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Executives

Greg Schroeter – Senior Vice President, IR and Corporate Development

David Cash – Chief Executive Officer

Mike McGuire – Chief Financial Officer

Bill Jewett – President

Mike Angelina – Chief Risk Officer

Mark Silverstein – Chief Investment Officer

Analysts

Amit Kumar – Macquarie

Donald Chin – JPMorgan

Endurance Specialty Holdings Ltd. (ENH) Q3 2011 Earnings Call October 28, 2011 8:30 AM ET

Operator

Good morning, everyone. And welcome to the Endurance Specialty Holdings Third Quarter Earnings Results Conference Call. This call is being recorded. Your lines will be in listen-only mode during the presentation. You will have an opportunity to ask questions after the presentation. Instructions will be given at that time.

I would now like to turn the call over to Mr. Greg Schroeter, Senior Vice President of Investor Relations and Corporate Development. Please go ahead, sir.

Greg Schroeter

Thank you, Nikki, and welcome to our call. David Cash, Chief Executive Officer; and Mike McGuire, Chief Financial Officer will deliver our prepared remarks. For the question and answer portion of our call, joining David and Mike will be Bill Jewett, President; Mike Angelina, Chief Risk Officer; and Mark Silverstein, Chief Investment Officer.

Before I turn the call over to David, I’d like to note that certain of the matters will be discussed here today are forward-looking statements. These statements are based on current plans, estimates and expectations, and include, but are not necessarily limited to, various elements of our strategy, business plans, growth prospects, market conditions, capital management initiatives and information regarding our premiums, loss reserves, expenses and investment portfolio.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the markets in which we operate, the economy and other future conditions, and involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in the forward-looking statements and we therefore caution you against relying on any of these forward-looking statements.

Forward-looking statements are sensitive to many factors including those identified in Endurance’s most recent annual report on Form 10-K, quarterly report on Form 10-Q and other documents on file with SEC that could cause actual results to differ materially from those contained in the forward-looking statements.

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

In addition, this presentation contains information regarding operating income and other measures that are non-GAAP financial measures. For reconciliation of these items to the most directly comparable GAAP financial measures, please refer to our press release, which can be found our website www.endurance.bm.

I would now like to turn the call over to David Cash.

David Cash

Thank you, Greg. Good morning and welcome to our call. The third quarter was a challenging one for the insurance and reinsurance industry with catastrophe loss activity and unsettled financial markets dominating results. Notwithstanding the unforgiving backdrop against, which we currently operate, our underlying businesses remain very strong and I’m confident that as these conditions normalize, Endurance’s results will reflect that underlying strength.

For the quarter, our diluted book value share shrink 1.1% and now stand at $51.63, after adding back dividends paid, book value per share is down 0.4% for the year 2011. The company posted a combined ratio of a 104.6% for the quarter. This number included 17.5 percentage points of catastrophe losses, which was partially offset by 7.9 points of favorable prior year development.

Year-over-year written premiums grew materially with a 26% increase in gross written premiums and a 22% increase in net premiums. We experienced premium increases in our crop insurance business, rate and volume driven increases in our small risk and contract binding authority insurance businesses and finally, rate increases in our U.S. catastrophe business.

As respect to investments, our portfolio generated a positive total return of 37 basis points in the quarter. Net investment income was $14 million, down from the $54 million we generated in Q3 of 2010. This drop in income primarily stands from the negative marketing to market of our portfolio alternatives, which is fully reflected in our income statement. Later in the call, I will provide further commentary on our performance for the quarter, as well as some thoughts on our positioning for the balance of this year.

With that, I will now hand the call over to Mike McGuire, who will review our financial results in more detail.

Mike McGuire

Thanks, David, and good morning, everyone. As we reported last night, Endurance generated a net loss of $20 million and $0.71 per diluted share for the third quarter, and our operating loss was $24.7 million and $0.83 per diluted share. Our results this quarter were impacted by $98.5 million of net catastrophe losses and $22.5 million of mark-to-market losses on our alternative investments.

Our third quarter net premiums written were $541.3 million, reflecting an increase of 22% over the same period in 2010. Our insurance segment generated net written premiums of $303.2 million, 48.4% higher than the third quarter of 2010. Due to premium growth in our agriculture and casualty lines of business, partially offset by declines in property and professional lines of business.

