Contact: Lily Outerbridge
Investor Relations
(441) 298-0760
PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2008
HAMILTON, BERMUDA, October 21, 2008 – Platinum Underwriters Holdings, Ltd. (“Platinum”) (NYSE: PTP) today reported a net loss of $45.3 million, or $0.99 per basic common share, for the quarter ended September 30, 2008.
The results for the quarter are consistent with previously announced ultimate loss estimates from Hurricanes Gustav and Ike of approximately $120 million, net of reinstatement premiums and tax benefit, and other-than-temporary impairments and realized losses of $18.2 million associated with certain securities held in Platinum’s investment portfolio. The results for the quarter include net premiums earned of $280.7 million, a decrease of 3.3% from the same quarter last year, net favorable development of $32.0 million, compared with net favorable development of $13.4 million for the same quarter last year, and net investment income of $48.0 million, a decrease of 11.5% from the same quarter last year.
Michael D. Price, Chief Executive Officer, commented, “Significant catastrophe activity and the impact of the global financial crisis on our investment portfolio adversely affected our results in the quarter. Our book value per share was $33.64 as of September 30, 2008, a decrease of 9.1% for the quarter and a decrease of 1.2% for the nine months ending September 30, 2008.”
Mr. Price added, “Our outlook for market conditions is cautiously optimistic. Given the challenging state of the credit and equity markets, we expect increasing demand for reinsurance. However, reinsurers may be reluctant to provide capacity without appropriate rate increases. We believe we are well capitalized and have the financial strength to continue writing a significant multi-class reinsurance portfolio and buying back shares, provided the business performs as expected.”
Results for the quarter ended September 30, 2008 were summarized as follows:
· Net loss was $45.3 million, or $0.99 per basic common share.
· Net premiums written were $279.1 million and net premiums earned were $280.7 million.
· GAAP combined ratio was 122.6%.
· Net investment income was $48.0 million.
Results for the quarter ended September 30, 2008 compared to the quarter ended September 30, 2007 were summarized as follows:
· Net loss of $45.3 million compared to net income of $91.3 million.
· Net premiums written decreased $13.0 million (or 4.4%) and net premiums earned decreased $9.6 million (or 3.3%).
· GAAP combined ratio increased 41.3 percentage points.
· Net investment income decreased $6.2 million (or 11.5%).
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2008 were $167.1 million, $106.8 million and $5.2 million, respectively, representing 59.9%, 38.3% and 1.8%, respectively, of the total net premiums written. Combined ratios for these segments were 144.3%, 96.7% and 102.8%, respectively, for the quarter. Compared to the quarter ended September 30, 2007, net premiums written increased by $24.6 million (or 17.2%) in the Property and Marine segment and decreased $34.4 million (or 24.4%) and $3.2 million (or 38.1%) in the Casualty and Finite Risk segments, respectively.
Results for the nine months ended September 30, 2008 were summarized as follows:
· Net income was $162.2 million, or $2.83 per diluted common share.
· Net premiums written were $800.3 million and net premiums earned were $840.6 million.
· GAAP combined ratio was 90.1%.
· Net investment income was $144.0 million.
Results for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 were summarized as follows:
· Net income decreased $92.6 million (or 36.3%).
·Net premiums written decreased $78.5 million (or 8.9%) and net premiums earned decreased $30.5 million (or 3.5%).
· GAAP combined ratio increased 7.1 percentage points.
· Net investment income decreased $16.7 million (or 10.4%).
Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the nine months ended September 30, 2008 were $454.5 million, $335.3 million, and $10.4 million, respectively, representing 56.8%, 41.9% and 1.3%, respectively, of the total net premiums written. Combined ratios for these segments were 84.7%, 96.1% and 104.4%, respectively, for the nine months ended September 30, 2008. Compared to the nine months ended September 30, 2007, net premiums written increased $55.1 million (or 13.8%) in the Property and Marine segment and decreased $120.7 million (or 26.5%) and $13.0 million (or 55.4%) in the Casualty and Finite Risk segments, respectively.
Total assets were $4.91 billion as of September 30, 2008, a decrease of $173.4 million (or 3.4%) from $5.08 billion as of December 31, 2007. The decrease in total assets reflects an increase of $156.2 million in the unrealized loss on fixed maturity securities to $183.0 million as of September 30, 2008. Cash, cash equivalents and fixed maturity investments were $4.26 billion as of September 30, 2008, a decrease of $202.8 million (or 4.6%) from December 31, 2007.
Shareholders’ equity was $1.77 billion as of September 30, 2008, a decrease of $226.0 million (or 11.3%) from December 31, 2007. Book value per common share was $33.64 as of September 30, 2008 based on 47.7 million common shares outstanding, a decrease of $0.40 (or 1.2%) from $34.04 as of December 31, 2007 based on 53.8 million common shares outstanding.
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 Wednesday, October 22, 2008 at 8:00 a.m. Eastern time. The call may be accessed by dialing 888-812-8569 (US callers) or 913-312-1382 (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 Wednesday, October 22, 2008 until midnight Eastern time on Wednesday, October 29, 2008. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 4379337. 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 has a financial strength rating of A (Excellent) from A.M. Best Company, Inc. For further information, please visit Platinum’s website at www.platinumre.com.
Safe Harbor Statement Regarding Forwarding-Looking Statements
Management believes certain statements in this press release may constitute "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 include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "may," "should," "estimate," "expect," "anticipate," "intend," "believe," "predict," "potential," or words of similar import. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and risks, many of which are subject to change. These uncertainties and risks include, but are not limited to, conducting operations in a competitive environment; our ability to maintain our A.M. Best Company, Inc. rating; significant weather-related or other natural or man-made disasters over which the Company has no control; the effectiveness of our loss limitation methods and pricing models; the adequacy of the Company's liability for unpaid losses and loss adjustment expenses; the availability of retrocessional reinsurance on acceptable terms; our ability to maintain our business relationships with reinsurance brokers; general political and economic conditions, including the effects of civil unrest, acts of terrorism, war or a prolonged U.S. or global economic downturn or recession; the cyclicality of the property and casualty reinsurance business; market volatility and interest rate and currency exchange rate fluctuation; tax, regulatory or legal restrictions or limitations applicable to the Company or the property and casualty reinsurance business generally; and changes in the Company's plans, strategies, objectives, expectations or intentions, which may happen at any time at the Company's discretion. As a consequence, current plans, anticipated actions and future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to release publicly the results of any future revisions or updates we may make to forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.
