according to their respective contractual terms. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2013.

The Company’s aggregate direct exposure to the indebtedness and equity securities of those countries whose currency is the Euro or whose sovereign debt rating is below AAA (except the U.S.) was $442.5 million at June 30, 2013, compared to $247.1 million at December 31, 2012. The increase in exposures as of June 30, 2013 compared to December 31, 2012 is mainly due to Moody’s downgrade of the United Kingdom from “Aaa” to “Aa1” in February 2013.

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In addition to the direct exposures above, the Company has indirect exposure to sovereign and non-sovereign investments whose currency is the Euro or whose sovereign debt rating is below AAA through a hedge fund with a primary focus on European indebtedness, principally focused on benefiting from the declining value of European sovereign indebtedness.

Cash Flows

	Six Months Ended June 30,
	2013			2012
	(U.S. dollars in thousands)
Net cash provided by operating activities	$	42,712		$	70,295
Net cash used in investing activities		(165,604	)		(70,197	)
Net cash used in financing activities		(30,706	)		(46,447	)
Effect of exchange rate changes on cash and cash equivalents		(28,359	)		(2,385	)
Net decrease in cash and cash equivalents		(181,957	)		(48,734	)
Cash and cash equivalents, beginning of period		1,124,019			890,914
Cash and cash equivalents, end of period	$	942,062		$	842,180

The decrease in cash flows provided by operating activities in the first half of 2013 compared to the same period in 2012 was primarily due to settlement of agriculture insurance losses incurred in 2012, as well as higher claim payments for catastrophe losses incurred in 2011 and 2012, partially offset by increased premium collections.

The increase in cash used in investing activities reflected the Company’s active management of its investment portfolio on a fair value basis to generate attractive economic returns and income. Movements in financial markets and interest rates influence the timing of investment sales and purchases. The increase in cash flows used in investing activities in 2013 principally reflected reduced proceeds from sales and maturities of available for sale investments partially offset by reduced purchases of available for sale investments compared to 2012.

The cash flows used in financing activities in 2013 were lower than in 2012 principally due to proceeds associated with the issuance of common shares partially offset by repurchases of common shares in 2013.

On May 28, 2013, prior to John R. Charman becoming the Company’s Chairman and Chief Executive Officer, Mr. Charman, together with members of his family, purchased from the Company $30.0 million of newly issued ordinary shares.

During the six months ended June 30, 2013, the Company used its capital to repurchase 318,252 ordinary shares in the open market for $14.6 million at an average price per share of $45.83. During the six months ended June 30, 2012, the Company repurchased $1.0 million of its 6.15% Senior Notes due October 15, 2015.

As of June 30, 2013 and December 31, 2012, the Company had pledged cash and cash equivalents and fixed maturity investments of $203.6 million and $224.4 million, respectively, in favor of certain ceding companies to collateralize obligations. As of June 30, 2013 and December 31, 2012, the Company had also pledged $319.1 million and $380.0 million of its cash and fixed maturity investments to meet collateral obligations for $269.4 million and $320.4 million in letters of credit outstanding under its credit facility, respectively. In addition, at June 30, 2013 and December 31, 2012, cash and fixed maturity investments with fair values of $275.1 million and $280.0 million were on deposit with U.S. state regulators, respectively.

Credit Facility. Under the Company’s credit facility, the Company and its subsidiaries have access to a revolving line of credit of up to $700.0 million, which expires April 19, 2016. As of June 30, 2013, there were no borrowings under this facility and letters of credit outstanding under the facility were $269.4 million.

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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 investments, 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 2013, absent the occurrence of additional significant loss 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. However, there can be no assurance that the Company will be successful in executing these strategies.

Currency and Foreign Exchange

The Company’s functional currencies are U.S. dollars for its U.S. and Bermuda operations and British Sterling for its U.K. operations. The reporting currency for all operations 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, which is subject to the PRA’s 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 gains or 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.

Effects of Inflation

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. In addition, inflation could lead to higher interest rates causing the current unrealized gain position on the Company’s fixed maturity portfolio to decrease or become an unrealized loss position. In response, the Company may choose to hold its fixed income investments to maturity, which would result in the unrealized gains largely amortizing through net investment income.

Cautionary Statement Regarding Forward-Looking Statements

Some of the statements under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The PSLRA provides a “safe harbor” for forward-looking statements. These forward-looking statements reflect our current views with respect to us specifically and the insurance and reinsurance business generally, investments, capital markets and the general economic environments in which we operate. 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 PSLRA or otherwise.

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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 effects of competitors’ pricing policies, and of changes in laws and regulations on competition, 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 or as a result of changing climate conditions, than our underwriting, reserving or investment practices have anticipated;

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

• termination of or changes in the terms of the U.S. multiple peril crop insurance program and termination or changes to the U.S. farm bill, including modifications to the Standard Reinsurance Agreement put in place by the Risk Management Agency of the U.S. Department of Agriculture;

• 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;

• the ability of the counterparty institutions with which we conduct business to continue to meet their obligations to us;

• the failure or delay of the Florida Hurricane Catastrophe Fund or private market participants in Florida to promptly pay claims, particularly following a large windstorm or of multiple smaller storms;

• our continued ability to comply with applicable financial standards and restrictive covenants, the breach of which could trigger significant collateral or prepayment obligations;

• Endurance Holdings or Endurance Bermuda becomes subject to income taxes in jurisdictions outside of Bermuda;

• 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;

• changes in insurance regulations in the U.S. or other jurisdictions in which we operate, including the new Federal Insurance Office within the U.S. Department of the Treasury and other regulatory changes mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 in the United States and the implementation of Solvency II by the European Commission;

• 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;

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• actions by our competitors, many of which are larger or have greater financial resources than we do;

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

• the impact of acts of terrorism and acts of war;

• the effects of terrorist related insurance legislation and laws;

• loss of key personnel;

• political stability of Bermuda;

• changes in the political environment of certain countries in which we operate or underwrite business;

• changes in accounting regulation, policies or practices;

• our investment performance;

• the valuation of our invested assets and the determination of impairments of those assets, if any;

• the breach of our investment guidelines or the inability of those guidelines to mitigate investment risk;

• the possible further downgrade of U.S. or foreign government securities by credit rating agencies, and the resulting effect on the value of U.S. or foreign government and other securities in our investment portfolio as well as the uncertainty in the market generally;

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

• the ability to maintain the availability of our systems and safeguard the security of our data in the event of a disaster or other unanticipated event; and

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

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 our 2012 Form 10-K, including the risk factors set forth in Item 1A thereof. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no 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 2012 Form 10-K.

Item 4. Controls and Procedures

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 Securities Exchange Act of 1934, as amended (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 second fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

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.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A. Risk Factors in our 2012 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES
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)
April 1, 2013 – April 30, 2013		91,800	$	48.14		91,800		6,433,739
May 1, 2013 – May 31, 2013		3,300	$	48.77		3,300		6,430,439
June 1, 2013 – June 30, 2013		—	$	—		—		6,430,439
Total		95,100	$	48.16		95,100		6,430,439

⁽¹⁾  Ordinary shares or share equivalents.

⁽²⁾  At its meeting on November 9, 2011, the Board of Directors of the Company authorized the repurchase of up to a total of 7,000,000 ordinary shares and share equivalents through November 30, 2013, superseding all

previous authorizations.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

None

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Item 6. Exhibits

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

Exhibit Number	Description
3.1	Amended and Restated Bye-laws. Incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 9, 2013.
10.1	Employment Agreement, dated May 28, 2013, by and between the Company and John R. Charman. Incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 31, 2013.**
10.2	Restricted Share Agreement, dated May 28, 2013, by and between the Company and John R. Charman. Incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on May 31, 2013.**
10.3	Option Agreement, dated May 28, 2013, by and between the Company and John R. Charman. Incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on May 31, 2013.**
10.4	Indemnification Agreement, dated May 28, 2013, by and between the Company and John R. Charman. Incorporated herein by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on May 31, 2013.**
10.5	Share Purchase Agreement, dated May 28, 2013, by and between Dragon Global Holdings Ltd. and the Company. Incorporated herein by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on May 31, 2013.
10.6	Share Purchase Agreement, dated May 28, 2013, by and between The Fortis Trust and the Company. Incorporated herein by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on May 31, 2013.
10.7	Share Purchase Agreement, dated May 28, 2013, by and between The Prometheus Trust and the Company. Incorporated herein by reference to Exhibit 10.7 to the Current Report on Form 8-K filed on May 31, 2013.
10.8	Shareholders’ Agreement, dated May 28, 2013, by and among John R. Charman, Dragon Global Holdings Ltd. and the Company. Incorporated herein by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on May 31, 2013.
10.9	Consulting Agreement, dated May 28, 2013, by and between the Company and David Cash. Incorporated herein by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on May 31, 2013.**
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.
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Condensed Consolidated Balance Sheets as at June 30, 2013 (unaudited) and December 31, 2012; (ii) the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2013 and 2012; (iii) the Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2013 and 2012; (iv) the Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012; and (v) the Notes to the Unaudited Condensed Consolidated Financial Statements for the six months ended June 30, 2013 and 2012.

** Management contract or compensatory plan or arrangement

65

SIGNATURES

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.

		ENDURANCE SPECIALTY HOLDINGS LTD.
Date: August 8, 2013	By:	/s/ John R. Charman
		John R. Charman
		Chief Executive Officer
Date: August 8, 2013	By:	/s/ Michael J. McGuire
		Michael J. McGuire
		Chief Financial Officer (Principal Financial Officer)

66

EX-31.1

Exhibit 31.1

Endurance Specialty Holdings Ltd.

Certification of Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, John R. Charman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Endurance Specialty Holdings Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2013 By: /s/ John R. Charman Chief Executive Officer

EX-31.2

Exhibit 31.2

Endurance Specialty Holdings Ltd.

Certification of Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Michael J. McGuire, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Endurance Specialty Holdings Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2013	By:	/s/ Michael J. McGuire
		Chief Financial Officer

EX-32

Exhibit 32

Endurance Specialty Holdings Ltd.

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Endurance Specialty Holdings Ltd. (the “Company”) for the quarterly period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, each hereby certify pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that (1) to the best of his knowledge the Report fully complies with requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2013	By:	/s/ John R. Charman
		John R. Charman
		Chief Executive Officer
Date: August 8, 2013	By:	/s/ Michael J. McGuire
		Michael J. McGuire
		Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies

Commitments And Contingencies

10.Commitments and contingencies

Concentrations of credit risk.The Company's reinsurance recoverables on paid and unpaid losses at June 30, 2013 and December 31, 2012amounted to $695.8 million and $774.9 million, respectively. At June 30, 2013, substantially all reinsurance recoverables on paid and unpaid losses were due from the U.S. government or from reinsurers rated A- or better by A.M. Best Company Inc. or Standard & Poor's Corporation.

Major production sources. The following table shows the percentage of net premiums written generated through the Company's largest brokers for the six months endedJune 30, 2013 and 2012, respectively:

Broker	2013		2012
Aon Benfield	19.5	%	19.3	%
Marsh & McLennan Companies, Inc.	15.3	%	17.8	%
Willis Companies	9.8	%	9.0	%
Total of largest brokers	44.6	%	46.1	%

Letters of credit. As of June 30, 2013, the Company had issued letters of credit of $269.4 million (December 31, 2012– $320.4 million) under its credit facility in favor of certain ceding companies to collateralize obligations.

10. Commitments and contingencies, cont'd.

Investment commitments. As of June 30, 2013and December 31, 2012, the Company had pledged cash and cash equivalents and fixed maturity investments of $203.6 million and $224.4 million, respectively, in favor of certain ceding companies to collateralize obligations. As of June 30, 2013and December 31, 2012, the Company had also pledged $319.1 million and $380.0 million of its cash and fixed maturity investments as required to meet collateral obligations for $269.4 million and $320.4 million in letters of credit outstanding under its credit facility, respectively. In addition, as ofJune 30, 2013and December 31, 2012, cash and fixed maturity investments with fair values of $275.1 million and $280.0 million were on deposit with U.S. state regulators, respectively.

The Company is subject to certain commitments with respect to other investments at June 30, 2013and December 31, 2012.See Note 3.

Reinsurance commitments. In the ordinary course of business, the Company periodically enters into reinsurance agreements thatinclude terms which could require the Company to collateralize certain of its obligations.

Employment agreements. The Company has entered into employment agreements with certain officers that provide for equity incentive awards, 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 June 30, 2013are as follows:

Twelve months ended June 30,	Amount
2014	$	14,999
2015		13,996
2016		12,166
2017		10,011
2018		9,978
2019 and thereafter		46,853
	$	108,003

Total lease expense under operating leases for the six months ended June 30, 2013 was $7.1 million (2012 – $7.2 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 settled by arbitration.

XML

Stock-Based Employee Compensation And Other Stock Plans (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	800,000		800,000
Number of options exercised	12,501	13,800	24,501	26,800
Number of options vested	160,000		160,000
Total intrinsic value of options exercised	$ 300,000	$ 300,000	$ 500,000	$ 600,000
Proceeds from stock options exercised	300,000	300,000	600,000	500,000
Expenses related to employee stock purchase plan	44,000	45,000	82,000	89,000
Number of restricted shares and RSUs granted	727,271	23,260	1,070,655	400,568
Restricted shares and RSUs weighted average grant date fair value	35,100,000	900,000	50,300,000	15,400,000
Options weighted average grant date fair value	10,200,000		10,200,000
Aggregate fair value of restricted shares and RSUs vested	7,800,000	1,400,000	16,900,000	11,600,000
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expenses related to unvested stock options	7,800,000		7,800,000
Compensation costs recognized	2,400,000		2,400,000
Percentage of compensation expense to be expensed in remainder of 2013			27.20%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs recognized	8,800,000	1,600,000	13,500,000	6,600,000
Compensation costs not yet recognized	$ 38,500,000		$ 38,500,000
Percentage of compensation expense to be expensed in remainder of 2013			29.60%

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Condensed Consolidated Statements Of Income And Comprehensive (Loss) Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues
Gross premiums written	$ 572,710	$ 604,076	$ 1,750,072	$ 1,665,725
Ceded premiums written	(108,089)	(119,663)	(376,536)	(338,256)
Net premiums written	464,621	484,413	1,373,536	1,327,469
Change in unearned premiums	78,714	34,927	(410,084)	(396,494)
Net premiums earned	543,335	519,340	963,452	930,975
Net investment income	32,468	31,766	81,773	88,841
Net realized and unrealized investment gains	10,372	14,958	16,607	20,161
Total other-than-temporary impairment losses	(579)	(148)	(1,385)	(148)
Portion of loss recognized in other comprehensive (loss) income	0	(259)	0	(478)
Net impairment losses recognized in earnings	(579)	(407)	(1,385)	(626)
Other underwriting income (loss)	888	19	1,637	(316)
Total revenues	586,484	565,676	1,062,084	1,039,035
Expenses
Net losses and loss expenses	359,058	345,897	578,028	608,664
Acquisition expenses	71,868	72,128	143,504	140,617
General and administrative expenses	81,359	62,609	147,837	128,650
Amortization of intangibles	1,625	2,777	3,726	5,554
Net foreign exchange losses (gains)	3,368	(336)	6,295	(18,473)
Interest expense	9,052	9,044	18,090	18,091
Total expenses	526,330	492,119	897,480	883,103
Income before income taxes	60,154	73,557	164,604	155,932
Income tax benefit (expense)	865	(1,074)	(3,286)	(907)
Net income	61,019	72,483	161,318	155,025
Dividends on preferred shares	(8,188)	(8,188)	(16,376)	(16,376)
Net income available to common and participating common shareholders	52,831	64,295	144,942	138,649
Comprehensive (loss) income
Net income	61,019	72,483	161,318	155,025
Other comprehensive (loss) income
Net unrealized holding (losses) gains on investments arising during the period (net of other-than-temporary impairment losses recognized in other comprehensive (loss) income, reclassification adjustment and applicable deferred income taxes of $10,831 and $629 for the six months ended June 30, 2013 and 2012, respectively)	(106,249)	11,495	(111,095)	22,416
Foreign currency translation adjustments	219	(2,060)	(9,975)	(2,600)
Reclassification adjustment for net losses on derivative designated as cash flow hedge included in net income	29	22	45	44
Other comprehensive (loss) income	(106,001)	9,457	(121,025)	19,860
Comprehensive (loss) income	$ (44,982)	$ 81,940	$ 40,293	$ 174,885
Per share data
Basic earnings per common share	$ 1.21	$ 1.48	$ 3.34	$ 3.20
Diluted earnings per common share	$ 1.21	$ 1.48	$ 3.34	$ 3.20
Dividend per common share	$ 0.32	$ 0.31	$ 0.64	$ 0.62

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Investments

6 Months Ended

Jun. 30, 2013

Investments

Investments

3.Investments

Composition of Net Investment Income and of Invested Assets

The components of net investment income for the three and six months endedJune 30,2013 and 2012 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
		2013		2012		2013		2012
Available for sale investments	$	28,666	$	34,678	$	58,147	$	71,660
Other investments		6,780		(74)		29,839		23,051
Cash and cash equivalents		840		349		1,291		689
	$	36,286	$	34,953	$	89,277	$	95,400
Investment expenses		(3,818)		(3,187)		(7,504)		(6,559)
Net investment income	$	32,468	$	31,766	$	81,773	$	88,841

The following table summarizes the composition of the investment portfolio by investment type at June 30,2013 and December 31,2012:

		June 30, 2013				December 31, 2012
Type of Investment		Fair Value	Percentage			Fair Value	Percentage
Fixed maturity investments	$	4,755,091	74.2	%	$	4,868,150	74.2	%
Cash and cash equivalents(1)		839,245	13.1	%		1,051,694	16.0	%
Other investments(2)		569,393	8.9	%		517,546	7.9	%
Short-term investments		15,382	0.2	%		42,230	0.6	%
Equity securities		232,919	3.6	%		86,997	1.3	%
Total	$	6,412,030	100.0	%	$	6,566,617	100.0	%
(1) Includes net receivable on sales of investments and net payable on purchases of investments.
(2) Consists of investments in alternative funds and specialty funds.

The following table summarizes the composition by investment rating of the fixed maturity and short-term investments at June 30,2013 and December 31,2012. In some cases, where bonds are unrated, the rating of the issuer has been applied.

		June 30, 2013				December 31, 2012
Ratings(1)		Fair Value	Percentage			Fair Value	Percentage
U.S. government and agencies securities	$	671,597	14.1	%	$	737,535	15.0	%
AAA / Aaa		1,017,720	21.3	%		993,277	20.2	%
AA / Aa		1,746,510	36.7	%		1,821,250	37.1	%
A / A		931,561	19.5	%		993,307	20.2	%
BBB		292,820	6.1	%		219,017	4.5	%
Below BBB		105,384	2.2	%		143,198	2.9	%
Not rated		4,881	0.1	%		2,796	0.1	%
Total	$	4,770,473	100.0	%	$	4,910,380	100.0	%
(1) The credit rating for each security reflected above was determined based on the rating assigned to the individual security by Standard & Poor's Financial Services LLC ("Standard & Poor's"). If a rating is not supplied by Standard & Poor's, the equivalent rating supplied by either Moody's Investors Service, Inc. ("Moody's") or Fitch Ratings is used.

3. Investments, cont'd.

Contractual maturities of the Company's fixed maturity and short-term investments are shown below as of June 30,2013 and December 31,2012. 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.

