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8-K - LIVE FILING - PLATINUM UNDERWRITERS HOLDINGS LTD | htm_44096.htm |
EXHIBIT 99.1
Contact: Kenneth A. Kurtzman |
203-252-5833
PLATINUM UNDERWRITERS HOLDINGS, LTD. COMMENTS ON ESTIMATES FOR CATASTROPHE LOSSES AND OTHER ITEMS
HAMILTON, BERMUDA, January 26, 2012 Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today announced that it expects losses from 2011 catastrophes will have a net negative impact of approximately $55.4 million on the Companys fourth quarter 2011 results. Approximately $27.9 million of the estimated net negative impact from catastrophes relates to the recent severe flooding in Thailand.
The net negative impact on the fourth quarter 2011 results includes an estimate of losses and loss adjustment expenses, net of retrocessional coverage, reinstatement premiums, taxes and the expected impact of foreign exchange rates as follows:
Estimated Net Negative Impact from 2011 Catastrophes | ||||
($ in millions) | ||||
Flooding in Thailand |
$ | 27.9 | ||
Increases to Loss Estimates for other 2011 Catastrophes: |
||||
Japan earthquake |
$ | 17.1 | ||
February New Zealand earthquake |
11.8 | |||
Aggregate effect of other 2011 catastrophes |
(1.4 | ) | ||
Total |
$ | 55.4 | ||
The Company also announced that it currently does not expect to incur a material loss related to the Costa Concordia cruise ship disaster that occurred in January 2012.
Estimated catastrophe losses are generally based on the Companys portfolio modeling, discussions with brokers and clients, market share analysis and a review of the Companys in-force contracts as well as claims information and analysis, if any, received from brokers and clients.
The Companys assessment of its exposure to these events is ongoing. The actual net negative impact of these events on the Companys results may differ materially from the Companys estimates due to the inherent uncertainties of making such estimates, including the preliminary nature of available information, uncertainties in loss development patterns, the use of portfolio models in the estimation process and potential inaccuracies and inadequacies in data provided by clients and brokers.
In addition, the Company expects that net impairment losses on securities in the fourth quarter of 2011 will be approximately $13.1 million, net of taxes. These net impairment losses relate primarily to non-agency residential mortgage-backed securities and sub-prime asset-backed securities and reflect revised assumptions regarding macroeconomic conditions in the United States, including the outlook for home prices.
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 Platinums 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 cyclicality of the
property and casualty reinsurance business; the highly competitive nature of the property and
casualty reinsurance 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 catastrophic loss protection on acceptable terms; foreign currency exchange rate fluctuation;
our ability to maintain and enhance effective operating procedures and internal controls over
financial reporting; the preparation of our financial statements requires us to make many estimates
and judgments; the representations, warranties and covenants in our credit facilities limit our
financial and operational flexibility; our ability to retain key executives and attract and retain
additional qualified personnel in the future; the performance of our investment portfolio;
fluctuations in the mortgage-backed and asset-backed securities markets; 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 possibility that we may become
subject to taxes in Bermuda after 2035; 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 if
we are considered to be a passive foreign investment company for U.S. federal income tax purposes;
under certain circumstances, our shareholders may be required to pay taxes on their pro rata share
of the related person insurance income of Platinum Underwriters Bermuda, Ltd.; 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; 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 impact of Bermudas
commitment to the Organization for Economic Cooperation and Development to eliminate harmful tax
practices on our tax status in Bermuda is uncertain; the effect 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 impact of the
Dodd-Frank Act on our business; the dependence of the cash flows of Platinum Underwriters Holdings,
Ltd., a holding company, on dividends, interest and other permissible payments from its
subsidiaries; 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,
2010.
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