Attached files
| file | filename |
|---|---|
| 8-K - PLATINUM UNDERWRITERS HOLDINGS LTD | thirdquarter2012_8k.htm |
| EX-99.1 - PLATINUM UNDERWRITERS HOLDINGS LTD | earningsreleaseq3_2012.htm |
Exhibit 99.2
Financial Supplement
Financial Information
as of September 30, 2012
(UNAUDITED)
The following supplement of information is provided to assist in your understanding of
Platinum Underwriters Holdings, Ltd.
This report is for informational purposes only. It should be read in conjunction with
documents filed with the Securities and Exchange Commission by Platinum Underwriters Holdings, Ltd.,
including the Company's Annual Report on Form 10-K.
Our Investor Relations Department can be reached at (203) 252-5833.
Platinum Underwriters Holdings, Ltd.
Overview
September 30, 2012
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Address:
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Investor Information:
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Platinum Underwriters Holdings, Ltd.
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Kenneth A. Kurtzman
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The Belvedere Building
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Tel: (203) 252-5833
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69 Pitts Bay Road
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Email: kkurtzman@platinumre.com
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Pembroke, HM 08 Bermuda
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Website: www.platinumre.com
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Definitions and presentation:
All financial information contained herein is unaudited except for the information for the fiscal year ended December 31, 2011. Amounts may not reconcile exactly due to rounding differences.
In presenting the Company's results, management has included 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 (pages 14-18), operating income or loss (page 7), related underwriting ratios (pages 14-18), book value per common share and fully converted book value per common share (page 11), are referred to as non-GAAP measures. 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. Reconciliations of such measures to the most comparable GAAP figures are included within this financial supplement in accordance with Regulation G.
Safe Harbor Statement Regarding Forward-Looking Statements:
This financial supplement 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 financial supplement 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; 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; 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; 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 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, 2011.
- 1 -
Platinum Underwriters Holdings, Ltd.
Table of Contents
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Section:
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Page:
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Financial Highlights:
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a. Financial Highlights
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3 | |||
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Balance Sheets:
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a. Condensed Consolidated Balance Sheets - by Quarter
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4 | |||
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Statements of Operations:
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a. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
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5 | |||
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b. Condensed Consolidated Statements of Operations and Comprehensive Income - by Quarter
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6 | |||
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Other Company Data:
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||||
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a. Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share
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7 | |||
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b. Key Ratios, Share Data, Ratings
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8 | |||
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Earnings (Loss) and Book Value Per Common Share Analysis:
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||||
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a. Computation of Basic and Diluted Earnings (Loss) Per Common Share
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9 | |||
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b. Computation of Basic and Diluted Earnings (Loss) Per Common Share - by Quarter
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10 | |||
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c. Book Value Per Common Share – by Quarter
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11 | |||
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Statements of Cash Flows:
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a. Condensed Consolidated Statements of Cash Flows
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12 | |||
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b. Condensed Consolidated Statements of Cash Flows - by Quarter
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13 | |||
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Segment Data:
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||||
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a. Segment Reporting - Three Month Summary
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14 | |||
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b. Segment Reporting - Nine Month Summary
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15 | |||
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c. Property and Marine Segment - by Quarter
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16 | |||
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d. Casualty Segment - by Quarter
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17 | |||
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e. Finite Risk Segment - by Quarter
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18 | |||
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Net Premiums Written Data:
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a. Net Premiums Written - Supplemental Information
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19 | |||
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b. Premiums by Line of Business - Three Month Summary
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20 | |||
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c. Premiums by Line of Business - Nine Month Summary
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21 | |||
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Investments:
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a. Investments
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22 | |||
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b. Fixed Maturity Available-for-Sale Securities Detail
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23 | |||
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c. Corporate Bonds Detail
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24 | |||
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d. Municipal Bonds Detail
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25 | |||
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e. Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments
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26 | |||
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Loss Reserves:
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a. Analysis of Losses and Loss Adjustment Expenses
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27 | |||
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b. Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions
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28 | |||
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Exposures:
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a. Estimated Exposure to Peak Zone Property Catastrophe Losses
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29 | |||
- 2 -
Platinum Underwriters Holdings, Ltd.
Financial Highlights
September 30, 2012 and 2011
($ and amounts in thousands, except per share data)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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|||||||||||||
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2012
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2011
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2012
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2011
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Highlights
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Net premiums written
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$ | 145,979 | $ | 177,124 | $ | 431,099 | $ | 497,796 | ||||||||
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Net premiums earned
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138,588 | 166,813 | 421,875 | 522,130 | ||||||||||||
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Underwriting income (loss)
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53,691 | (76,052 | ) | 104,400 | (293,007 | ) | ||||||||||
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Net investment income
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23,209 | 29,762 | 77,916 | 96,105 | ||||||||||||
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Net operating income (loss) (1)
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65,292 | (56,449 | ) | 142,290 | (226,800 | ) | ||||||||||
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Net realized gains on investments
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22,982 | 7,498 | 70,299 | 3,216 | ||||||||||||
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Net impairment losses on investments
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(699 | ) | (4,451 | ) | (2,882 | ) | (7,624 | ) | ||||||||
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Net income (loss)
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$ | 84,864 | $ | (53,535 | ) | $ | 205,683 | $ | (231,128 | ) | ||||||
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Total assets
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$ | 4,492,922 | $ | 4,747,995 | $ | 4,492,922 | $ | 4,747,995 | ||||||||
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Investments and cash
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4,121,514 | 4,323,517 | 4,121,514 | 4,323,517 | ||||||||||||
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Total shareholders' equity
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1,789,946 | 1,726,912 | 1,789,946 | 1,726,912 | ||||||||||||
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Unpaid losses and loss adjustment expenses
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$ | 2,160,154 | $ | 2,468,987 | $ | 2,160,154 | $ | 2,468,987 | ||||||||
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Per share data
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Common shares outstanding
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32,782 | 37,330 | 32,782 | 37,330 | ||||||||||||
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Weighted average common shares outstanding - basic
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32,996 | 37,183 | 34,063 | 37,165 | ||||||||||||
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Adjusted weighted average common shares outstanding - diluted
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33,272 | 37,360 | 34,286 | 37,578 | ||||||||||||
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Basic earnings (loss) per common share
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$ | 2.56 | $ | (1.43 | ) | $ | 6.02 | $ | (6.18 | ) | ||||||
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Diluted earnings (loss) per common share (2)
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2.54 | (1.43 | ) | 5.98 | (6.18 | ) | ||||||||||
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Operating income (loss) per common share - diluted (1)
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1.96 | (1.52 | ) | 4.15 | (6.10 | ) | ||||||||||
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Dividends per common share
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0.08 | 0.08 | 0.24 | 0.24 | ||||||||||||
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Basic book value per common share (3)
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$ | 54.60 | $ | 46.26 | $ | 54.60 | $ | 46.26 | ||||||||
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(1)
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See computation of net operating income (loss) and per common share on page 7.
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(2)
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During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
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(3)
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See computation of basic book value per common share on page 11.
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- 3 -
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets – by Quarter
($ in thousands, except per share data)
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September 30,
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June 30,
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March 31,
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December 31,
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September 30,
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||||||||||||||||
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2012
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2012
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2012
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2011
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2011
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Assets
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Investments:
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Fixed maturity securities
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$ | 2,293,094 | $ | 2,423,834 | $ | 2,743,760 | $ | 2,788,700 | $ | 2,657,325 | ||||||||||
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Short-term investments
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165,741 | 167,778 | 216,047 | 588,834 | 538,887 | |||||||||||||||
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Cash and cash equivalents
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1,662,679 | 1,465,983 | 1,167,848 | 792,510 | 1,127,305 | |||||||||||||||
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Accrued investment income
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23,856 | 24,541 | 29,337 | 29,440 | 32,682 | |||||||||||||||
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Reinsurance premiums receivable
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150,775 | 145,132 | 148,126 | 159,387 | 152,633 | |||||||||||||||
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Reinsurance balances (prepaid and recoverable)
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4,335 | 4,538 | 7,393 | 14,662 | 57,025 | |||||||||||||||
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Funds held by ceding companies
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113,310 | 111,408 | 95,357 | 94,546 | 91,886 | |||||||||||||||
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Deferred acquisition costs
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29,189 | 27,620 | 28,203 | 28,779 | 31,417 | |||||||||||||||
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Other assets
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49,943 | 54,103 | 52,349 | 54,753 | 58,835 | |||||||||||||||
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Total assets
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$ | 4,492,922 | $ | 4,424,937 | $ | 4,488,420 | $ | 4,551,611 | $ | 4,747,995 | ||||||||||
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Liabilities
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Unpaid losses and loss adjustment expenses
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$ | 2,160,154 | $ | 2,229,603 | $ | 2,315,527 | $ | 2,389,614 | $ | 2,468,987 | ||||||||||
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Unearned premiums
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122,150 | 114,759 | 121,553 | 121,164 | 141,814 | |||||||||||||||
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Debt obligations
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250,000 | 250,000 | 250,000 | 250,000 | 250,000 | |||||||||||||||
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Commissions payable
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67,489 | 64,304 | 62,083 | 62,773 | 56,413 | |||||||||||||||
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Other liabilities
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103,183 | 44,444 | 32,362 | 37,201 | 103,869 | |||||||||||||||
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Total liabilities
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$ | 2,702,976 | $ | 2,703,110 | $ | 2,781,525 | $ | 2,860,752 | $ | 3,021,083 | ||||||||||
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Shareholders' Equity
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||||||||||||||||||||
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Common shares
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$ | 328 | $ | 332 | $ | 348 | $ | 355 | $ | 373 | ||||||||||
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Additional paid-in capital
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211,546 | 227,482 | 285,503 | 313,730 | 373,790 | |||||||||||||||
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Accumulated other comprehensive income
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150,387 | 148,562 | 140,458 | 146,635 | 126,838 | |||||||||||||||
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Retained earnings
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1,427,685 | 1,345,451 | 1,280,586 | 1,230,139 | 1,225,911 | |||||||||||||||
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Total shareholders' equity
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$ | 1,789,946 | $ | 1,721,827 | $ | 1,706,895 | $ | 1,690,859 | $ | 1,726,912 | ||||||||||
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Total liabilities and shareholders' equity
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$ | 4,492,922 | $ | 4,424,937 | $ | 4,488,420 | $ | 4,551,611 | $ | 4,747,995 | ||||||||||
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Book value per common share (1)
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$ | 54.60 | $ | 51.84 | $ | 49.00 | $ | 47.59 | $ | 46.26 | ||||||||||
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(1)
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Book value per common share is a non-GAAP financial measure as defined by Regulation G. See computation of book value per common share on page 11.
