Bermuda-based re/insurer Endurance Specialty Insurance Ltd has been affirmed the A insurer financial strength (IFS) rating by Fitch Ratings.Fitch has also affirmed the Issuer Default Rating (IDR) at ‘A-’, senior unsecured notes at ‘BBB+’ and non-cumulative perpetual preferred shares at ‘BBB-’ of Endurance.The rating outlook is stable for all ratings.Fitch said its ratings continued to reflect the company’s solid profitability and interest coverage, moderate financial leverage, and high-quality and liquid investment portfolio.Partially offsetting these positives were the inherent earnings volatility derived from the company’s catastrophe exposure, potential uncertainty in the company’s loss reserve estimates for ‘long-tail’ business lines, and the fact that premium rates in many of the company’s core business lines continue to face downward cyclical pressure, with no apparent near-term catalyst for a reversal.Fitch views Endurance’s use of financial leverage as moderate and its operating earnings-based interest coverage as good. At September 30, 2010, Endurance’s equity-credit-adjusted ratio of debt plus preferred shares-to-total capital was approximately 14 percent.The ratings agency said that despite the company’s earnings and coverage being materially exposed to catastrophe-related claims, Endurance’s annual interest requirements were modest at about $36 million and the company’s operating subsidiaries have significant dividend capacity. Endurance’s operating earnings-based interest coverage has averaged a strong 10.6 times over the past five full years, although coverage has been negative in some periods due to higher catastrophe losses.Fitch said that Endurance’s investment portfolio was high-quality and liquid with almost the entire portfolio invested in cash and fixed income securities.