Platinum Underwriters Holdings, Ltd. Reports Financial Results for the Third Quarter 2010

Oct 20, 2010, 16:21 ET from Platinum Underwriters Holdings, Ltd.

HAMILTON, Bermuda, Oct. 20 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $93.7 million and diluted earnings per common share of $2.13 for the quarter ended September 30, 2010.

The results for the quarter include net premiums earned of $183.4 million, net favorable development of $34.6 million and net investment income and net realized gains on investments of $75.4 million.

Michael D. Price, Platinum's Chief Executive Officer, commented, "Our book value per common share grew by 7.6% in the quarter to $55.13 as of September 30, 2010.  These results reflect $28.5 million in estimated net losses from the New Zealand earthquake, favorable reserve development, strong investment performance on a total return basis, active capital management and the favorable impact of a change to our estimate of administrative costs of managing claims."

Mr. Price added, "Despite an overcapitalized reinsurance marketplace, we have developed an acceptable portfolio of treaty reinsurance risks.  Through active management, we have better aligned our capital base with business opportunities."

Results for the quarter ended September 30, 2010 are summarized as follows:  

  • Net income was $93.7 million and diluted earnings per common share were $2.13.
  • Net premiums written were $199.4 million and net premiums earned were $183.4 million.
  • GAAP combined ratio was 68.1%.
  • Net investment income was $31.1 million.
  • Net realized gains on investments were $44.3 million.

Results for the quarter ended September 30, 2010 as compared with the quarter ended September 30, 2009 are summarized as follows:

  • Net income decreased $15.8 million (or 14.4%).
  • Net premiums written decreased $44.2 million (or 18.1%) and net premiums earned decreased $46.1 million (or 20.1%).
  • GAAP combined ratio decreased 4.2 percentage points.
  • Net investment income decreased $13.7 million (or 30.5%).
  • Net realized gains on investments increased $21.8 million.

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2010 were $114.9 million, $80.3 million and $4.2 million, respectively, representing 57.6%, 40.3% and 2.1%, respectively, of total net premiums written. Combined ratios for these segments were 94.2%, 36.9% and 55.6%, respectively. Compared with the quarter ended September 30, 2009, net premiums written decreased $32.6 million (or 22.1%), $8.1 million (or 9.2%) and $3.5 million (or 45.5%) in the Property and Marine, Casualty and Finite Risk segments, respectively.

Results for the nine months ended September 30, 2010 are summarized as follows:  

  • Net income was $233.2 million and diluted earnings per common share were $5.04.
  • Net premiums written were $598.6 million and net premiums earned were $595.0 million.
  • GAAP combined ratio was 79.3%.
  • Net investment income was $104.0 million.
  • Net realized gains on investments were $99.3 million.

Results for the nine months ended September 30, 2010 as compared with the nine months ended September 30, 2009 are summarized as follows:

  • Net income decreased $59.3 million (or 20.3%).
  • Net premiums written decreased $98.4 million (or 14.1%) and net premiums earned decreased $114.7 million (or 16.2%).
  • GAAP combined ratio increased 2.7 percentage points.
  • Net investment income decreased $19.1 million (or 15.5%).
  • Net realized gains on investments increased $45.4 million.

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the nine months ended September 30, 2010 were $335.8 million, $246.7 million and $16.1 million, respectively, representing 56.1%, 41.2% and 2.7%, respectively, of total net premiums written. Combined ratios for these segments were 93.1%, 59.2% and 118.4%, respectively. Compared with the nine months ended September 30, 2009, net premiums written decreased $66.8 million (or 16.6%), $27.2 million (or 9.9%) and $4.4 million (or 21.5%) in the Property and Marine, Casualty and Finite Risk segments, respectively.

Total assets were $4.94 billion as of September 30, 2010, a decrease of $85.3 million (or 1.7%) from $5.02 billion as of December 31, 2009. Fixed maturity investments and cash and cash equivalents were $4.54 billion as of September 30, 2010, an increase of $169.5 million (or 3.9%) from $4.37 billion as of December 31, 2009.

