EXHIBIT 99.1
Contact: Justin Cressall
Treasurer
(441) 298-0753
PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS
THIRD QUARTER 2004 FINANCIAL RESULTS
HAMILTON, BERMUDA, NOVEMBER 8, 2004 - Platinum Underwriters Holdings, Ltd.
(NYSE: PTP) today reported results for the third quarter ended September 30,
2004.
Summary of the results for the quarter are as follows:
- Net loss was $69.8 million.
- Basic net loss per common share was $1.62.
- GAAP combined ratio was 124.8%.
- Net premiums written were $440.5 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite
Risk segments for the quarter ended September 30, 2004 were $120.6 million,
$172.0 million and $147.9 million, respectively, representing 27.4%, 39.0% and
33.6%, respectively, of our total net premiums written. Combined ratios for
these segments were 164.2%, 95.9% and 116.1%, respectively.
During the quarter the Company recorded an estimated after-tax negative impact
from hurricanes Charley, Frances, Ivan and Jeanne of approximately $145 million.
The impact of the hurricanes for both the quarter and nine months ended
September 30, 2004 was as follows: gross losses of $186 million, additional
premiums earned of $20 million and reduction in profit commissions of $10
million. Hurricane losses adversely impacted the quarterly combined ratio by
approximately 41.6 percentage points.
Due to the unusual size and frequency of the recent hurricanes, the Company has
received relatively few claims advices from its brokers and clients. As a
result, the estimated impact is based on reported losses to date, commercial and
proprietary catastrophe modeling and industry losses of approximately $28
billion. Consequently, the ultimate impact on the Company's results arising from
these events may differ materially from the current estimate.
The Company recently evaluated the negative impact of the hurricanes in light of
an excess-of-loss retrocessional contract which provided aggregate coverage to
the Company. Based on results of operations for the quarter ended September 30,
2004 a cession to the contract was indicated; however, that cession was unlikely
to produce a significant economic benefit to the Company and accordingly the
Company commuted the contract effective November 8, 2004. Results for the
quarter ended September 30, 2004 reflect no benefit from this contract.
2
As of September 30, 2004 total assets were $3,294.3 million, of which cash and
fixed maturity investments were $2,374.3 million, an increase of $812.5 million
and $583.8 million from their respective balances as of December 31, 2003. Net
investment income was $21.4 million for the quarter ended September 30, 2004.
As of September 30, 2004 shareholders' equity was $1,088.5 million and book
value per share was $25.30. Shareholders' equity increased $21.3 million or
$0.51 per share from their respective balances as of December 31, 2003.
Steven H. Newman, Chairman of the Board, commented: "Despite our hurricane
losses, Platinum distinguished itself by achieving a modest underwriting profit
on a year to date basis. This serves to confirm the quality and diversity of our
underwriting commitments."
Gregory Morrison, Chief Executive Officer, commented: "While our results this
quarter were dominated by the losses arising from the hurricanes, these losses
were consistent with the size of our portfolio and our position in the market.
We are encouraged by the underlying growth of our business and the opportunities
we see for the future. Market conditions should provide us with a strong
upcoming January reinsurance renewal season."
The results for the quarter ended September 30, 2004, compared to the quarter
ended September 30, 2003 are as follows:
- Net income decreased $107.6 million and the combined ratio increased
39.4 percentage points, largely as a result of the significant
catastrophe losses incurred in the current period.
- Net premiums written increased $159.2 million, or 56.6%, driven by
an increase in all three segments. Net premiums earned rose $110.8
million or 40.7%.
- Net investment income increased $6.6 million or 45.0%.
Summary of the results for the nine months ended September 30, 2004 are as
follows:
- Net income was $34.9 million.
- Basic and diluted net income per common share was $0.81 and $0.78,
respectively.
- GAAP combined ratio was 99.6%.
- Net premiums written were $1.3 billion.
The results for the nine months ended September 30, 2004, compared to the nine
months ended September 30, 2003 were as follows:
- Net income decreased $60.1 million and the combined ratio increased
13.9 percentage points, largely as a result of the significant
catastrophe losses incurred in the current period.
- Net premiums written increased $302.5 million, or 31.9%, driven by
an increase in all three segments. Net premiums earned rose $225.3
million or 28.5%.
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- Net investment income increased $15.9 million or 37.4%.
Updated Guidance
Based on the third quarter results, the current industry environment, the mix of
business underwritten and in the absence of any unusual catastrophe activity,
Platinum estimates that net premiums written for 2004 will be approximately $1.6
billion, and its GAAP combined ratio for 2004 will be approximately 97%.
