Attached files
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| 8-K - PLATINUM UNDERWRITERS HOLDINGS LTD | firstquarter2011_8k.htm |
| EX-99.2 - PLATINUM UNDERWRITERS HOLDINGS LTD | financialsupplementq1_2011.htm |
Exhibit 99.1
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Contact:
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Lily Outerbridge
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Investor Relations
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(441) 298-0760
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PLATINUM UNDERWRITERS HOLDINGS, LTD. REPORTS
FIRST QUARTER 2011 FINANCIAL RESULTS
HAMILTON, BERMUDA, April 19, 2011 – Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported a net loss of $157.2 million and a loss per common share of $4.20 for the quarter ended March 31, 2011.
The results for the quarter include net premiums earned of $182.9 million, net favorable development of $33.1 million, net investment income and net realized gains on investments of $32.8 million and catastrophe losses of $248.1 million, net of retrocession and reinstatement premiums. Net catastrophe losses include $136.9 million relating to New Zealand’s 2011 earthquake, $86.6 million relating to Japan’s Tohoku earthquake and $24.6 million relating to Australia’s 2011 floods and Cyclone Yasi.
Michael D. Price, Platinum’s Chief Executive Officer, commented, “There were numerous natural catastrophes in the first quarter of 2011 that gave rise to significant insured losses. Our book value per common share was $44.68 as of March 31, 2011, a decrease of 11.0% from December 31, 2010, reflecting strong non-catastrophe performance, the negative impact of catastrophe losses and the repurchase of options on the Company’s common shares.”
Mr. Price added, “Due to the accumulation of international catastrophe losses in the past 15 months in combination with changes to vendors’ catastrophe models, we generally expect property catastrophe reinsurance rates to improve for the balance of the year and the upcoming renewal period will allow us to benefit from a rising rate environment. While it has been a challenging start to 2011, we are well positioned to take advantage of quality reinsurance underwriting opportunities as they may arise.”
Results for the quarter ended March 31, 2011 are summarized as follows:
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Net loss was $157.2 million and the loss per common share was $4.20.
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Net premiums written were $194.8 million and net premiums earned were $182.9 million.
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GAAP combined ratio was 200.4%.
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Net investment income was $32.4 million.
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Net realized gains on investments were $0.4 million.
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Results for the quarter ended March 31, 2011 as compared with the quarter ended March 31, 2010 are summarized as follows:
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Net income decreased $172.6 million.
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Net premiums written decreased $52.6 million (or 21.3%) and net premiums earned decreased $37.3 million (or 16.9%).
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GAAP combined ratio increased 101.7 percentage points.
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Net investment income decreased $5.1 million (or 13.7%).
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Net realized gains on investments decreased $5.1 million.
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Net premiums written for Platinum’s Property and Marine, Casualty and Finite Risk segments for the quarter ended March 31, 2011 were $111.8 million, $80.5 million and $2.5 million, respectively, representing 57.4%, 41.3% and 1.3%, respectively, of total net premiums written. Combined ratios for these segments were 305.7%, 78.6% and 87.7%, respectively. Compared with the quarter ended March 31, 2010, net premiums written decreased $35.0 million (or 23.8%), $13.2 million (or 14.1%) and $4.4 million (or 64.2%) in the Property and Marine, Casualty and Finite Risk segments, respectively.
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Total assets were $4.62 billion as of March 31, 2011, an increase of $2.5 million (or 0.1%) from $4.61 billion as of December 31, 2010. Fixed maturity investments and cash and cash equivalents were $4.14 billion as of March 31, 2011, a decrease of $72.2 million (or 1.7%) from $4.21 billion as of December 31, 2010.
Shareholders’ equity was $1.67 billion as of March 31, 2011, a decrease of $230.3 million (or 12.1%) from $1.90 billion as of December 31, 2010. Book value per common share was $44.68 as of March 31, 2011 based on 37.3 million common shares outstanding, a decrease of $5.52 (or 11.0%) from $50.20 as of December 31, 2010 based on 37.8 million common shares outstanding. During the quarter ended March 31, 2011, the Company repurchased 762,000 common shares for approximately $33.9 million at a weighted average cost, including commissions, of $44.50 per share. The Company also purchased 2,500,000 options held by RenaissanceRe Holdings Ltd. for $47.9 million on January 20, 2011.