Shareholders' equity was $2.16 billion as of September 30, 2010, an increase of $87.1 million (or 4.2%) from $2.08 billion as of December 31, 2009.  Book value per common share was $55.13 as of September 30, 2010 based on 39.3 million common shares outstanding, an increase of $9.91 (or 21.9%) from $45.22 as of December 31, 2009 based on 45.9 million common shares outstanding.  During the three months ended September 30, 2010, the Company repurchased 2,228,611 common shares for approximately $91.8 million at a weighted average cost, including commissions, of $41.19 per share.  During the nine months ended September 30, 2010, the Company repurchased an aggregate of 7,986,517 common shares for approximately $304.6 million at a weighted average cost, including commissions, of $38.14 per share.

The Company also reported that the previously announced purchase of 6,000,000 options held by The Travelers Companies, Inc. for $98.5 million closed on October 18, 2010.

Financial Supplement

Platinum has posted a financial supplement on the Financial Reports page of the Investor Relations section of its website (Financial Supplement).  The Financial Supplement provides additional detail regarding the financial performance of Platinum and its business segments.

Teleconference

Platinum will host a teleconference to discuss its financial results on Thursday, October 21, 2010 at 8:00 a.m. Eastern time.  The call may be accessed by dialing 888-809-3657 (US callers) or 913-312-0676 (international callers), or in a listen-only mode via the Investor Relations section of Platinum's website at www.platinumre.com.  Those who intend to participate in the teleconference should register at least ten minutes in advance to ensure access to the call.

The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern time on Thursday, October 21, 2010 until midnight Eastern time on Thursday, October 28, 2010.  To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 2242819. The teleconference will also be archived on the Investor Relations section of Platinum's website at www.platinumre.com for the same period of time.

Non-GAAP Financial Measures

In presenting the Company's results, management has included and discussed certain schedules containing financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including segment underwriting income (or loss) and related underwriting ratios are referred to as non-GAAP. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures, which are used to monitor the results of operations, allow for a more complete understanding of the underlying business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. A reconciliation of such measures to the most comparable GAAP figures such as income before income tax expense and total shareholders' equity is presented in the attached financial information in accordance with Regulation G.

About Platinum

Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of property, casualty and finite risk reinsurance coverages, through reinsurance intermediaries, to a diverse clientele on a worldwide basis.  Platinum operates through its principal subsidiaries in Bermuda and the United States.  For further information, please visit Platinum's website at www.platinumre.com.

Safe Harbor Statement Regarding Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Forward-looking statements are based on our current plans or expectations that are inherently subject to significant business, economic and competitive uncertainties and contingencies.  These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us.  In particular, statements using words such as "may," "should," "estimate," "expect," "anticipate," "intend," "believe," "predict," "potential," or words of similar import generally involve forward-looking statements.  The inclusion of forward-looking statements in this press release should not be considered as a representation by us or any other person that our current plans or expectations will be achieved.  Numerous factors could cause our actual results to differ materially from those in forward-looking statements, including, but not limited to, severe catastrophic events over which we have no control, the effectiveness of our loss limitation methods and pricing models, the adequacy of our liability for unpaid losses and loss adjustment expenses, our ability to maintain our A.M. Best Company, Inc. and Standard & Poor's ratings, our ability to raise capital on acceptable terms if necessary, the cyclicality of the property and casualty reinsurance business, the highly competitive nature of the property and casualty reinsurance industry, our ability to maintain our business relationships with reinsurance brokers, the availability of retrocessional reinsurance on acceptable terms, market volatility and interest rate and currency exchange rate fluctuation, tax, regulatory or legal restrictions or limitations applicable to us or the property and casualty reinsurance business generally, general political and economic conditions, including the effects of civil unrest, acts of terrorism, war or a prolonged United States or global economic downturn or recession; and changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion. As a consequence, our future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of us. The foregoing factors should not be construed as exhaustive. Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to revise or update forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.

Platinum Underwriters Holdings, Ltd.

