Platinum Underwriters Holdings, Ltd. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2008
Published In: Bermuda, Business 
Tuesday, July 22, 2008 4:02 PM
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HAMILTON, Bermuda, July 22 /PRNewswire-FirstCall/ -- Platinum Underwriters
Holdings, Ltd. (NYSE: PTP) today reported net income of $102.4 million, or
$1.82 per diluted common share, for the quarter ended June 30, 2008. The
results for the quarter include net premiums earned of $258.0 million, a
decrease of 12.8% from the same quarter last year, net favorable development
of $36.8 million, compared with net favorable development of $22.2 million for
the same quarter last year, and net investment income of $46.9 million, a
decrease of 14.2% from the same quarter last year.

Michael D. Price, Chief Executive Officer, commented, "Our results reflect
disciplined underwriting, favorable reserve development, lower than expected
catastrophe activity, significant investment income, and active capital
management. Our net income was very strong and resulted in record earnings
per diluted common share. Our book value per share growth of 2.7% for the
quarter and 8.7% year to date reflected an increase in unrealized losses in
our investment portfolio."

Mr. Price added, "Reinsurers face challenging market conditions for both
their underwriting and investment activities. Through this turbulent period,
we will continue taking risk on both sides of the balance sheet provided we
believe we are being adequately compensated for doing so."


Results for the quarter ended June 30, 2008 were summarized as follows:

-- Net income was $102.4 million, or $1.82 per diluted common share.

-- Net premiums written were $224.9 million and net premiums earned were
$258.0 million.

-- GAAP combined ratio was 68.4%.
-- Net investment income was $46.9 million.



Results for the quarter ended June 30, 2008 compared to the quarter ended
June 30, 2007 were summarized as follows:

-- Net income increased $11.7 million (or 12.9%).

-- Net premiums written decreased $62.9 million (or 21.8%) and net
premiums earned decreased $37.9 million (or 12.8%).

-- GAAP combined ratio decreased 12.4 percentage points.
-- Net investment income decreased $7.8 million (or 14.2%).



Net premiums written for Platinum's Property and Marine, Casualty and
Finite Risk segments for the quarter ended June 30, 2008 were $118.6 million,
$102.9 million and $3.4 million, respectively, representing 52.7%, 45.8% and
1.5%, respectively, of the total net premiums written. Combined ratios for
these segments were 47.8%, 93.6% and 91.2%, respectively, for the quarter.
Compared to the quarter ended June 30, 2007, net premiums written decreased by
$0.6 million (or 0.5%), $59.7 million (or 36.7%) and $2.6 million (or 43.2%)
in the Property and Marine, Casualty and Finite Risk segments, respectively.


Results for the six months ended June 30, 2008 were summarized as follows:

-- Net income was $207.5 million, or $3.58 per diluted common share.

-- Net premiums written were $521.1 million and net premiums earned were
$559.8 million.

-- GAAP combined ratio was 73.7%.
-- Net investment income was $96.0 million.



Results for the six months ended June 30, 2008 compared to the six months
ended June 30, 2007 were summarized as follows:

-- Net income increased $44.0 million (or 26.9%).

-- Net premiums written decreased $65.5 million (or 11.2%) and net
premiums earned decreased $20.9 million (or 3.6%).

-- GAAP combined ratio decreased 10.1 percentage points.
-- Net investment income decreased $10.4 million (or 9.8%).



Net premiums written for Platinum's Property and Marine, Casualty and
Finite Risk segments for the six months ended June 30, 2008 were $287.4
million, $228.5 million, and $5.2 million, respectively, representing 55.2%,
43.8% and 1.0%, respectively, of the total net premiums written. Combined
ratios for these segments were 53.9%, 95.7% and 106.3%, respectively, for the
six months ended June 30, 2008. Compared to the six months ended June 30,
2007, net premiums written increased $30.5 million (or 11.9%) in the Property
and Marine segment and decreased $86.3 million (or 27.4%) and $9.8 million (or
65.0%) in the Casualty and Finite Risk segments, respectively.

