PLATINUM UNDERWRITERS HOLDINGS, LTD. 
By HAMILTON, Bermuda, Oct. 16, 2013 /PRNewswire/ -- Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $38.3 million and diluted earnings per common share of $1.32 for the quarter ended September 30, 2013.
The results for the quarter include net premiums earned of $135.4 million, net favorable development of $41.2 million, net investment income of $17.8 million and net losses from German hailstorms of $15.7 million.
Michael D. Price, Platinum's Chief Executive Officer, commented, "Our performance reflects favorable prior period development, investment results on a total return basis and active capital management. Our book value per common share was $60.87 as of September 30, 2013, an increase of 2.0% from June 30, 2013."
Mr. Price added, "Our talented professionals, strong balance sheet and financial flexibility allow us to operate effectively in the current challenging market conditions. We currently expect to write a portfolio of business in 2014 that is similar to our 2013 portfolio."
Results for the quarter ended September 30, 2013 are summarized as follows:
-- Net income was $38.3 million and diluted earnings per common share were
$1.32.
-- Gross premiums written were $146.8 million and net premiums written were
$137.9 million.
-- Net premiums earned were $135.4 million.
-- Combined ratio was 65.5%.
-- Net investment income was $17.8 million.
-- Net realized losses on investments were $0.3 million.
Results for the quarter ended September 30, 2013 as compared with the quarter ended September 30, 2012 are summarized as follows:
-- Net income was $38.3 million compared to net income of $84.9 million.
-- Gross premium written increased by $0.6 million (or 0.4%) and net
premiums written decreased $8.1 million (or 5.5%).
-- Net premiums earned decreased $3.2 million (or 2.3%).
-- Combined ratio increased 4.2 percentage points.
-- Net investment income decreased $5.5 million (or 23.5%).
-- Net realized losses on investments were $0.3 million compared to net
realized gains on investments of $23.0 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2013 were $59.2 million, $70.0 million and $8.7 million, respectively, representing 42.9%, 50.8% and 6.3%, respectively, of total net premiums written. Combined ratios for these segments were 83.1%, 48.3% and 101.5%, respectively. Compared with the quarter ended September 30, 2012, net premiums written decreased $5.7 million (or 8.8%) and $2.4 million (or 3.3%) in the Property and Marine and Casualty segments, respectively, and were level in the Finite Risk segment.
Results for the nine months ended September 30, 2013 are summarized as follows:
-- Net income was $174.7 million and diluted earnings per common share were
$5.63.
-- Gross premiums written were $430.0 million and net premiums written were
$419.0 million.
-- Net premiums earned were $405.1 million.
-- Combined ratio was 62.3%.
-- Net investment income was $54.1 million.
-- Net realized gains on investments were $24.7 million.
Results for the nine months ended September 30, 2013 as compared with the nine months ended September 30, 2012 are summarized as follows:
-- Net income was $174.7 million compared to net income of $205.7 million.
-- Gross premiums written decreased by $1.5 million (or 0.3%) and net
premiums written decreased $12.1 million (or 2.8%).
-- Net premiums earned decreased $16.7 million (or 4.0%).
-- Combined ratio decreased 12.9 percentage points.
-- Net investment income decreased $23.8 million (or 30.6%).
-- Net realized gains on investments decreased $45.6 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the nine months ended September 30, 2013 were $175.9 million, $220.5 million and $22.6 million, respectively, representing 42.0%, 52.6% and 5.4%, respectively, of total net premiums written. Combined ratios for these segments were 51.7%, 66.6% and 104.8%, respectively. Compared with the nine months ended September 30, 2012, net premiums written decreased $18.8 million (or 9.6%) in the Property and Marine segment and increased $1.1 million (or 0.5%) and $5.6 million (or 33.1%) in the Casualty and Finite Risk segments, respectively.