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- 4 -
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
($ and amounts in thousands, except per share data)
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Three Months Ended
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Nine Months Ended
|
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September 30,
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September 30,
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September 30,
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September 30,
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|||||||||||||
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2012
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2011
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2012
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2011
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Revenue
|
||||||||||||||||
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Net premiums earned
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$ | 138,588 | $ | 166,813 | $ | 421,875 | $ | 522,130 | ||||||||
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Net investment income
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23,209 | 29,762 | 77,916 | 96,105 | ||||||||||||
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Net realized gains on investments
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22,982 | 7,498 | 70,299 | 3,216 | ||||||||||||
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Net impairment losses on investments
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(699 | ) | (4,451 | ) | (2,882 | ) | (7,624 | ) | ||||||||
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Other income (expense)
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(96 | ) | (198 | ) | (766 | ) | 838 | |||||||||
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Total revenue
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183,984 | 199,424 | 566,442 | 614,665 | ||||||||||||
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Expenses
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||||||||||||||||
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Net losses and loss adjustment expenses
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45,117 | 201,453 | 191,430 | 680,405 | ||||||||||||
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Net acquisition expenses
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26,168 | 30,208 | 87,025 | 98,273 | ||||||||||||
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Net changes in fair value of derivatives
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- | 4,546 | - | 5,294 | ||||||||||||
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Operating expenses
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19,966 | 14,755 | 56,645 | 49,011 | ||||||||||||
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Net foreign currency exchange losses (gains)
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541 | (982 | ) | 763 | (179 | ) | ||||||||||
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Interest expense
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4,775 | 4,769 | 14,321 | 14,302 | ||||||||||||
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Total expenses
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96,567 | 254,749 | 350,184 | 847,106 | ||||||||||||
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Income (loss) before income taxes
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87,417 | (55,325 | ) | 216,258 | (232,441 | ) | ||||||||||
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Income tax expense (benefit)
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2,553 | (1,790 | ) | 10,575 | (1,313 | ) | ||||||||||
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Net income (loss)
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$ | 84,864 | $ | (53,535 | ) | $ | 205,683 | $ | (231,128 | ) | ||||||
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Basic
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||||||||||||||||
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Weighted average common shares outstanding
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32,996 | 37,183 | 34,063 | 37,165 | ||||||||||||
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Basic earnings (loss) per common share
|
$ | 2.56 | $ | (1.43 | ) | $ | 6.02 | $ | (6.18 | ) | ||||||
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Diluted
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||||||||||||||||
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Adjusted weighted average common shares outstanding
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33,272 | 37,360 | 34,286 | 37,578 | ||||||||||||
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Diluted earnings (loss) per common share (1)
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$ | 2.54 | $ | (1.43 | ) | $ | 5.98 | $ | (6.18 | ) | ||||||
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Comprehensive income (loss)
|
||||||||||||||||
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Net income (loss)
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$ | 84,864 | $ | (53,535 | ) | $ | 205,683 | $ | (231,128 | ) | ||||||
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Other comprehensive income, net of deferred taxes
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1,825 | 86,804 | 3,752 | 151,326 | ||||||||||||
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Comprehensive income (loss)
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$ | 86,689 | $ | 33,269 | $ | 209,435 | $ | (79,802 | ) | |||||||
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(1)
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During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
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- 5 -
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income – by Quarter
($ and amounts in thousands, except per share data)
|
Three Months Ended
|
||||||||||||||||||||
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September 30,
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June 30,
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March 31,
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December 31,
|
September 30,
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||||||||||||||||
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2012
|
2012
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2012
|
2011
|
2011
|
||||||||||||||||
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Revenue
|
||||||||||||||||||||
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Net premiums earned
|
$ | 138,588 | $ | 145,075 | $ | 138,212 | $ | 167,322 | $ | 166,813 | ||||||||||
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Net investment income
|
23,209 | 26,155 | 28,552 | 29,758 | 29,762 | |||||||||||||||
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Net realized gains on investments
|
22,982 | 24,978 | 22,339 | 718 | 7,498 | |||||||||||||||
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Net impairment losses on investments
|
(699 | ) | (1,113 | ) | (1,070 | ) | (14,746 | ) | (4,451 | ) | ||||||||||
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Other income (expense)
|
(96 | ) | (191 | ) | (479 | ) | (193 | ) | (198 | ) | ||||||||||
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Total revenue
|
183,984 | 194,904 | 187,554 | 182,859 | 199,424 | |||||||||||||||
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Expenses
|
||||||||||||||||||||
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Net losses and loss adjustment expenses
|
45,117 | 67,117 | 79,196 | 125,032 | 201,453 | |||||||||||||||
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Net acquisition expenses
|
26,168 | 30,200 | 30,657 | 34,904 | 30,208 | |||||||||||||||
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Net changes in fair value of derivatives
|
- | - | - | (965 | ) | 4,546 | ||||||||||||||
|
Operating expenses
|
19,966 | 19,696 | 16,983 | 14,168 | 14,755 | |||||||||||||||
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Net foreign currency exchange losses (gains)
|
541 | (310 | ) | 532 | (294 | ) | (982 | ) | ||||||||||||
|
Interest expense
|
4,775 | 4,774 | 4,772 | 4,770 | 4,769 | |||||||||||||||
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Total expenses
|
96,567 | 121,477 | 132,140 | 177,615 | 254,749 | |||||||||||||||
|
Income (loss) before income taxes
|
87,417 | 73,427 | 55,414 | 5,244 | (55,325 | ) | ||||||||||||||
|
Income tax expense (benefit)
|
2,553 | 5,895 | 2,127 | (1,820 | ) | (1,790 | ) | |||||||||||||
|
Net income (loss)
|
$ | 84,864 | $ | 67,532 | $ | 53,287 | $ | 7,064 | $ | (53,535 | ) | |||||||||
|
Basic
|
||||||||||||||||||||
|
Weighted average common shares outstanding
|
32,996 | 33,914 | 35,291 | 36,117 | 37,183 | |||||||||||||||
|
Basic earnings (loss) per common share
|
$ | 2.56 | $ | 1.98 | $ | 1.50 | $ | 0.20 | $ | (1.43 | ) | |||||||||
|
Diluted
|
||||||||||||||||||||
|
Adjusted weighted average common shares outstanding
|
33,272 | 34,104 | 35,510 | 36,302 | 37,360 | |||||||||||||||
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Diluted earnings (loss) per common share (1)
|
$ | 2.54 | $ | 1.97 | $ | 1.49 | $ | 0.19 | $ | (1.43 | ) | |||||||||
|
Comprehensive income
|
||||||||||||||||||||
|
Net income (loss)
|
$ | 84,864 | $ | 67,532 | $ | 53,287 | $ | 7,064 | $ | (53,535 | ) | |||||||||
|
Other comprehensive income (loss), net of deferred taxes
|
1,825 | 8,104 | (6,177 | ) | 19,797 | 86,804 | ||||||||||||||
|
Comprehensive income
|
$ | 86,689 | $ | 75,636 | $ | 47,110 | $ | 26,861 | $ | 33,269 | ||||||||||
|
(1)
|
During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
|
- 6 -
Platinum Underwriters Holdings, Ltd.
Computation of Net Operating Income (Loss) and Net Operating Income (Loss) per Diluted Common Share
($ and amounts in thousands, except per share data)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Net income (loss) attributable to common shareholders
|
$ | 84,864 | $ | (53,535 | ) | $ | 205,683 | $ | (231,128 | ) | ||||||
|
Portion allocated to participating common shareholders (1)
|
(234 | ) | 251 | (740 | ) | 1,285 | ||||||||||
|
Net income (loss) allocated to common shareholders
|
$ | 84,630 | $ | (53,284 | ) | $ | 204,943 | $ | (229,843 | ) | ||||||
|
Adjustments for:
|
||||||||||||||||
|
Net realized gains on investments, net of tax
|
$ | (20,516 | ) | $ | (6,187 | ) | $ | (66,079 | ) | $ | (3,838 | ) | ||||
|
Net impairment losses on investments, net of tax
|
666 | 4,047 | 2,617 | 7,141 | ||||||||||||
|
Net foreign currency exchange losses (gains), net of tax
|
512 | (1,025 | ) | 809 | (260 | ) | ||||||||||
|
Net operating income (loss) (2)
|
$ | 65,292 | $ | (56,449 | ) | $ | 142,290 | $ | (226,800 | ) | ||||||
|
Per diluted common share:
|
||||||||||||||||
|
Net income (loss)
|
$ | 2.54 | $ | (1.43 | ) | $ | 5.98 | $ | (6.18 | ) | ||||||
|
Adjustments for:
|
||||||||||||||||
|
Net realized gains on investments
|
(0.62 | ) | (0.17 | ) | (1.93 | ) | (0.10 | ) | ||||||||
|
Net impairment losses on investments
|
0.02 | 0.11 | 0.08 | 0.19 | ||||||||||||
|
Net foreign currency exchange losses (gains)
|
0.02 | (0.03 | ) | 0.02 | (0.01 | ) | ||||||||||
|
Net operating income (loss) per diluted common share (3)
|
$ | 1.96 | $ | (1.52 | ) | $ | 4.15 | $ | (6.10 | ) | ||||||
|
Adjusted weighted average common shares outstanding - diluted (4)
|
33,272 | 37,183 | 34,286 | 37,165 | ||||||||||||
|
(1)
|
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities. The net income (loss) allocated to common shareholders for the three and nine months ended September 30, 2011 has been revised to include the effect of earnings attributable to holders of unvested restricted shares.
|
|
(2)
|
Net operating income (loss) is a non-GAAP measure as defined by Regulation G and represents net income (loss) after taxes excluding net realized gains and losses on investments, net impairment losses on investments and net foreign exchange gains and losses.
|
|
(3)
|
Net operating income (loss) per diluted common share is also a non-GAAP measure and is calculated by dividing net operating income (loss) by diluted weighted average shares outstanding for the period.
|
|
(4)
|
During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive. The adjusted weighted average common shares outstanding - diluted for the three and nine months ended September 30, 2011 was 37,360 and 37,578.
|
- 7 -
Platinum Underwriters Holdings, Ltd.
