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Platinum Underwriters Holdings, Ltd. Reports Record Fourth Quarter and Year Ended December 31, 2007 Financial Results
Date:2/19/2008

HAMILTON, Bermuda, Feb. 19 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $102.2 million, or $1.60 per diluted common share, for the quarter ended December 31, 2007 and net income of $357.0 million, or $5.38 per diluted common share, for the year ended December 31, 2007. The results for the quarter ended December 31, 2007 include net premiums earned of $302.0 million, a decrease of 4.3% from the same quarter last year, net favorable development of $28.3 million, compared with net favorable development of $23.7 million in the same quarter last year, and net investment income of $53.6 million, an increase of 5.4% from the same quarter last year.

Michael D. Price, Chief Executive Officer, commented, "Platinum produced record results in 2007 reflecting solid current period underwriting margins, strong investment income, the absence of major catastrophes and favorable prior period development. Our book value per share increased 20.2% from December 31, 2006 to $34.04 and reflects share repurchases during the year of $240.5 million at an average price of $34.68."

Mr. Price added, "In response to deteriorating reinsurance market conditions, we cut back our underwriting activity at January 1st. Our underwriting discipline coupled with greater retention by ceding companies has resulted in approximately 18% less premium bound at January 1st as compared to last year."

Mr. Price also stated, "Overall, 2007 was another successful year for Platinum. We produced excellent returns while maintaining prudent risk levels. We are strongly capitalized and if the business performs as expected, we anticipate generating excess capital allowing us to continue actively managing our capital $112,842

GAAP underwriting ratios:

Loss and LAE 35.7% 62.6% (70.7%) 48.1%

Acquisition expense 13.6% 24.4% 85.1% 21.2%

Other underwriting expense 7.5% 4.7% 10.2% 6.0%

Combined 56.8% 91.7% 24.6% 75.3%

Three Months Ended December 31, 2006

Segment underwriting results

Net premiums written $91,023 173,725 10,825 $275,573

Net premiums earned 106,637 191,173 17,916 315,726

Net losses and LAE 41,024 128,728 5,184 174,936

Net acquisition expenses 15,122 47,692 2,824 65,638

Other underwriting expenses 12,245 3,535 452 16,232

Total underwriting expenses 68,391 179,955 8,460 256,806

Segment underwriting income $38,246 11,218 9,456 58,920

Net investment income 50,822

Net realized gains on investments 1,068

Net foreign currency exchange gains 277

Other expense (945)

Corporate expenses not allocated to

segments (7,530)

Interest expense (5,453)

Income before income tax expense $97,159

GAAP underwriting ratios:

Loss and LAE 38.5% 67.3% 28.9% 55.4%

Acquisition expense 14.2% 24.9% 15.8% 20.8%

Other underwriting expense 11.5% 1.8% 2.5% 5.1%

Combined 64.2% 94.0% 47.2% 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 Twelve Months Ended December 31, 2007 and 2006

($ in thousands)

Twelve Months Ended December 31, 2007 (Unaudited)

Property Finite

Segment underwriting results and Marine Casualty Risk Total

Net premiums written $505,010 584,605 30,192 $1,119,807

Net premiums earned 502,291 637,856 32,941 1,173,088

Net losses and LAE 195,398 444,701 15,388 655,487

Net acquisition expenses 68,351 145,969 6,010 220,330

Other underwriting expenses 42,422 29,194 2,696 74,312

Total underwriting expenses 306,171 619,864 24,094 950,129

Segment underwriting income $196,120 17,992 8,847 222,959

Net investment income 214,222

Net realized losses on

investments (2,615)

Net foreign currency

exchange gains 2,775

Other expense (5,787)

Corporate expenses not

allocated to segments (29,281)

Interest expense (21,470)

Income before income tax

expense $380,803

GAAP underwriting ratios:

Loss and LAE 38.9% 69.7% 46.7% 55.9%

Acquisition expense 13.6% 22.9% 18.2% 18.8%

Other underwriting expense 8.4% 4.6% 8.2% 6.3%

Combined 60.9% 97.2% 73.1% 81.0%

Twelve Months Ended December 31, 2006

Segment underwriting results

Net premiums written $424,929 757,675 (5,991) $1,176,613

Net premiums earned 448,959 764,341 123,401 1,336,701

Net losses and LAE 145,900 522,815 91,887 760,602

Net acquisition expenses 70,905 188,717 26,301 285,923

Other underwriting expenses 39,887 27,022 4,387 71,296

Total underwriting expenses 256,692 738,554 122,575 1,117,821

Segment underwriting income $192,267 25,787 826 218,880

Net investment income 187,987

Net realized gains on

investments 1,090

Net foreign currency

exchange gains 738

Other expense (2,872)