Total assets were $4.0 billion as of September 30, 2013, a decrease of $38.6 million (or 1.0%) from June 30, 2013 and a decrease of $324.0 million (or 7.5%) from December 31, 2012. Investments and cash and cash equivalents were $3.6 billion as of September 30, 2013, a decrease of $30.8 million (or 0.9%) from June 30, 2013 and a decrease of $370.7 million (or 9.4%) from December 31, 2012.
Net unrealized gains on available-for-sale investments, net of deferred taxes, were $57.4 million as of September 30, 2013, a decrease of $7.0 million from June 30, 2013 and a decrease of $80.3 million from December 31, 2012.
During the quarter ended September 30, 2013, the Company repurchased 1,353,682 common shares for $78.5 million at a weighted average cost, including commissions, of $58.01 per share. During the nine months ended September 30, 2013, the Company repurchased 5,351,343 common shares for $302.8 million at a weighted average cost, including commissions, of $56.58 per share.
Shareholders' equity was $1.7 billion as of September 30, 2013, a decrease of $47.6 million (or 2.7%) from June 30, 2013 and a decrease of $195.6 million (or 10.3%) from December 31, 2012. Book value per common share was $60.87 as of September 30, 2013 based on 27.9 million common shares outstanding, an increase of $1.20 (or 2.0%) from $59.67 as of June 30, 2013 based on 29.3 million common shares outstanding and an increase of $2.97 (or 5.1%) from $57.90 as of December 31, 2012 based on 32.7 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 Thursday, October 17, 2013 at 8:00 a.m. Eastern Time. The call may be accessed by dialing 888-256-9132 (US callers) or 913-312-0982 (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. Please specify passcode 7381260.
The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern Time on Thursday, October 17, 2013 until 11:00 a.m. Eastern Time on Thursday, October 24, 2013. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 7381260. 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 financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including underwriting income or loss, related underwriting ratios and book value per common share, 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 are used to monitor our results and 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 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. For further information, please visit Platinum's website at www.platinumre.com.
Safe Harbor Statement Regarding Forward-Looking Statements:
This press release 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 press release 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 natural or man-made 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 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 ratings; our ability to raise capital on acceptable terms if necessary; our exposure to credit loss from counterparties in the normal course of business; our ability to provide reinsurance from Bermuda to insurers domiciled in the United States; 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 fluctuation; 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 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 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 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, 2012.
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of September 30, 2013 and December 31, 2012
($ and amounts in thousands, except per share data)
(unaudited)
September 30, December 31,
2013 2012
---- ----
Assets
Investments:
Fixed maturity securities $1,937,984 $2,054,498
Short-term investments 73,635 172,801
Cash and cash equivalents 1,565,405 1,720,395
Accrued investment income 20,451 21,299
Reinsurance premiums receivable 133,769 128,517
Reinsurance balances (prepaid
and recoverable) 8,645 6,560
Funds held by ceding companies 118,983 114,090
Deferred acquisition costs 32,378 28,112
Reinsurance deposit assets 78,179 50,693
Other assets 39,830 36,338
Total assets $4,009,259 $4,333,303
========== ==========
Liabilities
Unpaid losses and loss
adjustment expenses $1,758,056 $1,961,282
Unearned premiums 130,488 113,960
Debt obligations 250,000 250,000
Commissions payable 75,018 64,849
Other liabilities 96,767 48,678
------ ------
Total liabilities $2,310,329 $2,438,769
---------- ----------
Shareholders' Equity
Common shares $279 $327
Additional paid-in capital - 209,897
Accumulated other comprehensive
income 57,390 137,690
Retained earnings 1,641,261 1,546,620
--------- ---------
Total shareholders' equity $1,698,930 $1,894,534
---------- ----------
Total liabilities and
shareholders' equity $4,009,259 $4,333,303
========== ==========
$60.87 $57.90
====== ======
Book value per common share (1)
(1) Book value per common share
is a non-GAAP financial
measure as defined by
Regulation G and is
determined by dividing
shareholders' equity by
common shares outstanding
of 27,910 and 32,722 at
September 30, 2013 and
December 31, 2012,
respectively.
