PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS RECORD YEAR ENDED DECEMBER 31, 2009 FINANCIAL RESULTS
HAMILTON, BERMUDA, FEBRUARY 17, 2010 – 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.
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