Key Ratios, Share Data, Ratings
|
As of and for the Three Months Ended
|
||||||||||||||||||||
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Key Ratios
|
||||||||||||||||||||
|
Combined ratio (%)
|
61.3% | 76.3% | 88.2% | 102.2% | 145.6% | |||||||||||||||
|
Investable assets to shareholders' equity ratio
|
2.30:1
|
2.36:1
|
2.42:1
|
2.47:1
|
2.50:1
|
|||||||||||||||
|
Debt to total capital (%)
|
12.3% | 12.7% | 12.8% | 12.9% | 12.6% | |||||||||||||||
|
Net premiums written (annualized) to shareholders' equity
|
0.33 | 0.33 | 0.34 | 0.36 | 0.41 | |||||||||||||||
|
Share Data
|
||||||||||||||||||||
|
Book value per common share (1)
|
$ | 54.60 | $ | 51.84 | $ | 49.00 | $ | 47.59 | $ | 46.26 | ||||||||||
|
Common shares outstanding (000's)
|
32,782 | 33,212 | 34,838 | 35,526 | 37,330 | |||||||||||||||
|
Market Price Per Common Share
|
||||||||||||||||||||
|
High
|
$ | 43.08 | $ | 38.43 | $ | 37.64 | $ | 35.36 | $ | 35.78 | ||||||||||
|
Low
|
37.58 | 34.97 | 32.94 | 27.53 | 28.05 | |||||||||||||||
|
Close
|
$ | 40.87 | $ | 38.10 | $ | 36.50 | $ | 34.11 | $ | 30.75 | ||||||||||
|
Industry Ratings
|
||||||||||||||||||||
|
Financial Strength Ratings:
|
||||||||||||||||||||
|
A.M. Best Company, Inc.
|
A | A | A | A | A | |||||||||||||||
|
Standard & Poor's Ratings Services
|
A- | A- | A- | A- | A | |||||||||||||||
|
Counterparty Credit Ratings (senior unsecured):
|
||||||||||||||||||||
|
A.M. Best Company, Inc.
|
bbb
|
bbb
|
bbb
|
bbb
|
bbb
|
|||||||||||||||
|
Standard & Poor's Ratings Services
|
BBB
|
BBB
|
BBB
|
BBB
|
BBB+
|
|||||||||||||||
|
Supplemental Data
|
||||||||||||||||||||
|
Total employees
|
125 | 124 | 127 | 125 | 129 | |||||||||||||||
|
(1)
|
See computation of book value per common share on page 11.
|
- 8 -
Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings (Loss) per Common Share
($ and amounts in thousands, except per share data)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Earnings (Loss)
|
||||||||||||||||
|
Basic and Diluted
|
||||||||||||||||
|
Net income (loss) attributable to common shareholders
|
$ | 84,864 | $ | (53,535 | ) | $ | 205,683 | $ | (231,128 | ) | ||||||
|
Portion allocated to participating common shareholders (1)
|
(234 | ) | 251 | (740 | ) | 1,285 | ||||||||||
|
Net income (loss) allocated to common shareholders
|
$ | 84,630 | $ | (53,284 | ) | $ | 204,943 | $ | (229,843 | ) | ||||||
|
Common Shares
|
||||||||||||||||
|
Basic
|
||||||||||||||||
|
Weighted average common shares outstanding
|
32,996 | 37,183 | 34,063 | 37,165 | ||||||||||||
|
Diluted
|
||||||||||||||||
|
Weighted average common shares outstanding
|
32,996 | 37,183 | 34,063 | 37,165 | ||||||||||||
|
Effect of dilutive securities:
|
||||||||||||||||
|
Common share options
|
179 | 52 | 154 | 195 | ||||||||||||
|
Restricted share units
|
97 | 125 | 69 | 218 | ||||||||||||
|
Adjusted weighted average common shares outstanding
|
33,272 | 37,360 | 34,286 | 37,578 | ||||||||||||
|
Earnings (Loss) Per Common Share
|
||||||||||||||||
|
Basic earnings (loss) per common share
|
$ | 2.56 | $ | (1.43 | ) | $ | 6.02 | $ | (6.18 | ) | ||||||
|
Diluted earnings (loss) per common share (2)
|
$ | 2.54 | $ | (1.43 | ) | $ | 5.98 | $ | (6.18 | ) | ||||||
|
(1)
|
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
|
|
(2)
|
During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
|
- 9 -
Platinum Underwriters Holdings, Ltd.
Computation of Basic and Diluted Earnings (Loss) per Common Share – by Quarter
($ and amounts in thousands, except per share data)
|
Three Months Ended
|
||||||||||||||||||||
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Earnings (Loss)
|
||||||||||||||||||||
|
Basic and Diluted
|
||||||||||||||||||||
|
Net income (loss) attributable to common shareholders
|
$ | 84,864 | $ | 67,532 | $ | 53,287 | $ | 7,064 | $ | (53,535 | ) | |||||||||
|
Portion allocated to participating common shareholders (1)
|
(234 | ) | (278 | ) | (208 | ) | (17 | ) | 251 | |||||||||||
|
Net income (loss) allocated to common shareholders
|
$ | 84,630 | $ | 67,254 | $ | 53,079 | $ | 7,047 | $ | (53,284 | ) | |||||||||
|
Common Shares
|
||||||||||||||||||||
|
Basic
|
||||||||||||||||||||
|
Weighted average common shares outstanding
|
32,996 | 33,914 | 35,291 | 36,117 | 37,183 | |||||||||||||||
|
Diluted
|
||||||||||||||||||||
|
Weighted average common shares outstanding
|
32,996 | 33,914 | 35,291 | 36,117 | 37,183 | |||||||||||||||
|
Effect of dilutive securities:
|
||||||||||||||||||||
|
Common share options
|
179 | 142 | 135 | 59 | 52 | |||||||||||||||
|
Restricted share units
|
97 | 48 | 84 | 126 | 125 | |||||||||||||||
|
Adjusted weighted average common shares outstanding
|
33,272 | 34,104 | 35,510 | 36,302 | 37,360 | |||||||||||||||
|
Earnings (Loss) Per Common Share
|
||||||||||||||||||||
|
Basic earnings (loss) per common share
|
$ | 2.56 | $ | 1.98 | $ | 1.50 | $ | 0.20 | $ | (1.43 | ) | |||||||||
|
Diluted earnings (loss) per common share (2)
|
$ | 2.54 | $ | 1.97 | $ | 1.49 | $ | 0.19 | $ | (1.43 | ) | |||||||||
|
(1)
|
Represents earnings attributable to holders of unvested restricted shares issued under the Company's share incentive plans that are considered to be participating securities.
|
|
(2)
|
During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.
|
- 10 -
Platinum Underwriters Holdings, Ltd.
Book Value Per Common Share – by Quarter
($ and amounts in thousands, except per share data)
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Price per share at period end
|
$ | 40.87 | $ | 38.10 | $ | 36.50 | $ | 34.11 | $ | 30.75 | ||||||||||
|
Shareholders' equity
|
$ | 1,789,946 | $ | 1,721,827 | $ | 1,706,895 | $ | 1,690,859 | $ | 1,726,912 | ||||||||||
|
Add: Assumed exercise of share options
|
29,669 | 31,209 | 32,356 | 18,925 | 7,418 | |||||||||||||||
|
Shareholders' equity - diluted
|
$ | 1,819,615 | $ | 1,753,036 | $ | 1,739,251 | $ | 1,709,784 | $ | 1,734,330 | ||||||||||
|
Basic common shares outstanding (1)
|
32,782 | 33,212 | 34,838 | 35,526 | 37,330 | |||||||||||||||
|
Add: Management and directors' options (2)
|
903 | 968 | 1,014 | 624 | 276 | |||||||||||||||
|
Add: Directors' and officers' restricted share units
|
515 | 406 | 405 | 321 | 363 | |||||||||||||||
|
Diluted common shares outstanding
|
34,200 | 34,586 | 36,257 | 36,471 | 37,969 | |||||||||||||||
|
Book value per common share (3)
|
||||||||||||||||||||
|
Basic book value per common share
|
$ | 54.60 | $ | 51.84 | $ | 49.00 | $ | 47.59 | $ | 46.26 | ||||||||||
|
Fully converted book value per common share
|
$ | 53.21 | $ | 50.69 | $ | 47.97 | $ | 46.88 | $ | 45.68 | ||||||||||
|
(1)
|
As of September 30, 2012, there were 32,782 common shares issued and outstanding. Included in this number were 73 restricted shares issued but unvested.
|
|
(2)
|
As of September 30, 2012, these were options with a price below the closing share price of $40.87.
|
|
(3)
|
Book value per common share and fully converted book value per common share are non-GAAP financial measures as defined by Regulation G.
|
- 11 -
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows
($ in thousands)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2011
|
|||||||||||||
|
Net cash provided by (used in) operating activities
|
$ | 40,216 | $ | 4,858 | $ | (18,969 | ) | $ | 38,146 | |||||||
|
Net cash provided by (used in) investing activities
|
170,213 | (185,555 | ) | 1,002,491 | 182,937 | |||||||||||
|
Net cash provided by (used in) financing activities
|
(20,788 | ) | (2,884 | ) | (115,216 | ) | (89,492 | ) | ||||||||
|
Effect of foreign currency exchange rate changes on cash
|
7,055 | (7,887 | ) | 1,863 | 7,837 | |||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
$ | 196,696 | $ | (191,468 | ) | $ | 870,169 | $ | 139,428 | |||||||
- 12 -
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Cash Flows – by Quarter
($ in thousands)
|
Three Months Ended
|
||||||||||||||||||||
|
September 30,
2012
|
June 30,
2012
|
March 31,
2012
|
December 31,
2011
|
September 30,
2011
|
||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$ | 40,216 | $ | (26,496 | ) | $ | (32,689 | ) | $ | (71,852 | ) | $ | 4,858 | |||||||
|
Net cash provided by (used in) investing activities
|
170,213 | 388,556 | 443,722 | (207,148 | ) | (185,555 | ) | |||||||||||||
|
Net cash provided by (used in) financing activities
|
(20,788 | ) | (62,533 | ) | (31,895 | ) | (63,601 | ) | (2,884 | ) | ||||||||||
|
Effect of foreign currency exchange rate changes on cash
|
7,055 | (1,392 | ) | (3,800 | ) | 7,806 | (7,887 | ) | ||||||||||||
|
Net increase (decrease) in cash and cash equivalents
|
$ | 196,696 | $ | 298,135 | $ | 375,338 | $ | (334,795 | ) | $ | (191,468 | ) | ||||||||
- 13 -
Platinum Underwriters Holdings, Ltd.