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, April 20, 2011 at 8:00 a.m. Eastern time. The call can be accessed by dialing 888-240-9314 (US callers) or 913-312-1495 (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, April 20, 2011 until midnight Eastern time on Wednesday, April 27, 2011. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 6035070. 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 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), related underwriting ratios and book value per common share, 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. 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, severe natural or man-made catastrophic events, the effectiveness of our loss limitation methods and pricing models, the adequacy of our liability for unpaid losses and loss adjustment expenses, our ability to maintain our A.M. Best Company, Inc. and Standard & Poor’s ratings, our ability to raise capital on acceptable terms if necessary, the cyclicality of the property and casualty reinsurance business, the highly competitive nature of the property and casualty reinsurance industry, our ability to maintain our business relationships with reinsurance brokers, the availability of retrocessional reinsurance on acceptable terms, market volatility and interest rate and currency exchange rate fluctuation, tax, regulatory or legal restrictions or limitations applicable to us or the property and casualty reinsurance business generally, general political and economic conditions, including the effects of civil unrest, acts of terrorism, war or a prolonged United States or global economic downturn or recession; and changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion. 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, 2010.
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Platinum Underwriters Holdings, Ltd.
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Condensed Consolidated Balance Sheets
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As of March 31, 2011 and December 31, 2010
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($ in thousands, except per share data)
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March 31,
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December 31,
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2011
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2010
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(Unaudited)
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Assets
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Investments
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$ | 2,978,381 | $ | 3,047,973 | ||||
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Cash, cash equivalents and short-term investments
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1,161,884 | 1,164,525 | ||||||
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Accrued investment income
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33,855 | 31,288 | ||||||
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Reinsurance premiums receivable
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208,959 | 162,682 | ||||||
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Reinsurance balances (prepaid and recoverable)
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49,992 | 18,434 | ||||||
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Funds held by ceding companies
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76,914 | 84,078 | ||||||
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Deferred acquisition costs
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36,417 | 36,584 | ||||||
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Other assets
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70,372 | 68,749 | ||||||
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Total assets
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$ | 4,616,774 | $ | 4,614,313 | ||||
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Liabilities
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Unpaid losses and loss adjustment expenses
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$ | 2,428,477 | $ | 2,217,378 | ||||
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Unearned premiums
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167,516 | 154,975 | ||||||
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Debt obligations
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250,000 | 250,000 | ||||||
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Commissions payable
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64,816 | 59,388 | ||||||
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Other liabilities
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40,792 | 37,117 | ||||||
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Total liabilities
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$ | 2,951,601 | $ | 2,718,858 | ||||
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Shareholders' Equity
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Common shares
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$ | 373 | $ | 377 | ||||
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Additional paid-in capital
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371,493 | 453,619 | ||||||
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Accumulated other comprehensive income (loss)
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(12,484 | ) | (24,488 | ) | ||||
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Retained earnings
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1,305,791 | 1,465,947 | ||||||
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Total shareholders' equity
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$ | 1,665,173 | $ | 1,895,455 | ||||
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Total liabilities and shareholders' equity
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$ | 4,616,774 | $ | 4,614,313 | ||||
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Book value per common share (a)
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$ | 44.68 | $ | 50.20 | ||||
(a) Book value per common share is determined by dividing shareholders' equity by actual common shares outstanding of 37,269,612 shares.
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Platinum Underwriters Holdings, Ltd.
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
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For the Three Months Ended March 31, 2011 and 2010
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($ and amounts in thousands, except per share data)
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Three Months Ended
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March 31,
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March 31,
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2011
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2010
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Revenue
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Net premiums earned
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$ | 182,881 | $ | 220,178 | ||||
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Net investment income
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32,378 | 37,505 | ||||||
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Net realized gains on investments
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407 | 5,457 | ||||||
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Net impairment losses on investments
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(1,507 | ) | (18,102 | ) | ||||
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Other income
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1,096 | 273 | ||||||
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Total revenue
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215,255 | 245,311 | ||||||
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Expenses
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Net losses and loss adjustment expenses
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319,595 | 164,568 | ||||||
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Net acquisition expenses
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33,950 | 37,329 | ||||||
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Net changes in fair value of derivatives
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(3,726 | ) | 2,315 | |||||
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Operating expenses
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17,151 | 21,741 | ||||||
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Net foreign currency exchange losses (gains)
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189 | (1,229 | ) | |||||
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Interest expense
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4,766 | 4,760 | ||||||
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Total expenses
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371,925 | 229,484 | ||||||
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Income (loss) before income taxes
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(156,670 | ) | 15,827 | |||||
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Income tax expense
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522 | 406 | ||||||
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Net income (loss)
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$ | (157,192 | ) | $ | 15,421 | |||
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Basic
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Weighted average common shares outstanding
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37,199 | 45,431 | ||||||
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Basic earnings (loss) per common share
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$ | (4.20 | ) | $ | 0.34 | |||
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Diluted
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Adjusted weighted average common shares outstanding
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38,022 | 48,494 | ||||||
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Diluted earnings (loss) per common share
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$ | (4.20 | ) | $ | 0.32 | |||
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Comprehensive income (loss)
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Net income (loss)
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$ | (157,192 | ) | $ | 15,421 | |||
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Other comprehensive income, net of deferred taxes
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12,004 | 47,872 | ||||||
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Comprehensive income (loss)
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$ | (145,188 | ) | $ | 63,293 | |||
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Platinum Underwriters Holdings, Ltd.
