Platinum Underwriters Holdings, Ltd.
This report is for informational purposes only. It should be read in conjunction with
Underwriters Holdings, Ltd., including the Company's Annual Report on Form 10-K.
Kenneth A. Kurtzman – Investor Relations
Platinum Underwriters Holdings, Ltd.
All financial information contained herein is unaudited except for the information for the fiscal year ended December 31, 2013. Amounts may not reconcile exactly due to rounding differences.
In presenting the Company's results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including operating income or loss (page 11), book value per common share and fully converted book value per common share (page 13) and underwriting income or loss and related underwriting ratios (pages 14-17), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures 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.
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 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 estimated 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 financial strength ratings; our ability to raise capital on acceptable terms if necessary; our exposure to credit loss from counterparties in the normal course of business; the availability and cost of collateral arrangements in order to provide reinsurance; the effect on our business of the cyclicality of the property and casualty reinsurance business; the effect on our business of the highly competitive nature of the property and casualty reinsurance industry, including the effect of new entrants to the 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 retrocessional reinsurance on acceptable terms; foreign currency exchange rate fluctuations; our ability to maintain and enhance effective operating procedures and internal controls over financial reporting; our need to make many estimates and judgments in the preparation of our financial statements; the limitations placed on our financial and operational flexibility by the representations, warranties and covenants in our debt and credit facilities; our ability to retain key executives and attract and retain additional qualified personnel in the future; the effect of technology breaches or failures on our business; the performance of our investment portfolio; 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 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 under certain circumstances; the risk that 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; the risk that 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 possibility that we may become subject to taxes in Bermuda; the effect of income, premium or other taxes on Platinum Underwriters Holdings, Ltd. or its subsidiaries by other jurisdictions; the effect on our business 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 uncertain impact on our business of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010; the non-compliance with laws, regulations and taxation on transactions with international counter-parties; the dependence of the cash flows of Platinum Underwriters Holdings, Ltd., a holding company, on dividends, interest and other permissible payments from its subsidiaries to meet its obligations; 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, 2013.
Platinum Underwriters Holdings, Ltd.
March 31, 2014 and 2013
($ and amounts in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Highlights | | | | | | |
| Net premiums written | | $ | 135,777 | | | $ | 134,765 | |
| Net premiums earned | | | 126,273 | | | | 126,853 | |
| Underwriting income (1) | | | 59,373 | | | | 69,248 | |
| Net investment income | | | 17,692 | | | | 18,544 | |
| Net operating income (2) | | | 64,119 | | | | 74,914 | |
| Net realized gains (losses) on investments | | | (515 | ) | | | 13,318 | |
| Net impairment losses on investments | | | (88 | ) | | | (421 | ) |
| Net income | | $ | 63,735 | | | $ | 86,516 | |
| | | | | | | | | |
| Total assets | | $ | 3,885,351 | | | $ | 4,269,308 | |
| Investments and cash and cash equivalents | | | 3,452,759 | | | | 3,883,146 | |
| Total shareholders' equity | | | 1,759,943 | | | | 1,912,666 | |
| Unpaid losses and loss adjustment expenses | | $ | 1,604,762 | | | $ | 1,862,278 | |
| | | | | | | | | |
| Per share data | | | | | | | | |
| Common shares outstanding - end of period | | | 26,933 | | | | 31,757 | |
| Weighted average common shares outstanding - basic | | | 27,765 | | | | 32,373 | |
| Adjusted weighted average common shares outstanding - diluted | | | 28,109 | | | | 32,838 | |
| Basic earnings per common share | | $ | 2.30 | | | $ | 2.67 | |
| Diluted earnings per common share | | | 2.27 | | | | 2.63 | |
| Operating income per common share - diluted (2) | | | 2.28 | | | | 2.28 | |
| Dividends per common share | | | 0.08 | | | | 0.08 | |
| Book value per common share (3) | | | 65.35 | | | | 60.23 | |
| Fully converted book value per common share (3) | | $ | 63.87 | | | $ | 58.76 | |
| (1) | See reconciliation of underwriting income on pages 14-17. |
| (2) | See computation of net operating income and net operating income per diluted common share on page 11. |
| (3) | See computation of book value per common share and fully converted book value per common share on page 13. |
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets – by Quarter ($ in thousands, except per share data)
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Assets | | | | | | | | | | | | | | | |
| Investments: | | | | | | | | | | | | | | | |
| Fixed maturity securities | | $ | 1,986,320 | | | $ | 1,961,265 | | | $ | 1,937,984 | | | $ | 1,920,710 | | | $ | 1,992,457 | |
| Short-term investments | | | 53,469 | | | | 66,679 | | | | 73,635 | | | | 77,636 | | | | 104,443 | |
| Cash and cash equivalents | | | 1,412,970 | | | | 1,464,418 | | | | 1,565,405 | | | | 1,609,461 | | | | 1,786,246 | |
| Accrued investment income | | | 22,112 | | | | 20,026 | | | | 20,451 | | | | 19,805 | | | | 22,995 | |
| Reinsurance premiums receivable | | | 142,643 | | | | 138,454 | | | | 133,769 | | | | 133,360 | | | | 124,590 | |
| Reinsurance balances (prepaid and recoverable) | | | 2,687 | | | | 2,089 | | | | 8,645 | | | | 5,464 | | | | 4,701 | |
| Funds held by ceding companies | | | 117,428 | | | | 119,241 | | | | 118,983 | | | | 119,445 | | | | 115,915 | |
| Deferred acquisition costs | | | 33,213 | | | | 31,103 | | | | 32,378 | | | | 30,173 | | | | 28,789 | |
| Reinsurance deposit assets | | | 81,004 | | | | 79,303 | | | | 78,179 | | | | 76,948 | | | | 52,088 | |
| Other assets | | | 33,505 | | | | 41,307 | | | | 39,830 | | | | 54,900 | | | | 37,084 | |
| Total assets | | $ | 3,885,351 | | | $ | 3,923,885 | | | $ | 4,009,259 | | | $ | 4,047,902 | | | $ | 4,269,308 | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | |
| Unpaid losses and loss adjustment expenses | | $ | 1,604,762 | | | $ | 1,671,365 | | | $ | 1,758,056 | | | $ | 1,793,087 | | | $ | 1,862,278 | |
| Unearned premiums | | | 136,272 | | | | 126,300 | | | | 130,488 | | | | 123,590 | | | | 119,537 | |
| Debt obligations | | | 250,000 | | | | 250,000 | | | | 250,000 | | | | 250,000 | | | | 250,000 | |
| Commissions payable | | | 79,748 | | | | 78,791 | | | | 75,018 | | | | 72,994 | | | | 67,667 | |
| Other liabilities | | | 54,626 | | | | 50,722 | | | | 96,767 | | | | 61,685 | | | | 57,160 | |
| Total liabilities | | $ | 2,125,408 | | | $ | 2,177,178 | | | $ | 2,310,329 | | | $ | 2,301,356 | | | $ | 2,356,642 | |
| | | | | | | | | | | | | | | | | | | | | |
| Shareholders' Equity | | | | | | | | | | | | | | | | | | | | |
| Common shares | | $ | 269 | | | $ | 281 | | | $ | 279 | | | $ | 293 | | | $ | 318 | |
| Additional paid-in capital | | | - | | | | 10,711 | | | | - | | | | 3,817 | | | | 150,693 | |
| Accumulated other comprehensive income | | | 74,559 | | | | 48,084 | | | | 57,390 | | | | 64,367 | | | | 131,103 | |