Agriculture net premiums written were up $96 million from a year ago, as increases in net positive premium adjustments by $74 million related to spring crops will recorded to reflect [treat up] acreage reports and the full impact of commodity price increases year-over-year. Fall planted winter wheat premiums accounted for much remaining growth, as wheat prices were approximately 20% higher than a year ago.

Within the casualty insurance line of business, growth in our small risk contract binding authority unit, which was launched late last year was partially offset by declines in large risk, excess casualty insurance, where the market remains competitive. In both our property and professional lines of insurance, business conditions remain competitive and we let policies go that did not meet our written requirements.

Reinsurance segment net premiums written were $248.1 million, up modestly from the third quarter of 2010 as renewals and price improvements in our catastrophe and property reinsurance lines of business were offset by a decline in casualty premiums as we continue to actively non-renew portions of our portfolio, due to pricing terms and conditions. We did have one $5 million casualty treaty, whose renewal was extended into the fourth quarter creating a small timing difference.

Endurance’s combined ratio was 104.6% in the third quarter of 2011, compared to 83.7% reported in the third quarter a year ago. The decline – the increase year-over-year was driven primarily by $98.5 million of previously announced catastrophe losses in our business, which added 17.5 points to our overall combined ratio. In addition, our Crop Insurance business has been impacted by less favorable growing conditions for U. S. crops, particularly and the droughts took in Southwest, which has led to lower margins in that business year-over-year.

So reinsurance segment combined ratio was 115% in the third quarter, up 38.1 percentage points from the third quarter of 2010. Third quarter catastrophe losses added 37.6 percentage points to reinsurance segment combined ratio. In contrast, catastrophe losses in the third quarter of 2010 only added 5 percentage points to the comparable period combined ratio.

Our insurance segment combined ratio was 96.8%, up 6.7 percentage points from the third quarter of 2010. The increase was driven by higher 2011 accident year loss ratios and our agriculture line of business, and 2 percentage points of cat losses related to hurricane Irene. Despite the adverse weather, our crop insurance business has produced an accident year combined ratio of 95.8% through the first nine months of this year.

Moving to investments, our portfolio’s total return was a positive 37 basis points in the quarter and positive 2.7% year-to-date. Our portfolio results this quarter were impacted by mark-to-market losses on our alternatives and equity portfolios, and spread widening in most fixed income categories, partially offset by rate declines.

In light of market conditions, we believe our alternative investments performed well on a relative basis with a decrease of 6% versus a 14% decline in the S&P 500. Since the start of our alternatives program seven years ago, our alternative investment portfolio has on an annualized return 5% better than the S&P 500 with half of the volatilities.

Our fixed income portfolio duration remains short, just under 2.5 years due to the poor risk reward associated with near zero rates. The book yield in our portfolio ended the quarter at 2.79%. During the third quarter we added modestly to our equity investments on market dips and took advantage of strengthening the most senior classes of prime, not agency mortgages to sell half of our exposure retaining primarily very seasoned senior classes of mortgages.

We continue to be concerned about the state of the global economy and the lack of clear or coordinated policy responses from governments around the world. We believe investment market volatility will stay high for a while. Therefore, we are focused on diversifying our risk exposures, but only into risk that we feel offer real potential and are available at attractive entry levels.

Our loss reserves continue to be robust with $449 million of IBNR short tailed lines held as of quarter end. Excluding reserves for named catastrophe -- our short tailed IBNR for the 2011 accident year end the quarter at a $132.3 million, consistent with the levels we held for 2010 at this point last year. In addition, $1.9 billion or 74% of long tailed reserves are IBNR.

Our capital position remained strong with total shareholders activity of $2.6 billion and total capital of $3.2 billion. We currently hold significant capital in excess of rating agency minimum requirements, the level we feel positions us very strongly for the challenging economic and underwriting environment we are in and provides us with ample capacity to take advantage of the opportunities ahead.

This year, we have repurchased 7.5 million shares for $340 million and since the beginning of 2007 we have repurchased 32.5 million shares for $1.26 billion.

With that, I’ll turn the call back to David for some additional comments and concluding remarks.

David Cash

Thank you, Mike. I’ll now take some time to review the following areas. The Q3 catastrophe loss activity, investment returns, crop insurance and rating agencies and capital management. As we pre-announced on October 7th, Endurance experienced approximately a $100 million in catastrophe losses in the quarter. These catastrophe losses were incurred both in Europe and in the U.S.

In order, our catastrophe losses for the quarter were as follows, $26 million related to the July Copenhagen flood, $21 million related to Hurricane Irene, $11 million related to September Texas brushfires and $41 million related to aggregate coverage written for Midwestern and regional clients.

