Platinum Underwriters Holdings, Ltd. Reports Record Year Ended December 31, 2009 Financial Results
HAMILTON, Bermuda, Feb. 17, 2010 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $383.3 million, or a record $7.33 per diluted common share, for the year ended December 31, 2009.
The results for the quarter ended December 31, 2009 include net income of $90.8 million or $1.76 per diluted common share. Net premiums earned were $227.6 million, net favorable development was $35.0 million and net investment income and net realized gains on investments were $65.6 million for the quarter.
Michael D. Price, Platinum's Chief Executive Officer, commented, "Platinum performed very well in 2009 producing record earnings per share and record growth in book value per share. Our results reflect a disciplined approach to underwriting, investing and capital management aided by a low level of major catastrophe loss activity. Our book value per share was $45.22 as of December 31, 2009, an increase of 3.8% from September 30, 2009 and 30.8% from December 31, 2008."
Mr. Price added, "Absent a major event in the insurance or capital markets, we expect the reinsurance marketplace to show deterioration over the course of 2010. We will continue with our strategy of responding to changes in market conditions and underwriting for profitability, not market share. We believe 2010 will be a challenging year from an underwriting perspective, but market conditions should allow us to participate selectively in a range of reinsurance classes."
Results for the quarter ended December 31, 2009 are summarized as follows:
- Net income was $90.8 million or $1.76 per diluted common share.
- Net premiums written were $200.9 million and net premiums earned were $227.6 million.
- GAAP combined ratio was 77.3%.
- Net investment income was $40.9 million.
- Net realized gains on investments were $24.7 million.
Results for the quarter ended December 31, 2009 as compared with the quarter ended December 31, 2008 are summarized as follows:
- Net income increased $26.7 million (or 41.7%).
- Net premiums written decreased $36.4 million (or 15.4%) and net premiums earned decreased $46.7 million (or 17.0%).
- GAAP combined ratio decreased 20.4 percentage points.
- Net investment income decreased $1.7 million (or 3.9%).
- Net realized gains on investments decreased $35.8 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended December 31, 2009 were $114.4 million, $82.6 million and $3.9 million, respectively, representing 57.0%, 41.1% and 1.9%, respectively, of total net premiums written. Combined ratios for these segments were 70.0%, 86.4% and 112.3%, respectively. Compared with the quarter ended December 31, 2008, net premiums written decreased $24.1 million (or 17.4%), $12.2 million (or 12.9%) and $0.07 million (or 1.8%) in the Property and Marine, Casualty and Finite Risk segments, respectively.
Results for the year ended December 31, 2009 are summarized as follows:
- Net income was $383.3 million or $7.33 per diluted common share.
- Net premiums written were $897.8 million and net premiums earned were $937.3 million.
- GAAP combined ratio was 76.7%.
- Net investment income was $163.9 million.
- Net realized gains on investments were $78.6 million.
Results for the year ended December 31, 2009 as compared with the year ended December 31, 2008 are summarized as follows:
- Net income increased $157.1 million (or 69.4%).
- Net premiums written decreased $139.7 million (or 13.5%) and net premiums earned decreased $177.5 million (or 15.9%).
- GAAP combined ratio decreased 15.2 percentage points.
- Net investment income decreased $22.6 million (or 12.1%).
- Net realized gains on investments increased $21.4 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the year ended December 31, 2009 were $517.0 million, $356.5 million and $24.3 million, respectively, representing 57.6%, 39.7% and 2.7%, respectively, of total net premiums written. Combined ratios for these segments were 67.2%, 87.6% and 116.2%, respectively. Compared with the year ended December 31, 2008, net premiums written decreased $76.1 million (or 12.8%) and $73.6 million (or 17.1%) in the Property and Marine and Casualty segments, respectively, and increased $9.9 million (or 69.1%) in the Finite Risk segment.
Total assets were $5.02 billion as of December 31, 2009, an increase of $94.4 million (or 1.9%) from $4.93 billion as of December 31, 2008. Cash, cash equivalents and fixed maturity investments were $4.37 billion as of December 31, 2009, an increase of $109.7 million (or 2.6%) from $4.26 billion as of December 31, 2008.
Shareholders' equity was $2.08 billion as of December 31, 2009, an increase of $268.3 million (or 14.8%) from $1.81 billion as of December 31, 2008. Book value per common share was $45.22 as of December 31, 2009 based on 45.9 million common shares outstanding, an increase of $10.64 (or 30.8%) from $34.58 as of December 31, 2008 based on 47.5 million common shares outstanding. Book value reflects common share repurchases of $252.3 million at a weighted average cost, including commissions, of $32.13 per share during the year ended December 31, 2009.