	June 30, 2013				December 31, 2012
		Amortized				Amortized
		Cost		Fair Value		Cost		Fair Value
Due within one year	$	158,318	$	159,900	$	136,283	$	137,567
Due after one year through five years		1,675,581		1,677,171		1,725,927		1,765,662
Due after five years through ten years		336,818		334,020		410,755		429,099
Due after ten years		27,465		28,920		29,654		33,803
Residential mortgage-backed securities		1,205,773		1,203,477		1,252,468		1,280,579
Commercial mortgage-backed securities		852,103		866,181		741,178		781,379
Asset-backed securities		496,389		500,804		474,555		482,291
Total	$	4,752,447	$	4,770,473	$	4,770,820	$	4,910,380

In addition to the Company's fixed maturity, short-term and equityinvestments, the Company invests in (i) hedge funds and private investment funds that generally invest in senior secured bank debt, high yield credit, distressed debt, distressed real estate, derivatives, equity long/short strategies, currencies and commodities (“alternative funds”) and (ii) high yield loan and convertible debt funds (“specialty funds”). The Company's alternative funds and specialty funds are recorded on the Company's balance sheet as “other investments”.At June 30, 2013 and December 31, 2012, the Company had invested, net of capital returned, a total of $426.7 million and $394.5 million, respectively, in other investments. At June 30, 2013 and December 31, 2012, the carrying value of other investments was $569.4 million and $517.5 million, respectively. The following table summarizes the composition and redemption restrictionsof other investments as of June 30, 2013 and December 31, 2012:

June 30, 2013			Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
	Hedge funds	$	372,450	$	-	$	80,437
	Private investment funds		47,458		22,195		47,458
Total alternative funds			419,908		22,195		127,895
Specialty funds
	High yield loan funds		107,926		-		-
	Convertible debt funds		41,559		-		-
Total specialty funds			149,485		-		-
Total other investments		$	569,393	$	22,195	$	127,895

December 31, 2012			Market Value		Unfunded Commitments		Ineligible for Redemption in 2013
Alternative funds
	Hedge funds	$	337,200	$	-	$	61,161
	Private investment funds		35,219		29,483		35,219
Total alternative funds			372,419		29,483		96,380
Specialty funds
	High yield loan funds		105,886		-		-
	Convertible debt funds		39,241		-		-
Total specialty funds			145,127		-		-
Total other investments		$	517,546	$	29,483	$	96,380

Hedge funds – The redemption frequency of the hedge funds range from monthly to biennially with notice periods from 30 to 90 days. Over one year, it is estimated that the Company can liquidate approximately 78% of the hedge fund portfolio, with the remainder over the following two years.

Private investment funds – The Company generally has no right to redeem its interest in any private investment funds in advance of dissolution of the applicable partnership. Instead, the nature of these investments is that distributions are received by the Company in connection with the liquidation of the underlying assets of the applicable limited partnership. It is estimated that the majority of the underlying assets of the limited partnerships would liquidate over 5 to 10 years from inception of the limited partnership. A secondary market, with unpredictable liquidity, exists for limited partner interests in private equity funds.

High yield loan funds – There are generally no restrictions on the Company's right to redeem its interest in high yield loan funds with the exception of certain redemption frequency and notice requirements. The redemption frequency of these funds ranges from monthly to quarterly with notice periods from 30 to 90 days.

Convertible debt funds – There are generally no restrictions on the Company's right to redeem its interest in convertible debt funds with the exception of certain redemption frequency and notice requirements. The redemption frequency of these funds is monthly with a required notice period of 5 days.

Net Realized and Unrealized Investment Gains

Realized and unrealized investment gains and losses are recognized in earnings using the first in, first out method. The analysis of net realized and unrealized investment gains for the three and six months endedJune 30,2013and 2012is as follows:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Gross realized gains on investment sales	$	16,591	$	15,613	$	24,011	$	22,861
Gross realized losses on investment sales		(5,283)		(822)		(6,746)		(3,169)
Change in fair value of derivative financial instruments(1)		(936)		167		(658)		469
Net realized and unrealized investment gains	$	10,372	$	14,958	$	16,607	$	20,161
(1) For additional information on the Company's derivative financial instruments, see Note 7

3.Investments, cont'd.

Unrealized Gains and Losses and Other-than-temporary Impairments

The Company classifies its investments in fixed maturity investments, short-term investments and equities as available for sale. The amortized cost, fair value and related gross unrealized gains and losses and non-credit other-than-temporary impairment (“OTTI”) losses on the Company's securities classified as available for sale at June 30,2013 andDecember 31,2012 are as follows:

					Gross		Gross
			Amortized		Unrealized		Unrealized				Non-Credit
	June 30, 2013		Cost		Gains		Losses		Fair Value		OTTI (2)
	Fixed maturity investments
		U.S. government and agencies securities	$	670,997	$	8,732	$	(8,132)	$	671,597	$	-
		U.S. state and municipal securities		28,116		164		(378)		27,902		-
		Foreign government securities		162,370		1,519		(2,516)		161,373		-
		Government guaranteed corporate securities		49,710		815		(90)		50,435		-
		Corporate securities		1,271,607		17,966		(16,251)		1,273,322		-
		Residential mortgage-backed securities		1,205,773		18,730		(21,026)		1,203,477		(5,136)
		Commercial mortgage-backed securities(1)		852,103		26,624		(12,546)		866,181		(47)
		Asset-backed securities		496,389		5,548		(1,133)		500,804		-
	Total fixed maturity investments		$	4,737,065	$	80,098	$	(62,072)	$	4,755,091	$	(5,183)
	Short-term investments			15,382		-		-		15,382		-
	Total fixed income investments		$	4,752,447	$	80,098	$	(62,072)	$	4,770,473	$	(5,183)
	Equity securities
		Equity investments	$	139,470	$	12,784	$	(3,663)	$	148,591	$	-
		Emerging market debt funds		50,000		139		-		50,139		-
		Preferred equity investments		7,279		1,791		(2)		9,068		-
		Short-term fixed income fund		25,121		-		-		25,121		-
	Total equity securities		$	221,870	$	14,714	$	(3,665)	$	232,919	$	-
(1)	Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.
(2)	Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At June 30, 2013, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.1 million.

						Gross		Gross
				Amortized		Unrealized		Unrealized				Non-Credit
		December 31, 2012		Cost		Gains		Losses		Fair Value		OTTI (2)
		Fixed maturity investments
			U.S. government and agencies securities	$	718,992	$	18,596	$	(53)	$	737,535	$	-
			U.S. state and municipal securities		37,952		1,119		(177)		38,894		-
			Foreign government securities		106,218		3,264		(145)		109,337		-
			Government guaranteed corporate
			securities		62,782		1,682		-		64,464		-
			Corporate securities		1,334,451		40,555		(1,335)		1,373,671		-
			Residential mortgage-backed securities		1,252,468		30,426		(2,315)		1,280,579		(5,884)
			Commercial mortgage-backed securities(1)		741,178		41,737		(1,536)		781,379		(53)
			Asset-backed securities		474,555		8,435		(699)		482,291		-
		Total fixed maturity investments		$	4,728,596	$	145,814	$	(6,260)	$	4,868,150	$	(5,937)
		Short-term investments			42,224		6		-		42,230		-
		Total fixed income investments		$	4,770,820	$	145,820	$	(6,260)	$	4,910,380	$	(5,937)
		Equity securities
			Equity investments	$	59,736	$	7,194	$	(620)	$	66,310	$	-
			Emerging market debt funds		10,000		576		-		10,576		-
			Preferred equity investments		7,261		2,851		(1)		10,111		-
		Total equity securities		$	76,997	$	10,621	$	(621)	$	86,997	$	-
(1)	Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.
(2)	Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2012, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.4 million.

The following tables summarize, for all available for sale securities in an unrealized loss position at June 30,2013 and December 31,2012, the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position.

					Less than 12 months				12 months or greater				Total
					Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
	June 30, 2013				Losses(1)		Value		Losses(1)		Value		Losses(1)		Value
	Fixed maturity investments
		U.S. government and agencies
			securities	$	(8,132)	$	350,292	$	-	$	-	$	(8,132)	$	350,292
		U.S. state and municipal
			securities		(378)		19,910		-		-		(378)		19,910
		Foreign government securities			(2,516)		108,087		-		-		(2,516)		108,087
		Government guaranteed
			corporate securities		(90)		10,870		-		-		(90)		10,870
		Corporate securities			(16,251)		673,297		-		-		(16,251)		673,297
		Residential mortgage-backed
			securities		(20,917)		674,696		(109)		1,646		(21,026)		676,342
		Commercial mortgage-backed
			securities		(12,180)		459,330		(366)		5,446		(12,546)		464,776
		Asset-backed securities			(915)		210,342		(218)		9,041		(1,133)		219,383
	Total fixed maturity investments			$	(61,379)	$	2,506,824	$	(693)	$	16,133	$	(62,072)	$	2,522,957
	Equity securities
		Equity investments		$	(3,644)	$	42,190	$	(19)	$	200	$	(3,663)	$	42,390
		Preferred equity investments			(2)		400		-		-		(2)		400
	Total equity securities			$	(3,646)	$	42,590	$	(19)	$	200	$	(3,665)	$	42,790
(1)	Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at June 30, 2013.

As of June 30, 2013, 865available for sale securities were in an unrealized loss position aggregating $65.7 million. Of those, 38 securities with aggregated unrealized losses of $0.7 million at June 30, 2013 had been in a continuous unrealized loss position for twelve months or greater.

The unrealized losses on the Company's available for sale securities at June 30, 2013were primarily due to an increase in interest rates and widening of credit spreads, rather than any actual credit losses on these securities. Because the Company has the ability and intent to hold these securities until recovery, the Company currently believes it is probable that it will collect all amounts due according to their respective contractual terms. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2013.

3.	Investments, cont’d.
					Less than 12 months				12 months or greater				Total
					Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
	December 31, 2012				Losses(1)		Value		Losses(1)		Value		Losses(1)		Value
	Fixed maturity investments
		U.S. government and agencies
			securities	$	(53)	$	48,570	$	-	$	-	$	(53)	$	48,570
		U.S. state and municipal
			securities		(177)		6,905		-		-		(177)		6,905
		Foreign government securities			(139)		23,157		(6)		4,870		(145)		28,027
		Corporate securities			(1,305)		245,232		(30)		1,849		(1,335)		247,081
		Residential mortgage-backed
			securities		(1,920)		327,473		(395)		7,511		(2,315)		334,984
		Commercial mortgage-backed
			securities		(474)		79,125		(1,062)		11,625		(1,536)		90,750
		Asset-backed securities			(94)		53,471		(605)		8,123		(699)		61,594
	Total fixed maturity investments			$	(4,162)	$	783,933	$	(2,098)	$	33,978	$	(6,260)	$	817,911
	Equity securities
		Equity investments		$	(580)	$	9,183	$	(40)	$	387	$	(620)	$	9,570
		Preferred equity investments			(1)		201		-		-		(1)		201
	Total equity securities			$	(581)	$	9,384	$	(40)	$	387	$	(621)	$	9,771
(1)	Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2012.

As ofDecember 31, 2012, 403 available for sale securities were in an unrealized loss position aggregating $6.9 million. Of those, 55 securities with aggregated unrealized losses of $2.1 million had been in a continuous unrealized loss position for twelve months or greater.

The analysis of OTTI for the three and six months endedJune 30, 2013 and 2012is as follows:

		Three months ended June 30,				Six months ended June 30,
		2013		2012		2013		2012
Total other-than-temporary impairment losses	$	(579)	$	(148)	$	(1,385)	$	(148)
Portion of loss recognized in other
comprehensive (loss) income		-		(259)		-		(478)
Net impairment losses recognized in earnings	$	(579)	$	(407)	$	(1,385)	$	(626)

Of the $0.6 million (2012: $0.4 million) of OTTI losses recognized by the Company in the second quarter of 2013, the majority was related to expected losses on corporate securities following the Company's decision to liquidate a specific portfolio. At June 30, 2013, the Company did not have the intent to sell any of the remaining securities in an unrealized loss position and determined that it was unlikely that the Company would be required to sell securities in an unrealized loss position.

The following table provides a roll-forward of the amount related to credit losses for the Company's available for sale investments recognized in earningsfor which a portion of an OTTI loss was recognized in accumulated other comprehensive incomefor the three and six months ended June 30, 2013:

		Three months ended June 30,				Six months ended June 30,
		2013		2012		2013		2012
Beginning balance		$	(1,883)	$	(2,187)	$	(2,000)	$	(2,225)
Addition for the amount related to the credit loss for
	which an other-than-temporary impairment was
	not previously recognized		-		(3)		-		(3)
Addition for the amount related to the credit loss for
	which an other-than-temporary impairment was
	previously recognized		-		(278)		-		(498)
Reductions for increases in cash flows expected to be
	collected that are recognized over the remaining life
	of the security		-		-		-		-
Reductions for securities sold during the period			114		200		231		458
Ending balance		$	(1,769)	$	(2,268)	$	(1,769)	$	(2,268)

Variable Interest Entities

Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristics of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis.

The Company is involved in the normal course of business with VIEs primarily as a passive investor in residential and commercial mortgage-backed securities and through its interests in other investments in alternative and specialty funds that are structured as limited partnerships considered to be third party VIEs. The Company determined that it was not the primary beneficiary for any of these investments as of June 30, 2013. The Company believes its exposure to loss with respect to these investments is generally limited to the investment carrying amounts reported in the Company's Condensed Consolidated Balance Sheets and any unfunded investment commitments.

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Investments (Tables)

6 Months Ended

Jun. 30, 2013

Investments

Composition Of Net Investment Income

	Three Months Ended June 30,				Six Months Ended June 30,
		2013		2012		2013		2012
Available for sale investments	$	28,666	$	34,678	$	58,147	$	71,660
Other investments		6,780		(74)		29,839		23,051
Cash and cash equivalents		840		349		1,291		689
	$	36,286	$	34,953	$	89,277	$	95,400
Investment expenses		(3,818)		(3,187)		(7,504)		(6,559)
Net investment income	$	32,468	$	31,766	$	81,773	$	88,841

Composition of the Investment Portfolio by Investment Type

		June 30, 2013				December 31, 2012
Type of Investment		Fair Value	Percentage			Fair Value	Percentage
Fixed maturity investments	$	4,755,091	74.2	%	$	4,868,150	74.2	%
Cash and cash equivalents(1)		839,245	13.1	%		1,051,694	16.0	%
Other investments(2)		569,393	8.9	%		517,546	7.9	%
Short-term investments		15,382	0.2	%		42,230	0.6	%
Equity securities		232,919	3.6	%		86,997	1.3	%
Total	$	6,412,030	100.0	%	$	6,566,617	100.0	%
(1) Includes net receivable on sales of investments and net payable on purchases of investments.
(2) Consists of investments in alternative funds and specialty funds.

Composition Of Fixed Income Portfolio, Including Fixed Maturity Investments And Short Term Investments, By Investment Ratings

		June 30, 2013				December 31, 2012
Ratings(1)		Fair Value	Percentage			Fair Value	Percentage
U.S. government and agencies securities	$	671,597	14.1	%	$	737,535	15.0	%
AAA / Aaa		1,017,720	21.3	%		993,277	20.2	%
AA / Aa		1,746,510	36.7	%		1,821,250	37.1	%
A / A		931,561	19.5	%		993,307	20.2	%
BBB		292,820	6.1	%		219,017	4.5	%
Below BBB		105,384	2.2	%		143,198	2.9	%
Not rated		4,881	0.1	%		2,796	0.1	%
Total	$	4,770,473	100.0	%	$	4,910,380	100.0	%
(1) The credit rating for each security reflected above was determined based on the rating assigned to the individual security by Standard & Poor's Financial Services LLC ("Standard & Poor's"). If a rating is not supplied by Standard & Poor's, the equivalent rating supplied by either Moody's Investors Service, Inc. ("Moody's") or Fitch Ratings is used.

Contractual Maturities Of Fixed Maturity And Short Term Investments

	June 30, 2013				December 31, 2012
		Amortized				Amortized
		Cost		Fair Value		Cost		Fair Value
Due within one year	$	158,318	$	159,900	$	136,283	$	137,567
Due after one year through five years		1,675,581		1,677,171		1,725,927		1,765,662
Due after five years through ten years		336,818		334,020		410,755		429,099
Due after ten years		27,465		28,920		29,654		33,803
Residential mortgage-backed securities		1,205,773		1,203,477		1,252,468		1,280,579
Commercial mortgage-backed securities		852,103		866,181		741,178		781,379
Asset-backed securities		496,389		500,804		474,555		482,291
Total	$	4,752,447	$	4,770,473	$	4,770,820	$	4,910,380

Other Investments

June 30, 2013			Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
	Hedge funds	$	372,450	$	-	$	80,437
	Private investment funds		47,458		22,195		47,458
Total alternative funds			419,908		22,195		127,895
Specialty funds
	High yield loan funds		107,926		-		-
	Convertible debt funds		41,559		-		-
Total specialty funds			149,485		-		-
Total other investments		$	569,393	$	22,195	$	127,895

December 31, 2012			Market Value		Unfunded Commitments		Ineligible for Redemption in 2013
Alternative funds
	Hedge funds	$	337,200	$	-	$	61,161
	Private investment funds		35,219		29,483		35,219
Total alternative funds			372,419		29,483		96,380
Specialty funds
	High yield loan funds		105,886		-		-
	Convertible debt funds		39,241		-		-
Total specialty funds			145,127		-		-
Total other investments		$	517,546	$	29,483	$	96,380

Net Realized And Unrealized Investment Gains

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Gross realized gains on investment sales	$	16,591	$	15,613	$	24,011	$	22,861
Gross realized losses on investment sales		(5,283)		(822)		(6,746)		(3,169)
Change in fair value of derivative financial instruments(1)		(936)		167		(658)		469
Net realized and unrealized investment gains	$	10,372	$	14,958	$	16,607	$	20,161
(1) For additional information on the Company's derivative financial instruments, see Note 7

Unrealized Gains and Losses And Other-Then-Temporary Impairments

					Gross		Gross
			Amortized		Unrealized		Unrealized				Non-Credit
	June 30, 2013		Cost		Gains		Losses		Fair Value		OTTI (2)
	Fixed maturity investments
		U.S. government and agencies securities	$	670,997	$	8,732	$	(8,132)	$	671,597	$	-
		U.S. state and municipal securities		28,116		164		(378)		27,902		-
		Foreign government securities		162,370		1,519		(2,516)		161,373		-
		Government guaranteed corporate securities		49,710		815		(90)		50,435		-
		Corporate securities		1,271,607		17,966		(16,251)		1,273,322		-
		Residential mortgage-backed securities		1,205,773		18,730		(21,026)		1,203,477		(5,136)
		Commercial mortgage-backed securities(1)		852,103		26,624		(12,546)		866,181		(47)
		Asset-backed securities		496,389		5,548		(1,133)		500,804		-
	Total fixed maturity investments		$	4,737,065	$	80,098	$	(62,072)	$	4,755,091	$	(5,183)
	Short-term investments			15,382		-		-		15,382		-
	Total fixed income investments		$	4,752,447	$	80,098	$	(62,072)	$	4,770,473	$	(5,183)
	Equity securities
		Equity investments	$	139,470	$	12,784	$	(3,663)	$	148,591	$	-
		Emerging market debt funds		50,000		139		-		50,139		-
		Preferred equity investments		7,279		1,791		(2)		9,068		-
		Short-term fixed income fund		25,121		-		-		25,121		-
	Total equity securities		$	221,870	$	14,714	$	(3,665)	$	232,919	$	-
(1)	Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.
(2)	Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At June 30, 2013, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.1 million.

						Gross		Gross
				Amortized		Unrealized		Unrealized				Non-Credit
		December 31, 2012		Cost		Gains		Losses		Fair Value		OTTI (2)
		Fixed maturity investments
			U.S. government and agencies securities	$	718,992	$	18,596	$	(53)	$	737,535	$	-
			U.S. state and municipal securities		37,952		1,119		(177)		38,894		-
			Foreign government securities		106,218		3,264		(145)		109,337		-
			Government guaranteed corporate
			securities		62,782		1,682		-		64,464		-
			Corporate securities		1,334,451		40,555		(1,335)		1,373,671		-
			Residential mortgage-backed securities		1,252,468		30,426		(2,315)		1,280,579		(5,884)
			Commercial mortgage-backed securities(1)		741,178		41,737		(1,536)		781,379		(53)
			Asset-backed securities		474,555		8,435		(699)		482,291		-
		Total fixed maturity investments		$	4,728,596	$	145,814	$	(6,260)	$	4,868,150	$	(5,937)
		Short-term investments			42,224		6		-		42,230		-
		Total fixed income investments		$	4,770,820	$	145,820	$	(6,260)	$	4,910,380	$	(5,937)
		Equity securities
			Equity investments	$	59,736	$	7,194	$	(620)	$	66,310	$	-
			Emerging market debt funds		10,000		576		-		10,576		-
			Preferred equity investments		7,261		2,851		(1)		10,111		-
		Total equity securities		$	76,997	$	10,621	$	(621)	$	86,997	$	-
(1)	Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.
(2)	Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2012, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.4 million.