| Retained earnings | | | 1,685,115 | | | | 1,687,631 | | | | 1,641,261 | | | | 1,678,069 | | | | 1,630,552 | |
| Total shareholders' equity | | $ | 1,759,943 | | | $ | 1,746,707 | | | $ | 1,698,930 | | | $ | 1,746,546 | | | $ | 1,912,666 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 3,885,351 | | | $ | 3,923,885 | | | $ | 4,009,259 | | | $ | 4,047,902 | | | $ | 4,269,308 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per common share (1) | | $ | 65.35 | | | $ | 62.07 | | | $ | 60.87 | | | $ | 59.67 | | | $ | 60.23 | |
| Fully converted book value per common share (1) | | $ | 63.87 | | | $ | 60.64 | | | $ | 59.26 | | | $ | 58.28 | | | $ | 58.76 | |
| (1) | Book value per common share and fully converted book value per common share are non-GAAP financial measures as defined by Regulation G. See computation of book value per common share and fully converted book value per common share on page 13. |
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income ($ and amounts in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Revenue | | | | | | |
| Net premiums earned | | $ | 126,273 | | | $ | 126,853 | |
| Net investment income | | | 17,692 | | | | 18,544 | |
| Net realized gains (losses) on investments | | | (515 | ) | | | 13,318 | |
| Net impairment losses on investments | | | (88 | ) | | | (421 | ) |
| Other income | | | 1,517 | | | | 1,392 | |
| Total revenue | | | 144,879 | | | | 159,686 | |
| | | | | | | | | |
| Expenses | | | | | | | | |
| Net losses and loss adjustment expenses | | | 26,509 | | | | 13,998 | |
| Net acquisition expenses | | | 27,501 | | | | 30,219 | |
| Operating expenses | | | 18,283 | | | | 19,305 | |
| Net foreign currency exchange losses (gains) | | | (187 | ) | | | (220 | ) |
| Interest expense | | | 4,786 | | | | 4,779 | |
| Total expenses | | | 76,892 | | | | 68,081 | |
| Income before income taxes | | | 67,987 | | | | 91,605 | |
| | | 4,252 | | | | 5,089 | |
| Net income | | $ | 63,735 | | | $ | 86,516 | |
| | | | | | | | | |
| Earnings Per Common Share | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 32,373 | |
| Basic earnings per common share | | $ | 2.30 | | | $ | 2.67 | |
| | | | | | | | | |
| Adjusted weighted average common shares outstanding | | | 28,109 | | | | 32,838 | |
| Diluted earnings per common share | | $ | 2.27 | | | $ | 2.63 | |
| | | | | | | | | |
| Comprehensive income | | | | | | | | |
| Net income | | $ | 63,735 | | | $ | 86,516 | |
| Other comprehensive income (loss) | | | 26,475 | | | | (6,587 | ) |
| Comprehensive income | | $ | 90,210 | | | $ | 79,929 | |
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 | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Revenue | | | | | | | | | | | | | | | |
| Net premiums earned | | $ | 126,273 | | | $ | 148,267 | | | $ | 135,360 | | | $ | 142,933 | | | $ | 126,853 | |
| Net investment income | | | 17,692 | | | | 17,936 | | | | 17,758 | | | | 17,808 | | | | 18,544 | |
| Net realized gains (losses) on investments | | | (515 | ) | | | (778 | ) | | | (306 | ) | | | 11,686 | | | | 13,318 | |
| Net impairment losses on investments | | | (88 | ) | | | (31 | ) | | | (65 | ) | | | (1,516 | ) | | | (421 | ) |
| Other income (expense) | | | 1,517 | | | | 974 | | | | 1,426 | | | | (315 | ) | | | 1,392 | |
| Total revenue | | | 144,879 | | | | 166,368 | | | | 154,173 | | | | 170,596 | | | | 159,686 | |
| | | | | | | | | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | | | | | | | | |
| Net losses and loss adjustment expenses | | | 26,509 | | | | 46,639 | | | | 44,142 | | | | 62,667 | | | | 13,998 | |
| Net acquisition expenses | | | 27,501 | | | | 32,560 | | | | 30,675 | | | | 30,313 | | | | 30,219 | |
| Operating expenses | | | 18,283 | | | | 23,019 | | | | 20,672 | | | | 19,718 | | | | 19,305 | |
| Net foreign currency exchange losses (gains) | | | (187 | ) | | | 358 | | | | 487 | | | | (859 | ) | | | (220 | ) |
| Interest expense | | | 4,786 | | | | 4,784 | | | | 4,782 | | | | 4,780 | | | | 4,779 | |
| Total expenses | | | 76,892 | | | | 107,360 | | | | 100,758 | | | | 116,619 | | | | 68,081 | |
| Income before income taxes | | | 67,987 | | | | 59,008 | | | | 53,415 | | | | 53,977 | | | | 91,605 | |
| Income tax expense | | | 4,252 | | | | 10,385 | | | | 15,130 | | | | 4,123 | | | | 5,089 | |
| Net income | | $ | 63,735 | | | $ | 48,623 | | | $ | 38,285 | | | $ | 49,854 | | | $ | 86,516 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings Per Common Share | | | | | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 28,097 | | | | 28,655 | | | | 30,571 | | | | 32,373 | |
| Basic earnings per common share | | $ | 2.30 | | | $ | 1.73 | | | $ | 1.34 | | | $ | 1.63 | | | $ | 2.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted weighted average common shares outstanding | | | 28,109 | | | | 28,492 | | | | 29,065 | | | | 30,970 | | | | 32,838 | |
| Diluted earnings per common share | | $ | 2.27 | | | $ | 1.71 | | | $ | 1.32 | | | $ | 1.61 | | | $ | 2.63 | |
| | | | | | | | | | | | | | | | | | | | | |
| Comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 63,735 | | | $ | 48,623 | | | $ | 38,285 | | | $ | 49,854 | | | $ | 86,516 | |
| Other comprehensive income (loss) | | | 26,475 | | | | (9,306 | ) | | | (6,977 | ) | | | (66,736 | ) | | | (6,587 | ) |
| Comprehensive income (loss) | | $ | 90,210 | | | $ | 39,317 | | | $ | 31,308 | | | $ | (16,882 | ) | | $ | 79,929 | |
Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings Per Common Share ($ and amounts in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Earnings | | | | | | |
| Basic and Diluted | | | | | | |
| Net income attributable to common shareholders | | $ | 63,735 | | | $ | 86,516 | |
| Portion allocated to participating common shareholders (1) | | | - | | | | (189 | ) |
| Net income allocated to common shareholders | | $ | 63,735 | | | $ | 86,327 | |
| | | | | | | | | |
| Common Shares | | | | | | | | |
| Basic | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 32,373 | |
| Diluted | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 32,373 | |
| Effect of dilutive securities: | | | | | | | | |
| Common share options | | | 51 | | | | 219 | |
| Restricted share units | | | 293 | | | | 246 | |
| Adjusted weighted average common shares outstanding | | | 28,109 | | | | 32,838 | |
| | | | | | | | | |
| Earnings Per Common Share | | | | | | | | |
| Basic earnings per common share | | $ | 2.30 | | | $ | 2.67 | |
| Diluted earnings per common share | | $ | 2.27 | | | $ | 2.63 | |
| (1) | Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plan that are considered to be participating securities. All outstanding restricted shares vested in July 2013. |
Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings Per Common Share – by Quarter ($ and amounts in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Earnings | | | | | | | | | | | | | | | |
| Basic and Diluted | | | | | | | | | | | | | | | |
| Net income attributable to common shareholders | | $ | 63,735 | | | $ | 48,623 | | | $ | 38,285 | | | $ | 49,854 | | | $ | 86,516 | |
| Portion allocated to participating common shareholders (1) | | | - | | | | - | | | | (26 | ) | | | (113 | ) | | | (189 | ) |
| Net income allocated to common shareholders | | $ | 63,735 | | | $ | 48,623 | | | $ | 38,259 | | | $ | 49,741 | | | $ | 86,327 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common Shares | | | | | | | | | | | | | | | | | | | | |
| Basic | | | | | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 28,097 | | | | 28,655 | | | | 30,571 | | | | 32,373 | |
| Diluted | | | | | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | 27,765 | | | | 28,097 | | | | 28,655 | | | | 30,571 | | | | 32,373 | |
| Effect of dilutive securities: | | | | | | | | | | | | | | | | | | | | |
| Common share options | | | 51 | | | | 71 | | | | 131 | | | | 155 | | | | 219 | |
