Platinum Underwriters Holdings, Ltd. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2008.
HAMILTON, Bermuda, Oct. 21 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. ("Platinum") today reported a net loss of $45.3 million, or $0.99 per basic common share, for the quarter ended September 30, 2008.
The results for the quarter are consistent with previously announced
Michael D. Price, Chief Executive Officer, commented, "Significant catastrophe activity and the impact of the global financial crisis on our investment portfolio adversely affected our results in the quarter. Our book value per share was $33.64 as of September 30, 2008, a decrease of 9.1% for the quarter and a decrease of 1.2% for the nine months ending September 30, 2008."
Mr. Price added, "Our outlook for market conditions is cautiously optimistic. Given the challenging state of the credit and equity markets, we expect increasing demand for reinsurance. However, reinsurers may be reluctant to provide capacity without appropriate rate increases. We believe we are well capitalized and have the financial strength to continue writing a significant multi-class reinsurance portfolio and buying back shares, provided the business performs as expected."
Results for the quarter ended September 30, 2008 were summarized as follows:
-- Net loss was $45.3 million, or $0.99 per basic common share.
-- Net premiums written were $279.1 million and net premiums earned were
$280.7 million.
-- GAAP combined ratio was 122.6%.
-- Net investment income was $48.0 million.
Results for the quarter ended September 30, 2008 compared to the quarter ended September 30, 2007 were summarized as follows:
-- Net loss of $45.3 million compared to net income of $91.3 million.
-- Net premiums written decreased $13.0 million (or 4.4%) and net
premiums earned decreased $9.6 million (or 3.3%).
-- GAAP combined ratio increased 41.3 percentage points.
-- Net investment income decreased $6.2 million (or 11.5%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2008 were $167.1 million, $106.8 million and $5.2 million, respectively, representing 59.9%, 38.3% and 1.8%, respectively, of the total net premiums written. Combined ratios for these segments were 144.3%, 96.7% and 102.8%, respectively, for the quarter. Compared to the quarter ended September 30, 2007, net premiums written increased by $24.6 million (or 17.2%) in the Property and Marine segment and decreased $34.4 million (or 24.4%) and $3.2 million (or 38.1%) in the Casualty and Finite Risk segments, respectively.
Results for the nine months ended September 30, 2008 were summarized as follows:
-- Net income was $162.2 million, or $2.83 per diluted common share.
-- Net premiums written were $800.3 million and net premiums earned were
$840.6 million.
-- GAAP combined ratio was 90.1%.
-- Net investment income was $144.0 million.
Results for the nine months ended September 30, 2008 compared to the nine months ended September 30, 2007 were summarized as follows:
-- Net income decreased $92.6 million (or 36.3%).
-- Net premiums written decreased $78.5 million (or 8.9%) and net
premiums earned decreased $30.5 million (or 3.5%).
-- GAAP combined ratio increased 7.1 percentage points.
-- Net investment income decreased $16.7 million (or 10.4%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the nine months ended September 30, 2008 were $454.5 million, $335.3 million, and $10.4 million, respectively, representing 56.8%, 41.9% and 1.3%, respectively, of the total net premiums written. Combined ratios for these segments were 84.7%, 96.1% and 104.4%, respectively, for the nine months ended September 30, 2008. Compared to the nine months ended September 30, 2007, net premiums written increased $55.1 million (or 13.8%) in the Property and Marine segment and decreased $120.7 million (or 26.5%) and $13.0 million (or 55.4%) in the Casualty and Finite Risk segments, respectively.
Total assets were $4.91 billion as of September 30, 2008, a decrease of $173.4 million (or 3.4%) from $5.08 billion as of December 31, 2007. The decrease in total assets reflects an increase of $156.2 million in the unrealized loss on fixed maturity securities to $183.0 million as of September 30, 2008. Cash, cash equivalents and fixed maturity investments were $4.26 billion as of September 30, 2008, a decrease of $202.8 million (or 4.6%) from December 31, 2007.