Total assets were $4.99 billion as of June 30, 2008, a decrease of $89.9
million (or 1.8%) from $5.08 billion as of December 31, 2007. Cash, cash
equivalents and fixed maturity investments were $4.38 billion as of June 30,
2008, a decrease of $83.1 million (or 1.9%) from December 31, 2007.

Shareholders' equity was $1.97 billion as of June 30, 2008, a decrease of
$29.8 million (or 1.5%) from December 31, 2007. Book value per common share
was $36.99 as of June 30, 2008 based on 48.7 million common shares
outstanding, an increase of $2.95 (or 8.7%) from $34.04 as of December 31,
2007 based on 53.8 million common shares outstanding.


Financial Supplement

Platinum has posted a financial supplement on the Financial Reports page
of the Investor Relations section of its website (Financial Supplement). The
financial supplement provides additional detail regarding the financial
performance of Platinum and its business segments.


Teleconference

Platinum will host a teleconference to discuss its financial results on
Wednesday, July 23, 2008 at 8:30 a.m. Eastern time. The call may be accessed
by dialing 888-802-2275 (US callers) or 913-312-1508 (international callers),
or in a listen-only mode via the Investor Relations section of Platinum's
website at www.platinumre.com. Those who intend to participate in the
teleconference should register at least ten minutes in advance to ensure
access to the call.

The teleconference will be recorded and a replay will be available from
11:00 a.m. Eastern time on Wednesday, July 23, 2008 until midnight Eastern
time on Wednesday, July 30, 2008. To access the replay by telephone, dial
888-203-1112 (US callers) or 719-457-0820 (international callers) and specify
passcode 9206842. The teleconference will also be archived on the Investor
Relations section of Platinum's website at www.platinumre.com for the same
period of time.


Non-GAAP Financial Measures

In presenting the Company's results, management has included and discussed
certain schedules containing financial measures that are not calculated under
standards or rules that comprise accounting principles generally accepted in
the United States (GAAP). Such measures, including segment underwriting
income (or loss) and related underwriting ratios are referred to as non-GAAP.
These non-GAAP measures may be defined or calculated differently by other
companies. Management believes these measures, which are used to monitor the
results of operations, allow for a more complete understanding of the
underlying business. These measures should not be viewed as a substitute for
those determined in accordance with GAAP. A reconciliation of such measures
to the most comparable GAAP figures such as income before income tax expense
and total shareholders' equity is presented in the attached financial
information in accordance with Regulation G.


About Platinum

Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of
property, casualty and finite risk reinsurance coverages, through reinsurance
intermediaries, to a diverse clientele on a worldwide basis. Platinum
operates through its principal subsidiaries in Bermuda and the United States.
The Company has a financial strength rating of A (Excellent) from A.M. Best
Company, Inc. For further information, please visit Platinum's website at
www.platinumre.com.


Safe Harbor Statement Regarding Forwarding-Looking Statements

Management believes certain statements in this press release may
constitute "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements include all statements that do not relate
solely to historical or current facts, and can be identified by the use of
words such as "may," "should," "estimate," "expect," "anticipate," "intend,"
"believe," "predict," "potential," or words of similar import.
Forward-looking statements are necessarily based on estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and risks, many of which are subject to change. These
uncertainties and risks include, but are not limited to, conducting operations
in a competitive environment; our ability to maintain our A.M. Best Company,
Inc. rating; significant weather-related or other natural or man-made
disasters over which the Company has no control; the effectiveness of our loss
limitation methods and pricing models; the adequacy of the Company's liability
for unpaid losses and loss adjustment expenses; the availability of
retrocessional reinsurance on acceptable terms; our ability to maintain our
business relationships with reinsurance brokers; general political and
economic conditions, including the effects of civil unrest, acts of terrorism,
war or a prolonged U.S. or global economic downturn or recession; the
cyclicality of the property and casualty reinsurance business; market
volatility and interest rate and currency exchange rate fluctuation; tax,
regulatory or legal restrictions or limitations applicable to the Company or
the property and casualty reinsurance business generally; and changes in the
Company's plans, strategies, objectives, expectations or intentions, which may
happen at any time at the Company's discretion. As a consequence, current
plans, anticipated actions and future financial condition and results may
differ from those expressed in any forward-looking statements made by or on
behalf of the Company. Additionally, forward-looking statements speak only as
of the date they are made, and we undertake no obligation to release publicly
the results of any future revisions or updates we may make to forward-looking
statements to reflect new information or circumstances after the date hereof
or to reflect the occurrence of future events.




Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of June 30, 2008 and December 31, 2007
(amounts in thousands, except per share amounts)

June 30, 2008 December 31, 2007
(Unaudited)
Assets
Investments $3,425,356 $3,371,348
Cash, cash equivalents and short-term
investments 953,059 1,090,155
Reinsurance premiums receivable 262,128 244,360
Accrued investment income 34,429 34,696
Reinsurance balances (prepaid and
recoverable) 27,650 37,348
Deferred acquisition costs 62,237 70,508
Funds held by ceding companies 157,603 165,604
Other assets 66,342 64,731

Total assets $4,988,804 $5,078,750

Liabilities
Unpaid losses and loss adjustment expenses $2,352,116 $2,361,038
Unearned premiums 263,672 298,498
Debt obligations 250,000 250,000
Commissions payable 110,346 100,204
Other liabilities 44,078 70,633

Total liabilities 3,020,212 3,080,373

Total shareholders' equity 1,968,592 1,998,377

Total liabilities and
shareholders' equity $4,988,804 $5,078,750

Book value per common share (a) $36.99 $34.04


(a) Book value per common share is determined by dividing shareholders'
equity, excluding capital attributable to preferred shares, by actual common
shares outstanding including unvested restricted common shares. Unvested
restricted common shares were as follows: June 30, 2008 - 50,732; December 31,
2007 - 55,910




Platinum Underwriters Holdings, Ltd.
Consolidated Statements of Operations and Comprehensive Income (Unaudited)
For the Three and Six Months Ended June 30, 2008 and 2007
(amounts in thousands, except per share amounts)


Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007

Revenue
Net premiums earned $257,982 295,918 559,833 $580,766
Net investment income 46,932 54,684 95,994 106,383
Net realized losses on investments (184) (1,639) (139) (1,657)
Other expense (6,227) (2,206) (4,206) (2,986)

Total revenue 298,503 346,757 651,482 682,506

Expenses
Net losses and LAE 93,392 164,431 253,595 346,344
Net acquisition expenses 66,137 56,827 126,679 104,947
Other underwriting expenses 16,991 17,617 32,692 35,396
Corporate expenses 8,109 8,491 14,098 13,918
Net foreign currency exchange gains
(losses) 1,998 (1,416) (2,871) (1,458)
Interest expense 4,751 5,456 9,501 10,911

Total expenses 191,378 251,406 433,694 510,058

Income before income tax expense 107,125 95,351 217,788 172,448

Income tax expense 4,768 4,701 10,260 8,965

Net income 102,357 90,650 207,528 163,483

Preferred dividends 2,602 2,602 5,204 5,204

Net income attributable to common
shareholders $99,755 88,048 202,324 $158,279

Basic
Weighted average common shares
outstanding 48,468 60,061 50,286 59,891
Basic earnings per common share $2.06 1.47 4.02 $2.64

Diluted
Adjusted weighted average common
shares outstanding 56,097 67,857 58,021 67,578
Diluted earnings per common share $1.82 1.34 3.58 $2.42

Comprehensive income
Net income $102,357 90,650 207,528 $163,483
Other comprehensive loss, net of
deferred taxes (38,876) (32,926) (42,997) (23,541)
Comprehensive income $63,481 57,724 164,531 $139,942



Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended June 30, 2008 and 2007
($ in thousands)

Three Months Ended June 30, 2008
(Unaudited)

Property Finite
Segment underwriting results and Marine Casualty Risk Total

Net premiums written $118,588 102,893 3,379 $224,860
Net premiums earned 141,716 113,245 3,021 257,982
Net losses and LAE 33,367 66,783 (6,758) 93,392
Net acquisition expenses 24,774 32,214 9,149 66,137
Other underwriting expenses 9,635 6,991 365 16,991
Total underwriting expenses 67,776 105,988 2,756 176,520
Segment underwriting income $73,940 7,257 265 81,462
Net investment income 46,932
Net realized losses on investments (184)
Net foreign currency exchange losses (1,998)
Other expense (6,227)
Corporate expenses not allocated to
segments (8,109)
Interest expense (4,751)
Income before income tax expense $107,125
GAAP underwriting ratios:
Loss and LAE 23.5% 59.0% (223.7%) 36.2%
Acquisition expense 17.5% 28.4% 302.8% 25.6%
Other underwriting expense 6.8% 6.2% 12.1% 6.6%
Combined 47.8% 93.6% 91.2% 68.4%