Available For Sale Securities In An Unrealized Loss Position

					Less than 12 months				12 months or greater				Total
					Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
	June 30, 2013				Losses(1)		Value		Losses(1)		Value		Losses(1)		Value
	Fixed maturity investments
		U.S. government and agencies
			securities	$	(8,132)	$	350,292	$	-	$	-	$	(8,132)	$	350,292
		U.S. state and municipal
			securities		(378)		19,910		-		-		(378)		19,910
		Foreign government securities			(2,516)		108,087		-		-		(2,516)		108,087
		Government guaranteed
			corporate securities		(90)		10,870		-		-		(90)		10,870
		Corporate securities			(16,251)		673,297		-		-		(16,251)		673,297
		Residential mortgage-backed
			securities		(20,917)		674,696		(109)		1,646		(21,026)		676,342
		Commercial mortgage-backed
			securities		(12,180)		459,330		(366)		5,446		(12,546)		464,776
		Asset-backed securities			(915)		210,342		(218)		9,041		(1,133)		219,383
	Total fixed maturity investments			$	(61,379)	$	2,506,824	$	(693)	$	16,133	$	(62,072)	$	2,522,957
	Equity securities
		Equity investments		$	(3,644)	$	42,190	$	(19)	$	200	$	(3,663)	$	42,390
		Preferred equity investments			(2)		400		-		-		(2)		400
	Total equity securities			$	(3,646)	$	42,590	$	(19)	$	200	$	(3,665)	$	42,790
(1)	Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at June 30, 2013.

3.	Investments, cont’d.
					Less than 12 months				12 months or greater				Total
					Unrealized		Fair		Unrealized		Fair		Unrealized		Fair
	December 31, 2012				Losses(1)		Value		Losses(1)		Value		Losses(1)		Value
	Fixed maturity investments
		U.S. government and agencies
			securities	$	(53)	$	48,570	$	-	$	-	$	(53)	$	48,570
		U.S. state and municipal
			securities		(177)		6,905		-		-		(177)		6,905
		Foreign government securities			(139)		23,157		(6)		4,870		(145)		28,027
		Corporate securities			(1,305)		245,232		(30)		1,849		(1,335)		247,081
		Residential mortgage-backed
			securities		(1,920)		327,473		(395)		7,511		(2,315)		334,984
		Commercial mortgage-backed
			securities		(474)		79,125		(1,062)		11,625		(1,536)		90,750
		Asset-backed securities			(94)		53,471		(605)		8,123		(699)		61,594
	Total fixed maturity investments			$	(4,162)	$	783,933	$	(2,098)	$	33,978	$	(6,260)	$	817,911
	Equity securities
		Equity investments		$	(580)	$	9,183	$	(40)	$	387	$	(620)	$	9,570
		Preferred equity investments			(1)		201		-		-		(1)		201
	Total equity securities			$	(581)	$	9,384	$	(40)	$	387	$	(621)	$	9,771
(1)	Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2012.

Analysis Of OTTI

		Three months ended June 30,				Six months ended June 30,
		2013		2012		2013		2012
Total other-than-temporary impairment losses	$	(579)	$	(148)	$	(1,385)	$	(148)
Portion of loss recognized in other
comprehensive (loss) income		-		(259)		-		(478)
Net impairment losses recognized in earnings	$	(579)	$	(407)	$	(1,385)	$	(626)

Credit Losses Recognized For Available For Sale Investments In Earnings, OTTI Loss Was Recognized In Accumulated Other Comprehensive Income

		Three months ended June 30,				Six months ended June 30,
		2013		2012		2013		2012
Beginning balance		$	(1,883)	$	(2,187)	$	(2,000)	$	(2,225)
Addition for the amount related to the credit loss for
	which an other-than-temporary impairment was
	not previously recognized		-		(3)		-		(3)
Addition for the amount related to the credit loss for
	which an other-than-temporary impairment was
	previously recognized		-		(278)		-		(498)
Reductions for increases in cash flows expected to be
	collected that are recognized over the remaining life
	of the security		-		-		-		-
Reductions for securities sold during the period			114		200		231		458
Ending balance		$	(1,769)	$	(2,268)	$	(1,769)	$	(2,268)

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Stock-Based Employee Compensation And Other Stock Plans (CEO) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of restricted shares granted	727,271	23,260	1,070,655	400,568
Number of options granted			800,000
Exercise price of options			$ 48.20
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Vesting period for employee awards			5 years 0 months 0 days
Number of restricted shares granted			708,890
Number of options granted			800,000
Exercise price of options			$ 48.2
Contractual life			10 years 0 months 0 days

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Summary Of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2013

Summary Of Significant Accounting Policies

New Accounting Pronouncements Adopted

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-11 “Disclosures About Offsetting Assets and Liabilities” (“ASU 2011-11”). ASU 2011-11 requires additional disclosures about financial instruments and derivative instruments relating to netting arrangements.

ASU 2011-11was effective for interim and annual periods beginning on or after January 1, 2013, with retrospective presentation required. The Company adopted this standard effective January 1, 2013. This standard did not have a material impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02 “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”). ASU 2013-02 requires entities to report, in one location, information about reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 also requires companies to report changes in AOCI balances. For significant items reclassified out of AOCI into net income in their entirety in the same reporting period, reporting (either on the face of the statement where net income is presented or in the notes to the financial statements) is required about the effect of the reclassifications on the respective line items in the statement where net income is presented. For items that are not reclassified into net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under US GAAP is required in the notes. The above information must be presented in one place (parenthetically on the face of the financial statements by income statement line item or in a note to the financial statements).

ASU 2013-02 was effective for fiscal years and interim periods beginning after December 15, 2012. The Company adopted this standard prospectively on January 1, 2013. This standard resulted in an additional note to the consolidated financial statements (see Note 6).

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Earnings Per Share (Schedule Of Dividends Declared) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Dividend Per Share Basic [Line Items]
Dividends declared per common share	$ 0.32	$ 0.31	$ 0.64	$ 0.62
Series A Preferred Stock [Member]
Dividend Per Share Basic [Line Items]
Dividends declared per preferred share	$ 0.484375	$ 0.484375	$ 0.968750	$ 0.968750
Series B Preferred Stock [Member]
Dividend Per Share Basic [Line Items]
Dividends declared per preferred share	$ 0.468750	$ 0.468750	$ 0.937500	$ 0.937500

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Segment Reporting (Summary Of The Segment Revenues, Results And Reserve For Losses And Loss Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Segment Reporting Information [Line Items]
Gross premiums written	$ 572,710	$ 604,076	$ 1,750,072	$ 1,665,725
Ceded premiums written	(108,089)	(119,663)	(376,536)	(338,256)
Net premiums written	464,621	484,413	1,373,536	1,327,469
Net premiums earned	543,335	519,340	963,452	930,975
Other underwriting income (loss)	888	19	1,637	(316)
Total revenue	544,223	519,359	965,089	930,659
Net losses and loss expenses	359,058	345,897	578,028	608,664
Acquisition expenses	71,868	72,128	143,504	140,617
General and administrative expenses	81,359	62,609	147,837	128,650
Total expenses	512,285	480,634	869,369	877,931
Underwriting income (loss)	31,938	38,725	95,720	52,728
Net loss ratio	66.10%	66.50%	60.00%	65.40%
Acquisition expense ratio	13.20%	13.90%	14.90%	15.10%
General and administrative expense ratio	15.00%	12.10%	15.30%	13.80%
Combined ratio	94.30%	92.50%	90.20%	94.30%
Reserve for losses and loss expenses	4,145,581	3,984,622	4,145,581	3,984,622	4,240,876
Insurance [Member]
Segment Reporting Information [Line Items]
Gross premiums written	276,941	292,659	929,884	928,006
Ceded premiums written	(85,439)	(106,000)	(333,688)	(313,566)
Net premiums written	191,502	186,659	596,196	614,440
Net premiums earned	267,878	266,085	419,030	427,715
Other underwriting income (loss)	0	(1,300)	0	(1,300)
Total revenue	267,878	264,785	419,030	426,415
Net losses and loss expenses	215,844	208,504	315,308	322,206
Acquisition expenses	14,968	17,545	29,584	33,759
General and administrative expenses	43,524	32,819	79,151	67,254
Total expenses	274,336	258,868	424,043	423,219
Underwriting income (loss)	(6,458)	5,917	(5,013)	3,196
Net loss ratio	80.60%	78.40%	75.20%	75.30%
Acquisition expense ratio	5.60%	6.60%	7.10%	7.90%
General and administrative expense ratio	16.20%	12.30%	18.90%	15.70%
Combined ratio	102.40%	97.30%	101.20%	98.90%
Reserve for losses and loss expenses	2,242,894	2,113,823	2,242,894	2,113,823
Reinsurance [Member]
Segment Reporting Information [Line Items]
Gross premiums written	295,769	311,417	820,188	737,719
Ceded premiums written	(22,650)	(13,663)	(42,848)	(24,690)
Net premiums written	273,119	297,754	777,340	713,029
Net premiums earned	275,457	253,255	544,422	503,260
Other underwriting income (loss)	888	1,319	1,637	984
Total revenue	276,345	254,574	546,059	504,244
Net losses and loss expenses	143,214	137,393	262,720	286,458
Acquisition expenses	56,900	54,583	113,920	106,858
General and administrative expenses	37,835	29,790	68,686	61,396
Total expenses	237,949	221,766	445,326	454,712
Underwriting income (loss)	38,396	32,808	100,733	49,532
Net loss ratio	52.00%	54.20%	48.30%	57.00%
Acquisition expense ratio	20.70%	21.60%	20.90%	21.20%
General and administrative expense ratio	13.70%	11.80%	12.60%	12.20%
Combined ratio	86.40%	87.60%	81.80%	90.40%
Reserve for losses and loss expenses	$ 1,902,687	$ 1,870,799	$ 1,902,687	$ 1,870,799

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Investments (Other Investments) (Details 2)	6 Months Ended
	Jun. 30, 2013
Hedge Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated remaining liquidation period in years	2 years 0 months 0 days
Estimated liquidation, percentage in next 12 months	78.00%
Hedge Funds [Member] | Maximum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated notice period, in days	90
Hedge Funds [Member] | Minimum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated notice period, in days	30
Private Equity Funds [Member] | Maximum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated remaining liquidation period in years	10 years 0 months 0 days
Private Equity Funds [Member] | Minimum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated remaining liquidation period in years	5 years 0 months 0 days
High Yield Loan Funds [Member] | Maximum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated notice period, in days	90
High Yield Loan Funds [Member] | Minimum [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated notice period, in days	30
Convertible Debt Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Estimated notice period, in days	5

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income Loss Net Of Tax

Schedule Of Accumulated Other Comprehensive Income

		For the Three Months Ended June 30, 2013
		Gains and losses on cash flow hedges		Unrealized gains and losses on available-for-sale securities		Foreign currency items		Total
Beginning balance		$	(1,928)	$	136,885	$	2,482	$	137,439
	Other comprehensive (loss) income before reclassifications		-		(96,457)		219		(96,238)
	Amounts reclassified from accumulated other comprehensive income(1)		29		(9,792)		-		(9,763)
Net current period other comprehensive (loss) income			29		(106,249)		219		(106,001)
Ending balance		$	(1,899)	$	30,636	$	2,701	$	31,438
(1) All amounts are net of tax.

		Six Months Ended June 30, 2013
		Gains and losses on cash flow hedges		Unrealized gains and losses on available-for-sale securities		Foreign currency items		Total
Beginning balance		$	(1,944)	$	141,731	$	12,676	$	152,463
	Other comprehensive (loss) income before reclassifications		-		(96,360)		(9,975)		(106,335)
	Amounts reclassified from accumulated other comprehensive income(1)		45		(14,735)		-		(14,690)
Net current period other comprehensive (loss) income			45		(111,095)		(9,975)		(121,025)
Ending balance		$	(1,899)	$	30,636	$	2,701	$	31,438
(1) All amounts are net of tax.

Reclassification Out Of Accumulated Other Comprehensive Income

Three Months Ended June 30, 2013
Details about accumulated other comprehensive income components			Amount reclassified from accumulated other comprehensive income	Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges -
	Debt	$	29	Interest expense
			29	Total before income taxes
			-	Income tax expense
		$	29	Total net of income taxes
Unrealized (gains) losses on available-for-sale securities		$	(11,308)	Net realized and unrealized investment gains
			579	Net impairment losses recognized in earnings
			(10,729)	Total before income taxes
			937	Income tax expense
		$	(9,792)	Total net of income taxes

Six Months Ended June 30, 2013
Details about accumulated other comprehensive income components			Amount reclassified from accumulated other comprehensive income	Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges -
	Debt	$	45	Interest expense
			45	Total before income taxes
			-	Income tax expense
		$	45	Total net of income taxes
Unrealized (gains) losses on available-for-sale securities		$	(17,265)	Net realized and unrealized investment gains
			1,385	Net impairment losses recognized in earnings
			(15,880)	Total before income taxes
			1,145	Income tax expense
		$	(14,735)	Total net of income taxes

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Schedule Of Computation Of Basic And Diluted Earnings Per Share

				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2013		2012		2013		2012
Numerator:
	Net income available to common and participating
		common shareholders	$	52,831	$	64,295	$	144,942	$	138,649
	Less amount allocated to participating
		common shareholders(1)		(1,132)		(1,085)		(2,745)		(2,377)
	Net income allocated to common shareholders		$	51,699	$	63,210	$	142,197	$	136,272
Denominator:
	Weighted average shares – basic			42,621,301		42,598,611		42,526,686		42,518,902
	Share equivalents:
		Options		-		36,093		-		39,693
		Restricted share units		229		479		679		3,412
	Weighted average shares – diluted			42,621,530		42,635,183		42,527,365		42,562,007
Basic earnings per common share			$	1.21	$	1.48	$	3.34	$	3.20
Diluted earnings per common share			$	1.21	$	1.48	$	3.34	$	3.20
(1) Represents earnings attributable to holders of unvested restricted shares issued by the Company. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

Schedule Of Dividends Declared

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	0.968750	$	0.968750
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	0.937500	$	0.937500
Dividends declared per common share	$	0.32	$	0.31	$	0.64	$	0.62

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Fair Value Measurement (Reconciliation Of The Beginning And Ending Balances For All Available For Sale Investments Measured At Fair Value On A Recurring Basis Using Level 3 Inputs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	$ 564,535	$ 441,331	$ 529,004	$ 10,394
Total net realized gains included in earnings	16,462	10,830	41,950	10,835
Total net realized and unrealized losses included in earnings	(9,641)	(10,912)	(12,065)	(10,912)
Change in unrealized gains included in other comprehensive (loss) income	243	568	327	1,162
Change in unrealized losses included in other comprehensive (loss) income	(154)	(115)	(208)	(229)
Purchases	23,424	46,986	45,420	47,160
Sales	(17,808)	(1,276)	(30,575)	(1,726)
Transfers in to Level 3	383	1,684	3,647	434,504
Transfers out of Level 3	(505)	(417)	(561)	(2,509)
Level 3, end of period	576,939	488,679	576,939	488,679
Fixed Maturity Investments [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	9,814	8,903	8,497	10,394
Total net realized gains included in earnings	43	5	48	10
Total net realized and unrealized losses included in earnings	(2)	(13)	(2)	(13)
Change in unrealized gains included in other comprehensive (loss) income	243	568	327	1,162
Change in unrealized losses included in other comprehensive (loss) income	(154)	(115)	(208)	(229)
Purchases	0	(214)	0	(40)
Sales	(2,276)	(582)	(4,202)	(1,032)
Transfers in to Level 3	383	1,684	3,647	2,076
Transfers out of Level 3	(505)	(417)	(561)	(2,509)
Level 3, end of period	7,546	9,819	7,546	9,819
Other Investments [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	554,715	432,428	517,546	0
Total net realized gains included in earnings	16,419	10,825	41,902	10,825
Total net realized and unrealized losses included in earnings	(9,639)	(10,899)	(12,063)	(10,899)
Change in unrealized gains included in other comprehensive (loss) income	0	0	0	0
Change in unrealized losses included in other comprehensive (loss) income	0	0	0	0
Purchases	23,424	47,200	45,414	47,200
Sales	(15,526)	(694)	(23,406)	(694)
Transfers in to Level 3	0	0	0	432,428	[1]
Transfers out of Level 3	0	0	0	0
Level 3, end of period	569,393	478,860	569,393	478,860
Other Assets [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	6	0	2,961	0
Total net realized gains included in earnings	0	0	0	0
Total net realized and unrealized losses included in earnings	0	0	0	0
Change in unrealized gains included in other comprehensive (loss) income	0	0	0	0
Change in unrealized losses included in other comprehensive (loss) income	0	0	0	0
Purchases	0	0	6	0
Sales	(6)	0	(2,967)	0
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Level 3, end of period	0	0	0	0
Other Liabilities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	12	0	2,961	0
Total net realized gains included in earnings	0	0	0	0
Total net realized and unrealized losses included in earnings	0	0	0	0
Change in unrealized gains included in other comprehensive (loss) income	0	0	0	0
Change in unrealized losses included in other comprehensive (loss) income	0	0	0	0
Purchases	0	0	12	0
Sales	(12)	0	(2,973)	0
Transfers in to Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Level 3, end of period	$ 0	$ 0	$ 0	$ 0

[1] As required by ASU 2011-04, the fair value of the Company's other investments was transferred into Level 3 at March 31, 2012.

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Investments (Summary Of Investment Portfolio By Type) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Summary of Investment Holdings [Line Items]
Fair Value	$ 6,412,030		$ 6,566,617
Percentage of Investment	100.00%		100.00%
Fixed Maturity Securities [Member]
Summary of Investment Holdings [Line Items]
Fair Value	4,755,091		4,868,150
Percentage of Investment	74.20%		74.20%
Cash and Cash Equivalents [Member]
Summary of Investment Holdings [Line Items]
Fair Value	839,245	[1]	1,051,694	[1]
Percentage of Investment	13.10%	[1]	16.00%	[1]
Other Investments [Member]
Summary of Investment Holdings [Line Items]
Fair Value	569,393	[2]	517,546	[2]
Percentage of Investment	8.90%	[2]	7.90%	[2]
Short Term Investments [Member]
Summary of Investment Holdings [Line Items]
Fair Value	15,382		42,230
Percentage of Investment	0.20%		0.60%
Equity Securities [Member]
Summary of Investment Holdings [Line Items]
Fair Value	$ 232,919		$ 86,997
Percentage of Investment	3.60%		1.30%

[1] Includes net receivable on sales of investments and net payable on purchases of investments.

[2] Consists of investments in alternative funds and specialty funds.