With the exception of Hurricane Irene, these losses rose from small to mid-size events or accumulation of events. But we have context for these losses, Endurance generates most of its catastrophe premiums as a reinsurance of regional reinsurance programs in the U.S. and from single country reinsurance programs outside the U.S. Greater than two-thirds of our U.S. and international catastrophe premiums come from regional programs as opposed to multi-region and multi-parallel programs.

In general, regional programs tend to attach at lower levels of industry loss and so in the years such as 2011, where we’ve experienced multiple smaller events both in the U. S. and internationally is not that surprising as we experienced the losses that we reported this quarter.

Finally, with respect to our catastrophe portfolio, we do write some coverage on an aggregate basis. In the U.S., we have $15 million of aggregate expose limit in our portfolio. In total, approximately 3% of our expose catastrophe limit is written on an aggregate basis. The $50 million of U.S. limit has of course been almost fully wrote by the Midwestern events of this summer.

As was noted by Mike earlier in the call, our total investment return quarter was 37 basis points. This return was comprised of a plus 1% total return on our core fixed income portfolio and a minus 6% total return on the balance of our portfolio.

In considering our Q3 results, there are two obvious things would stand out. As respect to interest rate exposure, we were relatively short, in a quarter we’re having longer duration was rewarded. Outside of duration risk, this is also a quarter we’re being risk-off with the right place to be as equity markets were down materially and credit spreads widened.

Although, we could have benefited more, have that duration being longer, our portfolio positioning was consistent with our medium to longer term use of risk and reward, is one that I feel continues to be appropriate for the world we live in today. We will continue to seek place to safely diversify our portfolio and enhance returns by retaining flexibility to take advantage of investing opportunity should conditions improve.

Turning to crop insurance, the third quarter was a positive one. We saw material growth in premiums as result of finalizing acreage reports for spring crops. We experienced growth in our Q3 premiums winter crops and we experienced modest improvement in our 2011 crop year combined ratio.

In combination, these three effects produced year-over-year growth in written premiums for the quarter of almost $100 million and a bottom line contribution of profits of approximately $10 million. Given the continued challenging growing conditions being experienced in the Southwestern United States this result is very gratifying.

We stop a fair way to go before the 2011 crop year is completed. That being said, we are now in the back side of the hill. In particular, harvest is underway in the Midwest and northern states, and field conditions are good for taking crops off the field to market. Unlike 2009, when the harvest was very long and drawn out, the 2011 year is expected to be done earlier than normal.

Separate from harvest conditions, the fall harvest prices are largely known at this point and it does appear that settlement prices for key crops such as corn, cotton, soybeans and wheat will be in line with the sales close prices established the start of the year. Both of these facts serve to reduce substantial for unexpected end of year and seasonal loss emergence order book. Certainly, there are challenges that remain, but on balance we feel that our crop business is performing well and that is rightly seen as a positive source of differentiation within Endurance’s portfolio of businesses.

Finally, turning to rating agencies and capital management, I did want to provide an update in both areas. Endurance typically goes towards annual rating agency reviews in the third quarter. The rating reviews include our financial strength ratings assessments and our enterprise risk management assessment. Given the large number of catastrophe events that have taken place over the last 21 months, it’s fair to say that the rating agency sounds a meaningful data points with which to evaluate companies.

In our case, I’m pleased to say that our financial strength in enterprise risk management ratings were recently reaffirmed by Standard & Poor’s. In of the year, when 21st catastrophes occurred, I can honestly say that I’m very satisfied with the performance as to manage our risk. Consultants are very gratifying to able to report that the rating agency scaled our way too.

Turning to capital management, our industry find itself once more carrying very low evaluations versus book value per share. This does present an opportunity for companies to generate value for shareholder by repurchasing stock. Endurance has always subscribed to a philosophy of cycle managing and capital managing our business.

When and where our market conditions indicate, we’re prepare to shrink individual business and either redeploy that capital in other businesses or to return it to our shareholders. To that end, over the period from January 2007 through today, Endurance has exited several businesses, while at the same time growing its growth written premiums 31%.

Units we’ve grown in size over that same period we’ve been able to reduce our outstanding share count from 72 million shares to just over 42 million shares today. While we do expect to see opportunities to grow our business in January 1, we also recognize that it’s possible to such opportunities will not emerge.