Condensed Consolidated Balance Sheets

As of September 30, 2010 and December 31, 2009

($ in thousands, except per share data)

September 30,

December 31,

2010

2009

(Unaudited)

Assets

Investments

$

2,874,351

3,660,515

Cash, cash equivalents and short-term investments

1,664,833

709,134

Accrued investment income

27,315

29,834

Reinsurance premiums receivable

175,914

269,912

Reinsurance balances (prepaid and recoverable)

24,253

29,710

Funds held by ceding companies

82,428

84,478

Deferred acquisition costs

39,841

40,427

Other assets

47,324

197,568

Total assets

$

4,936,259

$

5,021,578

Liabilities

Unpaid losses and loss adjustment expenses

$

2,194,173

$

2,349,336

Unearned premiums

180,432

180,609

Debt obligations

250,000

250,000

Commissions payable

58,460

90,461

Other liabilities

88,321

73,441

Total liabilities

2,771,386

2,943,847

Total shareholders' equity

2,164,873

2,077,731

Total liabilities and shareholders' equity

$

4,936,259

$

5,021,578

Book value per common share (a)

$

55.13

$

45.22

(a) Book value per common share is determined by dividing shareholders' equity by actual common shares outstanding.

Platinum Underwriters Holdings, Ltd.

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

For the Three and Nine Months Ended September 30, 2010 and 2009

($ and amounts in thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2010

2009

2010

2009

Revenue

Net premiums earned

$

183,404

229,538

595,014

$

709,752

Net investment income

31,078

44,747

103,955

123,070

Net realized gains (losses) on investments

44,351

22,553

99,297

53,917

Net impairment losses on investments

(4,048)

(5,075)

(25,560)

(11,739)

Other income (expense)

(171)

(1,222)

(42)

4,222

Total revenue

254,614

290,541

772,664

879,222

Expenses

Net losses and loss adjustment expenses

79,094

99,240

315,137

368,349

Net acquisition expenses

32,517

50,009

113,934

128,503

Net changes in fair value of derivatives

4,154

4,305

6,499

6,828

Operating expenses

20,004

25,210

61,905

68,984

Net foreign currency exchange losses (gains)

235

(616)

(1,061)

(157)

Interest expense

4,763

4,757

14,232

14,268

Total expenses

140,767

182,905

510,646

586,775

Income before income tax expense (benefit)

113,847

107,636

262,018

292,447

Income tax expense (benefit)

20,185

(1,832)

28,796

(73)

Net income

93,662

109,468

233,222

292,520

Preferred dividends

-

-

-

1,301

Net income attributable to common shareholders

$

93,662

109,468

233,222

$

291,219

Basic

Weighted average common shares outstanding

40,485

49,660

43,029

49,955

Basic earnings per common share

$

2.31

2.20

5.42

$

5.83

Diluted

Adjusted weighted average common shares outstanding

44,044

52,039

46,263

52,547

Diluted earnings per common share

$

2.13

2.10

5.04

$

5.57

Comprehensive income

Net income

$

93,662

109,468

233,222

$

292,520

Other comprehensive income, net of deferred taxes

45,895

106,570

128,600

169,952

Comprehensive income

$

139,557

216,038

361,822

$

462,472

Platinum Underwriters Holdings, Ltd.

Segment Reporting (Unaudited)

For the Three Months Ended September 30, 2010 and 2009

($ in thousands)

Three Months Ended September 30, 2010

Segment underwriting results

Property and Marine

Casualty

Finite Risk

Total

Net premiums written

$

114,885

80,362

4,180

$

199,427

Net premiums earned

98,342

80,437

4,625

183,404

Net losses and loss adjustment expenses

70,657

8,156

281

79,094

Net acquisition expenses

14,140

16,395

1,982

32,517

Other underwriting expenses

7,905

5,171

307

13,383

Total underwriting expenses

92,702

29,722

2,570

124,994

Segment underwriting income (loss)

$

5,640

50,715

2,055

58,410

Net investment income

31,078

Net realized gains (losses) on investments

44,351

Net impairment losses on investments

(4,048)

Net changes in fair value of derivatives

(4,154)

Net foreign currency exchange gains (losses)

(235)

Other income (expense)

(171)

Corporate expenses not allocated to segments

(6,621)

Interest expense

(4,763)

Income before income tax expense (benefit)

$

113,847

GAAP underwriting ratios:

