10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

for the period ended September 30, 2014,

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.)

Waterloo House

100 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  ý    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  ý    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	ý	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  ý

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 November 3, 2014
Ordinary Shares - $1.00 par value	44,757,803

INDEX

	Page
Part I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2014 (unaudited) and December 31, 2013	2
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2014 and 2013	3
Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended September 30, 2014 and 2013	4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013	5
Notes to the Unaudited Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3. Quantitative and Qualitative Disclosures about Market Risk	64
Item 4. Controls and Procedures	64
Part II. OTHER INFORMATION
Item 1. Legal Proceedings	65
Item 1A. Risk Factors	65
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3. Defaults Upon Senior Securities	65
Item 4. Mine Safety Disclosures	65
Item 5. Other Information	65
Item 6. Exhibits	66
SIGNATURES	67

1

ENDURANCE SPECIALTY HOLDINGS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	SEPTEMBER 30, 2014		DECEMBER 31, 2013
	(UNAUDITED)
ASSETS
Investments
Fixed maturity investments, available for sale at fair value (amortized cost: $4,820,169 and $4,802,580 at September 30, 2014 and December 31, 2013, respectively)	$	4,871,420	$	4,823,964
Short-term investments, available for sale at fair value (amortized cost: $11,843 and $35,029 at September 30, 2014 and December 31, 2013, respectively)	11,844		35,028
Equity securities, available for sale at fair value (cost: $239,487 and $227,828 at September 30, 2014 and December 31, 2013, respectively)	267,728		252,466
Other investments	658,678		617,478
Total investments	5,809,670		5,728,936
Cash and cash equivalents	805,716		845,851
Premiums receivable, net	1,452,228		669,198
Insurance and reinsurance balances receivable	123,432		127,722
Deferred acquisition costs	246,437		186,027
Prepaid reinsurance premiums	414,013		187,209
Reinsurance recoverable on unpaid losses	566,329		593,755
Reinsurance recoverable on paid losses	165,592		164,220
Accrued investment income	23,652		24,104
Goodwill and intangible assets	160,560		165,378
Deferred tax asset	53,403		51,703
Net receivable on sales of investments	84,699		54,910
Other assets	240,087		179,109
Total assets	$	10,145,818	$	8,978,122
LIABILITIES
Reserve for losses and loss expenses	$	3,897,483	$	4,002,259
Reserve for unearned premiums	1,552,168		1,018,851
Deposit liabilities	17,521		19,458
Reinsurance balances payable	482,093		181,061
Debt	527,732		527,478
Net payable on purchases of investments	238,038		129,047
Other liabilities	310,329		213,419
Total liabilities	7,025,364		6,091,573
Commitments and contingent liabilities
SHAREHOLDERS' EQUITY
Preferred shares
Series A and B, total liquidation preference $430,000 (2013 - $430,000)	17,200		17,200
Common shares
Ordinary - 44,751,174 issued and outstanding (2013 - 44,368,742)	44,751		44,369
Additional paid-in capital	590,330		569,116
Accumulated other comprehensive income	81,299		62,731
Retained earnings	2,386,874		2,193,133
Total shareholders' equity	3,120,454		2,886,549
Total liabilities and shareholders' equity	$	10,145,818	$	8,978,122

See accompanying notes to unaudited condensed consolidated financial statements.

2

ENDURANCE SPECIALTY HOLDINGS LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

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

	THREE MONTHS ENDED    SEPTEMBER 30,						NINE MONTHS ENDED   SEPTEMBER 30,
	2014			2013			2014			2013
Revenues
Gross premiums written	$	626,110		$	544,363		$	2,473,050		$	2,294,435
Ceded premiums written	(236,004		)	(149,030		)	(772,812		)	(525,566		)
Net premiums written	390,106			395,333			1,700,238			1,768,869
Change in unearned premiums	124,789			158,212			(307,539		)	(251,872		)
Net premiums earned	514,895			553,545			1,392,699			1,516,997
Net investment income	25,357			38,097			105,649			119,870
Net realized and unrealized investment gains (losses)	9,788			(6,640		)	18,071			9,967
Total other-than-temporary impairment losses	(102		)	(190		)	(411		)	(1,575		)
Portion of loss recognized in other comprehensive (loss) income	—			—			—			—
Net impairment losses recognized in earnings	(102		)	(190		)	(411		)	(1,575		)
Other underwriting income (loss)	2,123			(943		)	(3,939		)	694
Total revenues	552,061			583,869			1,512,069			1,645,953
Expenses
Net losses and loss expenses	290,269			339,036			726,361			917,064
Acquisition expenses	93,392			78,775			244,150			222,279
General and administrative expenses	80,915			67,470			240,576			215,307
Amortization of intangibles	1,623			1,652			4,863			5,378
Net foreign exchange losses	783			2,201			4,066			8,496
Interest expense	13,127			9,048			31,910			27,138
Total expenses	480,109			498,182			1,251,926			1,395,662
Income before income taxes	71,952			85,687			260,143			250,291
Income tax benefit (expense)	4,282			(2,271		)	3,734			(5,557		)
Net income	76,234			83,416			263,877			244,734
Preferred dividends	(8,188		)	(8,188		)	(24,564		)	(24,564		)
Net income available to common and participating common shareholders	$	68,046		$	75,228		$	239,313		$	220,170
Comprehensive income
Net income	$	76,234		$	83,416		$	263,877		$	244,734
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 ($3,358) and $8,582 for the nine months ended September 30, 2014 and 2013, respectively)	(34,357		)	29,079			26,682			(82,016		)
Foreign currency translation adjustments	(20,404		)	8,918			(8,181		)	(1,057		)
Reclassification adjustment for net losses on derivative designated as cash flow hedge included in net income	22			22			67			67
Other comprehensive (loss) income	(54,739		)	38,019			18,568			(83,006		)
Comprehensive income	$	21,495		$	121,435		$	282,445		$	161,728
Per share data
Basic earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04
Diluted earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04
Dividend per common share	$	0.34		$	0.32		$	1.02		$	0.96

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)

	NINE MONTHS ENDED   SEPTEMBER 30,
	2014			2013
Preferred shares
Balance, beginning and end of period	$	17,200		$	17,200
Common shares
Balance, beginning of period	44,369			43,116
Issuance of common shares, net of forfeitures	382			1,452
Repurchase of common shares	—			(318		)
Balance, end of period	44,751			44,250
Additional paid-in capital
Balance, beginning of period	569,116			527,915
Issuance of common shares, net of forfeitures	1,270			29,961
Repurchase of common shares and share equivalents	—			(14,266		)
Settlement of equity awards	(4,039		)	(2,975		)
Stock-based compensation expense	23,983			19,569
Balance, end of period	590,330			560,204
Accumulated other comprehensive income
Cumulative foreign currency translation adjustments:
Balance, beginning of period	18,636			12,676
Foreign currency translation adjustments	(8,181		)	(1,057		)
Balance, end of period	10,455			11,619
Unrealized holding gains on investments, net of deferred taxes:
Balance, beginning of period	45,950			141,731
Net unrealized holding gains (losses) arising during the period, net of other-than-temporary impairment losses and reclassification adjustment	26,682			(82,016		)
Balance, end of period	72,632			59,715
Accumulated derivative loss on cash flow hedging instruments:
Balance, beginning of period	(1,855		)	(1,944		)
Net change from current period hedging transactions, net of reclassification adjustment	67			67
Balance, end of period	(1,788		)	(1,877		)
Total accumulated other comprehensive income	81,299			69,457
Retained earnings
Balance, beginning of period	2,193,133			1,969,903
Net income	263,877			244,734
Dividends on preferred shares	(24,564		)	(24,564		)
Dividends on common shares	(45,572		)	(42,174		)
Balance, end of period	2,386,874			2,147,899
Total shareholders’ equity	$	3,120,454		$	2,839,010

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)

	NINE MONTHS ENDED   SEPTEMBER 30,
	2014			2013
Cash flows provided by (used in) operating activities
Net income	$	263,877		$	244,734
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of net premium on investments	34,128			39,933
Amortization of other intangibles and depreciation	20,593			15,131
Net realized and unrealized investment gains	(18,071		)	(9,967		)
Net impairment losses recognized in earnings	411			1,575
Deferred taxes	(5,058		)	1,935
Stock-based compensation expense	23,983			19,569
Equity in earnings of other investments	(22,542		)	(43,083		)
Premiums receivable, net	(783,030		)	(404,275		)
Insurance and reinsurance balances receivable	4,290			(18,114		)
Deferred acquisition costs	(60,410		)	(28,796		)
Prepaid reinsurance premiums	(226,804		)	(96,797		)
Reinsurance recoverable on unpaid losses	27,426			178,703
Reinsurance recoverable on paid losses	(1,372		)	(345,141		)
Accrued investment income	452			5,383
Other assets	(152		)	(6,875		)
Reserve for losses and loss expenses	(104,776		)	(188,774		)
Reserve for unearned premiums	533,317			349,443
Deposit liabilities	(1,937		)	(4,643		)
Reinsurance balances payable	301,032			236,205
Other liabilities	66,815			37,280
Net cash flows provided by (used in) operating activities	52,172			(16,574		)
Cash flows provided by (used in) investing activities
Proceeds from sales of available for sale investments	2,658,866			2,382,068
Proceeds from maturities and calls on available for sale investments	467,374			542,059
Proceeds from the redemption of other investments	34,072			28,485
Purchases of available for sale investments	(3,085,817		)	(3,094,718		)
Purchases of other investments	(52,731		)	(62,012		)
Net settlements of other assets	14,836			(38,223		)
Purchases of fixed assets	(34,038		)	(10,768		)
Net cash paid for subsidiary acquisition	(45		)	(378		)
Net cash flows provided by (used in) investing activities	2,517			(253,487		)
Cash flows used in financing activities
Issuance of common shares, net of forfeitures	1,480			31,289
Repurchase of common shares	—			(14,584		)
Settlement of equity awards	(4,039		)	(2,975		)
Loan facility costs paid	(4,750		)	—
Proceeds from issuance of debt	591			640
Repayments and repurchases of debt	(499		)	(624		)
Dividends on preferred shares	(24,564		)	(24,564		)
Dividends on common shares	(45,548		)	(42,174		)
Net cash flows used in financing activities	(77,329		)	(52,992		)
Effect of exchange rate changes on cash and cash equivalents	(17,495		)	(10,967		)
Net decrease in cash and cash equivalents	(40,135		)	(334,020		)
Cash and cash equivalents, beginning of period	845,851			1,124,019
Cash and cash equivalents, end of period	$	805,716		$	789,999

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 the Quarterly Report on 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 nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. 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, 2013 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, 2013 contained in Endurance Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 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 filing of the 2013 Form 10-K.

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”). ASU 2013-11 provides 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 was effective for annual and interim reporting periods beginning after December 15, 2013, with both early adoption and retrospective application permitted. The Company adopted this standard effective January 1, 2014. This standard did not have a material impact on the Company’s consolidated financial statements.

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)

3. Investments

Composition of Net Investment Income and of Invested Assets

The components of net investment income for the three and nine months ended September 30, 2014 and 2013 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Available for sale investments	$	29,959		$	27,889		$	91,905		$	86,036
Other investments	(1,785		)	13,244			22,542			43,083
Cash and cash equivalents	581			752			1,878			2,043
	$	28,755		$	41,885		$	116,325		$	131,162
Investment expenses	(3,398		)	(3,788		)	(10,676		)	(11,292		)
Net investment income	$	25,357		$	38,097		$	105,649		$	119,870

The following table summarizes the composition of the investment portfolio by investment type at September 30, 2014 and December 31, 2013:

	September 30, 2014				December 31, 2013
Type of Investment	Fair Value		Percentage		Fair Value		Percentage
Fixed maturity investments	$	4,871,420	75.4	%	$	4,823,964	74.2	%
Cash and cash equivalents (1)	652,377		10.1	%	771,714		11.9	%
Other investments (2)	658,678		10.2	%	617,478		9.5	%
Short-term investments	11,844		0.2	%	35,028		0.5	%
Equity securities	267,728		4.1	%	252,466		3.9	%
Total	$	6,462,047	100.0	%	$	6,500,650	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.

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, cont'd.

The following table summarizes the composition by investment rating of the fixed maturity and short-term investments at September 30, 2014 and December 31, 2013. In some cases, where bonds are unrated, the rating of the issuer has been applied.

	September 30, 2014				December 31, 2013
Ratings (1)	Fair Value		Percentage		Fair Value		Percentage
U.S. government and agencies securities	$	514,672	10.5	%	$	769,343	15.8	%
AAA / Aaa	1,153,558		23.7	%	972,820		20.0	%
AA / Aa	1,738,964		35.7	%	1,771,156		36.5	%
A / A	952,894		19.5	%	895,549		18.4	%
BBB	407,093		8.3	%	363,722		7.5	%
Below BBB	94,824		1.9	%	66,791		1.4	%
Not rated	21,259		0.4	%	19,611		0.4	%
Total	$	4,883,264	100.0	%	$	4,858,992	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 Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc., or DBRS, Inc. is used.

Contractual maturities of the Company’s fixed maturity and short-term investments are shown below as of September 30, 2014 and December 31, 2013. 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.

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	128,535	$	129,382	$	144,814	$	145,653
Due after one year through five years	1,575,875		1,583,414		1,808,001		1,815,240
Due after five years through ten years	339,764		341,993		290,391		288,486
Due after ten years	33,034		35,474		26,344		26,937
Residential mortgage-backed securities	1,185,911		1,203,322		1,192,085		1,187,191
Commercial mortgage-backed securities	948,460		965,696		932,263		947,677
Collateralized loan and debt obligations	205,465		207,214		92,519		94,552
Asset-backed securities	414,968		416,769		351,192		353,256
Total	$	4,832,012	$	4,883,264	$	4,837,609	$	4,858,992

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.

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, and equity long/short strategies (“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 September 30, 2014 and December 31, 2013, the Company had invested, net of capital returned, a total of $462.1 million and $440.9 million, respectively, in other investments. At September 30, 2014 and December 31, 2013, the carrying value of other investments was $658.7 million and $617.5 million, respectively. The following table summarizes the composition and redemption restrictions of other investments as of September 30, 2014 and December 31, 2013:

September 30, 2014	Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
Hedge funds	$	431,278	$	—	$	38,900
Private investment funds	68,433		64,473		68,433
Total alternative funds	499,711		64,473		107,333
Specialty funds
High yield loan funds	112,892		—		—
Convertible debt funds	46,075		—		—
Total specialty funds	158,967		—		—
Total other investments	$	658,678	$	64,473	$	107,333
December 31, 2013	Market Value		Unfunded Commitments		Ineligible for Redemption in 2014
Alternative funds
Hedge funds	$	401,438	$	—	$	47,406
Private investment funds	59,703		57,997		59,703
Total alternative funds	461,141		57,997		107,109
Specialty funds
High yield loan funds	111,254		—		—
Convertible debt funds	45,083		—		—
Total specialty funds	156,337		—		—
Total other investments	$	617,478	$	57,997	$	107,109

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 91.0% of the hedge fund portfolio, with the remainder over the following two years.

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.

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 or distribution of earnings from 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 (Losses)

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 (losses) and the change in the fair value of investment-related derivative financial instruments for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Gross realized gains on investment sales	$	10,683		$	6,180		$	28,317		$	30,191
Gross realized losses on investment sales	(1,475		)	(13,178		)	(12,778		)	(19,924		)
Change in fair value of derivative financial instruments (1)	580			358			2,532			(300		)
Net realized and unrealized investment gains (losses)	$	9,788		$	(6,640	)	$	18,071		$	9,967

(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 September 30, 2014 and December 31, 2013 are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	512,199	$	5,450	$	(2,977	)	$	514,672	$	—
U.S. state and municipal securities	31,437		207		(157		)	31,487		—
Foreign government securities	204,033		2,033		(373		)	205,693		—
Government guaranteed corporate securities	45,577		624		—			46,201		—
Corporate securities	1,272,119		13,037		(4,790		)	1,280,366		—
Residential mortgage-backed securities	1,185,911		21,984		(4,573		)	1,203,322		(3,319		)
Commercial mortgage-backed securities	948,460		20,763		(3,527		)	965,696		(5		)
Collateralized loan and debt obligations (1)	205,465		1,974		(225		)	207,214		—
Asset-backed securities	414,968		2,333		(532		)	416,769		—
Total fixed maturity investments	$	4,820,169	$	68,405	$	(17,154	)	$	4,871,420	$	(3,324	)
Short-term investments	11,843		1		—			11,844		—
Total fixed income investments	$	4,832,012	$	68,406	$	(17,154	)	$	4,883,264	$	(3,324	)
Equity securities
Equity investments	$	157,924	$	26,471	$	(1,881	)	$	182,514	$	—
Emerging market debt funds	60,250		1,612		—			61,862		—
Preferred equity investments	12,283		2,071		(37		)	14,317		—
Short-term fixed income fund	9,030		6		(1		)	9,035		—
Total equity securities	$	239,487	$	30,160	$	(1,919	)	$	267,728	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 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 September 30, 2014, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was nil.

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.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	771,227	$	5,735	$	(7,619	)	$	769,343	$	—
U.S. state and municipal securities	27,138		111		(395		)	26,854		—
Foreign government securities	183,650		1,003		(2,006		)	182,647		—
Government guaranteed corporate securities	34,921		274		(50		)	35,145		—
Corporate securities	1,217,585		16,225		(6,511		)	1,227,299		—
Residential mortgage-backed securities	1,192,085		17,005		(21,899		)	1,187,191		(4,257		)
Commercial mortgage-backed securities	932,263		23,423		(8,009		)	947,677		(47		)
Collateralized loan and debt obligations (1)	92,519		2,233		(200		)	94,552		—
Asset-backed securities	351,192		2,919		(855		)	353,256		(163		)
Total fixed maturity investments	$	4,802,580	$	68,928	$	(47,544	)	$	4,823,964	$	(4,467	)
Short-term investments	35,029		1		(2		)	35,028		—
Total fixed income investments	$	4,837,609	$	68,929	$	(47,546	)	$	4,858,992	$	(4,467	)
Equity securities
Equity investments	$	152,525	$	24,139	$	(1,995	)	$	174,669	$	—
Emerging market debt funds	60,250		594		—			60,844		—
Preferred equity investments	6,325		1,977		(79		)	8,223		—
Short-term fixed income funds	8,728		2		—			8,730		—
Total equity securities	$	227,828	$	26,712	$	(2,074	)	$	252,466	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 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, 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.

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 September 30, 2014 and December 31, 2013, 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 Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	(559	)	$	95,967	$	(2,418	)	$	95,856	$	(2,977	)	$	191,823
U.S. state and municipal securities	(78		)	7,261		(79		)	6,835		(157		)	14,096
Foreign government securities	(204		)	43,104		(169		)	23,314		(373		)	66,418
Corporate securities	(3,026		)	432,053		(1,764		)	97,104		(4,790		)	529,157
Residential mortgage-backed securities	(593		)	168,976		(3,980		)	152,520		(4,573		)	321,496
Commercial mortgage-backed securities	(1,186		)	200,660		(2,341		)	93,769		(3,527		)	294,429
Collateralized loan and debt obligations	(174		)	95,995		(51		)	1,467		(225		)	97,462
Asset-backed securities	(264		)	156,553		(268		)	29,991		(532		)	186,544
Total fixed income investments	$	(6,084	)	$	1,200,569	$	(11,070	)	$	500,856	$	(17,154	)	$	1,701,425
Equity securities
Equity investments	$	(1,861	)	$	40,720	$	(20	)	$	141	$	(1,881	)	$	40,861
Preferred equity investments	(37		)	5,676		—			—		(37		)	5,676
Short-term fixed income fund	(1		)	2,899		—			—		(1		)	2,899
Total equity securities	$	(1,899	)	$	49,295	$	(20	)	$	141	$	(1,919	)	$	49,436

As of September 30, 2014, 752 available for sale securities were in an unrealized loss position aggregating $19.1 million. Of those, 222 securities with aggregated unrealized losses of $11.1 million had been in a continuous unrealized loss position for twelve months or greater.

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
	Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	(7,359	)	$	382,593	$	(260	)	$	6,050	$	(7,619	)	$	388,643
U.S. state and municipal securities	(395		)	20,452		—			—		(395		)	20,452
Foreign government securities	(1,981		)	139,503		(25		)	5,261		(2,006		)	144,764
Government guaranteed corporate securities	(50		)	13,326		—			—		(50		)	13,326
Corporate securities	(5,959		)	478,287		(552		)	28,690		(6,511		)	506,977
Residential mortgage-backed securities	(17,542		)	514,702		(4,357		)	102,446		(21,899		)	617,148
Commercial mortgage-backed securities	(7,681		)	384,548		(328		)	16,804		(8,009		)	401,352
Collateralized loan and debt obligations	(48		)	20,733		(152		)	2,379		(200		)	23,112
Asset-backed securities	(703		)	157,172		(152		)	7,011		(855		)	164,183
Total fixed maturity investments	$	(41,718	)	$	2,111,316	$	(5,826	)	$	168,641	$	(47,544	)	$	2,279,957
Short-term investments	(2		)	2,468		—			—		(2		)	2,468
Total fixed income investments	$	(41,720	)	$	2,113,784	$	(5,826	)	$	168,641	$	(47,546	)	$	2,282,425
Equity securities
Equity investments	$	(1,995	)	$	36,751	$	—		$	—	$	(1,995	)	$	36,751
Preferred equity investments	(79		)	2,987		—			—		(79		)	2,987
Total equity securities	$	(2,074	)	$	39,738	$	—		$	—	$	(2,074	)	$	39,738

(1) Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2013.

As of December 31, 2013, 880 available for sale securities were in an unrealized loss position aggregating $49.6 million. Of those, 71 securities with aggregated unrealized losses of $5.8 million had been in a continuous unrealized loss position for twelve months or greater.

The analysis of OTTI for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Total other-than-temporary impairment losses	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)
Portion of loss recognized in other comprehensive (loss) income	—			—			—			—
Net impairment losses recognized in earnings	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)

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 $0.1 million (2013: $0.2 million) of OTTI losses recognized by the Company in the third quarter of 2014, the majority was related to equity investments that had been at a loss for over a year. The decrease in gross unrealized losses on the Company’s fixed income investments at September 30, 2014 compared to December 31, 2013 was primarily due to a decrease in longer term interest rates during the period. At September 30, 2014, the Company did not have the intent to sell any of the remaining fixed income investments in an unrealized loss position and determined that it was unlikely that the Company would be required to sell those securities in an unrealized loss position. The Company has the ability and intent to hold its equity securities until recovery; therefore, the Company does not consider its fixed income investments or equity securities to be other-than-temporarily impaired at September 30, 2014.

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 nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Beginning balance	$	(1,441	)	$	(1,769	)	$	(1,553	)	$	(2,000	)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			—
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized	—			—			—			—
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	579			113			691			344
Ending balance	$	(862	)	$	(1,656	)	$	(862	)	$	(1,656	)

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 various other investments 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 September 30, 2014. 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.

• Other assets and liabilities – A portion of other assets and liabilities are composed of 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 are 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 and collateralized loan and debt obligations – 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.

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 investments – Other investments are comprised of alternative funds and specialty funds and 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 September 30, 2014.

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 September 30, 2014:

	Fair Value Measurements at September 30, 2014
	Total at   September 30, 2014		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	$	514,672	$	—	$	514,672	$	—
U.S. state and municipal securities	31,487		—		31,487		—
Foreign government securities	205,693		—		205,693		—
Government guaranteed corporate securities	46,201		—		46,201		—
Corporate securities	1,280,366		—		1,279,666		700
Residential mortgage-backed securities	1,203,322		—		1,203,294		28
Commercial mortgage-backed securities	965,696		—		962,868		2,828
Collateralized loan and debt obligations	207,214		—		206,574		640
Asset-backed securities	416,769		—		413,772		2,997
Total fixed maturity investments	$	4,871,420	$	—	$	4,864,227	$	7,193
Equity securities
Equity investments	182,514		123,283		59,231		—
Emerging market debt funds	61,862		—		61,862		—
Preferred equity investments	14,317		—		14,317		—
Short-term fixed income fund	9,035		9,035		—		—
Total equity securities	$	267,728	$	132,318	$	135,410	$	—
Short-term investments	11,844		—		11,844		—
Other investments	658,678		—		—		658,678
Other assets (see Note 7)	147,488		—		132,666		14,822
Total assets	$	5,957,158	$	132,318	$	5,144,147	$	680,693
Liabilities
Other liabilities (see Note 7)	$	95,704	$	—	$	79,788	$	15,916
Debt	615,568		—		615,568		—
Total liabilities	$	711,272	$	—	$	695,356	$	15,916

During the three months ended September 30, 2014, $2.2 million of commercial mortgage-backed securities were transferred into Level 3 as no observable inputs were available, and $5.0 million of primarily residential mortgage-backed securities and collateralized loan and debt obligations were transferred out of Level 3 to Level 2 during the period as market activity for these securities increased and observable inputs became available.

During the nine months ended September 30, 2014, $7.2 million of primarily commercial and residential mortgage-backed securities were transferred into Level 3 as no observable inputs were available, and $6.8 million of primarily commercial and residential mortgage-backed securities and collateralized loan and debt obligations were transferred out of Level 3 as market activity for these securities increased and observable inputs became available. During the three and nine months ended September 30, 2014, $6.6 million of U.S. government and agencies securities were transferred from Level 1 to Level 2 as they no longer qualified as on the run U.S. treasury securities.

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, 2013:

	Fair Value Measurements at December 31, 2013
	Total at   December 31, 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	$	769,343	$	20,248	$	749,095	$	—
U.S. state and municipal securities	26,854		—		26,854		—
Foreign government securities	182,647		—		182,647		—
Government guaranteed corporate securities	35,145		—		35,145		—
Corporate securities	1,227,299		—		1,226,553		746
Residential mortgage-backed securities	1,187,191		—		1,186,943		248
Commercial mortgage-backed securities	947,677		—		946,794		883
Collateralized loan and debt obligations	94,552		—		92,095		2,457
Asset-backed securities	353,256		—		350,262		2,994
Total fixed maturity investments	$	4,823,964	$	20,248	$	4,796,388	$	7,328
Equity securities
Equity investments	174,669		117,776		56,893		—
Emerging market debt funds	60,844		—		60,844		—
Preferred equity investments	8,223		—		8,223		—
Short-term fixed income fund	8,730		8,730		—		—
Total equity securities	$	252,466	$	126,506	$	125,960	$	—
Short-term investments	35,028		—		35,028		—
Other investments	617,478		—		—		617,478
Other assets (see Note 7)	108,272		—		94,234		14,038
Total assets	$	5,837,208	$	146,754	$	5,051,610	$	638,844
Liabilities
Other liabilities (see Note 7)	$	49,452	$	—	$	29,883	$	19,569
Debt	575,115		—		575,115		—
Total liabilities	$	624,567	$	—	$	604,998	$	19,569

Level 3 assets represented 11.4% and 10.9% of the Company’s total available for sale investments, other investments and derivative instruments at September 30, 2014 and December 31, 2013, respectively. Level 3 securities are primarily comprised of non-agency commercial mortgage-backed securities, asset-backed securities, investments in alternative and specialty funds, and weather derivatives. The NAV used to measure the fair value of the Company’s other investments are generally derived from the underlying investments held within the funds. Although the Company does not have direct access to detailed financial information related to the underlying investments of the funds, the Company obtains and reviews fund financial statements, internal control review reports, and industry benchmarking reports to determine the reasonability of the NAV of the funds. There were no material changes in the Company’s valuation techniques for the nine months ended September 30, 2014.

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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)

4. Fair value measurement, cont'd.

Other assets and other liabilities measured at fair value at September 30, 2014 include assets of $14.8 million (2013 - $14.0 million) and liabilities of $15.9 million (2013 - $19.6 million) related to proprietary, non-exchange traded derivative-based risk management products used in the Company’s weather risk management business, and hedging and trading activities related to these risks. In instances where market prices are not available, the Company may use industry or internally developed valuation techniques such as historical analysis and simulation modeling to determine fair value and are considered Level 3.

Observable and unobservable inputs to these valuation techniques vary by contract requirements and commodity type, are validated using market-based or independently sourced parameters where applicable and may include the following:

•Observable inputs: contract price, notional, option strike, term to expiry, interest rate, contractual limits;

•Unobservable inputs: correlation; and

•Both observable and unobservable: forward commodity price, forward weather curve.

The Company’s weather curves are determined by taking the average payouts for each transaction within its portfolio utilizing detrended historical weather measurements. The Company’s commodity curves are determined using historical market data scaled to currently observed market prices. The range of each unobservable input could vary based on the specific commodity, including, but not limited to natural gas, electricity, crude, liquids, temperature or precipitation. Due to the diversity of the portfolio, the range of unobservable inputs could be wide-spread as reflected in the below table on quantitative information.

If a trade has one or more significant valuation inputs that are unobservable, such trades are initially valued at the transaction price, which is considered to be the best initial estimate of fair value. Subsequent to the initial valuation, the Company updates market observable inputs to reflect observable market changes. The unobservable inputs are validated at each reporting period and are only changed when corroborated by evidence such as similar market transactions, third-party pricing services and/or broker or dealer quotations or other empirical market data.

Changes in any or all of the unobservable inputs listed above may contribute positively or negatively to the overall portfolio fair value depending upon the underlying position. In general, movements in weather curves are the largest contributing factor that impacts fair value.

Below is a summary of quantitative information regarding the significant unobservable inputs used in determining the fair value of the net weather and energy related derivative liabilities classified in Level 3 that are measured at fair value on a recurring basis at September 30, 2014:

	September 30, 2014
	Fair Value (Level 3)			Valuation Techniques	Unobservable Inputs	Low		High		Weighted Average or Actual
	(U.S. dollars in thousands, except for correlation and commodity curve)
Net weather and energy related derivative liabilities	$	(1,094	)	Historical  Analysis and Simulation	Correlation	0		1		Actual
					Weather curve	$	400	$	2,500	Actual
					Commodity curve	$	28.50	$	122.20	Actual

There were no impairment losses on Level 3 securities recognized in earnings for the three and nine months ended September 30, 2014 or 2013.

20

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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.

