Exhibit 99.2
| Financial Supplement | |||||||||
| Financial Information | |||||||||
| as of June 30, 2011 | |||||||||
| (UNAUDITED) | |||||||||
| The following supplement of information is provided to assist in your understanding of | |||||||||
| Platinum Underwriters Holdings, Ltd. | |||||||||
| This report is for informational purposes only. It should be read in conjunction with | |||||||||
| documents filed with the Securities and Exchange Commission by Platinum Underwriters Holdings, Ltd., | |||||||||
| including the Company's Annual Report on Form 10-K. | |||||||||
| Our Investor Relations Department can be reached at (441) 298-0760. | |||||||||
| Platinum Underwriters Holdings, Ltd. | ||||||||||||||
| Overview | ||||||||||||||
| June 30, 2011 | ||||||||||||||
| Address: | Investor Information: | |||||||||||||
| Platinum Underwriters Holdings, Ltd. | Lily Outerbridge | |||||||||||||
| The Belvedere Building | Vice President, Director of Investor Relations | |||||||||||||
| 69 Pitts Bay Road | Tel: (441) 298-0760 | |||||||||||||
| Pembroke, HM 08 Bermuda | Fax: (441) 296-0528 | |||||||||||||
| Website: www.platinumre.com | Email: louterbridge@platinumre.com | |||||||||||||
Definitions and presentation:
All financial information contained herein is unaudited except for the information for the fiscal year ended December 31, 2010. Amounts may not reconcile exactly due to rounding differences.
In presenting the Company's results, management has included 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 (pages 14-18), operating income or loss (page 7), related underwriting ratios (pages 14-18), book value per common share and fully converted book value per common share (page 11), 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. Reconciliations of such measures to the most comparable GAAP figures are included within this financial supplement in accordance with Regulation G.
Safe Harbor Statement Regarding Forward-Looking Statements:
This financial supplement 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 financial supplement 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, the occurrence of severe natural or man-made catastrophic events; the effectiveness of our loss limitation methods and pricing models; the adequacy of our ceding companies’ ability to assess the risks they underwrite; the adequacy of our liability for unpaid losses and loss adjustment expenses; the effects of emerging claim and coverage issues on our business; our ability to maintain our A.M. Best and S&P ratings; our ability to raise capital on acceptable terms if necessary; our exposure to credit loss from counterparties in the normal course of business; our ability to provide reinsurance from Bermuda to insurers domiciled in the United States; the cyclicality of the property and casualty reinsurance business; the highly competitive nature of the property and casualty reinsurance industry; losses that we could face from terrorism, political unrest and war; our dependence on the business provided to us by reinsurance brokers and our exposure to credit risk associated with our brokers during the premium and loss settlement process; the availability of catastrophic loss protection on acceptable terms; foreign currency exchange rate fluctuation; our ability to maintain and enhance effective operating procedures and internal controls over financial reporting; the preparation of our financial statements requires us to make many estimates and judgments; the representations, warranties and covenants in our credit facilities limit our financial and operational flexibility; our ability to retain key executives and attract and retain additional qualified personnel in the future; the performance of our investment portfolio; fluctuations in the mortgage-backed and asset-backed securities markets; the effects of changes in market interest rates on our investment portfolio; the concentration of our investment portfolio in any particular industry, asset class or geographic region; the possibility that we may become subject to taxes in Bermuda after 2016; the effects that the imposition of U.S. corporate income tax would have on Platinum Underwriters Holdings, Ltd. and its non-U.S. subsidiaries; the risk that U.S. persons who hold our shares will be subject to adverse U.S. federal income tax consequences if we are considered to be a passive foreign investment company for U.S. federal income tax purposes; under certain circumstances, our shareholders may be required to pay taxes on their pro rata share of the related person insurance income of Platinum Underwriters Bermuda, Ltd.; U.S. persons who dispose of our shares may be subject to U.S. federal income taxation at the rates applicable to dividends on all or a portion of their gains, if any; holders of 10% or more of our shares may be subject to U.S. income taxation under the “controlled foreign corporation” rules; the effect of changes in U.S. federal income tax law on an investment in our shares; the impact of Bermuda's commitment to the Organization for Economic Cooperation and Development to eliminate harmful tax practices on our tax status in Bermuda is uncertain; the effect of potential changes in the regulatory system under which we operate; the impact of regulatory regimes and changes to accounting rules on our financial results, irrespective of business operations; the impact of the Dodd-Frank Act on our business; the dependence of the cash flows of Platinum Underwriters Holdings, Ltd., a holding company, on dividends, interest and other permissible payments from its subsidiaries; the risk that our shareholders may have greater difficulty in protecting their interests than would shareholders of a U.S. corporation; and limitations on the ownership, transfer and voting rights of our common shares. 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. For a detailed discussion of our risk factors, refer to Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2010.
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| Platinum Underwriters Holdings, Ltd. | |||||
| Table of Contents | |||||
| Section: | Page: |
| Financial Highlights: | |
| a. Financial Highlights | 3 |
| Balance Sheet: | |
| a. Condensed Consolidated Balance Sheets - by Quarter | 4 |
| Statements of Operations: | |
| a. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | 5 |
| b. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - by Quarter | 6 |
| Other Company Data: | |
| a. Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share | 7 |
| b. Key Ratios, Share Data, Ratings | 8 |
| Earnings (Loss) and Book Value Per Common Share Analysis: | |
| a. Computation of Basic and Diluted Earnings (Loss) Per Common Share | 9 |
| b. Computation of Basic and Diluted Earnings (Loss) Per Common Share - by Quarter | 10 |
| c. Book Value Per Common Share | 11 |
| Statements of Cash Flow: | |
| a. Condensed Consolidated Statements of Cash Flows | 12 |
| b. Condensed Consolidated Statements of Cash Flows - by Quarter | 13 |
| Segment Data: | |
| a. Segment Reporting - Three Month Summary | 14 |
| b. Segment Reporting - Six Month Summary | 15 |
| c. Property and Marine Segment - by Quarter | 16 |
| d. Casualty Segment - by Quarter | 17 |
| e. Finite Risk Segment - by Quarter | 18 |
| Net Premiums Written Data: | |
| a. Net Premiums Written - Supplemental Information | 19 |
| b. Premiums by Line of Business - Three Month Summary | 20 |
| c. Premiums by Line of Business - Six Month Summay | 21 |
| Investments: | |
| a. Investment Portfolio | 22 |
| b. Available-for-Sale Security Detail | 23 |
| c. Corporate Bonds Detail | 24 |
| d. Municipal Bonds Detail | 25 |
| e. Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments | 26 |
| Loss Reserves: | |
| a. Analysis of Losses and Loss Adjustment Expenses | 27 |
| b. Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions | 28 |
| Exposures: | |
| a. Estimated Exposures to Peak Zone Property Catastrophe Losses | 29 |
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| Platinum Underwriters Holdings, Ltd. |
| Financial Highlights |
| June 30, 2011 and 2010 |
| ($ and amounts in thousands, except per share data) |
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Highlights | ||||||||||||||||
| Net premiums written | $ | 125,887 | $ | 151,718 | $ | 320,672 | $ | 399,145 | ||||||||
| Net premiums earned | 172,436 | 191,432 | 355,317 | 411,610 | ||||||||||||
| Underwriting income (loss) | (33,403 | ) | 62,182 | (216,955 | ) | 64,956 | ||||||||||
| Net investment income | 33,965 | 35,372 | 66,343 | 72,877 | ||||||||||||
| Net operating income (loss) (a) | (15,642 | ) | 83,677 | (171,385 | ) | 106,976 | ||||||||||
| Net realized gains (losses) on investments | (4,689 | ) | 49,489 | (4,282 | ) | 54,946 | ||||||||||
| Net impairment losses on investments | (1,666 | ) | (3,410 | ) | (3,173 | ) | (21,512 | ) | ||||||||
| Net income (loss) | $ | (20,401 | ) | $ | 124,139 | $ | (177,593 | ) | $ | 139,560 | ||||||
| Total assets | $ | 4,682,397 | $ | 4,934,749 | $ | 4,682,397 | $ | 4,934,749 | ||||||||
| Investments and cash | 4,256,369 | 4,528,013 | 4,256,369 | 4,528,013 | ||||||||||||
| Total shareholders' equity | 1,695,710 | 2,105,435 | 1,695,710 | 2,105,435 | ||||||||||||
| Unpaid losses and loss adjustment expenses | $ | 2,472,861 | $ | 2,224,026 | $ | 2,472,861 | $ | 2,224,026 | ||||||||
| Per share data | ||||||||||||||||
| Common shares outstanding | 37,324 | 41,095 | 37,324 | 41,095 | ||||||||||||
| Weighted average common shares outstanding - basic | 37,113 | 43,225 | 37,155 | 44,322 | ||||||||||||
| Adjusted weighted average common shares outstanding - diluted | 37,399 | 46,249 | 37,692 | 47,365 | ||||||||||||
| Basic earnings (loss) per common share | $ | (0.55 | ) | $ | 2.87 | $ | (4.75 | ) | $ | 3.15 | ||||||
| Diluted earnings (loss) per common share | (0.55 | ) | 2.68 | (4.75 | ) | 2.95 | ||||||||||
| Operating income (loss) per common share - diluted (a) | (0.42 | ) | 1.81 | (4.59 | ) | 2.26 | ||||||||||
| Dividends per common share | 0.08 | 0.08 | 0.16 | 0.16 | ||||||||||||
| Book value per common share (b) | $ | 45.43 | $ | 51.23 | $ | 45.43 | $ | 51.23 | ||||||||
(a) See computation of net operating income (loss) on page 7.
(b) See computation of book value per common share on page 11.