| Restricted share units | | | 293 | | | | 324 | | | | 279 | | | | 244 | | | | 246 | |
| Adjusted weighted average common shares outstanding | | | 28,109 | | | | 28,492 | | | | 29,065 | | | | 30,970 | | | | 32,838 | |
| | | | | | | | | | | | | | | | | | | | | |
| Earnings Per Common Share | | | | | | | | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 2.30 | | | $ | 1.73 | | | $ | 1.34 | | | $ | 1.63 | | | $ | 2.67 | |
| Diluted earnings per common share | | $ | 2.27 | | | $ | 1.71 | | | $ | 1.32 | | | $ | 1.61 | | | $ | 2.63 | |
| (1) | Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plan that are considered to be participating securities. All outstanding restricted shares vested in July 2013. |
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows ($ in thousands)
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | |
| Net cash provided by (used in) operating activities | | $ | 6,266 | | | $ | (12,558 | ) |
| | | | | | | | | |
| Net cash provided by (used in) investing activities | | | 18,220 | | | | 146,734 | |
| | | | | | | | | |
| Net cash provided by (used in) financing activities | | | (77,717 | ) | | | (63,514 | ) |
| | | | | | | | | |
| Effect of foreign currency exchange rate changes | | | 1,783 | | | | (4,811 | ) |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (51,448 | ) | | $ | 65,851 | |
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows – by Quarter ($ in thousands)
| | | Three Months Ended | |
| | | March 31, 2014 | | | December 31, 2013 | | | September 30, 2013 | | | June 30, 2013 | | | March 31, 2013 | |
| Net cash provided by (used in) operating activities | | $ | 6,266 | | | $ | (42,464 | ) | | $ | 35,015 | | | $ | (36,555 | ) | | $ | (12,558 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net cash provided by (used in) investing activities | | | 18,220 | | | | (62,878 | ) | | | (4,036 | ) | | | 18,716 | | | | 146,734 | |
| | | | | | | | | | | | | | | | | | | | | |
| Net cash provided by (used in) financing activities | | | (77,717 | ) | | | 6,209 | | | | (79,551 | ) | | | (151,496 | ) | | | (63,514 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Effect of foreign currency exchange rate changes | | | 1,783 | | | | (1,854 | ) | | | 4,516 | | | | (7,450 | ) | | | (4,811 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | $ | (51,448 | ) | | $ | (100,987 | ) | | $ | (44,056 | ) | | $ | (176,785 | ) | | $ | 65,851 | |
Platinum Underwriters Holdings, Ltd.
Computation of Net Operating Income and Net Operating Income Per Diluted Common Share ($ and amounts in thousands, except per share data)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Net income attributable to common shareholders | | $ | 63,735 | | | $ | 86,516 | |
| Portion allocated to participating common shareholders (1) | | | - | | | | (189 | ) |
| Net income allocated to common shareholders | | $ | 63,735 | | | $ | 86,327 | |
| | | | | | | | | |
| Adjustments for: | | | | | | | | |
| Net realized (gains) losses on investments, net of tax | | $ | 515 | | | $ | (11,623 | ) |
| Net impairment losses on investments, net of tax | | | 88 | | | | 388 | |
| Net foreign currency exchange losses (gains), net of tax | | | (219 | ) | | | (178 | ) |
| Net operating income (2) | | $ | 64,119 | | | $ | 74,914 | |
| | | | | | | | | |
| Per diluted common share: | | | | | | | | |
| Net income | | $ | 2.27 | | | $ | 2.63 | |
| Adjustments for: | | | | | | | | |
| Net realized (gains) losses on investments | | | 0.02 | | | | (0.35 | ) |
| Net impairment losses on investments | | | - | | | | 0.01 | |
| Net foreign currency exchange losses (gains) | | | (0.01 | ) | | | (0.01 | ) |
| Net operating income per diluted common share (3) | | $ | 2.28 | | | $ | 2.28 | |
| | | | | | | | | |
| Adjusted weighted average common shares outstanding - diluted | | | 28,109 | | | | 32,838 | |
| (1) | Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plan that are considered to be participating securities. All outstanding restricted shares vested in July 2013. |
| (2) | Net operating income is a non-GAAP measure as defined by Regulation G and represents net income after taxes excluding net realized gains and losses on investments, net impairment losses on investments and net foreign currency exchange gains and losses. |
| (3) | Net operating income per diluted common share is also a non-GAAP measure and is calculated by dividing net operating income by diluted weighted average shares outstanding for the period. |
Platinum Underwriters Holdings, Ltd.
Key Ratios, Share Data, Ratings
| | | As of and for the Three Months Ended | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Key Ratios | | | | | | | | | | | | | | | |
| Combined ratio (%) | | | 53.0% | | | | 63.5% | | | | 65.5% | | | | 74.4% | | | | 45.4% | |
| Investable assets to shareholders' equity ratio | | 2.0:1 | | | 2.0:1 | | | 2.1:1 | | | 2.1:1 | | | 2.0:1 | |
| Debt to total capital (%) | | | 12.4% | | | | 12.5% | | | | 12.8% | | | | 12.5% | | | | 11.6% | |
| Net premiums written (annualized) to shareholders' equity | | | 0.31 | | | | 0.34 | | | | 0.32 | | | | 0.34 | | | | 0.28 | |
| | | | | | | | | | | | | | | | | | | | | |
| Share Data | | | | | | | | | | | | | | | | | | | | |
| Book value per common share (1) | | $ | 65.35 | | | $ | 62.07 | | | $ | 60.87 | | | $ | 59.67 | | | $ | 60.23 | |
| Common shares outstanding (000's) | | | 26,933 | | | | 28,143 | | | | 27,910 | | | | 29,268 | | | | 31,757 | |
| | | | | | | | | | | | | | | | | | | | | |
| Market Price Per Common Share | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 61.05 | | | $ | 63.60 | | | $ | 61.06 | | | $ | 59.50 | | | $ | 56.34 | |
| Low | | | 55.03 | | | | 57.84 | | | | 56.63 | | | | 54.06 | | | | 46.24 | |
| Close | | $ | 60.10 | | | $ | 61.28 | | | $ | 59.73 | | | $ | 57.22 | | | $ | 55.81 | |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | 124 | | | | 124 | | | | 123 | | | | 124 | | | | 125 | |
| (1) | See computation of book value per common share on page 13. |
Platinum Underwriters Holdings, Ltd.
Book Value and Fully Converted Book Value Per Common Share – by Quarter ($ and amounts in thousands, except per share data)
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Market price per share at period end | | $ | 60.10 | | | $ | 61.28 | | | $ | 59.73 | | | $ | 57.22 | | | $ | 55.81 | |
| | | | | | | | | | | | | | | | | | | | | |
| Shareholders' equity | | $ | 1,759,943 | | | $ | 1,746,707 | | | $ | 1,698,930 | | | $ | 1,746,546 | | | $ | 1,912,666 | |
| Add: Proceeds from exercise of share options | | | 4,994 | | | | 4,994 | | | | 13,225 | | | | 13,539 | | | | 20,303 | |
| Shareholders' equity - diluted | | $ | 1,764,937 | | | $ | 1,751,701 | | | $ | 1,712,155 | | | $ | 1,760,085 | | | $ | 1,932,969 | |
| | | | | | | | | | | | | | | | | | | | | |
| Basic common shares outstanding | | | 26,933 | | | | 28,143 | | | | 27,910 | | | | 29,268 | | | | 31,757 | |
| Add: Common share options (1) | | | 148 | | | | 148 | | | | 388 | | | | 397 | | | | 604 | |
| Add: Restricted share units | | | 553 | | | | 598 | | | | 596 | | | | 535 | | | | 536 | |
| Diluted common shares outstanding | | | 27,634 | | | | 28,889 | | | | 28,894 | | | | 30,200 | | | | 32,897 | |
| | | | | | | | | | | | | | | | | | | | | |
| Book value per common share (2) | | | | | | | | | | | | | | | | | | | | |
| Book value per common share | | $ | 65.35 | | | $ | 62.07 | | | $ | 60.87 | | | $ | 59.67 | | | $ | 60.23 | |
| Fully converted book value per common share | | $ | 63.87 | | | $ | 60.64 | | | $ | 59.26 | | | $ | 58.28 | | | $ | 58.76 | |
| (1) | Options with a price below the market price per share at period end. |
| (2) | Book value per common share and fully converted book value per common share are non-GAAP financial measures as defined by Regulation G. |
Platinum Underwriters Holdings, Ltd.