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 months ended September 30, 2014 and 2013:

	Three Months Ended September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	9,515		$	648,642		$	10,992		$	669,149		$	(10,284	)
Total equity income and realized gains included in earnings	9			10,913			—			10,922			—
Total equity losses and losses included in earnings	(6		)	(12,698		)	—			(12,704		)	—
Total income included in other underwriting income (loss)	—			—			3,180			3,180			4,794
Total loss included in other underwriting income (loss)	—			—			(5,235		)	(5,235		)	(3,719		)
Change in unrealized gains included in other comprehensive (loss) income	245			—			—			245			—
Change in unrealized losses included in other comprehensive (loss) income	(104		)	—			—			(104		)	—
Purchases	842			26,190			1,501			28,533			(751		)
Issues	—			—			7,331			7,331			(10,917		)
Sales	(545		)	(14,369		)	—			(14,914		)	—
Settlements	—			—			(2,947		)	(2,947		)	4,961
Transfers into Level 3	2,198			—			—			2,198			—
Transfers out of Level 3	(4,961		)	—			—			(4,961		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Three Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,546		$	569,393		$	—		$	576,939		$	—
Total equity income and realized gains included in earnings	56			19,108			—			19,164			—
Total equity losses and losses included in earnings	(15		)	(5,864		)	—			(5,879		)	—
Total income included in other underwriting income (loss)	—			—			—			—			—
Total loss included in other underwriting income (loss)	—			—			—			—			—
Change in unrealized gains included in other comprehensive (loss) income	111			—			—			111			—
Change in unrealized losses included in other comprehensive (loss) income	(62		)	—			—			(62		)	—
Purchases	—			16,597			—			16,597			—
Sales	(1,879		)	(5,078		)	—			(6,957		)	—
Transfers in to Level 3	7,903			—			—			7,903			—
Transfers out of Level 3	(1,202		)	—			—			(1,202		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

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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)

4. Fair value measurement, cont'd.

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 nine months ended September 30, 2014 and 2013:

	Nine Months Ended September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,328		$	617,478		$	14,038		$	638,844		$	(19,569	)
Total equity income and realized gains included in earnings	62			46,385			—			46,447			—
Total equity losses and losses included in earnings	(32		)	(23,844		)	—			(23,876		)	—
Total income included in other underwriting income (loss)	—			—			18,396			18,396			24,842
Total loss included in other underwriting income (loss)	—			—			(23,845		)	(23,845		)	(20,672		)
Change in unrealized gains included in other comprehensive (loss) income	445			—			—			445			—
Change in unrealized losses included in other comprehensive (loss) income	(255		)	—			—			(255		)	—
Purchases	842			52,731			1,501			55,074			(751		)
Issues	—			—			10,912			10,912			(18,080		)
Sales	(1,585		)	(34,072		)	—			(35,657		)	—
Settlements	—			—			(6,180		)	(6,180		)	18,314
Transfers in to Level 3	7,201			—			—			7,201			—
Transfers out of Level 3	(6,813		)	—			—			(6,813		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Nine Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	8,497		$	517,546		$	882		$	526,925		$	(1,922	)
Total equity income and realized gains included in earnings	104			61,010			—			61,114			—
Total equity losses and losses included in earnings	(17		)	(17,927		)	—			(17,944		)	—
Total income included in other underwriting income (loss)	—			—			—			—			2,354
Total loss included in other underwriting income (loss)	—			—			(1,182		)	(1,182		)	—
Change in unrealized gains included in other comprehensive income (loss)	438			—			—			438			—
Change in unrealized losses included in other comprehensive income (loss)	(270		)	—			—			(270		)	—
Purchases	—			62,011			—			62,011			—
Issues	—			—			300			300			(432		)
Sales	(6,081		)	(28,484		)	—			(34,565		)	—
Transfers in to Level 3	11,550			—			—			11,550			—
Transfers out of Level 3	(1,763		)	—			—			(1,763		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

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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)

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 nine months ended September 30, 2014 and 2013:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Numerator:
Net income available to common and participating common shareholders	$	68,046		$	75,228		$	239,313		$	220,170
Less amount allocated to participating common shareholders(1)	(1,930		)	(1,997		)	(6,907		)	(4,742		)
Net income allocated to common shareholders	$	66,116		$	73,231		$	232,406		$	215,428
Denominator:
Weighted average shares - basic	43,464,790			43,099,841			43,332,461			42,719,837
Share equivalents:
Options	45,625			—			23,237			—
Restricted share units	—			298			94			594
Weighted average shares - diluted	43,510,415			43,100,139			43,355,792			42,720,431
Basic earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04
Diluted earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04

(1) Represents earnings attributable to holders of unvested restricted shares issued under the Company's equity compensation plan that are considered participating. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

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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)

5.     Earnings per share, cont'd.

Endurance Holdings declared a dividend of $0.484375 per Series A preferred share and $0.468750 per Series B preferred share on August 15, 2014 (2013 - Series A: $0.484375, Series B: $0.468750). The Series A and Series B preferred share dividends were paid on September 15, 2014 to shareholders of record on August 29, 2014. Endurance Holdings also declared a dividend of $0.34 per common share on August 15, 2014 (2013 - $0.32). The dividend was paid on September 30, 2014 to shareholders of record on September 15, 2014.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	1.453125	$	1.453125
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	1.406250	$	1.406250
Dividends declared per common share	$	0.34	$	0.32	$	1.02	$	0.96

6. Accumulated other comprehensive income

The following tables present the changes in accumulated other comprehensive income balances by component for the three months ended September 30, 2014 and 2013:

	For the Three Months Ended September 30, 2014
	Losses on  cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,810	)	$	106,989		$	30,859		$	136,038
Other comprehensive (loss) income before reclassifications	—			(25,100		)	(20,404		)	(45,504		)
Amounts reclassified from accumulated other comprehensive income (1)	22			(9,257		)	—			(9,235		)
Net current period other comprehensive (loss) income	22			(34,357		)	(20,404		)	(54,739		)
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

	For the Three Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains on available for sale securities		Foreign currency translation adjustments		Total
Beginning balance	$	(1,899	)	30,636		$	2,701	$	31,438
Other comprehensive (loss) income before reclassifications	—			22,358		8,918		31,276
Amounts reclassified from accumulated other comprehensive income (1)	22			6,721		—		6,743
Net current period other comprehensive (loss) income	22			29,079		8,918		38,019
Ending balance	$	(1,877	)	$	59,715	$	11,619	$	69,457

(1)All amounts are net of tax.

24

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 tables present the changes in accumulated other comprehensive income balances by component for the nine months ended September 30, 2014 and 2013:

	For the Nine Months Ended September 30, 2014
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,855	)	$	45,950		$	18,636		$	62,731
Other comprehensive (loss) income before reclassifications	—			41,895			(8,181		)	33,714
Amounts reclassified from accumulated other comprehensive income (1)	67			(15,213		)	—			(15,146		)
Net current period other comprehensive (loss) income	67			26,682			(8,181		)	18,568
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

	For the Nine Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,944	)	$	141,731		$	12,676		$	152,463
Other comprehensive (loss) income before reclassifications	—			(74,001		)	(1,057		)	(75,058		)
Amounts reclassified from accumulated other comprehensive income (1)	67			(8,015		)	—			(7,948		)
Net current period other comprehensive (loss) income	67			(82,016		)	(1,057		)	(83,006		)
Ending balance	$	(1,877	)	$	59,715		$	11,619		$	69,457

(1)All amounts are net of tax.

25

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 tables present the significant items reclassified out of accumulated other comprehensive income during the three months ended September 30, 2014 and 2013:

Three Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(9,208	)	Net realized and unrealized investment gains
	102			Net impairment losses recognized in earnings
	(9,106		)	Total before income taxes
	195			Income tax expense
	$	(8,911	)	Total net of income taxes
Three Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized losses on available for sale securities	$	6,999		Net realized and unrealized investment losses
	190			Net impairment losses recognized in earnings
	7,189			Total before income taxes
	(468		)	Income tax benefit
	$	6,721		Total net of income taxes

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)

6. Accumulated other comprehensive income, cont'd.

The following tables present the significant items reclassified out of accumulated other comprehensive income during the nine months ended September 30, 2014 and 2013:

Nine Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(15,539	)	Net realized and unrealized investment gains
	411			Net impairment losses recognized in earnings
	(15,128		)	Total before income taxes
	(85		)	Income tax benefit
	$	(15,213	)	Total net of income taxes
Nine Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(10,267	)	Net realized and unrealized investment gains
	1,575			Net impairment losses recognized in earnings
	(8,692		)	Total before income taxes
	677			Income tax expense
	$	(8,015	)	Total net of income taxes

27

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 regularly transacts in certain derivative-based weather risk management products primarily to address weather and energy risks on behalf of third parties. The 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 also 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 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 (losses), net foreign exchange losses and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive Income.

The Company’s derivatives are not designated as hedges under current accounting guidance.

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.

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. Generally, the Company’s current portfolio of energy and weather derivative contracts is of comparably short duration and such contracts are predominantly seasonal in nature.

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ENDURANCE SPECIALTY HOLDINGS LTD.

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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)

7. Derivatives, cont'd.

The fair values and the related notional values of derivatives at September 30, 2014 and December 31, 2013 are shown below.

	September 30, 2014				December 31, 2013
	Fair Value		Notional Principal Amount		Fair Value		Notional Principal Amount
Derivatives recorded in other assets
Foreign exchange forward contracts	$	1,128	$	40,923	$	251	$	19,269
Credit default swaps	11		1,785		—		—
Interest rate swaps	211		72,700		124		16,100
Interest rate swaptions	—		—		39		24,338
TBAs	131,316		127,255		93,820		93,840
Energy and weather contracts	14,822		79,846		14,038		53,986
Total recorded in other assets	$	147,488			$	108,272
Derivatives recorded in other liabilities
Foreign exchange forward contracts	$	312	$	23,641	$	172	$	15,861
Interest rate swaps	731		11,782		933		12,193
Interest rate swaptions	18		56,216		543		361,455
Interest rate futures	—		—		17		103,935
TBAs	78,727		76,000		28,218		28,000
Energy and weather contracts	15,916		115,574		19,569		66,113
Total recorded in other liabilities	$	95,704			$	49,452
Net derivative asset	$	51,784			$	58,820

29

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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)

7. Derivatives, cont'd.

At September 30, 2014, the Company’s derivative assets of $147.5 million (December 31, 2013 - $108.3 million) and liabilities of $95.7 million (December 31, 2013 - $49.4 million) are subject to master netting agreements, which provide for the ability to settle the derivative asset and liability with each counterparty on a net basis. Interest rate futures are not subject to a master netting agreement. At September 30, 2014 and December 31, 2013, none of the Company’s derivative instruments were recorded on a net basis in the Condensed Consolidated Balance Sheets.

The gains and losses on the Condensed Consolidated Statements of Income and Comprehensive Income for derivatives for the three and nine months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Total included in net foreign exchange losses from foreign exchange forward contracts	$	1,214		$	(123	)	$	815		$	207
Futures contracts	$	—		$	112		$	136		$	64
Credit default swaps	6			(68		)	20			49
Interest rate swaps	384			(67		)	(698		)	(228		)
Interest rate swaptions	(3		)	392			425			291
TBAs	193			(11		)	2,649			(476		)
Total included in net realized and unrealized investment gains (losses)	$	580		$	358		$	2,532		$	(300	)
Total included in other underwriting income (loss) from energy and weather contracts	$	1,784		$	—		$	1,486		$	1,172
Total gains from derivatives	$	3,578		$	235		$	4,833		$	1,079

8. Stock-based employee compensation and other stock plans

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

No options were granted, expired, vested or exercised during the quarters ended September 30, 2014 and 2013. For the quarter ended September 30, 2014, compensation costs recognized in earnings for all options totaled $0.6 million (2013 - $1.0 million). At September 30, 2014, compensation costs not yet recognized related to unvested stock options was $3.2 million (2013 - $6.7 million).

No options were granted or expired during the nine months ended September 30, 2014. During the nine months ended September 30, 2013, 800,000 options were granted with a weighted average grant date fair value of $10.2 million. The Company uses the Black-Scholes-Merton formula to estimate the value of stock options granted. No options expired during the nine months ended September 30, 2013. During the nine months ended September 30, 2014, 15,000 (2013 - 24,501) options were exercised. During the nine months ended September 30, 2014, 160,000 (2013 - 160,000) options vested. The total intrinsic value of options exercised during the nine months ended September 30, 2014 was $0.3 million (2013 - $0.5 million). The Company received proceeds of $0.5 million (2013 - $0.6 million) from the exercise of options during the nine months ended September 30, 2014. The Company issued new ordinary shares in connection with the exercise of the above options. For the nine months ended September 30, 2014, compensation costs recognized in earnings for all options totaled $2.5 million (2013 - $3.5 million).

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)

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

During the quarter ended September 30, 2014, the Company granted an aggregate of 39,080 (2013 – 8,453) restricted shares with weighted average grant date fair values of $2.1 million (2013 - $0.4 million). During the quarter ended September 30, 2014, the aggregate fair value of restricted shares and restricted share units that vested was $0.2 million (2013 - $0.1 million). For the quarter ended September 30, 2014, compensation costs recognized in earnings for all restricted shares and restricted share units were $5.7 million (2013 - $2.6 million). At September 30, 2014, compensation costs not yet recognized related to unvested restricted shares and restricted share units was $27.7 million (2013 - $31.6 million).

During the nine months ended September 30, 2014, the Company granted an aggregate of 472,497 (2013 – 1,079,108) restricted shares and restricted share units with weighted average grant date fair values of $24.8 million (2013 - $50.7 million). During the nine months ended September 30, 2014, the aggregate fair value of restricted shares and restricted share units that vested was $18.7 million (2013 - $17.0 million). For the nine months ended September 30, 2014, compensation costs recognized in earnings for all restricted shares and restricted share units were $21.5 million (2013 - $16.1 million).

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. For the quarter ended September 30, 2014, total expenses related to the Company’s Employee Share Purchase Plan were approximately $62,000 (2013- $42,000) and $172,000 (2013 - $124,000) for the nine months ended September 30, 2014.

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

Reinsurance segment lines of business

•Catastrophe

•Property

•Casualty

•Professional lines

•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.

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 a summary of segment revenues, results and reserves for losses and loss expenses for the three months ended September 30, 2014:

	Three Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	420,343		$	205,767		$	626,110
Ceded premiums written	(222,704		)	(13,300		)	(236,004		)
Net premiums written	197,639			192,467			390,106
Net premiums earned	253,583			261,312			514,895
Other underwriting income	—			2,123			2,123
	253,583			263,435			517,018
Expenses
Net losses and loss expenses	196,677			93,592			290,269
Acquisition expenses	20,170			73,222			93,392
General and administrative expenses	44,957			35,958			80,915
	261,804			202,772			464,576
Underwriting (loss) income	$	(8,221	)	$	60,663		$	52,442
Net loss ratio	77.5		%	35.8		%	56.4		%
Acquisition expense ratio	8.0		%	28.0		%	18.1		%
General and administrative expense ratio	17.7		%	13.8		%	15.7		%
Combined ratio	103.2		%	77.6		%	90.2		%
Reserve for losses and loss expenses	$	2,134,985		$	1,762,498		$	3,897,483

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 segment revenues, results and reserves for losses and loss expenses for the three months ended September 30, 2013:

	Three Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	344,819		$	199,544		$	544,363
Ceded premiums written	(120,481		)	(28,549		)	(149,030		)
Net premiums written	224,338			170,995			395,333
Net premiums earned	291,477			262,068			553,545
Other underwriting loss	—			(943		)	(943		)
	291,477			261,125			552,602
Expenses
Net losses and loss expenses	228,409			110,627			339,036
Acquisition expenses	18,440			60,335			78,775
General and administrative expenses	35,641			31,829			67,470
	282,490			202,791			485,281
Underwriting income	$	8,987		$	58,334		$	67,321
Net loss ratio	78.4		%	42.3		%	61.3		%
Acquisition expense ratio	6.3		%	23.0		%	14.2		%
General and administrative expense ratio	12.2		%	12.1		%	12.2		%
Combined ratio	96.9		%	77.4		%	87.7		%
Reserve for losses and loss expenses	$	2,146,136		$	1,905,966		$	4,052,102

The following table reconciles total segment results to income before income taxes for the three months ended September 30, 2014 and 2013:

	Three Months Ended September 30,
	2014			2013
Total underwriting income	$	52,442		$	67,321
Net investment income	25,357			38,097
Net foreign exchange losses	(783		)	(2,201		)
Net realized and unrealized investment gains (losses)	9,788			(6,640		)
Net impairment losses recognized in earnings	(102		)	(190		)
Amortization of intangibles	(1,623		)	(1,652		)
Interest expense	(13,127		)	(9,048		)
Income before income taxes	$	71,952		$	85,687

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 gross and net premiums written by line of business for the three months ended September 30, 2014 and 2013:

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	188,011	$	103,536	$	200,062	$	120,617
Casualty and other specialty	144,706		58,390		95,862		72,431
Professional lines	62,631		20,216		34,221		20,972
Property	24,995		15,497		14,674		10,318
Total Insurance	420,343		197,639		344,819		224,338
Reinsurance
Catastrophe	47,173		41,157		38,676		12,551
Property	73,807		73,807		91,653		90,528
Casualty	23,409		23,409		27,649		27,648
Professional lines	21,520		21,520		25,670		25,670
Specialty	39,858		32,574		15,896		14,598
Total Reinsurance	205,767		192,467		199,544		170,995
Total	$	626,110	$	390,106	$	544,363	$	395,333

The following table provides a summary of the segment revenues and results for the nine months ended September 30, 2014:

	Nine Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,394,145		$	1,078,905		$	2,473,050
Ceded premiums written	(674,441		)	(98,371		)	(772,812		)
Net premiums written	719,704			980,534			1,700,238
Net premiums earned	616,167			776,532			1,392,699
Other underwriting loss	—			(3,939		)	(3,939		)
	616,167			772,593			1,388,760
Expenses
Net losses and loss expenses	434,777			291,584			726,361
Acquisition expenses	47,559			196,591			244,150
General and administrative expenses	133,930			106,646			240,576
	616,266			594,821			1,211,087
Underwriting (loss) income	$	(99	)	$	177,772		$	177,673
Net loss ratio	70.6		%	37.6		%	52.2		%
Acquisition expense ratio	7.7		%	25.3		%	17.5		%
General and administrative expense ratio	21.7		%	13.7		%	17.3		%
Combined ratio	100.0		%	76.6		%	87.0		%

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 a summary of the segment revenues and results for the nine months ended September 30, 2013:

	Nine Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,274,703		$	1,019,732		$	2,294,435
Ceded premiums written	(454,169		)	(71,397		)	(525,566		)
Net premiums written	820,534			948,335			1,768,869
Net premiums earned	710,507			806,490			1,516,997
Other underwriting income	—			694			694
	710,507			807,184			1,517,691
Expenses
Net losses and loss expenses	543,717			373,347			917,064
Acquisition expenses	48,024			174,255			222,279
General and administrative expenses	114,792			100,515			215,307
	706,533			648,117			1,354,650
Underwriting income	$	3,974		$	159,067		$	163,041
Net loss ratio	76.4		%	46.3		%	60.4		%
Acquisition expense ratio	6.8		%	21.6		%	14.7		%
General and administrative expense ratio	16.2		%	12.5		%	14.2		%
Combined ratio	99.4		%	80.4		%	89.3		%

The following table reconciles total segment results to income before income taxes for the nine months ended September 30, 2014 and 2013, respectively:

	Nine Months Ended September 30,
	2014			2013
Total underwriting income	$	177,673		$	163,041
Net investment income	105,649			119,870
Net foreign exchange losses	(4,066		)	(8,496		)
Net realized and unrealized investment gains	18,071			9,967
Net impairment losses recognized in earnings	(411		)	(1,575		)
Amortization of intangibles	(4,863		)	(5,378		)
Interest expense	(31,910		)	(27,138		)
Income before income taxes	$	260,143		$	250,291

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)

9. Segment reporting, cont'd.

The following table provides gross and net premiums written by line of business for the nine months ended September 30, 2014 and 2013:

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	796,445	$	431,007	$	896,169	$	546,284
Casualty and other specialty	366,329		189,876		239,943		179,065
Professional lines	176,061		64,632		93,481		62,963
Property	55,310		34,189		45,110		32,222
Total Insurance	1,394,145		719,704		1,274,703		820,534
Reinsurance
Catastrophe	332,193		243,531		341,973		281,990
Property	283,107		283,015		288,448		283,455
Casualty	139,266		137,669		211,458		210,030
Professional lines	131,256		131,256		50,505		50,505
Specialty	193,083		185,063		127,348		122,355
Total Reinsurance	1,078,905		980,534		1,019,732		948,335
Total	$	2,473,050	$	1,700,238	$	2,294,435	$	1,768,869

10. Commitments and contingencies

Concentrations of credit risk. The Company’s reinsurance recoverables on paid and unpaid losses at September 30, 2014 and December 31, 2013 amounted to $731.9 million and $758.0 million, respectively. At September 30, 2014, 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. At September 30, 2014 and December 31, 2013, the Company held collateral of $87.6 million and $14.2 million, respectively, related to its ceded reinsurance agreements.

Major production sources. The following table shows the percentage of net premiums written generated through the Company’s largest brokers for the nine months ended September 30, 2014 and 2013, respectively:

Broker	2014		2013
Marsh & McLennan Companies, Inc.	20.9	%	15.0	%
Aon Benfield	15.4	%	18.5	%
Willis Companies	14.2	%	12.4	%
Total of largest brokers	50.5	%	45.9	%

Letters of credit. As of September 30, 2014, the Company had issued letters of credit of $202.9 million (December 31, 2013 – $260.3 million) under its credit facility in favor of certain ceding companies to collateralize obligations.

On January 17, 2014, the Company and certain designated subsidiaries of the Company entered into a $50.0 million revolving letter of credit reimbursement agreement (“LOC Agreement”) and cash collateral agreement with Australia and New Zealand Banking Group Limited. As of September 30, 2014, the Company had issued letters of credit of $1.4 million (December 31, 2013 - nil) under the LOC Agreement. For letters of credit issued under the LOC Agreement, the Company is required to pay a fee that is negotiated at the time of issuance of the letter of credit. Letters of credit issued under the LOC Agreement are required to be collateralized with cash or investments.

36

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.

Agreement with Equity Investors. On June 2, 2014, the Company entered into an agreement (the “Agreement”) terminating a prior equity commitment letter, dated January 28, 2014. In connection with such termination, the Company extended to CVC Capital Partners Advisory (U.S.), Inc. (“CVC”) and certain permitted assignees of CVC (collectively, the “Equity Option Investors”) an equity investment option in the event that, on or prior to December 31, 2014, the Company enters into a definitive written agreement to acquire, or acquires, 95% or more of the issued and outstanding Aspen Insurance Holdings Limited (“Aspen”) ordinary shares (the “Equity Investment Option”). Pursuant to the Equity Investment Option, if exercised, the Equity Option Investors would purchase $250.0 million of newly issued Company ordinary shares at a price of $50.03 per ordinary share, as adjusted for any stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The Equity Investment Option would be exercisable for the sixty (60) day period following the closing of the Company’s proposed acquisition of Aspen.

The Equity Option Investors would have certain preemptive rights with respect to future share issuances by the Company, and the purchased ordinary shares would be subject to lock-up restrictions that would limit the right of the Equity Option Investors to transfer the shares for 12 months following the exercise of the Equity Investment Option, subject to certain exceptions.

In addition to the purchase of Company ordinary shares, upon the closing of the Equity Investment Option, the Company would also grant the Equity Option Investors, on a pro rata basis, warrants to purchase a number of additional Company ordinary shares equal to 38.5% of the total number of Company ordinary shares acquired by the Equity Option Investors in connection with the Equity Investment Option, at an exercise price equal to $58.86 per share, as adjusted for any stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The warrants would have a term of 10 years from the date of the closing of the Equity Investment Option.

Upon the closing of the Equity Investment Option, CVC would have the right to nominate one individual to serve as a director of the Company, which individual shall qualify as an independent director for purposes of the NYSE rules and, except for two specified individuals, shall be subject to the approval of the Company’s board of directors (such approval not to be unreasonably withheld).

Pursuant to the Agreement, the Company also granted the Equity Option Investors a right of first refusal in the event the Company proposes to raise, on a private basis, equity capital through the sale of equity securities or securities convertible into or exchangeable or exercisable for equity securities of the Company or other equity-linked securities, the purpose of which is to partially fund the cash portion of an acquisition of Aspen completed, or for which a definitive written agreement is entered into, on or prior to December 31, 2014, or to refinance any debt incurred by the Company in connection with any such acquisition (only to the extent the proceeds of any such refinancing are specifically earmarked for such purposes). This right of first refusal is subject to certain exceptions, including with respect to equity purchased by the Company’s Chief Executive Officer of up to $25.0 million and by certain other specified equity investors of up to $100.0 million. The Company does not currently intend to raise any equity capital that would be subject to the right of first refusal, but reserves the right to do so.

The Company has also agreed that, in the event any person or entity (other than certain funds advised by CVC or their affiliates) enters into a definitive written agreement to acquire or acquires more than 40% of the capital stock of the Company on or prior to December 31, 2014, the Company will pay CVC an amount equal to $26.3 million upon the closing of such transaction, less the amount of any previously reimbursed expenses.

The Charman Agreement. John R. Charman, the Company’s Chief Executive Officer, and the Company entered into an agreement on June 2, 2014, pursuant to which Mr. Charman committed to purchase, subject to the receipt of any required regulatory approvals and the completion of the Company’s acquisition of Aspen, $25.0 million of newly issued Company common shares at a price per share equal to $53.51, as adjusted for any stock splits, stock dividends or combinations prior to the closing of such investment.

37

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 September 30, 2014 and December 31, 2013, the Company had pledged cash and cash equivalents and fixed maturity investments of $130.1 million and $146.1 million, respectively, in favor of certain ceding companies to collateralize obligations. As of September 30, 2014 and December 31, 2013, the Company had also pledged $237.9 million and $302.7 million of its cash and fixed maturity investments as required to meet collateral obligations for $202.9 million and $260.3 million, respectively, in letters of credit outstanding under its credit facility and LOC Agreement. In addition, as of September 30, 2014 and December 31, 2013, cash and fixed maturity investments with fair values of $273.1 million and $273.7 million were on deposit with U.S. state regulators, respectively.

The Company is subject to certain commitments with respect to other investments at September 30, 2014 and December 31, 2013. 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 September 30, 2014 are as follows:

Twelve months ended September 30,	Amount
2015	$	16,066
2016	13,527
2017	11,957
2018	11,465
2019	10,809
2020 and thereafter	36,377
	$	100,201

Total net lease expense under operating leases for the nine months ended September 30, 2014 was $11.6 million (2013 – $11.2 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.

11. Debt

On April 19, 2012, the Company and certain designated subsidiaries of the Company entered into a $700.0 million four-year revolving credit facility with JPMorgan Chase Bank, N.A. (“JPMorgan”) as administrative agent (“Credit Facility”). As of September 30, 2014, there were no borrowings under this facility and letters of credit outstanding under the Credit Facility were $202.9 million (December 31, 2013 – $260.3 million).

On June 25, 2014, the Company entered into the First Amendment (the “Amendment”) to the Credit Facility. The Amendment also amends the Security Agreement, dated as of April 19, 2012 (the “Security Agreement”), among the Company and various designated subsidiaries of the Company, Deutsche Bank Trust Company America, as collateral agent, and JPMorgan. The Amendment contained certain amendments to the Credit Facility and the Security Agreement applicable to the proposed acquisition of Aspen.

38

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)

11. Debt, cont'd.

On June 2, 2014, the Company entered into a commitment letter with Morgan Stanley Senior Funding, Inc. (the “Commitment Letter”). Pursuant to the Commitment Letter, Morgan Stanley Senior Funding, Inc., as lead arranger, committed to provide to the Company, subject to certain conditions, senior unsecured bank financing of up to $1.0 billion under an unsecured 364-day bridge facility (the “Bridge Facility”), which was to be used to finance a portion of the cash consideration to be paid in connection with the Company’s proposed acquisition of Aspen and related costs and expenses. Upon the termination by the Company of its offer to acquire Aspen on July 30, 2014, the Bridge Facility expired pursuant to its terms.

39

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 nine months ended September 30, 2014 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, 2013, 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, 2013 (the “2013 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 2013 Form 10-K and this Form 10-Q 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 specialty reinsurance.

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

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 2013 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 that report. 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.

40

Consolidated Results of Operations – For the Three Months Ended September 30, 2014 and 2013

Results of operations for the three months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended   September 30,
	2014			2013			Change (1)
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	626,110		$	544,363		15.0	%
Ceded premiums written	(236,004		)	(149,030		)	58.4	%
Net premiums written	390,106			395,333			(1.3	)%
Net premiums earned	514,895			553,545			(7.0	)%
Net investment income	25,357			38,097			(33.4	)%
Net realized and unrealized investment gains (losses)	9,788			(6,640		)	NM		(2)
Net impairment losses recognized in earnings	(102		)	(190		)	(46.3	)%
Other underwriting income (loss)	2,123			(943		)	NM		(2)
Total revenues	552,061			583,869			(5.4	)%
Expenses
Net losses and loss expenses	290,269			339,036			(14.4	)%
Acquisition expenses	93,392			78,775			18.6	%
General and administrative expenses	80,915			67,470			19.9	%
Amortization of intangibles	1,623			1,652			(1.8	)%
Net foreign exchange losses	783			2,201			(64.4	)%
Interest expense	13,127			9,048			45.1	%
Income tax (benefit) expense	(4,282		)	2,271			NM		(2)
Net income	$	76,234		$	83,416		(8.6	)%
Net loss ratio	56.4		%	61.3		%	(4.9	)
Acquisition expense ratio	18.1		%	14.2		%	3.9
General and administrative expense ratio	15.7		%	12.2		%	3.5
Combined ratio	90.2		%	87.7		%	2.5

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

(2) Not meaningful.

Premiums

Gross premiums written in the three months ended September 30, 2014 were $626.1 million, an increase of $81.7 million, or 15.0%, compared to the same period in 2013. Net premiums written in the three months ended September 30, 2014 were $390.1 million, a decrease of $5.2 million, or 1.3% compared to the same period in 2013. The increase in gross premiums written and the decrease in net premiums written was driven by the following factors:

• An increase in gross premiums written in the casualty and other specialty, property and professional lines of business in the Insurance segment, including marine and energy, excess casualty and various professional liability coverages, as a result of the expansion of the Company’s Insurance underwriting personnel over the last twelve months;

• An increase in gross premiums written in the catastrophe line of business in the Reinsurance segment due to increases in signed lines on renewed contracts and targeted new business, partially offset by non-renewal of contracts that no longer met profitability targets;

• An increase in gross and net premiums written in the specialty line of business in the Reinsurance segment as a result of new trade credit, surety and international agriculture business, partially offset by non-renewals and reductions in signed lines of aviation business;

• A decline in gross and net premiums written in the agriculture line of business in the Insurance segment due to declines in commodity prices on fall crops, partially offset by growth in policy counts;

41

• A decline in gross and net premiums written in the property line of business in the Reinsurance segment due to non-renewal of business that no longer met profitability targets and increased ceding company retentions, partially offset by new business; and

• An increase in ceded premiums written by the Company during the quarter ended September 30, 2014 as compared to the same period in 2013 in the Insurance segment. Ceded premiums written increased across all lines of business in the Insurance segment primarily due to a whole account quota share treaty covering the entire Insurance segment’s book of business for 2014 and additional quota share covers or increases in coverage in 2014 for the healthcare, casualty and other specialty and professional lines. In the Reinsurance segment, ceded premium written declined compared to 2013 as greater levels of current year retrocessional protection was purchased in the catastrophe line of business in the first half of 2014 compared to 2013, when a greater amount retrocessional protection was purchased in the third quarter.

Net premiums earned for the three months ended September 30, 2014 were $514.9 million, a decrease of $38.7 million, or 7.0%, from the third quarter of 2013 due to the increase in ceded premiums written. The agriculture line of business in the Insurance segment primarily contributed to this decline as a result of lower gross premiums written due to commodity price declines as well as from additional expense incurred from the purchase of excess of loss reinsurance on this line of business.

Net Investment Income

The Company’s net investment income of $25.4 million decreased by 33.4%, or $12.7 million, for the quarter ended September 30, 2014 as compared to the same period in 2013. This decrease resulted primarily from a decrease in mark to market gains on other investments during the quarter ended September 30, 2014 partially offset by increased returns on the Company’s available for sale investments from September 30, 2013 to September 30, 2014. Net investment income during the third quarter of 2014 included net mark to market losses of $1.8 million on other investments, comprised of alternative funds and specialty funds, as compared to mark to market gains of $13.2 million in the third quarter of 2013. Net investment income generated from the Company’s available for sale investments, which consist of fixed maturity investments, short-term investments and equity securities, increased by $2.1 million for the three months ended September 30, 2014 compared to the same period in 2013. Investment expenses, including investment management fees, for the three months ended September 30, 2014 were $3.4 million compared to $3.8 million for the same period in 2013.