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| Platinum Underwriters Holdings, Ltd. | ||
| Condensed Consolidated Balance Sheets - by Quarter | ||
| ($ in thousands, except per share data) | ||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Assets | ||||||||||||||||||||
| Investments | $ | 2,711,289 | $ | 2,978,381 | $ | 3,047,973 | $ | 2,874,351 | $ | 3,335,914 | ||||||||||
| Cash, cash equivalents and short-term investments | 1,545,080 | 1,161,884 | 1,164,525 | 1,664,833 | 1,192,099 | |||||||||||||||
| Accrued investment income | 31,724 | 33,855 | 31,288 | 27,315 | 28,373 | |||||||||||||||
| Reinsurance premiums receivable | 149,616 | 208,959 | 162,682 | 175,914 | 160,729 | |||||||||||||||
| Reinsurance balances (prepaid and recoverable) | 64,858 | 49,992 | 18,434 | 24,253 | 28,036 | |||||||||||||||
| Funds held by ceding companies | 90,507 | 76,914 | 84,078 | 82,428 | 85,030 | |||||||||||||||
| Deferred acquisition costs | 32,143 | 36,417 | 36,584 | 39,841 | 38,994 | |||||||||||||||
| Other assets | 57,180 | 70,372 | 68,749 | 47,324 | 65,574 | |||||||||||||||
| Total assets | $ | 4,682,397 | $ | 4,616,774 | $ | 4,614,313 | $ | 4,936,259 | $ | 4,934,749 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Unpaid losses and loss adjustment expenses | $ | 2,472,861 | $ | 2,428,477 | $ | 2,217,378 | $ | 2,194,173 | $ | 2,224,026 | ||||||||||
| Unearned premiums | 139,767 | 167,516 | 154,975 | 180,432 | 168,545 | |||||||||||||||
| Debt obligations | 250,000 | 250,000 | 250,000 | 250,000 | 250,000 | |||||||||||||||
| Commissions payable | 54,112 | 64,816 | 59,388 | 58,460 | 57,370 | |||||||||||||||
| Other liabilities | 69,947 | 40,792 | 37,117 | 88,321 | 129,373 | |||||||||||||||
| Total liabilities | $ | 2,986,687 | $ | 2,951,601 | $ | 2,718,858 | $ | 2,771,386 | $ | 2,829,314 | ||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Common shares | $ | 373 | $ | 373 | $ | 377 | $ | 393 | $ | 411 | ||||||||||
| Additional paid-in capital | 372,882 | 371,493 | 453,619 | 619,112 | 695,967 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 40,034 | (12,484 | ) | (24,488 | ) | 58,595 | 12,700 | |||||||||||||
| Retained earnings | 1,282,421 | 1,305,791 | 1,465,947 | 1,486,773 | 1,396,357 | |||||||||||||||
| Total shareholders' equity | $ | 1,695,710 | $ | 1,665,173 | $ | 1,895,455 | $ | 2,164,873 | $ | 2,105,435 | ||||||||||
| Total liabilities and shareholders' equity | $ | 4,682,397 | $ | 4,616,774 | $ | 4,614,313 | $ | 4,936,259 | $ | 4,934,749 | ||||||||||
Book value per common share (a) | $ | 45.43 | $ | 44.68 | $ | 50.20 | $ | 55.13 | $ | 51.23 | ||||||||||
(a) Book value per common share is a non-GAAP financial measure as defined by Regulation G. See computation of book value per common share on page 11.
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| Platinum Underwriters Holdings, Ltd. | ||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||||
| ($ and amounts in thousands, except per share data) | ||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenue | ||||||||||||||||
| Net premiums earned | $ | 172,436 | $ | 191,432 | $ | 355,317 | $ | 411,610 | ||||||||
| Net investment income | 33,965 | 35,372 | 66,343 | 72,877 | ||||||||||||
| Net realized gains (losses) on investments | (4,689 | ) | 49,489 | (4,282 | ) | 54,946 | ||||||||||
| Net impairment losses on investments | (1,666 | ) | (3,410 | ) | (3,173 | ) | (21,512 | ) | ||||||||
| Other income (expense) | (60 | ) | (144 | ) | 1,036 | 129 | ||||||||||
| Total revenue | 199,986 | 272,739 | 415,241 | 518,050 | ||||||||||||
| Expenses | ||||||||||||||||
| Net losses and loss adjustment expenses | 159,357 | 71,475 | 478,952 | 236,043 | ||||||||||||
| Net acquisition expenses | 34,115 | 44,088 | 68,065 | 81,417 | ||||||||||||
| Net changes in fair value of derivatives | 4,474 | 30 | 748 | 2,345 | ||||||||||||
| Operating expenses | 17,105 | 20,160 | 34,256 | 41,901 | ||||||||||||
| Net foreign currency exchange losses (gains) | 614 | (67 | ) | 803 | (1,296 | ) | ||||||||||
| Interest expense | 4,767 | 4,709 | 9,533 | 9,469 | ||||||||||||
| Total expenses | 220,432 | 140,395 | 592,357 | 369,879 | ||||||||||||
| Income (loss) before income taxes | (20,446 | ) | 132,344 | (177,116 | ) | 148,171 | ||||||||||
| Income tax expense (benefit) | (45 | ) | 8,205 | 477 | 8,611 | |||||||||||
| Net income (loss) | $ | (20,401 | ) | $ | 124,139 | $ | (177,593 | ) | $ | 139,560 | ||||||
| Basic | ||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 43,225 | 37,155 | 44,322 | ||||||||||||
| Basic earnings (loss) per common share | $ | (0.55 | ) | $ | 2.87 | $ | (4.75 | ) | $ | 3.15 | ||||||
| Diluted | ||||||||||||||||
| Adjusted weighted average common shares outstanding | 37,399 | 46,249 | 37,692 | 47,365 | ||||||||||||
| Diluted earnings (loss) per common share | $ | (0.55 | ) | $ | 2.68 | $ | (4.75 | ) | $ | 2.95 | ||||||
| Comprehensive income (loss) | ||||||||||||||||
| Net income (loss) | $ | (20,401 | ) | $ | 124,139 | $ | (177,593 | ) | $ | 139,560 | ||||||
| Other comprehensive income, net of deferred taxes | 52,518 | 34,833 | 64,522 | 82,705 | ||||||||||||
| Comprehensive income (loss) | $ | 32,117 | $ | 158,972 | $ | (113,071 | ) | $ | 222,265 | |||||||
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| Platinum Underwriters Holdings, Ltd. | ||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - by Quarter | ||||||||
| ($ and amounts in thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Net premiums earned | $ | 172,436 | $ | 182,881 | $ | 184,980 | $ | 183,404 | $ | 191,432 | ||||||||||
| Net investment income | 33,965 | 32,378 | 30,430 | 31,078 | 35,372 | |||||||||||||||
| Net realized gains (losses) on investments | (4,689 | ) | 407 | 8,494 | 44,351 | 49,489 | ||||||||||||||
| Net impairment losses on investments | (1,666 | ) | (1,507 | ) | (11,050 | ) | (4,048 | ) | (3,410 | ) | ||||||||||
| Other income (expense) | (60 | ) | 1,096 | (165 | ) | (171 | ) | (144 | ) | |||||||||||
| Total revenue | 199,986 | 215,255 | 212,689 | 254,614 | 272,739 | |||||||||||||||
| Expenses | ||||||||||||||||||||
| Net losses and loss adjustment expenses | 159,357 | 319,595 | 152,283 | 79,094 | 71,475 | |||||||||||||||
| Net acquisition expenses | 34,115 | 33,950 | 32,742 | 32,517 | 44,088 | |||||||||||||||
| Net changes in fair value of derivatives | 4,474 | (3,726 | ) | 3,089 | 4,154 | 30 | ||||||||||||||
| Operating expenses | 17,105 | 17,151 | 20,731 | 20,004 | 20,160 | |||||||||||||||
| Net foreign currency exchange losses (gains) | 614 | 189 | 2,446 | 235 | (67 | ) | ||||||||||||||
| Interest expense | 4,767 | 4,766 | 4,764 | 4,763 | 4,709 | |||||||||||||||
| Total expenses | 220,432 | 371,925 | 216,055 | 140,767 | 140,395 | |||||||||||||||
| Income (loss) before income taxes | (20,446 | ) | (156,670 | ) | (3,366 | ) | 113,847 | 132,344 | ||||||||||||
| Income tax expense (benefit) | (45 | ) | 522 | 14,358 | 20,185 | 8,205 | ||||||||||||||
| Net income (loss) | $ | (20,401 | ) | $ | (157,192 | ) | $ | (17,724 | ) | $ | 93,662 | $ | 124,139 | |||||||
| Basic | ||||||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 37,199 | 38,670 | 40,485 | 43,225 | |||||||||||||||
| Basic earnings (loss) per common share | $ | (0.55 | ) | $ | (4.20 | ) | $ | (0.46 | ) | $ | 2.31 | $ | 2.87 | |||||||
| Diluted | ||||||||||||||||||||
| Adjusted weighted average common shares outstanding | 37,399 | 38,022 | 40,953 | 44,044 | 46,249 | |||||||||||||||
| Diluted earnings (loss) per common share | $ | (0.55 | ) | $ | (4.20 | ) | $ | (0.46 | ) | $ | 2.13 | $ | 2.68 | |||||||
| Comprehensive income (loss) | ||||||||||||||||||||
| Net income (loss) | $ | (20,401 | ) | $ | (157,192 | ) | $ | (17,724 | ) | $ | 93,662 | $ | 124,139 | |||||||
| Other comprehensive income (loss), net of deferred taxes | 52,518 | 12,004 | (83,083 | ) | 45,895 | 34,833 | ||||||||||||||
| Comprehensive income (loss) | $ | 32,117 | $ | (145,188 | ) | $ | (100,807 | ) | $ | 139,557 | $ | 158,972 | ||||||||
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| Platinum Underwriters Holdings, Ltd. | ||||||
| Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share | ||||||
| ($ and amounts in thousands, except per share data) | ||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income (loss) | $ | (20,401 | ) | $ | 124,139 | $ | (177,593 | ) | $ | 139,560 | ||||||
| Adjustments for: | ||||||||||||||||
| Net realized (gains) losses on investments, net of tax | 2,527 | (43,382 | ) | 2,349 | (48,541 | ) | ||||||||||
| Net impairment losses on investments, net of tax | 1,632 | 2,966 | 3,094 | 17,227 | ||||||||||||
| Net foreign currency exchange losses (gains), net of tax | 600 | (46 | ) | 765 | (1,270 | ) | ||||||||||
| Net operating income (loss) (a) | $ | (15,642 | ) | $ | 83,677 | $ | (171,385 | ) | $ | 106,976 | ||||||
| Per diluted common share: | ||||||||||||||||
| Net income (loss) | $ | (0.55 | ) | $ | 2.68 | $ | (4.75 | ) | $ | 2.95 | ||||||
| Adjustments for: | ||||||||||||||||
| Net realized (gains) losses on investments | 0.07 | (0.94 | ) | 0.06 | (1.02 | ) | ||||||||||
| Net impairment losses on investments | 0.04 | 0.06 | 0.08 | 0.36 | ||||||||||||
| Net foreign currency exchange losses (gains) | 0.02 | - | 0.02 | (0.03 | ) | |||||||||||
| Net operating income (loss) (b) | $ | (0.42 | ) | $ | 1.81 | $ | (4.59 | ) | $ | 2.26 | ||||||
| Adjusted weighted average common shares outstanding - diluted (c) | 37,113 | 46,249 | 37,155 | 47,365 | ||||||||||||
(a) Net operating income (loss) is a non-GAAP measure as defined by Regulation G and represents net income (loss) after taxes excluding net realized gains and losses on investments, net impairment losses on investments and net foreign exchange gains and losses.