Segment Reporting – Three Month Summary
($ in thousands)
|
Three Months Ended September 30, 2012
|
Three Months Ended September 30, 2011
|
|||||||||||||||||||||||||||||||
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
|||||||||||||||||||||||||
|
Net premiums written
|
$ | 64,876 | $ | 72,358 | $ | 8,745 | $ | 145,979 | $ | 101,633 | $ | 72,689 | $ | 2,802 | $ | 177,124 | ||||||||||||||||
|
Net premiums earned
|
61,900 | 70,326 | 6,362 | 138,588 | 85,239 | 78,021 | 3,553 | 166,813 | ||||||||||||||||||||||||
|
Net losses and loss adjustment expenses
|
26,790 | 14,358 | 3,969 | 45,117 | 156,995 | 42,704 | 1,754 | 201,453 | ||||||||||||||||||||||||
|
Net acquisition expenses
|
7,078 | 16,710 | 2,380 | 26,168 | 12,068 | 16,780 | 1,360 | 30,208 | ||||||||||||||||||||||||
|
Other underwriting expenses
|
7,661 | 5,662 | 289 | 13,612 | 6,686 | 4,300 | 218 | 11,204 | ||||||||||||||||||||||||
|
Segment underwriting income (loss)*
|
$ | 20,371 | $ | 33,596 | $ | (276 | ) | 53,691 | $ | (90,510 | ) | $ | 14,237 | $ | 221 | (76,052 | ) | |||||||||||||||
|
Net investment income
|
23,209 | 29,762 | ||||||||||||||||||||||||||||||
|
Net realized gains on investments
|
22,982 | 7,498 | ||||||||||||||||||||||||||||||
|
Net impairment losses on investments
|
(699 | ) | (4,451 | ) | ||||||||||||||||||||||||||||
|
Other income (expense)
|
(96 | ) | (198 | ) | ||||||||||||||||||||||||||||
|
Net changes in fair value of derivatives
|
- | (4,546 | ) | |||||||||||||||||||||||||||||
|
Corporate expenses not allocated to segments
|
(6,354 | ) | (3,551 | ) | ||||||||||||||||||||||||||||
|
Net foreign currency exchange (losses) gains
|
(541 | ) | 982 | |||||||||||||||||||||||||||||
|
Interest expense
|
(4,775 | ) | (4,769 | ) | ||||||||||||||||||||||||||||
|
Income (loss) before income taxes
|
$ | 87,417 | $ | (55,325 | ) | |||||||||||||||||||||||||||
|
Underwriting ratios:*
|
||||||||||||||||||||||||||||||||
|
Net loss and loss adjustment expense
|
43.3 | % | 20.4 | % | 62.4 | % | 32.6 | % | 184.2 | % | 54.7 | % | 49.4 | % | 120.8 | % | ||||||||||||||||
|
Net acquisition expense
|
11.4 | % | 23.8 | % | 37.4 | % | 18.9 | % | 14.2 | % | 21.5 | % | 38.3 | % | 18.1 | % | ||||||||||||||||
|
Other underwriting expense
|
12.4 | % | 8.1 | % | 4.5 | % | 9.8 | % | 7.8 | % | 5.5 | % | 6.1 | % | 6.7 | % | ||||||||||||||||
|
Combined
|
67.1 | % | 52.3 | % | 104.3 | % | 61.3 | % | 206.2 | % | 81.7 | % | 93.8 | % | 145.6 | % | ||||||||||||||||
|
Statutory underwriting ratios:*
|
||||||||||||||||||||||||||||||||
|
Net loss and loss adjustment expense
|
43.3 | % | 20.4 | % | 62.4 | % | 32.6 | % | 184.2 | % | 54.7 | % | 49.4 | % | 120.8 | % | ||||||||||||||||
|
Net acquisition expense
|
11.7 | % | 23.8 | % | 32.8 | % | 19.0 | % | 12.6 | % | 21.5 | % | 42.5 | % | 16.7 | % | ||||||||||||||||
|
Other underwriting expense
|
11.8 | % | 7.8 | % | 3.3 | % | 9.3 | % | 6.6 | % | 5.9 | % | 7.8 | % | 6.3 | % | ||||||||||||||||
|
Combined
|
66.8 | % | 52.0 | % | 98.5 | % | 60.9 | % | 203.4 | % | 82.1 | % | 99.7 | % | 143.8 | % | ||||||||||||||||
* Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G.
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
|
(1)
|
Net losses & LAE are divided by net premiums earned;
|
|
(2)
|
Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and |
|
(3)
|
Other underwriting expenses are divided by net premiums written. |
- 14 -
Platinum Underwriters Holdings, Ltd.
Segment Reporting – Nine Month Summary
($ in thousands)
|
Nine Months Ended September 30, 2012
|
Nine Months Ended September 30, 2011
|
|||||||||||||||||||||||||||||||
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
|||||||||||||||||||||||||
|
Net premiums written
|
$ | 194,724 | $ | 219,436 | $ | 16,939 | $ | 431,099 | $ | 267,846 | $ | 222,442 | $ | 7,508 | $ | 497,796 | ||||||||||||||||
|
Net premiums earned
|
186,066 | 221,838 | 13,971 | 421,875 | 274,996 | 235,949 | 11,185 | 522,130 | ||||||||||||||||||||||||
|
Net losses and loss adjustment expenses
|
85,380 | 101,245 | 4,805 | 191,430 | 551,868 | 126,191 | 2,346 | 680,405 | ||||||||||||||||||||||||
|
Net acquisition expenses
|
25,034 | 52,572 | 9,419 | 87,025 | 37,703 | 53,487 | 7,083 | 98,273 | ||||||||||||||||||||||||
|
Other underwriting expenses
|
21,950 | 16,323 | 747 | 39,020 | 21,281 | 14,461 | 717 | 36,459 | ||||||||||||||||||||||||
|
Segment underwriting income (loss)*
|
$ | 53,702 | $ | 51,698 | $ | (1,000 | ) | 104,400 | $ | (335,856 | ) | $ | 41,810 | $ | 1,039 | (293,007 | ) | |||||||||||||||
|
Net investment income
|
77,916 | 96,105 | ||||||||||||||||||||||||||||||
|
Net realized gains on investments
|
70,299 | 3,216 | ||||||||||||||||||||||||||||||
|
Net impairment losses on investments
|
(2,882 | ) | (7,624 | ) | ||||||||||||||||||||||||||||
|
Other income (expense)
|
(766 | ) | 838 | |||||||||||||||||||||||||||||
|
Net changes in fair value of derivatives
|
- | (5,294 | ) | |||||||||||||||||||||||||||||
|
Corporate expenses not allocated to segments
|
(17,625 | ) | (12,552 | ) | ||||||||||||||||||||||||||||
|
Net foreign currency exchange (losses) gains
|
(763 | ) | 179 | |||||||||||||||||||||||||||||
|
Interest expense
|
(14,321 | ) | (14,302 | ) | ||||||||||||||||||||||||||||
|
Income (loss) before income taxes
|
$ | 216,258 | $ | (232,441 | ) | |||||||||||||||||||||||||||
|
Underwriting ratios:*
|
||||||||||||||||||||||||||||||||
|
Net loss and loss adjustment expense
|
45.9 | % | 45.6 | % | 34.4 | % | 45.4 | % | 200.7 | % | 53.5 | % | 21.0 | % | 130.3 | % | ||||||||||||||||
|
Net acquisition expense
|
13.5 | % | 23.7 | % | 67.4 | % | 20.6 | % | 13.7 | % | 22.7 | % | 63.3 | % | 18.8 | % | ||||||||||||||||
|
Other underwriting expense
|
11.8 | % | 7.4 | % | 5.3 | % | 9.2 | % | 7.7 | % | 6.1 | % | 6.4 | % | 7.0 | % | ||||||||||||||||
|
Combined
|
71.2 | % | 76.7 | % | 107.1 | % | 75.2 | % | 222.1 | % | 82.3 | % | 90.7 | % | 156.1 | % | ||||||||||||||||
|
Statutory underwriting ratios:*
|
||||||||||||||||||||||||||||||||
|
Net loss and loss adjustment expense
|
45.9 | % | 45.6 | % | 34.4 | % | 45.4 | % | 200.7 | % | 53.5 | % | 21.0 | % | 130.3 | % | ||||||||||||||||
|
Net acquisition expense
|
12.8 | % | 24.0 | % | 58.9 | % | 20.3 | % | 13.9 | % | 22.3 | % | 83.6 | % | 18.7 | % | ||||||||||||||||
|
Other underwriting expense
|
11.3 | % | 7.4 | % | 4.4 | % | 9.1 | % | 7.9 | % | 6.5 | % | 9.5 | % | 7.3 | % | ||||||||||||||||
|
Combined
|
70.0 | % | 77.0 | % | 97.7 | % | 74.8 | % | 222.5 | % | 82.3 | % | 114.1 | % | 156.3 | % | ||||||||||||||||
* Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G.
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
|
(1)
|
Net losses & LAE are divided by net premiums earned;
|
|
(2)
|
Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and |
|
(3)
|
Other underwriting expenses are divided by net premiums written. |
- 15 -
Platinum Underwriters Holdings, Ltd.
Property and Marine Segment – by Quarter
($ in thousands)
|
Three Months Ended
|
||||||||||||||||||||
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Net premiums written
|
$ | 64,876 | $ | 61,695 | $ | 68,153 | $ | 76,836 | $ | 101,633 | ||||||||||
|
Net premiums earned
|
61,900 | 62,838 | 61,328 | 81,980 | 85,239 | |||||||||||||||
|
Net losses and loss adjustment expenses
|
26,790 | 17,653 | 40,937 | 76,194 | 156,995 | |||||||||||||||
|
Net acquisition expenses
|
7,078 | 8,721 | 9,235 | 11,645 | 12,068 | |||||||||||||||
|
Other underwriting expenses
|
7,661 | 7,454 | 6,835 | 6,341 | 6,686 | |||||||||||||||
|
Segment underwriting income (loss)*
|
$ | 20,371 | $ | 29,010 | $ | 4,321 | $ | (12,200 | ) | $ | (90,510 | ) | ||||||||
|
Underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
43.3 | % | 28.1 | % | 66.8 | % | 92.9 | % | 184.2 | % | ||||||||||
|
Net acquisition expense
|
11.4 | % | 13.9 | % | 15.1 | % | 14.2 | % | 14.2 | % | ||||||||||
|
Other underwriting expense
|
12.4 | % | 11.9 | % | 11.1 | % | 7.7 | % | 7.8 | % | ||||||||||
|
Combined
|
67.1 | % | 53.9 | % | 93.0 | % | 114.8 | % | 206.2 | % | ||||||||||
|
Statutory underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
43.3 | % | 28.1 | % | 66.8 | % | 92.9 | % | 184.2 | % | ||||||||||
|
Net acquisition expense
|
11.7 | % | 13.1 | % | 13.5 | % | 14.0 | % | 12.6 | % | ||||||||||
|
Other underwriting expense
|
11.8 | % | 12.1 | % | 10.0 | % | 8.3 | % | 6.6 | % | ||||||||||
|
Combined
|
66.8 | % | 53.3 | % | 90.3 | % | 115.2 | % | 203.4 | % | ||||||||||
* Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G.