The annualized net earned yield and total return of the investment portfolio for the three months ended September 30, 2014 and 2013 and the market yield and portfolio duration as of September 30, 2014 and 2013 were as follows:

	Three Months Ended   September 30,
	2014		2013
Annualized net earned yield (1)	1.59	%	2.43	%
Total return on investment portfolio (2)	(0.39	)%	1.32	%
Market yield (3)	1.91	%	1.85	%
Portfolio duration (4)	2.77 years		3.10 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 third quarter of 2014, the yield on the benchmark three year U.S. Treasury bond fluctuated within a 24 basis point range, with a high of 1.10% and a low of 0.86%. Trading activity in the Company’s portfolio during the third quarter included reductions in U.S. government and government agencies securities, corporate securities, foreign government bonds, residential mortgage-backed securities, equity securities, short-term investments, government and agency guaranteed corporate securities, commercial mortgage-backed securities, and municipal securities, and increased allocations to asset-backed securities, collateralized obligations and other investments. The duration of fixed income investments decreased to 2.77 years at September 30, 2014 from 3.11 years at December 31, 2013, primarily due to the decrease in longer term interest rates, which increased the estimated rate of prepayments underlying the Company’s mortgage-backed securities portfolio, causing a reduction of the average expected maturity of these securities.

42

Net Realized and Unrealized Investment Gains (Losses)

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 September 30, 2014 were $598.1 million compared to $986.6 million during the same period a year ago. Net realized investment gains increased during the three months ended September 30, 2014 compared to the same period in 2013.

Gross realized investment gains and losses and the change in the fair value of derivative financial instruments for the three months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended   September 30,
	2014			2013
	(U.S. dollars in thousands)
Gross realized gains on investment sales	$	10,683		$	6,180
Gross realized losses on investment sales	(1,475		)	(13,178		)
Change in fair value of derivative financial instruments	580			358
Net realized and unrealized investment gains (losses)	$	9,788		$	(6,640	)

Net impairment losses recognized in earnings for the three months ended September 30, 2014 and 2013 were $0.1 million and $0.2 million, respectively.

Net Foreign Exchange Gains and Losses

For the three months ended September 30, 2014, the Company remeasured its monetary assets and liabilities denominated in foreign currencies, which resulted in a net foreign exchange loss of $0.8 million compared to a net foreign exchange loss of $2.2 million for the same period of 2013. The current period net foreign exchange loss resulted from a decrease in the value of net asset positions in other key currencies as the U.S. dollar strengthened generally in the period. In the prior year, the net foreign exchange loss resulted from offsetting exposures across the Company as the U.S. dollar weakened against the British Sterling, the Euro and New Zealand dollar.

Net Losses and Loss Expenses

The Company’s net loss ratio for the three months ended September 30, 2014 decreased compared to the same period in 2013, principally as a result of lower incurred losses across all lines of business in the Insurance segment and the catastrophe, property, and casualty lines of business in the Reinsurance segment. Improvement in the net loss ratio was due to decreased catastrophe losses compared to the prior year, and the strategic re-underwriting and re-balancing of the Company’s underwriting portfolios, driven in part by the impact of underwriting teams added in the past year. This improvement was partially offset by increased expenditures for excess of loss reinsurance protection in our agriculture line of business in the Insurance segment without any expected recoveries, lower earned premiums and shifts in the Reinsurance segment business written to lines with higher associated initial loss ratios.

Favorable prior year loss reserve development was $60.5 million for the third quarter of 2014 compared to $48.1 million during the same period in 2013. In the third quarter of 2014, prior year loss reserves emerged favorably across all lines of business of the Insurance and Reinsurance segments. In the Insurance segment, favorable reserve development in the third quarter of 2014 was higher than the third quarter of 2013 primarily in the casualty and other specialty line of business due to lower than expected claims reported and favorable case reserve development. Favorable reserve development in the Reinsurance segment was slightly lower than in 2013, with increased favorable reserve development in the catastrophe, casualty, and specialty lines of business, offset by decreased favorable reserve development in the property and professional lines of business.

43

The following table shows the net losses after adjustment for reinstatement premiums and other loss sensitive accruals recorded by the Company in connection with current calendar year catastrophes for the three months ended September 30, 2014 and 2013.

Three Months Ended September 30, 2014				Three Months Ended September 30, 2013
Event Date	Event	Net Loss		Event Date	Event	Net Loss
(U.S. dollars in millions)
	Other loss events in 2014	$	12.2	July 2013	Hailstorms in Germany	$	24.3
					Other loss events in 2013	(6.2		)
		$	12.2			$	18.1

For the three months ended September 30, 2014, natural catastrophe related losses added 2.4 percentage points to the Company’s net loss ratio after adjustment for reinstatement premiums and other loss sensitive accruals compared to 3.7 percentage points in the same period in 2013.

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.

Acquisition Expenses

The acquisition expense ratio for the three months ended September 30, 2014 was higher than the same period in 2013 primarily due to growth in net earned premiums in the specialty and professional lines of business in the Reinsurance segment, which incur a higher than average net acquisition expense rate, and a decline in earned premiums in the agriculture insurance and catastrophe reinsurance lines of business, which incur a lower than average acquisition expense rate.

General and Administrative Expenses

The Company’s general and administrative expense ratio for the third quarter of 2014 increased by 3.5 percentage points compared to the same period in 2013 due to an increase in performance based annual incentive compensation costs associated with improved year to date corporate results, and $2.3 million related to the potential acquisition of Aspen Insurance Holdings Limited (“Aspen”). This increase was partially offset by increased ceding commission reimbursements as a result of additional purchases of reinsurance. At September 30, 2014, the Company had a total of 979 employees compared to 913 employees at September 30, 2013.

Income Tax (Benefit) Expense

The Company recorded a tax benefit for the quarter ended September 30, 2014 of $4.3 million compared to a tax expense of $2.3 million for the quarter ended September 30, 2013. The increase in tax benefit in 2014 resulted from losses recorded at the Company’s United States taxable jurisdictions, partially offset by an increase in the valuation allowance against the Company’s deferred tax assets.

Net Income

The Company generated net income of $76.2 million in the three months ended September 30, 2014 compared to net income of $83.4 million in the same period of 2013 primarily due to reductions in net premiums earned and higher acquisition and general administrative expenses in the current period compared to 2013, partially offset by a reduction in losses incurred during the current quarter and increased net realized and unrealized investment gains.

44

Consolidated Results of Operations – For the Nine Months EndedSeptember 30, 2014 and 2013

Results of operations for the nine months ended September 30, 2014 and 2013 were as follows:

	Nine Months Ended September 30,
	2014			2013			Change (1)
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	2,473,050		$	2,294,435		7.8	%
Ceded premiums written	(772,812		)	(525,566		)	47.0	%
Net premiums written	1,700,238			1,768,869			(3.9	)%
Net premiums earned	1,392,699			1,516,997			(8.2	)%
Net investment income	105,649			119,870			(11.9	)%
Net realized and unrealized investment gains	18,071			9,967			81.3	%
Net impairment losses recognized in earnings	(411		)	(1,575		)	(73.9	)%
Other underwriting (loss) income	(3,939		)	694			NM		(2)
Total revenues	1,512,069			1,645,953			(8.1	)%
Expenses
Losses and loss expenses	726,361			917,064			(20.8	)%
Acquisition expenses	244,150			222,279			9.8	%
General and administrative expenses	240,576			215,307			11.7	%
Amortization of intangibles	4,863			5,378			(9.6	)%
Net foreign exchange losses	4,066			8,496			(52.1	)%
Interest expense	31,910			27,138			17.6	%
Income tax (benefit) expense	(3,734		)	5,557			NM		(2)
Net income	$	263,877		$	244,734		7.8	%
Net loss ratio	52.2		%	60.4		%	(8.2	)
Acquisition expense ratio	17.5		%	14.7		%	2.8
General and administrative expense ratio	17.3		%	14.2		%	3.1
Combined ratio	87.0		%	89.3		%	(2.3	)

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

(2) Not meaningful.

Premiums

Gross premiums written in the nine months ended September 30, 2014 were $2,473.1 million, an increase of $178.6 million, or 7.8%, compared to the same period in 2013. Net premiums written in the nine months ended September 30, 2014 were $1,700.2 million, a decrease of $68.6 million, or 3.9%, compared to the same period in 2013. The increase in gross premiums written and the decrease in net premiums written was driven by the following factors:

• An increase in gross premiums written in the casualty and other specialty and professional lines of business in the Insurance segment, including marine and energy, excess casualty and various professional liability coverages, as a result of the expansion of the Company’s Insurance underwriting personnel over the last twelve months, partially offset by reductions in casualty business due to non-renewal of policies that no longer met profitability targets;

• An increase in gross premiums written in the specialty line of business in the Reinsurance segment as a result of new trade credit, surety and international agriculture business written, partially offset by non-renewal of business that no longer met profitability targets and increased ceding company retentions in the aviation and space business;

• An increase in gross premiums written in the professional line of business in the Reinsurance segment, due primarily to new business generated by underwriting teams that joined the Company in late 2013 and an extension of a significant contract, partially offset by non-renewal of contracts that no longer met profitability targets;

45

• A decline in gross premiums written in the casualty line of business in the Reinsurance segment due to non-renewal of business that no longer met profitability targets and reduced participation on certain contracts where pricing was inadequate, partially offset by new business;

• A decline in gross premiums written in the agriculture line of business in the Insurance segment due to declines in commodity prices on spring and fall crops, partially offset by growth in policy counts; and

• An increase in ceded premiums written by the Company for the nine months ended September 30, 2014 as compared to the same period in 2013 across both the Insurance and Reinsurance segments. Ceded premiums written increased across all lines of business in the Insurance segment primarily due to a new whole account quota share treaty covering the entire Insurance segment’s book of business for 2014. In addition, the Company purchased excess of loss reinsurance covering the Insurance segment’s agriculture line of business at a lower attachment point compared to 2013, resulting in increased ceded premiums written. In the Reinsurance segment, ceded premium written increased as the Company purchased increased levels of retrocessional protection within the catastrophe and specialty lines of business, including an aggregate all perils excess of loss treaty and increased proportional retrocession.

Net premiums earned for the nine months ended September 30, 2014 were $1,392.7 million, a decrease of $124.3 million, or 8.2%, from the nine months ended September 30, 2013 principally due to the increase in ceded premiums written.

Net Investment Income

The Company’s net investment income of $105.6 million decreased by 11.9%, or $14.2 million, for the nine months ended September 30, 2014 as compared to the same period in 2013. Net investment income during the first nine months of 2014 included net mark to market gains of $22.5 million on other investments, comprised of alternative funds and specialty funds, as compared to mark to market gains of $43.1 million in the first nine months of 2013. Net investment income generated from the Company’s available for sale investments, which consist of fixed maturity investments, short-term investments and equity securities, increased by $5.9 million for the nine months ended September 30, 2014 compared to the same period in 2013. Investment expenses, including investment management fees, for the nine months ended September 30, 2014 were $10.7 million compared to $11.3 million for the same period in 2013.

The annualized net earned yield and total return on the investment portfolio for the nine months ended September 30, 2014 and 2013 and the market yield and portfolio duration as of September 30, 2014 and 2013 were as follows:

	Nine Months Ended September 30,
	2014		2013
Annualized net earned yield(1)	2.21	%	2.52	%
Total return on investment portfolio(2)	2.38	%	0.68	%
Market yield(3)	1.91	%	1.85	%
Portfolio duration(4)	2.77 years		3.10 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 nine months ended September 30, 2014, the yield on the benchmark three year U.S. Treasury bond fluctuated within a 48 basis point range, with a high of 1.10% and a low of 0.62%. Trading activity in the Company’s portfolio for the nine months ended September 30, 2014 included reductions in U.S. government and government agencies securities and short-term investments, and increased allocations to collateralized obligations, corporate securities, asset-backed securities, foreign government bonds, equity securities, other investments, residential mortgage-backed securities, government and agency guaranteed corporate securities, commercial mortgage-backed securities and municipal securities.

46

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 nine months ended September 30, 2014 were $2,658.9 million compared to $2,382.1 million during the same period a year ago. Net realized investment gains increased during the nine months ended September 30, 2014 compared to the same period in 2013.

Gross realized investment gains and losses and the change in the fair value of derivative financial instruments for the nine months ended September 30, 2014 and 2013 were as follows:

	Nine Months Ended September 30,
	2014			2013
	(U.S. dollars in thousands)
Gross realized gains on investment sales	$	28,317		$	30,191
Gross realized losses on investment sales	(12,778		)	(19,924		)
Change in fair value of derivative financial instruments	2,532			(300		)
Net realized and unrealized investment gains	$	18,071		$	9,967

Net impairment losses recognized in earnings for the nine months ended September 30, 2014 and 2013 were $0.4 million and $1.6 million, respectively.

Net Foreign Exchange Losses

For the nine months ended September 30, 2014, the Company remeasured its monetary assets and liabilities denominated in foreign currencies, which resulted in a net foreign exchange loss of $4.1 million compared to a net foreign exchange loss of $8.5 million for the same period in 2013. The current period net foreign exchange loss resulted from offsetting exposures across the Company as the U.S. dollar weakened generally in the first half before strengthening against the major currencies in the third quarter. In the prior year, the net foreign exchange loss resulted from offsetting exposures across the Company as the U.S. dollar strengthened against the Japanese Yen and Australian dollar in the period.

Net Losses and Loss Expenses

The Company’s net loss ratio for the nine months ended September 30, 2014 decreased compared to the same period in 2013, principally as a result of lower incurred losses in the agriculture, casualty and other specialty and professional lines of business in the Insurance segment and the catastrophe, property and casualty lines of business in the Reinsurance segment. Improvement in the net loss ratio was due to a decrease in catastrophe losses compared to the prior year, and the strategic re-underwriting and re-balancing of the Company’s underwriting portfolios, driven in part by the impact of underwriting teams added during the past year. This improvement was partially offset by increased expenditures for excess of loss reinsurance protection in the agriculture line of business in the Insurance segment without any expected recoveries and lower earned premiums.

Favorable prior year loss reserve development was $165.0 million for the nine months ended September 30, 2014 as compared to $161.5 million for the same period in 2013. In the nine months ended September 30, 2014 and 2013, prior year loss reserves emerged favorably across all lines of the Insurance and Reinsurance segments. Favorable reserve development in the nine months ended September 30, 2014 was higher than the nine months ended September 30, 2013 in the Insurance segment due primarily to lower than expected reported losses in the casualty and other specialty and professional lines of business. Favorable reserve development in the nine months ended September 30, 2014 was lower than the nine months ended September 30, 2013 in the Reinsurance segment in the catastrophe line of business as the nine months ended September 30, 2013 included significant reductions in reserve estimates related to the Thailand flood losses of 2011 and Superstorm Sandy losses in 2012.

47

The following table shows the net losses after adjustment for reinstatement premiums and other loss sensitive accruals recorded by the Company in connection with current calendar year catastrophes for the nine months ended September 30, 2014 and 2013.

Nine Months Ended September 30, 2014				Nine Months Ended September 30, 2013
Event Date	Event	Net Loss		Event Date	Event	Net Loss
(U.S. dollars in millions)
February 2014	Windstorm in Japan	$	5.6	May 2013	Windstorms in the United States	$	10.7
April 2014	Windstorms in the United States	6.8		June 2013	Floods in Canada	10.8
May 2014	Windstorms in the United States	2.5		June 2013	Floods in Europe	19.7
June 2014	Windstorms in the United States	5.2		July 2013	Hailstorms in Germany	24.3
June 2014	Windstorm Ela	18.5
	Other loss events in 2014	2.2
		$	40.8			$	65.5

For the nine months ended September 30, 2014, catastrophe related losses added 3.1 percentage points to the Company’s net loss ratio after adjustment for reinstatement premiums and other loss sensitive accruals compared to 4.6 percentage points in the same period in 2013.

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 nine months ended September 30, 2014 was higher than the same period in 2013 primarily due to growth in net premiums earned in the specialty and professional lines of business in the Reinsurance segment, which incur a higher than average net acquisition expense rate, and a decline in net premiums earned in the agriculture line of business in the Insurance segment and the catastrophe line of business in the Reinsurance segment, which incur lower than average acquisition expenses.

General and Administrative Expenses

The Company’s general and administrative expense ratio for the nine months ended September 30, 2014 increased by 3.1 percentage points compared to the same period in 2013 due to $15.3 million of expenses related to the potential acquisition of Aspen and an increase in performance based annual incentive compensation expenses associated with improved year to date corporate results. This increase was partially offset by increased ceding commission reimbursements as a result of additional purchases of reinsurance during the current year.

Income Tax (Benefit) Expense

The Company recorded a tax benefit for the nine months ended September 30, 2014 of $3.7 million compared to a tax expense of $5.6 million for the same period in 2013. The increase in tax benefit in 2014 resulted from losses recorded at the Company’s United States taxable jurisdictions.

Net Income

The Company generated net income of $263.9 million for the nine months ended September 30, 2014 compared to net income of $244.7 million in the same period of 2013 primarily due to a reduction in losses incurred, which was partially offset by reduced net premiums earned, reduced investment income, and higher acquisition and general and administrative expenses.

48

Reserve for Losses and Loss Expenses

As of September 30, 2014, the Company had accrued losses and loss expense reserves of $3.9 billion (December 31, 2013 - $4.0 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 nine months ended September 30, 2014 and 2013, the Company’s net paid losses and loss expenses were $778.3 million and $925.9 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 2013 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 2013 Form 10-K.

49

Losses and loss expenses for the three and nine months ended September 30, 2014 are summarized as follows:

	Incurred related to:
Three Months Ended September 30, 2014	Current year		Prior years			Total incurred losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	159,824	$	(1,260	)	$	158,564
Casualty and other specialty	40,271		(15,340		)	24,931
Professional lines	15,375		(866		)	14,509
Property	1,518		(2,845		)	(1,327		)
Total Insurance	216,988		(20,311		)	196,677
Reinsurance:
Catastrophe	17,025		(16,012		)	1,013
Property	33,054		(9,043		)	24,011
Casualty	29,034		(5,269		)	23,765
Professional lines	22,959		(3,162		)	19,797
Specialty	31,678		(6,672		)	25,006
Total Reinsurance	133,750		(40,158		)	93,592
Totals	$	350,738	$	(60,469	)	$	290,269
	Incurred related to:
Nine Months Ended September 30, 2014	Current year		Prior years			Total incurred losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	324,053	$	(5,588	)	$	318,465
Casualty and other specialty	104,023		(33,406		)	70,617
Professional lines	49,919		(5,985		)	43,934
Property	10,789		(9,028		)	1,761
Total Insurance	488,784		(54,007		)	434,777
Reinsurance:
Catastrophe	56,453		(31,486		)	24,967
Property	121,254		(33,302		)	87,952
Casualty	86,158		(10,841		)	75,317
Professional lines	63,889		(7,742		)	56,147
Specialty	74,805		(27,604		)	47,201
Total Reinsurance	402,559		(110,975		)	291,584
Totals	$	891,343	$	(164,982	)	$	726,361

Losses and loss expenses for the three and nine months ended September 30, 2014 included $60.5 million and $165.0 million in favorable development of reserves relating to prior accident years, respectively. The favorable loss reserve development experienced during the three and nine months ended September 30, 2014 benefited the Company’s reported net loss ratios by approximately 11.7 and 11.8 percentage points, respectively. This net reduction in estimated losses for prior accident years reflects lower than expected claims emergence for the three and nine months ended September 30, 2014 in all lines of business within the Insurance and Reinsurance segments.

For the three and nine months ended September 30, 2014, the Company did not materially alter 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.

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

	Incurred related to:
Three Months Ended September 30, 2013	Current year		Prior years			Total incurred losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	177,920	$	(616	)	$	177,304
Casualty and other specialty	38,669		(4,263		)	34,406
Professional lines	15,642		(427		)	15,215
Property	2,388		(904		)	1,484
Total Insurance	234,619		(6,210		)	228,409
Reinsurance:
Catastrophe	26,120		(9,234		)	16,886
Property	48,986		(21,107		)	27,879
Casualty	47,208		(1,640		)	45,568
Professional lines	11,416		(4,558		)	6,858
Specialty	18,747		(5,311		)	13,436
Total Reinsurance	152,477		(41,850		)	110,627
Totals	$	387,096	$	(48,060	)	$	339,036
	Incurred related to:
Nine Months Ended September 30, 2013	Current year		Prior years			Total incurred losses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	386,953	$	(5,582	)	$	381,371
Casualty and other specialty	119,371		(14,181		)	105,190
Professional lines	57,074		1,912			58,986
Property	9,449		(11,279		)	(1,830		)
Total Insurance	572,847		(29,130		)	543,717
Reinsurance:
Catastrophe	122,343		(47,584		)	74,759
Property	161,637		(46,177		)	115,460
Casualty	131,623		(10,780		)	120,843
Professional lines	30,282		(11,212		)	19,070
Specialty	59,865		(16,650		)	43,215
Total Reinsurance	505,750		(132,403		)	373,347
Totals	$	1,078,597	$	(161,533	)	$	917,064

Losses and loss expenses for the three and nine months ended September 30, 2013 included $48.1 million and $161.5 million in favorable development of reserves relating to prior accident years, respectively. The favorable loss reserve development experienced during the three and nine months ended September 30, 2013 benefited the Company’s reported net loss ratio by approximately 8.7 and 10.6 percentage points, respectively. This net reduction in estimated losses for prior accident years reflects lower than expected claims emergence for the nine months ended September 30, 2013 in the agriculture, casualty and other specialty and property lines of business in the Insurance segment, and in all lines of business within the Reinsurance segment.

For the three and nine months ended September 30, 2013, 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.

51

Insurance

Agriculture. For the three and nine months ended September 30, 2014 and 2013, the Company recorded slightly favorable loss emergence due to lower than anticipated agriculture claims settlements for the 2013 crop year.

Casualty and other specialty. For the three and nine months ended September 30, 2014, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims activity within the Bermuda based excess casualty businesses and a reduction in accident year 2009 and prior IBNR for the Bermuda based healthcare liability business due to case incurred loss activity and open claim counts being less than expected. For the three and nine months ended September 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 and the Bermuda based excess casualty businesses. This favorable loss emergence was partially offset by adverse development within the U.S. based casualty business.

Professional lines. For the three and nine months ended September 30, 2014, the Company recorded modest favorable loss emergence within this line of business, primarily due to lower than expected reported claims activity. For the three and nine months ended September 30, 2013, the Company recorded unfavorable loss emergence within this line of business, primarily due to higher than expected reported claims activity in the U.S. based environmental and miscellaneous errors and omissions businesses.

Property. For the three and nine months ended September 30, 2014 and 2013, the favorable loss emergence within the property line of business was primarily due to lower than expected reported claims emergence.

Reinsurance

Catastrophe. For the nine months ended September 30, 2014, the Company recorded significant favorable loss emergence within this line of business primarily due to lower than expected claims activity and a reduction in IBNR for worker's compensation catastrophe business for accident years 2005 to 2011. For the nine months ended September 30, 2013, the Company recorded significant favorable loss emergence within this line of business primarily due to lower than expected claims activity, primarily related to the Thailand floods of 2011 and Superstorm Sandy in 2012.

Property. For the three and nine months ended September 30, 2014, the Company recorded favorable loss emergence in the property line of business primarily due to lower than expected claims activity within the U.S. and Singapore based businesses. For the three and nine months ended September 30, 2013, the Company recorded favorable loss emergence in the property line of business due to lower than expected claims activity, primarily related to the Thailand floods of 2011 and Superstorm Sandy in 2012.

Casualty. For the three and nine months ended September 30, 2014 and 2013, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims emergence.

Professional lines. For the three and nine months ended September 30, 2014 and 2013, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims emergence.

Specialty. For the three and nine months ended September 30, 2014 and 2013, the Company recorded favorable loss emergence within this line of business primarily due to lower than expected claims emergence.

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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 September 30, 2014:

	Case Reserves		IBNR Reserves		Reserve for losses and loss expenses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	272,485	$	35,509	$	307,994
Casualty and other specialty	358,426		940,019		1,298,445
Professional lines	110,988		389,469		500,457
Property	18,046		10,043		28,089
Total Insurance	759,945		1,375,040		2,134,985
Reinsurance:
Catastrophe	139,400		73,601		213,001
Property	173,326		99,095		272,421
Casualty	246,483		543,230		789,713
Professional lines	58,261		191,575		249,836
Specialty	97,691		139,836		237,527
Total Reinsurance	715,161		1,047,337		1,762,498
Totals	$	1,475,106	$	2,422,377	$	3,897,483

The total reserves for losses and loss expenses recorded on the Company’s balance sheet were comprised of the following at December 31, 2013:

	Case Reserves		IBNR Reserves		Reserve for losses and loss expenses
	(U.S. dollars in thousands)
Insurance:
Agriculture	$	257,939	$	84,429	$	342,368
Casualty and other specialty	316,170		960,130		1,276,300
Professional lines	110,880		390,875		501,755
Property	23,410		15,057		38,467
Total Insurance	708,399		1,450,491		2,158,890
Reinsurance:
Catastrophe	167,152		98,474		265,626
Property	196,715		127,083		323,798
Casualty	239,385		529,682		769,067
Professional lines	65,353		149,882		215,235
Specialty	101,716		167,927		269,643
Total Reinsurance	770,321		1,073,048		1,843,369
Totals	$	1,478,720	$	2,523,539	$	4,002,259

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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 nine months ended September 30, 2014 and 2013.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	420,343		$	344,819		$	1,394,145		$	1,274,703
Ceded premiums written	(222,704		)	(120,481		)	(674,441		)	(454,169		)
Net premiums written	197,639			224,338			719,704			820,534
Net premiums earned	253,583			291,477			616,167			710,507
Expenses
Losses and loss expenses	196,677			228,409			434,777			543,717
Acquisition expenses	20,170			18,440			47,559			48,024
General and administrative expenses	44,957			35,641			133,930			114,792
	261,804			282,490			616,266			706,533
Underwriting (loss) income	$	(8,221	)	$	8,987		$	(99	)	$	3,974
Net loss ratio	77.5		%	78.4		%	70.6		%	76.4		%
Acquisition expense ratio	8.0		%	6.3		%	7.7		%	6.8		%
General and administrative expense ratio	17.7		%	12.2		%	21.7		%	16.2		%
Combined ratio	103.2		%	96.9		%	100.0		%	99.4		%

Premiums. Gross premiums written for the three months ended September 30, 2014 in the Insurance segment increased by 21.9% over the same period in 2013. Gross premiums written for the nine months ended September 30, 2014 in the Insurance segment increased by 9.4% over the same period in 2013. Gross and net premiums written for each line of business in the Insurance segment were as follows:

	Three Months Ended September 30,
	2014				2013
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Agriculture	$	188,011	$	103,536	$	200,062	$	120,617
Casualty and other specialty	144,706		58,390		95,862		72,431
Professional lines	62,631		20,216		34,221		20,972
Property	24,995		15,497		14,674		10,318
Total	$	420,343	$	197,639	$	344,819	$	224,338

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	Nine Months Ended September 30,
	2014				2013
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Agriculture	$	796,445	$	431,007	$	896,169	$	546,284
Casualty and other specialty	366,329		189,876		239,943		179,065
Professional lines	176,061		64,632		93,481		62,963
Property	55,310		34,189		45,110		32,222
Total	$	1,394,145	$	719,704	$	1,274,703	$	820,534

The Insurance segment’s gross premiums written increased while the net premiums written declined for the three and nine months ended September 30, 2014 compared to the same periods in 2013 due to the following factors:

• An increase in gross premiums written in the casualty and other specialty and professional lines of business, including marine and energy, excess casualty and various professional liability coverages, as a result of the expansion of the Company’s Insurance underwriting personnel over the last twelve months. Increases were partially offset by reductions in casualty business due to non-renewal of policies as a result of the continued re-underwriting and re-balancing of the portfolio;

• An increase in gross premiums written in the property line of business, due primarily to new business generated by a new underwriting team in the Company's U.K. subsidiary;

• A decline in gross premiums written in the agriculture line of business due to declines in commodity prices on spring and fall crops, partially offset by growth in policy counts; and

• An increase in ceded premiums written by the Company during the quarter and nine months ended September 30, 2014 as compared to the same period in 2013. Ceded premiums written increased across all lines of business primarily due to an increase in the whole account quota share treaty covering the entire Insurance segment’s book of business for 2014 combined with additional quota share covers or increases in coverage in 2014 compared to 2013. In addition, the Company purchased an excess of loss treaty covering the agriculture line of business at a lower attachment point compared to 2013, resulting in increased ceded premiums written.

Net premiums earned by the Company in the Insurance segment decreased in the three and nine months ended September 30, 2014 compared to the same periods in 2013. The agriculture line of business primarily contributed to this decline as a result of lower gross premiums written due to commodity price declines as well as from additional expense incurred from the purchase of excess of loss reinsurance on this line of business.

Losses and Loss Expenses. The net loss ratio in the Company’s Insurance segment decreased by 0.9 percentage points for the three month period ended September 30, 2014 compared to the same period in 2013 and decreased by 5.8 percentage points for the nine months ended September 30, 2014 compared to the same period in 2013. During the three and nine months ended September 30, 2014, the Company’s previously estimated loss and loss expense reserve for the Insurance segment for prior accident years was reduced by $20.3 million and $54.0 million, respectively, which decreased the net loss ratio by 8.0 and 8.8 percentage points, respectively, as compared to reductions of $6.2 million and $29.1 million, which decreased the net loss ratio by 2.1 and 4.1 percentage points for the three and nine months ended September 30, 2013, respectively. Higher levels of favorable loss development in the third quarter and first nine months of 2014 compared to 2013 was experienced primarily in the casualty and other specialty and professional lines of business following lower than expected claims activity than in 2013.

The current accident year loss ratio increased by 5.0 percentage points and decreased 1.1 percentage points for the three and nine months ended September 30, 2014, respectively, compared to the same periods in 2013. The increase in the current accident year loss ratio for the third quarter of 2014 compared to 2013 resulted from increased expenditures for excess of loss reinsurance protection in the agriculture line of business without any expected recoveries as of September 30, 2014, which was partially offset by lower losses in the other insurance lines of business. The current accident year loss ratio improved for year to date 2014 versus 2013 due primarily to lower losses incurred in the casualty and other specialty line of business driven by the strategic re-underwriting and re-balancing of the portfolio.

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Acquisition Expenses. The acquisition expense ratios in the Insurance segment in the third quarter and nine months ended September 30, 2014 increased compared to the same periods in 2013 primarily due to the decrease in net earned premiums in the agriculture line of business, which incurs a lower than average net acquisition expense rate.

General and Administrative Expenses. The increase in general and administrative expense ratios in the Insurance segment in the third quarter and nine months ended September 30, 2014 compared to the same periods in 2013 was due to an increase in annual incentive compensation expenses associated with improved year to date corporate results and increased corporate expenses related to the potential acquisition of Aspen on a lower earned premium base. This increase was partially offset by increased ceding commissions received as a result of additional purchases of reinsurance during the current quarter and year-to-date.