(b) Net operating income (loss) per diluted common share is also a non-GAAP measure and is calculated by dividing net operating income (loss) by diluted weighted average shares outstanding for the period.
(c) The adjusted weighted average common shares outstanding - diluted for the three and six months ended June 30, 2011 was 37,399 and 37,692. During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
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| Platinum Underwriters Holdings, Ltd. |
| Key Ratios, Share Data, Ratings |
| As of and for the Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Key Ratios | ||||||||||||||||||||
| Combined ratio (%) | 119.4 | % | 200.4 | % | 107.8 | % | 68.1 | % | 67.4 | % | ||||||||||
| Investable assets to shareholders' equity ratio | 2.51:1 | 2.49:1 | 2.22:1 | 2.10:1 | 2.15:1 | |||||||||||||||
| Debt to total capital (%) | 12.8 | % | 13.1 | % | 11.7 | % | 10.4 | % | 10.6 | % | ||||||||||
| Net premiums written (annualized) to shareholders' equity | 0.30 | 0.47 | 0.34 | 0.37 | 0.29 | |||||||||||||||
| Share Data | ||||||||||||||||||||
| Book value per common share (a) | $ | 45.43 | $ | 44.68 | $ | 50.20 | $ | 55.13 | $ | 51.23 | ||||||||||
| Common shares outstanding (000's) | 37,324 | 37,270 | 37,758 | 39,266 | 41,095 | |||||||||||||||
| Market Price Per Common Share | ||||||||||||||||||||
| High | $ | 38.67 | $ | 46.42 | $ | 45.80 | $ | 44.04 | $ | 39.28 | ||||||||||
| Low | 32.18 | 34.70 | 42.10 | 35.63 | 35.06 | |||||||||||||||
| Close | $ | 33.24 | $ | 38.09 | $ | 44.97 | $ | 43.52 | $ | 36.29 | ||||||||||
| Industry Ratings | ||||||||||||||||||||
| Financial Strength Ratings: | ||||||||||||||||||||
| A.M. Best Company, Inc. | A | A | A | A | A | |||||||||||||||
| Standard & Poor's Ratings Services | A | A | A | A | A | |||||||||||||||
| Counterparty Credit Ratings (senior unsecured): | ||||||||||||||||||||
| A.M. Best Company, Inc. | bbb | bbb | bbb | bbb | bbb | |||||||||||||||
| Standard & Poor's Ratings Services | BBB+ | BBB+ | BBB+ | BBB+ | BBB+ | |||||||||||||||
| Supplemental Data | ||||||||||||||||||||
| Total employees | 132 | 144 | 144 | 145 | 145 | |||||||||||||||
(a) See computation of book value per common share on page 11.
- 8 -
| Platinum Underwriters Holdings, Ltd. | ||
| Computation of Basic and Diluted Earnings (Loss) Per Common Share | ||
| ($ and amounts in thousands, except per share data) | ||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Earnings (Loss) | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
| Net income (loss) available to common shareholders | $ | (20,401 | ) | $ | 124,139 | $ | (177,593 | ) | $ | 139,560 | ||||||
| Net income (loss) allocated to participating common shareholders (a) | (137 | ) | - | (1,069 | ) | - | ||||||||||
| Net income (loss) allocated to common shareholders | $ | (20,264 | ) | $ | 124,139 | $ | (176,524 | ) | $ | 139,560 | ||||||
| Common Shares | ||||||||||||||||
| Basic | ||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 43,225 | 37,155 | 44,322 | ||||||||||||
| Diluted | ||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 43,225 | 37,155 | 44,322 | ||||||||||||
| Effect of dilutive securities: | ||||||||||||||||
| Common share options | 127 | 2,583 | 268 | 2,562 | ||||||||||||
| Restricted share units | 159 | 441 | 269 | 481 | ||||||||||||
| Adjusted weighted average common shares outstanding | 37,399 | 46,249 | 37,692 | 47,365 | ||||||||||||
| Earnings (Loss) Per Common Share | ||||||||||||||||
| Basic earnings (loss) per common share | $ | (0.55 | ) | $ | 2.87 | $ | (4.75 | ) | $ | 3.15 | ||||||
| Diluted earnings (loss) per common share (b) | $ | (0.55 | ) | $ | 2.68 | $ | (4.75 | ) | $ | 2.95 | ||||||
(a) Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
(b) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
- 9 -
| Platinum Underwriters Holdings, Ltd. | |||||
| Computation of Basic and Diluted Earnings (Loss) Per Common Share - by Quarter | |||||
| ($ and amounts in thousands, except per share data) | |||||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Earnings (Loss) | ||||||||||||||||||||
| Basic and diluted | ||||||||||||||||||||
| Net income (loss) available to common shareholders | $ | (20,401 | ) | $ | (157,192 | ) | $ | (17,724 | ) | $ | 93,662 | $ | 124,139 | |||||||
| Net income (loss) allocated to participating common shareholders (a) | (137 | ) | (932 | ) | - | - | - | |||||||||||||
| Net income (loss) allocated to common shareholders | $ | (20,264 | ) | $ | (156,260 | ) | $ | (17,724 | ) | $ | 93,662 | $ | 124,139 | |||||||
| Common Shares | ||||||||||||||||||||
| Basic | ||||||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 37,199 | 38,670 | 40,485 | 43,225 | |||||||||||||||
| Diluted | ||||||||||||||||||||
| Weighted average common shares outstanding | 37,113 | 37,199 | 38,670 | 40,485 | 43,225 | |||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| Common share options | 127 | 438 | 1,703 | 3,064 | 2,583 | |||||||||||||||
| Restricted share units | 159 | 385 | 580 | 495 | 441 | |||||||||||||||
| Adjusted weighted average common shares outstanding | 37,399 | 38,022 | 40,953 | 44,044 | 46,249 | |||||||||||||||
| Earnings (Loss) Per Common Share | ||||||||||||||||||||
| Basic earnings (loss) per common share | $ | (0.55 | ) | $ | (4.20 | ) | $ | (0.46 | ) | $ | 2.31 | $ | 2.87 | |||||||
| Diluted earnings (loss) per common share (b) | $ | (0.55 | ) | $ | (4.20 | ) | $ | (0.46 | ) | $ | 2.13 | $ | 2.68 | |||||||
(a) Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
(b) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
- 10 -
| Platinum Underwriters Holdings, Ltd. | |||||||
| Book Value Per Common Share | |||||||
| ($ and amounts in thousands, except per share data) |
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Price per share at period end | $ | 33.24 | $ | 38.09 | $ | 44.97 | $ | 43.52 | $ | 36.29 | ||||||||||
| Shareholders' equity | $ | 1,695,710 | $ | 1,665,173 | $ | 1,895,455 | $ | 2,164,873 | $ | 2,105,435 | ||||||||||
| Add: Assumed exercise of share options | 10,543 | 33,488 | 34,213 | 39,511 | 50,396 | |||||||||||||||
| Shareholders' equity - diluted | $ | 1,706,253 | $ | 1,698,661 | $ | 1,929,668 | $ | 2,204,384 | $ | 2,155,831 | ||||||||||
| Basic common shares outstanding | 37,324 | 37,270 | 37,758 | 39,266 | 41,095 | |||||||||||||||
| Add: Common share options (a) | - | - | 1,010 | 3,173 | 2,282 | |||||||||||||||
| Add: Management and directors' options (b) | 379 | 1,054 | 1,081 | 1,264 | 1,689 | |||||||||||||||
| Add: Directors' and officers' restricted share units (c) | 413 | 505 | 790 | 847 | 856 | |||||||||||||||
| Diluted common shares outstanding | 38,116 | 38,829 | 40,639 | 44,550 | 45,922 | |||||||||||||||
| Book Value Per Common Share* | ||||||||||||||||||||
| Basic book value per common share | $ | 45.43 | $ | 44.68 | $ | 50.20 | $ | 55.13 | $ | 51.23 | ||||||||||
| Fully converted book value per common share | $ | 44.76 | $ | 43.75 | $ | 47.48 | $ | 49.48 | $ | 46.95 | ||||||||||
| * Book value per common share and fully converted book value per common share are non-GAAP financial measures as defined by Regulation G. | ||||||||||||||||||||
(a) Options with a price of $27.00.
(b) Options with a price below $33.24, the closing share price at June 30, 2011.
(c) As of June 30, 2011 there were 37,324 common shares issued and outstanding. Included in this number were 218 restricted shares issued but unvested.