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Investments (Unrealized Gains And Losses And Other-Than-Temporary Impairments) (Details) (USD $)	Jun. 30, 2013		Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	$ 4,737,065,000		$ 4,728,596,000
Debt Securities, Fair Value	4,755,091,000		4,868,150,000
Available for sale, equity Securities, cost	221,870,000		76,997,000
Equity Securities, Fair Value	232,919,000		86,997,000
Gross unrealized loss related to securities, non-credit OTTI	100,000		400,000
U.S. Government And Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	670,997,000		718,992,000
Debt Securities, Gross Unrealized Gains	8,732,000		18,596,000
Debt Securities, Gross Unrealized Losses	(8,132,000)		(53,000)
Debt Securities, Fair Value	671,597,000		737,535,000
Non-Credit OTTI	0	[1]	0	[2]
U.S. State And Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	28,116,000		37,952,000
Debt Securities, Gross Unrealized Gains	164,000		1,119,000
Debt Securities, Gross Unrealized Losses	(378,000)		(177,000)
Debt Securities, Fair Value	27,902,000		38,894,000
Non-Credit OTTI	0	[1]	0	[2]
Foreign Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	162,370,000		106,218,000
Debt Securities, Gross Unrealized Gains	1,519,000		3,264,000
Debt Securities, Gross Unrealized Losses	(2,516,000)		(145,000)
Debt Securities, Fair Value	161,373,000		109,337,000
Non-Credit OTTI	0	[1]	0	[2]
Government Guaranteed Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	49,710,000		62,782,000
Debt Securities, Gross Unrealized Gains	815,000		1,682,000
Debt Securities, Gross Unrealized Losses	(90,000)		0
Debt Securities, Fair Value	50,435,000		64,464,000
Non-Credit OTTI	0	[1]	0	[2]
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	1,271,607,000		1,334,451,000
Debt Securities, Gross Unrealized Gains	17,966,000		40,555,000
Debt Securities, Gross Unrealized Losses	(16,251,000)		(1,335,000)
Debt Securities, Fair Value	1,273,322,000		1,373,671,000
Non-Credit OTTI	0	[1]	0	[2]
Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	1,205,773,000		1,252,468,000
Debt Securities, Gross Unrealized Gains	18,730,000		30,426,000
Debt Securities, Gross Unrealized Losses	(21,026,000)		(2,315,000)
Debt Securities, Fair Value	1,203,477,000		1,280,579,000
Non-Credit OTTI	(5,136,000)	[1]	(5,884,000)	[2]
Commercial Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	852,103,000	[3]	741,178,000	[4]
Debt Securities, Gross Unrealized Gains	26,624,000	[3]	41,737,000	[4]
Debt Securities, Gross Unrealized Losses	(12,546,000)	[3]	(1,536,000)	[4]
Debt Securities, Fair Value	866,181,000	[3]	781,379,000	[4]
Non-Credit OTTI	(47,000)	[1],[3]	(53,000)	[2],[4]
Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	496,389,000		474,555,000
Debt Securities, Gross Unrealized Gains	5,548,000		8,435,000
Debt Securities, Gross Unrealized Losses	(1,133,000)		(699,000)
Debt Securities, Fair Value	500,804,000		482,291,000
Non-Credit OTTI	0	[1]	0	[2]
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	4,737,065,000		4,728,596,000
Debt Securities, Gross Unrealized Gains	80,098,000		145,814,000
Debt Securities, Gross Unrealized Losses	(62,072,000)		(6,260,000)
Debt Securities, Fair Value	4,755,091,000		4,868,150,000
Non-Credit OTTI	(5,183,000)	[1]	(5,937,000)	[2]
Short Term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	15,382,000		42,224,000
Debt Securities, Gross Unrealized Gains	0		6,000
Debt Securities, Gross Unrealized Losses	0		0
Debt Securities, Fair Value	15,382,000		42,230,000
Non-Credit OTTI	0	[1]	0	[2]
Fixed Income Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Amortized Cost	4,752,447,000		4,770,820,000
Debt Securities, Gross Unrealized Gains	80,098,000		145,820,000
Debt Securities, Gross Unrealized Losses	(62,072,000)		(6,260,000)
Debt Securities, Fair Value	4,770,473,000		4,910,380,000
Non-Credit OTTI	(5,183,000)	[1]	(5,937,000)	[2]
Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale, equity Securities, cost	139,470,000		59,736,000
Equity Securities, Gross Unrealized Gains	12,784,000		7,194,000
Equity Securities, Gross Unrealized Losses	(3,663,000)		(620,000)
Equity Securities, Fair Value	148,591,000		66,310,000
Non-Credit OTTI	0	[1]	0	[2]
Emerging Market Debt Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale, equity Securities, cost	50,000,000		10,000,000
Equity Securities, Gross Unrealized Gains	139,000		576,000
Equity Securities, Gross Unrealized Losses	0		0
Equity Securities, Fair Value	50,139,000		10,576,000
Non-Credit OTTI	0	[1]	0	[2]
Preferred Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale, equity Securities, cost	7,279,000		7,261,000
Equity Securities, Gross Unrealized Gains	1,791,000		2,851,000
Equity Securities, Gross Unrealized Losses	(2,000)		(1,000)
Equity Securities, Fair Value	9,068,000		10,111,000
Non-Credit OTTI	0	[1]	0	[2]
Short-term Fixed Income Fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale, equity Securities, cost	25,121,000
Equity Securities, Gross Unrealized Gains	0
Equity Securities, Gross Unrealized Losses	0
Equity Securities, Fair Value	25,121,000
Non-Credit OTTI	0	[1]
Total Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available for sale, equity Securities, cost	221,870,000		76,997,000
Equity Securities, Gross Unrealized Gains	14,714,000		10,621,000
Equity Securities, Gross Unrealized Losses	(3,665,000)		(621,000)
Equity Securities, Fair Value	232,919,000		86,997,000
Non-Credit OTTI	0	[1]	0	[2]
Collateralized Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Debt Securities, Fair Value	$ 11,400,000		$ 8,500,000

[1] Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At June 30, 2013, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.1 million.

[2] Represents total OTTI recognized in accumulated other comprehensive income. It does not include the change in fair value subsequent to the impairment measurement date. At December 31, 2012, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was $0.4 million.

[3] Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.

[4] Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.

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Accumulated Other Comprehensive Income (Schedule Of Changes In Accumulated Other Comprehensive Income By Component) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012	Jun. 30, 2013		Jun. 30, 2012
Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income, Beginning Balance	$ 137,439			$ 152,463
Other Comprehensive (Loss) Income Before Reclassifications	(96,238)			(106,335)
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax	(9,763)	[1]		(14,690)	[1]
Other comprehensive (loss) income	(106,001)		9,457	(121,025)		19,860
Accumulated Other Comprehensive Income, Ending Balance	31,438			31,438
Accumulated Derivative Loss On Cash Flow Hedging Instruments [Member]
Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income, Beginning Balance	(1,928)			(1,944)
Other Comprehensive (Loss) Income Before Reclassifications	0			0
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax	29	[1]		45	[1]
Other comprehensive (loss) income	29			45
Accumulated Other Comprehensive Income, Ending Balance	(1,899)			(1,899)
Unrealized Holding Gains On AFS Investments, Net Of Deferred Taxes [Member]
Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income, Beginning Balance	136,885			141,731
Other Comprehensive (Loss) Income Before Reclassifications	(96,457)			(96,360)
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax	(9,792)	[1]		(14,735)	[1]
Other comprehensive (loss) income	(106,249)			(111,095)
Accumulated Other Comprehensive Income, Ending Balance	30,636			30,636
Cumulative Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income, Beginning Balance	2,482			12,676
Other Comprehensive (Loss) Income Before Reclassifications	219			(9,975)
Reclassification From Accumulated Other Comprehensive Income Current Period Net Of Tax	0	[1]		0	[1]
Other comprehensive (loss) income	219			(9,975)
Accumulated Other Comprehensive Income, Ending Balance	$ 2,701			$ 2,701

[1] All amounts are net of tax.

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Commitments And Contingencies (Tables)

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies

Schedule Of Percentage Of Net Premiums

Broker	2013		2012
Aon Benfield	19.5	%	19.3	%
Marsh & McLennan Companies, Inc.	15.3	%	17.8	%
Willis Companies	9.8	%	9.0	%
Total of largest brokers	44.6	%	46.1	%

Schedule Of Future Minimum Lease Commitments

Twelve months ended June 30,	Amount
2014	$	14,999
2015		13,996
2016		12,166
2017		10,011
2018		9,978
2019 and thereafter		46,853
	$	108,003

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Commitments And Contingencies (Schedule Of Percentage Of Net Premiums) (Details)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Revenue from External Customer [Line Items]
Percentage of net premium written	44.60%	46.10%
Aon Benfield [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	19.50%	19.30%
Marsh & Mclennan Companies, Inc. [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	15.30%	17.80%
Willis Companies [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	9.80%	9.00%

XML

Investments (Credit Losses Rollforward) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Investments
Beginning balance	$ (1,883)	$ (2,187)	$ (2,000)	$ (2,225)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized	0	(3)	0	(3)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized	0	(278)	0	(498)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	0	0	0	0
Reductions for securities sold during the period	114	200	231	458
Ending balance	$ (1,769)	$ (2,268)	$ (1,769)	$ (2,268)

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Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Measurement

Schedule Of Available For Sale Investments, Other Investments, Other Assets And Liabilities And Debt

			Fair Value Measurements at June 30, 2013
					Quoted
					Prices in
					Active
					Markets		Significant
					for		Other		Significant
			Total at		Identical		Observable		Unobservable
			June 30,		Assets		Inputs		Inputs
			2013		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity investments
	U.S. government and agencies securities	$	671,597	$	13,764	$	657,833	$	-
	U.S. state and municipal securities		27,902		-		27,902		-
	Foreign government securities		161,373		-		161,373		-
	Government guaranteed corporate securities		50,435		-		50,435		-
	Corporate securities		1,273,322		-		1,272,545		777
	Residential mortgage-backed securities		1,203,477		-		1,203,246		231
	Commercial mortgage-backed securities		866,181		-		861,072		5,109
	Asset-backed securities		500,804		-		499,375		1,429
Total fixed maturity investments		$	4,755,091	$	13,764	$	4,733,781	$	7,546
Equity securities
	Equity investments		148,591		107,439		41,152		-
	Emerging market debt funds		50,139		-		50,139		-
	Preferred equity investments		9,068		-		9,068		-
	Short-term fixed income fund		25,121		25,121		-		-
Total equity securities		$	232,919	$	132,560	$	100,359	$	-
Short-term investments			15,382		-		15,382		-
Other investments			569,393		-		-		569,393
Other assets (see Note 7)			72,157		-		72,157		-
Total assets		$	5,644,942	$	146,324	$	4,921,679	$	576,939
Liabilities
Other liabilities (see Note 7)		$	40,914	$	-	$	40,914	$	-
Debt			577,188		-		577,188		-
Total liabilities		$	618,102	$	-	$	618,102	$	-

			Fair Value Measurements at December 31, 2012
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
			Total at		Identical		Observable		Unobservable
			December 31,		Assets		Inputs		Inputs
			2012		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity investments
	U.S. government and agencies securities	$	737,535	$	39,889	$	697,646	$	-
	U.S. state and municipal securities		38,894		-		38,894		-
	Foreign government securities		109,337		-		109,337		-
	Government guaranteed corporate securities		64,464		-		64,464		-
	Corporate securities		1,373,671		-		1,373,671		-
	Residential mortgage-backed securities		1,280,579		-		1,280,223		356
	Commercial mortgage-backed securities		781,379		-		777,049		4,330
	Asset-backed securities		482,291		-		478,480		3,811
Total fixed maturity investments		$	4,868,150	$	39,889	$	4,819,764	$	8,497
Equity securities
	Equity investments		66,310		66,310		-		-
	Emerging market debt funds		10,576		-		10,576		-
	Preferred equity investments		10,111		-		10,111		-
Total equity securities		$	86,997	$	66,310	$	20,687	$	-
Short-term investments			42,230		-		42,230		-
Other investments			517,546		-		-		517,546
Other assets (see Note 7)			23,649		-		20,688		2,961
Total assets		$	5,538,572	$	106,199	$	4,903,369	$	529,004
Liabilities
Other liabilities (see Note 7)			10,660		-		7,699		2,961
Debt			592,677		-		592,677		-
Total liabilities		$	603,337	$	-	$	600,376	$	2,961

Reconciliation Of The Beginning And Ending Balances For All Available For Sale Investments, Other Investments And Derivative Instruments Measured At Fair Value On A Recurring Basis Using Level 3 Inputs

	Three Months Ended June 30, 2013
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	9,814	$	554,715	$	6	$	564,535	$	12
Total net realized gains included in earnings		43		16,419		-		16,462		-
Total net realized and unrealized losses included in earnings		(2)		(9,639)		-		(9,641)		-
Change in unrealized gains included in other comprehensive (loss) income		243		-		-		243		-
Change in unrealized losses included in other comprehensive (loss) income		(154)		-		-		(154)		-
Purchases		-		23,424		-		23,424		-
Sales		(2,276)		(15,526)		(6)		(17,808)		(12)
Transfers in to Level 3		383		-		-		383		-
Transfers out of Level 3		(505)		-		-		(505)		-
Level 3, end of period	$	7,546	$	569,393	$	-	$	576,939	$	-

	Six Months Ended June 30, 2013
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	8,497	$	517,546	$	2,961	$	529,004	$	2,961
Total net realized gains included in earnings		48		41,902		-		41,950		-
Total net realized and unrealized losses included in earnings		(2)		(12,063)		-		(12,065)		-
Change in unrealized gains included in other comprehensive (loss) income		327		-		-		327		-
Change in unrealized losses included in other comprehensive (loss) income		(208)		-		-		(208)		-
Purchases		-		45,414		6		45,420		12
Sales		(4,202)		(23,406)		(2,967)		(30,575)		(2,973)
Transfers in to Level 3		3,647		-		-		3,647		-
Transfers out of Level 3		(561)		-		-		(561)		-
Level 3, end of period	$	7,546	$	569,393	$	-	$	576,939	$	-

	Three Months Ended June 30, 2012
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	8,903	$	432,428	$	-	$	441,331	$	-
Total net realized gains included in earnings		5		10,825		-		10,830		-
Total net realized and unrealized losses included in earnings		(13)		(10,899)		-		(10,912)		-
Change in unrealized gains included in other comprehensive (loss) income		568		-		-		568		-
Change in unrealized losses included in other comprehensive (loss) income		(115)		-		-		(115)		-
Purchases		(214)		47,200		-		46,986		-
Sales		(582)		(694)		-		(1,276)		-
Transfers in to Level 3		1,684		-		-		1,684		-
Transfers out of Level 3		(417)		-		-		(417)		-
Level 3, end of period	$	9,819	$	478,860	$	-	$	488,679	$	-

		Six Months Ended June 30, 2012
		Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period		$	10,394	$	-	$	-	$	10,394	$	-
Total net realized gains included in earnings			10		10,825		-		10,835		-
Total net realized and unrealized losses included in earnings			(13)		(10,899)		-		(10,912)		-
Change in unrealized gains included in other comprehensive (loss) income			1,162		-		-		1,162		-
Change in unrealized losses included in other comprehensive (loss) income			(229)		-		-		(229)		-
Purchases			(40)		47,200		-		47,160		-
Sales			(1,032)		(694)		-		(1,726)		-
Transfers in to Level 3			2,076		432,428(1)		-		434,504		-
Transfers out of Level 3			(2,509)		-		-		(2,509)		-
Level 3, end of period		$	9,819	$	478,860	$	-	$	488,679	$	-
(1)	As required by ASU 2011-04, the fair value of the Company's other investments was transferred into Level 3 at March 31, 2012.

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Condensed Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands	Total	Preferred Shares [Member]	Common Shares [Member]	Additional Paid-In Capital [Member]	Cumulative Foreign Currency Translation Adjustments [Member]	Unrealized Holding Gains On Investments, Net Of Deferred Taxes [Member]	Accumulated Derivative Loss On Cash Flow Hedging Instruments [Member]	Total Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]
Balance, beginning of period at Dec. 31, 2011		$ 17,200	$ 43,087	$ 526,910	$ 9,609	$ 122,815	$ (2,032)		$ 1,893,576
Net income	155,025								155,025
Issuance of common shares net of forfeitures			209	858
Repurchase of common shares and share equivalents			0	0
Settlement of equity awards	(3,185)			(3,185)
Stock-based compensation expense				6,562
Foreign currency translation adjustments	(2,600)				(2,600)
Net unrealized holding (losses) gains arising during the period, net of other-than-temporary impairment losses and reclassification adjustment	22,416					22,416
Net change from current period hedging transactions, net of reclassification adjustment							44
Dividends on preferred shares	(16,376)								(16,376)
Dividends on common shares									(26,876)
Balance, end of period at Jun. 30, 2012	2,747,242	17,200	43,296	531,145	7,009	145,231	(1,988)	150,252	2,005,349
Balance, beginning of period at Dec. 31, 2012	2,710,597	17,200	43,116	527,915	12,676	141,731	(1,944)		1,969,903
Net income	161,318								161,318
Issuance of common shares net of forfeitures			1,533	29,598
Repurchase of common shares and share equivalents			(318)	(14,266)
Settlement of equity awards	(2,923)			(2,923)
Stock-based compensation expense				15,931
Foreign currency translation adjustments	(9,975)				(9,975)
Net unrealized holding (losses) gains arising during the period, net of other-than-temporary impairment losses and reclassification adjustment	(111,095)					(111,095)
Net change from current period hedging transactions, net of reclassification adjustment							45
Dividends on preferred shares	(16,376)								(16,376)
Dividends on common shares									(28,015)
Balance, end of period at Jun. 30, 2013	$ 2,736,054	$ 17,200	$ 44,331	$ 556,255	$ 2,701	$ 30,636	$ (1,899)	$ 31,438	$ 2,086,830

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General

6 Months Ended

Jun. 30, 2013

General

General

1.       General

Endurance Specialty Holdings Ltd. (“Endurance Holdings” or the “Company”) 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 wholly-owned operating subsidiaries:

Operating Subsidiaries	Domicile
Endurance Specialty Insurance Ltd.	Bermuda
Endurance Worldwide Insurance Limited	England
Endurance Reinsurance Corporation of America	Delaware
Endurance American Insurance Company	Delaware
Endurance American Specialty Insurance Company	Delaware
Endurance Risk Solutions Assurance Co.	Delaware
American Agri-Business Insurance Company	Texas

XML

Fair Value Measurement

6 Months Ended

Jun. 30, 2013

Fair Value Measurement

Fair Value Measurement

4.Fair value measurement

The Company determines the fair value of the fixed maturity investments, short-term investments,equity securities, other investments, debt, and other assets and liabilitiesin accordance with current accounting guidance, 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 Company determines the estimated fair value of each individual security utilizing the highest level inputs available. Valuation inputs by security type may include the following:

• Government and agencies fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical models which may incorporate option adjusted spreads, daily interest rate data and market/sector news. The Company generally classifies the fair values of government and agencies securities in Level 2. Current issue U.S. government securities are generally valued based on Level 1 inputs, which use the market approach valuation technique.
• Government guaranteed corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing service or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical spread models which may incorporate inputs from the U.S treasury curve or LIBOR. The Company generally classifies the fair values of its government guaranteed corporate securities in Level 2.
• Corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers typically use discounted cash flow models that incorporate benchmark curves for treasury, swap and high issuance credits. Credit spreads are developed from current market observations for like or similar securities. The Company generally classifies the fair values of its corporate securities in Level 2.
• Equity securities – These securities are generally priced by pricing services or index providers. Depending on the type of underlying equity security or equity fund, the securities are priced by pricing services or index providers based on quoted market prices in active markets or through a discounted cash flow model that incorporates benchmark curves for treasury, swap and credits for like or similar securities. The Company generally classifies the fair values of its equity securities in Level 1 or 2.

• Other assets and liabilities – These balances include a variety of derivative instruments used to enhance the efficiency of the investment portfolio and economically hedge certain risks. These instruments are generally priced by pricing services, broker/dealers and/or recent trading activity. The market value approach valuation technique is used to estimate the fair value for these derivatives based on significant observable market inputs. Certain derivative instruments are priced by pricing services based on quoted market prices in active markets. These derivative instruments are generally classified in Level 1. Other derivative instruments are priced using industry valuation models and are considered Level 2, as the inputs to the valuation model are based on observable market inputs. Also included in this line item are proprietary, non-exchange traded derivative-based risk management products primarily used to address weather and energy risks. The trading market for these weather derivatives is generally linked to energy and agriculture commodities, weather and other natural phenomena. In instances where market prices are not available, the Company uses industry or internally developed valuation techniques such as spread option, Black Scholes, quanto and simulation modeling to determine fair value and classifies these in Level 3. These models may reference prices for similar instruments.
• Structured securities including agency and non-agency, residential and commercial, mortgage and asset-backed securities – These securities are generally priced by broker/dealers. Broker/dealers may use current market trades for securities with similar qualities. If no such trades are available, inputs such as bid and offer, prepayment speeds, the U.S. treasury curve, swap curve and cash settlement may be used in a discounted cash flow model to determine the fair value of a security. The Company generally classifies the fair values of its structured securities in Level 2.
• Other investments – Other investments, including alternative funds and specialty funds, are generally priced on net asset values (“NAV”) received from the fund managers or administrators. Due to the timing of the delivery of the final NAV by certain of the fund managers, valuations of certain alternative funds and specialty funds are estimated based on the most recently available information, including period end NAVs, period end estimates, or, in some cases, prior month or prior quarter NAVs. As this valuation technique incorporates both observable and significant unobservable inputs, the Company generally classifies the fair value of its other investments in Level 3.
• Debt – Outstanding debt consists of the Company's 6.15% Senior Notes due October 15, 2015 and the 7.0% Senior Notes due July 15, 2034 (the “Senior Notes”). The fair values of these securities were obtained from a third party pricing service and pricing was based on the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. As these spreads and the yields for the risk-free yield curve are observable market inputs, the fair values of the Senior Notesare classified in Level 2.