Three Months Ended June 30, 2007
(Unaudited)

Segment underwriting results

Net premiums written $119,226 162,548 5,949 $287,723
Net premiums earned 125,136 163,845 6,937 295,918
Net losses and LAE 43,242 117,993 3,196 164,431
Net acquisition expenses 16,264 40,061 502 56,827
Other underwriting expenses 10,582 6,442 593 17,617
Total underwriting expenses 70,088 164,496 4,291 238,875
Segment underwriting income (loss) $55,048 (651) 2,646 57,043
Net investment income 54,684
Net realized losses on investments (1,639)
Net foreign currency exchange gains 1,416
Other expense (2,206)
Corporate expenses not allocated to
segments (8,491)
Interest expense (5,456)
Income before income tax expense $95,351
GAAP underwriting ratios:
Loss and LAE 34.6% 72.0% 46.1% 55.6%
Acquisition expense 13.0% 24.5% 7.2% 19.2%
Other underwriting expense 8.5% 3.9% 8.5% 6.0%
Combined 56.1% 100.4% 61.8% 80.8%

The GAAP underwriting ratios are calculated by dividing each item above by
net premiums earned.



Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Six Months Ended June 30, 2008 and 2007
($ in thousands)

Six Months Ended June 30, 2008
(Unaudited)

Property Finite
Segment underwriting results and Marine Casualty Risk Total

Net premiums written $287,405 228,469 5,257 $521,131
Net premiums earned 295,106 260,740 3,987 559,833
Net losses and LAE 95,406 166,176 (7,987) 253,595
Net acquisition expenses 45,428 69,702 11,549 126,679
Other underwriting expenses 18,231 13,786 675 32,692
Total underwriting expenses 159,065 249,664 4,237 412,966
Segment underwriting income
(expense) $136,041 11,076 (250) 146,867
Net investment income 95,994
Net realized losses on
investments (139)
Net foreign currency exchange
gains 2,871
Other expense (4,206)
Corporate expenses not
allocated to segments (14,098)
Interest expense (9,501)
Income before income tax
expense $217,788
GAAP underwriting ratios:
Loss and LAE 32.3% 63.7% (200.3%) 45.3%
Acquisition expense 15.4% 26.7% 289.7% 22.6%
Other underwriting expense 6.2% 5.3% 16.9% 5.8%
Combined 53.9% 95.7% 106.3% 73.7%


Six Months Ended June 30, 2007
(Unaudited)

Segment underwriting results

Net premiums written $256,880 314,731 15,029 $586,640
Net premiums earned 244,846 317,864 18,056 580,766
Net losses and LAE 105,869 230,375 10,100 346,344
Net acquisition expenses 32,199 72,096 652 104,947
Other underwriting expenses 20,610 13,159 1,627 35,396
Total underwriting expenses 158,678 315,630 12,379 486,687
Segment underwriting income $86,168 2,234 5,677 94,079
Net investment income 106,383
Net realized losses on
investments (1,657)
Net foreign currency exchange
gains 1,458
Other expense (2,986)
Corporate expenses not
allocated to segments (13,918)
Interest expense (10,911)
Income before income tax
expense $172,448
GAAP underwriting ratios:
Loss and LAE 43.2% 72.5% 55.9% 59.6%
Acquisition expense 13.2% 22.7% 3.6% 18.1%
Other underwriting expense 8.4% 4.1% 9.0% 6.1%
Combined 64.8% 99.3% 68.5% 83.8%

The GAAP underwriting ratios are calculated by dividing each item above by
net premiums earned.



SOURCE Platinum Underwriters Holdings, Ltd.


 
Tuesday, July 22, 2008 4:02 PM

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