To that end, we will be recommending to our board in November that we extend and replenish our current share repurchase program. This program is currently set to expire in November and hasn’t non-extra size share repurchase authorization of approximately 2.5 million shares, although 7 million shares originally authorized.

As we done in the past, we will continue to seek the best opportunities for our capital, added deploying it in spite of core underwriting activities by seeking new business opportunities or by returning to our shareholders through dividends and share repurchases.

With that operator, I’d now like to open the lines for questions.

Question-and-Answer Session

Operator

(Operator Instructions) And our first question will come from Amit Kumar with Macquarie. Please go ahead.

Amit Kumar – Macquarie

Thanks. And good morning. Just going back to the discussion on the crop program, you said that the 9 months is running at 95.5, based on what do you know currently -- how do you expect that 2011 year to shape up, I mean, does it get better than this or there is in a set of range where that could inside even go higher?

David Cash

Good morning, Amit. In this quarter, I guess reflecting back-to-last quarter we had a situation where we saw conditions in Texas were challenging and there is the potential for them to worsen and we saw that happen through the quarter. And at the same time we were carrying reserves in the Midwest for particularly the reserves set up in the beginning of the year where we had delayed plantings.

And that the sense was particular in the state like Indiana that those reserves might improve. And we saw essentially both of those things take place during the quarter. And so when I now look at the balance of the year, I would say this was a range of uncertainty around our result has reduced materially, there is certainly a potential for us to improve better, to improve and to worsen but we’re probably fairly close to where we end up looking at for the year at this point.

Amit Kumar – Macquarie

Got it. That’s helpful. Just moving on to the broader discussion on you being the richer of regional programs and two thirds of your profile in that place, is that a top process where you’re saying to yourself just based on Q2 and Q3 results, maybe we should be relooking at our profile and may be diversifying into other areas or do you think that 2011 was a one off and hence we should anticipate no meaningful changes in your approach to the regional programs?

Mike McGuire

Sure. Let me try that. On balance, over two thirds of our portfolio is, we’ll call it regional or single country exposure. And so it’s possible we adjust that mix it a bit, but it would be hard to move it significantly. And at the heart of it, we really -- we like those clients because we’re able to diversify and in the sense reuse our limit again and again and again as we move from region to region. And so that philosophy will not change.

When you look at the actual -- the book of business, which was particularly hit in the Midwest, the rate online that we achieved on those programs that around closing on a 20% rate online. And so we’ve received almost $10 million of premium for the $50 million of limit that was exposed to this period.

And on balance this feels to me like a more unusual year than a one in five years. So we don’t think the pricing was particularly wrong and we may adjust on the margin in terms of limit exposed, but not significantly. I think that’s really what we had said today.

Amit Kumar – Macquarie

Got it. And just one more question and then I will re-queue. Your comments regarding 1.1 did they seem to be, maybe a bit more cautious than what I have heard from some other players. Can you sort of just expand on that and maybe talk about what’s your thought would happen at $7.1 for $1.1 and what you think now, just coming out of [barn and barn] has your view changed or there is still a lot of pricing momentum which is expected to last into $1.1? Thanks.

David Cash

Sure. If you look at, particularly cat expose business, we saw price increases at 6.1 and 7.1 and they were U.S. price increases and also some international price increases. And generally, our experiences being when the cat market speaks price increases they seek it at least for a year and these price increases started after January 1st of 2011.

Ans so there I think we’ll see some price increases at January 1. So I wouldn’t want to see -- we are not expecting that, I would expect to see that. If you look across our total book of business, probably half of our book of business is crop insurance or cap reinsurance. And those lines of business will price flat or up next year, which is a great place to be.

And then when we look at our insurance book of business, we’re seeing trends similar to those flag, that some of standard launch riders took on our smaller risk insurance business, we are seeing price increases at this point, kind of 5% to 8% price increases.

And that book of business, in spite of $60 million book of business, has historically moved which we will call market scout reporting companies and so even there I’m optimistic about to 2011 and ‘12. Less than half of our book of business, I would say, sort of in that zone where competition still exists.

So overall we feel positive. We do think we’ll have opportunistic growth at January 1 both organically and maybe some inorganic opportunities to come our way as well. So I don’t want to over message the optimism, but I certainly wouldn’t want to under-message this as well.

Amit Kumar – Macquarie

Got it. Thanks for your answers.

Operator

And our next question will come from [Donald Chin] with JPMorgan. Please go ahead.