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Segment Reporting (Unaudited)
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For the Three Months Ended March 31, 2011 and 2010
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($ in thousands)
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Three Months Ended March 31, 2011
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| Property and Marine |
Casualty
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Finite Risk |
Total
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Net premiums written
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$ | 111,802 | $ | 80,519 | $ | 2,464 | $ | 194,785 | ||||||||
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Net premiums earned
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97,905 | 80,824 | 4,152 | 182,881 | ||||||||||||
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Net losses and loss adjustment expenses
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278,330 | 39,619 | 1,646 | 319,595 | ||||||||||||
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Net acquisition expenses
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13,626 | 18,563 | 1,761 | 33,950 | ||||||||||||
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Other underwriting expenses
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7,321 | 5,332 | 235 | 12,888 | ||||||||||||
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Segment underwriting income (loss)
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$ | (201,372 | ) | $ | 17,310 | $ | 510 | (183,552 | ) | |||||||
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Net investment income
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32,378 | |||||||||||||||
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Net realized gains on investments
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407 | |||||||||||||||
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Net impairment losses on investments
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(1,507 | ) | ||||||||||||||
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Other income
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1,096 | |||||||||||||||
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Net changes in fair value of derivatives
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3,726 | |||||||||||||||
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Corporate expenses not allocated to segments
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(4,263 | ) | ||||||||||||||
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Net foreign currency exchange (losses) gains
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(189 | ) | ||||||||||||||
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Interest expense
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(4,766 | ) | ||||||||||||||
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Income (loss) before income taxes
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$ | (156,670 | ) | |||||||||||||
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Underwriting ratios:
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Net loss and loss adjustment expense
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284.3 | % | 49.0 | % | 39.6 | % | 174.8 | % | ||||||||
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Net acquisition expense
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13.9 | % | 23.0 | % | 42.4 | % | 18.6 | % | ||||||||
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Other underwriting expense
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7.5 | % | 6.6 | % | 5.7 | % | 7.0 | % | ||||||||
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Combined
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305.7 | % | 78.6 | % | 87.7 | % | 200.4 | % | ||||||||
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Three Months Ended March 31, 2010
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| Property and Marine |
Casualty
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Finite Risk |
Total
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Net premiums written
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$ | 146,785 | $ | 93,751 | $ | 6,891 | $ | 247,427 | ||||||||
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Net premiums earned
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127,806 | 87,902 | 4,470 | 220,178 | ||||||||||||
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Net losses and loss adjustment expenses
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126,627 | 31,530 | 6,411 | 164,568 | ||||||||||||
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Net acquisition expenses
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16,231 | 17,727 | 3,371 | 37,329 | ||||||||||||
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Other underwriting expenses
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8,699 | 6,470 | 338 | 15,507 | ||||||||||||
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Segment underwriting income (loss)
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$ | (23,751 | ) | $ | 32,175 | $ | (5,650 | ) | 2,774 | |||||||
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Net investment income
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37,505 | |||||||||||||||
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Net realized gains on investments
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5,457 | |||||||||||||||
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Net impairment losses on investments
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(18,102 | ) | ||||||||||||||
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Other income
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273 | |||||||||||||||
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Net changes in fair value of derivatives
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(2,315 | ) | ||||||||||||||
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Corporate expenses not allocated to segments
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(6,234 | ) | ||||||||||||||
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Net foreign currency exchange (losses) gains
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1,229 | |||||||||||||||
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Interest expense
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(4,760 | ) | ||||||||||||||
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Income before income taxes
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$ | 15,827 | ||||||||||||||
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Underwriting ratios:
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Net loss and loss adjustment expense
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99.1 | % | 35.9 | % | 143.4 | % | 74.7 | % | ||||||||
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Net acquisition expense
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12.7 | % | 20.2 | % | 75.4 | % | 17.0 | % | ||||||||
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Other underwriting expense
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6.8 | % | 7.4 | % | 7.6 | % | 7.0 | % | ||||||||
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Combined
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118.6 | % | 63.5 | % | 226.4 | % | 98.7 | % | ||||||||
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The underwriting ratios are calculated by dividing each item above by net premiums earned.
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