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
($ and amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2013 2012 2013 2012
---- ---- ---- ----
Revenue
Net premiums earned $135,360 $138,588 $405,146 $421,875
Net investment income 17,758 23,209 54,110 77,916
Net realized gains (losses) on investments (306) 22,982 24,698 70,299
Net impairment losses on investments (65) (699) (2,002) (2,882)
Other income (expense) 1,426 (96) 2,503 (766)
----- --- ----- ----
Total revenue 154,173 183,984 484,455 566,442
------- ------- ------- -------
Expenses
Net losses and loss adjustment expenses 44,142 45,117 120,807 191,430
Net acquisition expenses 30,675 26,168 91,207 87,025
Operating expenses 20,672 19,966 59,695 56,645
Net foreign currency exchange losses (gains) 487 541 (592) 763
Interest expense 4,782 4,775 14,341 14,321
----- ----- ------ ------
Total expenses 100,758 96,567 285,458 350,184
------- ------ ------- -------
Income before income taxes 53,415 87,417 198,997 216,258
Income tax expense 15,130 2,553 24,342 10,575
------ ----- ------ ------
Net income $38,285 $84,864 $174,655 $205,683
======= ======= ======== ========
Earnings Per Common Share
Weighted average common shares outstanding 28,655 32,996 30,519 34,063
Basic earnings per common share $1.34 $2.56 $5.71 $6.02
Adjusted weighted average common shares 29,065 33,272 30,949 34,286
outstanding
Diluted earnings per common share $1.32 $2.54 $5.63 $5.98
Comprehensive income
Net income $38,285 $84,864 $174,655 $205,683
Other comprehensive income (loss), net of (6,977) 1,825 (80,300) 3,752
deferred taxes
---
Comprehensive income $31,308 $86,689 $94,355 $209,435
======= ======= ======= ========
Platinum Underwriters Holdings, Ltd.
Segment Reporting (Unaudited)
For the Three Months Ended September 30, 2013 and 2012
($ in thousands)
Three Months Ended September 30, 2013
-------------------------------------
Property Casualty Finite Risk Total
and Marine
----------
Net premiums written $59,169 $69,992 $8,737 $137,898
------- ------- ------ --------
Net premiums earned 55,127 72,543 7,690 135,360
Net losses and loss adjustment expenses 28,339 10,242 5,561 44,142
Net acquisition expenses 9,699 19,067 1,909 30,675
Other underwriting expenses 7,747 5,727 342 13,816
Segment underwriting income (loss)* $9,342 $37,507 $(122) 46,727
------ ------- -----
Net investment income 17,758
Net realized gains (losses) on investments (306)
Net impairment losses on investments (65)
Other income (expense) 1,426
Corporate expenses not allocated to segments (6,856)
Net foreign currency exchange (losses) gains (487)
Interest expense (4,782)
Income before income taxes $53,415
-------
Underwriting ratios:*
Net loss and loss adjustment expense 51.4% 14.1% 72.3% 32.6%
Net acquisition expense 17.6% 26.3% 24.8% 22.7%
Other underwriting expense 14.1% 7.9% 4.4% 10.2%
Combined 83.1% 48.3% 101.5% 65.5%
---- ---- ----- ----
Three Months Ended September 30, 2012
-------------------------------------
Property Casualty Finite Risk Total
and Marine
----------
Net premiums written $64,876 $72,358 $8,745 $145,979
------- ------- ------ --------
Net premiums earned 61,900 70,326 6,362 138,588
Net losses and loss adjustment expenses 26,790 14,358 3,969 45,117
Net acquisition expenses 7,078 16,710 2,380 26,168
Other underwriting expenses 7,661 5,662 289 13,612
Segment underwriting income (loss)* $20,371 $33,596 $(276) 53,691
------- ------- -----
Net investment income 23,209
Net realized gains (losses) on investments 22,982
Net impairment losses on investments (699)
Other income (expense) (96)
Corporate expenses not allocated to segments (6,354)
Net foreign currency exchange (losses) gains (541)
Interest expense (4,775)
Income before income taxes $87,417
-------
Underwriting ratios:*
Net loss and loss adjustment expense 43.3% 20.4% 62.4% 32.6%
Net acquisition expense 11.4% 23.8% 37.4% 18.9%
Other underwriting expense 12.4% 8.1% 4.5% 9.8%
Combined 67.1% 52.3% 104.3% 61.3%
---- ---- ----- ----
* Segment underwriting
income or loss and
underwriting ratios are
non-GAAP measures as
defined by Regulation G.