Operating Segment Reporting – Three Month Summary
($ in thousands)
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | Property and Marine | | | Casualty | | | Finite Risk | | | Total | | | Property and Marine | | | Casualty | | | Finite Risk | | | Total | |
| Net premiums written | | $ | 57,745 | | | $ | 71,674 | | | $ | 6,358 | | | $ | 135,777 | | | $ | 59,427 | | | $ | 70,844 | | | $ | 4,494 | | | $ | 134,765 | |
| Net premiums earned | | | 53,192 | | | | 65,717 | | | | 7,364 | | | | 126,273 | | | | 51,852 | | | | 70,795 | | | | 4,206 | | | | 126,853 | |
| Net losses and loss adjustment expenses | | | 5,610 | | | | 14,960 | | | | 5,939 | | | | 26,509 | | | | (14,205 | ) | | | 29,643 | | | | (1,440 | ) | | | 13,998 | |
| Net acquisition expenses | | | 10,043 | | | | 15,642 | | | | 1,816 | | | | 27,501 | | | | 8,227 | | | | 16,249 | | | | 5,743 | | | | 30,219 | |
| Other underwriting expenses | | | 7,370 | | | | 5,228 | | | | 292 | | | | 12,890 | | | | 7,332 | | | | 5,723 | | | | 333 | | | | 13,388 | |
| Segment underwriting income (loss)* | | $ | 30,169 | | | $ | 29,887 | | | $ | (683 | ) | | | 59,373 | | | $ | 50,498 | | | $ | 19,180 | | | $ | (430 | ) | | | 69,248 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | | | | | | | | | | | | 17,692 | | | | | | | | | | | | | | | | 18,544 | |
| Net realized gains (losses) on investments | | | | | | | | | | | | | | | (515 | ) | | | | | | | | | | | | | | | 13,318 | |
| Net impairment losses on investments | | | | | | | | | | | | | | | (88 | ) | | | | | | | | | | | | | | | (421 | ) |
| Other income | | | | | | | | | | | | | | | 1,517 | | | | | | | | | | | | | | | | 1,392 | |
| Corporate expenses not allocated to segments | | | | | | | | | | | | | | | (5,393 | ) | | | | | | | | | | | | | | | (5,917 | ) |
| Net foreign currency exchange (losses) gains | | | | | | | | | | | | | | | 187 | | | | | | | | | | | | | | | | 220 | |
| Interest expense | | | | | | | | | | | | | | | (4,786 | ) | | | | | | | | | | | | | | | (4,779 | ) |
| Income before income taxes | | | | | | | | | | | | | | $ | 67,987 | | | | | | | | | | | | | | | $ | 91,605 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Underwriting ratios:* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 10.5 | % | | | 22.8 | % | | | 80.6 | % | | | 21.0 | % | | | (27.4 | %) | | | 41.9 | % | | | (34.2 | %) | | | 11.0 | % |
| Net acquisition expense | | | 18.9 | % | | | 23.8 | % | | | 24.7 | % | | | 21.8 | % | | | 15.9 | % | | | 23.0 | % | | | 136.5 | % | | | 23.8 | % |
| Other underwriting expense | | | 13.9 | % | | | 8.0 | % | | | 4.0 | % | | | 10.2 | % | | | 14.1 | % | | | 8.1 | % | | | 7.9 | % | | | 10.6 | % |
| Combined | | | 43.3 | % | | | 54.6 | % | | | 109.3 | % | | | 53.0 | % | | | 2.6 | % | | | 73.0 | % | | | 110.2 | % | | | 45.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Statutory underwriting ratios:* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 10.5 | % | | | 22.8 | % | | | 80.6 | % | | | 21.0 | % | | | (27.4 | %) | | | 41.9 | % | | | (34.2 | %) | | | 11.0 | % |
| Net acquisition expense | | | 18.5 | % | | | 24.0 | % | | | 26.8 | % | | | 21.8 | % | | | 15.4 | % | | | 22.7 | % | | | 127.7 | % | | | 23.0 | % |
| Other underwriting expense | | | 12.8 | % | | | 7.3 | % | | | 4.6 | % | | | 9.5 | % | | | 12.3 | % | | | 8.1 | % | | | 7.4 | % | | | 9.9 | % |
| Combined | | | 41.8 | % | | | 54.1 | % | | | 112.0 | % | | | 52.3 | % | | | 0.3 | % | | | 72.7 | % | | | 100.9 | % | | | 43.9 | % |
* 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.
Platinum Underwriters Holdings, Ltd.
Property and Marine Segment – by Quarter ($ in thousands)
| | | Three Months Ended | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Net premiums written | | $ | 57,745 | | | $ | 53,561 | | | $ | 59,169 | | | $ | 57,350 | | | $ | 59,427 | |
| Net premiums earned | | | 53,192 | | | | 56,199 | | | | 55,127 | | | | 58,832 | | | | 51,852 | |
| Net losses and loss adjustment expenses | | | 5,610 | | | | (1,005 | ) | | | 28,339 | | | | 21,292 | | | | (14,205 | ) |
| Net acquisition expenses | | | 10,043 | | | | 10,718 | | | | 9,699 | | | | 9,698 | | | | 8,227 | |
| Other underwriting expenses | | | 7,370 | | | | 8,405 | | | | 7,747 | | | | 7,414 | | | | 7,332 | |
| Segment underwriting income* | | $ | 30,169 | | | $ | 38,081 | | | $ | 9,342 | | | $ | 20,428 | | | $ | 50,498 | |
| | | | | | | | | | | | | | | | | | | | | |
| Underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 10.5 | % | | | (1.8 | %) | | | 51.4 | % | | | 36.2 | % | | | (27.4 | %) |
| Net acquisition expense | | | 18.9 | % | | | 19.1 | % | | | 17.6 | % | | | 16.5 | % | | | 15.9 | % |
| Other underwriting expense | | | 13.9 | % | | | 15.0 | % | | | 14.1 | % | | | 12.6 | % | | | 14.1 | % |
| Combined | | | 43.3 | % | | | 32.3 | % | | | 83.1 | % | | | 65.3 | % | | | 2.6 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Statutory underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 10.5 | % | | | (1.8 | %) | | | 51.4 | % | | | 36.2 | % | | | (27.4 | %) |
| Net acquisition expense | | | 18.5 | % | | | 16.8 | % | | | 20.6 | % | | | 17.3 | % | | | 15.4 | % |
| Other underwriting expense | | | 12.8 | % | | | 15.7 | % | | | 13.1 | % | | | 12.9 | % | | | 12.3 | % |
| Combined | | | 41.8 | % | | | 30.7 | % | | | 85.1 | % | | | 66.4 | % | | | 0.3 | % |
* 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.
Platinum Underwriters Holdings, Ltd.