Platinum expects its combined portfolio of cash and fixed maturity investments
to be approximately $2.5 billion at year-end 2004. On this basis Platinum now
projects that earnings for 2004 will be approximately $1.75 per diluted common
share based on an estimate of 51,000,000 diluted shares.
Financial Supplement
Platinum has posted a financial supplement on the Financial Reports page of the
Investor Relations section of its website (Financial Supplement). The financial
supplement provides additional detail regarding Platinum's financial performance
and that of its various business segments.
Teleconference
Platinum will host a teleconference to discuss its financial results on Tuesday,
November 9, 2004 at 8:30 am Eastern Time (ET). The call can be accessed by
dialing 877-502-9274 (US callers) or 913-981-5584 (international callers) or in
a listen-only mode via the Investor Relations section of Platinum's website at
www.platinumre.com. Those who intend to access the teleconference should
register at least ten minutes in advance to ensure access to the call.
The teleconference will be recorded and a replay will be available from 11:30 am
ET on Tuesday, November 9 until midnight ET on Tuesday, November 16. To access
the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820
(international callers) and specify passcode 878959. The teleconference will
also be archived on the Investor Relations section of www.platinumre.com for the
same period of time.
About Platinum
Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of
property, casualty and finite risk reinsurance coverages, through reinsurance
intermediaries, to a diverse clientele on a worldwide basis. Platinum operates
through its principal subsidiaries in Bermuda, the United States and the United
Kingdom. The Company has a financial strength rating of "A" (Excellent) from
A.M. Best Company, Inc. For further information, please visit Platinum's website
at www.platinumre.com.
Safe Harbor Statement Regarding Forward-Looking Statements
Management believes certain statements in this press release may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include all statements
that do not relate solely to historical or current facts, and can be identified
by the use of words such as "may," "will," "expect," "project," "estimate,"
"anticipate," "plan" or "continue." These forward-looking statements are based
upon the Company's current plans or expectations and are subject to a number of
uncertainties and risks that could significantly affect current plans,
anticipated actions and the Company's future financial condition and results.
The uncertainties and risks include, but are not limited to, those relating to
successfully executing the Company's business strategy; the adequacy of the
Company's loss reserves; conducting operations in a competitive environment;
conducting operations in foreign countries; dependence upon the availability of
key executives and reinsurance brokers; general economic conditions, including
the effects of market volatility or a prolonged U.S. or global economic downturn
or recession; variations in political, economic or other factors such as
currency exchange rates, inflation rates and recessionary or expansive trends;
the cyclicality of the property and casualty reinsurance business; tax, legal or
regulatory restrictions or limitations applicable to the Company or the property
and casualty reinsurance business generally, and changes therein; significant
4
weather-related or other natural or human-made disasters, civil unrest or other
external factors over which the Company has no control; and changes in the
Company's plans, strategies, objectives, expectations or intentions, which may
happen at any time at the Company's discretion. As a consequence, current plans,
anticipated actions and future financial condition and results may differ from
those expressed in any forward-looking statements made by or on behalf of the
Company. Additionally, forward-looking statements speak only as of the date they
are made, and the Company assumes no obligation to update or revise any of them
in light of new information, future events or otherwise.