Corporate expenses not

allocated to segments (24,194)

Interest expense (21,805)

Income before income tax

expense $359,824

GAAP underwriting ratios:

Loss and LAE 32.5% 68.4% 74.5% 56.9%

Acquisition expense 15.8% 24.7% 21.3% 21.4%

Other underwriting expense 8.9% 3.5% 3.6% 5.3%

Combined 57.2% 96.6% 99.4% 83.6%

The GAAP underwriting ratios are calculated by dividing each item above by

net premiums earned.

base through share repurchases, subject to appropriate valuation constraints."

Results for the quarter ended December 31, 2007 were summarized as follows:

-- Net income was $102.2 million or $1.60 per diluted common share.

-- Net premiums written were $241.0 million and net premiums earned were

$302.0 million.

-- GAAP combined ratio was 75.3%.

-- Net investment income was $53.6 million.

Results for the quarter ended December 31, 2007 compared to the quarter ended December 31, 2006 were summarized as follows:

-- Net income increased $16.2 million (or 18.9%).

-- Net premiums written decreased $34.5 million (or 12.5%) and net

premiums earned decreased $13.7 million (or 4.3%).

-- GAAP combined ratio decreased 6.0 percentage points.

-- Net investment income increased $2.7 million (or 5.4%).

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended December 31, 2007 were $105.6 million, $128.7 million and $6.8 million, respectively, representing 43.8%, 53.4% and 2.8%, respectively, of the total net premiums written. Combined ratios for these segments were 56.8%, 91.7% and 24.6%, respectively. Compared to the quarter ended December 31, 2006, net premiums written increased $14.6 million (or 16.0%) in the Property and Marine segment and decreased $45.1 million (or 25.9%) and $4.0 million (or 37.2%) in the Casualty and Finite Risk segments, respectively.

Results for the year ended December 31, 2007 were summarized as follows:

-- Net income was $357.0 million or $5.38 per diluted common share.

-- Net premiums written were $1.12 billion and net premiums earned were

$1.17 billion.

-- GAAP combined ratio was 81.0%.

-- Net investment income was $214.2 million.

Results for the year ended December 31, 2007 compared to the year ended December 31, 2006 were summarized as follows:

-- Net income increased $27.3 million (or 8.3%).

-- Net premiums written decreased $56.8 million (or 4.8%) and net premiums

earned decreased $163.6 million (or 12.2%).

-- GAAP combined ratio decreased 2.6 percentage points.

-- Net investment income increased $26.2 million (or 14.0%).

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the year ended December 31, 2007 were $505.0 million, $584.6 million and $30.2 million, respectively, representing 45.1%, 52.2% and 2.7%, respectively, of the total net premiums written. Combined ratios for these segments were 60.9%, 97.2% and 73.1%, respectively. Compared to the year ended December 31, 2006, net premiums written increased $80.1 million (or 18.9%) in the Property and Marine segment, decreased $173.1 (or 22.8%) in the Casualty segment and increased $36.2 million in the Finite Risk segment.

Total assets were $5.08 billion as of December 31, 2007. Total assets decreased $14.8 million (or 0.3%) from $5.09 billion as of December 31, 2006. Cash, cash equivalents and fixed maturity investments were $4.46 billion as of December 31, 2007, an increase of $232.6 million (or 5.5%) from $4.23 billion as of December 31, 2006.

Shareholders' equity was $2.00 billion as of December 31, 2007, an increase of $140.3 million (or 7.6%) from $1.86 billion as of December 31, 2006. Book value per common share was $34.04 as of December 31, 2007 based on 53.8 million common shares outstanding, an increase of $5.71 (or 20.2%) from $28.33 based on 59.7 million common shares outstanding as of December 31, 2006.

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, February 20, 2008 at 8:00 a.m. Eastern time. The call can be accessed by dialing 888-791-4326 (US callers) or 913-312-0402 (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, February 20, 2008 until midnight Eastern time on Wednesday, February 27, 2008. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode: 5962154. 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. (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 http://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 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.