Reinsurance

The following table summarizes the underwriting results and associated ratios for the Company’s Reinsurance business segment for the three and nine months ended September 30, 2014 and 2013.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(U.S. dollars in thousands, except for ratios)
Revenues
Gross premiums written	$	205,767		$	199,544		$	1,078,905		$	1,019,732
Ceded premiums written	(13,300		)	(28,549		)	(98,371		)	(71,397		)
Net premiums written	192,467			170,995			980,534			948,335
Net premiums earned	261,312			262,068			776,532			806,490
Other underwriting income (loss)	2,123			(943		)	(3,939		)	694
	263,435			261,125			772,593			807,184
Expenses
Losses and loss expenses	93,592			110,627			291,584			373,347
Acquisition expenses	73,222			60,335			196,591			174,255
General and administrative expenses	35,958			31,829			106,646			100,515
	202,772			202,791			594,821			648,117
Underwriting income	$	60,663		$	58,334		$	177,772		$	159,067
Net loss ratio	35.8		%	42.3		%	37.6		%	46.3		%
Acquisition expense ratio	28.0		%	23.0		%	25.3		%	21.6		%
General and administrative expense ratio	13.8		%	12.1		%	13.7		%	12.5		%
Combined ratio	77.6		%	77.4		%	76.6		%	80.4		%

Premiums. In the third quarter of 2014, net premiums written in the Reinsurance segment increased by 12.6% over the same period of 2013. In the nine months ended September 30, 2014, net premiums written in the Reinsurance segment increased by 3.4% over the same period in 2013. Gross and net premiums written for each line of business in the Reinsurance segment for the three and nine months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended September 30,
	2014				2013
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Catastrophe	$	47,173	$	41,157	$	38,676	$	12,551
Property	73,807		73,807		91,653		90,528
Casualty	23,409		23,409		27,649		27,648
Professional lines	21,520		21,520		25,670		25,670
Specialty	39,858		32,574		15,896		14,598
Total	$	205,767	$	192,467	$	199,544	$	170,995

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	Nine Months Ended September 30,
	2014				2013
	Gross Premiums Written		Net Premiums Written		Gross Premiums Written		Net Premiums Written
	(U.S. dollars in thousands)
Catastrophe	$	332,193	$	243,531	$	341,973	$	281,990
Property	283,107		283,015		288,448		283,455
Casualty	139,266		137,669		211,458		210,030
Professional lines	131,256		131,256		50,505		50,505
Specialty	193,083		185,063		127,348		122,355
Total	$	1,078,905	$	980,534	$	1,019,732	$	948,335

The movements in gross and ceded premiums written in the Reinsurance segment for the third quarter and nine months ended September 30, 2014 compared to the same periods in 2013 were primarily due to the following factors:

• An increase in gross and net premiums written in the professional line of business for the nine months ended September 30, 2014, due primarily to new business generated by new underwriting teams that joined the Company in late 2013 and an extension of a significant contract, partially offset by non-renewal of contracts that no longer met profitability targets;

• An increase in gross and net premiums written in the specialty line of business as a result of new trade credit, surety and international agriculture business written, partially offset by non-renewals and reductions in signed lines of aviation business;

• A decline in gross and net premiums written in the property line of business due to non-renewal of business that no longer met profitability targets and increased ceding company retentions, partially offset by new business;

• A decline in gross and net premiums written in the casualty line of business due to to non-renewal of policies from continued restructuring and balancing to meet profitability targets, and reduced participation on certain contracts where pricing declined, partially offset by new business;

• An increase in gross and net premiums written in the catastrophe line of business for the third quarter due to increases in signed lines on renewed contracts and new business written, while for the nine months gross and net premiums declined from non-renewals due to rates and decreased participation; and

• An increase in ceded premiums written by the Company in the first nine months of the year as compared to the same period in 2013. Ceded premium written increased as the Company purchased increased levels of protection within the catastrophe line of business, including an aggregate all perils excess of loss treaty and additional proportional retrocession on both the catastrophe and specialty lines.

Net premiums earned by the Company in the Reinsurance segment for the three and nine months ended September 30, 2014 decreased compared to the same period in 2013 due to the increase in ceded premiums written.

Losses and Loss Expenses. The net loss ratios in the Company’s Reinsurance segment for the three and nine months ended September 30, 2014 decreased compared to the same periods in 2013 principally as a result of lower incurred losses in 2014 compared to 2013. Improvement in the net loss ratios was due to a decrease in catastrophe losses compared to the same periods in the prior year, and the strategic re-underwriting and re-balancing of the Company’s underwriting portfolios, driven in part by the impact of underwriting teams added during the past year. This improvement was partially offset by decreased favorable prior year loss reserve development for the three and nine months ended September 30, 2014 compared to the same periods in 2013.

The Company recorded catastrophe losses, net of reinstatement premiums and other loss sensitive accruals, of $12.2 million and $40.8 million in the quarter and nine months ended September 30, 2014. The net losses from catastrophes added 4.7 and 5.6 percentage points to the Reinsurance segment’s net loss ratios for the third quarter and nine months ended September 30, 2014, respectively. During the third quarter and nine months ended September 30, 2013, the Company incurred catastrophe losses of $18.1 million and $65.5 million. The net losses from catastrophes added 8.0 and 9.0 percentage points to the Reinsurance segment’s net loss ratios for the third quarter and nine months ended September 30, 2013, respectively.

The Company recorded $40.2 million and $111.0 million of favorable prior year loss reserve development in the three and nine months ended September 30, 2014 compared to $41.9 million and $132.4 million in the three and nine months ended September 30, 2013. During the three and nine months ended September 30, 2014, the majority of the favorable

57

loss reserve development in the catastrophe, property, and specialty lines of business. The same periods in 2013 experienced favorable loss reserve development emanating from the property and catastrophe lines of business, driven by reductions in the Thailand flood losses of 2011 and Superstorm Sandy losses in 2012, and from lower than expected attritional losses.

The following table shows the net losses after adjustment for reinstatement premiums and other loss sensitive accruals recorded by the Company in the Reinsurance segment in connection with current calendar year catastrophes for the three and nine months ended September 30, 2014 and 2013.

Three Months Ended September 30, 2014				Three Months Ended September 30, 2013
Event Date	Event	Net Loss		Event Date	Event	Net Loss
(U.S. dollars in millions)
	Other loss events in 2014	$	12.2	July 2013	Hailstorms in Germany	$	24.3
					Other loss events in 2013	(6.2		)
		$	12.2			$	18.1

Nine Months Ended September 30, 2014				Nine Months Ended September 30, 2013
Event Date	Event	Net Loss		Event Date	Event	Net Loss
(U.S. dollars in millions)
February 2014	Windstorm in Japan	$	5.6	May 2013	Windstorms in the United States	$	10.7
April 2014	Windstorms in the United States	6.8		June 2013	Floods in Canada	10.8
May 2014	Windstorms in the United States	2.5		June 2013	Floods in Europe	19.7
June 2014	Windstorms in the United States	5.2		July 2013	Hailstorms in Germany	24.3
June 2014	Windstorm Ela	18.5
	Other loss events in 2014	2.2
		$	40.8			$	65.5

Acquisition Expenses. The Company’s acquisition expense ratios in the Reinsurance segment for the three and nine months ended September 30, 2014 were higher than in the same periods in 2013 primarily due to growth in net premiums earned in the professional line of business, which incurs a higher than average net acquisition expense rate, and a decline in net premiums earned in the catastrophe line of business, which incurs a lower than average net acquisition expense rate.

General and Administrative Expenses. The general and administrative expense ratios in the Reinsurance segment for the three and nine months ended September 30, 2014 increased compared to those in the same periods in 2013 due to an increase in annual incentive compensation expenses associated with improved year to date corporate results and higher corporate expenses primarily related to the potential acquisition of Aspen.

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 September 30, 2014, Endurance Bermuda could pay a dividend or return additional paid-in capital totaling approximately $539.5 million (December 31, 2013 – $654.5 million) without prior regulatory approval based upon the Bermuda insurance and corporate regulations. In addition, 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

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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, 2013, 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 September 30, 2014 without the prior approval of the applicable insurance regulator. At September 30, 2014, American Agri-Business could pay dividends of $3.9 million with notice to the Texas Department of Insurance. 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 September 30, 2014, 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 September 30, 2014 totaled $6.5 billion, which is consistent with the aggregate invested assets of $6.5 billion as of December 31, 2013.

At September 30, 2014, the Company’s available for sale investments had gross unrealized gains of $98.6 and gross unrealized losses of $19.1 million compared to gross unrealized gains of $95.6 million and gross unrealized losses of $49.6 million at December 31, 2013. The decrease in gross unrealized losses on the Company’s fixed income investments at September 30, 2014 compared to December 31, 2013 was primarily due to a decrease in longer term interest rates. The Company did not have the intent to sell any of its fixed income investments 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 at September 30, 2014. The Company has the ability and intent to hold its equity securities until recovery. Therefore, the Company does not consider its fixed income investments or equity securities to be other-than-temporarily impaired at September 30, 2014.

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 $614.7 million at September 30, 2014, compared to $463.4 million at December 31, 2013.

Cash Flows

	Nine Months Ended September 30,
	2014			2013
	(U.S. dollars in thousands)
Net cash flows provided by (used in) operating activities	$	52,172		$	(16,574	)
Net cash flows provided by (used in) investing activities	2,517			(253,487		)
Net cash flows used in financing activities	(77,329		)	(52,992		)
Effect of exchange rate changes on cash and cash equivalents	(17,495		)	(10,967		)
Net decrease in cash and cash equivalents	(40,135		)	(334,020		)
Cash and cash equivalents, beginning of period	845,851			1,124,019
Cash and cash equivalents, end of period	$	805,716		$	789,999

The increase in cash flows provided by (used in) operating activities in the nine months ended September 30, 2014 compared to the same period in 2013 was primarily due to lower net loss claims outflows, partially offset by lower net premium receipts.

The increase in cash provided by (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 provided by (used in) investing activities in 2014 principally reflected increased proceeds from sales of available for sale investments and net proceeds from other assets, partially offset by lower proceeds from maturities on available for sale investments and increased purchases of fixed assets compared to 2013.

The cash flows used in financing activities in the nine months ended September 30,2014 were higher than the same period in 2013 principally due to a decrease in the number of common shares issued, costs paid for bridge financing related to the proposed acquisition of Aspen and an increase in dividends paid to holders of the Company’s common shares. The higher financing outflows were partially offset by the absence of common share repurchases in 2014; while in the nine

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months ended September 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.

The effect of exchange rate changes had a negative impact on the cash balances of the Company in the nine months ended September 30, 2014 as the U.S. dollar strengthened against all key currencies in the period resulting in a decline in the reported value of holdings in those currencies. In the nine months ended September 30, 2013 the dollar strengthened significantly against the Australian dollar and Japanese Yen resulting in a reduction in the reported value of cash balances.

As of September 30, 2014 and December 31, 2013, the Company had pledged cash and cash equivalents and fixed maturity investments of $130.1 million and $146.1 million, respectively, in favor of certain ceding companies to collateralize obligations. As of September 30, 2014 and December 31, 2013, the Company had also pledged $237.9 million and $302.7 million of its cash and fixed maturity investments to meet collateral obligations for $202.9 million and $260.3 million, respectively, in letters of credit outstanding under its Credit Facility (as defined below) and LOC agreement. In addition, at September 30, 2014 and December 31, 2013, cash and fixed maturity investments with fair values of $273.1 million and $273.7 million were on deposit with U.S. state regulators, respectively.

Credit Facility. On April 19, 2012, the Company and certain designated subsidiaries of the Company entered into a $700.0 million four-year revolving credit facility with JPMorgan Chase Bank, N.A. (“JPMorgan”) as administrative agent (“Credit Facility”). As of September 30, 2014, there were no borrowings under this facility and letters of credit outstanding under the Credit Facility were $202.9 million (December 31, 2013 – $260.3 million).

On June 25, 2014, the Company entered into the First Amendment (the “Amendment”) to the Credit Facility. The Amendment also amends the Security Agreement, dated as of April 19, 2012 (the “Security Agreement”), among the Company and certain designated subsidiaries of the Company, Deutsche Bank Trust Company Americas, as collateral agent, and JPMorgan as the administrative agent. The Amendment contained certain amendments to the Credit Facility and the Security Agreement applicable to the proposed acquisition of Aspen.

Letter of Credit Facility. On January 17, 2014, the Company and certain designated subsidiaries of the Company entered into a $50.0 million revolving letter of credit reimbursement agreement (“LOC Agreement”) and cash collateral agreement with Australia and New Zealand Banking Group Limited. As of September 30, 2014, the Company had issued letters of credit of $1.4 million (December 31, 2013 - nil) under the LOC Agreement. For letters of credit issued under the LOC Agreement, the Company is required to pay a fee that is negotiated at the time of issuance of the letter of credit. Letters of credit issued under the LOC Agreement are required to be collateralized with cash or investments.

Bridge Facility. On June 2, 2014, the Company entered into a commitment letter with Morgan Stanley Senior Funding, Inc. (the “Commitment Letter”). Pursuant to the Commitment Letter, Morgan Stanley Senior Funding, Inc., as lead arranger, committed to provide to the Company, subject to certain conditions, senior unsecured bank financing of up to $1.0 billion under an unsecured 364-day bridge facility (the “Bridge Facility”), which was to be used to finance a portion of the cash consideration to be paid in connection with the Company’s proposed acquisition of Aspen and related costs and expenses. Upon the termination by the Company on July 30, 2014 of its offer to acquire Aspen, the Bridge Facility expired pursuant to its terms. During the quarter ended September 30, 2014, the Company recognized the capitalized debt issuance costs associated with the facility of $4.1 million.

Agreement with Equity Investors. On June 2, 2014, the Company entered into an agreement (the “Agreement”) terminating a prior equity commitment letter, dated January 28, 2014, pursuant to its terms. In connection with such termination, the Company extended to CVC Capital Partners Advisory (U.S.), Inc. (“CVC”) and certain permitted assignees of CVC (collectively, the “Equity Option Investors”) an equity investment option in the event that, on or prior to December 31, 2014, the Company enters into a definitive written agreement to acquire, or acquires, 95% or more of the issued and outstanding Aspen ordinary shares (the “Equity Investment Option”). Pursuant to the Equity Investment Option, if exercised, the Equity Option Investors would purchase $250.0 million of newly issued Company ordinary shares at a price of $50.03 per ordinary share, as adjusted for any stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The Equity Investment Option would be exercisable for the sixty (60) day period following the closing of the Company’s acquisition of Aspen.

The Equity Option Investors would have certain preemptive rights with respect to future share issuances by the Company, and the purchased ordinary shares would be subject to lock-up restrictions that would limit the right of the Equity Option Investors to transfer the shares for 12 months following the exercise of the Equity Investment Option, subject to certain exceptions.

In addition to the purchase of Company ordinary shares, upon the closing of the Equity Investment Option, the Company would also grant the Equity Option Investors, on a pro rata basis, warrants to purchase a number of additional Company ordinary shares equal to 38.5% of the total number of Company ordinary shares acquired by the Equity Option Investors in connection with the Equity Investment Option, at an exercise price equal to $58.86 per share, as adjusted for any

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stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The warrants would have a term of ten years from the date of the closing of the Equity Investment Option.

Upon the closing of the Equity Investment Option, CVC would have the right to nominate one individual to serve as a director of the Company, which individual shall qualify as an independent director for purposes of the NYSE rules and, except for two specified individuals, shall be subject to the approval of the Company’s board of directors (such approval not to be unreasonably withheld).

Pursuant to the Agreement, the Company also granted the Equity Option Investors a right of first refusal in the event the Company proposes to raise, on a private basis, equity capital through the sale of equity securities or securities convertible into or exchangeable or exercisable for equity securities of the Company or other equity-linked securities, the purpose of which is to partially fund the cash portion of an acquisition of Aspen completed, or for which a definitive written agreement is entered into, on or prior to December 31, 2014, or to refinance any debt incurred by the Company in connection with any such acquisition (only to the extent the proceeds of any such refinancing are specifically earmarked for such purposes). This right of first refusal is subject to certain exceptions, including with respect the to sale of equity securities to the Company’s Chief Executive Officer of up to $25.0 million and to certain other specified equity investors of up to $100.0 million. The Company does not currently intend to raise any equity capital that would be subject to the right of first refusal, but reserves the right to do so.

The Company has also agreed that, in the event any person or entity (other than certain funds advised by CVC or their affiliates) enters into a definitive written agreement to acquire or acquires more than 40% of the capital stock of the Company on or prior to December 31, 2014, the Company will pay CVC an amount equal to $26.3 million upon the closing of such transaction, less the amount of any previously reimbursed expenses.

The Charman Agreement. John R. Charman, the Company’s Chief Executive Officer, and the Company entered into an agreement on June 2, 2014, pursuant to which Mr. Charman committed to purchase, subject to the receipt of any required regulatory approvals and the completion of the Company’s acquisition of Aspen, $25.0 million of newly issued Company common shares at a price per share equal to $53.51, as adjusted for any stock splits, stock dividends or combinations prior to the closing of such investment.

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 generate positive operating cash flows through 2014, 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. 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,

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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.

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;

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• 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;

• 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;

• the inability to retain 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 and/or industry specific 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 2013 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 2013 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 third 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 2013 Form 10-K, as supplemented by the risk factors disclosed in Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the period ended June 30, 2014.

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)
July 1, 2014 - July 31, 2014	0	$	—	0	5,000,000
August 1, 2014 - August 31, 2014	0	$	—	0	5,000,000
September 1, 2014 - September 30, 2014	0	$	—	0	5,000,000
Total	0	$	—	0	5,000,000

(1) Ordinary shares or share equivalents.

(2) At its meeting on February 27, 2014, the Board of Directors of the Company authorized the repurchase of up to a total of 5,000,000 ordinary shares and share equivalents through February 28, 2016, 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
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 September 30, 2014 (unaudited) and December 31, 2013; (ii) the Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2014 and 2013; (iii) the Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2014 and 2013; (iv) the Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013; and (v) the Notes to the Unaudited Condensed Consolidated Financial Statements.

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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:	November 7, 2014	By:	/s/ John R. Charman
			John R. Charman
			Chief Executive Officer
Date:	November 7, 2014	By:	/s/ Michael J. McGuire
			Michael J. McGuire
			Chief Financial Officer (Principal Financial Officer)

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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:	November 7, 2014	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:	November 7, 2014	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 September 30, 2014 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:	November 7, 2014	By:	/s/ John R. Charman
			John R. Charman
			Chief Executive Officer
Date:	November 7, 2014	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.

XML

Investments (Net Realized and Unrealized Investment Gains (Losses)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Investments [Abstract]
Gross realized gains on investment sales	$ 10,683		$ 6,180		$ 28,317		$ 30,191
Gross realized losses on investment sales	(1,475)		(13,178)		(12,778)		(19,924)
Change in fair value of derivative financial instruments	580	[1]	358	[1]	2,532	[1]	(300)	[1]
Net realized and unrealized investment gains (losses)	$ 9,788		$ (6,640)		$ 18,071		$ 9,967

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

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Stock-Based Employee Compensation And Other Stock Plans (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	0	0	0	800,000
Number of options expired	0	0	0	0
Number of options vested	0	0	160,000	160,000
Number of options exercised	0	0	15,000	24,501
Total intrinsic value of options exercised			$ 300,000	$ 500,000
Proceeds from stock options exercised			500,000	600,000
Options weighted average grant date fair value				10,200,000
Number of restricted shares and RSUs granted	39,080	8,453	472,497	1,079,108
Restricted shares and RSUs weighted average grant date fair value	2,100,000	400,000	24,800,000	50,700,000
Aggregate fair value of restricted shares and RSUs vested	200,000	100,000	18,700,000	17,000,000
Expenses related to employee stock purchase plan	62,000	42,000	172,000	124,000
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs recognized	600,000	1,000,000	2,500,000	3,500,000
Compensation costs not yet recognized - stock options	3,200,000	6,700,000	3,200,000	6,700,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation costs recognized	5,700,000	2,600,000	21,500,000	16,100,000
Compensation costs not yet recognized - restricted stock	$ 27,700,000	$ 31,600,000	$ 27,700,000	$ 31,600,000

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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				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Net income available to common and participating common shareholders	$ 68,046		$ 75,228		$ 239,313		$ 220,170
Less amount allocated to participating common shareholders	(1,930)	[1]	(1,997)	[1]	(6,907)	[1]	(4,742)	[1]
Net income allocated to common shareholders	$ 66,116		$ 73,231		$ 232,406		$ 215,428
Weighted average shares - basic	43,464,790		43,099,841		43,332,461		42,719,837
Weighted average shares - diluted	43,510,415		43,100,139		43,355,792		42,720,431
Basic earnings per common share	$ 1.52		$ 1.70		$ 5.36		$ 5.04
Diluted earnings per common share	$ 1.52		$ 1.70		$ 5.36		$ 5.04
Employee Stock Option [Member]
Share equivalents	45,625		0		23,237		0
Restricted Stock [Member]
Share equivalents	0		298		94		594

[1] Represents earnings attributable to holders of unvested restricted shares issued under the Company's equity compensation plan that are considered participating. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

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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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Gross premiums written	$ 626,110	$ 544,363	$ 2,473,050	$ 2,294,435
Ceded premiums written	(236,004)	(149,030)	(772,812)	(525,566)
Net premiums written	390,106	395,333	1,700,238	1,768,869
Net premiums earned	514,895	553,545	1,392,699	1,516,997
Other underwriting income (loss)	2,123	(943)	(3,939)	694
Total revenue	517,018	552,602	1,388,760	1,517,691
Net losses and loss expenses	290,269	339,036	726,361	917,064
Acquisition expenses	93,392	78,775	244,150	222,279
General and administrative expenses	80,915	67,470	240,576	215,307
Total expenses	464,576	485,281	1,211,087	1,354,650
Underwriting (loss) income	52,442	67,321	177,673	163,041
Net loss ratio	56.40%	61.30%	52.20%	60.40%
Acquisition expense ratio	18.10%	14.20%	17.50%	14.70%
General and administrative expense ratio	15.70%	12.20%	17.30%	14.20%
Combined ratio	90.20%	87.70%	87.00%	89.30%
Reserve for losses and loss expenses	3,897,483	4,052,102	3,897,483	4,052,102	4,002,259
Insurance [Member]
Segment Reporting Information [Line Items]
Gross premiums written	420,343	344,819	1,394,145	1,274,703
Ceded premiums written	(222,704)	(120,481)	(674,441)	(454,169)
Net premiums written	197,639	224,338	719,704	820,534
Net premiums earned	253,583	291,477	616,167	710,507
Other underwriting income (loss)	0	0	0	0
Total revenue	253,583	291,477	616,167	710,507
Net losses and loss expenses	196,677	228,409	434,777	543,717
Acquisition expenses	20,170	18,440	47,559	48,024
General and administrative expenses	44,957	35,641	133,930	114,792
Total expenses	261,804	282,490	616,266	706,533
Underwriting (loss) income	(8,221)	8,987	(99)	3,974
Net loss ratio	77.50%	78.40%	70.60%	76.40%
Acquisition expense ratio	8.00%	6.30%	7.70%	6.80%
General and administrative expense ratio	17.70%	12.20%	21.70%	16.20%
Combined ratio	103.20%	96.90%	100.00%	99.40%
Reserve for losses and loss expenses	2,134,985	2,146,136	2,134,985	2,146,136
Reinsurance [Member]
Segment Reporting Information [Line Items]
Gross premiums written	205,767	199,544	1,078,905	1,019,732
Ceded premiums written	(13,300)	(28,549)	(98,371)	(71,397)
Net premiums written	192,467	170,995	980,534	948,335
Net premiums earned	261,312	262,068	776,532	806,490
Other underwriting income (loss)	2,123	(943)	(3,939)	694
Total revenue	263,435	261,125	772,593	807,184
Net losses and loss expenses	93,592	110,627	291,584	373,347
Acquisition expenses	73,222	60,335	196,591	174,255
General and administrative expenses	35,958	31,829	106,646	100,515
Total expenses	202,772	202,791	594,821	648,117
Underwriting (loss) income	60,663	58,334	177,772	159,067
Net loss ratio	35.80%	42.30%	37.60%	46.30%
Acquisition expense ratio	28.00%	23.00%	25.30%	21.60%
General and administrative expense ratio	13.80%	12.10%	13.70%	12.50%
Combined ratio	77.60%	77.40%	76.60%	80.40%
Reserve for losses and loss expenses	$ 1,762,498	$ 1,905,966	$ 1,762,498	$ 1,905,966

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Fair Value Measurement (Quantitative Information Used As Level 3 Inputs) (Details) (USD $)								9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Energy Related Derivative [Member]	Dec. 31, 2013 Energy Related Derivative [Member]	Sep. 30, 2014 Simulation Valuation Technique [Member] Energy Related Derivative [Member]	Sep. 30, 2014 Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2013 Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2014 Fair Value, Inputs, Level 3 [Member] Simulation Valuation Technique [Member] Maximum [Member]	Sep. 30, 2014 Fair Value, Inputs, Level 3 [Member] Simulation Valuation Technique [Member] Minimum [Member]
Fair Value Inputs Assets And Liabilities Quantitative Information [Line Items]
Net weather and energy related derivative liabilities	$ 51,784,000	$ 58,820,000			$ (1,094,000)
Correlation								1	0
Weather curve								2500	400
Commodity curve								122.20	28.50
Derivatives recorded in other assets, fair value	147,488,000	108,272,000	14,822,000	14,038,000		14,822,000	14,038,000
Derivatives recorded in other liabilities, fair value	$ 95,704,000	$ 49,452,000	$ 15,916,000	$ 19,569,000		$ 15,916,000	$ 19,569,000

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Investments (Composition Of Net Investment Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Investments [Abstract]
Available for sale investments	$ 29,959	$ 27,889	$ 91,905	$ 86,036
Other investments	(1,785)	13,244	22,542	43,083
Cash and cash equivalents	581	752	1,878	2,043
Investment income	28,755	41,885	116,325	131,162
Investment expenses	(3,398)	(3,788)	(10,676)	(11,292)
Net investment income	$ 25,357	$ 38,097	$ 105,649	$ 119,870

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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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue from External Customer [Line Items]
Gross premiums written	$ 626,110	$ 544,363	$ 2,473,050	$ 2,294,435
Net premiums written	390,106	395,333	1,700,238	1,768,869
Insurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	420,343	344,819	1,394,145	1,274,703
Net premiums written	197,639	224,338	719,704	820,534
Agriculture Insurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	188,011	200,062	796,445	896,169
Net premiums written	103,536	120,617	431,007	546,284
Casualty And Other Specialty Insurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	144,706	95,862	366,329	239,943
Net premiums written	58,390	72,431	189,876	179,065
Professional Lines Insurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	62,631	34,221	176,061	93,481
Net premiums written	20,216	20,972	64,632	62,963
Property Insurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	24,995	14,674	55,310	45,110
Net premiums written	15,497	10,318	34,189	32,222
Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	205,767	199,544	1,078,905	1,019,732
Net premiums written	192,467	170,995	980,534	948,335
Catastrophe Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	47,173	38,676	332,193	341,973
Net premiums written	41,157	12,551	243,531	281,990
Casualty Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	23,409	27,649	139,266	211,458
Net premiums written	23,409	27,648	137,669	210,030
Property Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	73,807	91,653	283,107	288,448
Net premiums written	73,807	90,528	283,015	283,455
Professional Lines Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	21,520	25,670	131,256	50,505
Net premiums written	21,520	25,670	131,256	50,505
Specialty Reinsurance [Member]
Revenue from External Customer [Line Items]
Gross premiums written	39,858	15,896	193,083	127,348
Net premiums written	$ 32,574	$ 14,598	$ 185,063	$ 122,355

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Investments (Tables)

9 Months Ended

Sep. 30, 2014

Investments [Abstract]

Composition Of Net Investment Income

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Available for sale investments	$	29,959		$	27,889		$	91,905		$	86,036
Other investments	(1,785		)	13,244			22,542			43,083
Cash and cash equivalents	581			752			1,878			2,043
	$	28,755		$	41,885		$	116,325		$	131,162
Investment expenses	(3,398		)	(3,788		)	(10,676		)	(11,292		)
Net investment income	$	25,357		$	38,097		$	105,649		$	119,870

Composition of the Investment Portfolio by Investment Type

	September 30, 2014				December 31, 2013
Type of Investment	Fair Value		Percentage		Fair Value		Percentage
Fixed maturity investments	$	4,871,420	75.4	%	$	4,823,964	74.2	%
Cash and cash equivalents (1)	652,377		10.1	%	771,714		11.9	%
Other investments (2)	658,678		10.2	%	617,478		9.5	%
Short-term investments	11,844		0.2	%	35,028		0.5	%
Equity securities	267,728		4.1	%	252,466		3.9	%
Total	$	6,462,047	100.0	%	$	6,500,650	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

	September 30, 2014				December 31, 2013
Ratings (1)	Fair Value		Percentage		Fair Value		Percentage
U.S. government and agencies securities	$	514,672	10.5	%	$	769,343	15.8	%
AAA / Aaa	1,153,558		23.7	%	972,820		20.0	%
AA / Aa	1,738,964		35.7	%	1,771,156		36.5	%
A / A	952,894		19.5	%	895,549		18.4	%
BBB	407,093		8.3	%	363,722		7.5	%
Below BBB	94,824		1.9	%	66,791		1.4	%
Not rated	21,259		0.4	%	19,611		0.4	%
Total	$	4,883,264	100.0	%	$	4,858,992	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 Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc., or DBRS, Inc. is used.