- 11 -
| Platinum Underwriters Holdings, Ltd. | |
| Condensed Consolidated Statements of Cash Flows | |
| ($ in thousands) | |
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | 38,516 | $ | (12,897 | ) | $ | 33,288 | $ | 21,527 | |||||||
| Net cash provided by (used in) investing activities | 205,333 | 728,210 | 368,492 | 607,150 | ||||||||||||
| Net cash provided by (used in) financing activities | (2,562 | ) | (140,564 | ) | (86,608 | ) | (200,627 | ) | ||||||||
| Effect of foreign currency exchange rate changes on cash | 12,755 | (5,517 | ) | 15,724 | (8,560 | ) | ||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 254,042 | $ | 569,232 | $ | 330,896 | $ | 419,490 | ||||||||
- 12 -
| Platinum Underwriters Holdings, Ltd. | |||
| Condensed Consolidated Statements of Cash Flows - by Quarter | |||
| ($ in thousands) | |||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 38,516 | $ | (5,228 | ) | $ | (38,042 | ) | $ | 41,244 | $ | (12,897 | ) | |||||||
| Net cash provided by (used in) investing activities | 205,333 | 163,159 | (301,531 | ) | 432,699 | 728,210 | ||||||||||||||
| Net cash provided by (used in) financing activities | (2,562 | ) | (84,046 | ) | (171,626 | ) | (84,720 | ) | (140,564 | ) | ||||||||||
| Effect of foreign currency exchange rate changes on cash | 12,755 | 2,969 | 450 | 7,129 | (5,517 | ) | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 254,042 | $ | 76,854 | $ | (510,749 | ) | $ | 396,352 | $ | 569,232 | |||||||||
- 13 -
| Platinum Underwriters Holdings, Ltd. |
| Segment Reporting - Three Month Summary |
| ($ in thousands) |
| Three Months Ended June 30, 2011 | Three Months Ended June 30, 2010 | |||||||||||||||||||||||||||||||
| Property and Marine | Casualty | Finite Risk | Total | Property and Marine | Casualty | Finite Risk | Total | |||||||||||||||||||||||||
| Net premiums written | $ | 54,411 | $ | 69,234 | $ | 2,242 | $ | 125,887 | $ | 74,105 | $ | 72,628 | $ | 4,985 | $ | 151,718 | ||||||||||||||||
| Net premiums earned | 91,852 | 77,104 | 3,480 | 172,436 | 100,550 | 85,166 | 5,716 | 191,432 | ||||||||||||||||||||||||
| Net losses and loss adjustment expenses | 116,543 | 43,868 | (1,054 | ) | 159,357 | 35,010 | 40,058 | (3,593 | ) | 71,475 | ||||||||||||||||||||||
| Net acquisition expenses | 12,009 | 18,144 | 3,962 | 34,115 | 17,218 | 18,752 | 8,118 | 44,088 | ||||||||||||||||||||||||
| Other underwriting expenses | 7,274 | 4,829 | 264 | 12,367 | 7,720 | 5,654 | 313 | 13,687 | ||||||||||||||||||||||||
| Segment underwriting income (loss)* | $ | (43,974 | ) | $ | 10,263 | $ | 308 | (33,403 | ) | $ | 40,602 | $ | 20,702 | $ | 878 | 62,182 | ||||||||||||||||
| Net investment income | 33,965 | 35,372 | ||||||||||||||||||||||||||||||
| Net realized gains (losses) on investments | (4,689 | ) | 49,489 | |||||||||||||||||||||||||||||
| Net impairment losses on investments | (1,666 | ) | (3,410 | ) | ||||||||||||||||||||||||||||
| Other income (expense) | (60 | ) | (144 | ) | ||||||||||||||||||||||||||||
| Net changes in fair value of derivatives | (4,474 | ) | (30 | ) | ||||||||||||||||||||||||||||
| Corporate expenses not allocated to segments | (4,738 | ) | (6,473 | ) | ||||||||||||||||||||||||||||
| Net foreign currency exchange (losses) gains | (614 | ) | 67 | |||||||||||||||||||||||||||||
| Interest expense | (4,767 | ) | (4,709 | ) | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | (20,446 | ) | $ | 132,344 | |||||||||||||||||||||||||||
| Underwriting ratios*: | ||||||||||||||||||||||||||||||||
| Net loss and loss adjustment expense | 126.9 | % | 56.9 | % | (30.3 | %) | 92.4 | % | 34.8 | % | 47.0 | % | (62.9 | %) | 37.3 | % | ||||||||||||||||
| Net acquisition expense | 13.1 | % | 23.5 | % | 113.9 | % | 19.8 | % | 17.1 | % | 22.0 | % | 142.0 | % | 23.0 | % | ||||||||||||||||
| Other underwriting expense | 7.9 | % | 6.3 | % | 7.6 | % | 7.2 | % | 7.7 | % | 6.6 | % | 5.5 | % | 7.1 | % | ||||||||||||||||
| Combined | 147.9 | % | 86.7 | % | 91.2 | % | 119.4 | % | 59.6 | % | 75.6 | % | 84.6 | % | 67.4 | % | ||||||||||||||||
| Statutory underwriting ratios*: | ||||||||||||||||||||||||||||||||
| Net loss and loss adjustment expense | 126.9 | % | 56.9 | % | (30.3 | %) | 92.4 | % | 34.8 | % | 47.0 | % | (62.9 | %) | 37.3 | % | ||||||||||||||||
| Net acquisition expense | 19.8 | % | 22.3 | % | 148.3 | % | 23.5 | % | 20.3 | % | 23.3 | % | 159.0 | % | 26.3 | % | ||||||||||||||||
| Other underwriting expense | 13.4 | % | 7.0 | % | 11.8 | % | 9.8 | % | 10.4 | % | 7.8 | % | 6.3 | % | 9.0 | % | ||||||||||||||||
| Combined | 160.1 | % | 86.2 | % | 129.8 | % | 125.7 | % | 65.5 | % | 78.1 | % | 102.4 | % | 72.6 | % | ||||||||||||||||
| * Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G. | ||||||||||||||||||||||||||||||||
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
(1) Net losses & LAE are divided by net premiums earned;
(2) Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and
(3) Other underwriting expenses are divided by net premiums written.
- 14 -
| Platinum Underwriters Holdings, Ltd. | |
| Segment Reporting - Six Month Summary | |
| ($ in thousands) | |
| Six Months Ended June 30, 2011 | Six Months Ended June 30, 2010 | |||||||||||||||||||||||||||||||
| Property and Marine | Casualty | Finite Risk | Total | Property and Marine | Casualty | Finite Risk | Total | |||||||||||||||||||||||||
| Net premiums written | $ | 166,213 | $ | 149,753 | $ | 4,706 | $ | 320,672 | $ | 220,890 | $ | 166,379 | $ | 11,876 | $ | 399,145 | ||||||||||||||||
| Net premiums earned | 189,757 | 157,928 | 7,632 | 355,317 | 228,356 | 173,068 | 10,186 | 411,610 | ||||||||||||||||||||||||
| Net losses and loss adjustment expenses | 394,873 | 83,487 | 592 | 478,952 | 161,637 | 71,588 | 2,818 | 236,043 | ||||||||||||||||||||||||
| Net acquisition expenses | 25,635 | 36,707 | 5,723 | 68,065 | 33,449 | 36,479 | 11,489 | 81,417 | ||||||||||||||||||||||||
| Other underwriting expenses | 14,595 | 10,161 | 499 | 25,255 | 16,419 | 12,124 | 651 | 29,194 | ||||||||||||||||||||||||
| Segment underwriting income (loss)* | $ | (245,346 | ) | $ | 27,573 | $ | 818 | (216,955 | ) | $ | 16,851 | $ | 52,877 | $ | (4,772 | ) | 64,956 | |||||||||||||||
| Net investment income | 66,343 | 72,877 | ||||||||||||||||||||||||||||||
| Net realized gains (losses) on investments | (4,282 | ) | 54,946 | |||||||||||||||||||||||||||||
| Net impairment losses on investments | (3,173 | ) | (21,512 | ) | ||||||||||||||||||||||||||||
| Other income (expense) | 1,036 | 129 | ||||||||||||||||||||||||||||||
| Net changes in fair value of derivatives | (748 | ) | (2,345 | ) | ||||||||||||||||||||||||||||
| Corporate expenses not allocated to segments | (9,001 | ) | (12,707 | ) | ||||||||||||||||||||||||||||
| Net foreign currency exchange (losses) gains | (803 | ) | 1,296 | |||||||||||||||||||||||||||||
| Interest expense | (9,533 | ) | (9,469 | ) | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | (177,116 | ) | $ | 148,171 | |||||||||||||||||||||||||||
| Underwriting ratios*: | ||||||||||||||||||||||||||||||||
| Net loss and loss adjustment expense | 208.1 | % | 52.9 | % | 7.8 | % | 134.8 | % | 70.8 | % | 41.4 | % | 27.7 | % | 57.3 | % | ||||||||||||||||
| Net acquisition expense | 13.5 | % | 23.2 | % | 75.0 | % | 19.2 | % | 14.6 | % | 21.1 | % | 112.8 | % | 19.8 | % | ||||||||||||||||
| Other underwriting expense | 7.7 | % | 6.4 | % | 6.5 | % | 7.1 | % | 7.2 | % | 7.0 | % | 6.4 | % | 7.1 | % | ||||||||||||||||
| Combined | 229.3 | % | 82.5 | % | 89.3 | % | 161.1 | % | 92.6 | % | 69.5 | % | 146.9 | % | 84.2 | % | ||||||||||||||||
| Statutory underwriting ratios*: | ||||||||||||||||||||||||||||||||
| Net loss and loss adjustment expense | 208.1 | % | 52.9 | % | 7.8 | % | 134.8 | % | 70.8 | % | 41.4 | % | 27.7 | % | 57.3 | % | ||||||||||||||||
| Net acquisition expense | 14.7 | % | 22.7 | % | 108.1 | % | 19.8 | % | 15.1 | % | 21.1 | % | 99.6 | % | 20.1 | % | ||||||||||||||||
| Other underwriting expense | 8.8 | % | 6.8 | % | 10.6 | % | 7.9 | % | 7.4 | % | 7.3 | % | 5.5 | % | 7.3 | % | ||||||||||||||||
| Combined | 231.6 | % | 82.4 | % | 126.5 | % | 162.5 | % | 93.3 | % | 69.8 | % | 132.8 | % | 84.7 | % | ||||||||||||||||
| * Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G. |
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
(1) Net losses & LAE are divided by net premiums earned;
(2) Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and
(3) Other underwriting expenses are divided by net premiums written.
