HAMILTON, Bermuda, Feb. 26 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. today reported a net loss to common shareholders of $103.3 million, or $1.94 per basic common share, for the quarter ended December 31, 2005 and a net loss of $138.2 million, or $3.01 per basic common share, for the year ended December 31, 2005.
The results for the quarter ended December 31, 2005 include the estimated net after-tax negative impact of approximately $153.4 million from hurricane Wilma, adverse development of $30.9 million related to hurricanes Katrina and Rita, net favorable development of $12.0 million from prior years and net investment income of $37.2 million, an increase of 41.7% from the quarter ended December 31, 2004.
The results for the year ended December 31, 2005 include the aggregate estimated net after-tax negative impact of approximately $459.0 million from hurricanes Katrina, Rita and Wilma, net favorable development of $79.3 million from prior years and net investment income of $129.4 million, an increase of 53.1% from the year ended December 31, 2004.
Michael D. Price, Chief Executive Officer, commented: "2005 was the worst year on record for insured catastrophe losses and a challenging year for Platinum. Our share of these losses overshadowed the strong underwriting results in our non-catastrophe business."
Mr. Price added, "Despite the unprecedented events of 2005, we were well- positioned for the January 1, 2006 renewal season and we competed successfully. Market conditions are good in many classes of business and we believe we have strong underwriting prospects for the remainder of the year."
Results for the quarter ended December 31, 2005 were summarized as follows:
* Net loss was $103.3 million or $1.94 per basic common share.
* Net premiums written were $390.8 million and net premiums earned were
$442.8 million.
* GAAP combined ratio was 131.9%.
* Net investment income, including interest on funds held, was $37.2
million.
Results for the quarter ended December 31, 2005 compared to the quarter ended December 31, 2004 were summarized as follows:
* Net loss of $103.3 million compared to net income of $49.9 million.
* Net premiums written decreased $4.1 million (or 1.0%) and net premiums
earned increased $9.9 million (or 2.3%).
* GAAP combined ratio increased by 42.2 percentage points.
* Net investment income, which includes funds held, increased
$11.0 million (or 41.7%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended December 31, 2005 were $121.7 million, $187.8 million and $81.3 million, respectively, representing 31.1%, 48.1% and 20.8%, respectively, of the total net premiums written. Combined ratios for these segments were 191.3%, 96.4% and 108.0%, respectively, for the quarter. Compared to the quarter ended December 31, 2004, net premiums written increased by $11.0 million (or 10.0%) for Platinum's Property and Marine segment and $19.1 million (or 11.3%) for the Casualty segment. Net premiums written decreased by $34.2 million (or 29.6%) for the Finite Risk segment.
Results for the year ended December 31, 2005 were summarized as follows:
* Net loss was $138.2 million or $3.01 per basic common share.
* Net premiums written were $1.72 billion and net premiums earned were
$1.71 billion.
* GAAP combined ratio was 114.5%.
* Net investment income, including interest on funds held, was
$129.4 million.
Results for the year ended December 31, 2005 compared to the year ended December 31, 2004 were summarized as follows:
* Net loss of $138.2 million as compared to net income of $84.8 million.
* Net premiums written increased $71.7 million (or 4.4%) and net premiums
earned increased by $266.8 million (or 18.4%).
* GAAP combined ratio increased by 17.8 percentage points.
* Net investment income, including interest on funds held, increased $44.9
million (or 53.1%).
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the year ended December 31, 2005 were $575.1 million, $809.0 million and $333.6 million, respectively, representing 33.5%, 47.1% and 19.4%, respectively, of the total net premiums written. Combined ratios for these segments were 154.1%, 92.5% and 100.2%, respectively for the year. Compared to the year ended December 31, 2004, net premiums written increased by $70.6 million (or 14.0%) for Platinum's Property and Marine segment and $131.6 million (or 19.4%) for the Casualty segment. Net premiums written decreased by $130.5 million (or 28.1%) for the Finite Risk segment.
Total assets were $5.15 billion as of December 31, 2005, an increase of $1.73 billion (or 50.6%) from $3.42 billion as of December 31, 2004. Cash and fixed maturity investments were $3.83 billion as of December 31, 2005, an increase of $1.37 billion (or 55.9%) from $2.46 billion as of December 31, 2004, due primarily to strong cash flow from operations and the receipt of the proceeds from the offerings of senior notes, common shares and mandatory convertible preferred shares issued during 2005.
Shareholders' equity was $1.54 billion as of December 31, 2005, an increase of $407.2 million (or 35.9%) from $1.13 billion as of December 31, 2004. Book value per common share was $23.22 as of December 31, 2005 based on 59.1 million common shares outstanding, a decrease of $3.08 (or 11.7%) from $26.30 based on 43.1 million common shares outstanding as of December 31, 2004.