Donald Chin – JPMorgan

Hi. Thank you. I just had a question, follow up on Amit’s question on the crop. Can you explain why Texas is still having issues, given seasonally you have small premiums. And how should we think about crop as a whole for next year, since plot has been used up?

David Cash

Sure. At this point in year, when you look at Texas, it’s been dry the whole year. And what you don’t know, until we get to the back half of this season, its just how that weather will impact the cotton harvest. And so cotton is coming off the field right now and until the sort of literally that harvest is being challenge, you don’t know what your loss will ultimately be.

And so what you tend to find is claims reports steady through the third quarter and into the fourth quarter and especially adjusted at the end of the fourth quarter. And it’s hard to predict how large those losses would be until you get there. And so what we saw in this quarter was and as the three months of extremely dry weather and new claim emergence in the quarter that reflected that extremely dry weather. And so it’s not -- it wasn’t to me surprise when you see Texas get worse given the weather that we experience.

So that would be my sort of explanation essentially for Texas. If you go to the Midwest, it’s a slightly different dynamics there rather than sort of experiencing more color harvest conditions. What’s happening in the Midwest was at the beginning of the season when people had a hard time planting their crop, they file essentially a precautionary notice and we’ll put claims reserve up against that precautionary notice.

And you don’t ultimately know whether that will turn into -- how large that loss will be or specifically reason be a loss, until you find out what crop the farmer finally was able to plant and so that too takes time to sort of sort out. It’s not really weather driven, it’s more of matter of how the farmers report their losses. It’s a little more, almost administrative I would say.

And so in this quarter, Texas got worse in this weather, the Midwest got better and it was essentially sorting out the, sort of, we called a lag associated with getting final, the assessment is what crop was in the ground.

Turning to the 2012 crop year, the 2012 crop years has just started. And so winter crops are into ground and the key winter crop there would be winter wheat in Texas and it’s dry in Texas, it actually started to rain in Texas, but essentially we should deal as a dry growing season in Texas.

And so we’ll be seeding probably as much as 75% of our Texas premium into the assign risk fund for winter wheat. And we’re not expecting Texas winter wheat to be all that sort of positive this year.

If you look at the 2011 year and I register, I’m jumping around, where we seeded risk – unit we signed risk pool. We ended up generating combined ratios that were relatively close to 100%, it was just how much of the losses essentially held by the federal government. And so, as the buss starts the growing season in Texas, but given the way we are seeding I feel that we are down the right path there.

Donald Chin – JPMorgan

Great. Thanks for the color. Can you actually give us a sense of what on premium for cropless byproduct and steep?

David Cash

Well, we’ve got in our supplement, you can see there aren’t premium mix just at the total level, we have not shown breakouts of the year end in premium by individual crop in state. If you do look in our investor presentation, we do provide rough percentages of the total annual portfolios, split the premiums by state and by crop. That’s probably the best way to look to get relative positioning in terms of the mix of that business.

Mike McGuire

I mean, it just had a high level, but the quick answer is, when it comes to crops, generally we are serving the ballpark of 20%, 20%, 20%, 20% cotton corn, wheat soybean and then the balance, the final 20% of our portfolio would be other crops and it’s an extremely wide range from fruits to nuts to other things.

If you look at our mixer of business by group, a little over 25% of our premiums group one state, those are going to be Midwestern states, around 25% of our net written premiums in Texas and that tends to be heavily ceded, if you sign risk funds, so they don’t have the same kind of volatility around it. And then the balances, we’ll call it group two states other than Texas and that’s a 50% will be group two than Texas.

Donald Chin – JPMorgan

Got it. Thanks. And in terms of the contract binding authority premiums, they’ve been growing this year. Can you give us a sense of what combined ratio it’s being booked out?

Mike McGuire

Sure. Essentially when we look at our book of business, the pricing model we use is, we launch estimate for the risk and then we apply a loss cost multiplied about loss in order to arrive at our final premium. And so the loss cost multiplier we’re using now is around 1.6, 1.65. And that will generate margins in the order of around 10%.

And if you really go back a year, we’re probably instead of 1.65, we’re probably closer to 1.6 and so that -- the sort of the increase in the multiplier in the sense is in my mind, it’s being echoed by some of the news reported by some of the larger standard lines writers in their earnings calls this quarter.

Donald Chin – JPMorgan

Thanks. And one last question if I may. Your estimates for first half events have held up so far. What given you confer that it doesn’t need additional provision and have there been any gross change that there haven’t been flow through yet?