Casualty Segment – by Quarter ($ in thousands)
| | | Three Months Ended | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Net premiums written | | $ | 71,674 | | | $ | 75,121 | | | $ | 69,992 | | | $ | 79,711 | | | $ | 70,844 | |
| Net premiums earned | | | 65,717 | | | | 78,921 | | | | 72,543 | | | | 75,629 | | | | 70,795 | |
| Net losses and loss adjustment expenses | | | 14,960 | | | | 40,645 | | | | 10,242 | | | | 35,358 | | | | 29,643 | |
| Net acquisition expenses | | | 15,642 | | | | 18,264 | | | | 19,067 | | | | 18,068 | | | | 16,249 | |
| Other underwriting expenses | | | 5,228 | | | | 6,029 | | | | 5,727 | | | | 5,670 | | | | 5,723 | |
| Segment underwriting income* | | $ | 29,887 | | | $ | 13,983 | | | $ | 37,507 | | | $ | 16,533 | | | $ | 19,180 | |
| | | | | | | | | | | | | | | | | | | | | |
| Underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 22.8 | % | | | 51.5 | % | | | 14.1 | % | | | 46.8 | % | | | 41.9 | % |
| Net acquisition expense | | | 23.8 | % | | | 23.1 | % | | | 26.3 | % | | | 23.9 | % | | | 23.0 | % |
| Other underwriting expense | | | 8.0 | % | | | 7.6 | % | | | 7.9 | % | | | 7.5 | % | | | 8.1 | % |
| Combined | | | 54.6 | % | | | 82.2 | % | | | 48.3 | % | | | 78.2 | % | | | 73.0 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Statutory underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 22.8 | % | | | 51.5 | % | | | 14.1 | % | | | 46.8 | % | | | 41.9 | % |
| Net acquisition expense | | | 24.0 | % | | | 23.1 | % | | | 26.5 | % | | | 23.9 | % | | | 22.7 | % |
| Other underwriting expense | | | 7.3 | % | | | 8.0 | % | | | 8.2 | % | | | 7.1 | % | | | 8.1 | % |
| Combined | | | 54.1 | % | | | 82.6 | % | | | 48.8 | % | | | 77.8 | % | | | 72.7 | % |
* 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.
Platinum Underwriters Holdings, Ltd.
Finite Risk Segment – by Quarter ($ in thousands)
| | | Three Months Ended | |
| | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | |
| | | 2014 | | | 2013 | | | 2013 | | | 2013 | | | 2013 | |
| Net premiums written | | $ | 6,358 | | | $ | 19,406 | | | $ | 8,737 | | | $ | 9,309 | | | $ | 4,494 | |
| Net premiums earned | | | 7,364 | | | | 13,147 | | | | 7,690 | | | | 8,472 | | | | 4,206 | |
| Net losses and loss adjustment expenses | | | 5,939 | | | | 6,999 | | | | 5,561 | | | | 6,017 | | | | (1,440 | ) |
| Net acquisition expenses | | | 1,816 | | | | 3,578 | | | | 1,909 | | | | 2,547 | | | | 5,743 | |
| Other underwriting expenses | | | 292 | | | | 437 | | | | 342 | | | | 327 | | | | 333 | |
| Segment underwriting income (loss)* | | $ | (683 | ) | | $ | 2,133 | | | $ | (122 | ) | | $ | (419 | ) | | $ | (430 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 80.6 | % | | | 53.2 | % | | | 72.3 | % | | | 71.0 | % | | | (34.2 | %) |
| Net acquisition expense | | | 24.7 | % | | | 27.2 | % | | | 24.8 | % | | | 30.1 | % | | | 136.5 | % |
| Other underwriting expense | | | 4.0 | % | | | 3.3 | % | | | 4.4 | % | | | 3.9 | % | | | 7.9 | % |
| Combined | | | 109.3 | % | | | 83.7 | % | | | 101.5 | % | | | 105.0 | % | | | 110.2 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Statutory underwriting ratios:* | | | | | | | | | | | | | | | | | | | | |
| Net loss and loss adjustment expense | | | 80.6 | % | | | 53.2 | % | | | 72.3 | % | | | 71.0 | % | | | (34.2 | %) |
| Net acquisition expense | | | 26.8 | % | | | 25.1 | % | | | 23.4 | % | | | 28.7 | % | | | 127.7 | % |
| Other underwriting expense | | | 4.6 | % | | | 2.3 | % | | | 3.9 | % | | | 3.5 | % | | | 7.4 | % |
| Combined | | | 112.0 | % | | | 80.6 | % | | | 99.6 | % | | | 103.2 | % | | | 100.9 | % |
* 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.
Platinum Underwriters Holdings, Ltd.
Net Premiums Written – Supplemental Information ($ in thousands)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Property and Marine | | | | | | |
| Excess-of-Loss | | $ | 41,082 | | | $ | 48,083 | |
| Proportional | | | 16,663 | | | | 11,344 | |
| Subtotal Property and Marine | | | 57,745 | | | | 59,427 | |
| Casualty | | | | | | | | |
| Excess-of-Loss | | | 59,330 | | | | 55,356 | |
| Proportional | | | 12,344 | | | | 15,488 | |
| Subtotal Casualty | | | 71,674 | | | | 70,844 | |
| Finite Risk | | | | | | | | |
| Excess-of-Loss | | | (7 | ) | | | - | |
| Proportional | | | 6,365 | | | | 4,494 | |
| Subtotal Finite Risk | | | 6,358 | | | | 4,494 | |
| Combined Segments | | | | | | | | |
| Excess-of-Loss | | | 100,405 | | | | 103,439 | |
| Proportional | | | 35,372 | | | | 31,326 | |
| Total | | $ | 135,777 | | | $ | 134,765 | |
| | | | | | | | | |
| | | Three Months Ended | |
| | | March 31, | |
| | | | 2014 | | | | 2013 | |
| Property and Marine | | | | | | | | |
| United States | | $ | 34,270 | | | $ | 32,105 | |
| International | | | 23,475 | | | | 27,322 | |
| Subtotal Property and Marine | | | 57,745 | | | | 59,427 | |
| Casualty | | | | | | | | |
| United States | | | 64,016 | | | | 64,792 | |
| International | | | 7,658 | | | | 6,052 | |
| Subtotal Casualty | | | 71,674 | | | | 70,844 | |
| Finite Risk | | | | | | | | |
| United States | | | 6,358 | | | | 4,494 | |
| International | | | - | | | | - | |
| Subtotal Finite Risk | | | 6,358 | | | | 4,494 | |
| Combined Segments | | | | | | | | |
| United States | | | 104,644 | | | | 101,391 | |
| International | | | 31,133 | | | | 33,374 | |
| Total | | $ | 135,777 | | | $ | 134,765 | |
Platinum Underwriters Holdings, Ltd.
Premiums by Line of Business – Three Month Summary ($ in thousands)
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | Gross Premiums Written | | | Net Premiums Written | | | Net Premiums Earned | | | Gross Premiums Written | | | Net Premiums Written | | | Net Premiums Earned | |
| Property and Marine | | | | | | | | | | | | | | | | | | |
| North American Property Proportional | | $ | 9,613 | | | $ | 9,613 | | | $ | 8,953 | | | $ | 4,238 | | | $ | 4,238 | | | $ | 4,334 | |
| North American Property Catastrophe | | | 17,171 | | | | 17,171 | | | | 16,821 | | | | 18,134 | | | | 18,134 | | | | 18,140 | |
| North American Property Risk | | | 6,866 | | | | 6,866 | | | | 6,947 | | | | 7,520 | | | | 7,470 | | | | 7,358 | |
| Other Property, including Crop | | | 1,734 | | | | 1,734 | | | | 1,774 | | | | 3,106 | | | | 3,106 | | | | 3,027 | |
| Marine / Aviation Proportional | | | 2,128 | | | | 2,128 | | | | 2,457 | | | | 1,923 | | | | 1,923 | | | | 1,182 | |
| Marine / Aviation Excess | | | 921 | | | | 921 | | | | 865 | | | | 533 | | | | 533 | | | | 557 | |
| International Property Proportional | | | 4,335 | | | | 4,335 | | | | 4,259 | | | | 4,302 | | | | 4,302 | | | | 4,062 | |
| International Property Catastrophe | | | 14,581 | | | | 13,057 | | | | 9,351 | | | | 17,152 | | | | 17,152 | | | | 10,785 | |
| International Property Risk | | | 1,920 | | | | 1,920 | | | | 1,765 | | | | 2,569 | | | | 2,569 | | | | 2,407 | |
| Subtotal | | | 59,269 | | | | 57,745 | | | | 53,192 | | | | 59,477 | | | | 59,427 | | | | 51,852 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Casualty | | | | | | | | | | | | | | | | | | | | | | | | |
| 1st Dollar GL | | | 289 | | | | 289 | | | | 1,224 | | | | 1,719 | | | | 1,719 | | | | 1,838 | |
| 1st Dollar Other | | | 1,607 | | | | 1,607 | | | | 2,022 | | | | 4,313 | | | | 4,313 | | | | 4,072 | |
| Casualty Excess | | | 42,361 | | | | 42,361 | | | | 37,082 | | | | 42,408 | | | | 42,408 | | | | 42,884 | |
| Accident & Health | | | 17,847 | | | | 16,869 | | | | 13,553 | | | | 13,665 | | | | 13,256 | | | | 12,766 | |
| Clash | | | 1,643 | | | | 1,643 | | | | 1,618 | | | | 1,962 | | | | 1,962 | | | | 1,822 | |
| International Casualty | | | 5,167 | | | | 5,167 | | | | 6,306 | | | | 2,792 | | | | 2,792 | | | | 2,889 | |
| International Motor | | | 520 | | | | 520 | | | | 446 | | | | 656 | | | | 656 | | | | 539 | |
| Financial Lines | | | 3,218 | | | | 3,218 | | | | 3,466 | | | | 3,738 | | | | 3,738 | | | | 3,985 | |
| Subtotal | | | 72,652 | | | | 71,674 | | | | 65,717 | | | | 71,253 | | | | 70,844 | | | | 70,795 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Finite Risk | | | | | | | | | | | | | | | | | | | | | | | | |
| Finite Property | | | (7 | ) | | | (7 | ) | | | (7 | ) | | | - | | | | - | | | | - | |
| Finite Casualty | | | 6,365 | | | | 6,365 | | | | 7,371 | | | | 4,494 | | | | 4,494 | | | | 4,206 | |
| Subtotal | | | 6,358 | | | | 6,358 | | | | 7,364 | | | | 4,494 | | | | 4,494 | | | | 4,206 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | $ | 138,279 | | | $ | 135,777 | | | $ | 126,273 | | | $ | 135,224 | | | $ | 134,765 | | | $ | 126,853 | |
Platinum Underwriters Holdings, Ltd.