The carrying values of cash and cash equivalents, accrued investment income, net receivable on sales of investments, net payable on purchases of investments and other financial instruments not described above approximated their fair values at June 30, 2013.

Transfers between levels are assumed to occur at the end of each period.

The following table sets forth the Company's available for sale investments, other investments, other assets and liabilities and debt categorized by the level within the hierarchy in which the fair value measurements fall at June 30, 2013:

			Fair Value Measurements at June 30, 2013
					Quoted
					Prices in
					Active
					Markets		Significant
					for		Other		Significant
			Total at		Identical		Observable		Unobservable
			June 30,		Assets		Inputs		Inputs
			2013		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity investments
	U.S. government and agencies securities	$	671,597	$	13,764	$	657,833	$	-
	U.S. state and municipal securities		27,902		-		27,902		-
	Foreign government securities		161,373		-		161,373		-
	Government guaranteed corporate securities		50,435		-		50,435		-
	Corporate securities		1,273,322		-		1,272,545		777
	Residential mortgage-backed securities		1,203,477		-		1,203,246		231
	Commercial mortgage-backed securities		866,181		-		861,072		5,109
	Asset-backed securities		500,804		-		499,375		1,429
Total fixed maturity investments		$	4,755,091	$	13,764	$	4,733,781	$	7,546
Equity securities
	Equity investments		148,591		107,439		41,152		-
	Emerging market debt funds		50,139		-		50,139		-
	Preferred equity investments		9,068		-		9,068		-
	Short-term fixed income fund		25,121		25,121		-		-
Total equity securities		$	232,919	$	132,560	$	100,359	$	-
Short-term investments			15,382		-		15,382		-
Other investments			569,393		-		-		569,393
Other assets (see Note 7)			72,157		-		72,157		-
Total assets		$	5,644,942	$	146,324	$	4,921,679	$	576,939
Liabilities
Other liabilities (see Note 7)		$	40,914	$	-	$	40,914	$	-
Debt			577,188		-		577,188		-
Total liabilities		$	618,102	$	-	$	618,102	$	-

During the six months ended June 30, 2013, there were net transfers into Level 3from Level 2 of $3.1 million, excluding other investments. Transfers into Level 3 consisted of corporate securities, commercial mortgage-backed securities and asset-backed securities for which observable inputs were no longer available in the current period.

4. Fair value measurement, cont'd.

The following table sets forth the Company's available for sale investments, other investments,other assets and liabilities and debt categorized by the level within the hierarchy in which the fair value measurements fall at December 31, 2012:

			Fair Value Measurements at December 31, 2012
					Quoted
					Prices in
					Active		Significant
					Markets for		Other		Significant
			Total at		Identical		Observable		Unobservable
			December 31,		Assets		Inputs		Inputs
			2012		(Level 1)		(Level 2)		(Level 3)
Assets
Fixed maturity investments
	U.S. government and agencies securities	$	737,535	$	39,889	$	697,646	$	-
	U.S. state and municipal securities		38,894		-		38,894		-
	Foreign government securities		109,337		-		109,337		-
	Government guaranteed corporate securities		64,464		-		64,464		-
	Corporate securities		1,373,671		-		1,373,671		-
	Residential mortgage-backed securities		1,280,579		-		1,280,223		356
	Commercial mortgage-backed securities		781,379		-		777,049		4,330
	Asset-backed securities		482,291		-		478,480		3,811
Total fixed maturity investments		$	4,868,150	$	39,889	$	4,819,764	$	8,497
Equity securities
	Equity investments		66,310		66,310		-		-
	Emerging market debt funds		10,576		-		10,576		-
	Preferred equity investments		10,111		-		10,111		-
Total equity securities		$	86,997	$	66,310	$	20,687	$	-
Short-term investments			42,230		-		42,230		-
Other investments			517,546		-		-		517,546
Other assets (see Note 7)			23,649		-		20,688		2,961
Total assets		$	5,538,572	$	106,199	$	4,903,369	$	529,004
Liabilities
Other liabilities (see Note 7)			10,660		-		7,699		2,961
Debt			592,677		-		592,677		-
Total liabilities		$	603,337	$	-	$	600,376	$	2,961

Level 3 assets represented 10.22% and 9.55% of the Company's total available for sale investments, other investments and derivative instruments at June 30, 2013 and December 31, 2012, respectively. There were no material changes in the Company's valuation techniques for the six months ended June 30, 2013. No impairment losses on Level 3 securities were recognized in earnings for the three and six months ended June 30, 2013 or 2012.

The following tables present a reconciliation of the beginning and ending balances for all assets and liabilities measured at fair value on a recurring basis using Level 3 inputs during the three and six months endedJune 30, 2013 and 2012, respectively:

	Three Months Ended June 30, 2013
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	9,814	$	554,715	$	6	$	564,535	$	12
Total net realized gains included in earnings		43		16,419		-		16,462		-
Total net realized and unrealized losses included in earnings		(2)		(9,639)		-		(9,641)		-
Change in unrealized gains included in other comprehensive (loss) income		243		-		-		243		-
Change in unrealized losses included in other comprehensive (loss) income		(154)		-		-		(154)		-
Purchases		-		23,424		-		23,424		-
Sales		(2,276)		(15,526)		(6)		(17,808)		(12)
Transfers in to Level 3		383		-		-		383		-
Transfers out of Level 3		(505)		-		-		(505)		-
Level 3, end of period	$	7,546	$	569,393	$	-	$	576,939	$	-

	Six Months Ended June 30, 2013
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	8,497	$	517,546	$	2,961	$	529,004	$	2,961
Total net realized gains included in earnings		48		41,902		-		41,950		-
Total net realized and unrealized losses included in earnings		(2)		(12,063)		-		(12,065)		-
Change in unrealized gains included in other comprehensive (loss) income		327		-		-		327		-
Change in unrealized losses included in other comprehensive (loss) income		(208)		-		-		(208)		-
Purchases		-		45,414		6		45,420		12
Sales		(4,202)		(23,406)		(2,967)		(30,575)		(2,973)
Transfers in to Level 3		3,647		-		-		3,647		-
Transfers out of Level 3		(561)		-		-		(561)		-
Level 3, end of period	$	7,546	$	569,393	$	-	$	576,939	$	-

	Three Months Ended June 30, 2012
	Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period	$	8,903	$	432,428	$	-	$	441,331	$	-
Total net realized gains included in earnings		5		10,825		-		10,830		-
Total net realized and unrealized losses included in earnings		(13)		(10,899)		-		(10,912)		-
Change in unrealized gains included in other comprehensive (loss) income		568		-		-		568		-
Change in unrealized losses included in other comprehensive (loss) income		(115)		-		-		(115)		-
Purchases		(214)		47,200		-		46,986		-
Sales		(582)		(694)		-		(1,276)		-
Transfers in to Level 3		1,684		-		-		1,684		-
Transfers out of Level 3		(417)		-		-		(417)		-
Level 3, end of period	$	9,819	$	478,860	$	-	$	488,679	$	-

		Six Months Ended June 30, 2012
		Fixed maturity investments		Other investments		Other assets		Total assets		Other liabilities
Level 3, beginning of period		$	10,394	$	-	$	-	$	10,394	$	-
Total net realized gains included in earnings			10		10,825		-		10,835		-
Total net realized and unrealized losses included in earnings			(13)		(10,899)		-		(10,912)		-
Change in unrealized gains included in other comprehensive (loss) income			1,162		-		-		1,162		-
Change in unrealized losses included in other comprehensive (loss) income			(229)		-		-		(229)		-
Purchases			(40)		47,200		-		47,160		-
Sales			(1,032)		(694)		-		(1,726)		-
Transfers in to Level 3			2,076		432,428(1)		-		434,504		-
Transfers out of Level 3			(2,509)		-		-		(2,509)		-
Level 3, end of period		$	9,819	$	478,860	$	-	$	488,679	$	-
(1)	As required by ASU 2011-04, the fair value of the Company's other investments was transferred into Level 3 at March 31, 2012.

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Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary Of Significant Accounting Policies

Summary Of Significant Accounting Policies

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 and six months endedJune 30,2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The unaudited condensed consolidated financial statements include the accounts of Endurance Holdings and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in 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, to record the fair value of investments 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, 2012 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, 2012 contained in Endurance Holdings' Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “2012 Form 10-K”).

Certain comparative information has been reclassified to conform to current year presentation.

There were no material changes in the Company's significant accounting and reporting policies subsequent to the 2012 Form 10-K.

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2011-11 “Disclosures About Offsetting Assets and Liabilities” (“ASU 2011-11”). ASU 2011-11 requires additional disclosures about financial instruments and derivative instruments relating to netting arrangements.

ASU 2011-11was effective for interim and annual periods beginning on or after January 1, 2013, with retrospective presentation required. The Company adopted this standard effective January 1, 2013. This standard did not have a material impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02 “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (“ASU 2013-02”). ASU 2013-02 requires entities to report, in one location, information about reclassifications out of accumulated other comprehensive income (“AOCI”). ASU 2013-02 also requires companies to report changes in AOCI balances. For significant items reclassified out of AOCI into net income in their entirety in the same reporting period, reporting (either on the face of the statement where net income is presented or in the notes to the financial statements) is required about the effect of the reclassifications on the respective line items in the statement where net income is presented. For items that are not reclassified into net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under US GAAP is required in the notes. The above information must be presented in one place (parenthetically on the face of the financial statements by income statement line item or in a note to the financial statements).

ASU 2013-02 was effective for fiscal years and interim periods beginning after December 15, 2012. The Company adopted this standard prospectively on January 1, 2013. This standard resulted in an additional note to the consolidated financial statements (see Note 6).

In July 2013, the FASB issued ASU 2013-11 “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). The objective of ASU 2013-11 is to improve the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. ASU 2013-11 seeks to reduce the diversity in practice by providing guidance on the presentation of unrecognized tax benefits to better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist.

ASU 2013-11 will be effective for annual and interim reporting periods beginning after December 15, 2013, with both early adoption and retrospective application permitted. The Company is currently evaluating the impact of this guidance; however, the Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

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Investments (Available For Sale Securities In An Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, 12 months or greater	$ (712)		$ (2,138)
Unrealized Losses	(65,737)		(6,881)
U.S. Government And Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(8,132)	[1]	(53)	[2]
Fair Value, Less than 12 months	350,292		48,570
Unrealized Losses, 12 months or greater	0	[1]	0	[2]
Fair Value, 12 months or greater	0		0
Unrealized Losses	(8,132)	[1]	(53)	[2]
Fair Value	350,292		48,570
U.S. State And Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(378)	[1]	(177)	[2]
Fair Value, Less than 12 months	19,910		6,905
Unrealized Losses, 12 months or greater	0	[1]	0	[2]
Fair Value, 12 months or greater	0		0
Unrealized Losses	(378)	[1]	(177)	[2]
Fair Value	19,910		6,905
Foreign Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(2,516)	[1]	(139)	[2]
Fair Value, Less than 12 months	108,087		23,157
Unrealized Losses, 12 months or greater	0	[1]	(6)	[2]
Fair Value, 12 months or greater	0		4,870
Unrealized Losses	(2,516)	[1]	(145)	[2]
Fair Value	108,087		28,027
Government Guaranteed Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(90)	[1]
Fair Value, Less than 12 months	10,870
Unrealized Losses, 12 months or greater	0	[1]
Fair Value, 12 months or greater	0
Unrealized Losses	(90)	[1]
Fair Value	10,870
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(16,251)	[1]	(1,305)	[2]
Fair Value, Less than 12 months	673,297		245,232
Unrealized Losses, 12 months or greater	0	[1]	(30)	[2]
Fair Value, 12 months or greater	0		1,849
Unrealized Losses	(16,251)	[1]	(1,335)	[2]
Fair Value	673,297		247,081
Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(20,917)	[1]	(1,920)	[2]
Fair Value, Less than 12 months	674,696		327,473
Unrealized Losses, 12 months or greater	(109)	[1]	(395)	[2]
Fair Value, 12 months or greater	1,646		7,511
Unrealized Losses	(21,026)	[1]	(2,315)	[2]
Fair Value	676,342		334,984
Commercial Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(12,180)	[1]	(474)	[2]
Fair Value, Less than 12 months	459,330		79,125
Unrealized Losses, 12 months or greater	(366)	[1]	(1,062)	[2]
Fair Value, 12 months or greater	5,446		11,625
Unrealized Losses	(12,546)	[1]	(1,536)	[2]
Fair Value	464,776		90,750
Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(915)	[1]	(94)	[2]
Fair Value, Less than 12 months	210,342		53,471
Unrealized Losses, 12 months or greater	(218)	[1]	(605)	[2]
Fair Value, 12 months or greater	9,041		8,123
Unrealized Losses	(1,133)	[1]	(699)	[2]
Fair Value	219,383		61,594
Fixed Maturity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(61,379)	[1]	(4,162)	[2]
Fair Value, Less than 12 months	2,506,824		783,933
Unrealized Losses, 12 months or greater	(693)	[1]	(2,098)	[2]
Fair Value, 12 months or greater	16,133		33,978
Unrealized Losses	(62,072)	[1]	(6,260)	[2]
Fair Value	2,522,957		817,911
Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(3,644)	[1]	(580)	[2]
Fair Value, Less than 12 months	42,190		9,183
Unrealized Losses, 12 months or greater	(19)	[1]	(40)	[2]
Fair Value, 12 months or greater	200		387
Unrealized Losses	(3,663)	[1]	(620)	[2]
Fair Value	42,390		9,570
Emerging Market Debt Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	0	[1]
Unrealized Losses, 12 months or greater	0	[1]
Unrealized Losses	0	[1]
Preferred Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(2)	[1]	(1)	[2]
Fair Value, Less than 12 months	400		201
Unrealized Losses, 12 months or greater	0	[1]	0	[2]
Fair Value, 12 months or greater	0		0
Unrealized Losses	(2)	[1]	(1)	[2]
Fair Value	400		201
Short-term Fixed Income Fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	0	[1]
Unrealized Losses, 12 months or greater	0	[1]
Unrealized Losses	0	[1]
Total Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized Losses, Less than 12 months	(3,646)	[1]	(581)	[2]
Fair Value, Less than 12 months	42,590		9,384
Unrealized Losses, 12 months or greater	(19)	[1]	(40)	[2]
Fair Value, 12 months or greater	200		387
Unrealized Losses	(3,665)	[1]	(621)	[2]
Fair Value	$ 42,790		$ 9,771

[1] Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at June 30, 2013.

[2] Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2012.

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Derivatives (Tables)

6 Months Ended

Jun. 30, 2013

Derivatives

Schedule Of The Fair Value And Related Notional Amounts Of Derivatives Included In The Company's Consolidated Balance Sheet

		June 30, 2013				December 31, 2012
				Notional				Notional
		Fair		Principal		Fair		Principal
		Value		Amount		Value		Amount
Derivatives recorded in other assets
	Foreign exchange forward contracts	$	430	$	11,640	$	23	$	1,652
	Credit default swaps		199		4,968		9		410
	Interest rate swaps		-		-		76		5,000
	Interest rate swaptions		37		1,000		57		2,200
	Interest rate futures		-		160,000		-		-
	TBAs		71,491		71,000		20,523		19,000
	Energy and weather contracts		-		-		2,961		15,573
	Total recorded in other assets	$	72,157			$	23,649
Derivatives recorded in other liabilities
	Foreign exchange forward contracts	$	320	$	11,589	$	60	$	5,296
	Interest rate swaps		753		18,421		-		-
	Interest rate swaptions		431		47,866		133		14,500
	TBAs		39,410		39,000		7,506		7,000
	Energy and weather contracts		-		-		2,961		15,573
	Total recorded in other liabilities	$	40,914			$	10,660
	Net derivative asset	$	31,243			$	12,989

Schedule Of The Gains And Losses On The Consolidated Statements Of Income And Comprehensive (Loss) Income From Derivatives

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Total gains included in net foreign exchange losses
	(gains) from foreign exchange forward contracts	$	169	$	270	$	330	$	151
	Futures contracts	$	(47)	$	-	$	(47)	$	87
	Credit default swaps		114		-		116		43
	Interest rate swaps		(279)		(196)		(161)		(43)
	Interest rate swaptions		(276)		37		(101)		47
	TBAs		(448)		326		(465)		335
Total (losses) gains included in net realized and unrealized
	investment gains	$	(936)	$	167	$	(658)	$	469
Total losses included in other underwriting income (loss) from
	commodity put options	$	-	$	(1,300)	$	-	$	(1,300)
Total gains included in other underwriting income (loss) from
	energy and weather contracts	$	6	$	-	$	1,172	$	-
Total (losses) gains from derivatives		$	(761)	$	(863)	$	844	$	(680)

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Investments (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Investments
Other investments amount invested, net of capital returned	$ 426,700,000		$ 426,700,000		$ 394,500,000
Market value of other investments	569,393,000		569,393,000		517,546,000
Number of available for sale securities in an unrealized loss position	865		865		403
Number of securities in a continuous unrealized loss position for twelve months or greater	38		38		55
OTTI losses recognized	579,000	407,000	1,385,000	626,000
Unrealized Losses	(65,737,000)		(65,737,000)		(6,881,000)
Unrealized Losses, 12 months or greater	$ (712,000)		$ (712,000)		$ (2,138,000)

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Investments (Other Investments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	$ 569,393	$ 517,546
Commitments under investment fund classified within other investments	22,195	29,483
Prohibited amount under redemption requests over the next 12 months	127,895	96,380
Alternative Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	419,908	372,419
Commitments under investment fund classified within other investments	22,195	29,483
Prohibited amount under redemption requests over the next 12 months	127,895	96,380
Hedge Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	372,450	337,200
Commitments under investment fund classified within other investments	0	0
Prohibited amount under redemption requests over the next 12 months	80,437	61,161
Private Equity Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	47,458	35,219
Commitments under investment fund classified within other investments	22,195	29,483
Prohibited amount under redemption requests over the next 12 months	47,458	35,219
Specialty Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	149,485	145,127
Commitments under investment fund classified within other investments	0	0
Prohibited amount under redemption requests over the next 12 months	0	0
High Yield Loan Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	107,926	105,886
Commitments under investment fund classified within other investments	0	0
Prohibited amount under redemption requests over the next 12 months	0	0
Convertible Debt Funds [Member]
Schedule Of Equity Method Investments [Line Items]
Market value of other investments	41,559	39,241
Commitments under investment fund classified within other investments	0	0
Prohibited amount under redemption requests over the next 12 months	$ 0	$ 0

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Stock-Based Employee Compensation And Other Stock Plans (Restricted Share And Restricted Share Unit Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares/units, unvested, beginning of period			686,633
Number of shares/units, granted	727,271	23,260	1,070,655	400,568
Number of shares/units, settled			(403,453)
Number of shares/units, forfeited			(116,508)
Number of shares/units, unvested, end of period	1,237,327		1,237,327
Number of shares/units, outstanding, end of period	1,237,327		1,237,327
Aggregate intrinsic value, outstanding, end of period	$ 63,660		$ 63,660

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Accumulated Other Comprehensive Income (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Interest expense	$ (9,052)	$ (9,044)	$ (18,090)	$ (18,091)
Net realized and unrealized investment gains	10,372	14,958	16,607	20,161
Net impairment losses recognized in earnings	(579)	(407)	(1,385)	(626)
Income before income taxes	60,154	73,557	164,604	155,932
Income tax expense	(865)	1,074	3,286	907
Net income	61,019	72,483	161,318	155,025
Accumulated Derivative Loss On Cash Flow Hedging Instruments [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Interest expense	29		45
Income before income taxes	29		45
Income tax expense	0		0
Net income	29		45
Unrealized Holding Gains On Investments, Net Of Deferred Taxes [Member] | Reclassification Out Of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Net realized and unrealized investment gains	(11,308)		(17,265)
Net impairment losses recognized in earnings	579		1,385
Income before income taxes	(10,729)		(15,880)
Income tax expense	(937)		(1,145)
Net income	$ (9,792)		$ (14,735)

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Fair Value Measurement (Schedule Of Available For Sale Investments, Other Investments, Derivative Instruments And Debt) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	$ 4,755,091		$ 4,868,150
Short term investments	15,382		42,230
Equity securities	232,919		86,997
Other investments	569,393		517,546
Other assets (see Note 7)	72,157		23,649
Total assets	5,644,942		5,538,572
Other liabilities (see Note 7)	40,914		10,660
Debt	577,188		592,677
Total liabilities	618,102		603,337
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	13,764		39,889
Short term investments	0		0
Other investments	0		0
Other assets (see Note 7)	0		0
Total assets	146,324		106,199
Other liabilities (see Note 7)	0		0
Debt	0		0
Total liabilities	0		0
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	4,733,781		4,819,764
Short term investments	15,382		42,230
Other investments	0		0
Other assets (see Note 7)	72,157		20,688
Total assets	4,921,679		4,903,369
Other liabilities (see Note 7)	40,914		7,699
Debt	577,188		592,677
Total liabilities	618,102		600,376
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	7,546		8,497
Short term investments	0		0
Other investments	569,393		517,546
Other assets (see Note 7)	0		2,961
Total assets	576,939		529,004
Other liabilities (see Note 7)	0		2,961
Debt	0		0
Total liabilities	0		2,961
U.S. Government And Agencies Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	671,597		737,535
U.S. Government And Agencies Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	13,764		39,889
U.S. Government And Agencies Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	657,833		697,646
U.S. Government And Agencies Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
U.S. State And Municipal Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	27,902		38,894
U.S. State And Municipal Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
U.S. State And Municipal Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	27,902		38,894
U.S. State And Municipal Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Foreign Government Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	161,373		109,337
Foreign Government Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Foreign Government Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	161,373		109,337
Foreign Government Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Government Guaranteed Corporate Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	50,435		64,464
Government Guaranteed Corporate Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Government Guaranteed Corporate Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	50,435		64,464
Government Guaranteed Corporate Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Corporate Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	1,273,322		1,373,671
Corporate Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Corporate Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	1,272,545		1,373,671
Corporate Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	777		0
Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	1,203,477		1,280,579
Residential Mortgage-Backed Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Residential Mortgage-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	1,203,246		1,280,223
Residential Mortgage-Backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	231		356
Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	866,181	[1]	781,379	[2]
Commercial Mortgage-Backed Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Commercial Mortgage-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	861,072		777,049
Commercial Mortgage-Backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	5,109		4,330
Asset-Backed Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	500,804		482,291
Asset-Backed Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	0		0
Asset-Backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	499,375		478,480
Asset-Backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	1,429		3,811
Fixed Maturity Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Total fixed maturity investments	4,755,091		4,868,150
Equity Investments [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	148,591		66,310
Equity Investments [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	107,439		66,310
Equity Investments [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	41,152		0
Equity Investments [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0		0
Emerging Market Debt Funds [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	50,139		10,576
Emerging Market Debt Funds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0		0
Emerging Market Debt Funds [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	50,139		10,576
Emerging Market Debt Funds [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0		0
Preferred Equity Investments [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	9,068		10,111
Preferred Equity Investments [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0		0
Preferred Equity Investments [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	9,068		10,111
Preferred Equity Investments [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0		0
Short-term Fixed Income Fund [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	25,121
Short-term Fixed Income Fund [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	25,121
Short-term Fixed Income Fund [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0
Short-term Fixed Income Fund [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	0
Total Equity Securities [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	232,919		86,997
Total Equity Securities [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	132,560		66,310
Total Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	100,359		20,687
Total Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Equity securities	$ 0		$ 0

[1] Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.