# # #
5
PLATINUM UNDERWRITERS HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
------------ ------------ ------------ ------------
REVENUES
Net premiums earned $ 383,090 $ 272,265 $ 1,014,999 $ 789,711
Net investment income 21,429 14,780 58,290 42,414
Net realized capital gains 2,262 1,508 1,435 2,771
Other income 1,021 544 2,137 4,444
----------- ----------- ----------- -----------
Total revenues 407,802 289,097 1,076,861 839,340
----------- ----------- ----------- -----------
EXPENSES
Losses and loss adjustment expenses 384,724 157,208 736,159 452,813
Acquisition expenses 81,271 60,408 232,886 172,503
Other underwriting expenses 12,234 15,093 43,084 51,953
Corporate expenses 3,166 3,406 10,352 19,710
Net foreign currency exchange losses (gains) (628) (1,356) (326) 3,456
Interest expense 2,322 2,444 6,952 7,150
----------- ----------- ----------- -----------
Total expenses 483,089 237,203 1,029,107 707,585
----------- ----------- ----------- -----------
Income (loss) before income tax
expense (benefit) (75,287) 51,894 47,754 131,755
Income tax expense (benefit) (5,535) 14,077 12,893 36,747
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (69,752) $ 37,817 $ 34,861 $ 95,008
=========== =========== =========== ===========
BASIC
Weighted average shares outstanding 43,127 43,022 43,186 43,012
Basic earnings per share $ (1.62) $ 0.88 $ 0.81 $ 2.21
DILUTED
Weighted average shares outstanding 43,127 48,876 50,422 48,904
Diluted earnings per share $ (1.62) $ 0.81 $ 0.78 $ 2.04
COMPREHENSIVE INCOME (LOSS)
Net income (loss) $ (69,752) $ 37,817 $ 34,861 $ 95,008
Other comprehensive income (loss), net of tax 31,007 (11,984) (2,328) 16,008
----------- ----------- ----------- -----------
Comprehensive income (loss) $ (38,745) $ 25,833 $ 32,533 $ 111,016
=========== =========== =========== ===========
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PLATINUM UNDERWRITERS HOLDINGS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
September 30, 2004
------------------ December 31, 2003
(Unaudited) -----------------
ASSETS
Investments and cash and cash equivalents $2,374,310 $1,790,509
Receivables 638,463 487,441
Accrued investment income 26,613 17,492
Reinsurance balances (prepaid and recoverable) 5,176 11,231
Deferred acquisition costs 142,000 79,307
Other assets 107,751 95,881
---------- ----------
Total assets $3,294,313 $2,481,861
========== ==========
LIABILITIES
Unpaid losses and loss adjustment expenses $1,222,364 $ 736,934
Unearned premiums 537,251 305,985
Debt obligations 137,500 137,500
Commissions payable 220,902 176,310
Other liabilities 87,767 57,929
---------- ----------
Total liabilities 2,205,784 1,414,658
TOTAL SHAREHOLDERS' EQUITY 1,088,529 1,067,203
---------- ----------
Total liabilities and shareholders' equity $3,294,313 $2,481,861
========== ==========
---------- ----------
BOOK VALUE PER SHARE $ 25.30 $ 24.79
========== ==========
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PLATINUM UNDERWRITERS HOLDINGS, LTD.
SEGMENT REPORTING
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
($ IN THOUSANDS)
Property and
Marine Casualty Finite Risk Total
------------ ---------- ----------- ----------
THREE MONTHS ENDED SEPTEMBER 30, 2004
SEGMENT UNDERWRITING RESULTS
Net premiums written $ 120,629 171,967 147,899 $ 440,495
Net premiums earned 135,430 156,512 91,148 383,090
---------- ---------- ---------- ----------
Losses and loss adjustment expenses 195,495 105,559 83,670 384,724
Acquisition expenses 20,834 38,935 21,502 81,271
Other underwriting expenses 5,956 5,617 661 12,234
---------- ---------- ---------- ----------
Total underwriting expenses 222,285 150,111 105,833 478,229
---------- ---------- ---------- ----------
Segment underwriting income (loss) $ (86,855) 6,401 (14,685) $ (95,139)
========== ========== ========== ==========
GAAP UNDERWRITING RATIOS
Loss and loss adjustment expense 144.4% 67.4% 91.8% 100.4%
Acquisition expense 15.4% 24.9% 23.6% 21.2%
Other underwriting expense 4.4% 3.6% 0.7% 3.2%
---------- ---------- ---------- ----------
Combined 164.2% 95.9% 116.1% 124.8%
---------- ---------- ---------- ----------
STATUTORY UNDERWRITING RATIOS
Loss and loss adjustment expense 144.4% 67.4% 91.8% 100.4%
Acquisition expense 15.0% 24.7% 27.3% 22.9%
Other underwriting expense 4.9% 3.3% 0.4% 2.8%
---------- ---------- ---------- ----------
Combined 164.3% 95.4% 119.5% 126.1%
---------- ---------- ---------- ----------
THREE MONTHS ENDED SEPTEMBER 30, 2003
SEGMENT UNDERWRITING RESULTS
Net premiums written $ 77,114 134,991 69,211 $ 281,316
Net premiums earned 81,113 106,298 84,854 272,265
---------- ---------- ---------- ----------
Losses and loss adjustment expenses 41,237 71,052 44,919 157,208
Acquisition expenses 9,930 29,465 21,013 60,408
Other underwriting expenses 7,412 5,065 2,616 15,093
---------- ---------- ---------- ----------
Total underwriting expenses 58,579 105,582 68,548 232,709
---------- ---------- ---------- ----------
Segment underwriting income $ 22,534 716 16,306 $ 39,556
========== ========== ========== ==========
GAAP UNDERWRITING RATIOS
Loss and loss adjustment expense 50.8% 66.8% 52.9% 57.7%
Acquisition expense 12.2% 27.7% 24.8% 22.2%
Other underwriting expense 9.1% 4.8% 3.1% 5.5%
---------- ---------- ---------- ----------
Combined 72.1% 99.3% 80.8% 85.4%
---------- ---------- ---------- ----------
STATUTORY UNDERWRITING RATIOS
Loss and loss adjustment expense 50.8% 66.8% 52.9% 57.7%
Acquisition expense 11.2% 28.0% 29.8% 23.9%
Other underwriting expense 9.6% 3.8% 3.8% 5.4%
---------- ---------- ---------- ----------
Combined 71.6% 98.6% 86.5% 87.0%
---------- ---------- ---------- ----------
The GAAP 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) Losses & loss adjustment expenses are divided by net premiums earned;
(2) 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.