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, February 18, 2010 at 8:00 a.m. Eastern time. The call can be accessed by dialing 888-264-8893 (US callers) or 913-312-1430 (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, February 18, 2010 until midnight Eastern time on Thursday, February 25, 2010. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode: 5494228. 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. The Company's operating subsidiaries have financial strength ratings of A (Excellent) from A.M. Best and A (Strong) from Standard & Poor's. 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 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). 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 December 31, 2009 and December 31, 2008
(amounts in thousands, except per share amounts)
December 31, 2009 December 31, 2008
----------------- -----------------
(Unaudited)
Assets
Investments $ 3,660,515 $ 3,371,886
Cash, cash equivalents and
short-term investments 709,134 888,053
Reinsurance premiums receivable 269,912 307,539
Accrued investment income 29,834 29,041
Reinsurance balances
(prepaid and recoverable) 29,710 23,310
Deferred acquisition costs 40,427 50,719
Funds held by ceding companies 84,478 136,278
Other assets 197,568 120,337
----------------- -----------------
Total assets $ 5,021,578 $ 4,927,163
================= =================
Liabilities
Unpaid losses and loss
adjustment expenses $ 2,349,336 $ 2,463,506
Unearned premiums 180,609 218,890
Debt obligations 250,000 250,000
Commissions payable 90,461 125,551
Other liabilities 73,441 59,819
----------------- -----------------
Total liabilities 2,943,847 3,117,766
Total shareholders' equity 2,077,731 1,809,397
----------------- -----------------
Total liabilities and
shareholders' equity $ 5,021,578 $ 4,927,163
================= =================
----------------- -----------------
Book value per common share(a) $ 45.22 $ 34.58
================= =================
(a) Book value per common share is determined by dividing shareholders'
equity, excluding capital attributable to preferred shares, by actual
common shares outstanding.
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and
Comprehensive Income (Unaudited)
For the Three and Twelve Months Ended December 31, 2009 and 2008
(amounts in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
----------- ----------- ----------- ------------
Revenue
Net premiums earned $ 227,584 274,238 937,336 $ 1,114,796
Net investment income 40,871 42,537 163,941 186,574
Net realized gains on
investments 24,713 60,521 78,630 57,254
Net impairment losses (5,864) (17,590) (17,603) (30,686)
Other (expense) income (1,138) (195) 3,084 337
--------- --------- --------- ---------
Total revenue 286,166 359,511 1,165,388 1,328,275
--------- --------- --------- ---------
Expenses
Net losses and LAE 109,993 193,775 478,342 718,233
Net acquisition
expenses 47,916 59,716 176,419 242,715
Net changes in fair
value of derivatives 2,913 5,700 9,741 14,114
Operating expenses 25,698 20,265 94,682 88,208
Net foreign currency
exchange (gains) losses (242) 3,497 (399) 6,760
Interest expense 4,759 4,753 19,027 19,006
--------- --------- --------- ---------
Total expenses 191,037 287,706 777,812 1,089,036
--------- --------- --------- ---------
Income before income
tax expense 95,129 71,805 387,576 239,239
Income tax expense 4,358 7,753 4,285 12,999
--------- --------- --------- ---------
Net income 90,771 64,052 383,291 226,240
Preferred dividends - 2,602 1,301 10,408
--------- --------- --------- ---------
Net income
attributable to common
shareholders $ 90,771 61,450 381,990 $ 215,832
========= ========= ========= =========
Basic
Weighted average common
shares outstanding 48,294 47,363 49,535 49,310
Basic earnings per
common share $ 1.88 1.30 7.71 $ 4.38
Diluted
Adjusted weighted
average common shares
outstanding 51,466 54,499 52,315 56,855
Diluted earnings per
common share $ 1.76 1.18 7.33 $ 3.98
Comprehensive income
Net income $ 90,771 64,052 383,291 $ 226,240
Other comprehensive
income (loss), net
of deferred taxes (36,726) (18,730) 133,226 (164,648)
--------- --------- --------- ---------
Comprehensive income $ 54,045 45,322 516,517 $ 61,592
========= ========= ========= =========
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended December 31, 2009 and 2008
($ in thousands)
Three Months Ended December 31, 2009 (Unaudited)
------------------------------------------------
Property
and
Segment underwriting results Marine Casualty Finite Risk Total
-------- -------- ----------- -----
Net premiums written $114,423 82,548 3,884 $200,855
Net premiums earned 133,934 89,189 4,461 227,584
------- ------ ----- -------
Net losses and LAE 64,081 47,085 (1,173) 109,993
Net acquisition expenses 19,281 22,821 5,814 47,916