Contractual Maturities Of Fixed Maturity And Short-Term Investments

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	128,535	$	129,382	$	144,814	$	145,653
Due after one year through five years	1,575,875		1,583,414		1,808,001		1,815,240
Due after five years through ten years	339,764		341,993		290,391		288,486
Due after ten years	33,034		35,474		26,344		26,937
Residential mortgage-backed securities	1,185,911		1,203,322		1,192,085		1,187,191
Commercial mortgage-backed securities	948,460		965,696		932,263		947,677
Collateralized loan and debt obligations	205,465		207,214		92,519		94,552
Asset-backed securities	414,968		416,769		351,192		353,256
Total	$	4,832,012	$	4,883,264	$	4,837,609	$	4,858,992

Other Investments

September 30, 2014	Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
Hedge funds	$	431,278	$	—	$	38,900
Private investment funds	68,433		64,473		68,433
Total alternative funds	499,711		64,473		107,333
Specialty funds
High yield loan funds	112,892		—		—
Convertible debt funds	46,075		—		—
Total specialty funds	158,967		—		—
Total other investments	$	658,678	$	64,473	$	107,333
December 31, 2013	Market Value		Unfunded Commitments		Ineligible for Redemption in 2014
Alternative funds
Hedge funds	$	401,438	$	—	$	47,406
Private investment funds	59,703		57,997		59,703
Total alternative funds	461,141		57,997		107,109
Specialty funds
High yield loan funds	111,254		—		—
Convertible debt funds	45,083		—		—
Total specialty funds	156,337		—		—
Total other investments	$	617,478	$	57,997	$	107,109

Net Realized And Unrealized Investment Gains (Losses)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Gross realized gains on investment sales	$	10,683		$	6,180		$	28,317		$	30,191
Gross realized losses on investment sales	(1,475		)	(13,178		)	(12,778		)	(19,924		)
Change in fair value of derivative financial instruments (1)	580			358			2,532			(300		)
Net realized and unrealized investment gains (losses)	$	9,788		$	(6,640	)	$	18,071		$	9,967

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

Amortized Cost, Fair Value, Unrealized Gains and Losses And Non-Credit Other-Then-Temporary Impairments

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	771,227	$	5,735	$	(7,619	)	$	769,343	$	—
U.S. state and municipal securities	27,138		111		(395		)	26,854		—
Foreign government securities	183,650		1,003		(2,006		)	182,647		—
Government guaranteed corporate securities	34,921		274		(50		)	35,145		—
Corporate securities	1,217,585		16,225		(6,511		)	1,227,299		—
Residential mortgage-backed securities	1,192,085		17,005		(21,899		)	1,187,191		(4,257		)
Commercial mortgage-backed securities	932,263		23,423		(8,009		)	947,677		(47		)
Collateralized loan and debt obligations (1)	92,519		2,233		(200		)	94,552		—
Asset-backed securities	351,192		2,919		(855		)	353,256		(163		)
Total fixed maturity investments	$	4,802,580	$	68,928	$	(47,544	)	$	4,823,964	$	(4,467	)
Short-term investments	35,029		1		(2		)	35,028		—
Total fixed income investments	$	4,837,609	$	68,929	$	(47,546	)	$	4,858,992	$	(4,467	)
Equity securities
Equity investments	$	152,525	$	24,139	$	(1,995	)	$	174,669	$	—
Emerging market debt funds	60,250		594		—			60,844		—
Preferred equity investments	6,325		1,977		(79		)	8,223		—
Short-term fixed income funds	8,728		2		—			8,730		—
Total equity securities	$	227,828	$	26,712	$	(2,074	)	$	252,466	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 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, 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.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	512,199	$	5,450	$	(2,977	)	$	514,672	$	—
U.S. state and municipal securities	31,437		207		(157		)	31,487		—
Foreign government securities	204,033		2,033		(373		)	205,693		—
Government guaranteed corporate securities	45,577		624		—			46,201		—
Corporate securities	1,272,119		13,037		(4,790		)	1,280,366		—
Residential mortgage-backed securities	1,185,911		21,984		(4,573		)	1,203,322		(3,319		)
Commercial mortgage-backed securities	948,460		20,763		(3,527		)	965,696		(5		)
Collateralized loan and debt obligations (1)	205,465		1,974		(225		)	207,214		—
Asset-backed securities	414,968		2,333		(532		)	416,769		—
Total fixed maturity investments	$	4,820,169	$	68,405	$	(17,154	)	$	4,871,420	$	(3,324	)
Short-term investments	11,843		1		—			11,844		—
Total fixed income investments	$	4,832,012	$	68,406	$	(17,154	)	$	4,883,264	$	(3,324	)
Equity securities
Equity investments	$	157,924	$	26,471	$	(1,881	)	$	182,514	$	—
Emerging market debt funds	60,250		1,612		—			61,862		—
Preferred equity investments	12,283		2,071		(37		)	14,317		—
Short-term fixed income fund	9,030		6		(1		)	9,035		—
Total equity securities	$	239,487	$	30,160	$	(1,919	)	$	267,728	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 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 September 30, 2014, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was nil.

Available For Sale Securities In An Unrealized Loss Position

	Less than 12 months					12 months or greater					Total
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	(559	)	$	95,967	$	(2,418	)	$	95,856	$	(2,977	)	$	191,823
U.S. state and municipal securities	(78		)	7,261		(79		)	6,835		(157		)	14,096
Foreign government securities	(204		)	43,104		(169		)	23,314		(373		)	66,418
Corporate securities	(3,026		)	432,053		(1,764		)	97,104		(4,790		)	529,157
Residential mortgage-backed securities	(593		)	168,976		(3,980		)	152,520		(4,573		)	321,496
Commercial mortgage-backed securities	(1,186		)	200,660		(2,341		)	93,769		(3,527		)	294,429
Collateralized loan and debt obligations	(174		)	95,995		(51		)	1,467		(225		)	97,462
Asset-backed securities	(264		)	156,553		(268		)	29,991		(532		)	186,544
Total fixed income investments	$	(6,084	)	$	1,200,569	$	(11,070	)	$	500,856	$	(17,154	)	$	1,701,425
Equity securities
Equity investments	$	(1,861	)	$	40,720	$	(20	)	$	141	$	(1,881	)	$	40,861
Preferred equity investments	(37		)	5,676		—			—		(37		)	5,676
Short-term fixed income fund	(1		)	2,899		—			—		(1		)	2,899
Total equity securities	$	(1,899	)	$	49,295	$	(20	)	$	141	$	(1,919	)	$	49,436

	Less than 12 months					12 months or greater					Total
	Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	(7,359	)	$	382,593	$	(260	)	$	6,050	$	(7,619	)	$	388,643
U.S. state and municipal securities	(395		)	20,452		—			—		(395		)	20,452
Foreign government securities	(1,981		)	139,503		(25		)	5,261		(2,006		)	144,764
Government guaranteed corporate securities	(50		)	13,326		—			—		(50		)	13,326
Corporate securities	(5,959		)	478,287		(552		)	28,690		(6,511		)	506,977
Residential mortgage-backed securities	(17,542		)	514,702		(4,357		)	102,446		(21,899		)	617,148
Commercial mortgage-backed securities	(7,681		)	384,548		(328		)	16,804		(8,009		)	401,352
Collateralized loan and debt obligations	(48		)	20,733		(152		)	2,379		(200		)	23,112
Asset-backed securities	(703		)	157,172		(152		)	7,011		(855		)	164,183
Total fixed maturity investments	$	(41,718	)	$	2,111,316	$	(5,826	)	$	168,641	$	(47,544	)	$	2,279,957
Short-term investments	(2		)	2,468		—			—		(2		)	2,468
Total fixed income investments	$	(41,720	)	$	2,113,784	$	(5,826	)	$	168,641	$	(47,546	)	$	2,282,425
Equity securities
Equity investments	$	(1,995	)	$	36,751	$	—		$	—	$	(1,995	)	$	36,751
Preferred equity investments	(79		)	2,987		—			—		(79		)	2,987
Total equity securities	$	(2,074	)	$	39,738	$	—		$	—	$	(2,074	)	$	39,738

(1) Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2013.

Analysis Of OTTI

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Total other-than-temporary impairment losses	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)
Portion of loss recognized in other comprehensive (loss) income	—			—			—			—
Net impairment losses recognized in earnings	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Beginning balance	$	(1,441	)	$	(1,769	)	$	(1,553	)	$	(2,000	)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			—
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized	—			—			—			—
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	579			113			691			344
Ending balance	$	(862	)	$	(1,656	)	$	(862	)	$	(1,656	)

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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				9 Months Ended
	Sep. 30, 2014		Sep. 30, 2013		Sep. 30, 2014		Sep. 30, 2013
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	$ 136,038		$ 31,438		$ 62,731		$ 152,463
Other comprehensive (loss) income before reclassifications	(45,504)		31,276		33,714		(75,058)
Amounts reclassified from accumulated other comprehensive income	(9,235)	[1]	6,743	[1]	(15,146)	[1]	(7,948)
Other comprehensive (loss) income	(54,739)		38,019		18,568		(83,006)
Ending balance	81,299		69,457		81,299		69,457
Gains and losses on cash flow hedges [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	(1,810)		(1,899)		(1,855)		(1,944)
Other comprehensive (loss) income before reclassifications	0		0		0		0
Amounts reclassified from accumulated other comprehensive income	22	[1]	22	[1]	67	[1]	67	[1]
Other comprehensive (loss) income	22		22		67		67
Ending balance	(1,788)		(1,877)		(1,788)		(1,877)
Unrealized gains and losses on available for sale securities [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	106,989		30,636		45,950		141,731
Other comprehensive (loss) income before reclassifications	(25,100)		22,358		41,895		(74,001)
Amounts reclassified from accumulated other comprehensive income	(9,257)	[1]	6,721	[1]	(15,213)	[1]	(8,015)	[1]
Other comprehensive (loss) income	(34,357)		29,079		26,682		(82,016)
Ending balance	72,632		59,715		72,632		59,715
Foreign currency translation adjustments [Member]
Accumulated Other Comprehensive Income [Line Items]
Beginning balance	30,859		2,701		18,636		12,676
Other comprehensive (loss) income before reclassifications	(20,404)		8,918		(8,181)		(1,057)
Amounts reclassified from accumulated other comprehensive income	0	[1]	0	[1]	0	[1]	0	[1]
Other comprehensive (loss) income	(20,404)		8,918		(8,181)		(1,057)
Ending balance	$ 10,455		$ 11,619		$ 10,455		$ 11,619

[1] All amounts are net of tax.

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Investments (Analysis Of OTTI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Investments [Abstract]
Total other-than-temporary impairment losses	$ (102)	$ (190)	$ (411)	$ (1,575)
Portion of loss recognized in other comprehensive (loss) income	0	0	0	0
Net impairment losses recognized in earnings	$ (102)	$ (190)	$ (411)	$ (1,575)

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Investments (Other Investments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Other investments, market value	$ 658,678	$ 617,478
Commitments under investment fund classified within other investments	64,473	57,997
Prohibited amount under redemption requests over the next 12 months	107,333	107,109
Alternative Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	499,711	461,141
Commitments under investment fund classified within other investments	64,473	57,997
Prohibited amount under redemption requests over the next 12 months	107,333	107,109
Hedge Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	431,278	401,438
Commitments under investment fund classified within other investments	0	0
Prohibited amount under redemption requests over the next 12 months	38,900	47,406
Private Equity Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	68,433	59,703
Commitments under investment fund classified within other investments	64,473	57,997
Prohibited amount under redemption requests over the next 12 months	68,433	59,703
Specialty Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	158,967	156,337
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]
Other investments, market value	112,892	111,254
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]
Other investments, market value	46,075	45,083
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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Derivatives (Schedule Of Derivative Fair Value And Notional Amount) (Details) (USD $)			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Maximum [Member]	Sep. 30, 2014 Foreign Exchange Forward [Member]	Dec. 31, 2013 Foreign Exchange Forward [Member]	Sep. 30, 2014 Credit Default Swap [Member]	Dec. 31, 2013 Credit Default Swap [Member]	Sep. 30, 2014 Interest Rate Swap [Member]	Dec. 31, 2013 Interest Rate Swap [Member]	Sep. 30, 2014 Interest Rate Swaption [Member]	Dec. 31, 2013 Interest Rate Swaption [Member]	Sep. 30, 2014 TBA [Member]	Dec. 31, 2013 TBA [Member]	Sep. 30, 2014 Energy and weather contracts [Member]	Dec. 31, 2013 Energy and weather contracts [Member]	Sep. 30, 2014 Interest Rate Future [Member]	Dec. 31, 2013 Interest Rate Future [Member]
Derivatives, Fair Value [Line Items]
Derivatives recorded in other assets, fair value	$ 147,488,000	$ 108,272,000		$ 1,128,000	$ 251,000	$ 11,000	$ 0	$ 211,000	$ 124,000	$ 0	$ 39,000	$ 131,316,000	$ 93,820,000	$ 14,822,000	$ 14,038,000
Derivatives recorded in other liabilities, fair value	95,704,000	49,452,000		312,000	172,000			731,000	933,000	18,000	543,000	78,727,000	28,218,000	15,916,000	19,569,000	0	17,000
Net derivative asset, fair value	51,784,000	58,820,000
Derivatives recorded in other assets, notional principal amount				40,923,000	19,269,000	1,785,000	0	72,700,000	16,100,000	0	24,338,000	127,255,000	93,840,000	79,846,000	53,986,000
Derivatives recorded in other liabilities, notional principal amount				23,641,000	15,861,000			11,782,000	12,193,000	56,216,000	361,455,000	76,000,000	28,000,000	115,574,000	66,113,000	0	103,935,000
Original term of credit default swap, in years			5 days
Derivative assets traded under master netting agreements	147,500,000	108,300,000
Derivative liabilities traded under master netting agreements	$ 95,700,000	$ 49,400,000

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Commitments And Contingencies (Option) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended	9 Months Ended
	Jun. 02, 2014	Sep. 30, 2014
Option Indexed to Issuer's Equity [Line Items]
Number of individuals investor has right to nominate for BOD after option is exercised	1
Specified individuals that investor can nominate to BOD which are not subject to board approval	2
Percentage of stock acquired	40.00%
Payment due to investors	$ 26.3
Call Option [Member]
Option Indexed to Issuer's Equity [Line Items]
Acquisition percentage	95.00%
Amount of equity able to be purchased under option	250.0
Strike price of option	$ 50.03
Period option is exercisable, in days		60
Period transfer of shares purchased under option is restricted, in months		12
Call Option [Member] | Maximum [Member] | Chief Executive Officer [Member]
Option Indexed to Issuer's Equity [Line Items]
Amount of equity issuance subject to exception	25.0
Call Option [Member] | Maximum [Member] | Investor [Member]
Option Indexed to Issuer's Equity [Line Items]
Amount of equity issuance subject to exception	$ 100.0

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Fair Value Measurement (Reconciliation Of The Beginning And Ending Balances For Fixed Maturity Investments, Other Investments, Other Assets and Other Liabilities Measured At Fair Value On A Recurring Basis Using Level 3 Inputs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	$ 669,149	$ 576,939	$ 638,844	$ 526,925
Total equity income and realized gains included in earnings	10,922	19,164	46,447	61,114
Total equity losses and losses included in earnings	(12,704)	(5,879)	(23,876)	(17,944)
Total income included in other underwriting income (loss)	3,180	0	18,396	0
Total loss included in other underwriting income (loss)	(5,235)	0	(23,845)	(1,182)
Change in unrealized gains included in other comprehensive (loss) income	245	111	445	438
Change in unrealized losses included in other comprehensive (loss) income	(104)	(62)	(255)	(270)
Purchases	28,533	16,597	55,074	62,011
Issues	7,331		10,912	300
Sales	(14,914)	(6,957)	(35,657)	(34,565)
Settlements	(2,947)		(6,180)
Transfers into Level 3	2,198	7,903	7,201	11,550
Transfers out of Level 3	(4,961)	(1,202)	(6,813)	(1,763)
Level 3, end of period	680,693	606,614	680,693	606,614
Fixed Maturity Investments [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	9,515	7,546	7,328	8,497
Total equity income and realized gains included in earnings	9	56	62	104
Total equity losses and losses included in earnings	(6)	(15)	(32)	(17)
Total income included in other underwriting income (loss)	0	0	0	0
Total loss included in other underwriting income (loss)	0	0	0	0
Change in unrealized gains included in other comprehensive (loss) income	245	111	445	438
Change in unrealized losses included in other comprehensive (loss) income	(104)	(62)	(255)	(270)
Purchases	842	0	842	0
Issues	0		0	0
Sales	(545)	(1,879)	(1,585)	(6,081)
Settlements	0		0
Transfers into Level 3	2,198	7,903	7,201	11,550
Transfers out of Level 3	(4,961)	(1,202)	(6,813)	(1,763)
Level 3, end of period	7,193	12,458	7,193	12,458
Other Investments [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	648,642	569,393	617,478	517,546
Total equity income and realized gains included in earnings	10,913	19,108	46,385	61,010
Total equity losses and losses included in earnings	(12,698)	(5,864)	(23,844)	(17,927)
Total income included in other underwriting income (loss)	0	0	0	0
Total loss included in other underwriting income (loss)	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	26,190	16,597	52,731	62,011
Issues	0		0	0
Sales	(14,369)	(5,078)	(34,072)	(28,484)
Settlements	0		0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Level 3, end of period	658,678	594,156	658,678	594,156
Other Assets [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	10,992	0	14,038	882
Total equity income and realized gains included in earnings	0	0	0	0
Total equity losses and losses included in earnings	0	0	0	0
Total income included in other underwriting income (loss)	3,180	0	18,396	0
Total loss included in other underwriting income (loss)	(5,235)	0	(23,845)	(1,182)
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	1,501	0	1,501	0
Issues	7,331		10,912	300
Sales	0	0	0	0
Settlements	(2,947)		(6,180)
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Level 3, end of period	14,822	0	14,822	0
Other Liabilities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3, beginning of period	(10,284)	0	(19,569)	(1,922)
Total equity income and realized gains included in earnings	0	0	0	0
Total equity losses and losses included in earnings	0	0	0	0
Total income included in other underwriting income (loss)	4,794	0	24,842	2,354
Total loss included in other underwriting income (loss)	(3,719)	0	(20,672)	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	(751)	0	(751)	0
Issues	(10,917)		(18,080)	(432)
Sales	0	0	0	0
Settlements	4,961		18,314
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Level 3, end of period	$ (15,916)	$ 0	$ (15,916)	$ 0

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Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

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 the Quarterly Report on 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 nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. 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, 2013 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, 2013 contained in Endurance Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 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 filing of the 2013 Form 10-K.

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”). ASU 2013-11 provides 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 was effective for annual and interim reporting periods beginning after December 15, 2013, with both early adoption and retrospective application permitted. The Company adopted this standard effective January 1, 2014. This standard did not have a material impact on the Company’s consolidated financial statements.

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Commitments And Contingencies (Warrants) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Jun. 02, 2014
Warrants and Rights Note Disclosure [Abstract]
Exercise price of warrant		$ 58.86
Term of warrants, in years	10
Percentage of number of ordinary shares acquired available under option		38.50%

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Investments (Credit Losses Rollforward) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Investments [Abstract]
Beginning balance	$ (1,441)	$ (1,769)	$ (1,553)	$ (2,000)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized	0	0	0	0
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized	0	0	0	0
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	579	113	691	344
Ending balance	$ (862)	$ (1,656)	$ (862)	$ (1,656)

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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

	September 30, 2014				December 31, 2013
	Fair Value		Notional Principal Amount		Fair Value		Notional Principal Amount
Derivatives recorded in other assets
Foreign exchange forward contracts	$	1,128	$	40,923	$	251	$	19,269
Credit default swaps	11		1,785		—		—
Interest rate swaps	211		72,700		124		16,100
Interest rate swaptions	—		—		39		24,338
TBAs	131,316		127,255		93,820		93,840
Energy and weather contracts	14,822		79,846		14,038		53,986
Total recorded in other assets	$	147,488			$	108,272
Derivatives recorded in other liabilities
Foreign exchange forward contracts	$	312	$	23,641	$	172	$	15,861
Interest rate swaps	731		11,782		933		12,193
Interest rate swaptions	18		56,216		543		361,455
Interest rate futures	—		—		17		103,935
TBAs	78,727		76,000		28,218		28,000
Energy and weather contracts	15,916		115,574		19,569		66,113
Total recorded in other liabilities	$	95,704			$	49,452
Net derivative asset	$	51,784			$	58,820

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

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Total included in net foreign exchange losses from foreign exchange forward contracts	$	1,214		$	(123	)	$	815		$	207
Futures contracts	$	—		$	112		$	136		$	64
Credit default swaps	6			(68		)	20			49
Interest rate swaps	384			(67		)	(698		)	(228		)
Interest rate swaptions	(3		)	392			425			291
TBAs	193			(11		)	2,649			(476		)
Total included in net realized and unrealized investment gains (losses)	$	580		$	358		$	2,532		$	(300	)
Total included in other underwriting income (loss) from energy and weather contracts	$	1,784		$	—		$	1,486		$	1,172
Total gains from derivatives	$	3,578		$	235		$	4,833		$	1,079

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule Of Accumulated Other Comprehensive Income

	For the Nine Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,944	)	$	141,731		$	12,676		$	152,463
Other comprehensive (loss) income before reclassifications	—			(74,001		)	(1,057		)	(75,058		)
Amounts reclassified from accumulated other comprehensive income (1)	67			(8,015		)	—			(7,948		)
Net current period other comprehensive (loss) income	67			(82,016		)	(1,057		)	(83,006		)
Ending balance	$	(1,877	)	$	59,715		$	11,619		$	69,457

(1)All amounts are net of tax.

	For the Three Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains on available for sale securities		Foreign currency translation adjustments		Total
Beginning balance	$	(1,899	)	30,636		$	2,701	$	31,438
Other comprehensive (loss) income before reclassifications	—			22,358		8,918		31,276
Amounts reclassified from accumulated other comprehensive income (1)	22			6,721		—		6,743
Net current period other comprehensive (loss) income	22			29,079		8,918		38,019
Ending balance	$	(1,877	)	$	59,715	$	11,619	$	69,457

(1)All amounts are net of tax.

	For the Three Months Ended September 30, 2014
	Losses on  cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,810	)	$	106,989		$	30,859		$	136,038
Other comprehensive (loss) income before reclassifications	—			(25,100		)	(20,404		)	(45,504		)
Amounts reclassified from accumulated other comprehensive income (1)	22			(9,257		)	—			(9,235		)
Net current period other comprehensive (loss) income	22			(34,357		)	(20,404		)	(54,739		)
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

	For the Three Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains on available for sale securities		Foreign currency translation adjustments		Total
Beginning balance	$	(1,899	)	30,636		$	2,701	$	31,438
Other comprehensive (loss) income before reclassifications	—			22,358		8,918		31,276
Amounts reclassified from accumulated other comprehensive income (1)	22			6,721		—		6,743
Net current period other comprehensive (loss) income	22			29,079		8,918		38,019
Ending balance	$	(1,877	)	$	59,715	$	11,619	$	69,457

	For the Nine Months Ended September 30, 2014
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,855	)	$	45,950		$	18,636		$	62,731
Other comprehensive (loss) income before reclassifications	—			41,895			(8,181		)	33,714
Amounts reclassified from accumulated other comprehensive income (1)	67			(15,213		)	—			(15,146		)
Net current period other comprehensive (loss) income	67			26,682			(8,181		)	18,568
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

Reclassification Out Of Accumulated Other Comprehensive Income

Nine Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(15,539	)	Net realized and unrealized investment gains
	411			Net impairment losses recognized in earnings
	(15,128		)	Total before income taxes
	(85		)	Income tax benefit
	$	(15,213	)	Total net of income taxes
Nine Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(10,267	)	Net realized and unrealized investment gains
	1,575			Net impairment losses recognized in earnings
	(8,692		)	Total before income taxes
	677			Income tax expense
	$	(8,015	)	Total net of income taxes

Three Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(9,208	)	Net realized and unrealized investment gains
	102			Net impairment losses recognized in earnings
	(9,106		)	Total before income taxes
	195			Income tax expense
	$	(8,911	)	Total net of income taxes
Three Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized losses on available for sale securities	$	6,999		Net realized and unrealized investment losses
	190			Net impairment losses recognized in earnings
	7,189			Total before income taxes
	(468		)	Income tax benefit
	$	6,721		Total net of income taxes

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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		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Segment Reporting [Abstract]
Total underwriting income	$ 52,442	$ 67,321	$ 177,673	$ 163,041
Net investment income	25,357	38,097	105,649	119,870
Net foreign exchange losses	(783)	(2,201)	(4,066)	(8,496)
Net realized and unrealized investment gains	9,788	(6,640)	18,071	9,967
Net impairment losses recognized in earnings	(102)	(190)	(411)	(1,575)
Amortization of intangibles	(1,623)	(1,652)	(4,863)	(5,378)
Interest expense	(13,127)	(9,048)	(31,910)	(27,138)
Income before income taxes	$ 71,952	$ 85,687	$ 260,143	$ 250,291

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Fair Value Measurement (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2013 Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers into Level 3	$ 2,198,000	$ 7,903,000	$ 7,201,000	$ 11,550,000
Transfers out of Level 3	(4,961,000)	(1,202,000)	(6,813,000)	(1,763,000)
Percentage of level 3 assets					11.40%	10.90%
Net impairment losses recognized in earnings	102,000	190,000	411,000	1,575,000	0
Amount of transfers from Level 1 to Level 2	$ 6,600,000		$ 6,600,000

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

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

	Three Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	344,819		$	199,544		$	544,363
Ceded premiums written	(120,481		)	(28,549		)	(149,030		)
Net premiums written	224,338			170,995			395,333
Net premiums earned	291,477			262,068			553,545
Other underwriting loss	—			(943		)	(943		)
	291,477			261,125			552,602
Expenses
Net losses and loss expenses	228,409			110,627			339,036
Acquisition expenses	18,440			60,335			78,775
General and administrative expenses	35,641			31,829			67,470
	282,490			202,791			485,281
Underwriting income	$	8,987		$	58,334		$	67,321
Net loss ratio	78.4		%	42.3		%	61.3		%
Acquisition expense ratio	6.3		%	23.0		%	14.2		%
General and administrative expense ratio	12.2		%	12.1		%	12.2		%
Combined ratio	96.9		%	77.4		%	87.7		%
Reserve for losses and loss expenses	$	2,146,136		$	1,905,966		$	4,052,102

	Nine Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,394,145		$	1,078,905		$	2,473,050
Ceded premiums written	(674,441		)	(98,371		)	(772,812		)
Net premiums written	719,704			980,534			1,700,238
Net premiums earned	616,167			776,532			1,392,699
Other underwriting loss	—			(3,939		)	(3,939		)
	616,167			772,593			1,388,760
Expenses
Net losses and loss expenses	434,777			291,584			726,361
Acquisition expenses	47,559			196,591			244,150
General and administrative expenses	133,930			106,646			240,576
	616,266			594,821			1,211,087
Underwriting (loss) income	$	(99	)	$	177,772		$	177,673
Net loss ratio	70.6		%	37.6		%	52.2		%
Acquisition expense ratio	7.7		%	25.3		%	17.5		%
General and administrative expense ratio	21.7		%	13.7		%	17.3		%
Combined ratio	100.0		%	76.6		%	87.0		%

	Three Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	420,343		$	205,767		$	626,110
Ceded premiums written	(222,704		)	(13,300		)	(236,004		)
Net premiums written	197,639			192,467			390,106
Net premiums earned	253,583			261,312			514,895
Other underwriting income	—			2,123			2,123
	253,583			263,435			517,018
Expenses
Net losses and loss expenses	196,677			93,592			290,269
Acquisition expenses	20,170			73,222			93,392
General and administrative expenses	44,957			35,958			80,915
	261,804			202,772			464,576
Underwriting (loss) income	$	(8,221	)	$	60,663		$	52,442
Net loss ratio	77.5		%	35.8		%	56.4		%
Acquisition expense ratio	8.0		%	28.0		%	18.1		%
General and administrative expense ratio	17.7		%	13.8		%	15.7		%
Combined ratio	103.2		%	77.6		%	90.2		%
Reserve for losses and loss expenses	$	2,134,985		$	1,762,498		$	3,897,483

	Nine Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,274,703		$	1,019,732		$	2,294,435
Ceded premiums written	(454,169		)	(71,397		)	(525,566		)
Net premiums written	820,534			948,335			1,768,869
Net premiums earned	710,507			806,490			1,516,997
Other underwriting income	—			694			694
	710,507			807,184			1,517,691
Expenses
Net losses and loss expenses	543,717			373,347			917,064
Acquisition expenses	48,024			174,255			222,279
General and administrative expenses	114,792			100,515			215,307
	706,533			648,117			1,354,650
Underwriting income	$	3,974		$	159,067		$	163,041
Net loss ratio	76.4		%	46.3		%	60.4		%
Acquisition expense ratio	6.8		%	21.6		%	14.7		%
General and administrative expense ratio	16.2		%	12.5		%	14.2		%
Combined ratio	99.4		%	80.4		%	89.3		%

Schedule Of Segment Results To Income Before Income Taxes

	Nine Months Ended September 30,
	2014			2013
Total underwriting income	$	177,673		$	163,041
Net investment income	105,649			119,870
Net foreign exchange losses	(4,066		)	(8,496		)
Net realized and unrealized investment gains	18,071			9,967
Net impairment losses recognized in earnings	(411		)	(1,575		)
Amortization of intangibles	(4,863		)	(5,378		)
Interest expense	(31,910		)	(27,138		)
Income before income taxes	$	260,143		$	250,291

	Three Months Ended September 30,
	2014			2013
Total underwriting income	$	52,442		$	67,321
Net investment income	25,357			38,097
Net foreign exchange losses	(783		)	(2,201		)
Net realized and unrealized investment gains (losses)	9,788			(6,640		)
Net impairment losses recognized in earnings	(102		)	(190		)
Amortization of intangibles	(1,623		)	(1,652		)
Interest expense	(13,127		)	(9,048		)
Income before income taxes	$	71,952		$	85,687

Schedule Of Gross And Net Premiums By Line Of Business

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	796,445	$	431,007	$	896,169	$	546,284
Casualty and other specialty	366,329		189,876		239,943		179,065
Professional lines	176,061		64,632		93,481		62,963
Property	55,310		34,189		45,110		32,222
Total Insurance	1,394,145		719,704		1,274,703		820,534
Reinsurance
Catastrophe	332,193		243,531		341,973		281,990
Property	283,107		283,015		288,448		283,455
Casualty	139,266		137,669		211,458		210,030
Professional lines	131,256		131,256		50,505		50,505
Specialty	193,083		185,063		127,348		122,355
Total Reinsurance	1,078,905		980,534		1,019,732		948,335
Total	$	2,473,050	$	1,700,238	$	2,294,435	$	1,768,869

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	188,011	$	103,536	$	200,062	$	120,617
Casualty and other specialty	144,706		58,390		95,862		72,431
Professional lines	62,631		20,216		34,221		20,972
Property	24,995		15,497		14,674		10,318
Total Insurance	420,343		197,639		344,819		224,338
Reinsurance
Catastrophe	47,173		41,157		38,676		12,551
Property	73,807		73,807		91,653		90,528
Casualty	23,409		23,409		27,649		27,648
Professional lines	21,520		21,520		25,670		25,670
Specialty	39,858		32,574		15,896		14,598
Total Reinsurance	205,767		192,467		199,544		170,995
Total	$	626,110	$	390,106	$	544,363	$	395,333

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Commitments And Contingencies (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Percentage Of Net Premiums

Broker	2014		2013
Marsh & McLennan Companies, Inc.	20.9	%	15.0	%
Aon Benfield	15.4	%	18.5	%
Willis Companies	14.2	%	12.4	%
Total of largest brokers	50.5	%	45.9	%

Schedule Of Future Minimum Lease Commitments

Twelve months ended September 30,	Amount
2015	$	16,066
2016	13,527
2017	11,957
2018	11,465
2019	10,809
2020 and thereafter	36,377
	$	100,201

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General

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

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Investments (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Investments [Abstract]
Number of available for sale securities in an unrealized loss position	752		752		880
Number of securities in a continuous unrealized loss position for twelve months or greater	222		222		71
Unrealized losses	$ (19,100,000)		$ (19,100,000)		$ (49,600,000)	[1]
Unrealized losses, 12 months or greater	(11,100,000)		(11,100,000)		(5,800,000)	[1]
OTTI losses recognized	$ 102,000	$ 190,000	$ 411,000	$ 1,575,000

[1] Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2013.