- 15 -
| Platinum Underwriters Holdings, Ltd. | ||
| Property and Marine Segment - by Quarter | ||
| ($ in thousands) | ||
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Net premiums written | $ | 54,411 | $ | 111,802 | $ | 76,900 | $ | 114,885 | $ | 74,105 | ||||||||||
| Net premiums earned | 91,852 | 97,905 | 92,065 | 98,342 | 100,550 | |||||||||||||||
| Net losses and loss adjustment expenses | 116,543 | 278,330 | 111,215 | 70,657 | 35,010 | |||||||||||||||
| Net acquisition expenses | 12,009 | 13,626 | 12,635 | 14,140 | 17,218 | |||||||||||||||
| Other underwriting expenses | 7,274 | 7,321 | 8,354 | 7,905 | 7,720 | |||||||||||||||
| Segment underwriting income (loss)* | $ | (43,974 | ) | $ | (201,372 | ) | $ | (40,139 | ) | $ | 5,640 | $ | 40,602 | |||||||
| Underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | 126.9 | % | 284.3 | % | 120.8 | % | 71.8 | % | 34.8 | % | ||||||||||
| Net acquisition expense | 13.1 | % | 13.9 | % | 13.7 | % | 14.4 | % | 17.1 | % | ||||||||||
| Other underwriting expense | 7.9 | % | 7.5 | % | 9.1 | % | 8.0 | % | 7.7 | % | ||||||||||
| Combined | 147.9 | % | 305.7 | % | 143.6 | % | 94.2 | % | 59.6 | % | ||||||||||
| Statutory underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | 126.9 | % | 284.3 | % | 120.8 | % | 71.8 | % | 34.8 | % | ||||||||||
| Net acquisition expense | 19.8 | % | 13.4 | % | 14.6 | % | 13.1 | % | 20.3 | % | ||||||||||
| Other underwriting expense | 13.4 | % | 6.5 | % | 10.9 | % | 6.9 | % | 10.4 | % | ||||||||||
| Combined | 160.1 | % | 304.2 | % | 146.3 | % | 91.8 | % | 65.5 | % | ||||||||||
| * Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G. | ||||||||||||||||||||
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
(1) Net losses & LAE are divided by net premiums earned;
(2) Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and
(3) Other underwriting expenses are divided by net premiums written.
- 16 -
| Platinum Underwriters Holdings, Ltd. |
| Casualty Segment - by Quarter |
| ($ in thousands) |
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Net premiums written | $ | 69,234 | $ | 80,519 | $ | 82,656 | $ | 80,362 | $ | 72,628 | ||||||||||
| Net premiums earned | 77,104 | 80,824 | 90,307 | 80,437 | 85,166 | |||||||||||||||
| Net losses and loss adjustment expenses | 43,868 | 39,619 | 39,935 | 8,156 | 40,058 | |||||||||||||||
| Net acquisition expenses | 18,144 | 18,563 | 18,600 | 16,395 | 18,752 | |||||||||||||||
| Other underwriting expenses | 4,829 | 5,332 | 5,796 | 5,171 | 5,654 | |||||||||||||||
| Segment underwriting income* | $ | 10,263 | $ | 17,310 | $ | 25,976 | $ | 50,715 | $ | 20,702 | ||||||||||
| Underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | 56.9 | % | 49.0 | % | 44.2 | % | 10.1 | % | 47.0 | % | ||||||||||
| Net acquisition expense | 23.5 | % | 23.0 | % | 20.6 | % | 20.4 | % | 22.0 | % | ||||||||||
| Other underwriting expense | 6.3 | % | 6.6 | % | 6.4 | % | 6.4 | % | 6.6 | % | ||||||||||
| Combined | 86.7 | % | 78.6 | % | 71.2 | % | 36.9 | % | 75.6 | % | ||||||||||
| Statutory underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | 56.9 | % | 49.0 | % | 44.2 | % | 10.1 | % | 47.0 | % | ||||||||||
| Net acquisition expense | 22.3 | % | 21.6 | % | 20.3 | % | 20.2 | % | 23.3 | % | ||||||||||
| Other underwriting expense | 7.0 | % | 6.6 | % | 7.0 | % | 6.4 | % | 7.8 | % | ||||||||||
| Combined | 86.2 | % | 77.2 | % | 71.5 | % | 36.7 | % | 78.1 | % | ||||||||||
| * Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G. | ||||||||||||||||||||
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
(1) Net losses & LAE are divided by net premiums earned;
(2) Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and
(3) Other underwriting expenses are divided by net premiums written.
- 17 -
| Platinum Underwriters Holdings, Ltd. |
| Finite Risk Segment - by Quarter |
| ($ in thousands) |
| Three Months Ended | ||||||||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
| 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||
| Net premiums written | $ | 2,242 | $ | 2,464 | $ | 2,461 | $ | 4,180 | $ | 4,985 | ||||||||||
| Net premiums earned | 3,480 | 4,152 | 2,608 | 4,625 | 5,716 | |||||||||||||||
| Net losses and loss adjustment expenses | (1,054 | ) | 1,646 | 1,133 | 281 | (3,593 | ) | |||||||||||||
| Net acquisition expenses | 3,962 | 1,761 | 1,507 | 1,982 | 8,118 | |||||||||||||||
| Other underwriting expenses | 264 | 235 | 302 | 307 | 313 | |||||||||||||||
| Segment underwriting income (loss)* | $ | 308 | $ | 510 | $ | (334 | ) | $ | 2,055 | $ | 878 | |||||||||
| Underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | (30.3 | %) | 39.6 | % | 43.4 | % | 6.1 | % | (62.9 | %) | ||||||||||
| Net acquisition expense | 113.9 | % | 42.4 | % | 57.8 | % | 42.9 | % | 142.0 | % | ||||||||||
| Other underwriting expense | 7.6 | % | 5.7 | % | 11.6 | % | 6.6 | % | 5.5 | % | ||||||||||
| Combined | 91.2 | % | 87.7 | % | 112.8 | % | 55.6 | % | 84.6 | % | ||||||||||
| Statutory underwriting ratios*: | ||||||||||||||||||||
| Net loss and loss adjustment expense | (30.3 | %) | 39.6 | % | 43.4 | % | 6.1 | % | (62.9 | %) | ||||||||||
| Net acquisition expense | 148.3 | % | 56.5 | % | 60.2 | % | 44.7 | % | 159.0 | % | ||||||||||
| Other underwriting expense | 11.8 | % | 9.5 | % | 12.3 | % | 7.3 | % | 6.3 | % | ||||||||||
| Combined | 129.8 | % | 105.6 | % | 115.9 | % | 58.1 | % | 102.4 | % | ||||||||||
| * Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G. | ||||||||||||||||||||
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
(1) Net losses & LAE are divided by net premiums earned;
(2) Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and
(3) Other underwriting expenses are divided by net premiums written.
- 18 -
| Platinum Underwriters Holdings, Ltd. | ||
| Net Premiums Written - Supplemental Information | ||
| ($ in thousands) | ||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Property and Marine | ||||||||||||||||
| Excess-of-loss | $ | 39,954 | $ | 54,290 | $ | 133,959 | $ | 176,812 | ||||||||
| Proportional | 14,457 | 19,815 | 32,254 | 44,078 | ||||||||||||
| Subtotal Property and Marine | 54,411 | 74,105 | 166,213 | 220,890 | ||||||||||||
| Casualty | ||||||||||||||||
| Excess-of-loss | 56,049 | 70,183 | 119,748 | 150,014 | ||||||||||||
| Proportional | 13,185 | 2,445 | 30,005 | 16,365 | ||||||||||||
| Subtotal Casualty | 69,234 | 72,628 | 149,753 | 166,379 | ||||||||||||
| Finite Risk | ||||||||||||||||
| Excess-of-loss | - | - | - | - | ||||||||||||
| Proportional | 2,242 | 4,985 | 4,706 | 11,876 | ||||||||||||
| Subtotal Finite Risk | 2,242 | 4,985 | 4,706 | 11,876 | ||||||||||||
| Combined Segments | ||||||||||||||||
| Excess-of-loss | 96,003 | 124,473 | 253,707 | 326,826 | ||||||||||||
| Proportional | 29,884 | 27,245 | 66,965 | 72,319 | ||||||||||||
| Total | $ | 125,887 | $ | 151,718 | $ | 320,672 | $ | 399,145 | ||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Property and Marine | ||||||||||||||||
| United States | $ | 37,595 | $ | 39,994 | $ | 88,672 | $ | 121,682 | ||||||||
| International | 16,816 | 34,111 | 77,541 | 99,208 | ||||||||||||
| Subtotal Property and Marine | 54,411 | 74,105 | 166,213 | 220,890 | ||||||||||||
| Casualty | ||||||||||||||||
| United States | 60,174 | 60,367 | 131,768 | 142,748 | ||||||||||||
| International | 9,060 | 12,261 | 17,985 | 23,631 | ||||||||||||
| Subtotal Casualty | 69,234 | 72,628 | 149,753 | 166,379 | ||||||||||||
| Finite Risk | ||||||||||||||||
| United States | 2,242 | 4,985 | 4,706 | 11,876 | ||||||||||||
| International | - | - | - | - | ||||||||||||
| Subtotal Finite Risk | 2,242 | 4,985 | 4,706 | 11,876 | ||||||||||||
| Combined Segments | ||||||||||||||||
| United States | 100,011 | 105,346 | 225,146 | 276,306 | ||||||||||||
| International | 25,876 | 46,372 | 95,526 | 122,839 | ||||||||||||
| Total | $ | 125,887 | $ | 151,718 | $ | 320,672 | $ | 399,145 | ||||||||
- 19 -
| Platinum Underwriters Holdings, Ltd. |
| Premiums by Line of Business - Three Month Summary |
| ($ in thousands) |
| Three Months Ended June 30, 2011 | Three Months Ended June 30, 2010 | |||||||||||||||||||||||
| Gross | Net | Net | Gross | Net | Net | |||||||||||||||||||