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
|
(1)
|
Net losses & LAE are divided by net premiums earned;
|
|
(2)
|
Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and |
|
(3)
|
Other underwriting expenses are divided by net premiums written. |
- 16 -
Platinum Underwriters Holdings, Ltd.
Casualty Segment – by Quarter
($ in thousands)
|
Three Months Ended
|
||||||||||||||||||||
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Net premiums written
|
$ | 72,358 | $ | 72,678 | $ | 74,400 | $ | 74,547 | $ | 72,689 | ||||||||||
|
Net premiums earned
|
70,326 | 75,746 | 75,766 | 82,785 | 78,021 | |||||||||||||||
|
Net losses and loss adjustment expenses
|
14,358 | 45,851 | 41,036 | 52,459 | 42,704 | |||||||||||||||
|
Net acquisition expenses
|
16,710 | 18,487 | 17,375 | 19,251 | 16,780 | |||||||||||||||
|
Other underwriting expenses
|
5,662 | 5,625 | 5,036 | 4,541 | 4,300 | |||||||||||||||
|
Segment underwriting income*
|
$ | 33,596 | $ | 5,783 | $ | 12,319 | $ | 6,534 | $ | 14,237 | ||||||||||
|
Underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
20.4 | % | 60.5 | % | 54.2 | % | 63.4 | % | 54.7 | % | ||||||||||
|
Net acquisition expense
|
23.8 | % | 24.4 | % | 22.9 | % | 23.3 | % | 21.5 | % | ||||||||||
|
Other underwriting expense
|
8.1 | % | 7.4 | % | 6.6 | % | 5.5 | % | 5.5 | % | ||||||||||
|
Combined
|
52.3 | % | 92.3 | % | 83.7 | % | 92.2 | % | 81.7 | % | ||||||||||
|
Statutory underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
20.4 | % | 60.5 | % | 54.2 | % | 63.4 | % | 54.7 | % | ||||||||||
|
Net acquisition expense
|
23.8 | % | 25.4 | % | 22.7 | % | 23.5 | % | 21.5 | % | ||||||||||
|
Other underwriting expense
|
7.8 | % | 7.7 | % | 6.8 | % | 6.1 | % | 5.9 | % | ||||||||||
|
Combined
|
52.0 | % | 93.6 | % | 83.7 | % | 93.0 | % | 82.1 | % | ||||||||||
* Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G.
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
|
(1)
|
Net losses & LAE are divided by net premiums earned;
|
|
(2)
|
Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and |
|
(3)
|
Other underwriting expenses are divided by net premiums written. |
- 17 -
Platinum Underwriters Holdings, Ltd.
Finite Risk Segment – by Quarter
($ in thousands)
|
Three Months Ended
|
||||||||||||||||||||
|
September 30,
|
June 30,
|
March 31,
|
December 31,
|
September 30,
|
||||||||||||||||
|
2012
|
2012
|
2012
|
2011
|
2011
|
||||||||||||||||
|
Net premiums written
|
$ | 8,745 | $ | 7,086 | $ | 1,108 | $ | 2,335 | $ | 2,802 | ||||||||||
|
Net premiums earned
|
6,362 | 6,491 | 1,118 | 2,557 | 3,553 | |||||||||||||||
|
Net losses and loss adjustment expenses
|
3,969 | 3,613 | (2,777 | ) | (3,621 | ) | 1,754 | |||||||||||||
|
Net acquisition expenses
|
2,380 | 2,992 | 4,047 | 4,008 | 1,360 | |||||||||||||||
|
Other underwriting expenses
|
289 | 267 | 191 | 223 | 218 | |||||||||||||||
|
Segment underwriting income (loss)*
|
$ | (276 | ) | $ | (381 | ) | $ | (343 | ) | $ | 1,947 | $ | 221 | |||||||
|
Underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
62.4 | % | 55.7 | % | (248.4 | %) | (141.6 | %) | 49.4 | % | ||||||||||
|
Net acquisition expense
|
37.4 | % | 46.1 | % | 362.0 | % | 156.7 | % | 38.3 | % | ||||||||||
|
Other underwriting expense
|
4.5 | % | 4.1 | % | 17.1 | % | 8.7 | % | 6.1 | % | ||||||||||
|
Combined
|
104.3 | % | 105.9 | % | 130.7 | % | 23.8 | % | 93.8 | % | ||||||||||
|
Statutory underwriting ratios:*
|
||||||||||||||||||||
|
Net loss and loss adjustment expense
|
62.4 | % | 55.7 | % | (248.4 | %) | (141.6 | %) | 49.4 | % | ||||||||||
|
Net acquisition expense
|
32.8 | % | 43.7 | % | 361.7 | % | 169.9 | % | 42.5 | % | ||||||||||
|
Other underwriting expense
|
3.3 | % | 3.8 | % | 17.2 | % | 9.6 | % | 7.8 | % | ||||||||||
|
Combined
|
98.5 | % | 103.2 | % | 130.5 | % | 37.9 | % | 99.7 | % | ||||||||||
* Segment underwriting income or loss and underwriting ratios are non-GAAP financial measures as defined by Regulation G.
The underwriting ratios are calculated by dividing each item above by net premiums earned.
The statutory underwriting ratios are based on statutory accounting principles and are calculated as follows:
|
(1)
|
Net losses & LAE are divided by net premiums earned;
|
|
(2)
|
Net acquisition expenses are divided by net premiums written and exclude changes in deferred acquisition costs; and |
|
(3)
|
Other underwriting expenses are divided by net premiums written. |
- 18 -
Platinum Underwriters Holdings, Ltd.
Net Premiums Written – Supplemental Information
($ in thousands)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Property and Marine
|
||||||||||||||||
|
Excess-of-Loss
|
$ | 53,249 | $ | 84,886 | $ | 160,284 | $ | 218,845 | ||||||||
|
Proportional
|
11,627 | 16,747 | 34,440 | 49,001 | ||||||||||||
|
Subtotal Property and Marine
|
64,876 | 101,633 | 194,724 | 267,846 | ||||||||||||
|
Casualty
|
||||||||||||||||
|
Excess-of-Loss
|
59,436 | 60,585 | 179,927 | 180,333 | ||||||||||||
|
Proportional
|
12,922 | 12,104 | 39,509 | 42,109 | ||||||||||||
|
Subtotal Casualty
|
72,358 | 72,689 | 219,436 | 222,442 | ||||||||||||
|
Finite Risk
|
||||||||||||||||
|
Excess-of-Loss
|
- | 531 | - | 531 | ||||||||||||
|
Proportional
|
8,745 | 2,271 | 16,939 | 6,977 | ||||||||||||
|
Subtotal Finite Risk
|
8,745 | 2,802 | 16,939 | 7,508 | ||||||||||||
|
Combined Segments
|
||||||||||||||||
|
Excess-of-Loss
|
112,685 | 146,002 | 340,211 | 399,709 | ||||||||||||
|
Proportional
|
33,294 | 31,122 | 90,888 | 98,087 | ||||||||||||
|
Total
|
$ | 145,979 | $ | 177,124 | $ | 431,099 | $ | 497,796 | ||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
|
Property and Marine
|
||||||||||||||||
|
United States
|
$ | 41,642 | $ | 53,816 | $ | 119,285 | $ | 142,488 | ||||||||
|
International
|
23,234 | 47,817 | 75,439 | 125,358 | ||||||||||||
|
Subtotal Property and Marine
|
64,876 | 101,633 | 194,724 | 267,846 | ||||||||||||
|
Casualty
|
||||||||||||||||
|
United States
|
65,454 | 61,086 | 197,866 | 192,854 | ||||||||||||
|
International
|
6,904 | 11,603 | 21,570 | 29,588 | ||||||||||||
|
Subtotal Casualty
|
72,358 | 72,689 | 219,436 | 222,442 | ||||||||||||
|
Finite Risk
|
||||||||||||||||
|
United States
|
8,745 | 2,802 | 16,939 | 7,508 | ||||||||||||
|
International
|
- | - | - | - | ||||||||||||
|
Subtotal Finite Risk
|
8,745 | 2,802 | 16,939 | 7,508 | ||||||||||||
|
Combined Segments
|
||||||||||||||||
|
United States
|
115,841 | 117,704 | 334,090 | 342,850 | ||||||||||||
|
International
|
30,138 | 59,420 | 97,009 | 154,946 | ||||||||||||
|
Total
|
$ | 145,979 | $ | 177,124 | $ | 431,099 | $ | 497,796 | ||||||||
- 19 -
Platinum Underwriters Holdings, Ltd.