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Investments (Amortized Cost, Fair Value, Unrealized Gains And Losses And Non-Credit Other-Than-Temporary Impairments) (Details) (USD $)	Sep. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	$ 4,820,169,000		$ 4,802,580,000
Fixed income investments, fair value	4,871,420,000		4,823,964,000
Equity securities, cost	239,487,000		227,828,000
Equity securities, fair value	267,728,000		252,466,000
Gross unrealized loss related to securities, non-credit OTTI	0		100,000
US Government and Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	512,199,000		771,227,000
Fixed income investments, gross unrealized gains	5,450,000		5,735,000
Fixed income investments, gross unrealized losses	(2,977,000)		(7,619,000)
Fixed income investments, fair value	514,672,000		769,343,000
Non-Credit OTTI	0	[1]	0	[2]
US State and Municipal Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	31,437,000		27,138,000
Fixed income investments, gross unrealized gains	207,000		111,000
Fixed income investments, gross unrealized losses	(157,000)		(395,000)
Fixed income investments, fair value	31,487,000		26,854,000
Non-Credit OTTI	0	[1]	0	[2]
Foreign Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	204,033,000		183,650,000
Fixed income investments, gross unrealized gains	2,033,000		1,003,000
Fixed income investments, gross unrealized losses	(373,000)		(2,006,000)
Fixed income investments, fair value	205,693,000		182,647,000
Non-Credit OTTI	0	[1]	0	[2]
Government Guaranteed Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	45,577,000		34,921,000
Fixed income investments, gross unrealized gains	624,000		274,000
Fixed income investments, gross unrealized losses	0		(50,000)
Fixed income investments, fair value	46,201,000		35,145,000
Non-Credit OTTI	0	[1]	0	[2]
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	1,272,119,000		1,217,585,000
Fixed income investments, gross unrealized gains	13,037,000		16,225,000
Fixed income investments, gross unrealized losses	(4,790,000)		(6,511,000)
Fixed income investments, fair value	1,280,366,000		1,227,299,000
Non-Credit OTTI	0	[1]	0	[2]
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	1,185,911,000		1,192,085,000
Fixed income investments, gross unrealized gains	21,984,000		17,005,000
Fixed income investments, gross unrealized losses	(4,573,000)		(21,899,000)
Fixed income investments, fair value	1,203,322,000		1,187,191,000
Non-Credit OTTI	(3,319,000)	[1]	(4,257,000)	[2]
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	948,460,000		932,263,000
Fixed income investments, gross unrealized gains	20,763,000		23,423,000
Fixed income investments, gross unrealized losses	(3,527,000)		(8,009,000)
Fixed income investments, fair value	965,696,000		947,677,000
Non-Credit OTTI	(5,000)	[1]	(47,000)	[2]
Collateralized Loan and Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	205,465,000	[3]	92,519,000	[4]
Fixed income investments, gross unrealized gains	1,974,000	[3]	2,233,000	[4]
Fixed income investments, gross unrealized losses	(225,000)	[3]	(200,000)	[4]
Fixed income investments, fair value	207,214,000	[3]	94,552,000	[4]
Non-Credit OTTI	0	[1],[3]	0	[2],[4]
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	414,968,000		351,192,000
Fixed income investments, gross unrealized gains	2,333,000		2,919,000
Fixed income investments, gross unrealized losses	(532,000)		(855,000)
Fixed income investments, fair value	416,769,000		353,256,000
Non-Credit OTTI	0	[1]	(163,000)	[2]
Fixed Maturities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	4,820,169,000		4,802,580,000
Fixed income investments, gross unrealized gains	68,405,000		68,928,000
Fixed income investments, gross unrealized losses	(17,154,000)		(47,544,000)
Fixed income investments, fair value	4,871,420,000		4,823,964,000
Non-Credit OTTI	(3,324,000)	[1]	(4,467,000)	[2]
Short-term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	11,843,000		35,029,000
Fixed income investments, gross unrealized gains	1,000		1,000
Fixed income investments, gross unrealized losses	0		(2,000)
Fixed income investments, fair value	11,844,000		35,028,000
Non-Credit OTTI	0	[1]	0	[2]
Fixed Income Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	4,832,012,000		4,837,609,000
Fixed income investments, gross unrealized gains	68,406,000		68,929,000
Fixed income investments, gross unrealized losses	(17,154,000)		(47,546,000)
Fixed income investments, fair value	4,883,264,000		4,858,992,000
Non-Credit OTTI	(3,324,000)	[1]	(4,467,000)	[2]
Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, cost	157,924,000		152,525,000
Equity securities, gross unrealized gains	26,471,000		24,139,000
Equity securities, gross unrealized losses	(1,881,000)		(1,995,000)
Equity securities, fair value	182,514,000		174,669,000
Non-Credit OTTI	0	[1]	0	[2]
Emerging Market Debt Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, cost	60,250,000		60,250,000
Equity securities, gross unrealized gains	1,612,000		594,000
Equity securities, gross unrealized losses	0		0
Equity securities, fair value	61,862,000		60,844,000
Non-Credit OTTI	0	[1]	0	[2]
Preferred Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, cost	12,283,000		6,325,000
Equity securities, gross unrealized gains	2,071,000		1,977,000
Equity securities, gross unrealized losses	(37,000)		(79,000)
Equity securities, fair value	14,317,000		8,223,000
Non-Credit OTTI	0	[1]	0	[2]
Short-term Fixed Income Fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, cost	9,030,000		8,728,000
Equity securities, gross unrealized gains	6,000		2,000
Equity securities, gross unrealized losses	(1,000)		0
Equity securities, fair value	9,035,000		8,730,000
Non-Credit OTTI	0	[1]	0	[2]
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Equity securities, cost	239,487,000		227,828,000
Equity securities, gross unrealized gains	30,160,000		26,712,000
Equity securities, gross unrealized losses	(1,919,000)		(2,074,000)
Equity securities, fair value	267,728,000		252,466,000
Non-Credit OTTI	0	[1]	0	[2]
Collateralized Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, fair value	$ 10,700,000		$ 18,700,000

[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 September 30, 2014, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was nil.

[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, 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.

[3] Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 million.

[4] Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 million.

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Derivatives (Schedule Of Derivative Gain (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	$ 580	$ 358	$ 2,532	$ (300)
Total gains from derivatives	3,578	235	4,833	1,079
Foreign Exchange Forward [Member]
Derivative [Line Items]
Derivatives included in net foreign exchange losses from foreign exchange forward contracts	1,214	(123)	815	207
Interest Rate Future [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	0	112	136	64
Credit Default Swap [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	6	(68)	20	49
Interest Rate Swap [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	384	(67)	(698)	(228)
Interest Rate Swaption [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	(3)	392	425	291
TBA [Member]
Derivative [Line Items]
Derivatives included in net realized and unrealized investment gains (losses)	193	(11)	2,649	(476)
Energy and weather contracts [Member]
Derivative [Line Items]
Derivatives included in other underwriting income (loss) from energy and weather contracts	$ 1,784	$ 0	$ 1,486	$ 1,172

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Fixed maturity investments, available for sale at fair value (amortized cost: $4,820,169 and $4,802,580 at September 30, 2014 and December 31, 2013, respectively)	$ 4,871,420	$ 4,823,964
Short-term investments, available for sale at fair value (amortized cost: $11,843 and $35,029 at September 30, 2014 and December 31, 2013, respectively)	11,844	35,028
Equity securities, available for sale at fair value (cost: $239,487 and $227,828 at September 30, 2014 and December 31, 2013, respectively)	267,728	252,466
Other investments	658,678	617,478
Total investments	5,809,670	5,728,936
Cash and cash equivalents	805,716	845,851
Premiums receivable, net	1,452,228	669,198
Insurance and reinsurance balances receivable	123,432	127,722
Deferred acquisition costs	246,437	186,027
Prepaid reinsurance premiums	414,013	187,209
Reinsurance recoverable on unpaid losses	566,329	593,755
Reinsurance recoverable on paid losses	165,592	164,220
Accrued investment income	23,652	24,104
Goodwill and intangible assets	160,560	165,378
Deferred tax asset	53,403	51,703
Net receivable on sales of investments	84,699	54,910
Other assets	240,087	179,109
Total assets	10,145,818	8,978,122
LIABILITIES
Reserve for losses and loss expenses	3,897,483	4,002,259
Reserve for unearned premiums	1,552,168	1,018,851
Deposit liabilities	17,521	19,458
Reinsurance balances payable	482,093	181,061
Debt	527,732	527,478
Net payable on purchases of investments	238,038	129,047
Other liabilities	310,329	213,419
Total liabilities	7,025,364	6,091,573
Commitments and contingent liabilities
SHAREHOLDERS' EQUITY
Preferred shares, Series A and B, total liquidation preference $430,000 (2013 - $430,000)	17,200	17,200
Common shares, Ordinary - 44,751,174 issued and outstanding (2013 - 44,368,742)	44,751	44,369
Additional paid-in capital	590,330	569,116
Accumulated other comprehensive income	81,299	62,731
Retained earnings	2,386,874	2,193,133
Total shareholders' equity	3,120,454	2,886,549
Total liabilities and shareholders' equity	$ 10,145,818	$ 8,978,122

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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	Sep. 30, 2014		Dec. 31, 2013
Assets
Fixed maturity investments	$ 4,871,420		$ 4,823,964
Short-term investments	11,844		35,028
Equity securities	267,728		252,466
Other investments	658,678		617,478
Other assets (see Note 7)	147,488		108,272
Total assets	5,957,158		5,837,208
Liabilities
Other liabilities (see Note 7)	95,704		49,452
Debt	615,568		575,115
Total liabilities	711,272		624,567
Fair Value, Inputs, Level 1 [Member]
Assets
Short-term investments	0		0
Other investments	0		0
Other assets (see Note 7)	0		0
Total assets	132,318		146,754
Liabilities
Other liabilities (see Note 7)	0		0
Debt	0		0
Total liabilities	0		0
Fair Value, Inputs, Level 2 [Member]
Assets
Short-term investments	11,844		35,028
Other investments	0		0
Other assets (see Note 7)	132,666		94,234
Total assets	5,144,147		5,051,610
Liabilities
Other liabilities (see Note 7)	79,788		29,883
Debt	615,568		575,115
Total liabilities	695,356		604,998
Fair Value, Inputs, Level 3 [Member]
Assets
Short-term investments	0		0
Other investments	658,678		617,478
Other assets (see Note 7)	14,822		14,038
Total assets	680,693		638,844
Liabilities
Other liabilities (see Note 7)	15,916		19,569
Debt	0		0
Total liabilities	15,916		19,569
US Government and Agencies Securities [Member]
Assets
Fixed maturity investments	514,672		769,343
US Government and Agencies Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		20,248
US Government and Agencies Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	514,672		749,095
US Government and Agencies Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	0		0
US State and Municipal Debt Securities [Member]
Assets
Fixed maturity investments	31,487		26,854
US State and Municipal Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
US State and Municipal Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	31,487		26,854
US State and Municipal Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	0		0
Foreign Government Securities [Member]
Assets
Fixed maturity investments	205,693		182,647
Foreign Government Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Foreign Government Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	205,693		182,647
Foreign Government Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	0		0
Government Guaranteed Corporate Securities [Member]
Assets
Fixed maturity investments	46,201		35,145
Government Guaranteed Corporate Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Government Guaranteed Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	46,201		35,145
Government Guaranteed Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	0		0
Corporate Securities [Member]
Assets
Fixed maturity investments	1,280,366		1,227,299
Corporate Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	1,279,666		1,226,553
Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	700		746
Residential Mortgage Backed Securities [Member]
Assets
Fixed maturity investments	1,203,322		1,187,191
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	1,203,294		1,186,943
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	28		248
Commercial Mortgage Backed Securities [Member]
Assets
Fixed maturity investments	965,696		947,677
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	962,868		946,794
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	2,828		883
Collateralized Loan and Debt Obligations [Member]
Assets
Fixed maturity investments	207,214	[1]	94,552	[2]
Collateralized Loan and Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Collateralized Loan and Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	206,574		92,095
Collateralized Loan and Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	640		2,457
Asset-backed Securities [Member]
Assets
Fixed maturity investments	416,769		353,256
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		0
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	413,772		350,262
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	2,997		2,994
Fixed Maturities [Member]
Assets
Fixed maturity investments	4,871,420		4,823,964
Fixed Maturities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Fixed maturity investments	0		20,248
Fixed Maturities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Fixed maturity investments	4,864,227		4,796,388
Fixed Maturities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Fixed maturity investments	7,193		7,328
Equity Investments [Member]
Assets
Equity securities	182,514		174,669
Equity Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Equity securities	123,283		117,776
Equity Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Equity securities	59,231		56,893
Equity Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Equity securities	0		0
Emerging Market Debt Funds [Member]
Assets
Equity securities	61,862		60,844
Emerging Market Debt Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Equity securities	0		0
Emerging Market Debt Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Equity securities	61,862		60,844
Emerging Market Debt Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Equity securities	0		0
Preferred Equity Investments [Member]
Assets
Equity securities	14,317		8,223
Preferred Equity Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Equity securities	0		0
Preferred Equity Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Equity securities	14,317		8,223
Preferred Equity Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Equity securities	0		0
Short-term Fixed Income Fund [Member]
Assets
Equity securities	9,035		8,730
Short-term Fixed Income Fund [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Equity securities	9,035		8,730
Short-term Fixed Income Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Equity securities	0		0
Short-term Fixed Income Fund [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Equity securities	0		0
Equity Securities [Member]
Assets
Equity securities	267,728		252,466
Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Equity securities	132,318		126,506
Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Equity securities	135,410		125,960
Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Equity securities	$ 0		$ 0

[1] Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 million.

[2] Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 million.

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Condensed Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands	Total	Preferred Shares [Member]	Common Stock [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]	Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]
Balance, beginning of period at Dec. 31, 2012		$ 17,200	$ 43,116	$ 527,915	$ 12,676	$ 141,731	$ (1,944)		$ 1,969,903
Issuance of common shares, net of forfeitures			1,452	29,961
Repurchase of common shares			(318)	(14,266)
Settlement of equity awards				(2,975)
Stock-based compensation expense				19,569
Foreign currency translation adjustments	(1,057)				(1,057)
Net unrealized holding gains (losses) arising during the period, net of other-than-temporary impairment losses and reclassification adjustment	(82,016)					(82,016)
Net change from current period hedging transactions, net of reclassification adjustment							67
Net income	244,734								244,734
Dividends on preferred shares	(24,564)								(24,564)
Dividends on common shares									(42,174)
Balance, end of period at Sep. 30, 2013	2,839,010	17,200	44,250	560,204	11,619	59,715	(1,877)	69,457	2,147,899
Balance, beginning of period at Dec. 31, 2013	2,886,549	17,200	44,369	569,116	18,636	45,950	(1,855)		2,193,133
Issuance of common shares, net of forfeitures			382	1,270
Repurchase of common shares			0	0
Settlement of equity awards				(4,039)
Stock-based compensation expense				23,983
Foreign currency translation adjustments	(8,181)				(8,181)
Net unrealized holding gains (losses) arising during the period, net of other-than-temporary impairment losses and reclassification adjustment	26,682					26,682
Net change from current period hedging transactions, net of reclassification adjustment							67
Net income	263,877								263,877
Dividends on preferred shares	(24,564)								(24,564)
Dividends on common shares									(45,572)
Balance, end of period at Sep. 30, 2014	$ 3,120,454	$ 17,200	$ 44,751	$ 590,330	$ 10,455	$ 72,632	$ (1,788)	$ 81,299	$ 2,386,874

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Commitments And Contingencies (Schedule Of Percentage Of Net Premiums) (Details)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Revenue from External Customer [Line Items]
Percentage of net premium written	50.50%	45.90%
Aon Benfield [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	15.40%	18.50%
Willis Companies [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	14.20%	12.40%
Marsh & Mclennan Companies, Inc. [Member]
Revenue from External Customer [Line Items]
Percentage of net premium written	20.90%	15.00%

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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	Sep. 30, 2014		Dec. 31, 2013
US Government and Agencies Securities [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	$ 514,672	[1]	$ 769,343	[1]
Percentage of fixed income portfolio by investment ratings	10.50%	[1]	15.80%	[1]
Standard & Poor's, AAA Rating [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	1,153,558	[1]	972,820	[1]
Percentage of fixed income portfolio by investment ratings	23.70%	[1]	20.00%	[1]
Standard & Poor's, AA Rating [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	1,738,964	[1]	1,771,156	[1]
Percentage of fixed income portfolio by investment ratings	35.70%	[1]	36.50%	[1]
Standard & Poor's, A Rating [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	952,894	[1]	895,549	[1]
Percentage of fixed income portfolio by investment ratings	19.50%	[1]	18.40%	[1]
Standard & Poor's, BBB Rating [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	407,093	[1]	363,722	[1]
Percentage of fixed income portfolio by investment ratings	8.30%	[1]	7.50%	[1]
Standard & Poor's, Below BBB Rating [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	94,824	[1]	66,791	[1]
Percentage of fixed income portfolio by investment ratings	1.90%	[1]	1.40%	[1]
Not Rated [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	21,259	[1]	19,611	[1]
Percentage of fixed income portfolio by investment ratings	0.40%	[1]	0.40%	[1]
Fixed Income Investments [Member]
Investments By Rating [Line Items]
Fair Value of fixed income portfolio by investment ratings	$ 4,883,264	[1]	$ 4,858,992	[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 Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc., or DBRS, Inc. is used.

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Commitments And Contingencies (Schedule Of Future Minimum Lease Commitments) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
2015	$ 16,066,000
2016	13,527,000
2017	11,957,000
2018	11,465,000
2019	10,809,000
2020 and thereafter	36,377,000
Total	100,201,000
Total lease expenses under operating leases	$ 11,600,000	$ 11,200,000

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Earnings Per Share (Policy)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

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.

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Investments (Contractual Maturities Of Fixed Income Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Due within one year, amortized cost	$ 128,535		$ 144,814
Due within one year, fair value	129,382		145,653
Due after one year through five years, amortized cost	1,575,875		1,808,001
Due after one year through five years, fair value	1,583,414		1,815,240
Due after five years through ten years, amortized cost	339,764		290,391
Due after five years through ten years, fair value	341,993		288,486
Due after ten years, amortized cost	33,034		26,344
Due after ten years, fair value	35,474		26,937
Fixed income investments, amortized cost	4,820,169		4,802,580
Fixed income investments, fair value	4,871,420		4,823,964
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
No single maturity date, amortized cost	1,185,911		1,192,085
No single maturity date, fair value	1,203,322		1,187,191
Fixed income investments, amortized cost	1,185,911		1,192,085
Fixed income investments, fair value	1,203,322		1,187,191
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
No single maturity date, amortized cost	948,460		932,263
No single maturity date, fair value	965,696		947,677
Fixed income investments, amortized cost	948,460		932,263
Fixed income investments, fair value	965,696		947,677
Collateralized Loan and Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
No single maturity date, amortized cost	205,465		92,519
No single maturity date, fair value	207,214		94,552
Fixed income investments, amortized cost	205,465	[1]	92,519	[2]
Fixed income investments, fair value	207,214	[1]	94,552	[2]
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
No single maturity date, amortized cost	414,968		351,192
No single maturity date, fair value	416,769		353,256
Fixed income investments, amortized cost	414,968		351,192
Fixed income investments, fair value	416,769		353,256
Fixed Income Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Fixed income investments, amortized cost	4,832,012		4,837,609
Fixed income investments, fair value	$ 4,883,264		$ 4,858,992

[1] Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 million.

[2] Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 million.

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Segment Reporting (Policy)

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

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

Reinsurance segment lines of business

•Catastrophe

•Property

•Casualty

•Professional lines

•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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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows provided by (used in) operating activities
Net income	$ 263,877	$ 244,734
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of net premium on investments	34,128	39,933
Amortization of other intangibles and depreciation	20,593	15,131
Net realized and unrealized investment gains	(18,071)	(9,967)
Net impairment losses recognized in earnings	411	1,575
Deferred taxes	(5,058)	1,935
Stock-based compensation expense	23,983	19,569
Equity in earnings of other investments	(22,542)	(43,083)
Premiums receivable, net	(783,030)	(404,275)
Insurance and reinsurance balances receivable	4,290	(18,114)
Deferred acquisition costs	(60,410)	(28,796)
Prepaid reinsurance premiums	(226,804)	(96,797)
Reinsurance recoverable on unpaid losses	27,426	178,703
Reinsurance recoverable on paid losses	(1,372)	(345,141)
Accrued investment income	452	5,383
Other assets	(152)	(6,875)
Reserve for losses and loss expenses	(104,776)	(188,774)
Reserve for unearned premiums	533,317	349,443
Deposit liabilities	(1,937)	(4,643)
Reinsurance balances payable	301,032	236,205
Other liabilities	66,815	37,280
Net cash flows provided by (used in) operating activities	52,172	(16,574)
Cash flows provided by (used in) investing activities
Proceeds from sales of available for sale investments	2,658,866	2,382,068
Proceeds from maturities and calls on available for sale investments	467,374	542,059
Proceeds from the redemption of other investments	34,072	28,485
Purchases of available for sale investments	(3,085,817)	(3,094,718)
Purchases of other investments	(52,731)	(62,012)
Net settlements of other assets	14,836	(38,223)
Purchases of fixed assets	(34,038)	(10,768)
Net cash paid for subsidiary acquisition	(45)	(378)
Net cash flows provided by (used in) investing activities	2,517	(253,487)
Cash flows used in financing activities
Issuance of common shares, net of forfeitures	1,480	31,289
Repurchase of common shares	0	(14,584)
Settlement of equity awards	(4,039)	(2,975)
Loan facility costs paid	(4,750)	0
Proceeds from issuance of debt	591	640
Repayments and repurchases of debt	(499)	(624)
Dividends on preferred shares	(24,564)	(24,564)
Dividends on common shares	(45,548)	(42,174)
Net cash flows used in financing activities	(77,329)	(52,992)
Effect of exchange rate changes on cash and cash equivalents	(17,495)	(10,967)
Net decrease in cash and cash equivalents	(40,135)	(334,020)
Cash and cash equivalents, beginning of period	845,851	1,124,019
Cash and cash equivalents, end of period	$ 805,716	$ 789,999

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Available-for-sale Securities [Abstract]
Fixed maturity investments, available for sale, amortized cost	$ 4,820,169	$ 4,802,580
Short-term investments, available for sale, amortized cost	11,843	35,029
Equity securities, available for sale, cost	239,487	227,828
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, aggregate liquidation preference	$ 430,000	$ 430,000
Common stock, shares issued	44,751,174	44,368,742
Common stock, shares outstanding	44,751,174	44,368,742

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

10. Commitments and contingencies

Concentrations of credit risk. The Company’s reinsurance recoverables on paid and unpaid losses at September 30, 2014 and December 31, 2013 amounted to $731.9 million and $758.0 million, respectively. At September 30, 2014, 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. At September 30, 2014 and December 31, 2013, the Company held collateral of $87.6 million and $14.2 million, respectively, related to its ceded reinsurance agreements.

Major production sources. The following table shows the percentage of net premiums written generated through the Company’s largest brokers for the nine months ended September 30, 2014 and 2013, respectively:

Broker	2014		2013
Marsh & McLennan Companies, Inc.	20.9	%	15.0	%
Aon Benfield	15.4	%	18.5	%
Willis Companies	14.2	%	12.4	%
Total of largest brokers	50.5	%	45.9	%

Letters of credit. As of September 30, 2014, the Company had issued letters of credit of $202.9 million (December 31, 2013 – $260.3 million) under its credit facility in favor of certain ceding companies to collateralize obligations.

On January 17, 2014, the Company and certain designated subsidiaries of the Company entered into a $50.0 million revolving letter of credit reimbursement agreement (“LOC Agreement”) and cash collateral agreement with Australia and New Zealand Banking Group Limited. As of September 30, 2014, the Company had issued letters of credit of $1.4 million (December 31, 2013 - nil) under the LOC Agreement. For letters of credit issued under the LOC Agreement, the Company is required to pay a fee that is negotiated at the time of issuance of the letter of credit. Letters of credit issued under the LOC Agreement are required to be collateralized with cash or investments.

10. Commitments and contingencies, cont'd.

Agreement with Equity Investors. On June 2, 2014, the Company entered into an agreement (the “Agreement”) terminating a prior equity commitment letter, dated January 28, 2014. In connection with such termination, the Company extended to CVC Capital Partners Advisory (U.S.), Inc. (“CVC”) and certain permitted assignees of CVC (collectively, the “Equity Option Investors”) an equity investment option in the event that, on or prior to December 31, 2014, the Company enters into a definitive written agreement to acquire, or acquires, 95% or more of the issued and outstanding Aspen Insurance Holdings Limited (“Aspen”) ordinary shares (the “Equity Investment Option”). Pursuant to the Equity Investment Option, if exercised, the Equity Option Investors would purchase $250.0 million of newly issued Company ordinary shares at a price of $50.03 per ordinary share, as adjusted for any stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The Equity Investment Option would be exercisable for the sixty (60) day period following the closing of the Company’s proposed acquisition of Aspen.

The Equity Option Investors would have certain preemptive rights with respect to future share issuances by the Company, and the purchased ordinary shares would be subject to lock-up restrictions that would limit the right of the Equity Option Investors to transfer the shares for 12 months following the exercise of the Equity Investment Option, subject to certain exceptions.

In addition to the purchase of Company ordinary shares, upon the closing of the Equity Investment Option, the Company would also grant the Equity Option Investors, on a pro rata basis, warrants to purchase a number of additional Company ordinary shares equal to 38.5% of the total number of Company ordinary shares acquired by the Equity Option Investors in connection with the Equity Investment Option, at an exercise price equal to $58.86 per share, as adjusted for any stock splits, stock dividends or combinations prior to the closing of the Equity Investment Option. The warrants would have a term of 10 years from the date of the closing of the Equity Investment Option.

Upon the closing of the Equity Investment Option, CVC would have the right to nominate one individual to serve as a director of the Company, which individual shall qualify as an independent director for purposes of the NYSE rules and, except for two specified individuals, shall be subject to the approval of the Company’s board of directors (such approval not to be unreasonably withheld).

Pursuant to the Agreement, the Company also granted the Equity Option Investors a right of first refusal in the event the Company proposes to raise, on a private basis, equity capital through the sale of equity securities or securities convertible into or exchangeable or exercisable for equity securities of the Company or other equity-linked securities, the purpose of which is to partially fund the cash portion of an acquisition of Aspen completed, or for which a definitive written agreement is entered into, on or prior to December 31, 2014, or to refinance any debt incurred by the Company in connection with any such acquisition (only to the extent the proceeds of any such refinancing are specifically earmarked for such purposes). This right of first refusal is subject to certain exceptions, including with respect to equity purchased by the Company’s Chief Executive Officer of up to $25.0 million and by certain other specified equity investors of up to $100.0 million. The Company does not currently intend to raise any equity capital that would be subject to the right of first refusal, but reserves the right to do so.

The Company has also agreed that, in the event any person or entity (other than certain funds advised by CVC or their affiliates) enters into a definitive written agreement to acquire or acquires more than 40% of the capital stock of the Company on or prior to December 31, 2014, the Company will pay CVC an amount equal to $26.3 million upon the closing of such transaction, less the amount of any previously reimbursed expenses.

The Charman Agreement. John R. Charman, the Company’s Chief Executive Officer, and the Company entered into an agreement on June 2, 2014, pursuant to which Mr. Charman committed to purchase, subject to the receipt of any required regulatory approvals and the completion of the Company’s acquisition of Aspen, $25.0 million of newly issued Company common shares at a price per share equal to $53.51, as adjusted for any stock splits, stock dividends or combinations prior to the closing of such investment.

10. Commitments and contingencies, cont'd.

Investment commitments. As of September 30, 2014 and December 31, 2013, the Company had pledged cash and cash equivalents and fixed maturity investments of $130.1 million and $146.1 million, respectively, in favor of certain ceding companies to collateralize obligations. As of September 30, 2014 and December 31, 2013, the Company had also pledged $237.9 million and $302.7 million of its cash and fixed maturity investments as required to meet collateral obligations for $202.9 million and $260.3 million, respectively, in letters of credit outstanding under its credit facility and LOC Agreement. In addition, as of September 30, 2014 and December 31, 2013, cash and fixed maturity investments with fair values of $273.1 million and $273.7 million were on deposit with U.S. state regulators, respectively.

The Company is subject to certain commitments with respect to other investments at September 30, 2014 and December 31, 2013. 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 September 30, 2014 are as follows:

Twelve months ended September 30,	Amount
2015	$	16,066
2016	13,527
2017	11,957
2018	11,465
2019	10,809
2020 and thereafter	36,377
	$	100,201

Total net lease expense under operating leases for the nine months ended September 30, 2014 was $11.6 million (2013 – $11.2 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.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 03, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
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		44,757,803

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Debt And Financing Arrangements

9 Months Ended

Sep. 30, 2014

Debt Instruments [Abstract]

Debt Disclosure [Text Block]

11. Debt

On April 19, 2012, the Company and certain designated subsidiaries of the Company entered into a $700.0 million four-year revolving credit facility with JPMorgan Chase Bank, N.A. (“JPMorgan”) as administrative agent (“Credit Facility”). As of September 30, 2014, there were no borrowings under this facility and letters of credit outstanding under the Credit Facility were $202.9 million (December 31, 2013 – $260.3 million).

On June 25, 2014, the Company entered into the First Amendment (the “Amendment”) to the Credit Facility. The Amendment also amends the Security Agreement, dated as of April 19, 2012 (the “Security Agreement”), among the Company and various designated subsidiaries of the Company, Deutsche Bank Trust Company America, as collateral agent, and JPMorgan. The Amendment contained certain amendments to the Credit Facility and the Security Agreement applicable to the proposed acquisition of Aspen.

11. Debt, cont'd.

On June 2, 2014, the Company entered into a commitment letter with Morgan Stanley Senior Funding, Inc. (the “Commitment Letter”). Pursuant to the Commitment Letter, Morgan Stanley Senior Funding, Inc., as lead arranger, committed to provide to the Company, subject to certain conditions, senior unsecured bank financing of up to $1.0 billion under an unsecured 364-day bridge facility (the “Bridge Facility”), which was to be used to finance a portion of the cash consideration to be paid in connection with the Company’s proposed acquisition of Aspen and related costs and expenses. Upon the termination by the Company of its offer to acquire Aspen on July 30, 2014, the Bridge Facility expired pursuant to its terms.

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Condensed Consolidated Statements Of Income And Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues
Gross premiums written	$ 626,110	$ 544,363	$ 2,473,050	$ 2,294,435
Ceded premiums written	(236,004)	(149,030)	(772,812)	(525,566)
Net premiums written	390,106	395,333	1,700,238	1,768,869
Change in unearned premiums	124,789	158,212	(307,539)	(251,872)
Net premiums earned	514,895	553,545	1,392,699	1,516,997
Net investment income	25,357	38,097	105,649	119,870
Net realized and unrealized investment gains (losses)	9,788	(6,640)	18,071	9,967
Total other-than-temporary impairment losses	(102)	(190)	(411)	(1,575)
Portion of loss recognized in other comprehensive (loss) income	0	0	0	0
Net impairment losses recognized in earnings	(102)	(190)	(411)	(1,575)
Other underwriting income (loss)	2,123	(943)	(3,939)	694
Total revenues	552,061	583,869	1,512,069	1,645,953
Expenses
Net losses and loss expenses	290,269	339,036	726,361	917,064
Acquisition expenses	93,392	78,775	244,150	222,279
General and administrative expenses	80,915	67,470	240,576	215,307
Amortization of intangibles	1,623	1,652	4,863	5,378
Net foreign exchange losses	783	2,201	4,066	8,496
Interest expense	13,127	9,048	31,910	27,138
Total expenses	480,109	498,182	1,251,926	1,395,662
Income before income taxes	71,952	85,687	260,143	250,291
Income tax benefit (expense)	4,282	(2,271)	3,734	(5,557)
Net income	76,234	83,416	263,877	244,734
Preferred dividends	(8,188)	(8,188)	(24,564)	(24,564)
Net income available to common and participating common shareholders	68,046	75,228	239,313	220,170
Comprehensive income
Net income	76,234	83,416	263,877	244,734
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 ($3,358) and $8,582 for the nine months ended September 30, 2014 and 2013, respectively)	(34,357)	29,079	26,682	(82,016)
Foreign currency translation adjustments	(20,404)	8,918	(8,181)	(1,057)
Reclassification adjustment for net losses on derivative designated as cash flow hedge included in net income	22	22	67	67
Other comprehensive (loss) income	(54,739)	38,019	18,568	(83,006)
Comprehensive income	$ 21,495	$ 121,435	$ 282,445	$ 161,728
Per share data
Basic earnings per common share	$ 1.52	$ 1.70	$ 5.36	$ 5.04
Diluted earnings per common share	$ 1.52	$ 1.70	$ 5.36	$ 5.04
Dividend per common share	$ 0.34	$ 0.32	$ 1.02	$ 0.96

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Earnings Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

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 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 nine months ended September 30, 2014 and 2013:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Numerator:
Net income available to common and participating common shareholders	$	68,046		$	75,228		$	239,313		$	220,170
Less amount allocated to participating common shareholders(1)	(1,930		)	(1,997		)	(6,907		)	(4,742		)
Net income allocated to common shareholders	$	66,116		$	73,231		$	232,406		$	215,428
Denominator:
Weighted average shares - basic	43,464,790			43,099,841			43,332,461			42,719,837
Share equivalents:
Options	45,625			—			23,237			—
Restricted share units	—			298			94			594
Weighted average shares - diluted	43,510,415			43,100,139			43,355,792			42,720,431
Basic earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04
Diluted earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04

(1) Represents earnings attributable to holders of unvested restricted shares issued under the Company's equity compensation plan that are considered participating. 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 $0.468750 per Series B preferred share on August 15, 2014 (2013 - Series A: $0.484375, Series B: $0.468750). The Series A and Series B preferred share dividends were paid on September 15, 2014 to shareholders of record on August 29, 2014. Endurance Holdings also declared a dividend of $0.34 per common share on August 15, 2014 (2013 - $0.32). The dividend was paid on September 30, 2014 to shareholders of record on September 15, 2014.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	1.453125	$	1.453125
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	1.406250	$	1.406250
Dividends declared per common share	$	0.34	$	0.32	$	1.02	$	0.96

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Fair Value Measurement

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

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 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.