Consolidated Statements of Operations and Comprehensive Income (Unaudited)

For the Three and Twelve Months Ended December 31, 2007 and 2006

(amounts in thousands, except per share amounts)

Three Months Ended Twelve Months Ended

December December December December

31, 2007 31, 2006 31, 2007 31, 2006

Revenue

Net premiums earned $302,012 315,726 1,173,088 $1,336,701

Net investment income 53,556 50,822 214,222 187,987

Net realized gains (losses) on

investments (94) 1,068 (2,615) 1,090

Other expense (2,142) (945) (5,787) (2,872)

Total revenue 353,332 366,671 1,378,908 1,522,906

Expenses

Net losses and LAE 145,220 174,936 655,487 760,602

Net acquisition expenses 63,938 65,638 220,330 285,923

Other underwriting expenses 18,159 16,232 74,312 71,296

Corporate expenses 7,959 7,530 29,281 24,194

Net foreign currency exchange

(gains) losses 112 (277) (2,775) (738)

Interest expense 5,102 5,453 21,470 21,805

Total expenses 240,490 269,512 998,105 1,163,082

Income before income

tax expense 112,842 97,159 380,803 359,824

Income tax expense 10,650 11,209 23,825 30,167

Net income 102,192 85,950 356,978 329,657

Preferred dividends 2,602 2,602 10,408 10,382

Net income attributable to

common shareholders $99,590 83,348 346,570 $319,275

Basic

Weighted average common shares

outstanding 55,838 59,621 58,631 59,371

Basic earnings per common share $1.78 1.40 5.91 $5.38

Diluted

Adjusted weighted average common

shares outstanding 63,761 67,091 66,404 66,498

Diluted earnings per common

share $1.60 1.28 5.38 $4.96

Comprehensive income

Net income $102,192 85,950 356,978 $329,657

Other comprehensive income

(loss), net of deferred taxes 19,772 2,208 19,950 (3,571)

Comprehensive income $121,964 88,158 376,928 $326,086

Platinum Underwriters Holdings, Ltd.

Condensed Consolidated Balance Sheets

As of December 31, 2007 and December 31, 2006

(amounts in thousands, except per share amounts)

December 31, 2007 December 31, 2006

(Unaudited)

Assets

Investments $3,371,348 $3,350,162

Cash, cash equivalents and short-term

investments 1,090,155 878,775

Reinsurance premiums receivable 244,360 377,183

Accrued investment income 34,696 32,682

Reinsurance balances (prepaid and

recoverable) 37,348 67,636

Deferred acquisition costs 70,508 82,610

Funds held by ceding companies 165,604 238,499

Other assets 64,731 66,020

Total assets $5,078,750 $5,093,567

Liabilities

Unpaid losses and loss adjustment

expenses $2,361,038 $2,368,482

Unearned premiums 298,498 349,792

Debt obligations 250,000 292,840

Commissions payable 100,204 140,835

Other liabilities 70,633 83,557

Total liabilities 3,080,373 3,235,506

Total shareholders' equity 1,998,377 1,858,061

Total liabilities and

shareholders' equity $5,078,750 $5,093,567

Book value per common share (a) $34.04 $28.33

(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: December 31, 2007 -

55,910; December 31, 2006 - 86,937

Platinum Underwriters Holdings, Ltd.

Segment Reporting

For the Three Months Ended December 31, 2007 and 2006

($ in thousands)

Three Months Ended December 31, 2007 (Unaudited)

Property Finite

Segment underwriting results and Marine Casualty Risk Total

Net premiums written $105,581 128,660 6,794 $241,035

Net premiums earned 129,065 166,054 6,893 302,012

Net losses and LAE 46,133 103,961 (4,874) 145,220

Net acquisition expenses 17,603 40,470 5,865 63,938

Other underwriting expenses 9,726 7,731 702 18,159

Total underwriting expenses 73,462 152,162 1,693 227,317

Segment underwriting income $55,603 13,892 5,200 74,695

Net investment income 53,556

Net realized losses on investments (94)

Net foreign currency exchange losses (112)

Other expense (2,142)

Corporate expenses not allocated to

segments (7,959)

Interest expense (5,102)

Income before income tax expense
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SOURCE Platinum Underwriters Holdings, Ltd.
Copyright©2008 PR Newswire.
All rights reserved

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