| Premiums | Premiums | Premiums | Premiums | Premiums | Premiums | |||||||||||||||||||
| Written | Written | Earned | Written | Written | Earned | |||||||||||||||||||
| Property and Marine | ||||||||||||||||||||||||
| North American Property Proportional | $ | 554 | $ | 554 | $ | 1,961 | $ | 1,980 | $ | 1,980 | $ | 2,217 | ||||||||||||
| North American Property Catastrophe | 23,840 | 14,928 | 26,666 | 25,689 | 15,466 | 30,235 | ||||||||||||||||||
| North American Property Risk | 9,040 | 9,071 | 11,152 | 10,398 | 10,763 | 13,577 | ||||||||||||||||||
| Other Property | 13,894 | 13,894 | 13,985 | 12,561 | 12,561 | 12,388 | ||||||||||||||||||
| Marine / Aviation Proportional | 746 | 746 | 1,020 | 1,837 | 1,837 | 2,190 | ||||||||||||||||||
| Marine / Aviation Excess | 1,138 | 1,138 | 1,697 | 2,734 | 2,745 | 2,898 | ||||||||||||||||||
| International Property Proportional | 4,055 | 4,055 | 3,946 | 4,367 | 4,367 | 4,135 | ||||||||||||||||||
| International Property Catastrophe | 21,024 | 7,674 | 29,080 | 21,949 | 21,934 | 29,944 | ||||||||||||||||||
| International Property Risk | 2,351 | 2,351 | 2,345 | 2,452 | 2,452 | 2,966 | ||||||||||||||||||
| Subtotal | 76,642 | 54,411 | 91,852 | 83,967 | 74,105 | 100,550 | ||||||||||||||||||
| Casualty | ||||||||||||||||||||||||
| Clash | 2,599 | 2,599 | 2,577 | 3,874 | 3,874 | 3,751 | ||||||||||||||||||
| 1st Dollar GL | 4,473 | 4,473 | 4,668 | 2,884 | 2,884 | 2,740 | ||||||||||||||||||
| 1st Dollar Other | 1,763 | 1,763 | 1,940 | 1,353 | 1,353 | 843 | ||||||||||||||||||
| Casualty Excess | 42,041 | 42,041 | 45,118 | 50,683 | 50,683 | 53,985 | ||||||||||||||||||
| Accident & Health | 7,608 | 7,608 | 9,572 | 5,732 | 5,732 | 9,568 | ||||||||||||||||||
| International Casualty | 4,692 | 4,692 | 6,259 | 7,716 | 7,716 | 6,002 | ||||||||||||||||||
| International Motor | 854 | 854 | 976 | 783 | 783 | 889 | ||||||||||||||||||
| Financial Lines | 5,204 | 5,204 | 5,994 | (397 | ) | (397 | ) | 7,388 | ||||||||||||||||
| Subtotal | 69,234 | 69,234 | 77,104 | 72,628 | 72,628 | 85,166 | ||||||||||||||||||
| Finite Risk | ||||||||||||||||||||||||
| Finite Casualty | 2,242 | 2,242 | 3,480 | 4,985 | 4,985 | 5,716 | ||||||||||||||||||
| Subtotal | 2,242 | 2,242 | 3,480 | 4,985 | 4,985 | 5,716 | ||||||||||||||||||
| Total | $ | 148,118 | $ | 125,887 | $ | 172,436 | $ | 161,580 | $ | 151,718 | $ | 191,432 | ||||||||||||
- 20 -
| Platinum Underwriters Holdings, Ltd. | |||
| Premiums by Line of Business - Six Month Summary | |||
| ($ in thousands) | |||
| Six Months Ended June 30, 2011 | Six Months Ended June 30, 2010 | |||||||||||||||||||||||
| Gross | Net | Net | Gross | Net | Net | |||||||||||||||||||
| Premiums | Premiums | Premiums | Premiums | Premiums | Premiums | |||||||||||||||||||
| Written | Written | Earned | Written | Written | Earned | |||||||||||||||||||
| Property and Marine | ||||||||||||||||||||||||
| North American Property Proportional | $ | 2,318 | $ | 2,318 | $ | 3,665 | $ | 4,019 | $ | 4,019 | $ | 3,390 | ||||||||||||
| North American Property Catastrophe | 57,244 | 42,145 | 50,238 | 68,034 | 57,809 | 68,125 | ||||||||||||||||||
| North American Property Risk | 18,913 | 19,182 | 21,852 | 29,348 | 27,494 | 30,921 | ||||||||||||||||||
| Other Property | 26,884 | 26,884 | 26,741 | 33,999 | 33,999 | 33,759 | ||||||||||||||||||
| Marine / Aviation Proportional | 2,589 | 2,589 | 2,830 | 3,016 | 3,016 | 3,830 | ||||||||||||||||||
| Marine / Aviation Excess | 3,209 | 3,209 | 4,456 | 6,458 | 6,469 | 6,735 | ||||||||||||||||||
| International Property Proportional | 8,338 | 8,338 | 7,869 | 8,169 | 8,169 | 7,494 | ||||||||||||||||||
| International Property Catastrophe | 76,025 | 56,612 | 67,184 | 78,081 | 74,527 | 68,855 | ||||||||||||||||||
| International Property Risk | 4,936 | 4,936 | 4,922 | 5,388 | 5,388 | 5,247 | ||||||||||||||||||
| Subtotal | 200,456 | 166,213 | 189,757 | 236,512 | 220,890 | 228,356 | ||||||||||||||||||
| Casualty | ||||||||||||||||||||||||
| Clash | 5,359 | 5,359 | 5,172 | 7,766 | 7,766 | 7,583 | ||||||||||||||||||
| 1st Dollar GL | 11,473 | 11,473 | 9,864 | 5,478 | 5,478 | 5,445 | ||||||||||||||||||
| 1st Dollar Other | 3,891 | 3,891 | 4,243 | 2,630 | 2,630 | 1,937 | ||||||||||||||||||
| Casualty Excess | 86,161 | 86,161 | 91,828 | 106,262 | 106,262 | 112,707 | ||||||||||||||||||
| Accident & Health | 21,517 | 21,517 | 17,791 | 20,826 | 20,826 | 18,317 | ||||||||||||||||||
| International Casualty | 8,605 | 8,605 | 11,600 | 13,042 | 13,042 | 12,856 | ||||||||||||||||||
| International Motor | 2,013 | 2,013 | 2,009 | 1,847 | 1,847 | 1,829 | ||||||||||||||||||
| Financial Lines | 10,734 | 10,734 | 15,421 | 8,528 | 8,528 | 12,394 | ||||||||||||||||||
| Subtotal | 149,753 | 149,753 | 157,928 | 166,379 | 166,379 | 173,068 | ||||||||||||||||||
| Finite Risk | ||||||||||||||||||||||||
| Finite Casualty | 4,706 | 4,706 | 7,632 | 11,876 | 11,876 | 10,186 | ||||||||||||||||||
| Subtotal | 4,706 | 4,706 | 7,632 | 11,876 | 11,876 | 10,186 | ||||||||||||||||||
| Total | $ | 354,915 | $ | 320,672 | $ | 355,317 | $ | 414,767 | $ | 399,145 | $ | 411,610 | ||||||||||||
- 21 -
| Platinum Underwriters Holdings, Ltd. |
| Investment Portfolio |
| ($ in thousands) |
| June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||
| Weighted Average | Weighted Average | Weighted Average | Weighted Average | |||||||||||||||||||||||
| Fair Value | Book Yield | Market Yield | Fair Value | Book Yield | Market Yield | |||||||||||||||||||||
| Available-for-sale securities | ||||||||||||||||||||||||||
| U.S. Government | $ | 113,981 | 0.1 | % | (0.6 | %) | $ | 391,303 | 1.9 | % | 2.4 | % | ||||||||||||||
| U.S. Government agencies | 100,420 | 0.6 | % | 0.2 | % | 100,547 | 0.7 | % | 0.3 | % | ||||||||||||||||
| Municipal bonds | 1,575,686 | 4.7 | % | 3.9 | % | 1,537,432 | 4.7 | % | 4.4 | % | ||||||||||||||||
| Non-U.S. governments | 61,568 | 2.8 | % | 1.8 | % | 76,306 | 2.9 | % | 1.9 | % | ||||||||||||||||
| Corporate bonds | 336,714 | 4.9 | % | 2.9 | % | 366,900 | 4.9 | % | 3.2 | % | ||||||||||||||||
| Commercial mortgage-backed securities | 202,359 | 5.6 | % | 4.0 | % | 203,313 | 5.4 | % | 4.5 | % | ||||||||||||||||
| Residential mortgage-backed securities | 130,538 | 4.4 | % | 6.2 | % | 166,458 | 4.9 | % | 6.0 | % | ||||||||||||||||
| Asset-backed securities | 22,418 | 0.0 | % | 6.7 | % | 23,568 | 3.6 | % | 7.6 | % | ||||||||||||||||
| Total fixed maturity available-for-sale securities | $ | 2,543,684 | 4.3 | % | 3.5 | % | $ | 2,865,827 | 4.2 | % | 3.9 | % | ||||||||||||||
| Trading securities | ||||||||||||||||||||||||||
| Non-U.S. dollar denominated securities: | ||||||||||||||||||||||||||
| Non-U.S. governments | $ | 146,478 | 3.6 | % | 2.2 | % | $ | 140,089 | 3.6 | % | 2.2 | % | ||||||||||||||
| U.S. Government agencies | 16,189 | 1.9 | % | 0.8 | % | 15,903 | 1.9 | % | 1.1 | % | ||||||||||||||||
| Corporate bonds | - | - | - | 68 | 4.5 | % | 2.3 | % | ||||||||||||||||||
| Insurance-linked securities | 4,938 | 9.6 | % | 17.6 | % | 26,086 | 10.7 | % | 6.5 | % | ||||||||||||||||
| Total fixed maturity trading securities | $ | 167,605 | 3.6 | % | 2.5 | % | $ | 182,146 | 4.5 | % | 2.7 | % | ||||||||||||||
| June 30, 2011 | December 31, 2010 | |||||||||||||||||||||||||
| Amount | % of Total | Amount | % of Total | |||||||||||||||||||||||
| Credit quality of investment portfolio* | ||||||||||||||||||||||||||
| Aaa | $ | 916,447 | 33.8 | % | $ | 1,219,482 | 40.0 | % | ||||||||||||||||||
| Aa | 987,870 | 36.4 | % | 1,033,067 | 33.9 | % | ||||||||||||||||||||
| A | 533,692 | 19.7 | % | 470,525 | 15.4 | % | ||||||||||||||||||||
| Baa | 201,418 | 7.4 | % | 225,928 | 7.4 | % | ||||||||||||||||||||
| Below investment grade | 71,862 | 2.7 | % | 98,971 | 3.3 | % | ||||||||||||||||||||
| Total | $ | 2,711,289 | 100.0 | % | $ | 3,047,973 | 100.0 | % | ||||||||||||||||||
| Credit quality | ||||||||||||||||||||||||||
| Weighted average credit quality | Aa3 | Aa2 | ||||||||||||||||||||||||
| * Rated using external rating agencies (primarily Moody's). | ||||||||||||||||||||||||||
| (Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality, Baa - Investment Grade) | ||||||||||||||||||||||||||
- 22 -
| Platinum Underwriters Holdings, Ltd. |
| Available-for-Sale Security Detail |