• Other assets and liabilities – A portion of other assets and liabilities are composed of 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 are 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 and collateralized loan and debt obligations – 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.

4. Fair value measurement, cont'd.

• Other investments – Other investments are comprised of alternative funds and specialty funds and 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 September 30, 2014.

Transfers between levels are assumed to occur at the end of each 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 September 30, 2014:

	Fair Value Measurements at September 30, 2014
	Total at   September 30, 2014		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	$	514,672	$	—	$	514,672	$	—
U.S. state and municipal securities	31,487		—		31,487		—
Foreign government securities	205,693		—		205,693		—
Government guaranteed corporate securities	46,201		—		46,201		—
Corporate securities	1,280,366		—		1,279,666		700
Residential mortgage-backed securities	1,203,322		—		1,203,294		28
Commercial mortgage-backed securities	965,696		—		962,868		2,828
Collateralized loan and debt obligations	207,214		—		206,574		640
Asset-backed securities	416,769		—		413,772		2,997
Total fixed maturity investments	$	4,871,420	$	—	$	4,864,227	$	7,193
Equity securities
Equity investments	182,514		123,283		59,231		—
Emerging market debt funds	61,862		—		61,862		—
Preferred equity investments	14,317		—		14,317		—
Short-term fixed income fund	9,035		9,035		—		—
Total equity securities	$	267,728	$	132,318	$	135,410	$	—
Short-term investments	11,844		—		11,844		—
Other investments	658,678		—		—		658,678
Other assets (see Note 7)	147,488		—		132,666		14,822
Total assets	$	5,957,158	$	132,318	$	5,144,147	$	680,693
Liabilities
Other liabilities (see Note 7)	$	95,704	$	—	$	79,788	$	15,916
Debt	615,568		—		615,568		—
Total liabilities	$	711,272	$	—	$	695,356	$	15,916

During the three months ended September 30, 2014, $2.2 million of commercial mortgage-backed securities were transferred into Level 3 as no observable inputs were available, and $5.0 million of primarily residential mortgage-backed securities and collateralized loan and debt obligations were transferred out of Level 3 to Level 2 during the period as market activity for these securities increased and observable inputs became available.

During the nine months ended September 30, 2014, $7.2 million of primarily commercial and residential mortgage-backed securities were transferred into Level 3 as no observable inputs were available, and $6.8 million of primarily commercial and residential mortgage-backed securities and collateralized loan and debt obligations were transferred out of Level 3 as market activity for these securities increased and observable inputs became available. During the three and nine months ended September 30, 2014, $6.6 million of U.S. government and agencies securities were transferred from Level 1 to Level 2 as they no longer qualified as on the run U.S. treasury securities.

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, 2013:

	Fair Value Measurements at December 31, 2013
	Total at   December 31, 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	$	769,343	$	20,248	$	749,095	$	—
U.S. state and municipal securities	26,854		—		26,854		—
Foreign government securities	182,647		—		182,647		—
Government guaranteed corporate securities	35,145		—		35,145		—
Corporate securities	1,227,299		—		1,226,553		746
Residential mortgage-backed securities	1,187,191		—		1,186,943		248
Commercial mortgage-backed securities	947,677		—		946,794		883
Collateralized loan and debt obligations	94,552		—		92,095		2,457
Asset-backed securities	353,256		—		350,262		2,994
Total fixed maturity investments	$	4,823,964	$	20,248	$	4,796,388	$	7,328
Equity securities
Equity investments	174,669		117,776		56,893		—
Emerging market debt funds	60,844		—		60,844		—
Preferred equity investments	8,223		—		8,223		—
Short-term fixed income fund	8,730		8,730		—		—
Total equity securities	$	252,466	$	126,506	$	125,960	$	—
Short-term investments	35,028		—		35,028		—
Other investments	617,478		—		—		617,478
Other assets (see Note 7)	108,272		—		94,234		14,038
Total assets	$	5,837,208	$	146,754	$	5,051,610	$	638,844
Liabilities
Other liabilities (see Note 7)	$	49,452	$	—	$	29,883	$	19,569
Debt	575,115		—		575,115		—
Total liabilities	$	624,567	$	—	$	604,998	$	19,569

Level 3 assets represented 11.4% and 10.9% of the Company’s total available for sale investments, other investments and derivative instruments at September 30, 2014 and December 31, 2013, respectively. Level 3 securities are primarily comprised of non-agency commercial mortgage-backed securities, asset-backed securities, investments in alternative and specialty funds, and weather derivatives. The NAV used to measure the fair value of the Company’s other investments are generally derived from the underlying investments held within the funds. Although the Company does not have direct access to detailed financial information related to the underlying investments of the funds, the Company obtains and reviews fund financial statements, internal control review reports, and industry benchmarking reports to determine the reasonability of the NAV of the funds. There were no material changes in the Company’s valuation techniques for the nine months ended September 30, 2014.

4. Fair value measurement, cont'd.

Other assets and other liabilities measured at fair value at September 30, 2014 include assets of $14.8 million (2013 - $14.0 million) and liabilities of $15.9 million (2013 - $19.6 million) related to proprietary, non-exchange traded derivative-based risk management products used in the Company’s weather risk management business, and hedging and trading activities related to these risks. In instances where market prices are not available, the Company may use industry or internally developed valuation techniques such as historical analysis and simulation modeling to determine fair value and are considered Level 3.

Observable and unobservable inputs to these valuation techniques vary by contract requirements and commodity type, are validated using market-based or independently sourced parameters where applicable and may include the following:

•Observable inputs: contract price, notional, option strike, term to expiry, interest rate, contractual limits;

•Unobservable inputs: correlation; and

•Both observable and unobservable: forward commodity price, forward weather curve.

The Company’s weather curves are determined by taking the average payouts for each transaction within its portfolio utilizing detrended historical weather measurements. The Company’s commodity curves are determined using historical market data scaled to currently observed market prices. The range of each unobservable input could vary based on the specific commodity, including, but not limited to natural gas, electricity, crude, liquids, temperature or precipitation. Due to the diversity of the portfolio, the range of unobservable inputs could be wide-spread as reflected in the below table on quantitative information.

If a trade has one or more significant valuation inputs that are unobservable, such trades are initially valued at the transaction price, which is considered to be the best initial estimate of fair value. Subsequent to the initial valuation, the Company updates market observable inputs to reflect observable market changes. The unobservable inputs are validated at each reporting period and are only changed when corroborated by evidence such as similar market transactions, third-party pricing services and/or broker or dealer quotations or other empirical market data.

Changes in any or all of the unobservable inputs listed above may contribute positively or negatively to the overall portfolio fair value depending upon the underlying position. In general, movements in weather curves are the largest contributing factor that impacts fair value.

Below is a summary of quantitative information regarding the significant unobservable inputs used in determining the fair value of the net weather and energy related derivative liabilities classified in Level 3 that are measured at fair value on a recurring basis at September 30, 2014:

	September 30, 2014
	Fair Value (Level 3)			Valuation Techniques	Unobservable Inputs	Low		High		Weighted Average or Actual
	(U.S. dollars in thousands, except for correlation and commodity curve)
Net weather and energy related derivative liabilities	$	(1,094	)	Historical  Analysis and Simulation	Correlation	0		1		Actual
					Weather curve	$	400	$	2,500	Actual
					Commodity curve	$	28.50	$	122.20	Actual

There were no impairment losses on Level 3 securities recognized in earnings for the three and nine months ended September 30, 2014 or 2013.

4. Fair value measurement, cont'd.

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 months ended September 30, 2014 and 2013:

	Three Months Ended September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	9,515		$	648,642		$	10,992		$	669,149		$	(10,284	)
Total equity income and realized gains included in earnings	9			10,913			—			10,922			—
Total equity losses and losses included in earnings	(6		)	(12,698		)	—			(12,704		)	—
Total income included in other underwriting income (loss)	—			—			3,180			3,180			4,794
Total loss included in other underwriting income (loss)	—			—			(5,235		)	(5,235		)	(3,719		)
Change in unrealized gains included in other comprehensive (loss) income	245			—			—			245			—
Change in unrealized losses included in other comprehensive (loss) income	(104		)	—			—			(104		)	—
Purchases	842			26,190			1,501			28,533			(751		)
Issues	—			—			7,331			7,331			(10,917		)
Sales	(545		)	(14,369		)	—			(14,914		)	—
Settlements	—			—			(2,947		)	(2,947		)	4,961
Transfers into Level 3	2,198			—			—			2,198			—
Transfers out of Level 3	(4,961		)	—			—			(4,961		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Three Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,546		$	569,393		$	—		$	576,939		$	—
Total equity income and realized gains included in earnings	56			19,108			—			19,164			—
Total equity losses and losses included in earnings	(15		)	(5,864		)	—			(5,879		)	—
Total income included in other underwriting income (loss)	—			—			—			—			—
Total loss included in other underwriting income (loss)	—			—			—			—			—
Change in unrealized gains included in other comprehensive (loss) income	111			—			—			111			—
Change in unrealized losses included in other comprehensive (loss) income	(62		)	—			—			(62		)	—
Purchases	—			16,597			—			16,597			—
Sales	(1,879		)	(5,078		)	—			(6,957		)	—
Transfers in to Level 3	7,903			—			—			7,903			—
Transfers out of Level 3	(1,202		)	—			—			(1,202		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

4. Fair value measurement, cont'd.

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 nine months ended September 30, 2014 and 2013:

	Nine Months Ended September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,328		$	617,478		$	14,038		$	638,844		$	(19,569	)
Total equity income and realized gains included in earnings	62			46,385			—			46,447			—
Total equity losses and losses included in earnings	(32		)	(23,844		)	—			(23,876		)	—
Total income included in other underwriting income (loss)	—			—			18,396			18,396			24,842
Total loss included in other underwriting income (loss)	—			—			(23,845		)	(23,845		)	(20,672		)
Change in unrealized gains included in other comprehensive (loss) income	445			—			—			445			—
Change in unrealized losses included in other comprehensive (loss) income	(255		)	—			—			(255		)	—
Purchases	842			52,731			1,501			55,074			(751		)
Issues	—			—			10,912			10,912			(18,080		)
Sales	(1,585		)	(34,072		)	—			(35,657		)	—
Settlements	—			—			(6,180		)	(6,180		)	18,314
Transfers in to Level 3	7,201			—			—			7,201			—
Transfers out of Level 3	(6,813		)	—			—			(6,813		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Nine Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	8,497		$	517,546		$	882		$	526,925		$	(1,922	)
Total equity income and realized gains included in earnings	104			61,010			—			61,114			—
Total equity losses and losses included in earnings	(17		)	(17,927		)	—			(17,944		)	—
Total income included in other underwriting income (loss)	—			—			—			—			2,354
Total loss included in other underwriting income (loss)	—			—			(1,182		)	(1,182		)	—
Change in unrealized gains included in other comprehensive income (loss)	438			—			—			438			—
Change in unrealized losses included in other comprehensive income (loss)	(270		)	—			—			(270		)	—
Purchases	—			62,011			—			62,011			—
Issues	—			—			300			300			(432		)
Sales	(6,081		)	(28,484		)	—			(34,565		)	—
Transfers in to Level 3	11,550			—			—			11,550			—
Transfers out of Level 3	(1,763		)	—			—			(1,763		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

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Derivatives (Policy)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Accounting policy for derivatives

The Company regularly transacts in certain derivative-based weather risk management products primarily to address weather and energy risks on behalf of third parties. The 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 also 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 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 (losses), net foreign exchange losses and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive Income.

The Company’s derivatives are not designated as hedges under current accounting guidance.

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.

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. Generally, the Company’s current portfolio of energy and weather derivative contracts is of comparably short duration and such contracts are predominantly seasonal in nature.

Offsetting of derivatives policy

At September 30, 2014 and December 31, 2013, none of the Company’s derivative instruments were recorded on a net basis in the Condensed Consolidated Balance Sheets.

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Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

New Accounting Pronouncements Adopted

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”). ASU 2013-11 provides 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 was effective for annual and interim reporting periods beginning after December 15, 2013, with both early adoption and retrospective application permitted. The Company adopted this standard effective January 1, 2014. This standard did not have a material impact on the Company’s consolidated financial statements.

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Stock-Based Employee Compensation And Other Stock Plans

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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, which provides the Company with the ability to grant options to purchase the Company’s ordinary shares, share appreciation rights, restricted shares, share bonuses and other equity incentive awards to key employees.

No options were granted, expired, vested or exercised during the quarters ended September 30, 2014 and 2013. For the quarter ended September 30, 2014, compensation costs recognized in earnings for all options totaled $0.6 million (2013 - $1.0 million). At September 30, 2014, compensation costs not yet recognized related to unvested stock options was $3.2 million (2013 - $6.7 million).

No options were granted or expired during the nine months ended September 30, 2014. During the nine months ended September 30, 2013, 800,000 options were granted with a weighted average grant date fair value of $10.2 million. The Company uses the Black-Scholes-Merton formula to estimate the value of stock options granted. No options expired during the nine months ended September 30, 2013. During the nine months ended September 30, 2014, 15,000 (2013 - 24,501) options were exercised. During the nine months ended September 30, 2014, 160,000 (2013 - 160,000) options vested. The total intrinsic value of options exercised during the nine months ended September 30, 2014 was $0.3 million (2013 - $0.5 million). The Company received proceeds of $0.5 million (2013 - $0.6 million) from the exercise of options during the nine months ended September 30, 2014. The Company issued new ordinary shares in connection with the exercise of the above options. For the nine months ended September 30, 2014, compensation costs recognized in earnings for all options totaled $2.5 million (2013 - $3.5 million).

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

During the quarter ended September 30, 2014, the Company granted an aggregate of 39,080 (2013 – 8,453) restricted shares with weighted average grant date fair values of $2.1 million (2013 - $0.4 million). During the quarter ended September 30, 2014, the aggregate fair value of restricted shares and restricted share units that vested was $0.2 million (2013 - $0.1 million). For the quarter ended September 30, 2014, compensation costs recognized in earnings for all restricted shares and restricted share units were $5.7 million (2013 - $2.6 million). At September 30, 2014, compensation costs not yet recognized related to unvested restricted shares and restricted share units was $27.7 million (2013 - $31.6 million).

During the nine months ended September 30, 2014, the Company granted an aggregate of 472,497 (2013 – 1,079,108) restricted shares and restricted share units with weighted average grant date fair values of $24.8 million (2013 - $50.7 million). During the nine months ended September 30, 2014, the aggregate fair value of restricted shares and restricted share units that vested was $18.7 million (2013 - $17.0 million). For the nine months ended September 30, 2014, compensation costs recognized in earnings for all restricted shares and restricted share units were $21.5 million (2013 - $16.1 million).

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. For the quarter ended September 30, 2014, total expenses related to the Company’s Employee Share Purchase Plan were approximately $62,000 (2013- $42,000) and $172,000 (2013 - $124,000) for the nine months ended September 30, 2014.

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Commitments And Contingencies (LOC) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Other Commitments [Line Items]
Amount of letters of credit outstanding	$ 202.9	$ 260.3
Maximum borrowing capacity	700.0
ANZ [Member]
Other Commitments [Line Items]
Amount of letters of credit outstanding	1.4	0
Maximum borrowing capacity	$ 50.0

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income

6. Accumulated other comprehensive income

The following tables present the changes in accumulated other comprehensive income balances by component for the three months ended September 30, 2014 and 2013:

	For the Three Months Ended September 30, 2014
	Losses on  cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,810	)	$	106,989		$	30,859		$	136,038
Other comprehensive (loss) income before reclassifications	—			(25,100		)	(20,404		)	(45,504		)
Amounts reclassified from accumulated other comprehensive income (1)	22			(9,257		)	—			(9,235		)
Net current period other comprehensive (loss) income	22			(34,357		)	(20,404		)	(54,739		)
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

	For the Three Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains on available for sale securities		Foreign currency translation adjustments		Total
Beginning balance	$	(1,899	)	30,636		$	2,701	$	31,438
Other comprehensive (loss) income before reclassifications	—			22,358		8,918		31,276
Amounts reclassified from accumulated other comprehensive income (1)	22			6,721		—		6,743
Net current period other comprehensive (loss) income	22			29,079		8,918		38,019
Ending balance	$	(1,877	)	$	59,715	$	11,619	$	69,457

(1)All amounts are net of tax.

6. Accumulated other comprehensive income, cont'd.

The following tables present the changes in accumulated other comprehensive income balances by component for the nine months ended September 30, 2014 and 2013:

	For the Nine Months Ended September 30, 2014
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,855	)	$	45,950		$	18,636		$	62,731
Other comprehensive (loss) income before reclassifications	—			41,895			(8,181		)	33,714
Amounts reclassified from accumulated other comprehensive income (1)	67			(15,213		)	—			(15,146		)
Net current period other comprehensive (loss) income	67			26,682			(8,181		)	18,568
Ending balance	$	(1,788	)	$	72,632		$	10,455		$	81,299

(1)All amounts are net of tax.

	For the Nine Months Ended September 30, 2013
	Losses on cash flow hedges			Unrealized gains (losses) on available for sale securities			Foreign currency translation adjustments			Total
Beginning balance	$	(1,944	)	$	141,731		$	12,676		$	152,463
Other comprehensive (loss) income before reclassifications	—			(74,001		)	(1,057		)	(75,058		)
Amounts reclassified from accumulated other comprehensive income (1)	67			(8,015		)	—			(7,948		)
Net current period other comprehensive (loss) income	67			(82,016		)	(1,057		)	(83,006		)
Ending balance	$	(1,877	)	$	59,715		$	11,619		$	69,457

(1)All amounts are net of tax.

6. Accumulated other comprehensive income, cont'd.

The following tables present the significant items reclassified out of accumulated other comprehensive income during the three months ended September 30, 2014 and 2013:

Three Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(9,208	)	Net realized and unrealized investment gains
	102			Net impairment losses recognized in earnings
	(9,106		)	Total before income taxes
	195			Income tax expense
	$	(8,911	)	Total net of income taxes
Three Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	22		Interest expense
	22			Total before income taxes
	—			Income tax expense
	$	22		Total net of income taxes
Unrealized losses on available for sale securities	$	6,999		Net realized and unrealized investment losses
	190			Net impairment losses recognized in earnings
	7,189			Total before income taxes
	(468		)	Income tax benefit
	$	6,721		Total net of income taxes

6. Accumulated other comprehensive income, cont'd.

The following tables present the significant items reclassified out of accumulated other comprehensive income during the nine months ended September 30, 2014 and 2013:

Nine Months Ended September 30, 2014
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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(15,539	)	Net realized and unrealized investment gains
	411			Net impairment losses recognized in earnings
	(15,128		)	Total before income taxes
	(85		)	Income tax benefit
	$	(15,213	)	Total net of income taxes
Nine Months Ended September 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 Income
Losses on cash flow hedges - Debt	$	67		Interest expense
	67			Total before income taxes
	—			Income tax expense
	$	67		Total net of income taxes
Unrealized (gains) losses on available for sale securities	$	(10,267	)	Net realized and unrealized investment gains
	1,575			Net impairment losses recognized in earnings
	(8,692		)	Total before income taxes
	677			Income tax expense
	$	(8,015	)	Total net of income taxes

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Derivatives

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

7. Derivatives

The Company regularly transacts in certain derivative-based weather risk management products primarily to address weather and energy risks on behalf of third parties. The 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 also 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 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 (losses), net foreign exchange losses and other underwriting income (loss) in the Condensed Consolidated Statements of Income and Comprehensive Income.

The Company’s derivatives are not designated as hedges under current accounting guidance.

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.

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. Generally, the Company’s current portfolio of energy and weather derivative contracts is of comparably short duration and such contracts are predominantly seasonal in nature.

7. Derivatives, cont'd.

The fair values and the related notional values of derivatives at September 30, 2014 and December 31, 2013 are shown below.

	September 30, 2014				December 31, 2013
	Fair Value		Notional Principal Amount		Fair Value		Notional Principal Amount
Derivatives recorded in other assets
Foreign exchange forward contracts	$	1,128	$	40,923	$	251	$	19,269
Credit default swaps	11		1,785		—		—
Interest rate swaps	211		72,700		124		16,100
Interest rate swaptions	—		—		39		24,338
TBAs	131,316		127,255		93,820		93,840
Energy and weather contracts	14,822		79,846		14,038		53,986
Total recorded in other assets	$	147,488			$	108,272
Derivatives recorded in other liabilities
Foreign exchange forward contracts	$	312	$	23,641	$	172	$	15,861
Interest rate swaps	731		11,782		933		12,193
Interest rate swaptions	18		56,216		543		361,455
Interest rate futures	—		—		17		103,935
TBAs	78,727		76,000		28,218		28,000
Energy and weather contracts	15,916		115,574		19,569		66,113
Total recorded in other liabilities	$	95,704			$	49,452
Net derivative asset	$	51,784			$	58,820

7. Derivatives, cont'd.

At September 30, 2014, the Company’s derivative assets of $147.5 million (December 31, 2013 - $108.3 million) and liabilities of $95.7 million (December 31, 2013 - $49.4 million) are subject to master netting agreements, which provide for the ability to settle the derivative asset and liability with each counterparty on a net basis. Interest rate futures are not subject to a master netting agreement. At September 30, 2014 and December 31, 2013, none of the Company’s derivative instruments were recorded on a net basis in the Condensed Consolidated Balance Sheets.

The gains and losses on the Condensed Consolidated Statements of Income and Comprehensive Income for derivatives for the three and nine months ended September 30, 2014 and 2013 were as follows:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Total included in net foreign exchange losses from foreign exchange forward contracts	$	1,214		$	(123	)	$	815		$	207
Futures contracts	$	—		$	112		$	136		$	64
Credit default swaps	6			(68		)	20			49
Interest rate swaps	384			(67		)	(698		)	(228		)
Interest rate swaptions	(3		)	392			425			291
TBAs	193			(11		)	2,649			(476		)
Total included in net realized and unrealized investment gains (losses)	$	580		$	358		$	2,532		$	(300	)
Total included in other underwriting income (loss) from energy and weather contracts	$	1,784		$	—		$	1,486		$	1,172
Total gains from derivatives	$	3,578		$	235		$	4,833		$	1,079

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Segment Reporting

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

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

Reinsurance segment lines of business

•Catastrophe

•Property

•Casualty

•Professional lines

•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.

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 September 30, 2014:

	Three Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	420,343		$	205,767		$	626,110
Ceded premiums written	(222,704		)	(13,300		)	(236,004		)
Net premiums written	197,639			192,467			390,106
Net premiums earned	253,583			261,312			514,895
Other underwriting income	—			2,123			2,123
	253,583			263,435			517,018
Expenses
Net losses and loss expenses	196,677			93,592			290,269
Acquisition expenses	20,170			73,222			93,392
General and administrative expenses	44,957			35,958			80,915
	261,804			202,772			464,576
Underwriting (loss) income	$	(8,221	)	$	60,663		$	52,442
Net loss ratio	77.5		%	35.8		%	56.4		%
Acquisition expense ratio	8.0		%	28.0		%	18.1		%
General and administrative expense ratio	17.7		%	13.8		%	15.7		%
Combined ratio	103.2		%	77.6		%	90.2		%
Reserve for losses and loss expenses	$	2,134,985		$	1,762,498		$	3,897,483

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 September 30, 2013:

	Three Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	344,819		$	199,544		$	544,363
Ceded premiums written	(120,481		)	(28,549		)	(149,030		)
Net premiums written	224,338			170,995			395,333
Net premiums earned	291,477			262,068			553,545
Other underwriting loss	—			(943		)	(943		)
	291,477			261,125			552,602
Expenses
Net losses and loss expenses	228,409			110,627			339,036
Acquisition expenses	18,440			60,335			78,775
General and administrative expenses	35,641			31,829			67,470
	282,490			202,791			485,281
Underwriting income	$	8,987		$	58,334		$	67,321
Net loss ratio	78.4		%	42.3		%	61.3		%
Acquisition expense ratio	6.3		%	23.0		%	14.2		%
General and administrative expense ratio	12.2		%	12.1		%	12.2		%
Combined ratio	96.9		%	77.4		%	87.7		%
Reserve for losses and loss expenses	$	2,146,136		$	1,905,966		$	4,052,102

The following table reconciles total segment results to income before income taxes for the three months ended September 30, 2014 and 2013:

	Three Months Ended September 30,
	2014			2013
Total underwriting income	$	52,442		$	67,321
Net investment income	25,357			38,097
Net foreign exchange losses	(783		)	(2,201		)
Net realized and unrealized investment gains (losses)	9,788			(6,640		)
Net impairment losses recognized in earnings	(102		)	(190		)
Amortization of intangibles	(1,623		)	(1,652		)
Interest expense	(13,127		)	(9,048		)
Income before income taxes	$	71,952		$	85,687

9. Segment reporting, cont'd.

The following table provides gross and net premiums written by line of business for the three months ended September 30, 2014 and 2013:

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	188,011	$	103,536	$	200,062	$	120,617
Casualty and other specialty	144,706		58,390		95,862		72,431
Professional lines	62,631		20,216		34,221		20,972
Property	24,995		15,497		14,674		10,318
Total Insurance	420,343		197,639		344,819		224,338
Reinsurance
Catastrophe	47,173		41,157		38,676		12,551
Property	73,807		73,807		91,653		90,528
Casualty	23,409		23,409		27,649		27,648
Professional lines	21,520		21,520		25,670		25,670
Specialty	39,858		32,574		15,896		14,598
Total Reinsurance	205,767		192,467		199,544		170,995
Total	$	626,110	$	390,106	$	544,363	$	395,333

The following table provides a summary of the segment revenues and results for the nine months ended September 30, 2014:

	Nine Months Ended September 30, 2014
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,394,145		$	1,078,905		$	2,473,050
Ceded premiums written	(674,441		)	(98,371		)	(772,812		)
Net premiums written	719,704			980,534			1,700,238
Net premiums earned	616,167			776,532			1,392,699
Other underwriting loss	—			(3,939		)	(3,939		)
	616,167			772,593			1,388,760
Expenses
Net losses and loss expenses	434,777			291,584			726,361
Acquisition expenses	47,559			196,591			244,150
General and administrative expenses	133,930			106,646			240,576
	616,266			594,821			1,211,087
Underwriting (loss) income	$	(99	)	$	177,772		$	177,673
Net loss ratio	70.6		%	37.6		%	52.2		%
Acquisition expense ratio	7.7		%	25.3		%	17.5		%
General and administrative expense ratio	21.7		%	13.7		%	17.3		%
Combined ratio	100.0		%	76.6		%	87.0		%

9. Segment reporting, cont'd.

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

	Nine Months Ended September 30, 2013
	Insurance			Reinsurance			Total
Revenues
Gross premiums written	$	1,274,703		$	1,019,732		$	2,294,435
Ceded premiums written	(454,169		)	(71,397		)	(525,566		)
Net premiums written	820,534			948,335			1,768,869
Net premiums earned	710,507			806,490			1,516,997
Other underwriting income	—			694			694
	710,507			807,184			1,517,691
Expenses
Net losses and loss expenses	543,717			373,347			917,064
Acquisition expenses	48,024			174,255			222,279
General and administrative expenses	114,792			100,515			215,307
	706,533			648,117			1,354,650
Underwriting income	$	3,974		$	159,067		$	163,041
Net loss ratio	76.4		%	46.3		%	60.4		%
Acquisition expense ratio	6.8		%	21.6		%	14.7		%
General and administrative expense ratio	16.2		%	12.5		%	14.2		%
Combined ratio	99.4		%	80.4		%	89.3		%

The following table reconciles total segment results to income before income taxes for the nine months ended September 30, 2014 and 2013, respectively:

	Nine Months Ended September 30,
	2014			2013
Total underwriting income	$	177,673		$	163,041
Net investment income	105,649			119,870
Net foreign exchange losses	(4,066		)	(8,496		)
Net realized and unrealized investment gains	18,071			9,967
Net impairment losses recognized in earnings	(411		)	(1,575		)
Amortization of intangibles	(4,863		)	(5,378		)
Interest expense	(31,910		)	(27,138		)
Income before income taxes	$	260,143		$	250,291

9. Segment reporting, cont'd.

The following table provides gross and net premiums written by line of business for the nine months ended September 30, 2014 and 2013:

	Gross premiums written		Net premiums written		Gross premiums written		Net premiums written
Business Segment	2014		2014		2013		2013
Insurance
Agriculture	$	796,445	$	431,007	$	896,169	$	546,284
Casualty and other specialty	366,329		189,876		239,943		179,065
Professional lines	176,061		64,632		93,481		62,963
Property	55,310		34,189		45,110		32,222
Total Insurance	1,394,145		719,704		1,274,703		820,534
Reinsurance
Catastrophe	332,193		243,531		341,973		281,990
Property	283,107		283,015		288,448		283,455
Casualty	139,266		137,669		211,458		210,030
Professional lines	131,256		131,256		50,505		50,505
Specialty	193,083		185,063		127,348		122,355
Total Reinsurance	1,078,905		980,534		1,019,732		948,335
Total	$	2,473,050	$	1,700,238	$	2,294,435	$	1,768,869

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Commitments And Contingencies (Deposits) (Details) (UNITED STATES [Member], USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
UNITED STATES [Member]
Statutory Accounting Practices [Line Items]
Assets Held by Insurance Regulators	$ 273.1	$ 273.7

XML

Debt And Financing Arrangements (Narrative) (Details) (USD $) In Millions, unless otherwise specified			0 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Jun. 25, 2014 Bridge Facility [Member]	Sep. 30, 2014 Bridge Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 700.0			$ 1,000.0
Amount outstanding under facility	0
Amount of letters of credit outstanding	$ 202.9	$ 260.3
Term of bridge facility, in days			364 days

XML

Commitments And Contingencies (Agreement) (Details) (Chief Executive Officer [Member], USD $) In Millions, except Per Share data, unless otherwise specified	0 Months Ended
	Jun. 02, 2014
Chief Executive Officer [Member]
Commitment To Purchase Common Shares [Line Items]
Amount of equity committed to purchase	$ 25.0
Price per share of commitment to purchase common shares	$ 53.51

XML

Investments (Summary Of Investment Portfolio By Type) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	$ 6,462,047		$ 6,500,650
Percentage of Investment	100.00%		100.00%
Fixed Maturities [Member]
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	4,871,420		4,823,964
Percentage of Investment	75.40%		74.20%
Cash and Cash Equivalents [Member]
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	652,377	[1]	771,714	[1]
Percentage of Investment	10.10%	[1]	11.90%	[1]
Other Investments [Member]
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	658,678	[2]	617,478	[2]
Percentage of Investment	10.20%	[2]	9.50%	[2]
Short-term Investments [Member]
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	11,844		35,028
Percentage of Investment	0.20%		0.50%
Equity Securities [Member]
Investment Holdings [Line Items]
Investments, Fair Value Disclosure	$ 267,728		$ 252,466
Percentage of Investment	4.10%		3.90%

[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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Accumulated Other Comprehensive Income (Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	$ 13,127	$ 9,048	$ 31,910	$ 27,138
Net realized and unrealized investment gains (losses)	9,788	(6,640)	18,071	9,967
Net impairment losses recognized in earnings	(102)	(190)	(411)	(1,575)
Total before income taxes	71,952	85,687	260,143	250,291
Income tax benefit (expense)	4,282	(2,271)	3,734	(5,557)
Total net of income taxes	76,234	83,416	263,877	244,734
Gains and losses on cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Interest expense	22	22	67	67
Total before income taxes	22	22	67	67
Income tax benefit (expense)	0	0	0	0
Total net of income taxes	22	22	67	67
Unrealized gains and losses on available for sale securities [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 (losses)	(9,208)	6,999	(15,539)	(10,267)
Net impairment losses recognized in earnings	102	190	411	1,575
Total before income taxes	(9,106)	7,189	(15,128)	(8,692)
Income tax benefit (expense)	195	(468)	(85)	677
Total net of income taxes	$ (8,911)	$ 6,721	$ (15,213)	$ (8,015)

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Fair Value Measurement (Policy)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

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 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.