Premiums by Line of Business – Three Month Summary
($ in thousands)
|
Three Months Ended September 30, 2012
|
Three Months Ended September 30, 2011
|
|||||||||||||||||||||||
|
Gross Premiums Written
|
Net Premiums
Written
|
Net Premiums
Earned
|
Gross Premiums Written
|
Net Premiums
Written
|
Net Premiums
Earned
|
|||||||||||||||||||
|
Property and Marine
|
||||||||||||||||||||||||
|
North American Property Proportional
|
$ | 1,855 | $ | 1,855 | $ | 784 | $ | 649 | $ | 649 | $ | 1,386 | ||||||||||||
|
North American Property Catastrophe
|
23,924 | 23,923 | 23,415 | 31,657 | 31,655 | 23,678 | ||||||||||||||||||
|
North American Property Risk
|
8,249 | 7,990 | 7,506 | 8,411 | 8,412 | 8,604 | ||||||||||||||||||
|
Other Property
|
8,599 | 8,599 | 8,648 | 13,877 | 13,877 | 13,897 | ||||||||||||||||||
|
Marine / Aviation Proportional
|
1,561 | 1,561 | 1,715 | 1,351 | 1,351 | 1,623 | ||||||||||||||||||
|
Marine / Aviation Excess
|
712 | 712 | 696 | 314 | 315 | 1,244 | ||||||||||||||||||
|
International Property Proportional
|
3,582 | 3,582 | 3,693 | 4,779 | 4,779 | 4,918 | ||||||||||||||||||
|
International Property Catastrophe
|
14,999 | 15,000 | 13,168 | 38,700 | 38,192 | 27,531 | ||||||||||||||||||
|
International Property Risk
|
1,654 | 1,654 | 2,275 | 2,403 | 2,403 | 2,358 | ||||||||||||||||||
|
Subtotal
|
65,135 | 64,876 | 61,900 | 102,141 | 101,633 | 85,239 | ||||||||||||||||||
|
Casualty
|
||||||||||||||||||||||||
|
Clash
|
2,458 | 2,458 | 2,599 | 2,524 | 2,524 | 2,673 | ||||||||||||||||||
|
1st Dollar GL
|
2,467 | 2,467 | 2,977 | 2,891 | 2,891 | 3,364 | ||||||||||||||||||
|
1st Dollar Other
|
3,192 | 3,192 | 3,248 | 1,906 | 1,906 | 2,135 | ||||||||||||||||||
|
Casualty Excess
|
45,401 | 45,401 | 43,574 | 41,518 | 41,518 | 44,708 | ||||||||||||||||||
|
Accident & Health
|
10,556 | 10,544 | 9,694 | 10,957 | 10,957 | 11,005 | ||||||||||||||||||
|
International Casualty
|
3,868 | 3,868 | 3,796 | 6,563 | 6,563 | 7,271 | ||||||||||||||||||
|
International Motor
|
581 | 581 | 473 | 1,208 | 1,208 | 1,091 | ||||||||||||||||||
|
Financial Lines
|
3,847 | 3,847 | 3,965 | 5,122 | 5,122 | 5,774 | ||||||||||||||||||
|
Subtotal
|
72,370 | 72,358 | 70,326 | 72,689 | 72,689 | 78,021 | ||||||||||||||||||
|
Finite Risk
|
||||||||||||||||||||||||
|
Finite Property
|
- | - | - | 531 | 531 | 531 | ||||||||||||||||||
|
Finite Casualty
|
8,745 | 8,745 | 6,362 | 2,271 | 2,271 | 3,022 | ||||||||||||||||||
|
Subtotal
|
8,745 | 8,745 | 6,362 | 2,802 | 2,802 | 3,553 | ||||||||||||||||||
|
Total
|
$ | 146,250 | $ | 145,979 | $ | 138,588 | $ | 177,632 | $ | 177,124 | $ | 166,813 | ||||||||||||
- 20 -
Platinum Underwriters Holdings, Ltd.
Premiums by Line of Business – Nine Month Summary
($ in thousands)
|
Nine Months Ended September 30, 2012
|
Nine Months Ended September 30, 2011
|
|||||||||||||||||||||||
|
Gross Premiums Written
|
Net Premiums
Written
|
Net Premiums
Earned
|
Gross Premiums Written
|
Net Premiums
Written
|
Net Premiums
Earned
|
|||||||||||||||||||
|
Property and Marine
|
||||||||||||||||||||||||
|
North American Property Proportional
|
$ | 3,256 | $ | 3,256 | $ | 3,341 | $ | 2,967 | $ | 2,967 | $ | 5,051 | ||||||||||||
|
North American Property Catastrophe
|
67,679 | 67,943 | 64,543 | 88,901 | 73,800 | 73,916 | ||||||||||||||||||
|
North American Property Risk
|
25,223 | 24,964 | 26,646 | 27,324 | 27,594 | 30,456 | ||||||||||||||||||
|
Other Property
|
25,407 | 25,407 | 25,335 | 40,761 | 40,761 | 40,638 | ||||||||||||||||||
|
Marine / Aviation Proportional
|
4,746 | 4,746 | 4,305 | 3,940 | 3,940 | 4,453 | ||||||||||||||||||
|
Marine / Aviation Excess
|
4,055 | 4,055 | 4,879 | 3,523 | 3,524 | 5,700 | ||||||||||||||||||
|
International Property Proportional
|
11,988 | 11,988 | 12,234 | 13,117 | 13,117 | 12,787 | ||||||||||||||||||
|
International Property Catastrophe
|
46,716 | 46,325 | 38,327 | 114,725 | 94,804 | 94,715 | ||||||||||||||||||
|
International Property Risk
|
6,040 | 6,040 | 6,456 | 7,339 | 7,339 | 7,280 | ||||||||||||||||||
|
Subtotal
|
195,110 | 194,724 | 186,066 | 302,597 | 267,846 | 274,996 | ||||||||||||||||||
|
Casualty
|
||||||||||||||||||||||||
|
Clash
|
6,988 | 6,988 | 7,086 | 7,883 | 7,883 | 7,845 | ||||||||||||||||||
|
1st Dollar GL
|
6,557 | 6,557 | 9,115 | 14,364 | 14,364 | 13,228 | ||||||||||||||||||
|
1st Dollar Other
|
8,710 | 8,710 | 9,453 | 5,797 | 5,797 | 6,378 | ||||||||||||||||||
|
Casualty Excess
|
139,546 | 139,546 | 139,264 | 127,679 | 127,679 | 136,536 | ||||||||||||||||||
|
Accident & Health
|
31,727 | 31,690 | 29,255 | 32,474 | 32,474 | 28,796 | ||||||||||||||||||
|
International Casualty
|
12,373 | 12,373 | 13,018 | 15,168 | 15,168 | 18,871 | ||||||||||||||||||
|
International Motor
|
1,477 | 1,477 | 1,365 | 3,221 | 3,221 | 3,100 | ||||||||||||||||||
|
Financial Lines
|
12,095 | 12,095 | 13,282 | 15,856 | 15,856 | 21,195 | ||||||||||||||||||
|
Subtotal
|
219,473 | 219,436 | 221,838 | 222,442 | 222,442 | 235,949 | ||||||||||||||||||
|
Finite Risk
|
||||||||||||||||||||||||
|
Finite Property
|
- | - | - | 531 | 531 | 531 | ||||||||||||||||||
|
Finite Casualty
|
16,939 | 16,939 | 13,971 | 6,977 | 6,977 | 10,654 | ||||||||||||||||||
|
Subtotal
|
16,939 | 16,939 | 13,971 | 7,508 | 7,508 | 11,185 | ||||||||||||||||||
|
Total
|
$ | 431,522 | $ | 431,099 | $ | 421,875 | $ | 532,547 | $ | 497,796 | $ | 522,130 | ||||||||||||
- 21 -
Platinum Underwriters Holdings, Ltd.
Investments
($ in thousands)
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||||||||||||
|
Fair Value
|
Book Yield
|
Market Yield
|
Fair Value
|
Book Yield
|
Market Yield
|
|||||||||||||||||||||
|
Fixed maturity available-for-sale securities:
|
||||||||||||||||||||||||||
|
U.S. Government
|
$ | 4,991 | 2.7 | % | 0.3 | % | $ | 5,083 | 2.7 | % | 0.6 | % | ||||||||||||||
|
U.S. Government agencies
|
10,290 | 1.4 | % | 0.7 | % | 100,259 | 0.9 | % | 0.4 | % | ||||||||||||||||
|
Municipal bonds
|
1,281,784 | 4.4 | % | 2.4 | % | 1,660,760 | 4.7 | % | 3.2 | % | ||||||||||||||||
|
Non-U.S. governments
|
94,761 | 2.0 | % | 0.9 | % | 71,266 | 2.6 | % | 2.1 | % | ||||||||||||||||
|
Corporate bonds
|
321,421 | 4.5 | % | 2.8 | % | 349,548 | 4.8 | % | 2.8 | % | ||||||||||||||||
|
Commercial mortgage-backed securities
|
176,649 | 5.5 | % | 2.7 | % | 204,609 | 5.6 | % | 3.8 | % | ||||||||||||||||
|
Residential mortgage-backed securities
|
265,551 | 2.2 | % | 1.7 | % | 251,627 | 2.9 | % | 2.9 | % | ||||||||||||||||
|
Asset-backed securities
|
21,591 | 2.7 | % | 3.9 | % | 20,422 | 1.7 | % | 8.5 | % | ||||||||||||||||
|
Total fixed maturity available-for-sale securities
|
$ | 2,177,038 | 4.1 | % | 2.3 | % | $ | 2,663,574 | 4.3 | % | 3.1 | % | ||||||||||||||
|
Fixed maturity trading securities:
|
||||||||||||||||||||||||||
|
Non-U.S. governments
|
$ | 116,056 | 3.6 | % | 0.5 | % | $ | 125,126 | 3.6 | % | 0.9 | % | ||||||||||||||
|
Total fixed maturity trading securities
|
$ | 116,056 | 3.6 | % | 0.5 | % | $ | 125,126 | 3.6 | % | 0.9 | % | ||||||||||||||
|
Short-term investments
|
$ | 165,741 | 1.9 | % | 1.9 | % | $ | 588,834 | 1.0 | % | 0.9 | % | ||||||||||||||
|
September 30, 2012
|
December 31, 2011
|
|||||||||||||||||||||||||
|
Credit quality of investments*
|
Fair Value
|
% of Total
|
Fair Value
|
% of Total
|
||||||||||||||||||||||
|
Aaa
|
$ | 892,573 | 36.2 | % | $ | 1,504,875 | 44.6 | % | ||||||||||||||||||
|
Aa
|
843,011 | 34.3 | % | 1,037,258 | 30.7 | % | ||||||||||||||||||||
|
A
|
404,513 | 16.5 | % | 561,045 | 16.6 | % | ||||||||||||||||||||
|
Baa
|
243,314 | 9.9 | % | 202,372 | 6.0 | % | ||||||||||||||||||||
|
Below investment grade
|
75,424 | 3.1 | % | 71,984 | 2.1 | % | ||||||||||||||||||||
|
Total
|
$ | 2,458,835 | 100.0 | % | $ | 3,377,534 | 100.0 | % | ||||||||||||||||||
|
Portfolio information**
|
||||||||||||||||||||||||||
|
Credit Quality
|
Aa2
|
Aa2
|
||||||||||||||||||||||||
|
Book Yield
|
2.4% | 3.0% | ||||||||||||||||||||||||
|
Duration
|
2.8 yrs
|
3.6 yrs
|
||||||||||||||||||||||||
|
*
|
Rated using external rating agencies (primarily Moody’s) including credit enhancements from insurance entities. As of September 30, 2012, there were approximately $10.1 million of municipal bonds whose ratings of “Aa” included the benefit of guarantees from third-party insurers that would otherwise be rated as “A” without the existence of such guarantees. |
|
**
|
Our portfolio includes investments, cash and cash equivalents, accrued investment income and net balances due to and from brokers.
(Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality; Baa-Investment Grade)
|
- 22 -
Platinum Underwriters Holdings, Ltd.