| ($ in thousands) |
| June 30, 2011 | ||||||||||||||||||||
| Unrealized | Credit | Weighted | ||||||||||||||||||
| Fair Value | Gain (Loss) | Quality | Duration | Average Life | ||||||||||||||||
| Available-for-sale securities | ||||||||||||||||||||
| U.S. Government | $ | 113,981 | $ | 2,677 | Aaa | 1.5 | ||||||||||||||
| U.S. Government agencies | 100,420 | 420 | Aaa | 0.3 | ||||||||||||||||
| Municipal bonds: | ||||||||||||||||||||
| State general obligation bonds | 825,880 | 22,373 | Aa2 | 7.2 | ||||||||||||||||
| Essential service bonds* | 403,246 | 13,546 | Aa3 | 7.5 | ||||||||||||||||
| State income tax and sales tax bonds | 168,104 | 7,448 | Aa1 | 7.7 | ||||||||||||||||
| Other municipal bonds | 135,587 | 4,487 | Aa2 | 6.4 | ||||||||||||||||
| Pre-refunded bonds | 42,869 | 2,475 | Aa2 | 2.8 | ||||||||||||||||
| Subtotal | 1,575,686 | 50,329 | Aa2 | 7.2 | ||||||||||||||||
| Non-U.S governments | 61,568 | 1,601 | Aa1 | 2.3 | ||||||||||||||||
| Corporate bonds: | ||||||||||||||||||||
| Industrial | 212,334 | 11,100 | A3 | 3.8 | ||||||||||||||||
| Utilities | 66,635 | 2,817 | A3 | 5.0 | ||||||||||||||||
| Insurance | 50,418 | 2,550 | A3 | 3.7 | ||||||||||||||||
| Finance | 7,327 | 47 | Baa1 | 6.3 | ||||||||||||||||
| Subtotal | 336,714 | 16,514 | A3 | 4.1 | ||||||||||||||||
| Commercial mortgage-backed securities | 202,359 | 10,372 | Aa2 | 3.7 | 4.3 | |||||||||||||||
| Residential mortgage-backed securities: | ||||||||||||||||||||
| U.S. Government agency residential mortgage-backed securities | 74,290 | 3,009 | Aaa | 1.4 | 3.0 | |||||||||||||||
| Non-agency residential mortgage-backed securities | 50,102 | (24,634 | ) | B3 | 0.4 | 3.3 | ||||||||||||||
| Alt-A residential mortgage-backed securities | 6,146 | (2,608 | ) | Caa2 | - | 5.0 | ||||||||||||||
| Subtotal | 130,538 | (24,233 | ) | Baa1 | 0.9 | 3.2 | ||||||||||||||
| Asset-backed securities: | ||||||||||||||||||||
| Asset-backed securities | 13,346 | (254 | ) | Aaa | - | 7.9 | ||||||||||||||
| Sub-prime asset-backed securities | 9,072 | (4,139 | ) | Caa2 | - | 9.4 | ||||||||||||||
| Subtotal | 22,418 | (4,393 | ) | Baa1 | - | 8.5 | ||||||||||||||
| Total | $ | 2,543,684 | $ | 53,287 | Aa3 | 5.5 | ||||||||||||||
* Essential service bonds include bonds issued for education, transportation and utilities.
- 23 -
| Platinum Underwriters Holdings, Ltd. |
| Corporate Bonds Detail |
| ($ in thousands) |
| June 30, 2011 | ||||||||||||||||
| Unrealized | Credit | |||||||||||||||
| Par Value | Fair Value | Gain (Loss) | Quality | |||||||||||||
| Top 20 Holdings by Issuer | ||||||||||||||||
| Philip Morris International Inc. | $ | 14,000 | $ | 15,758 | $ | 1,284 | A2 | |||||||||
| MetLife, Inc. | 14,922 | 15,136 | 177 | A3 | ||||||||||||
| American Electric Power Company, Inc. | 13,500 | 14,107 | 551 | Baa1 | ||||||||||||
| Hewlett-Packard Company | 10,000 | 10,960 | 599 | A2 | ||||||||||||
| HCC Insurance Holdings, Inc. | 10,000 | 10,768 | 696 | Baa1 | ||||||||||||
| Anglo American plc | 8,000 | 10,202 | 450 | Baa1 | ||||||||||||
| AT&T Inc. | 9,250 | 10,077 | 771 | A2 | ||||||||||||
| Mattel, Inc. | 10,000 | 9,993 | (144 | ) | Baa1 | |||||||||||
| Consolidated Edison, Inc. | 9,400 | 9,829 | 414 | A3 | ||||||||||||
| Diageo plc | 7,750 | 8,344 | 519 | A3 | ||||||||||||
| Snap-On Incorporated | 7,000 | 7,599 | 566 | Baa1 | ||||||||||||
| EOG Resources, Inc. | 6,660 | 6,965 | 208 | A3 | ||||||||||||
| Wal-Mart Stores, Inc. | 5,461 | 6,759 | (228 | ) | Aa2 | |||||||||||
| CNA Financial Corporation | 6,000 | 6,753 | 740 | Baa3 | ||||||||||||
| Rio Tinto plc | 5,000 | 6,620 | 408 | A3 | ||||||||||||
| ArcelorMittal | 5,000 | 6,366 | 12 | Baa3 | ||||||||||||
| Hess Corporation | 5,000 | 6,321 | 280 | Baa2 | ||||||||||||
| NextEra Energy, Inc. | 5,750 | 6,012 | 255 | Aa3 | ||||||||||||
| The Clorox Company | 5,500 | 5,991 | 484 | Baa1 | ||||||||||||
| CMS Energy Corporation | $ | 5,000 | $ | 5,972 | $ | 310 | A3 | |||||||||
- 24 -
| Platinum Underwriters Holdings, Ltd. |
| Municipal Bonds Detail |
| ($ in thousands) |
| June 30, 2011 | ||||||||||||||||
| Unrealized | Credit | |||||||||||||||
| Par Value | Fair Value | Gain (Loss) | Quality* | |||||||||||||
| Top 10 Exposures by Jurisdiction | ||||||||||||||||
| Illinois | $ | 164,680 | $ | 167,497 | $ | 1,686 | A1 | |||||||||
| Pennsylvania | 115,700 | 118,549 | 1,812 | Aa1 | ||||||||||||
| New York | 110,070 | 116,827 | 6,392 | Aa2 | ||||||||||||
| Connecticut | 106,000 | 108,528 | 491 | Aa2 | ||||||||||||
| California | 97,655 | 109,429 | 9,115 | A1 | ||||||||||||
| Massachusetts | 85,655 | 91,187 | 3,640 | Aa1 | ||||||||||||
| District of Columbia | 78,695 | 82,888 | 4,108 | Aa2 | ||||||||||||
| New Jersey | 75,250 | 77,013 | 1,338 | A1 | ||||||||||||
| Texas | 68,565 | 68,079 | (869 | ) | Aa1 | |||||||||||
| Ohio | $ | 53,795 | $ | 54,437 | $ | 473 | Aa1 | |||||||||
| Top 10 Holdings by Issuer | ||||||||||||||||
| State of Illinois | $ | 120,000 | $ | 121,439 | $ | 588 | A1 | |||||||||
| State of California | 92,665 | 104,384 | 9,194 | A1 | ||||||||||||
| State of Connecticut | 89,000 | 91,708 | 671 | Aa2 | ||||||||||||
| State of Pennsylvania | 76,700 | 79,289 | 1,891 | Aa1 | ||||||||||||
| New York State Urban Development Corporation | 47,000 | 48,812 | 1,812 | Aaa | ||||||||||||
| State of Mississippi | 46,060 | 47,831 | 695 | Aa2 | ||||||||||||
| State of Ohio | 37,550 | 37,868 | 318 | Aa1 | ||||||||||||
| State of Texas | 39,900 | 37,470 | (2,600 | ) | Aaa | |||||||||||
| State of Massachusetts | 34,635 | 37,124 | 596 | Aa1 | ||||||||||||
| State of Michigan | $ | 36,500 | $ | 36,843 | $ | 80 | Aa2 | |||||||||
| June 30, 2011 | ||||||||||||||||
| Amount | % of Total | |||||||||||||||
| Credit quality of municipal bond portfolio* | ||||||||||||||||
| Aaa | $ | 264,344 | 16.8 | % | ||||||||||||
| Aa | 910,004 | 57.8 | % | |||||||||||||
| A | 392,457 | 24.8 | % | |||||||||||||
| Baa | 8,881 | 0.6 | % | |||||||||||||
| Total | $ | 1,575,686 | 100.0 | % | ||||||||||||
| * Rated using external rating agencies (primarily Moody's) excluding credit enhancements from insurance entities. | ||||||||||||||||
| (Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality, Baa - Investment Grade) | ||||||||||||||||
- 25 -
| Platinum Underwriters Holdings, Ltd. | |||||
| Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments | |||||
| ($ in thousands) | |||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net realized gains (losses) on investments by entity: | ||||||||||||||||
| Subsidiary domiciled in Bermuda | $ | 1,488 | $ | 32,041 | $ | 1,241 | $ | 36,646 | ||||||||
| Subsidiaries domiciled in the United States | (6,177 | ) | 17,448 | �� | (5,523 | ) | 18,300 | |||||||||
| Total | $ | (4,689 | ) | $ | 49,489 | $ | (4,282 | ) | $ | 54,946 | ||||||
| Net realized gains (losses) on investments by type: | ||||||||||||||||
| Sale of securities | $ | (6,417 | ) | $ | 47,891 | $ | (2,476 | ) | $ | 52,602 | ||||||
| Mark-to-market on trading securities | 1,728 | 1,598 | (1,806 | ) | 2,344 | |||||||||||
| Total | $ | (4,689 | ) | $ | 49,489 | $ | (4,282 | ) | $ | 54,946 | ||||||
| Net impairment losses on investments by entity: | ||||||||||||||||
| Subsidiary domiciled in Bermuda | $ | 1,569 | $ | 2,142 | $ | 2,946 | $ | 9,269 | ||||||||
| Subsidiaries domiciled in the United States | 97 | 1,268 | 227 | 12,243 | ||||||||||||
| Total | $ | 1,666 | $ | 3,410 | $ | 3,173 | $ | 21,512 | ||||||||
| Net impairment losses on investments by type of security: | ||||||||||||||||
| Commercial mortgage-backed securities | $ | - | $ | - | $ | - | $ | 7,731 | ||||||||
| Residential mortgage-backed securities | 1,454 | 1,792 | 2,387 | 2,740 | ||||||||||||
| Asset-backed securities | 212 | 1,618 | 786 | 11,041 | ||||||||||||
| Total | $ | 1,666 | $ | 3,410 | $ | 3,173 | $ | 21,512 | ||||||||
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| Platinum Underwriters Holdings, Ltd. | ||
| Analysis of Losses and Loss Adjustment Expenses | ||
| ($ in thousands) | ||
| Analysis of Losses and Loss Adjustment Expenses | ||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2011 (a) | Twelve Months Ended December 31, 2010 (b) | |||||||||||||||||||||||||||||||