Shareholders' equity was $1.77 billion as of September 30, 2008, a decrease of $226.0 million (or 11.3%) from December 31, 2007. Book value per common share was $33.64 as of September 30, 2008 based on 47.7 million common shares outstanding, a decrease of $0.40 (or 1.2%) 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, October 22, 2008 at 8:00 a.m. Eastern time. The call may be accessed by dialing 888-812-8569 (US callers) or 913-312-1382 (international callers), or in a listen-only mode via the Investor Relations section of Platinum's website at http://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, October 22, 2008 until midnight Eastern time on Wednesday, October 29, 2008. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 4379337. The teleconference will also be archived on the Investor Relations section of Platinum's website at http://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. 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 http://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 September 30, 2008 and December 31, 2007
(amounts in thousands, except per share amounts)
September 30, December 31,
2008 2007
------------- ------------
(Unaudited)
Assets
Investments $3,562,033 $3,371,348
Cash, cash equivalents and
short-term investments 696,660 1,090,155
Reinsurance premiums receivable 295,914 244,360
Accrued investment income 30,932 34,696
Reinsurance balances
(prepaid and recoverable) 27,131 37,348
Deferred acquisition costs 58,731 70,508
Funds held by ceding companies 146,470 165,604
Other assets 87,502 64,731
---------- ----------
Total assets $4,905,373 $5,078,750
========== ==========
Liabilities
Unpaid losses and loss
adjustment expenses $2,460,185 $2,361,038
Unearned premiums 261,979 298,498
Debt obligations 250,000 250,000
Commissions payable 122,699 100,204
Other liabilities 38,118 70,633
--------- ---------
Total liabilities 3,132,981 3,080,373
Total shareholders' equity 1,772,392 1,998,377
---------- ----------
Total
liabilities and
shareholders'
equity $4,905,373 $5,078,750
========== ==========
------ ------
Book value per common
share (a) $33.64 $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: September 30, 2008 -
276,026; December 31, 2007 - 55,910
Platinum Underwriters Holdings, Ltd.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
For the Three and Nine Months Ended September 30, 2008 and 2007
(amounts in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
Revenue
Net premiums earned $280,725 290,310 840,558 $871,076
Net investment income 48,043 54,283 144,037 160,666
Net realized
losses on
investments (18,214) (864) (18,353) (2,521)
Other expense (1,686) (659) (5,892) (3,645)
------- ------- ------- ---------
Total revenue 308,868 343,070 960,350 1,025,576
------- ------- ------- ---------
Expenses
Net losses and LAE 270,863 163,923 524,458 510,267
Net acquisition expenses 56,320 51,445 182,999 156,392
Other underwriting expenses 16,777 20,757 49,469 56,153
Corporate expenses 4,376 7,404 18,474 21,322
Net foreign currency
exchange (gains)
losses 6,134 (1,429) 3,263 (2,887)
Interest expense 4,752 5,457 14,253 16,368
------- ------- ------- -------
Total expenses 359,222 247,557 792,916 757,615
------- ------ ------- -------
Income (loss) before
income tax expense
(benefit) (50,354) 95,513 167,434 267,961
Income tax
expense
(benefit) (5,014) 4,210 5,246 13,175
------- ------ ------- -------
Net income (loss) (45,340) 91,303 162,188 254,786
Preferred dividends 2,602 2,602 7,806 7,806
-------- ------ ------- --------
Net income (loss)
attributable to common
shareholders $(47,942) 88,701 154,382 $246,980
======== ====== ======= ========
Basic
Weighted average
common shares
outstanding 48,260 58,946 49,606 59,572
Basic earnings
(loss) per common
share $(0.99) 1.50 3.11 $4.15
Diluted
Adjusted weighted average
common shares outstanding 48,260 66,710 57,276 67,294
Diluted earnings
(loss) per common
share $(0.99) 1.37 2.83 $3.79
Comprehensive income (loss)
Net income (loss) $(45,340) 91,303 162,188 $254,786
Other comprehensive income
(loss), net of deferred
taxes (102,921) 23,719 (145,918) 178
-------- ------ -------- ---
Comprehensive income (loss) $(148,261) 115,022 16,270 $254,964
========= ======= ====== ========
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended September 30, 2008 and 2007
($ in thousands)
Three Months Ended September
30, 2008 (Unaudited)
----------------------------
Property
and
Segment underwriting results Marine Casualty Finite Risk Total
-------- -------- ----------- -----
Net premiums written $167,136 106,826 5,180 $279,142
Net premiums earned 151,763 124,319 4,643 280,725
------- ------- ----- -------