($ in thousands)
| | | | March 31, 2014 | | | December 31, 2013 | |
| | | | Fair Value | | | Book Yield | | | Market Yield | | | Fair Value | | | Book Yield | | | Market Yield | |
| Fixed maturity available-for-sale securities: | | | | | | | | | | | | | | | | | | | |
| U.S. Government | | | $ | 4,724 | | | | 2.8 | % | | | 0.3 | % | | $ | 4,765 | | | | 2.8 | % | | | 0.3 | % |
| U.S. Government agencies | | | | 81,909 | | | | 2.9 | % | | | 2.8 | % | | | 51,122 | | | | 2.7 | % | | | 3.0 | % |
| Municipal bonds | | | | 1,275,585 | | | | 3.8 | % | | | 2.4 | % | | | 1,269,247 | | | | 3.8 | % | | | 2.7 | % |
| Non-U.S. governments | | | | 40,501 | | | | 1.2 | % | | | 0.6 | % | | | 40,514 | | | | 1.2 | % | | | 0.6 | % |
| Corporate bonds | | | | 228,414 | | | | 4.2 | % | | | 3.4 | % | | | 227,235 | | | | 4.3 | % | | | 3.7 | % |
| Commercial mortgage-backed securities | | | | 71,154 | | | | 5.9 | % | | | 2.5 | % | | | 77,491 | | | | 5.7 | % | | | 2.3 | % |
| Residential mortgage-backed securities | | | | 162,741 | | | | 1.5 | % | | | 1.2 | % | | | 169,965 | | | | 1.5 | % | | | 1.3 | % |
| Asset-backed securities | | | | 18,164 | | | | 4.8 | % | | | 2.7 | % | | | 17,531 | | | | 4.9 | % | | | 2.4 | % |
| Total fixed maturity available-for-sale securities | | | $ | 1,883,192 | | | | 3.6 | % | | | 2.4 | % | | $ | 1,857,870 | | | | 3.6 | % | | | 2.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fixed maturity trading securities: | | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-U.S. governments | | | $ | 103,128 | | | | 3.5 | % | | | 0.5 | % | | $ | 103,395 | | | | 3.5 | % | | | 0.6 | % |
| Total fixed maturity trading securities | | | $ | 103,128 | | | | 3.5 | % | | | 0.5 | % | | $ | 103,395 | | | | 3.5 | % | | | 0.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Short-term investments | | | $ | 53,469 | | | | 2.7 | % | | | 2.7 | % | | $ | 66,679 | | | | 2.4 | % | | | 2.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | March 31, 2014 | | | | | | | December 31, 2013 | | | | | |
| Credit quality of investments* | | | Fair Value | | | % of Total | | | | | | | Fair Value | | | % of Total | | | | | |
| Aaa | | | $ | 603,201 | | | | 29.6 | % | | | | | | $ | 628,265 | | | | 31.0 | % | | | | |
| Aa | | | | 857,063 | | | | 42.0 | % | | | | | | | 806,282 | | | | 39.8 | % | | | | |
| A | | | | 355,069 | | | | 17.4 | % | | | | | | | 359,803 | | | | 17.7 | % | | | | |
| Baa | | | | 189,844 | | | | 9.3 | % | | | | | | | 200,437 | | | | 9.9 | % | | | | |
| Below investment grade | | | | 34,612 | | | | 1.7 | % | | | | | | | 33,157 | | | | 1.6 | % | | | | |
| Total | | | $ | 2,039,789 | | | | 100.0 | % | | | | | | $ | 2,027,944 | | | | 100.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio information** | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investable Assets | | | $3.5 billion | | | | | | | | | | | $3.5 billion | | | | | | | | | |
| Credit Quality | | | Aa2 | | | | | | | | | | | Aa2 | | | | | | | | | |
| Book Yield | | | | 2.1% | | | | | | | | | | | | 2.1% | | | | | | | | | |
| Duration | | | 2.6 yrs | | | | | | | | | | | 2.6 yrs | | | | | | | | | |
| | * | Rated using external rating agencies (primarily Moody’s) including credit enhancements from insurance entities. As of March 31, 2014, there were approximately $13.0 million and $4.5 million of municipal bonds for which ratings of “Aa” and “A”, respectively, included the benefit of guarantees from third-party insurers that would otherwise be rated as “A” and “Baa”, respectively, without the existence of such guarantees. |
| | ** | Our portfolio includes investments, cash and cash equivalents, accrued investment income and net balances due to and from brokers. |
| | (Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality; Baa-Investment Grade) |
Platinum Underwriters Holdings, Ltd.