| Gross | Ceded | Net | Paid to Incurred % | Gross | Ceded | Net | Paid to Incurred % | |||||||||||||||||||||||||
| Paid losses and loss adjustment expenses | $ | 290,239 | $ | 3,314 | $ | 286,925 | 59.9 | % | $ | 604,260 | $ | 10,047 | $ | 594,213 | 127.1 | % | ||||||||||||||||
| Change in unpaid losses and loss adjustment expenses | 223,033 | 31,006 | 192,027 | (132,171 | ) | (5,378 | ) | (126,793 | ) | |||||||||||||||||||||||
| Losses and loss adjustment expenses incurred | $ | 513,272 | $ | 34,320 | $ | 478,952 | $ | 472,089 | $ | 4,669 | $ | 467,420 | ||||||||||||||||||||
| Analysis of Unpaid Losses and Loss Adjustment Expenses | ||||||||||||||||||||||||||||||||
| As of June 30, 2011 | As of December 31, 2010 | |||||||||||||||||||||||||||||||
| Gross | Ceded | Net | % | Gross | Ceded | Net | % | |||||||||||||||||||||||||
| Outstanding losses and loss adjustment expenses | $ | 899,697 | $ | 4,517 | $ | 895,180 | 36.8 | % | $ | 671,846 | $ | 8,149 | $ | 663,697 | 30.1 | % | ||||||||||||||||
| Incurred but not reported | 1,573,164 | 35,417 | 1,537,747 | 63.2 | % | 1,545,532 | 763 | 1,544,769 | 69.9 | % | ||||||||||||||||||||||
| Unpaid losses and loss adjustment expenses | $ | 2,472,861 | $ | 39,934 | $ | 2,432,927 | 100.0 | % | $ | 2,217,378 | $ | 8,912 | $ | 2,208,466 | 100.0 | % | ||||||||||||||||
| (a) Gross and ceded losses and loss adjustment expenses incurred includes effects of foreign currency exchange rate losses of $32,449 and gains of $16, respectively. | ||||||||||||||||||||||||||||||||
| (b) Gross and ceded losses and loss adjustment expenses incurred includes effects of foreign currency exchange rate losses of $213 and $38, respectively. | ||||||||||||||||||||||||||||||||
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| Platinum Underwriters Holdings, Ltd. | |||||||||||
| Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions | |||||||||||
| ($ in thousands) | |||||||||||
| Three Months Ended June 30, 2011 | Three Months Ended June 30, 2010 | |||||||||||||||||||||||||||||||
| Property and Marine | Casualty | Finite Risk | Total | Property and Marine | Casualty | Finite Risk | Total | |||||||||||||||||||||||||
| Non-Catastrophe Favorable (Unfavorable) Development | ||||||||||||||||||||||||||||||||
| Net loss development related to prior years | $ | 4,935 | $ | 11,286 | $ | 3,306 | $ | 19,527 | $ | 20,468 | $ | 22,616 | $ | 7,809 | $ | 50,893 | ||||||||||||||||
| Net premium adjustments related to prior years' losses | (821 | ) | 891 | - | 70 | 546 | 136 | - | 682 | |||||||||||||||||||||||
| Net commission adjustments related to prior years' losses | 212 | (478 | ) | (3,217 | ) | (3,483 | ) | (2,999 | ) | 648 | (6,586 | ) | (8,937 | ) | ||||||||||||||||||
| Net favorable (unfavorable) development | 4,326 | 11,699 | 89 | 16,114 | 18,015 | 23,400 | 1,223 | 42,638 | ||||||||||||||||||||||||
| Catastrophe Favorable (Unfavorable) Development | ||||||||||||||||||||||||||||||||
| Net loss development related to prior years | 239 | (32 | ) | 371 | 578 | (691 | ) | 2 | - | (689 | ) | |||||||||||||||||||||
| Net premium adjustments related to prior years' losses | (308 | ) | - | - | (308 | ) | (1,874 | ) | - | - | (1,874 | ) | ||||||||||||||||||||
| Net commission adjustments related to prior years' losses | (3 | ) | - | - | (3 | ) | - | - | - | - | ||||||||||||||||||||||
| Net favorable (unfavorable) development | (72 | ) | (32 | ) | 371 | 267 | (2,565 | ) | 2 | - | (2,563 | ) | ||||||||||||||||||||
| Total net favorable (unfavorable) development | $ | 4,254 | $ | 11,667 | $ | 460 | $ | 16,381 | $ | 15,450 | $ | 23,402 | $ | 1,223 | $ | 40,075 | ||||||||||||||||
| Six Months Ended June 30, 2011 | Six Months Ended June 30, 2010 | |||||||||||||||||||||||||||||||
| Property and Marine | Casualty | Finite Risk | Total | Property and Marine | Casualty | Finite Risk | Total | |||||||||||||||||||||||||
| Non-Catastrophe Favorable (Unfavorable) Development | ||||||||||||||||||||||||||||||||
| Net loss development related to prior years | $ | 2,987 | $ | 30,841 | $ | 4,781 | $ | 38,609 | $ | 39,113 | $ | 55,955 | $ | 4,692 | $ | 99,760 | ||||||||||||||||
| Net premium adjustments related to prior years' losses | (70 | ) | 482 | - | 412 | 989 | 430 | - | 1,419 | |||||||||||||||||||||||
| Net commission adjustments related to prior years' losses | 4 | 98 | (4,071 | ) | (3,969 | ) | (3,854 | ) | 3,566 | (9,176 | ) | (9,464 | ) | |||||||||||||||||||
| Net favorable (unfavorable) development | 2,921 | 31,421 | 710 | 35,052 | 36,248 | 59,951 | (4,484 | ) | 91,715 | |||||||||||||||||||||||
| Catastrophe Favorable (Unfavorable) Development | ||||||||||||||||||||||||||||||||
| Net loss development related to prior years | 14,421 | (32 | ) | 371 | 14,760 | (691 | ) | 5 | - | (686 | ) | |||||||||||||||||||||
| Net premium adjustments related to prior years' losses | (327 | ) | - | - | (327 | ) | (1,466 | ) | - | - | (1,466 | ) | ||||||||||||||||||||
| Net commission adjustments related to prior years' losses | (8 | ) | - | - | (8 | ) | - | - | - | - | ||||||||||||||||||||||
| Net favorable (unfavorable) development | 14,086 | (32 | ) | 371 | 14,425 | (2,157 | ) | 5 | - | (2,152 | ) | |||||||||||||||||||||
| Total net favorable (unfavorable) development | $ | 17,007 | $ | 31,389 | $ | 1,081 | $ | 49,477 | $ | 34,091 | $ | 59,956 | $ | (4,484 | ) | $ | 89,563 | |||||||||||||||
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| Platinum Underwriters Holdings, Ltd. | ||||||||
| Estimated Exposures to Peak Zone Property Catastrophe Losses | ||||||||
| As of July 1, 2011 | ||||||||
| ($ in millions) | ||||||||
| Estimated Probable Maximum Losses by Zone and Peril* | |||||||||||||||||||||||||
| 20 Year Return Period | 100 Year Return Period | 250 Year Return Period | |||||||||||||||||||||||
| Zones | Perils | Estimated Gross Loss | Estimated Net Loss | Estimated Gross Loss | Estimated Net Loss | Estimated Gross Loss | Estimated Net Loss | ||||||||||||||||||
| United States / Caribbean | Hurricane | $ | 148 | $ | 114 | $ | 294 | $ | 234 | $ | 366 | $ | 301 | ||||||||||||
| United States | Earthquake | 12 | 12 | 192 | 192 | 248 | 248 | ||||||||||||||||||
| Pan-European | Windstorm | 136 | 74 | 279 | 157 | 337 | 212 | ||||||||||||||||||
| Japan | Earthquake | 11 | 11 | 129 | 109 | 241 | 221 | ||||||||||||||||||
| Japan | Typhoon | 5 | 5 | 52 | 52 | 69 | 69 | ||||||||||||||||||
| Canada | Earthquake | $ | - | $ | - | $ | 57 | $ | 49 | $ | 176 | $ | 126 | ||||||||||||
The Company has developed the estimates of losses expected from certain catastrophes for its portfolio of property, marine, workers’ compensation, personal accident contracts and catastrophe contributions from insurance-linked securities using commercially available catastrophe models, which are applied and adjusted by the Company. These estimates include assumptions regarding the location, size and magnitude of an event, the frequency of events, the construction type and damageability of property in a zone, and the cost of rebuilding property in a zone, among other assumptions. These estimates do not include any losses that may be expected to arise from the Company’s casualty portfolio as a result of such catastrophes. Return period refers to the frequency with which losses of a given amount or greater are expected to occur.
Gross loss estimates are before income tax and net of reinstatement premiums. Net loss estimates are before income tax, net of reinstatement premiums and net of retrocessional recoveries.
The estimates set forth above are based on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses to differ materially from those expressed above. In particular, modeled loss estimates do not necessarily accurately predict actual losses, and may significantly misestimate actual losses. Such estimates, therefore, should not be considered as a representation of actual losses. Investors should not rely on the foregoing information when considering investment in the Company. The Company undertakes no duty to update or revise such information to reflect the occurrence of future events.
*Calculated excluding any benefit from Topiary Capital derivative which expires on July 31, 2011.
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