Other underwriting expenses 10,406 7,094 370 17,870
------ ----- --- ------
Total underwriting
expenses 93,768 77,000 5,011 175,779
------- ------ ---- ------
Segment underwriting
income (loss) $40,166 12,189 (550) 51,805
------- ------ ----
Net investment income 40,871
Net realized gains on
investments 24,713
Net impairment losses (5,864)
Net changes in fair
value of derivatives (2,913)
Net foreign
currency exchange
gains 242
Other expense (1,138)
Corporate expenses not
allocated to segments (7,828)
Interest expense (4,759)
-------
Income before income tax
expense $95,129
=======
GAAP underwriting ratios:
Loss and LAE 47.8% 52.8% (26.3%) 48.3%
Acquisition expense 14.4% 25.6% 130.3% 21.1%
Other underwriting
expense 7.8% 8.0% 8.3% 7.9%
--- --- --- ---
Combined 70.0% 86.4% 112.3% 77.3%
---- ---- ----- ----
Three Months Ended December 31, 2008
------------------------------------
Segment underwriting results
Net premiums written $138,546 94,789 3,957 $237,292
Net premiums earned 152,241 118,241 3,756 274,238
------- ------- ----- -------
Net losses and LAE 118,035 84,818 (9,078) 193,775
Net acquisition expenses 21,697 27,041 10,978 59,716
Other underwriting expenses 8,718 5,248 309 14,275
----- ----- --- ------
Total underwriting
expenses 148,450 117,107 2,209 267,766
------ ----- ----- -----
Segment underwriting
income $3,791 1,134 1,547 6,472
------ ----- -----
Net investment income 42,537
Net realized gains on
investments 60,521
Net impairment losses (17,590)
Net changes in fair value
of derivatives (5,700)
Net foreign currency exchange
losses (3,497)
Other expense (195)
Corporate expenses not
allocated to segments (5,990)
Interest expense (4,753)
-------
Income before income tax expense $71,805
=======
GAAP underwriting ratios:
Loss and LAE 77.5% 71.7% (241.7%) 70.7%
Acquisition expense 14.3% 22.9% 292.3% 21.8%
Other underwriting expense 5.7% 4.4% 8.2% 5.2%
--- --- --- ---
Combined 97.5% 99.0% 58.8% 97.7%
---- ---- ---- ----
The GAAP underwriting ratios are calculated by dividing each item above by
net premiums earned.
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Twelve Months Ended December 31, 2009 and 2008
($ in thousands)
Twelve Months Ended December 31, 2009 (Unaudited)
-------------------------------------------------
Property
Segment underwriting results and
Marine Casualty Finite Risk Total
-------- -------- ----------- -----
Net premiums
written $517,011 356,488 24,335 $897,834
Net premiums earned 528,488 388,901 19,947 937,336
------- ------- ------ -------
Net losses and LAE 250,646 226,511 1,185 478,342
Net acquisition
expenses 66,992 88,841 20,586 176,419
Other underwriting
expenses 37,331 25,644 1,412 64,387
------ ------ ----- ------
Total underwriting
expenses 354,969 340,996 23,183 719,148
-------- ------ ------ -------
Segment underwriting
income (loss) $173,519 47,905 (3,236) 218,188
-------- ------ ------
Net investment income 163,941
Net realized gains
on investments 78,630
Net impairment losses (17,603)
Net changes in
fair value of
derivatives (9,741)
Net foreign currency
exchange gains 399
Other income 3,084
Corporate expenses
not allocated to
segments (30,295)
Interest expense (19,027)
--------
Income before income
tax expense $387,576
========
GAAP underwriting ratios:
Loss and LAE 47.4% 58.2% 5.9% 51.0%
Acquisition expense 12.7% 22.8% 103.2% 18.8%
Other underwriting
expense 7.1% 6.6% 7.1% 6.9%
--- --- --- ---
Combined 67.2% 87.6% 116.2% 76.7%
---- ---- ----- ----
Twelve Months Ended December 31, 2008
-------------------------------------
Segment underwriting results
Net premiums written $593,087 430,084 14,394 $1,037,565
Net premiums earned 599,110 503,300 12,386 1,114,796
------- ------- ------ ---------
Net losses and LAE 397,200 337,051 (16,018) 718,233
Net acquisition expenses 90,816 125,934 25,965 242,715
Other underwriting
expenses 38,492 23,982 1,270 63,744
------ ------ ----- ------
Total underwriting
expenses 526,508 486,967 11,217 1,024,692
------- ------ ----- ------
Segment underwriting
income $72,602 16,333 1,169 90,104
------- ------ -----
Net investment income 186,574
Net realized gains
on investments 57,254
Net impairment losses (30,686)
Net changes in fair
value of derivatives (14,114)
Net foreign currency
exchange losses (6,760)
Other income 337
Corporate expenses
not allocated to
segments (24,464)
Interest expense (19,006)
--------
Income before income
tax expense $239,239
========
GAAP underwriting ratios:
Loss and LAE 66.3% 67.0% (129.3%) 64.4%
Acquisition expense 15.2% 25.0% 209.6% 21.8%
Other underwriting
expense 6.4% 4.8% 10.3% 5.7%
--- --- ---- ---
Combined 87.9% 96.8% 90.6% 91.9%
---- ---- ---- ----
The GAAP underwriting ratios are calculated by dividing each item above
by net premiums earned.
SOURCE Platinum Underwriters Holdings, Ltd.
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