Net loss and loss adjustment expense

71.8%

10.1%

6.1%

43.1%

Net acquisition expense

14.4%

20.4%

42.9%

17.7%

Other underwriting expense

8.0%

6.4%

6.6%

7.3%

Combined

94.2%

36.9%

55.6%

68.1%

Three Months Ended September 30, 2009

Segment underwriting results

Net premiums written

$

147,448

88,467

7,675

$

243,590

Net premiums earned

132,567

90,591

6,380

229,538

Net losses and loss adjustment expenses

46,307

59,243

(6,310)

99,240

Net acquisition expenses

16,821

19,393

13,795

50,009

Other underwriting expenses

9,643

6,751

342

16,736

Total underwriting expenses

72,771

85,387

7,827

165,985

Segment underwriting income (loss)

$

59,796

5,204

(1,447)

63,553

Net investment income

44,747

Net realized gains (losses) on investments

22,553

Net impairment losses on investments

(5,075)

Net changes in fair value of derivatives

(4,305)

Net foreign currency exchange gains (losses)

616

Other income (expense)

(1,222)

Corporate expenses not allocated to segments

(8,474)

Interest expense

(4,757)

Income before income tax expense (benefit)

$

107,636

GAAP underwriting ratios:

Net loss and loss adjustment expense

34.9%

65.4%

(98.9%)

43.2%

Net acquisition expense

12.7%

21.4%

216.2%

21.8%

Other underwriting expense

7.3%

7.5%

5.4%

7.3%

Combined

54.9%

94.3%

122.7%

72.3%

The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.

Platinum Underwriters Holdings, Ltd.

Segment Reporting (Unaudited)

For the Nine Months Ended September 30, 2010 and 2009

($ in thousands)

Nine Months Ended September 30, 2010

Segment underwriting results

Property and Marine

Casualty

Finite Risk

Total

Net premiums written

$

335,775

246,741

16,056

$

598,572

Net premiums earned

326,698

253,505

14,811

595,014

Net losses and loss adjustment expenses

232,294

79,744

3,099

315,137

Net acquisition expenses

47,589

52,874

13,471

113,934

Other underwriting expenses

24,324

17,295

958

42,577

Total underwriting expenses

304,207

149,913

17,528

471,648

Segment underwriting income (loss)

$

22,491

103,592

(2,717)

123,366

Net investment income

103,955

Net realized gains (losses) on investments

99,297

Net impairment losses on investments

(25,560)

Net changes in fair value of derivatives

(6,499)

Net foreign currency exchange gains (losses)

1,061

Other income (expense)

(42)

Corporate expenses not allocated to segments

(19,328)

Interest expense

(14,232)

Income before income tax expense (benefit)

$

262,018

GAAP underwriting ratios:

Net loss and loss adjustment expense

71.1%

31.5%

20.9%

53.0%

Net acquisition expense

14.6%

20.9%

91.0%

19.1%

Other underwriting expense

7.4%

6.8%

6.5%

7.2%

Combined

93.1%

59.2%

118.4%

79.3%

Nine Months Ended September 30, 2009

Segment underwriting results

Net premiums written

$

402,588

273,940

20,451

$

696,979

Net premiums earned

394,554

299,712

15,486

709,752

Net losses and loss adjustment expenses

186,565

179,426

2,358

368,349

Net acquisition expenses

47,711

66,020

14,772

128,503

Other underwriting expenses

26,925

18,550

1,042

46,517

Total underwriting expenses

261,201

263,996

18,172

543,369

Segment underwriting income (loss)

$

133,353

35,716

(2,686)

166,383

Net investment income

123,070

Net realized gains (losses) on investments

53,917

Net impairment losses on investments

(11,739)

Net changes in fair value of derivatives

(6,828)

Net foreign currency exchange gains (losses)

157

Other income (expense)

4,222

Corporate expenses not allocated to segments

(22,467)

Interest expense

(14,268)

Income before income tax expense (benefit)

$

292,447

GAAP underwriting ratios:

Net loss and loss adjustment expense

47.3%

59.9%

15.2%

51.9%

Net acquisition expense

12.1%

22.0%

95.4%

18.1%

Other underwriting expense

6.8%

6.2%

6.7%

6.6%

Combined

66.2%

88.1%

117.3%

76.6%

The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.

SOURCE Platinum Underwriters Holdings, Ltd.



RELATED LINKS

http://www.platinumre.com