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PLATINUM UNDERWRITERS HOLDINGS, LTD.
SEGMENT REPORTING
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)
($ IN THOUSANDS)
Property and
Marine Casualty Finite Risk Total
------------ ------------ ------------ ------------
NINE MONTHS ENDED SEPTEMBER 30, 2004
SEGMENT UNDERWRITING RESULTS
Net premiums written $ 393,764 508,693 348,671 $ 1,251,128
Net premiums earned 353,423 424,964 236,612 1,014,999
------------ ------------ ------------ ------------
Losses and loss adjustment expenses 285,047 293,734 157,378 736,159
Acquisition expenses 57,491 105,765 69,630 232,886
Other underwriting expenses 21,280 15,979 5,825 43,084
------------ ------------ ------------ ------------
Total underwriting expenses 363,818 415,478 232,833 1,012,129
------------ ------------ ------------ ------------
Segment underwriting income (loss) $ (10,395) 9,486 3,779 $ 2,870
============ ============ ============ ============
GAAP UNDERWRITING RATIOS
Loss and loss adjustment expense 80.7% 69.1% 66.5% 72.5%
Acquisition expense 16.3% 24.9% 29.4% 22.9%
Other underwriting expense 6.0% 3.8% 2.5% 4.2%
------------ ------------ ------------ ------------
Combined 103.0% 97.8% 98.4% 99.6%
------------ ------------ ------------ ------------
STATUTORY UNDERWRITING RATIOS
Loss and loss adjustment expense 80.7% 69.1% 66.5% 72.5%
Acquisition expense 16.3% 24.7% 30.3% 23.6%
Other underwriting expense 5.4% 3.1% 1.7% 3.4%
------------ ------------ ------------ ------------
Combined 102.4% 96.9% 98.5% 99.5%
------------ ------------ ------------ ------------
NINE MONTHS ENDED SEPTEMBER 30, 2003
SEGMENT UNDERWRITING RESULTS
Net premiums written $ 278,369 381,005 289,277 $ 948,651
Net premiums earned 265,052 289,975 234,684 789,711
------------ ------------ ------------ ------------
Losses and loss adjustment expenses 135,292 199,489 118,032 452,813
Acquisition expenses 38,734 74,943 58,826 172,503
Other underwriting expenses 28,243 14,225 9,485 51,953
------------ ------------ ------------ ------------
Total underwriting expenses 202,269 288,657 186,343 677,269
------------ ------------ ------------ ------------
Segment underwriting income $ 62,783 1,318 48,341 $ 112,442
============ ============ ============ ============
GAAP UNDERWRITING RATIOS
Loss and loss adjustment expense 51.0% 68.8% 50.3% 57.3%
Acquisition expense 14.6% 25.8% 25.1% 21.8%
Other underwriting expense 10.7% 4.9% 4.0% 6.6%
------------ ------------ ------------ ------------
Combined 76.3% 99.5% 79.4% 85.7%
------------ ------------ ------------ ------------
STATUTORY UNDERWRITING RATIOS
Loss and loss adjustment expense 51.0% 68.8% 50.3% 57.3%
Acquisition expense 14.2% 26.6% 24.6% 22.3%
Other underwriting expense 10.1% 3.7% 3.3% 5.5%
------------ ------------ ------------ ------------
Combined 75.3% 99.1% 78.2% 85.1%
------------ ------------ ------------ ------------
The GAAP 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) Losses & loss adjustment expenses are divided by net premiums earned;
(2) 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.