Fixed Maturity Available-for-Sale Securities Detail ($ in thousands)
| | | March 31, 2014 | |
| | | Fair Value | | | Net Unrealized Gain (Loss) | | | Credit Quality | | | Duration | | | Weighted Average Life | |
| Fixed maturity available-for-sale securities: | | | | | | | | | | | | | | | |
| U.S. Government | | $ | 4,724 | | | $ | 180 | | | Aaa | | | | 1.5 | | | | |
| U.S. Government agencies | | | 81,909 | | | | 502 | | | Aaa | | | | 6.1 | | | | |
| Municipal bonds: | | | | | | | | | | | | | | | | | | |
| State general obligation bonds | | | 891,557 | | | | 51,005 | | | Aa2 | | | | 5.6 | | | | |
| Essential service bonds* | | | 189,200 | | | | 9,037 | | | Aa3 | | | | 3.9 | | | | |
| State income tax and sales tax bonds | | | 70,464 | | | | 5,939 | | | Aa2 | | | | 6.4 | | | | |
| Other municipal bonds | | | 68,906 | | | | 2,419 | | | Aa2 | | | | 4.5 | | | | |
| Pre-refunded bonds | | | 55,458 | | | | 2,938 | | | Aa2 | | | | 1.7 | | | | |
| Subtotal | | | 1,275,585 | | | | 71,338 | | | Aa2 | | | | 5.2 | | | | |
| Non-U.S. governments | | | 40,501 | | | | 526 | | | Aa1 | | | | 1.1 | | | | |
| Corporate bonds: | | | | | | | | | | | | | | | | | | |
| Industrial | | | 147,857 | | | | 4,389 | | | Baa2 | | | | 5.3 | | | | |
| Utilities | | | 58,606 | | | | 1,290 | | | | A3 | | | | 6.2 | | | | |
| Insurance | | | 21,951 | | | | 2,004 | | | Baa2 | | | | 6.2 | | | | |
| Subtotal | | | 228,414 | | | | 7,683 | | | Baa1 | | | | 5.6 | | | | |
| Commercial mortgage-backed securities | | | 71,154 | | | | 4,593 | | | | A1 | | | | 1.9 | | | | 2.1 | |
| Residential mortgage-backed securities: | | | | | | | | | | | | | | | | | | | | |
| U.S. Government agency residential mortgage-backed securities | | | 146,770 | | | | 942 | | | Aaa | | | | 1.5 | | | | 5.9 | |
| Non-agency residential mortgage-backed securities | | | 15,971 | | | | (308 | ) | | Caa2 | | | | 1.1 | | | | 6.7 | |
| Subtotal | | | 162,741 | | | | 634 | | | Aa2 | | | | 1.4 | | | | 6.0 | |
| Asset-backed securities: | | | | | | | | | | | | | | | | | | | | |
| Asset-backed securities | | | 13,375 | | | | (225 | ) | | Aaa | | | | - | | | | 5.2 | |
| Sub-prime asset-backed securities | | | 4,789 | | | | 2,203 | | | | C | | | | 0.2 | | | | 10.1 | |
| Subtotal | | | 18,164 | | | | 1,978 | | | | A2 | | | | 0.1 | | | | 6.5 | |
| Total | | $ | 1,883,192 | | | $ | 87,434 | | | Aa3 | | | | 4.7 | | | | | |
| | * | Essential service bonds include bonds issued for education, transportation and utilities. |
Platinum Underwriters Holdings, Ltd.
($ in thousands)
| | | March 31, 2014 | |
| | | Par Value | | | Fair Value | | | Net Unrealized Gain (Loss) | | | Credit Quality | |
| Top 20 Holdings | | | | | | | | | | | | |
| American Electric Power Company, Inc. | | $ | 12,500 | | | $ | 12,904 | | | $ | 417 | | | | A3 | |
| Mattel, Inc. | | | 10,000 | | | | 10,512 | | | | 410 | | | Baa1 | |
| Entergy Corporation | | | 9,800 | | | | 9,964 | | | | 160 | | | | A3 | |
| Anglo American plc | | | 8,000 | | | | 9,395 | | | | 484 | | | Baa2 | |
| FirstEnergy Corp. | | | 7,000 | | | | 7,520 | | | | 522 | | | Baa2 | |
| Loews Corporation | | | 6,000 | | | | 7,260 | | | | 1,251 | | | Baa2 | |
| Teck Resources Limited | | | 6,750 | | | | 6,791 | | | | 70 | | | Baa2 | |
| Southern Company | | | 6,625 | | | | 6,431 | | | | (185 | ) | | | A3 | |
| Newmont Mining Corporation | | | 7,000 | | | | 6,350 | | | | (607 | ) | | Baa1 | |
| ArcelorMittal | | | 5,000 | | | | 6,343 | | | | 359 | | | Ba1 | |
| Hess Corporation | | | 5,000 | | | | 6,201 | | | | 493 | | | Baa2 | |
| Northeast Utilities | | | 5,700 | | | | 5,848 | | | | (29 | ) | | | A3 | |
| Southwestern Energy Company | | | 5,300 | | | | 5,439 | | | | 127 | | | Baa3 | |
| Grupo Mexico, S.A.B de C.V. | | | 5,000 | | | | 5,397 | | | | 379 | | | Baa2 | |
| Berkshire Hathaway Inc. | | | 5,375 | | | | 5,374 | | | | 3 | | | | A1 | |
| Joy Global Inc. | | | 5,000 | | | | 5,321 | | | | 293 | | | Baa2 | |
| Lowe’s Companies, Inc. | | | 5,000 | | | | 5,268 | | | | 250 | | | | A3 | |
| Noble Energy, Inc. | | | 5,000 | | | | 5,257 | | | | 240 | | | Baa2 | |
| Encana Corporation | | | 5,000 | | | | 5,127 | | | | 120 | | | Baa2 | |
| FMC Corporation | | $ | 5,000 | | | $ | 5,103 | | | $ | 112 | | | Baa1 | |
Platinum Underwriters Holdings, Ltd.
| | | March 31, 2014 | |
| | | Par Value | | | Fair Value | | | Net Unrealized Gain (Loss) | | | Credit Quality | |
| Top 10 Exposures by Jurisdiction | | | | | | | | | | | | |
| Pennsylvania | | $ | 131,911 | | | $ | 145,614 | | | $ | 8,328 | | | Aa2 | |
| Illinois | | | 122,500 | | | | 128,712 | | | | 4,553 | | | | A3 | |
| Connecticut | | | 99,620 | | | | 105,921 | | | | 5,067 | | | Aa3 | |
| California | | | 90,235 | | | | 103,044 | | | | 10,009 | | | | A1 | |
| Massachusetts | | | 72,425 | | | | 77,124 | | | | 3,760 | | | Aa2 | |
| Texas | | | 70,075 | | | | 76,461 | | | | 4,710 | | | Aaa | |
| Maryland | | | 46,180 | | | | 53,302 | | | | 1,815 | | | Aaa | |
| New Jersey | | | 48,675 | | | | 50,946 | | | | 131 | | | | A2 | |
| New York | | | 44,500 | | | | 48,775 | | | | 4,138 | | | Aa2 | |
| Mississippi | | $ | 42,905 | | | $ | 45,007 | | | $ | 1,519 | | | Aa2 | |
| | | | | | | | | | | | | | | | | |
| | | March 31, 2014 | |
| | | Par Value | | | Fair Value | | | Net Unrealized Gain (Loss) | | | Credit Quality | |
| Top 10 Holdings by Issuer | | | | | | | | | | | | | | | | |
| State of Pennsylvania | | $ | 96,700 | | | $ | 107,941 | | | $ | 6,471 | | | Aa2 | |
| State of Illinois | | | 102,000 | | | | 107,524 | | | | 3,976 | | | | A3 | |
| State of Connecticut | | | 99,620 | | | | 105,921 | | | | 5,067 | | | Aa3 | |
| State of California | | | 88,235 | | | | 100,935 | | | | 9,917 | | | | A1 | |
| State of Massachusetts | | | 59,010 | | | | 62,458 | | | | 2,509 | | | Aa1 | |
| State of Texas | | | 50,145 | | | | 55,347 | | | | 3,441 | | | Aaa | |
| State of Maryland | | | 38,180 | | | | 45,040 | | | | 1,580 | | | Aaa | |
| State of Mississippi | | | 42,905 | | | | 45,007 | | | | 1,519 | | | Aa2 | |
| State of Hawaii | | | 35,000 | | | | 40,383 | | | | 5,271 | | | Aa2 | |
| State of Arkansas | | $ | 30,000 | | | $ | 33,994 | | | $ | 964 | | | Aa1 | |
| | | | | | | | | | | | | | | | | |
| | | March 31, 2014 | | | | | | | | | |
| | | Fair Value | | | % of Total | | | | | | | | | |
Credit quality of municipal bond portfolio* | | | | | | | | | | | | | | | | |
| Aaa | | $ | 209,733 | | | | 16.4 | % | | | | | | | | |
| Aa | | | 753,425 | | | | 59.1 | % | | | | | | | | |
| A | | | 303,515 | | | | 23.8 | % | | | | | | | | |
| Baa | | | 7,829 | | | | 0.6 | % | | | | | | | | |
| Below investment grade | | | 1,083 | | | | 0.1 | % | | | | | | | | |
| Total | | $ | 1,275,585 | | | | 100.0 | % | | | | | | | | |
| | * | Rated using external rating agencies (primarily Moody’s) including credit enhancements from insurance entities. As of March 31, 2014, there were approximately $13.0 million and $4.5 million of municipal bonds for which ratings of “Aa” and “A”, respectively, included the benefit of guarantees from third-party insurers that would otherwise be rated as “A” and “Baa”, respectively, without the existence of such guarantees. |
| | (Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality; Baa-Investment Grade) |
Platinum Underwriters Holdings, Ltd.
Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments ($ in thousands)
| | | Three Months Ended | |
| | | March 31, | |
| | | 2014 | | | 2013 | |
| Net realized gains (losses) on investments by entity: | | | | | | |
| Subsidiary domiciled in Bermuda | | $ | (515 | ) | | $ | 8,474 | |
| Subsidiaries domiciled in the United States | | | - | | | | 4,844 | |
| Total | | $ | (515 | ) | | $ | 13,318 | |
| | | | | | | | | |
| Net realized gains (losses) on investments by type: | | | | | | | | |
| Sale of securities | | $ | - | | | $ | 14,276 | |
| Fair value adjustments on trading securities | | | (515 | ) | | | (958 | ) |
| Total | | $ | (515 | ) | | $ | 13,318 | |
| | | | | | | | | |
| Net impairment losses on investments by entity: | | | | | | | | |
| Subsidiary domiciled in Bermuda | | $ | 88 | | | $ | 328 | |
| Subsidiaries domiciled in the United States | | | - | | | | 93 | |
| Total | | $ | 88 | | | $ | 421 | |
| | | | | | | | | |
| Net impairment losses on investments by type of security: | | | | | | | | |
| Non-agency residential mortgage-backed securities | | $ | 88 | | | $ | 336 | |
| Sub-prime asset-backed securities | | | - | | | | 85 | |
| Total | | $ | 88 | | | $ | 421 | |
Platinum Underwriters Holdings, Ltd.
Analysis of Losses and Loss Adjustment Expenses ($ in thousands)
| | | Analysis of Losses and Loss Adjustment Expenses | |
| | | Three Months Ended March 31, 2014 | | | Twelve Months Ended December 31, 2013 | |
| | | Gross | | | Ceded | | | Net | | | Paid to Incurred % | | | Gross | | | Ceded | | | Net | | | Paid to Incurred % | |
| Paid losses and loss adjustment expenses | | $ | 97,923 | | | $ | - | | | $ | 97,923 | | | | 369.4 | % | | $ | 444,890 | | | $ | (476 | ) | | $ | 445,366 | | | | 266.0 | % |
| Change in unpaid losses and loss adjustment expenses | | | (71,160 | ) | | | 254 | | | | (71,414 | ) | | | | | | | (280,325 | ) | | | (2,405 | ) | | | (277,920 | ) | | | | |
| Losses and loss adjustment expenses | | $ | 26,763 | | | $ | 254 | | | $ | 26,509 | | | | | | | $ | 164,565 | | | $ | (2,881 | ) | | $ | 167,446 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Analysis of Unpaid Losses and Loss Adjustment Expenses | |
| | | As of March 31, 2014 (1) | | | As of December 31, 2013 (2) | |
| | | Gross | | | Ceded | | | Net | | | % | | | Gross | | | Ceded | | | Net | | % | |
| Outstanding losses and loss adjustment expenses | | $ | 673,794 | | | $ | 1,001 | | | $ | 672,793 | | | | 42.0 | % | | $ | 683,430 | | | $ | 1,001 | | | $ | 682,429 | | | | 40.9 | % |
| Incurred but not reported | | | 930,968 | | | | 446 | | | | 930,522 | | | | 58.0 | % | | | 987,935 | | | | 193 | | | | 987,742 | | | | 59.1 | % |
| Unpaid losses and loss adjustment expenses | | $ | 1,604,762 | | | $ | 1,447 | | | $ | 1,603,315 | | | | 100.0 | % | | $ | 1,671,365 | | | $ | 1,194 | | | $ | 1,670,171 | | | | 100.0 | % |
| (1) | Net unpaid losses and loss adjustment expenses include the effects of foreign currency exchange rate losses of $4,558 for the three months ended March 31, 2014. |
| (2) | Net unpaid losses and loss adjustment expenses include the effects of foreign currency exchange rate gains of $9,594 for the twelve months ended December 31, 2013. |
Platinum Underwriters Holdings, Ltd.
Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions ($ in thousands)
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | Property and Marine | | | Casualty | | | Finite Risk | | | Total | | | Property and Marine | | | Casualty | | | Finite Risk | | | Total | |
| Non-Major Catastrophe Favorable (Unfavorable) Development | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss development related to prior years | | $ | 4,118 | | | $ | 32,603 | | | $ | (239 | ) | | $ | 36,482 | | | $ | 14,504 | | | $ | 23,583 | | | $ | 4,862 | | | $ | 42,949 | |
| Net premium adjustments related to prior years' losses | | | 10 | | | | 863 | | | | - | | | | 873 | | | | 53 | | | | 124 | | | | - | | | | 177 | |
| Net commission adjustments related to prior years' losses | | | 125 | | | | 119 | | | | (378 | ) | | | (134 | ) | | | 170 | | | | 673 | | | | (4,886 | ) | | | (4,043 | ) |
| Net favorable (unfavorable) development | | | 4,253 | | | | 33,585 | | | | (617 | ) | | | 37,221 | | | | 14,727 | | | | 24,380 | | | | (24 | ) | | | 39,083 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Major Catastrophe Favorable (Unfavorable) Development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss development related to prior years | | | 9,746 | | | | - | | | | 20 | | | | 9,766 | | | | 17,089 | | | | 29 | | | | - | | | | 17,118 | |
| Net premium adjustments related to prior years' losses | | | (12 | ) | | | - | | | | (7 | ) | | | (19 | ) | | | (1,680 | ) | | | - | | | | - | | | | (1,680 | ) |
| Net commission adjustments related to prior years' losses | | | (4 | ) | | | - | | | | - | | | | (4 | ) | | | (23 | ) | | | - | | | | - | | | | (23 | ) |
| Net favorable (unfavorable) development | | | 9,730 | | | | - | | | | 13 | | | | 9,743 | | | | 15,386 | | | | 29 | | | | - | | | | 15,415 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total net favorable (unfavorable) development | | $ | 13,983 | | | $ | 33,585 | | | $ | (604 | ) | | $ | 46,964 | | | $ | 30,113 | | | $ | 24,409 | | | $ | (24 | ) | | $ | 54,498 | |
Platinum Underwriters Holdings, Ltd.
Estimated Exposure to Peak Zone Property Catastrophe Losses As of April 1, 2014
($ in millions)
Estimated Probable Maximum Losses by Zone and Peril
| | | | | 20 Year Return Period | | | 100 Year Return Period | | | 250 Year Return Period | |
| Zones | | Peril | | Estimated Gross Loss | | | Estimated Net Loss | | | Estimated Gross Loss | | | Estimated Net Loss | | | Estimated Gross Loss | | | Estimated Net Loss | |
| United States/Caribbean | | Hurricane | | $ | 97 | | | $ | 95 | | | $ | 194 | | | $ | 181 | | | $ | 236 | | | $ | 220 | |
| United States | | Earthquake | | | 28 | | | | 28 | | | | 110 | | | | 110 | | | | 151 | | | | 151 | |
| Pan-European | | Windstorm | | | 55 | | | | 55 | | | | 135 | | | | 135 | | | | 163 | | | | 163 | |
| Japanese | | Earthquake | | | 8 | | | | 8 | | | | 144 | | | | 144 | | | | 174 | | | | 174 | |
| Japanese | | Typhoon | | | 14 | | | | 14 | | | | 65 | | | | 65 | | | | 75 | | | | 75 | |
| Canadian | | Earthquake | | $ | - | | | $ | - | | | $ | 33 | | | $ | 33 | | | $ | 56 | | | $ | 56 | |
The Company has developed the estimates of losses expected from certain catastrophes for its portfolio of property, marine, workers’ compensation and personal accident contracts 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 net of reinstatement premiums but before income tax. Net loss estimates are net of reinstatement premiums and net of retrocessional recoveries but before income tax.
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.