Fixed Maturity Available-for-Sale Securities Detail
($ in thousands)
|
September 30, 2012
|
||||||||||||||||||||
|
Fair Value
|
Net Unrealized Gain (Loss)
|
Credit Quality
|
Duration
|
Weighted Average Life
|
||||||||||||||||
|
Fixed maturity available-for-sale securities:
|
||||||||||||||||||||
|
U.S. Government
|
$ | 4,991 | $ | 341 |
Aaa
|
2.9 | ||||||||||||||
|
U.S. Government agencies
|
10,290 | 287 |
Aaa
|
4.3 | ||||||||||||||||
|
Municipal bonds:
|
||||||||||||||||||||
|
State general obligation bonds
|
742,228 | 85,106 |
Aa2
|
6.8 | ||||||||||||||||
|
Essential service bonds*
|
305,228 | 31,033 |
Aa3
|
6.6 | ||||||||||||||||
|
State income tax and sales tax bonds
|
116,165 | 16,092 |
Aa1
|
7.2 | ||||||||||||||||
|
Other municipal bonds
|
78,058 | 6,081 |
Aa2
|
3.9 | ||||||||||||||||
|
Pre-refunded bonds
|
40,105 | 2,414 |
Aa3
|
2.0 | ||||||||||||||||
|
Subtotal
|
1,281,784 | 140,726 |
Aa2
|
6.5 | ||||||||||||||||
|
Non-U.S. governments
|
94,761 | 1,808 |
Aa1
|
1.6 | ||||||||||||||||
|
Corporate bonds:
|
||||||||||||||||||||
|
Industrial
|
188,114 | 9,950 |
Baa1
|
5.2 | ||||||||||||||||
|
Utilities
|
76,281 | 5,555 | A3 | 5.4 | ||||||||||||||||
|
Insurance
|
49,573 | 4,233 |
Baa1
|
4.1 | ||||||||||||||||
|
Finance
|
7,453 | 740 |
Baa1
|
6.7 | ||||||||||||||||
|
Subtotal
|
321,421 | 20,478 |
Baa1
|
5.1 | ||||||||||||||||
|
Commercial mortgage-backed securities
|
176,649 | 13,480 |
Aa2
|
3.1 | 3.4 | |||||||||||||||
|
Residential mortgage-backed securities:
|
||||||||||||||||||||
|
U.S. Government agency residential mortgage-backed securities
|
216,728 | 2,563 |
Aaa
|
0.7 | 3.6 | |||||||||||||||
|
Non-agency residential mortgage-backed securities
|
43,893 | (4,930 | ) |
Caa2
|
0.1 | 5.1 | ||||||||||||||
|
Alt-A residential mortgage-backed securities
|
4,930 | 45 |
Caa2
|
- | 6.1 | |||||||||||||||
|
Subtotal
|
265,551 | (2,322 | ) |
Aa3
|
0.6 | 3.9 | ||||||||||||||
|
Asset-backed securities:
|
||||||||||||||||||||
|
Asset-backed securities
|
13,684 | 84 |
Aaa
|
0.1 | 7.0 | |||||||||||||||
|
Sub-prime asset-backed securities
|
7,907 | (466 | ) |
Ca
|
- | 10.2 | ||||||||||||||
|
Subtotal
|
21,591 | (382 | ) |
Baa1
|
0.1 | 8.1 | ||||||||||||||
|
Total
|
$ | 2,177,038 | $ | 174,416 |
Aa3
|
5.0 | ||||||||||||||
|
*
|
Essential service bonds include bonds issued for education, transportation and utilities. |
- 23 -
Platinum Underwriters Holdings, Ltd.
Corporate Bonds Detail
($ in thousands)
|
September 30, 2012
|
||||||||||||||||
|
Par Value
|
Fair Value
|
Net Unrealized Gain (Loss)
|
Credit Quality
|
|||||||||||||
|
Top 20 Holdings by Issuer
|
||||||||||||||||
|
American Electric Power Company, Inc.
|
$ | 13,500 | $ | 14,907 | $ | 1,371 |
Baa1
|
|||||||||
|
HCC Insurance Holdings, Inc.
|
10,000 | 11,421 | 1,358 |
Baa1
|
||||||||||||
|
Mattel, Inc.
|
10,000 | 10,706 | 583 |
Baa1
|
||||||||||||
|
Hewlett-Packard Company
|
10,000 | 10,420 | 272 | A3 | ||||||||||||
|
MetLife, Inc.
|
10,000 | 10,099 | 99 | A3 | ||||||||||||
|
Anglo American plc
|
8,000 | 9,837 | 455 |
Baa1
|
||||||||||||
|
Snap-On Incorporated
|
7,000 | 7,406 | 388 |
Baa1
|
||||||||||||
|
Encana Corporation
|
7,000 | 7,386 | 352 |
Baa2
|
||||||||||||
|
CNA Financial Corporation
|
6,000 | 7,360 | 1,349 |
Baa2
|
||||||||||||
|
Newmont Mining Corporation
|
7,000 | 7,080 | 131 |
Baa1
|
||||||||||||
|
Teck Resources Limited
|
6,750 | 6,907 | 189 |
Baa2
|
||||||||||||
|
Southern Company
|
6,625 | 6,862 | 248 | A3 | ||||||||||||
|
Rio Tinto plc
|
5,000 | 6,784 | 735 | A3 | ||||||||||||
|
CMS Energy Corporation
|
5,000 | 6,523 | 947 | A3 | ||||||||||||
|
Hess Corporation
|
5,000 | 6,514 | 619 |
Baa2
|
||||||||||||
|
NextEra Energy, Inc.
|
5,750 | 6,246 | 500 |
Aa3
|
||||||||||||
|
Entergy Corporation
|
6,000 | 6,224 | 223 |
Baa2
|
||||||||||||
|
MidAmerican Energy Company
|
5,375 | 5,746 | 375 | A2 | ||||||||||||
|
FirstEnergy Corp.
|
5,000 | 5,731 | 733 |
Baa2
|
||||||||||||
|
ArcelorMittal
|
$ | 5,000 | $ | 5,713 | $ | (485 | ) |
Baa3
|
||||||||
- 24 -
Platinum Underwriters Holdings, Ltd.
Municipal Bonds Detail
|
September 30, 2012
|
||||||||||||||||
|
Par Value
|
Fair Value
|
Net Unrealized Gain (Loss)
|
Credit Quality
|
|||||||||||||
|
Top 10 Exposures by Jurisdiction
|
||||||||||||||||
|
Pennsylvania
|
$ | 110,200 | $ | 126,441 | $ | 15,487 |
Aa2
|
|||||||||
|
Connecticut
|
95,500 | 110,410 | 13,326 |
Aa3
|
||||||||||||
|
Illinois
|
97,500 | 106,640 | 8,265 | A2 | ||||||||||||
|
California
|
82,655 | 97,679 | 13,329 | A1 | ||||||||||||
|
District of Columbia
|
62,300 | 71,694 | 9,241 |
Aa2
|
||||||||||||
|
New Jersey
|
65,500 | 71,229 | 5,386 | A1 | ||||||||||||
|
Texas
|
61,830 | 70,468 | 8,406 |
Aa1
|
||||||||||||
|
New York
|
49,500 | 57,406 | 7,628 |
Aa1
|
||||||||||||
|
Massachusetts
|
45,930 | 53,815 | 6,449 |
Aa2
|
||||||||||||
|
Mississippi
|
$ | 45,255 | $ | 49,398 | $ | 3,287 |
Aa2
|
|||||||||
|
September 30, 2012
|
||||||||||||||||
|
Par Value
|
Fair Value
|
Net Unrealized Gain (Loss)
|
Credit Quality
|
|||||||||||||
|
Top 10 Holdings by Issuer
|
||||||||||||||||
|
State of California
|
$ | 77,665 | $ | 92,418 | $ | 13,129 | A1 | |||||||||
|
State of Connecticut
|
78,500 | 90,652 | 10,568 |
Aa3
|
||||||||||||
|
State of Pennsylvania
|
76,700 | 88,343 | 11,128 |
Aa2
|
||||||||||||
|
State of Illinois
|
73,000 | 78,835 | 5,158 | A2 | ||||||||||||
|
State of Mississippi
|
45,255 | 49,398 | 3,287 |
Aa2
|
||||||||||||
|
State of Texas
|
39,900 | 46,385 | 6,321 |
Aaa
|
||||||||||||
|
State of Hawaii
|
35,000 | 43,163 | 8,043 |
Aa2
|
||||||||||||
|
State of Massachusetts
|
35,930 | 41,600 | 4,234 |
Aa1
|
||||||||||||
|
New York State Urban Development Corporation
|
32,000 | 37,364 | 5,364 |
Aaa
|
||||||||||||
|
New Jersey Transportation Trust Fund Authority
|
$ | 25,000 | $ | 29,499 | $ | 4,499 | A1 | |||||||||
|
September 30, 2012
|
||||||||||||||||
|
Fair Value
|
% of Total
|
|||||||||||||||
|
Credit quality of municipal bond portfolio*
|
||||||||||||||||
|
Aaa
|
$ | 196,297 | 15.3 | % | ||||||||||||
|
Aa
|
787,919 | 61.5 | % | |||||||||||||
|
A
|
287,149 | 22.4 | % | |||||||||||||
|
Baa
|
7,405 | 0.6 | % | |||||||||||||
|
Below investment grade
|
3,014 | 0.2 | % | |||||||||||||
|
Total
|
$ | 1,281,784 | 100.0 | % | ||||||||||||
|
*
|
Rated using external rating agencies (primarily Moody’s) including credit enhancements from insurance entities. As of September 30, 2012, there were approximately $10.1 million of municipal bonds whose ratings of “Aa” included the benefit of guarantees from third-party insurers that would otherwise be rated as “A” without the existence of such guarantees. |
|
|
(Aaa-Best Quality; Aa-High Quality; A-Upper to Medium Quality; Baa-Investment Grade)
|
- 25 -
Platinum Underwriters Holdings, Ltd.
Net Realized Gains (Losses) on Investments and Net Impairment Losses on Investments
($ in thousands)
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
Net realized gains (losses) on investments by entity:
|
||||||||||||||||
|
Subsidiary domiciled in Bermuda
|
$ | 15,935 | $ | 3,751 | $ | 58,242 | $ | 4,992 | ||||||||
|
Subsidiaries domiciled in the United States
|
7,047 | 3,747 | 12,057 | (1,776 | ) | |||||||||||
|
Total
|
$ | 22,982 | $ | 7,498 | $ | 70,299 | $ | 3,216 | ||||||||
|
Net realized gains (losses) on investments by type:
|
||||||||||||||||
|
Sale of securities
|
$ | 22,979 | $ | 3,890 | $ | 70,919 | $ | 1,414 | ||||||||
|
Mark-to-market on trading securities
|
3 | 3,608 | (620 | ) | 1,802 | |||||||||||
|
Total
|
$ | 22,982 | $ | 7,498 | $ | 70,299 | $ | 3,216 | ||||||||
|
Net impairment losses on investments by entity:
|
||||||||||||||||
|
Subsidiary domiciled in Bermuda
|
$ | 605 | $ | 3,297 | $ | 2,126 | $ | 6,243 | ||||||||
|
Subsidiaries domiciled in the United States
|
94 | 1,154 | 756 | 1,381 | ||||||||||||
|
Total
|
$ | 699 | $ | 4,451 | $ | 2,882 | $ | 7,624 | ||||||||
|
Net impairment losses on investments by type of security:
|
||||||||||||||||
|
Commercial mortgage-backed securities
|
$ | - | $ | - | $ | 30 | $ | - | ||||||||
|
Residential mortgage-backed securities
|
693 | 3,923 | 2,839 | 6,310 | ||||||||||||
|
Asset-backed securities
|
6 | 528 | 13 | 1,314 | ||||||||||||
|
Total
|
$ | 699 | $ | 4,451 | $ | 2,882 | $ | 7,624 | ||||||||
- 26 -
Platinum Underwriters Holdings, Ltd.