[2] Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Available for Sale Securities
Available for sale securities, fixed maturity investments, amortized cost	$ 4,737,065	$ 4,728,596
Available for sale, short-term investments, amortized cost	15,382	42,224
Available for sale, equity Securities, cost	221,870	76,997
Shareholders' Equity
Preferred stock, aggregate liquidation preference	$ 430,000	$ 430,000
Common stock, shares issued	44,331,379	43,116,394
Common stock, shares outstanding	44,331,379	43,116,394

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Derivatives

6 Months Ended

Jun. 30, 2013

Derivatives

Derivatives

7.Derivatives

The Company's derivative instruments are recorded in the Condensed Consolidated Balance Sheets at fair value, with changes in fair value and gains and losses recognized in net realized and unrealized investment gains, net foreign exchange losses (gains) and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income.

During 2012, the Company entered into the weather risk management business through its newly formed unit,Endurance Global Weather. Endurance Global Weather regularly transacts in certain derivative-based riskmanagement products primarily to address weather and energy risks. The trading markets for these derivatives aregenerally linked to energy and agriculture commodities, weather and other natural phenomena. Generally, theCompany's current portfolio of such derivative contracts is of short duration and such contracts are predominantlyseasonal in nature.

The Company's derivatives are not designated as hedges under current accounting guidance. The Company invests a portion of its fixed maturity assets with third party investment managers with investmentguidelines that permit the use of derivative instruments.The Company may enter derivative transactions directly or as part of strategies employed by its external investment managers. The Company's objectives for holding these derivatives are as follows:

Interest Rate Futures, Swaps, Swaptions and Options - to manage exposure to interest rate risk, which can include increasing or decreasing its exposure to this risk through modification of the portfolio composition and duration.

Foreign Exchange Forwards, Futures and Options- as part of overall currency risk management and investment strategies.

Credit Default Swaps - to manage market exposures. The Company may assume or economically hedge credit risk through credit default swaps to replicate or hedge investment positions. The original term of these credit default swaps is generally five years or less.

Commodity Futures and Options- to economically hedge certain underwriting risks.

To-Be-Announced Mortgage-backed Securities (“TBAs”) - to enhance investment performance and as part of overall investment strategy. TBAs represent commitments to purchase or sell a future issuance of agency mortgage-backed securities. For the period between purchase of a TBA and issuance of the underlying securities, the Company's position is accounted for as a derivative.

Energy and Weather Contracts – to address weather and energy risks. The Company may purchase or sell contracts

with financial settlements based on the performance of an index linked to a quantifiable weather element, such as

temperature, precipitation, snowfall or windspeed, and structures with multiple risk triggers indexed to a quantifiable weather element and a weather sensitive commodity price, such as temperature and electrical power or natural gas.

The fair values and the related notional values of derivatives at June 30,2013and December 31, 2012are noted below.

		June 30, 2013				December 31, 2012
				Notional				Notional
		Fair		Principal		Fair		Principal
		Value		Amount		Value		Amount
Derivatives recorded in other assets
	Foreign exchange forward contracts	$	430	$	11,640	$	23	$	1,652
	Credit default swaps		199		4,968		9		410
	Interest rate swaps		-		-		76		5,000
	Interest rate swaptions		37		1,000		57		2,200
	Interest rate futures		-		160,000		-		-
	TBAs		71,491		71,000		20,523		19,000
	Energy and weather contracts		-		-		2,961		15,573
	Total recorded in other assets	$	72,157			$	23,649
Derivatives recorded in other liabilities
	Foreign exchange forward contracts	$	320	$	11,589	$	60	$	5,296
	Interest rate swaps		753		18,421		-		-
	Interest rate swaptions		431		47,866		133		14,500
	TBAs		39,410		39,000		7,506		7,000
	Energy and weather contracts		-		-		2,961		15,573
	Total recorded in other liabilities	$	40,914			$	10,660
	Net derivative asset	$	31,243			$	12,989

On January 1, 2013, the Company adopted new guidance that requires disclosure of financial instruments subject to a master netting agreement. At June 30, 2013, derivative assets of $0.7 million and liabilities of $1.5 million were traded under International Swaps and Derivatives Association Master Agreements (“ISDAs”) which provide for the ability to settle the derivative asset and liability with each counterparty on a net basis. TBAs and interest rate futures are not subject to ISDAs. At June 30, 2013 and December 31, 2012, none of the Company's derivative instruments were netted. See Note 10 for information on collateral pledged.

7.Derivatives, cont'd.

The gains and losses on the Condensed Consolidated Statements of Incomeand Comprehensive (Loss) Incomefor derivatives for the three and six months endedJune 30,2013and 2012were as follows:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Total gains included in net foreign exchange losses
	(gains) from foreign exchange forward contracts	$	169	$	270	$	330	$	151
	Futures contracts	$	(47)	$	-	$	(47)	$	87
	Credit default swaps		114		-		116		43
	Interest rate swaps		(279)		(196)		(161)		(43)
	Interest rate swaptions		(276)		37		(101)		47
	TBAs		(448)		326		(465)		335
Total (losses) gains included in net realized and unrealized
	investment gains	$	(936)	$	167	$	(658)	$	469
Total losses included in other underwriting income (loss) from
	commodity put options	$	-	$	(1,300)	$	-	$	(1,300)
Total gains included in other underwriting income (loss) from
	energy and weather contracts	$	6	$	-	$	1,172	$	-
Total (losses) gains from derivatives		$	(761)	$	(863)	$	844	$	(680)

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Condensed Consolidated Statements Of Income And Comprehensive (Loss) Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Condensed Consolidated Statements Of Income And Comprehensive (Loss) Income
Other comprehensive (loss) income, net unrealized holding (losses) gains on investments arising during the period, tax	$ 10,831	$ 629

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Segment Reporting (Schedule Of Segment Results To Income Before Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Segment Reporting
Total underwriting income	$ 31,938	$ 38,725	$ 95,720	$ 52,728
Net investment income	32,468	31,766	81,773	88,841
Net foreign exchange (losses) gains	(3,368)	336	(6,295)	18,473
Net realized and unrealized investment gains	10,372	14,958	16,607	20,161
Net impairment losses recognized in earnings	(579)	(407)	(1,385)	(626)
Amortization of intangibles	(1,625)	(2,777)	(3,726)	(5,554)
Interest expense	(9,052)	(9,044)	(18,090)	(18,091)
Income before income taxes	$ 60,154	$ 73,557	$ 164,604	$ 155,932

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Fixed maturity investments, available for sale at fair value (amortized cost: $4,737,065 and $4,728,596 at June 30, 2013 and December 31, 2012, respectively)	$ 4,755,091	$ 4,868,150
Short-term investments, available for sale at fair value (amortized cost: $15,382 and $42,224 at June 30, 2013 and December 31, 2012, respectively)	15,382	42,230
Equity securities, available for sale at fair value (cost: $221,870 and $76,997 at June 30, 2013 and December 31, 2012, respectively)	232,919	86,997
Other investments	569,393	517,546
Total investments	5,572,785	5,514,923
Cash and cash equivalents	942,062	1,124,019
Premiums receivable, net	1,271,818	601,952
Insurance and reinsurance balances receivable	111,405	105,663
Deferred acquisition costs	210,740	168,252
Prepaid reinsurance premiums	292,911	166,702
Reinsurance recoverables on unpaid losses	594,020	691,783
Reinsurance recoverable on paid losses	101,753	83,159
Accrued investment income	25,404	27,166
Goodwill and intangible assets	168,621	172,000
Deferred tax asset	52,240	43,501
Net receivable on sales of investments	78,243	9,144
Other assets	128,446	86,708
Total assets	9,550,448	8,794,972
LIABILITIES
Reserve for losses and loss expenses	4,145,581	4,240,876
Reserve for unearned premiums	1,500,253	965,244
Deposit liabilities	17,785	22,220
Reinsurance balances payable	262,582	110,843
Debt	527,401	527,339
Net payable on purchases of investments	181,060	81,469
Other liabilities	179,732	136,384
Total liabilities	6,814,394	6,084,375
Commitments and contingent liabilities
SHAREHOLDERS' EQUITY
Preferred shares Series A and B, total liquidation preference $430,000 (2012 - $430,000)	17,200	17,200
Common shares Ordinary - 44,331,379 issued and outstanding (2012 - 43,116,394)	44,331	43,116
Additional paid-in capital	556,255	527,915
Accumulated other comprehensive income	31,438	152,463
Retained earnings	2,086,830	1,969,903
Total shareholders' equity	2,736,054	2,710,597
Total liabilities and shareholders' equity	$ 9,550,448	$ 8,794,972

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Derivatives (Schedule Of Derivative Fair Value And Notional Amount) (Details) (USD $)							6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Foreign Exchange Forward Contracts [Member]	Dec. 31, 2012 Foreign Exchange Forward Contracts [Member]	Jun. 30, 2013 Credit Default Swaps [Member]	Dec. 31, 2012 Credit Default Swaps [Member]	Jun. 30, 2013 Credit Default Swaps [Member] Maximum [Member]	Jun. 30, 2013 Interest Rate Swaps [Member]	Dec. 31, 2012 Interest Rate Swaps [Member]	Jun. 30, 2013 Interest Rate Swaptions [Member]	Dec. 31, 2012 Interest Rate Swaptions [Member]	Jun. 30, 2013 TBA [Member]	Dec. 31, 2012 TBA [Member]	Jun. 30, 2013 Energy and weather contracts [Member]	Dec. 31, 2012 Energy and weather contracts [Member]	Jun. 30, 2013 Interest Rate Futures [Member]	Dec. 31, 2012 Interest Rate Futures [Member]
Derivatives, Fair Value [Line Items]
Derivative recorded in other liabilities, Fair Value	$ 40,914,000	$ 10,660,000	$ 320,000	$ 60,000				$ 753,000	$ 0	$ 431,000	$ 133,000	$ 39,410,000	$ 7,506,000	$ 0	$ 2,961,000
Derivatives recorded in other assets, Fair Value	72,157,000	23,649,000	430,000	23,000	199,000	9,000		0	76,000	37,000	57,000	71,491,000	20,523,000	0	2,961,000	0	0
Net derivative asset, Fair Value	31,243,000	12,989,000
Derivatives recorded in other asset, Notional Principal Amount			11,640,000	1,652,000	4,968,000	410,000		0	5,000,000	1,000,000	2,200,000	71,000,000	19,000,000	0	15,573,000	160,000,000	0
Derivatives recorded in other liabilities, Notional Principal Amount			11,589,000	5,296,000				18,421,000	0	47,866,000	14,500,000	39,000,000	7,000,000	0	15,573,000
Original term of credit default swap, in years							5 years 0 months 0 days
Derivative assets traded under ISDAs	700,000
Derivative liabilities traded under ISDAs	$ 1,500,000

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Stock-Based Employee Compensation And Other Stock Plans (Tables)

6 Months Ended

Jun. 30, 2013

Stock-Based Employee Compensation And Other Stock Plans

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Six Months Ended June 30, 2013
				Weighted Average
		Weighted		Remaining
	Number of	Average		Contractual Life		Aggregate
Options Outstanding	Options	Exercise Price		(years)		Intrinsic Value
Beginning, December 31, 2012	39,501	$	27.78
Granted	800,000		48.20
Exercised	24,501		23.88
Forfeited	-		-
Outstanding, June 30, 2013	815,000	$	47.94		9.75	$	2,861
Exercisable and vested options, June 30, 2013	175,000	$	46.98		9.14	$	782

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

	Six Months Ended June 30, 2013
	Number of	Aggregate
	Shares/Units	Intrinsic Value
Unvested, December 31, 2012	686,633
Granted	1,070,655
Settled	(403,453)
Forfeited	(116,508)
Unvested, June 30, 2013	1,237,327
Outstanding, June 30, 2013	1,237,327	$	63,660

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Segment Reporting (Policy)

6 Months Ended

Jun. 30, 2013

Segment Reporting

Segment Reporting

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:

Insurance segment lines of business

•       Agriculture

•Casualty and other specialty

•       Professional lines

•       Property

9. Segment reporting, cont'd.

Reinsurance segment lines of business

•       Catastrophe

•       Property

•       Casualty

•       Other specialty

Management measures segment results on the basis of the combined ratio, which is obtained by dividing the sum of the net losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. 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 business segment to which they apply.

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Fair Value Measurement (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Significant Unobservable Inputs (Level 3) [Member]	Dec. 31, 2012 Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities [Line Items]
Percentage of level 3 assets					10.22%	9.55%
Net transfers into Level 3 from Level 2					$ 3,100
Net impairment losses recognized in earnings	$ 579	$ 407	$ 1,385	$ 626	$ 0

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Stock-Based Employee Compensation And Other Stock Plans (Summary of Stock Option Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Share-based Compensation [Abstract]
Number of options, beginning of period			39,501
Number of options granted			800,000
Number of options exercised	12,501	13,800	24,501	26,800
Number of options forfeited			0
Number of options, end of period	815,000		815,000
Number of options, exercisable and vested options, end of period	175,000		175,000
Weighted average exercise price, beginning of period			$ 27.78
Weighted average exercise price, granted			$ 48.20
Weighted average exercise price, exercised			$ 23.88
Weighted average exercise price, forfeited			$ 0
Weighted average exercise price, end of period	$ 47.94		$ 47.94
Weighted average exercise price, exercisable and vested options, end of period	$ 46.98		$ 46.98
Weighted average remaining contractual life (in years) outstanding, end of period			9 years 9 months 4 days
Weighted average remaining contractual life (in years), exercisable and vested options, end of period			9 years 1 month 21 days
Aggregate intrinsic value, outstanding, end of period	$ 2,861		$ 2,861
Aggregate intrinsic value, exercisable and vested options, end of period	$ 782		$ 782

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Investments (Net Realized and Unrealized Investment Gains) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Investments
Gross realized gains on investment sales	$ 16,591		$ 15,613		$ 24,011		$ 22,861
Gross realized losses on investment sales	(5,283)		(822)		(6,746)		(3,169)
Change in fair value of derivatives financial instruments	(936)	[1]	167	[1]	(658)	[1]	469	[1]
Net realized and unrealized investment gains	$ 10,372		$ 14,958		$ 16,607		$ 20,161

[1] For additional information on the Company's derivative financial instruments, see Note 7

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Investments (Composition Of The Fixed Income Portfolio By Investment Ratings Assigned By Rating Agencies) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
AAA/Aaa [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	$ 1,017,720	[1]	$ 993,277	[1]
Percentage of fixed income portfolio by investment ratings	21.30%	[1]	20.20%	[1]
AA/Aa [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	1,746,510	[1]	1,821,250	[1]
Percentage of fixed income portfolio by investment ratings	36.70%	[1]	37.10%	[1]
A/A [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	931,561	[1]	993,307	[1]
Percentage of fixed income portfolio by investment ratings	19.50%	[1]	20.20%	[1]
BBB [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	292,820	[1]	219,017	[1]
Percentage of fixed income portfolio by investment ratings	6.10%	[1]	4.50%	[1]
Below BBB [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	105,384	[1]	143,198	[1]
Percentage of fixed income portfolio by investment ratings	2.20%	[1]	2.90%	[1]
Not Rated [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	4,881	[1]	2,796	[1]
Percentage of fixed income portfolio by investment ratings	0.10%	[1]	0.10%	[1]
U.S. Government And Agencies Securities [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	671,597	[1]	737,535	[1]
Percentage of fixed income portfolio by investment ratings	14.10%	[1]	15.00%	[1]
Fixed Income Investments [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	$ 4,770,473	[1]	$ 4,910,380	[1]
Percentage of fixed income portfolio by investment ratings	100.00%	[1]	100.00%	[1]

[1] The credit rating for each security reflected above was determined based on the rating assigned to the individual security by Standard & Poor's Financial Services LLC ("Standard & Poor's"). If a rating is not supplied by Standard & Poor's, the equivalent rating supplied by either Moody's Investors Service, Inc. ("Moody's") or Fitch Ratings is used.

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Investments (Contractual Maturities Of Fixed Income Securities) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013		Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Due within one year, Amortized Cost	$ 158,318		$ 136,283
Due within one year, Fair Value	159,900		137,567
Due after one year through five years, Amortized Cost	1,675,581		1,725,927
Due after one year through five years, Fair Value	1,677,171		1,765,662
Due after five years through ten years, Amortized Cost	336,818		410,755
Due after five years through ten years, Fair Value	334,020		429,099
Due after ten years, Amortized Cost	27,465		29,654
Due after ten years, Fair Value	28,920		33,803
Amortized Cost	4,737,065		4,728,596
Debt Securities, Fair Value	4,755,091		4,868,150
Residential Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,205,773		1,252,468
Debt Securities, Fair Value	1,203,477		1,280,579
Commercial Mortgage-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	852,103	[1]	741,178	[2]
Debt Securities, Fair Value	866,181	[1]	781,379	[2]
Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
No single maturity date, amortized cost	496,389		474,555
No single maturity date, fair value	500,804		482,291
Amortized Cost	496,389		474,555
Debt Securities, Fair Value	500,804		482,291
Fixed Income Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	4,752,447		4,770,820
Debt Securities, Fair Value	$ 4,770,473		$ 4,910,380

[1] Balances include amounts related to collateralized debt obligations held with total fair values of $11.4 million.