Net losses and LAE 183,759 86,057 1,047 270,863
Net acquisition expenses 23,691 29,191 3,438 56,320
Other underwriting
expenses 11,543 4,948 286 16,777
------ ----- --- ------
Total underwriting
expenses 218,993 120,196 4,771 343,960
-------- ----- ---- -------
Segment underwriting
income (loss) $(67,230) 4,123 (128) (63,235)
-------- ----- ----
Net investment income 48,043
Net realized losses on
investments (18,214)
Net foreign currency
exchange losses (6,134)
Other expense (1,686)
Corporate expenses not
allocated to segments (4,376)
Interest expense (4,752)
--------
Loss before income
tax benefit $(50,354)
========
GAAP underwriting ratios:
Loss and LAE 121.1% 69.2% 22.6% 96.5%
Acquisition expense 15.6% 23.5% 74.0% 20.1%
Other underwriting
expense 7.6% 4.0% 6.2% 6.0%
--- --- --- ---
Combined 144.3% 96.7% 102.8% 122.6%
----- ---- ----- -----
Three Months Ended
September 30, 2007
(Unaudited)
-------------------
Segment underwriting
results
Net premiums written $142,549 141,214 8,369 $292,132
Net premiums earned 128,380 153,938 7,992 290,310
------- ------- ----- -------
Net losses and LAE 43,396 110,365 10,162 163,923
Net acquisition expenses 18,549 33,403 (507) 51,445
Other underwriting
expenses 12,086 8,304 367 20,757
------ ----- --- ------
Total underwriting
expenses 74,031 152,072 10,022 236,125
------- ----- ------ ------
Segment underwriting
income (loss) $54,349 1,866 (2,030) 54,185
------- ----- ------
Net investment income 54,283
Net realized losses on
investments (864)
Net foreign currency
exchange gains 1,429
Other expense (659)
Corporate expenses not
allocated to segments (7,404)
Interest expense (5,457)
-------
Income before income
tax expense $95,513
=======
GAAP underwriting ratios:
Loss and LAE 33.8% 71.7% 127.2% 56.5%
Acquisition expense 14.4% 21.7% (6.3%) 17.7%
Other underwriting
expense 9.4% 5.4% 4.6% 7.1%
--- --- --- ---
Combined 57.6% 98.8% 125.5% 81.3%
---- ---- ----- ----
The GAAP underwriting ratios are calculated by dividing each item above
by net premiums earned.
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Nine Months Ended September 30, 2008 and 2007
($ in thousands)
Nine Months Ended September 30, 2008 (Unaudited)
------------------------------------------------
Property
Segment underwriting and
results Marine Casualty Finite Risk Total
-------- -------- ----------- -----
Net premiums written $454,541 335,295 10,437 $800,273
Net premiums earned 446,869 385,059 8,630 840,558
------- ------- ----- -------
Net losses and LAE 279,165 252,233 (6,940) 524,458
Net acquisition expenses 69,119 98,893 14,987 182,999
Other underwriting expenses 29,774 18,734 961 49,469
------ ------ --- ------
Total underwriting
expenses 378,058 369,860 9,008 756,926
------- ------ ---- ------
Segment underwriting
income (loss) $68,811 15,199 (378) 83,632
------- ------ ----
Net investment income 144,037
Net realized losses on
investments (18,353)
Net foreign currency exchange
losses (3,263)
Other expense (5,892)
Corporate expenses not allocated
to segments (18,474)
Interest expense (14,253)
--------
Income before income tax expense $167,434
========
GAAP underwriting ratios:
Loss and LAE 62.5% 65.5% (80.4%) 62.4%
Acquisition expense 15.5% 25.7% 173.7% 21.8%
Other underwriting
expense 6.7% 4.9% 11.1% 5.9%
--- --- ---- ---
Combined 84.7% 96.1% 104.4% 90.1%
---- ---- ----- ----
Nine Months Ended September 30, 2007 (Unaudited)
------------------------------------------------
Segment underwriting results
Net premiums written $399,429 455,945 23,398 $878,772
Net premiums earned 373,226 471,802 26,048 871,076
------- ------- ------ -------
Net losses and LAE 149,265 340,740 20,262 510,267
Net acquisition expenses 50,748 105,499 145 156,392
Other underwriting expenses 32,696 21,463 1,994 56,153
------ ------ ----- ------
Total underwriting
expenses 232,709 467,702 22,401 722,812
-------- ----- ----- -------
Segment underwriting
income $140,517 4,100 3,647 148,264
-------- ----- -----
Net investment income 160,666
Net realized losses on
investments (2,521)
Net foreign currency exchange
gains 2,887
Other expense (3,645)
Corporate expenses not allocated
to segments (21,322)
Interest expense (16,368)
--------
Income before income tax expense $267,961
========
GAAP underwriting ratios:
Loss and LAE 40.0% 72.2% 77.8% 58.6%
Acquisition expense 13.6% 22.4% 0.6% 18.0%
Other underwriting
expense 8.8% 4.5% 7.7% 6.4%
--- --- --- ---
Combined 62.4% 99.1% 86.1% 83.0%
---- ---- ---- ----
The GAAP underwriting ratios are calculated by dividing each item above
by net premiums earned.
CONTACT: Lily Outerbridge, Investor Relations, +1-441-298-0760
Web Site: http://www.platinumre.com/
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