The underwriting ratios
are calculated by
dividing each item above
by net premiums earned.
Platinum Underwriters Holdings, Ltd.
Segment Reporting (Unaudited)
For the Nine Months Ended September 30, 2013 and 2012
($ in thousands)
Nine Months Ended September 30, 2013
------------------------------------
Property Casualty Finite Risk Total
and Marine
----------
Net premiums written $175,946 $220,547 $22,540 $419,033
-------- -------- ------- --------
Net premiums earned 165,811 218,967 20,368 405,146
Net losses and loss adjustment expenses 35,426 75,243 10,138 120,807
Net acquisition expenses 27,624 53,384 10,199 91,207
Other underwriting expenses 22,493 17,120 1,002 40,615
------ ------ ----- ------
Segment underwriting income (loss)* $80,268 $73,220 $(971) 152,517
------- ------- -----
Net investment income 54,110
Net realized gains on investments 24,698
Net impairment losses on investments (2,002)
Other income (expense) 2,503
Corporate expenses not allocated to segments (19,080)
Net foreign currency exchange (losses) gains 592
Interest expense (14,341)
-------
Income before income taxes $198,997
--------
Underwriting ratios:*
Net loss and loss adjustment expense 21.4% 34.4% 49.8% 29.8%
Net acquisition expense 16.7% 24.4% 50.1% 22.5%
Other underwriting expense 13.6% 7.8% 4.9% 10.0%
---- --- --- ----
Combined 51.7% 66.6% 104.8% 62.3%
---- ---- ----- ----
Nine Months Ended September 30, 2012
------------------------------------
Property Casualty Finite Risk Total
and Marine
----------
Net premiums written $194,724 $219,436 $16,939 $431,099
-------- -------- ------- --------
Net premiums earned 186,066 221,838 13,971 421,875
Net losses and loss adjustment expenses 85,380 101,245 4,805 191,430
Net acquisition expenses 25,034 52,572 9,419 87,025
Other underwriting expenses 21,950 16,323 747 39,020
Segment underwriting income (loss)* $53,702 $51,698 $(1,000) 104,400
------- ------- -------
Net investment income 77,916
Net realized gains on investments 70,299
Net impairment losses on investments (2,882)
Other income (expense) (766)
Corporate expenses not allocated to segments (17,625)
Net foreign currency exchange (losses) gains (763)
Interest expense (14,321)
-------
Income before income taxes $216,258
--------
Underwriting ratios:*
Net loss and loss adjustment expense 45.9% 45.6% 34.4% 45.4%
Net acquisition expense 13.5% 23.7% 67.4% 20.6%
Other underwriting expense 11.8% 7.4% 5.3% 9.2%
---- --- --- ---
Combined 71.2% 76.7% 107.1% 75.2%
---- ---- ----- ----
* Segment underwriting
income or loss and
underwriting ratios are
non-GAAP measures as
defined by Regulation G.
The underwriting ratios
are calculated by
dividing each item above
by net premiums earned.
SOURCE Platinum Underwriters Holdings, Ltd.