[2] Balances include amounts related to collateralized debt obligations held with total fair values of $8.5 million.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income Loss Net Of Tax

Accumulated Other Comprehensive Income

6.Accumulated other comprehensive income

The following table presents the changes in accumulated other comprehensive income balances by component for the three and six months endedJune 30, 2013:

		For the Three Months Ended June 30, 2013
		Gains and losses on cash flow hedges		Unrealized gains and losses on available-for-sale securities		Foreign currency items		Total
Beginning balance		$	(1,928)	$	136,885	$	2,482	$	137,439
	Other comprehensive (loss) income before reclassifications		-		(96,457)		219		(96,238)
	Amounts reclassified from accumulated other comprehensive income(1)		29		(9,792)		-		(9,763)
Net current period other comprehensive (loss) income			29		(106,249)		219		(106,001)
Ending balance		$	(1,899)	$	30,636	$	2,701	$	31,438
(1) All amounts are net of tax.

		Six Months Ended June 30, 2013
		Gains and losses on cash flow hedges		Unrealized gains and losses on available-for-sale securities		Foreign currency items		Total
Beginning balance		$	(1,944)	$	141,731	$	12,676	$	152,463
	Other comprehensive (loss) income before reclassifications		-		(96,360)		(9,975)		(106,335)
	Amounts reclassified from accumulated other comprehensive income(1)		45		(14,735)		-		(14,690)
Net current period other comprehensive (loss) income			45		(111,095)		(9,975)		(121,025)
Ending balance		$	(1,899)	$	30,636	$	2,701	$	31,438
(1) All amounts are net of tax.

6.Accumulated other comprehensive income, cont'd.

The following table presents the significant items reclassified out of accumulated other comprehensive income during the three and six months endedJune 30, 2013:

Three Months Ended June 30, 2013
Details about accumulated other comprehensive income components			Amount reclassified from accumulated other comprehensive income	Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges -
	Debt	$	29	Interest expense
			29	Total before income taxes
			-	Income tax expense
		$	29	Total net of income taxes
Unrealized (gains) losses on available-for-sale securities		$	(11,308)	Net realized and unrealized investment gains
			579	Net impairment losses recognized in earnings
			(10,729)	Total before income taxes
			937	Income tax expense
		$	(9,792)	Total net of income taxes

Six Months Ended June 30, 2013
Details about accumulated other comprehensive income components			Amount reclassified from accumulated other comprehensive income	Affected line item in the Unaudited Condensed Consolidated Statements of Income and Comprehensive (Loss) Income
Gains and losses on cash flow hedges -
	Debt	$	45	Interest expense
			45	Total before income taxes
			-	Income tax expense
		$	45	Total net of income taxes
Unrealized (gains) losses on available-for-sale securities		$	(17,265)	Net realized and unrealized investment gains
			1,385	Net impairment losses recognized in earnings
			(15,880)	Total before income taxes
			1,145	Income tax expense
		$	(14,735)	Total net of income taxes

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Commitments And Contingencies (Schedule Of Future Minimum Lease Commitments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Commitments And Contingencies
2014	$ 14,999
2015	13,996
2016	12,166
2017	10,011
2018	9,978
2019 and thereafter	46,853
Total	$ 108,003

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting

Summary Of The Segment Revenues, Results And Reserve For Losses And Loss Expenses

		Three Months Ended June 30, 2013
			Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	276,941		$	295,769		$	572,710
	Ceded premiums written			(85,439)			(22,650)			(108,089)
	Net premiums written			191,502			273,119			464,621
	Net premiums earned			267,878			275,457			543,335
	Other underwriting income			-			888			888
				267,878			276,345			544,223
Expenses
	Net losses and loss expenses			215,844			143,214			359,058
	Acquisition expenses			14,968			56,900			71,868
	General and administrative expenses			43,524			37,835			81,359
				274,336			237,949			512,285
Underwriting (loss) income			$	(6,458)		$	38,396		$	31,938
Net loss ratio				80.6	%		52.0	%		66.1	%
Acquisition expense ratio				5.6	%		20.7	%		13.2	%
General and administrative expense ratio				16.2	%		13.7	%		15.0	%
Combined ratio				102.4	%		86.4	%		94.3	%
Reserve for losses and loss expenses			$	2,242,894		$	1,902,687		$	4,145,581

		Three Months Ended June 30, 2012
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	292,659		$	311,417		$	604,076
	Ceded premiums written			(106,000)			(13,663)			(119,663)
	Net premiums written			186,659			297,754			484,413
	Net premiums earned			266,085			253,255			519,340
	Other underwriting (loss) income			(1,300)			1,319			19
				264,785			254,574			519,359
Expenses
	Net losses and loss expenses			208,504			137,393			345,897
	Acquisition expenses			17,545			54,583			72,128
	General and administrative expenses			32,819			29,790			62,609
				258,868			221,766			480,634
Underwriting income			$	5,917		$	32,808		$	38,725
Net loss ratio				78.4	%		54.2	%		66.5	%
Acquisition expense ratio				6.6	%		21.6	%		13.9	%
General and administrative expense ratio				12.3	%		11.8	%		12.1	%
Combined ratio				97.3	%		87.6	%		92.5	%
Reserve for losses and loss expenses			$	2,113,823		$	1,870,799		$	3,984,622

		Six Months Ended June 30, 2013
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	929,884		$	820,188		$	1,750,072
	Ceded premiums written			(333,688)			(42,848)			(376,536)
	Net premiums written			596,196			777,340			1,373,536
	Net premiums earned			419,030			544,422			963,452
	Other underwriting income			-			1,637			1,637
				419,030			546,059			965,089
Expenses
	Net losses and loss expenses			315,308			262,720			578,028
	Acquisition expenses			29,584			113,920			143,504
	General and administrative expenses			79,151			68,686			147,837
				424,043			445,326			869,369
Underwriting (loss) income			$	(5,013)		$	100,733		$	95,720
Net loss ratio				75.2	%		48.3	%		60.0	%
Acquisition expense ratio				7.1	%		20.9	%		14.9	%
General and administrative expense ratio				18.9	%		12.6	%		15.3	%
Combined ratio				101.2	%		81.8	%		90.2	%

		Six Months Ended June 30, 2012
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	928,006		$	737,719		$	1,665,725
	Ceded premiums written			(313,566)			(24,690)			(338,256)
	Net premiums written			614,440			713,029			1,327,469
	Net premiums earned			427,715			503,260			930,975
	Other underwriting (loss) income			(1,300)			984			(316)
				426,415			504,244			930,659
Expenses
	Net losses and loss expenses			322,206			286,458			608,664
	Acquisition expenses			33,759			106,858			140,617
	General and administrative expenses			67,254			61,396			128,650
				423,219			454,712			877,931
Underwriting income			$	3,196		$	49,532		$	52,728
Net loss ratio				75.3	%		57.0	%		65.4	%
Acquisition expense ratio				7.9	%		21.2	%		15.1	%
General and administrative expense ratio				15.7	%		12.2	%		13.8	%
Combined ratio				98.9	%		90.4	%		94.3	%

Schedule Of Segment Results To Income Before Income Taxes

	Three Months Ended
	June 30,
		2013		2012
Total underwriting income	$	31,938	$	38,725
Net investment income		32,468		31,766
Net foreign exchange (losses) gains		(3,368)		336
Net realized and unrealized investment gains		10,372		14,958
Net impairment losses recognized in earnings		(579)		(407)
Amortization of intangibles		(1,625)		(2,777)
Interest expense		(9,052)		(9,044)
Income before income taxes	$	60,154	$	73,557

	Six Months Ended
	June 30,
		2013		2012
Total underwriting income	$	95,720	$	52,728
Net investment income		81,773		88,841
Net foreign exchange (losses) gains		(6,295)		18,473
Net realized and unrealized investment gains		16,607		20,161
Net impairment losses recognized in earnings		(1,385)		(626)
Amortization of intangibles		(3,726)		(5,554)
Interest expense		(18,090)		(18,091)
Income before income taxes	$	164,604	$	155,932

Schedule Of Gross And Net Premiums By Line Of Business

			Gross		Net		Gross		Net
			premiums		premiums		premiums		premiums
			written		written		written		written
Business Segment			2013		2013		2012		2012
Insurance
	Agriculture	$	131,633	$	84,537	$	133,439	$	67,249
	Casualty and other specialty		87,614		63,373		90,019		64,588
	Professional lines		38,296		27,788		51,019		42,832
	Property		19,398		15,804		18,182		11,990
Total Insurance			276,941		191,502		292,659		186,659
Reinsurance
	Catastrophe		155,431		138,041		172,222		158,865
	Casualty		67,209		67,211		58,897		58,895
	Property		48,384		44,516		54,026		54,033
	Other specialty		24,745		23,351		26,272		25,961
Total Reinsurance			295,769		273,119		311,417		297,754
Total		$	572,710	$	464,621	$	604,076	$	484,413

			Gross		Net		Gross		Net
			premiums		premiums		premiums		premiums
			written		written		written		written
Business Segment			2013		2013		2012		2012
Insurance
	Agriculture	$	696,107	$	425,667	$	667,106	$	422,169
	Casualty and other specialty		144,081		106,634		145,510		106,411
	Professional lines		59,260		41,991		87,364		73,037
	Property		30,436		21,904		28,026		12,823
Total Insurance			929,884		596,196		928,006		614,440
Reinsurance
	Catastrophe		303,297		269,439		315,404		292,583
	Casualty		218,911		217,484		180,571		179,332
	Property		196,795		192,927		160,772		160,779
	Other specialty		101,185		97,490		80,972		80,335
Total Reinsurance			820,188		777,340		737,719		713,029
Total		$	1,750,072	$	1,373,536	$	1,665,725	$	1,327,469

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Investments (Analysis Of OTTI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Investments
Total other-than-temporary impairment losses	$ (579)	$ (148)	$ (1,385)	$ (148)
Portion of loss recognized in other comprehensive (loss) income	0	(259)	0	(478)
Net impairment losses recognized in earnings	$ (579)	$ (407)	$ (1,385)	$ (626)

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Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting

Segment Reporting

9. Segment reporting

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:

Insurance segment lines of business

•       Agriculture

•Casualty and other specialty

•       Professional lines

•       Property

9. Segment reporting, cont'd.

Reinsurance segment lines of business

•       Catastrophe

•       Property

•       Casualty

•       Other specialty

Management measures segment results on the basis of the combined ratio, which is obtained by dividing the sum of the net losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. 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 business segment to which they apply.

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended June 30,2013:

		Three Months Ended June 30, 2013
			Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	276,941		$	295,769		$	572,710
	Ceded premiums written			(85,439)			(22,650)			(108,089)
	Net premiums written			191,502			273,119			464,621
	Net premiums earned			267,878			275,457			543,335
	Other underwriting income			-			888			888
				267,878			276,345			544,223
Expenses
	Net losses and loss expenses			215,844			143,214			359,058
	Acquisition expenses			14,968			56,900			71,868
	General and administrative expenses			43,524			37,835			81,359
				274,336			237,949			512,285
Underwriting (loss) income			$	(6,458)		$	38,396		$	31,938
Net loss ratio				80.6	%		52.0	%		66.1	%
Acquisition expense ratio				5.6	%		20.7	%		13.2	%
General and administrative expense ratio				16.2	%		13.7	%		15.0	%
Combined ratio				102.4	%		86.4	%		94.3	%
Reserve for losses and loss expenses			$	2,242,894		$	1,902,687		$	4,145,581

9.Segment reporting, cont'd.

The following table provides a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended June 30,2012:

		Three Months Ended June 30, 2012
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	292,659		$	311,417		$	604,076
	Ceded premiums written			(106,000)			(13,663)			(119,663)
	Net premiums written			186,659			297,754			484,413
	Net premiums earned			266,085			253,255			519,340
	Other underwriting (loss) income			(1,300)			1,319			19
				264,785			254,574			519,359
Expenses
	Net losses and loss expenses			208,504			137,393			345,897
	Acquisition expenses			17,545			54,583			72,128
	General and administrative expenses			32,819			29,790			62,609
				258,868			221,766			480,634
Underwriting income			$	5,917		$	32,808		$	38,725
Net loss ratio				78.4	%		54.2	%		66.5	%
Acquisition expense ratio				6.6	%		21.6	%		13.9	%
General and administrative expense ratio				12.3	%		11.8	%		12.1	%
Combined ratio				97.3	%		87.6	%		92.5	%
Reserve for losses and loss expenses			$	2,113,823		$	1,870,799		$	3,984,622

The following table reconciles total segment results toincomebefore income taxes for the three months ended June 30,2013 and 2012:

	Three Months Ended
	June 30,
		2013		2012
Total underwriting income	$	31,938	$	38,725
Net investment income		32,468		31,766
Net foreign exchange (losses) gains		(3,368)		336
Net realized and unrealized investment gains		10,372		14,958
Net impairment losses recognized in earnings		(579)		(407)
Amortization of intangibles		(1,625)		(2,777)
Interest expense		(9,052)		(9,044)
Income before income taxes	$	60,154	$	73,557

The following table provides gross and net premiums written by line of business for the three months ended June 30,2013 and 2012:

			Gross		Net		Gross		Net
			premiums		premiums		premiums		premiums
			written		written		written		written
Business Segment			2013		2013		2012		2012
Insurance
	Agriculture	$	131,633	$	84,537	$	133,439	$	67,249
	Casualty and other specialty		87,614		63,373		90,019		64,588
	Professional lines		38,296		27,788		51,019		42,832
	Property		19,398		15,804		18,182		11,990
Total Insurance			276,941		191,502		292,659		186,659
Reinsurance
	Catastrophe		155,431		138,041		172,222		158,865
	Casualty		67,209		67,211		58,897		58,895
	Property		48,384		44,516		54,026		54,033
	Other specialty		24,745		23,351		26,272		25,961
Total Reinsurance			295,769		273,119		311,417		297,754
Total		$	572,710	$	464,621	$	604,076	$	484,413

The following table provides a summary of the segment revenues and results for the six months ended June 30, 2013:

		Six Months Ended June 30, 2013
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	929,884		$	820,188		$	1,750,072
	Ceded premiums written			(333,688)			(42,848)			(376,536)
	Net premiums written			596,196			777,340			1,373,536
	Net premiums earned			419,030			544,422			963,452
	Other underwriting income			-			1,637			1,637
				419,030			546,059			965,089
Expenses
	Net losses and loss expenses			315,308			262,720			578,028
	Acquisition expenses			29,584			113,920			143,504
	General and administrative expenses			79,151			68,686			147,837
				424,043			445,326			869,369
Underwriting (loss) income			$	(5,013)		$	100,733		$	95,720
Net loss ratio				75.2	%		48.3	%		60.0	%
Acquisition expense ratio				7.1	%		20.9	%		14.9	%
General and administrative expense ratio				18.9	%		12.6	%		15.3	%
Combined ratio				101.2	%		81.8	%		90.2	%

The following table provides a summary of the segment revenues and results for the six months ended June 30, 2012:

		Six Months Ended June 30, 2012
				Insurance			Reinsurance			Total
Revenues
	Gross premiums written		$	928,006		$	737,719		$	1,665,725
	Ceded premiums written			(313,566)			(24,690)			(338,256)
	Net premiums written			614,440			713,029			1,327,469
	Net premiums earned			427,715			503,260			930,975
	Other underwriting (loss) income			(1,300)			984			(316)
				426,415			504,244			930,659
Expenses
	Net losses and loss expenses			322,206			286,458			608,664
	Acquisition expenses			33,759			106,858			140,617
	General and administrative expenses			67,254			61,396			128,650
				423,219			454,712			877,931
Underwriting income			$	3,196		$	49,532		$	52,728
Net loss ratio				75.3	%		57.0	%		65.4	%
Acquisition expense ratio				7.9	%		21.2	%		15.1	%
General and administrative expense ratio				15.7	%		12.2	%		13.8	%
Combined ratio				98.9	%		90.4	%		94.3	%

The following table reconciles total segment results to income (loss) before income taxes for the six months ended June 30, 2013 and 2012, respectively:

	Six Months Ended
	June 30,
		2013		2012
Total underwriting income	$	95,720	$	52,728
Net investment income		81,773		88,841
Net foreign exchange (losses) gains		(6,295)		18,473
Net realized and unrealized investment gains		16,607		20,161
Net impairment losses recognized in earnings		(1,385)		(626)
Amortization of intangibles		(3,726)		(5,554)
Interest expense		(18,090)		(18,091)
Income before income taxes	$	164,604	$	155,932

The following table provides gross and net premiums written by line of business for the six months endedJune 30,2013 and 2012:

			Gross		Net		Gross		Net
			premiums		premiums		premiums		premiums
			written		written		written		written
Business Segment			2013		2013		2012		2012
Insurance
	Agriculture	$	696,107	$	425,667	$	667,106	$	422,169
	Casualty and other specialty		144,081		106,634		145,510		106,411
	Professional lines		59,260		41,991		87,364		73,037
	Property		30,436		21,904		28,026		12,823
Total Insurance			929,884		596,196		928,006		614,440
Reinsurance
	Catastrophe		303,297		269,439		315,404		292,583
	Casualty		218,911		217,484		180,571		179,332
	Property		196,795		192,927		160,772		160,779
	Other specialty		101,185		97,490		80,972		80,335
Total Reinsurance			820,188		777,340		737,719		713,029
Total		$	1,750,072	$	1,373,536	$	1,665,725	$	1,327,469

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Earnings Per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Earnings Per Share

5.Earnings per share

The two-class method utilized by the Company is an earnings allocation formula that determines earnings per share for the holders of Endurance Holdings' ordinary shares (also referred to as “common shares”) and participating common shares, which includes unvested restricted shares that receive cash dividends, according to dividends declared and participation rights in undistributed earnings. Net incomeavailable to common and participating common shareholders is reduced by the amount of dividends declared in the current period and by the contractual amount of dividends that must be paid for the current period related to the Company's common and participating common shares. Any remaining undistributed earnings are allocated to the common and participating common shareholders to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. In periods of loss, no losses are allocated to participating common shareholders. Instead, all such losses are allocated solely to the common shareholders.

Basic earningsper common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. The weighted average number of common shares excludes any dilutive effect of outstanding options and convertible securities such as unvested restricted shares.

Diluted earningsper common share are based on the weighted average number of common shares and assumes the exercise of all dilutive stock options and the vesting or conversion of all convertible securities such as unvested restricted shares using the two-class method described above.

The following table sets forth the computation of basic and diluted earningsper share for the three and six months endedJune 30, 2013 and 2012:

				Three Months Ended				Six Months Ended
				June 30,				June 30,
				2013		2012		2013		2012
Numerator:
	Net income available to common and participating
		common shareholders	$	52,831	$	64,295	$	144,942	$	138,649
	Less amount allocated to participating
		common shareholders(1)		(1,132)		(1,085)		(2,745)		(2,377)
	Net income allocated to common shareholders		$	51,699	$	63,210	$	142,197	$	136,272
Denominator:
	Weighted average shares – basic			42,621,301		42,598,611		42,526,686		42,518,902
	Share equivalents:
		Options		-		36,093		-		39,693
		Restricted share units		229		479		679		3,412
	Weighted average shares – diluted			42,621,530		42,635,183		42,527,365		42,562,007
Basic earnings per common share			$	1.21	$	1.48	$	3.34	$	3.20
Diluted earnings per common share			$	1.21	$	1.48	$	3.34	$	3.20
(1) Represents earnings attributable to holders of unvested restricted shares issued by the Company. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

5.Earnings per share, cont'd.