David Cash

Sure, as of today where we book the end of the third quarter is what we believe the losses should be based on news we have today. What we’ve all learned is that for earthquakes, it can take a while to get to the final number, when you look at sort of where to some of the key we’ll call it sources of loss reserves.

When you look at Japan it’s my perception that some of the more recent news that’s come out of Japan is being focused on the larger mutual underwriters of risk, but sort of -- they are ensuring some of the other cooperative insurers and we’re relatively speaking less exposed to those than we are to, we’ll call it commercial insurers. And so we don’t feel that we’re sort of skewed towards where some of the most recent reporting has come from.

If you go back, really it’s the New Zealand losses where I think we’ve seen emergence there this quarter. We have -- the key program there is the earthquake authority, the earthquake commission at New Zealand. And we’ve been booked at full limits on that program where I think a quarter or may be two at this point. And so, that’s not to say that we couldn’t see emergence come from other parts of the portfolio, but sort of the key drivers that have been communicated by others, we think they were essentially -- were an essential spot, let’s expose to those risks or with limits.

Donald Chin – JPMorgan

Great. Thanks.

David Cash

You’re welcome. Thank you.

Operator

(Operator Instructions) And we do have a follow up from Amit Kumar with Macquarie. Please go ahead.

Amit Kumar – Macquarie

Thanks. Just going back to the discussion. Just to make sure you had no addition from the first half events in the third quarter results?

David Cash

Yes. And when you look at, some individual losses got a little worse and some individual losses got a little bit better. And that you don’t have those ones precisely mine, Japan, I think a little bit better. Is that a fair statement? And probably a little bit of creep out of Australia or something like that, but flat for the quarter.

So when we announced on October 7, the third quarter loss, that were the losses we experienced in the quarter, we were silent on loss emergence, because we didn’t think at that point we’re going to have loss emergence from prior periods and prior years.

Today, we can say we haven’t had in aggregate emergence positive or negative on prior periods and prior years.

Amit Kumar – Macquarie

Okay. That’s helpful. And then, I guess, just related to that industry in Asia, there has been a -- and again I think this is new, there has been all the charter about this flooding in industrial estates on Bangkok and it seems a lot of the Japanese car companies are out there, do you have any initial views on Q4 cash from that?

Mike McGuire

We’re sort of receiving the news kind of at the same pace as others are, but I think people rightly reserved in, some of the significant in short losses will come from Japanese interest abroad and so it will likely flow through Japanese insurance companies programs.

This time, not so much the mutuals, but more the commercial insurers and given the size that process is -- probably not something that we’ll hit cap programs, but we likely run through risk programs, so this also called individual risk exposed programs.

We are at greater risk business in Asia with relatively small shares on those programs, there is no difference in terms of share size from what we’ve been on the cap programs. So that I do know, what I also know is, I -- given it’s flood and take quite a while to figure out what the losses are there.

But I think the news you read so far seems to be on point, but I had to guess it would be a month or so before we have a real sense for the loss number.

Amit Kumar – Macquarie

Got it. And then just final follow-up question. In terms of those turnout of investments, there is no lag, right, that’s what we said its 1:1, so Q3 is Q3, right?

Mike McGuire

Amit, that’s absolutely right. We did not book any of our alternative investments on a lag, so our results are fully up to the end of September.

Amit Kumar – Macquarie

So now, if you look at the markets now. Has a big portion of it reversed already or can you just give some more color on that?

Mike McGuire

Sure. Most of our investments report on a monthly or bi-weekly basis, so we don’t have all the reports. And yet, what we’ve seen so far and obviously, as you’ve seen in the markets, there has been a decent rally in the month of October. So initial indications are positive, but it’s too early to give you a sense of the magnitude of that’s how positive.

Amit Kumar – Macquarie

Got it. Okay. Thanks for your answers.

David Cash

Thank you.

Mike McGuire

Right. Thank you, Amit.

Operator

There are no further questions at this time. I would like to turn the call back over to Mr. David Cash for any additional or closing remarks.

David Cash

Thank you, Nikki. Thank you again for joining us today in our earnings call. Looking towards the rest of the year, we’ll be meeting with investors at the JPMorgan Small Cap Mid Cap Conference in December and hosting several troops coming to Bermuda. Look forward to seeing you and talking to you again next quarter when we release our full-year results. Thank you.

Operator

That does conclude today’s conference. Thank you for your participation.

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