Analysis of Losses and Loss Adjustment Expenses
($ in thousands)
|
Analysis of Losses and Loss Adjustment Expenses
|
||||||||||||||||||||||||||||||||
|
Nine Months Ended September 30, 2012 (1)
|
Twelve Months Ended December 31, 2011 (2)
|
|||||||||||||||||||||||||||||||
|
Gross
|
Ceded
|
Net
|
Paid to Incurred %
|
Gross
|
Ceded
|
Net
|
Paid to Incurred %
|
|||||||||||||||||||||||||
|
Paid losses and loss adjustment expenses
|
$ | 433,489 | $ | 172 | $ | 433,317 | 226.4 | % | $ | 672,148 | $ | 38,859 | $ | 633,289 | 78.6 | % | ||||||||||||||||
|
Change in unpaid losses and loss adjustment expenses
|
(241,999 | ) | (112 | ) | (241,887 | ) | 167,175 | (4,973 | ) | 172,148 | ||||||||||||||||||||||
|
Losses and loss adjustment expenses incurred
|
$ | 191,490 | $ | 60 | $ | 191,430 | $ | 839,323 | $ | 33,886 | $ | 805,437 | ||||||||||||||||||||
|
Analysis of Unpaid Losses and Loss Adjustment Expenses
|
||||||||||||||||||||||||||||||||
|
As of September 30, 2012
|
As of December 31, 2011
|
|||||||||||||||||||||||||||||||
|
Gross
|
Ceded
|
Net
|
%
|
Gross
|
Ceded
|
Net
|
%
|
|||||||||||||||||||||||||
|
Outstanding losses and loss adjustment expenses
|
$ | 911,672 | $ | 3,813 | $ | 907,859 | 42.1 | % | $ | 894,403 | $ | 3,914 | $ | 890,489 | 37.3 | % | ||||||||||||||||
|
Incurred but not reported
|
1,248,482 | 30 | 1,248,452 | 57.9 | % | 1,495,211 | 41 | 1,495,170 | 62.7 | % | ||||||||||||||||||||||
|
Unpaid losses and loss adjustment expenses
|
$ | 2,160,154 | $ | 3,843 | $ | 2,156,311 | 100.0 | % | $ | 2,389,614 | $ | 3,955 | $ | 2,385,659 | 100.0 | % | ||||||||||||||||
|
(1)
|
Gross and ceded losses and loss adjustment expenses incurred includes effects of foreign currency exchange rate losses and gains of $12,539 and $0, respectively. |
|
(2)
|
Gross and ceded losses and loss adjustment expenses incurred includes effects of foreign currency exchange rate losses and gains of $5,061 and $16, respectively. |
- 27 -
Platinum Underwriters Holdings, Ltd.
Summary of Favorable (Unfavorable) Development of Losses and Related Premiums and Commissions
($ in thousands)
|
Three Months Ended September 30, 2012
|
Three Months Ended September 30, 2011
|
|||||||||||||||||||||||||||||||
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
|||||||||||||||||||||||||
|
Non-Major Catastrophe Favorable (Unfavorable) Development
|
||||||||||||||||||||||||||||||||
|
Net loss development related to prior years
|
$ | 9,532 | $ | 39,951 | $ | 1,136 | $ | 50,619 | $ | 12,035 | $ | 14,485 | $ | 549 | $ | 27,069 | ||||||||||||||||
|
Net premium adjustments related to prior years' losses
|
272 | 417 | - | 689 | (476 | ) | 121 | - | (355 | ) | ||||||||||||||||||||||
|
Net commission adjustments related to prior years' losses
|
461 | (55 | ) | (1,015 | ) | (609 | ) | (508 | ) | 409 | (652 | ) | (751 | ) | ||||||||||||||||||
|
Net favorable (unfavorable) development
|
10,265 | 40,313 | 121 | 50,699 | 11,051 | 15,015 | (103 | ) | 25,963 | |||||||||||||||||||||||
|
Major Catastrophe Favorable (Unfavorable) Development
|
||||||||||||||||||||||||||||||||
|
Net loss development related to prior years
|
11,281 | 4 | - | 11,285 | 1,905 | - | - | 1,905 | ||||||||||||||||||||||||
|
Net premium adjustments related to prior years' losses
|
(648 | ) | - | - | (648 | ) | (28 | ) | - | - | (28 | ) | ||||||||||||||||||||
|
Net commission adjustments related to prior years' losses
|
(13 | ) | - | - | (13 | ) | (2 | ) | - | - | (2 | ) | ||||||||||||||||||||
|
Net favorable (unfavorable) development
|
10,620 | 4 | - | 10,624 | 1,875 | - | - | 1,875 | ||||||||||||||||||||||||
|
Total net favorable (unfavorable) development
|
$ | 20,885 | $ | 40,317 | $ | 121 | $ | 61,323 | $ | 12,926 | $ | 15,015 | $ | (103 | ) | $ | 27,838 | |||||||||||||||
|
Nine Months Ended September 30, 2012
|
Nine Months Ended September 30, 2011
|
|||||||||||||||||||||||||||||||
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
Property and Marine
|
Casualty
|
Finite Risk
|
Total
|
|||||||||||||||||||||||||
|
Non-Major Catastrophe Favorable (Unfavorable) Development
|
||||||||||||||||||||||||||||||||
|
Net loss development related to prior years
|
$ | 25,730 | $ | 67,696 | $ | 6,555 | $ | 99,981 | $ | 15,022 | $ | 45,326 | $ | 5,330 | $ | 65,678 | ||||||||||||||||
|
Net premium adjustments related to prior years' losses
|
4,080 | 1,976 | - | 6,056 | (546 | ) | 603 | - | 57 | |||||||||||||||||||||||
|
Net commission adjustments related to prior years' losses
|
178 | (1,015 | ) | (6,413 | ) | (7,250 | ) | (504 | ) | 507 | (4,723 | ) | (4,720 | ) | ||||||||||||||||||
|
Net favorable (unfavorable) development
|
29,988 | 68,657 | 142 | 98,787 | 13,972 | 46,436 | 607 | 61,015 | ||||||||||||||||||||||||
|
Major Catastrophe Favorable (Unfavorable) Development
|
||||||||||||||||||||||||||||||||
|
Net loss development related to prior years
|
13,572 | (13 | ) | - | 13,559 | 16,326 | (32 | ) | 371 | 16,665 | ||||||||||||||||||||||
|
Net premium adjustments related to prior years' losses
|
29 | - | - | 29 | (355 | ) | - | - | (355 | ) | ||||||||||||||||||||||
|
Net commission adjustments related to prior years' losses
|
(37 | ) | - | - | (37 | ) | (10 | ) | - | - | (10 | ) | ||||||||||||||||||||
|
Net favorable (unfavorable) development
|
13,564 | (13 | ) | - | 13,551 | 15,961 | (32 | ) | 371 | 16,300 | ||||||||||||||||||||||
|
Total net favorable (unfavorable) development
|
$ | 43,552 | $ | 68,644 | $ | 142 | $ | 112,338 | $ | 29,933 | $ | 46,404 | $ | 978 | $ | 77,315 | ||||||||||||||||
- 28 -
Platinum Underwriters Holdings, Ltd.
Estimated Exposure to Peak Zone Property Catastrophe Losses
As of October 1, 2012
($ in millions)
Estimated Probable Maximum Losses by Zone and Peril
|
20 Year Return Period
|
100 Year Return Period
|
250 Year Return Period
|
||||||||||||||||||||||||
|
Zones
|
Peril
|
Estimated Gross Loss
|
Estimated
Net Loss
|
Estimated Gross Loss
|
Estimated
Net Loss
|
Estimated Gross Loss
|
Estimated
Net Loss
|
|||||||||||||||||||
|
United States/Caribbean
|
Hurricane
|
$ | 91 | $ | 91 | $ | 175 | $ | 175 | $ | 221 | $ | 221 | |||||||||||||
|
United States
|
Earthquake
|
13 | 13 | 98 | 98 | 147 | 147 | |||||||||||||||||||
|
Pan-European
|
Windstorm
|
67 | 61 | 156 | 146 | 177 | 167 | |||||||||||||||||||
|
Japanese
|
Typhoon
|
7 | 7 | 70 | 70 | 71 | 71 | |||||||||||||||||||
|
Japanese
|
Earthquake
|
13 | 13 | 169 | 169 | 226 | 226 | |||||||||||||||||||
|
Canadian
|
Earthquake
|
$ | - | $ | - | $ | 22 | $ | 22 | $ | 91 | $ | 91 | |||||||||||||
The Company has developed the estimates of losses expected from certain catastrophes for its portfolio of property, marine, workers’ compensation, personal accident contracts and catastrophe contributions from insurance-linked securities using commercially available catastrophe models, which are applied and adjusted by the Company. These estimates include assumptions regarding the location, size and magnitude of an event, the frequency of events, the construction type and damageability of property in a zone, and the cost of rebuilding property in a zone, among other assumptions. These estimates do not include any losses that may be expected to arise from the Company’s casualty portfolio as a result of such catastrophes. Return period refers to the frequency with which losses of a given amount or greater are expected to occur.
Gross loss estimates are net of reinstatement premiums but before income tax. Net loss estimates are net of reinstatement premiums and net of retrocessional recoveries but before income tax.
The estimates set forth above are based on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect actual losses and could cause actual losses to differ materially from those expressed above. In particular, modeled loss estimates do not necessarily accurately predict actual losses, and may significantly misestimate actual losses. Such estimates, therefore, should not be considered as a representation of actual losses. Investors should not rely on the foregoing information when considering investment in the Company. The Company undertakes no duty to update or revise such information to reflect the occurrence of future events.
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