Endurance Holdings declared a dividend of $0.484375 per Series A preferred share and $0.46875 per Series B preferred share on May 8, 2013 (2012 - Series A:$0.484375, Series B:$0.46875). The Series A and Series B preferred share dividends were paid on June 14, 2013 to shareholders of record on May 31, 2013. Endurance Holdings also declared a dividend of $0.32 per common share on May 8, 2013 (2012 - $0.31). The dividend was paid on June 28, 2013 to shareholders of record on June 14, 2013.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	0.968750	$	0.968750
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	0.937500	$	0.937500
Dividends declared per common share	$	0.32	$	0.31	$	0.64	$	0.62

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows provided by operating activities
Net income	$ 161,318	$ 155,025
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of net premium on investments	27,804	10,502
Amortization of other intangibles and depreciation	9,479	12,352
Net realized and unrealized investment gains	(16,607)	(20,161)
Net impairment losses recognized in earnings	1,385	626
Deferred taxes	2,092	(4,230)
Stock-based compensation expense	15,931	6,562
Equity in earnings of other investments	(29,839)	(23,051)
Premiums receivable, net	(669,866)	(745,461)
Insurance and reinsurance balances receivable	(5,742)	(23,194)
Deferred acquisition costs	(42,488)	(30,644)
Prepaid reinsurance premiums	(126,209)	(108,852)
Reinsurance recoverable on unpaid losses	97,763	59,080
Reinsurance recoverable on paid losses	(18,594)	(10,599)
Accrued investment income	1,762	2,325
Other assets	8,540	17,299
Reserve for losses and loss expenses	(95,295)	160,398
Reserve for unearned premiums	535,009	505,374
Deposit liabilities	(4,435)	(1,949)
Reinsurance balances payable	151,739	116,634
Other liabilities	38,965	(7,741)
Net cash provided by operating activities	42,712	70,295
Cash flows used in investing activities:
Proceeds from sales of available for sale investments	1,395,528	1,552,896
Proceeds from maturities and calls on available for sale investments	381,332	464,318
Proceeds from the redemption of other investments	23,406	25,724
Purchases of available for sale investments	(1,894,444)	(2,038,075)
Purchases of other investments	(45,414)	(48,875)
Net settlements of other assets	(18,584)	(16,193)
Purchases of fixed assets	(7,081)	(9,478)
Net cash paid for subsidiary acquisition	(347)	(514)
Net cash flows used in investing activities	(165,604)	(70,197)
Cash flows used in financing activities
Issuance of common shares net of forfeitures	31,049	978
Repurchase of common shares	(14,584)	0
Settlement of equity awards	(2,923)	(3,185)
Proceeds from issuance of debt	408	602
Repayments and repurchases of debt	(446)	(1,590)
Dividends on preferred shares	(16,376)	(16,376)
Dividends on common shares	(27,834)	(26,876)
Net cash flows used in financing activities	(30,706)	(46,447)
Effect of exchange rate changes on cash and cash equivalents	(28,359)	(2,385)
Net decrease in cash and cash equivalents	(181,957)	(48,734)
Cash and cash equivalents, beginning of period	1,124,019	890,914
Cash and cash equivalents, end of period	$ 942,062	$ 842,180

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Derivatives (Schedule Of Derivative (Loss) Gain) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Derivative [Line Items]
Derivatives included in net foreign exchange losses (gains) from foreign exchange forward contracts	$ 169	$ 270	$ 330	$ 151
Derivatives included in net realized and unrealized investment gains	(936)	167	(658)	469
Total (losses) gains from derivatives	(761)	(863)	844	(680)
Interest Rate Futures [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains	(47)	0	(47)	87
Credit Default Swaps [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains	114	0	116	43
Interest Rate Swaps [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains	(279)	(196)	(161)	(43)
Interest Rate Swaptions [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains	(276)	37	(101)	47
TBA [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains	(448)	326	(465)	335
Energy and weather contracts [Member]
Derivative [Line Items]
Derivatives included in other underwriting income (loss)	6	0	1,172	0
Commodity Put Option [Member]
Derivative [Line Items]
Derivatives included in other underwriting income (loss)	$ 0	$ (1,300)	$ 0	$ (1,300)

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Earnings Per Share (Schedule Of Computing Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Jun. 30, 2013		Jun. 30, 2012
Dividend Per Share [Line Items]
Net income available to common and participating common shareholders	$ 52,831		$ 64,295		$ 144,942		$ 138,649
Less amount allocated to participating common shareholders	(1,132)	[1]	(1,085)	[1]	(2,745)	[1]	(2,377)	[1]
Net income allocated to common shareholders	$ 51,699		$ 63,210		$ 142,197		$ 136,272
Weighted average shares - basic	42,621,301		42,598,611		42,526,686		42,518,902
Weighted average shares - diluted	42,621,530		42,635,183		42,527,365		42,562,007
Basic earnings per common share	$ 1.21		$ 1.48		$ 3.34		$ 3.20
Diluted earnings per common share	$ 1.21		$ 1.48		$ 3.34		$ 3.20
Employee Stock Option [Member]
Dividend Per Share [Line Items]
Share equivalents	0		36,093		0		39,693
Restricted Stock [Member]
Dividend Per Share [Line Items]
Share equivalents	229		479		679		3,412

[1] Represents earnings attributable to holders of unvested restricted shares issued by the Company. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

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Investments (Composition Of Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Investments
Available for sale investments	$ 28,666	$ 34,678	$ 58,147	$ 71,660
Other investments	6,780	(74)	29,839	23,051
Cash and cash equivalents	840	349	1,291	689
Gross investment income	36,286	34,953	89,277	95,400
Investment expenses	(3,818)	(3,187)	(7,504)	(6,559)
Net investment income	$ 32,468	$ 31,766	$ 81,773	$ 88,841

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Segment Reporting (Schedule Of Gross And Net Premiums By Line Of Business) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenue from External Customer [Line Items]
Gross written premiums	$ 572,710	$ 604,076	$ 1,750,072	$ 1,665,725
Net premiums written	464,621	484,413	1,373,536	1,327,469
Insurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	276,941	292,659	929,884	928,006
Net premiums written	191,502	186,659	596,196	614,440
Agriculture Insurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	131,633	133,439	696,107	667,106
Net premiums written	84,537	67,249	425,667	422,169
Casualty And Other Specialty Insurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	87,614	90,019	144,081	145,510
Net premiums written	63,373	64,588	106,634	106,411
Professional Lines Insurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	38,296	51,019	59,260	87,364
Net premiums written	27,788	42,832	41,991	73,037
Property Insurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	19,398	18,182	30,436	28,026
Net premiums written	15,804	11,990	21,904	12,823
Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	295,769	311,417	820,188	737,719
Net premiums written	273,119	297,754	777,340	713,029
Catastrophe Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	155,431	172,222	303,297	315,404
Net premiums written	138,041	158,865	269,439	292,583
Casualty Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	67,209	58,897	218,911	180,571
Net premiums written	67,211	58,895	217,484	179,332
Property Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	48,384	54,026	196,795	160,772
Net premiums written	44,516	54,033	192,927	160,779
Other Specialty Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross written premiums	24,745	26,272	101,185	80,972
Net premiums written	$ 23,351	$ 25,961	$ 97,490	$ 80,335

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Investments (Policy)

6 Months Ended

Jun. 30, 2013

Investments

Other Investments

In addition to the Company's fixed maturity, short-term and equityinvestments, the Company invests in (i) hedge funds and private investment funds that generally invest in senior secured bank debt, high yield credit, distressed debt, distressed real estate, derivatives, equity long/short strategies, currencies and commodities (“alternative funds”) and (ii) high yield loan and convertible debt funds (“specialty funds”). The Company's alternative funds and specialty funds are recorded on the Company's balance sheet as “other investments”.

Variable Interest Entities

Variable Interest Entities

Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristics of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis.

The Company is involved in the normal course of business with VIEs primarily as a passive investor in residential and commercial mortgage-backed securities and through its interests in other investments in alternative and specialty funds that are structured as limited partnerships considered to be third party VIEs. The Company determined that it was not the primary beneficiary for any of these investments as of June 30, 2013. The Company believes its exposure to loss with respect to these investments is generally limited to the investment carrying amounts reported in the Company's Condensed Consolidated Balance Sheets and any unfunded investment commitments.

Gain Loss On Investments

Realized and unrealized investment gains and losses are recognized in earnings using the first in, first out method.

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Stock-Based Employee Compensation And Other Stock Plans

6 Months Ended

Jun. 30, 2013

Stock-Based Employee Compensation And Other Stock Plans

Stock-Based Employee Compensation And Other Stock Plans

8.Stock-based employee compensation and other stock plans

The Company has a stock-based employee compensation plan, that provides the Company with the ability to grant to employees and non-employee directors restricted shares, restricted share units, stock appreciation rights, share bonuses, options to purchase the Company's ordinary shares and other forms of equity incentive awards, as determined by the Compensation Committee of the Company's Board of Directors.

On May 28, 2013, the Board of Directors elected John R. Charman as the Company's Chairman and Chief Executive Officer. Mr. Charman received a stock option to purchase 800,000 ordinary shares at an exercise price of $48.20 per share, and a grant of 708,890 restricted shares, as an employment inducement pursuant to Rule 303A.08 of the New York Stock Exchange Corporate Governance Standards.

Stock Options

The 800,000 options awarded to Mr. Charman will vest annually, in five equal tranches commencing on May 28, 2013, subject to Mr. Charman's continued employment, or in the event of certain terminations of employment and other events. Mr. Charman's option awards have a 10-year contractual life.

8.Stock-based employee compensation and other stock plans, cont'd.

A summary of option activity, including options held by employees and non-employee directors, during the six months ended June 30, 2013is presented below:

	Six Months Ended June 30, 2013
				Weighted Average
		Weighted		Remaining
	Number of	Average		Contractual Life		Aggregate
Options Outstanding	Options	Exercise Price		(years)		Intrinsic Value
Beginning, December 31, 2012	39,501	$	27.78
Granted	800,000		48.20
Exercised	24,501		23.88
Forfeited	-		-
Outstanding, June 30, 2013	815,000	$	47.94		9.75	$	2,861
Exercisable and vested options, June 30, 2013	175,000	$	46.98		9.14	$	782

During the three and six months ended June 30, 2013,800,000 options were granted (2012 – Nil) with a weighted average grant date fair value of $10.2 million (2012 – Nil). The Company uses the Black-Scholes-Merton formula to estimate the value of stock options granted. No options expired during the three and six months ended June 30, 2013 and 2012. During the three and six months ended June 30, 2013, 12,501 (2012 - 13,800) and 24,501 (2012 - 26,800) options were exercised, respectively. During the three and six months ended June 30, 2013,160,000 options vested (2012 – Nil).The total intrinsic value of options exercised during the three and six months ended June 30, 2013 was $0.3 million (2012 - $0.3 million) and $0.5 million (2012 - $0.6 million), respectively. The Company received proceeds of $0.3 million (2012 - $0.3 million)and $0.6 million (2012 - $0.5 million) from the exercise of options during the three and six months ended June 30, 2013, respectively. The Company issued new ordinary shares in connection with the exercise of the above options.

For the three and six months ended June 30, 2013, compensation costs recognized in earnings for all options totaled $2.4 million (2012 – Nil).

There was unrecognized stock-based compensation expenses of $7.8million related to unvested stock options at June 30,2013. This expense is expected to be recognized between 2013 and 2017, with approximately 27.2% expected to be recognized during the remainder of 2013.

Restricted Shares and Restricted Share Units

The 708,890 restricted shares awarded to Mr. Charman, as discussed above, will vest annually, in five equal tranches commencing on May 28, 2013, subject to Mr. Charman's continued employment, or in the event of certain terminations of employment and other events.

8.Stock-based employee compensation and other stock plans, cont'd.

A summary of the restricted share and restricted share unit activity during the six months ended June 30,2013is presented below:

	Six Months Ended June 30, 2013
	Number of	Aggregate
	Shares/Units	Intrinsic Value
Unvested, December 31, 2012	686,633
Granted	1,070,655
Settled	(403,453)
Forfeited	(116,508)
Unvested, June 30, 2013	1,237,327
Outstanding, June 30, 2013	1,237,327	$	63,660

During the three and six months ended June 30, 2013, the Company granted an aggregate of 727,271(2012 - 23,260) and 1,070,655(2012 - 400,568) restricted shares and restricted share units with weighted average grant date fair values of $35.1 million (2012 - $0.9 million) and $50.3 million (2012 - $15.4 million), respectively. During the three and six months ended June 30, 2013, the aggregate fair value of restricted shares and restricted share units that vested was $7.8 million (2012 - $1.4 million) and $16.9 million (2012 - $11.6 million), respectively.

For the three and six months ended June 30, 2013, compensation costs recognized in earnings for all restricted shares and restricted share units were $8.8 million (2012 - $1.6 million) and $13.5 million (2012 - $6.6 million), respectively. At June 30, 2013, compensation costs not yet recognized related to non-vested awards was $38.5 million. This expense is expected to be recognized between 2013 and 2017, with approximately 29.6% expected to be recognized during the remainder of 2013.

Employee Share Purchase Plan

The Company also has an Employee Share Purchase Plan under which employees of Endurance Holdings and certain of its subsidiaries may purchase Endurance Holdings' ordinary shares. Total expenses related to this plan for the three and six months ended June 30, 2013was approximately $44,000(2012 - $45,000) and $82,000 (2012 - $89,000), respectively.

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Derivatives (Policy)

6 Months Ended

Jun. 30, 2013

Derivatives

Accounting policy for derivativess

The Company's derivative instruments are recorded in the Condensed Consolidated Balance Sheets at fair value, with changes in fair value and gains and losses recognized in net realized and unrealized investment gains, net foreign exchange losses (gains) and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive (Loss) Income.

During 2012, the Company entered into the weather risk management business through its newly formed unit,Endurance Global Weather. Endurance Global Weather regularly transacts in certain derivative-based riskmanagement products primarily to address weather and energy risks. The trading markets for these derivatives aregenerally linked to energy and agriculture commodities, weather and other natural phenomena. Generally, theCompany's current portfolio of such derivative contracts is of short duration and such contracts are predominantlyseasonal in nature.

The Company's derivatives are not designated as hedges under current accounting guidance. The Company invests a portion of its fixed maturity assets with third party investment managers with investmentguidelines that permit the use of derivative instruments.The Company may enter derivative transactions directly or as part of strategies employed by its external investment managers. The Company's objectives for holding these derivatives are as follows:

Interest Rate Futures, Swaps, Swaptions and Options - to manage exposure to interest rate risk, which can include increasing or decreasing its exposure to this risk through modification of the portfolio composition and duration.

Foreign Exchange Forwards, Futures and Options- as part of overall currency risk management and investment strategies.

Credit Default Swaps - to manage market exposures. The Company may assume or economically hedge credit risk through credit default swaps to replicate or hedge investment positions. The original term of these credit default swaps is generally five years or less.

Commodity Futures and Options- to economically hedge certain underwriting risks.

To-Be-Announced Mortgage-backed Securities (“TBAs”) - to enhance investment performance and as part of overall investment strategy. TBAs represent commitments to purchase or sell a future issuance of agency mortgage-backed securities. For the period between purchase of a TBA and issuance of the underlying securities, the Company's position is accounted for as a derivative.

Energy and Weather Contracts – to address weather and energy risks. The Company may purchase or sell contracts

with financial settlements based on the performance of an index linked to a quantifiable weather element, such as

temperature, precipitation, snowfall or windspeed, and structures with multiple risk triggers indexed to a quantifiable weather element and a weather sensitive commodity price, such as temperature and electrical power or natural gas.

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Fair Value Measurement (Policy)

6 Months Ended

Jun. 30, 2013

Fair Value Measurement

Fair Value Of Financial Instruments

The Company determines the fair value of the fixed maturity investments, short-term investments,equity securities, other investments, debt, and other assets and liabilitiesin accordance with current accounting guidance, 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 Company determines the estimated fair value of each individual security utilizing the highest level inputs available. Valuation inputs by security type may include the following:

• Government and agencies fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical models which may incorporate option adjusted spreads, daily interest rate data and market/sector news. The Company generally classifies the fair values of government and agencies securities in Level 2. Current issue U.S. government securities are generally valued based on Level 1 inputs, which use the market approach valuation technique.
• Government guaranteed corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing service or index providers may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the pricing service typically uses analytical spread models which may incorporate inputs from the U.S treasury curve or LIBOR. The Company generally classifies the fair values of its government guaranteed corporate securities in Level 2.
• Corporate fixed maturity securities – These securities are generally priced by pricing services or index providers. The pricing services or index providers typically use discounted cash flow models that incorporate benchmark curves for treasury, swap and high issuance credits. Credit spreads are developed from current market observations for like or similar securities. The Company generally classifies the fair values of its corporate securities in Level 2.
• Equity securities – These securities are generally priced by pricing services or index providers. Depending on the type of underlying equity security or equity fund, the securities are priced by pricing services or index providers based on quoted market prices in active markets or through a discounted cash flow model that incorporates benchmark curves for treasury, swap and credits for like or similar securities. The Company generally classifies the fair values of its equity securities in Level 1 or 2.

• Other assets and liabilities – These balances include a variety of derivative instruments used to enhance the efficiency of the investment portfolio and economically hedge certain risks. These instruments are generally priced by pricing services, broker/dealers and/or recent trading activity. The market value approach valuation technique is used to estimate the fair value for these derivatives based on significant observable market inputs. Certain derivative instruments are priced by pricing services based on quoted market prices in active markets. These derivative instruments are generally classified in Level 1. Other derivative instruments are priced using industry valuation models and are considered Level 2, as the inputs to the valuation model are based on observable market inputs. Also included in this line item are proprietary, non-exchange traded derivative-based risk management products primarily used to address weather and energy risks. The trading market for these weather derivatives is generally linked to energy and agriculture commodities, weather and other natural phenomena. In instances where market prices are not available, the Company uses industry or internally developed valuation techniques such as spread option, Black Scholes, quanto and simulation modeling to determine fair value and classifies these in Level 3. These models may reference prices for similar instruments.
• Structured securities including agency and non-agency, residential and commercial, mortgage and asset-backed securities – These securities are generally priced by broker/dealers. Broker/dealers may use current market trades for securities with similar qualities. If no such trades are available, inputs such as bid and offer, prepayment speeds, the U.S. treasury curve, swap curve and cash settlement may be used in a discounted cash flow model to determine the fair value of a security. The Company generally classifies the fair values of its structured securities in Level 2.
• Other investments – Other investments, including alternative funds and specialty funds, are generally priced on net asset values (“NAV”) received from the fund managers or administrators. Due to the timing of the delivery of the final NAV by certain of the fund managers, valuations of certain alternative funds and specialty funds are estimated based on the most recently available information, including period end NAVs, period end estimates, or, in some cases, prior month or prior quarter NAVs. As this valuation technique incorporates both observable and significant unobservable inputs, the Company generally classifies the fair value of its other investments in Level 3.
• Debt – Outstanding debt consists of the Company's 6.15% Senior Notes due October 15, 2015 and the 7.0% Senior Notes due July 15, 2034 (the “Senior Notes”). The fair values of these securities were obtained from a third party pricing service and pricing was based on the spread above the risk-free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. As these spreads and the yields for the risk-free yield curve are observable market inputs, the fair values of the Senior Notesare classified in Level 2.

The carrying values of cash and cash equivalents, accrued investment income, net receivable on sales of investments, net payable on purchases of investments and other financial instruments not described above approximated their fair values at June 30, 2013.

Fair Value Transfer Between Levels

Transfers between levels are assumed to occur at the end of each period.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	Endurance Specialty Holdings Ltd.
Entity Central Index Key	0001179755
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		44,335,493

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Earnings Per Share (Policy)

6 Months Ended

Jun. 30, 2013

Earnings Per Share

Earnings Per Share

The two-class method utilized by the Company is an earnings allocation formula that determines earnings per share for the holders of Endurance Holdings' ordinary shares (also referred to as “common shares”) and participating common shares, which includes unvested restricted shares that receive cash dividends, according to dividends declared and participation rights in undistributed earnings. Net incomeavailable to common and participating common shareholders is reduced by the amount of dividends declared in the current period and by the contractual amount of dividends that must be paid for the current period related to the Company's common and participating common shares. Any remaining undistributed earnings are allocated to the common and participating common shareholders to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. In periods of loss, no losses are allocated to participating common shareholders. Instead, all such losses are allocated solely to the common shareholders.

Basic earningsper common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding. The weighted average number of common shares excludes any dilutive effect of outstanding options and convertible securities such as unvested restricted shares.

Diluted earningsper common share are based on the weighted average number of common shares and assumes the exercise of all dilutive stock options and the vesting or conversion of all convertible securities such as unvested restricted shares using the two-class method described above.

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Commitments and Contingencies (Deposits) (Details) (US, USD $) In Millions, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
US
Statutory Accounting Practices [Line Items]
Assets Held by Insurance Regulators	$ 275.1	$ 280.0

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Commitments And Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Commitments And Contingencies
Letters of credit outstanding, amount	$ 269.4		$ 320.4
Investments pledged under letters of credit facility	319.1		380.0
Securities pledged as collateral obligation	203.6		224.4
Total lease expenses under operating leases	7.1	7.2
Reinsurance recoverables	$ 695.8		$ 774.9