-- Platinum Underwriters Holdings, Ltd. (NYSE: PTP - News) today reported net income of $90.7 million, or $1.34 per diluted common share, for the quarter ended June 30, 2007. The results for the quarter include net premiums earned of $295.9 million, a decrease of 12.2% from the same quarter last year, net favorable development of $22.2 million, compared with net favorable development of $13.3 million for the same quarter last year, and net investment income of $54.7 million, an increase of 20.6% from the same quarter last year.
Michael D. Price, Chief Executive Officer, commented, "We produced strong net income in the second quarter of 2007 reflecting significant underwriting gains and growing investment income. Our book value per share was $30.35, an increase of 7.1% from December 31, 2006. Net premiums earned declined 12.2% from the same quarter last year as growth in our Property and Marine segment was more than offset by declines in the Casualty and Finite Risk segments."
Mr. Price added, "At this point we anticipate that we have written over 85% of total premium for 2007. We believe that market conditions for 2008 will be significantly influenced by the presence or absence of major catastrophe losses, significant capital management efforts and industry consolidation. With our solid balance sheet, excellent ratings and strong risk management capabilities, we believe we are well positioned to capitalize on whatever opportunities the reinsurance marketplace may present."
Results for the quarter ended June 30, 2007 were summarized as follows:
-- Net income was $90.7 million or $1.34 per diluted common share.
-- Net premiums written were $287.7 million and net premiums earned were
$295.9 million.
-- GAAP combined ratio was 80.8%.
-- Net investment income was $54.7 million.
Results for the quarter ended June 30, 2007 compared to the quarter ended June 30, 2006 were summarized as follows:
-- Net income increased $8.9 million (or 10.9%).
-- Net premiums written decreased $22.0 million (or 7.1%) and net premiums
earned decreased $41.1 million (or 12.2%).
-- GAAP combined ratio decreased 2.7 percentage points.
-- Net investment income increased $9.3 million (or 20.6%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended June 30, 2007 were $119.2 million, $162.5 million and $6.0 million, respectively, representing 41.4%, 56.5% and 2.1%, respectively, of the total net premiums written. Combined ratios for these segments were 56.1%, 100.4% and 61.8%, respectively, for the quarter. Compared to the quarter ended June 30, 2006, net premiums written increased by 33.6 million (or 39.2%) in the Property and Marine segment and decreased by $36.8 million (or 18.4%) and $18.9 million in the Casualty and Finite Risk segments, respectively.
Results for the six months ended June 30, 2007 were summarized as follows:
-- Net income was $163.5 million or $2.42 per diluted common share.
-- Net premiums written were $586.6 million and net premiums earned were
$580.8 million.
-- GAAP combined ratio was 83.8%.
-- Net investment income was $106.4 million.
Results for the six months ended June 30, 2007 compared to the six months ended June 30, 2006 were summarized as follows:
-- Net income increased $4.7 million (or 3.0%).
-- Net premiums written decreased $16.4 million (or 2.7%) and net premiums
earned decreased $100.6 million (or 14.8%).
-- GAAP combined ratio decreased 0.5 percentage points.
-- Net investment income increased $17.5 million (or 19.7%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the six months ended June 30, 2007 were $256.9 million, $314.7 million, and $15.0 million, respectively, representing 43.8%, 53.6% and 2.6%, respectively, of the total net premiums written. Combined ratios for these segments were 64.8%, 99.3% and 68.5%, respectively, for the six months ended June 30, 2007. Compared to the six months ended June 30, 2006, net premiums written increased $6.0 million (or 2.4%) in the Property and Marine segment and decreased $66.9 million (or 17.5%) in the Casualty segment. Compared to the six months ended June 30, 2006, net premiums written increased $44.5 million in the Finite Risk segment, primarily due to the termination of two quota share contacts in the quarter ended March 31, 2006. As previously disclosed, one of these contracts was terminated on a cut-off basis, which resulted in the return of approximately $56.6 million of previously written but unearned premium.
Total assets were $5.2 billion as of June 30, 2007, an increase of $105.0 million (or 2.1%) from $5.1 billion as of December 31, 2006. Cash, cash equivalents and fixed maturity investments were $4.4 billion as of June 30, 2007, an increase of $184.1 million (or 4.4%) from $4.2 billion as of December 31, 2006.
Shareholders' equity was $2.0 billion as of June 30, 2007, an increase of $133.0 million (or 7.2%) as of December 31, 2006. Book value per common share was $30.35 as of June 30, 2007 based on 60.1 million common shares outstanding, an increase of $2.02 (or 7.1%) 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, July 25, 2007 at 8:00 a.m. Eastern time. The call can be accessed by dialing 800-289-0569 (US callers) or 913-981-5542 (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, July 25, 2007 until midnight Eastern time on Wednesday, August 1, 2007. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode: 9590461. 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 - News) 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.
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