• Other assets and liabilities – A portion of other assets and liabilities are composed of 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 are 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 and collateralized loan and debt obligations – 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.

4. Fair value measurement, cont'd.

• Other investments – Other investments are comprised of alternative funds and specialty funds and 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 September 30, 2014.

Fair Value Transfer Between Levels

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

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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule Of Available For Sale Investments, Other Investments, Derivative Instruments And Debt Measured On A Recurring Basis

	Fair Value Measurements at December 31, 2013
	Total at   December 31, 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	$	769,343	$	20,248	$	749,095	$	—
U.S. state and municipal securities	26,854		—		26,854		—
Foreign government securities	182,647		—		182,647		—
Government guaranteed corporate securities	35,145		—		35,145		—
Corporate securities	1,227,299		—		1,226,553		746
Residential mortgage-backed securities	1,187,191		—		1,186,943		248
Commercial mortgage-backed securities	947,677		—		946,794		883
Collateralized loan and debt obligations	94,552		—		92,095		2,457
Asset-backed securities	353,256		—		350,262		2,994
Total fixed maturity investments	$	4,823,964	$	20,248	$	4,796,388	$	7,328
Equity securities
Equity investments	174,669		117,776		56,893		—
Emerging market debt funds	60,844		—		60,844		—
Preferred equity investments	8,223		—		8,223		—
Short-term fixed income fund	8,730		8,730		—		—
Total equity securities	$	252,466	$	126,506	$	125,960	$	—
Short-term investments	35,028		—		35,028		—
Other investments	617,478		—		—		617,478
Other assets (see Note 7)	108,272		—		94,234		14,038
Total assets	$	5,837,208	$	146,754	$	5,051,610	$	638,844
Liabilities
Other liabilities (see Note 7)	$	49,452	$	—	$	29,883	$	19,569
Debt	575,115		—		575,115		—
Total liabilities	$	624,567	$	—	$	604,998	$	19,569

	Fair Value Measurements at September 30, 2014
	Total at   September 30, 2014		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	$	514,672	$	—	$	514,672	$	—
U.S. state and municipal securities	31,487		—		31,487		—
Foreign government securities	205,693		—		205,693		—
Government guaranteed corporate securities	46,201		—		46,201		—
Corporate securities	1,280,366		—		1,279,666		700
Residential mortgage-backed securities	1,203,322		—		1,203,294		28
Commercial mortgage-backed securities	965,696		—		962,868		2,828
Collateralized loan and debt obligations	207,214		—		206,574		640
Asset-backed securities	416,769		—		413,772		2,997
Total fixed maturity investments	$	4,871,420	$	—	$	4,864,227	$	7,193
Equity securities
Equity investments	182,514		123,283		59,231		—
Emerging market debt funds	61,862		—		61,862		—
Preferred equity investments	14,317		—		14,317		—
Short-term fixed income fund	9,035		9,035		—		—
Total equity securities	$	267,728	$	132,318	$	135,410	$	—
Short-term investments	11,844		—		11,844		—
Other investments	658,678		—		—		658,678
Other assets (see Note 7)	147,488		—		132,666		14,822
Total assets	$	5,957,158	$	132,318	$	5,144,147	$	680,693
Liabilities
Other liabilities (see Note 7)	$	95,704	$	—	$	79,788	$	15,916
Debt	615,568		—		615,568		—
Total liabilities	$	711,272	$	—	$	695,356	$	15,916

Fair Value Inputs Assets And Liabilities Quantitative Information [Table Text Block]

	September 30, 2014
	Fair Value (Level 3)			Valuation Techniques	Unobservable Inputs	Low		High		Weighted Average or Actual
	(U.S. dollars in thousands, except for correlation and commodity curve)
Net weather and energy related derivative liabilities	$	(1,094	)	Historical  Analysis and Simulation	Correlation	0		1		Actual
					Weather curve	$	400	$	2,500	Actual
					Commodity curve	$	28.50	$	122.20	Actual

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 September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	9,515		$	648,642		$	10,992		$	669,149		$	(10,284	)
Total equity income and realized gains included in earnings	9			10,913			—			10,922			—
Total equity losses and losses included in earnings	(6		)	(12,698		)	—			(12,704		)	—
Total income included in other underwriting income (loss)	—			—			3,180			3,180			4,794
Total loss included in other underwriting income (loss)	—			—			(5,235		)	(5,235		)	(3,719		)
Change in unrealized gains included in other comprehensive (loss) income	245			—			—			245			—
Change in unrealized losses included in other comprehensive (loss) income	(104		)	—			—			(104		)	—
Purchases	842			26,190			1,501			28,533			(751		)
Issues	—			—			7,331			7,331			(10,917		)
Sales	(545		)	(14,369		)	—			(14,914		)	—
Settlements	—			—			(2,947		)	(2,947		)	4,961
Transfers into Level 3	2,198			—			—			2,198			—
Transfers out of Level 3	(4,961		)	—			—			(4,961		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Three Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,546		$	569,393		$	—		$	576,939		$	—
Total equity income and realized gains included in earnings	56			19,108			—			19,164			—
Total equity losses and losses included in earnings	(15		)	(5,864		)	—			(5,879		)	—
Total income included in other underwriting income (loss)	—			—			—			—			—
Total loss included in other underwriting income (loss)	—			—			—			—			—
Change in unrealized gains included in other comprehensive (loss) income	111			—			—			111			—
Change in unrealized losses included in other comprehensive (loss) income	(62		)	—			—			(62		)	—
Purchases	—			16,597			—			16,597			—
Sales	(1,879		)	(5,078		)	—			(6,957		)	—
Transfers in to Level 3	7,903			—			—			7,903			—
Transfers out of Level 3	(1,202		)	—			—			(1,202		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

	Nine Months Ended September 30, 2014
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	7,328		$	617,478		$	14,038		$	638,844		$	(19,569	)
Total equity income and realized gains included in earnings	62			46,385			—			46,447			—
Total equity losses and losses included in earnings	(32		)	(23,844		)	—			(23,876		)	—
Total income included in other underwriting income (loss)	—			—			18,396			18,396			24,842
Total loss included in other underwriting income (loss)	—			—			(23,845		)	(23,845		)	(20,672		)
Change in unrealized gains included in other comprehensive (loss) income	445			—			—			445			—
Change in unrealized losses included in other comprehensive (loss) income	(255		)	—			—			(255		)	—
Purchases	842			52,731			1,501			55,074			(751		)
Issues	—			—			10,912			10,912			(18,080		)
Sales	(1,585		)	(34,072		)	—			(35,657		)	—
Settlements	—			—			(6,180		)	(6,180		)	18,314
Transfers in to Level 3	7,201			—			—			7,201			—
Transfers out of Level 3	(6,813		)	—			—			(6,813		)	—
Level 3, end of period	$	7,193		$	658,678		$	14,822		$	680,693		$	(15,916	)
	Nine Months Ended September 30, 2013
	Fixed maturity investments			Other investments			Other assets			Total assets			Other liabilities
Level 3, beginning of period	$	8,497		$	517,546		$	882		$	526,925		$	(1,922	)
Total equity income and realized gains included in earnings	104			61,010			—			61,114			—
Total equity losses and losses included in earnings	(17		)	(17,927		)	—			(17,944		)	—
Total income included in other underwriting income (loss)	—			—			—			—			2,354
Total loss included in other underwriting income (loss)	—			—			(1,182		)	(1,182		)	—
Change in unrealized gains included in other comprehensive income (loss)	438			—			—			438			—
Change in unrealized losses included in other comprehensive income (loss)	(270		)	—			—			(270		)	—
Purchases	—			62,011			—			62,011			—
Issues	—			—			300			300			(432		)
Sales	(6,081		)	(28,484		)	—			(34,565		)	—
Transfers in to Level 3	11,550			—			—			11,550			—
Transfers out of Level 3	(1,763		)	—			—			(1,763		)	—
Level 3, end of period	$	12,458		$	594,156		$	—		$	606,614		$	—

XML

Earnings Per Share (Schedule Of Dividends Declared) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Dividends Declared [Line Items]
Dividends declared per common share	$ 0.34	$ 0.32	$ 1.02	$ 0.96
Series A Preferred Stock [Member]
Dividends Declared [Line Items]
Dividends declared per preferred share	$ 0.484375	$ 0.484375	$ 1.453125	$ 1.453125
Series B Preferred Stock [Member]
Dividends Declared [Line Items]
Dividends declared per preferred share	$ 0.468750	$ 0.468750	$ 1.406250	$ 1.406250

XML

Investments (Available For Sale Securities In An Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, 12 months or greater	$ (11,100)	$ (5,800)	[1]
Unrealized losses	(19,100)	(49,600)	[1]
US Government and Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(559)	(7,359)	[1]
Fair value, less than 12 months	95,967	382,593
Unrealized losses, 12 months or greater	(2,418)	(260)	[1]
Fair value, 12 months or greater	95,856	6,050
Unrealized losses	(2,977)	(7,619)	[1]
Fair value	191,823	388,643
US State and Municipal Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(78)	(395)	[1]
Fair value, less than 12 months	7,261	20,452
Unrealized losses, 12 months or greater	(79)	0	[1]
Fair value, 12 months or greater	6,835	0
Unrealized losses	(157)	(395)	[1]
Fair value	14,096	20,452
Foreign Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(204)	(1,981)	[1]
Fair value, less than 12 months	43,104	139,503
Unrealized losses, 12 months or greater	(169)	(25)	[1]
Fair value, 12 months or greater	23,314	5,261
Unrealized losses	(373)	(2,006)	[1]
Fair value	66,418	144,764
Government Guaranteed Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months		(50)	[1]
Fair value, less than 12 months		13,326
Unrealized losses, 12 months or greater		0	[1]
Fair value, 12 months or greater		0
Unrealized losses		(50)	[1]
Fair value		13,326
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(3,026)	(5,959)	[1]
Fair value, less than 12 months	432,053	478,287
Unrealized losses, 12 months or greater	(1,764)	(552)	[1]
Fair value, 12 months or greater	97,104	28,690
Unrealized losses	(4,790)	(6,511)	[1]
Fair value	529,157	506,977
Residential Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(593)	(17,542)	[1]
Fair value, less than 12 months	168,976	514,702
Unrealized losses, 12 months or greater	(3,980)	(4,357)	[1]
Fair value, 12 months or greater	152,520	102,446
Unrealized losses	(4,573)	(21,899)	[1]
Fair value	321,496	617,148
Commercial Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(1,186)	(7,681)	[1]
Fair value, less than 12 months	200,660	384,548
Unrealized losses, 12 months or greater	(2,341)	(328)	[1]
Fair value, 12 months or greater	93,769	16,804
Unrealized losses	(3,527)	(8,009)	[1]
Fair value	294,429	401,352
Collateralized Loan and Debt Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(174)	(48)	[1]
Fair value, less than 12 months	95,995	20,733
Unrealized losses, 12 months or greater	(51)	(152)	[1]
Fair value, 12 months or greater	1,467	2,379
Unrealized losses	(225)	(200)	[1]
Fair value	97,462	23,112
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(264)	(703)	[1]
Fair value, less than 12 months	156,553	157,172
Unrealized losses, 12 months or greater	(268)	(152)	[1]
Fair value, 12 months or greater	29,991	7,011
Unrealized losses	(532)	(855)	[1]
Fair value	186,544	164,183
Fixed Maturities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months		(41,718)	[1]
Fair value, less than 12 months		2,111,316
Unrealized losses, 12 months or greater		(5,826)	[1]
Fair value, 12 months or greater		168,641
Unrealized losses		(47,544)	[1]
Fair value		2,279,957
Short-term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months		(2)	[1]
Fair value, less than 12 months		2,468
Unrealized losses, 12 months or greater		0	[1]
Fair value, 12 months or greater		0
Unrealized losses		(2)	[1]
Fair value		2,468
Fixed Income Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(6,084)	(41,720)	[1]
Fair value, less than 12 months	1,200,569	2,113,784
Unrealized losses, 12 months or greater	(11,070)	(5,826)	[1]
Fair value, 12 months or greater	500,856	168,641
Unrealized losses	(17,154)	(47,546)	[1]
Fair value	1,701,425	2,282,425
Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(1,861)	(1,995)	[1]
Fair value, less than 12 months	40,720	36,751
Unrealized losses, 12 months or greater	(20)	0	[1]
Fair value, 12 months or greater	141	0
Unrealized losses	(1,881)	(1,995)	[1]
Fair value	40,861	36,751
Preferred Equity Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(37)	(79)	[1]
Fair value, less than 12 months	5,676	2,987
Unrealized losses, 12 months or greater	0	0	[1]
Fair value, 12 months or greater	0	0
Unrealized losses	(37)	(79)	[1]
Fair value	5,676	2,987
Short-term Fixed Income Fund [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(1)
Fair value, less than 12 months	2,899
Unrealized losses, 12 months or greater	0
Fair value, 12 months or greater	0
Unrealized losses	(1)
Fair value	2,899
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Unrealized losses, less than 12 months	(1,899)	(2,074)	[1]
Fair value, less than 12 months	49,295	39,738
Unrealized losses, 12 months or greater	(20)	0	[1]
Fair value, 12 months or greater	141	0
Unrealized losses	(1,919)	(2,074)	[1]
Fair value	$ 49,436	$ 39,738

[1] Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2013.

XML

Condensed Consolidated Statements Of Income And Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Other comprehensive (loss) income, net unrealized holding (losses) gains on investments arising during the period, tax	$ (3,358)	$ 8,582

XML

Investments

9 Months Ended

Sep. 30, 2014

Investments [Abstract]

Investments

3. Investments

Composition of Net Investment Income and of Invested Assets

The components of net investment income for the three and nine months ended September 30, 2014 and 2013 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Available for sale investments	$	29,959		$	27,889		$	91,905		$	86,036
Other investments	(1,785		)	13,244			22,542			43,083
Cash and cash equivalents	581			752			1,878			2,043
	$	28,755		$	41,885		$	116,325		$	131,162
Investment expenses	(3,398		)	(3,788		)	(10,676		)	(11,292		)
Net investment income	$	25,357		$	38,097		$	105,649		$	119,870

The following table summarizes the composition of the investment portfolio by investment type at September 30, 2014 and December 31, 2013:

	September 30, 2014				December 31, 2013
Type of Investment	Fair Value		Percentage		Fair Value		Percentage
Fixed maturity investments	$	4,871,420	75.4	%	$	4,823,964	74.2	%
Cash and cash equivalents (1)	652,377		10.1	%	771,714		11.9	%
Other investments (2)	658,678		10.2	%	617,478		9.5	%
Short-term investments	11,844		0.2	%	35,028		0.5	%
Equity securities	267,728		4.1	%	252,466		3.9	%
Total	$	6,462,047	100.0	%	$	6,500,650	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.

3. Investments, cont'd.

The following table summarizes the composition by investment rating of the fixed maturity and short-term investments at September 30, 2014 and December 31, 2013. In some cases, where bonds are unrated, the rating of the issuer has been applied.

	September 30, 2014				December 31, 2013
Ratings (1)	Fair Value		Percentage		Fair Value		Percentage
U.S. government and agencies securities	$	514,672	10.5	%	$	769,343	15.8	%
AAA / Aaa	1,153,558		23.7	%	972,820		20.0	%
AA / Aa	1,738,964		35.7	%	1,771,156		36.5	%
A / A	952,894		19.5	%	895,549		18.4	%
BBB	407,093		8.3	%	363,722		7.5	%
Below BBB	94,824		1.9	%	66,791		1.4	%
Not rated	21,259		0.4	%	19,611		0.4	%
Total	$	4,883,264	100.0	%	$	4,858,992	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 Moody's Investors Service, Inc. ("Moody's"), Fitch Ratings, Inc., or DBRS, Inc. is used.

Contractual maturities of the Company’s fixed maturity and short-term investments are shown below as of September 30, 2014 and December 31, 2013. 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.

	September 30, 2014				December 31, 2013
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	128,535	$	129,382	$	144,814	$	145,653
Due after one year through five years	1,575,875		1,583,414		1,808,001		1,815,240
Due after five years through ten years	339,764		341,993		290,391		288,486
Due after ten years	33,034		35,474		26,344		26,937
Residential mortgage-backed securities	1,185,911		1,203,322		1,192,085		1,187,191
Commercial mortgage-backed securities	948,460		965,696		932,263		947,677
Collateralized loan and debt obligations	205,465		207,214		92,519		94,552
Asset-backed securities	414,968		416,769		351,192		353,256
Total	$	4,832,012	$	4,883,264	$	4,837,609	$	4,858,992

3. Investments, cont'd.

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, and equity long/short strategies (“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 September 30, 2014 and December 31, 2013, the Company had invested, net of capital returned, a total of $462.1 million and $440.9 million, respectively, in other investments. At September 30, 2014 and December 31, 2013, the carrying value of other investments was $658.7 million and $617.5 million, respectively. The following table summarizes the composition and redemption restrictions of other investments as of September 30, 2014 and December 31, 2013:

September 30, 2014	Market Value		Unfunded Commitments		Ineligible for Redemption over next 12 months
Alternative funds
Hedge funds	$	431,278	$	—	$	38,900
Private investment funds	68,433		64,473		68,433
Total alternative funds	499,711		64,473		107,333
Specialty funds
High yield loan funds	112,892		—		—
Convertible debt funds	46,075		—		—
Total specialty funds	158,967		—		—
Total other investments	$	658,678	$	64,473	$	107,333
December 31, 2013	Market Value		Unfunded Commitments		Ineligible for Redemption in 2014
Alternative funds
Hedge funds	$	401,438	$	—	$	47,406
Private investment funds	59,703		57,997		59,703
Total alternative funds	461,141		57,997		107,109
Specialty funds
High yield loan funds	111,254		—		—
Convertible debt funds	45,083		—		—
Total specialty funds	156,337		—		—
Total other investments	$	617,478	$	57,997	$	107,109

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 91.0% of the hedge fund portfolio, with the remainder over the following two years.

3. Investments, cont'd.

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 or distribution of earnings from 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 (Losses)

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 (losses) and the change in the fair value of investment-related derivative financial instruments for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Gross realized gains on investment sales	$	10,683		$	6,180		$	28,317		$	30,191
Gross realized losses on investment sales	(1,475		)	(13,178		)	(12,778		)	(19,924		)
Change in fair value of derivative financial instruments (1)	580			358			2,532			(300		)
Net realized and unrealized investment gains (losses)	$	9,788		$	(6,640	)	$	18,071		$	9,967

(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 September 30, 2014 and December 31, 2013 are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	512,199	$	5,450	$	(2,977	)	$	514,672	$	—
U.S. state and municipal securities	31,437		207		(157		)	31,487		—
Foreign government securities	204,033		2,033		(373		)	205,693		—
Government guaranteed corporate securities	45,577		624		—			46,201		—
Corporate securities	1,272,119		13,037		(4,790		)	1,280,366		—
Residential mortgage-backed securities	1,185,911		21,984		(4,573		)	1,203,322		(3,319		)
Commercial mortgage-backed securities	948,460		20,763		(3,527		)	965,696		(5		)
Collateralized loan and debt obligations (1)	205,465		1,974		(225		)	207,214		—
Asset-backed securities	414,968		2,333		(532		)	416,769		—
Total fixed maturity investments	$	4,820,169	$	68,405	$	(17,154	)	$	4,871,420	$	(3,324	)
Short-term investments	11,843		1		—			11,844		—
Total fixed income investments	$	4,832,012	$	68,406	$	(17,154	)	$	4,883,264	$	(3,324	)
Equity securities
Equity investments	$	157,924	$	26,471	$	(1,881	)	$	182,514	$	—
Emerging market debt funds	60,250		1,612		—			61,862		—
Preferred equity investments	12,283		2,071		(37		)	14,317		—
Short-term fixed income fund	9,030		6		(1		)	9,035		—
Total equity securities	$	239,487	$	30,160	$	(1,919	)	$	267,728	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $10.7 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 September 30, 2014, the gross unrealized loss related to fixed income investments for which a non-credit OTTI was recognized in accumulated other comprehensive income was nil.

3. Investments, cont'd.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Non-Credit OTTI (2)
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	771,227	$	5,735	$	(7,619	)	$	769,343	$	—
U.S. state and municipal securities	27,138		111		(395		)	26,854		—
Foreign government securities	183,650		1,003		(2,006		)	182,647		—
Government guaranteed corporate securities	34,921		274		(50		)	35,145		—
Corporate securities	1,217,585		16,225		(6,511		)	1,227,299		—
Residential mortgage-backed securities	1,192,085		17,005		(21,899		)	1,187,191		(4,257		)
Commercial mortgage-backed securities	932,263		23,423		(8,009		)	947,677		(47		)
Collateralized loan and debt obligations (1)	92,519		2,233		(200		)	94,552		—
Asset-backed securities	351,192		2,919		(855		)	353,256		(163		)
Total fixed maturity investments	$	4,802,580	$	68,928	$	(47,544	)	$	4,823,964	$	(4,467	)
Short-term investments	35,029		1		(2		)	35,028		—
Total fixed income investments	$	4,837,609	$	68,929	$	(47,546	)	$	4,858,992	$	(4,467	)
Equity securities
Equity investments	$	152,525	$	24,139	$	(1,995	)	$	174,669	$	—
Emerging market debt funds	60,250		594		—			60,844		—
Preferred equity investments	6,325		1,977		(79		)	8,223		—
Short-term fixed income funds	8,728		2		—			8,730		—
Total equity securities	$	227,828	$	26,712	$	(2,074	)	$	252,466	$	—

(1) Balances include amounts related to collateralized debt obligations held with total fair values of $18.7 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, 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.

3. Investments, cont'd.

The following tables summarize, for all available for sale securities in an unrealized loss position at September 30, 2014 and December 31, 2013, 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 Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
September 30, 2014
Fixed maturity investments
U.S. government and agencies securities	$	(559	)	$	95,967	$	(2,418	)	$	95,856	$	(2,977	)	$	191,823
U.S. state and municipal securities	(78		)	7,261		(79		)	6,835		(157		)	14,096
Foreign government securities	(204		)	43,104		(169		)	23,314		(373		)	66,418
Corporate securities	(3,026		)	432,053		(1,764		)	97,104		(4,790		)	529,157
Residential mortgage-backed securities	(593		)	168,976		(3,980		)	152,520		(4,573		)	321,496
Commercial mortgage-backed securities	(1,186		)	200,660		(2,341		)	93,769		(3,527		)	294,429
Collateralized loan and debt obligations	(174		)	95,995		(51		)	1,467		(225		)	97,462
Asset-backed securities	(264		)	156,553		(268		)	29,991		(532		)	186,544
Total fixed income investments	$	(6,084	)	$	1,200,569	$	(11,070	)	$	500,856	$	(17,154	)	$	1,701,425
Equity securities
Equity investments	$	(1,861	)	$	40,720	$	(20	)	$	141	$	(1,881	)	$	40,861
Preferred equity investments	(37		)	5,676		—			—		(37		)	5,676
Short-term fixed income fund	(1		)	2,899		—			—		(1		)	2,899
Total equity securities	$	(1,899	)	$	49,295	$	(20	)	$	141	$	(1,919	)	$	49,436

As of September 30, 2014, 752 available for sale securities were in an unrealized loss position aggregating $19.1 million. Of those, 222 securities with aggregated unrealized losses of $11.1 million had been in a continuous unrealized loss position for twelve months or greater.

3. Investments, cont'd.

	Less than 12 months					12 months or greater					Total
	Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value		Unrealized Losses (1)			Fair Value
December 31, 2013
Fixed maturity investments
U.S. government and agencies securities	$	(7,359	)	$	382,593	$	(260	)	$	6,050	$	(7,619	)	$	388,643
U.S. state and municipal securities	(395		)	20,452		—			—		(395		)	20,452
Foreign government securities	(1,981		)	139,503		(25		)	5,261		(2,006		)	144,764
Government guaranteed corporate securities	(50		)	13,326		—			—		(50		)	13,326
Corporate securities	(5,959		)	478,287		(552		)	28,690		(6,511		)	506,977
Residential mortgage-backed securities	(17,542		)	514,702		(4,357		)	102,446		(21,899		)	617,148
Commercial mortgage-backed securities	(7,681		)	384,548		(328		)	16,804		(8,009		)	401,352
Collateralized loan and debt obligations	(48		)	20,733		(152		)	2,379		(200		)	23,112
Asset-backed securities	(703		)	157,172		(152		)	7,011		(855		)	164,183
Total fixed maturity investments	$	(41,718	)	$	2,111,316	$	(5,826	)	$	168,641	$	(47,544	)	$	2,279,957
Short-term investments	(2		)	2,468		—			—		(2		)	2,468
Total fixed income investments	$	(41,720	)	$	2,113,784	$	(5,826	)	$	168,641	$	(47,546	)	$	2,282,425
Equity securities
Equity investments	$	(1,995	)	$	36,751	$	—		$	—	$	(1,995	)	$	36,751
Preferred equity investments	(79		)	2,987		—			—		(79		)	2,987
Total equity securities	$	(2,074	)	$	39,738	$	—		$	—	$	(2,074	)	$	39,738

(1) Gross unrealized losses include unrealized losses on non-OTTI and non-credit OTTI securities recognized in accumulated other comprehensive income at December 31, 2013.

As of December 31, 2013, 880 available for sale securities were in an unrealized loss position aggregating $49.6 million. Of those, 71 securities with aggregated unrealized losses of $5.8 million had been in a continuous unrealized loss position for twelve months or greater.

The analysis of OTTI for the three and nine months ended September 30, 2014 and 2013 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Total other-than-temporary impairment losses	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)
Portion of loss recognized in other comprehensive (loss) income	—			—			—			—
Net impairment losses recognized in earnings	$	(102	)	$	(190	)	$	(411	)	$	(1,575	)

3. Investments, cont'd.

Of the $0.1 million (2013: $0.2 million) of OTTI losses recognized by the Company in the third quarter of 2014, the majority was related to equity investments that had been at a loss for over a year. The decrease in gross unrealized losses on the Company’s fixed income investments at September 30, 2014 compared to December 31, 2013 was primarily due to a decrease in longer term interest rates during the period. At September 30, 2014, the Company did not have the intent to sell any of the remaining fixed income investments in an unrealized loss position and determined that it was unlikely that the Company would be required to sell those securities in an unrealized loss position. The Company has the ability and intent to hold its equity securities until recovery; therefore, the Company does not consider its fixed income investments or equity securities to be other-than-temporarily impaired at September 30, 2014.

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 nine months ended September 30, 2014 and 2013:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Beginning balance	$	(1,441	)	$	(1,769	)	$	(1,553	)	$	(2,000	)
Addition for the amount related to the credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			—
Addition for the amount related to the credit loss for which an other-than-temporary impairment was previously recognized	—			—			—			—
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	579			113			691			344
Ending balance	$	(862	)	$	(1,656	)	$	(862	)	$	(1,656	)

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 various other investments 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 September 30, 2014. 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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Commitments And Contingencies (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Securities pledged as collateral obligation	$ 130.1	$ 146.1
Cash and investments pledged under letters of credit facility	237.9	302.7
Ceded Credit Risk [Line Items]
Reinsurance recoverables	731.9	758.0
Ceded Credit Risk, Secured [Member]
Ceded Credit Risk [Line Items]
Reinsurance recoverables	$ 87.6	$ 14.2

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule Of Computation Of Basic And Diluted Earnings Per Share

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
Numerator:
Net income available to common and participating common shareholders	$	68,046		$	75,228		$	239,313		$	220,170
Less amount allocated to participating common shareholders(1)	(1,930		)	(1,997		)	(6,907		)	(4,742		)
Net income allocated to common shareholders	$	66,116		$	73,231		$	232,406		$	215,428
Denominator:
Weighted average shares - basic	43,464,790			43,099,841			43,332,461			42,719,837
Share equivalents:
Options	45,625			—			23,237			—
Restricted share units	—			298			94			594
Weighted average shares - diluted	43,510,415			43,100,139			43,355,792			42,720,431
Basic earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04
Diluted earnings per common share	$	1.52		$	1.70		$	5.36		$	5.04

(1) Represents earnings attributable to holders of unvested restricted shares issued under the Company's equity compensation plan that are considered participating. In periods of loss, no losses are allocated to participating common shareholders (unvested restricted shares).

Schedule Of Dividends Declared

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
Dividends declared per Series A preferred share	$	0.484375	$	0.484375	$	1.453125	$	1.453125
Dividends declared per Series B preferred share	$	0.468750	$	0.468750	$	1.406250	$	1.406250
Dividends declared per common share	$	0.34	$	0.32	$	1.02	$	0.96

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Investments (Other Investments Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Other investments, invested amount	$ 462,100,000	$ 440,900,000
Other investments, market value	658,678,000	617,478,000
Alternative Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	499,711,000	461,141,000
Hedge Funds [Member]
Schedule of Equity Method Investments [Line Items]
Estimated liquidation, percentage in next 12 months	91.00%
Other investments, market value	431,278,000	401,438,000
Hedge Funds [Member] | Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated notice period, in days	90 days
Hedge Funds [Member] | Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated notice period, in days	30 days
Private Equity Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	68,433,000	59,703,000
Private Equity Funds [Member] | Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated remaining liquidation period in years	10 years
Private Equity Funds [Member] | Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated remaining liquidation period in years	5 years
Specialty Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	158,967,000	156,337,000
High Yield Loan Funds [Member]
Schedule of Equity Method Investments [Line Items]
Other investments, market value	112,892,000	111,254,000
High Yield Loan Funds [Member] | Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated notice period, in days	90 days
High Yield Loan Funds [Member] | Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Estimated notice period, in days	30 days
Convertible Debt Funds [Member]
Schedule of Equity Method Investments [Line Items]
Estimated notice period, in days	5 days
Other investments, market value	$ 46,075,000	$ 45,083,000

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Investments (Policy)

9 Months Ended

Sep. 30, 2014

Investments [Abstract]

Other Investments

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, and equity long/short strategies (“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.”

Gain Loss On Investments

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

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 various other investments 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 September 30, 2014. 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.