Quarterly Dividend
Platinum also announced that its Board of Directors has declared a quarterly dividend of $0.08 per common share, which is payable on March 31, 2006 to shareholders of record on March 2, 2006.
Financial Supplement
Platinum has posted a financial supplement on the Financial Reports page of the Investor Relations section of its website (Financial Supplement). The financial supplement provides additional detail regarding the financial performance of Platinum and its business segments.
Teleconference
Platinum will host a teleconference to discuss its financial results on Monday, February 27, 2006 at 9:00 a.m. Eastern Time. The call can be accessed by dialing 800-289-0493 (U.S. callers) or 913-981-5510 (international callers) or in a listen-only mode via the Investor Relations section of Platinum's website at http://www.platinumre.com/. Those who intend to access the teleconference should register at least ten minutes in advance to ensure access to the call.
The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern Time on Monday, February 27, 2006 until midnight Eastern Time on Monday March 6, 2006. To access the replay by telephone, dial 888-203-1112 (U.S. callers) or 719-457-0820 (international callers) and specify passcode: 4636274. The teleconference will also be archived on the Investor Relations section of Platinum's website at http://www.platinumre.com/ for the same period of time.
Non-GAAP Financial Measures
In presenting the Company's results, management has included and discussed certain schedules containing financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including segment underwriting income (or loss) and related underwriting ratios are referred to as non-GAAP. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures, which are used to monitor the results of operations, allow for a more complete understanding of the underlying business. These measures should not be viewed as a substitute for those determined in accordance with GAAP. A reconciliation of such measures to the most comparable GAAP figures such as income before income tax expense and total shareholders' equity is presented in the attached financial information in accordance with Regulation G.
About Platinum
Platinum Underwriters Holdings, Ltd. 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, the United States and the United Kingdom. The Company has a financial strength rating of A (Excellent) from A.M. Best Company, Inc. For further information, please visit Platinum's website at http://www.platinumre.com/.
Safe Harbor Statement Regarding Forwarding-Looking Statements Management believes certain statements in this press release may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "may," "should," "estimate," "expect," "anticipate," "intend," "believe," "predict," "potential," or words of similar import. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and risks, many of which are subject to change. These uncertainties and risks include, but are not limited to, conducting operations in a competitive environment; our ability to maintain our A.M. Best Company rating; significant weather-related or other natural or man-made disasters over which the Company has no control; the effectiveness of our loss limitation methods and pricing models; the adequacy of the Company's liability for unpaid losses and loss adjustment expenses; the availability of retrocessional reinsurance on acceptable terms; our ability to maintain our business relationships with reinsurance brokers; general political and economic conditions, including the effects of civil unrest, war or a prolonged U.S. or global economic downturn or recession; the cyclicality of the property and casualty reinsurance business; market volatility and interest rate and currency exchange rate fluctuation; tax, regulatory or legal restrictions or limitations applicable to the Company or the property and casualty reinsurance business generally; and changes in the Company's plans, strategies, objectives, expectations or intentions, which may happen at any time at the Company's discretion. As a consequence, current plans, anticipated actions and future financial condition and results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Additionally, forward-looking statements speak only as of the date they are made, and we undertake no obligation to release publicly the results of any future revisions or updates we may make to forward-looking statements to reflect new information or circumstances after the date hereof or to reflect the occurrence of future events.
Platinum Underwriters Holdings, Ltd.
Consolidated Statements of Income and Comprehensive Income
For The Quarter and Year Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
Revenue
Net premiums earned $442,825 $432,936 $1,714,723 $1,447,935
Net investment income 37,195 26,242 129,445 84,532
Net realized capital gains
(losses) (1,984) 520 (3,046) 1,955
Other income (expense) (385) 1,074 (586) 3,211
Total revenue 477,651 460,772 1,840,536 1,537,633
Expenses
Losses and loss adjustment
expenses 462,257 283,645 1,505,425 1,019,804
Acquisition expenses 107,100 94,935 403,135 327,821
Other underwriting expenses 14,467 10,053 55,669 53,137
Corporate expenses 3,792 2,844 14,158 13,196
Net foreign currency exchange
(gains) losses 241 (399) 2,111 (725)
Interest expense 6,820 2,316 20,006 9,268
Loss on repurchase of debt 2,486 - 2,486 -
Total expenses 597,163 393,394 2,002,990 1,422,501
Income (loss) before
income tax expense (119,512) 67,378 (162,454) 115,132
Income tax expense (benefit) (16,976) 17,456 (24,967) 30,349
Net income (loss) (102,536) 49,922 (137,487) 84,783
Preferred dividends 737 - 737 -
Net income (loss) available
to common shareholders $(103,273) $49,922 $(138,224) $84,783
Basic
Weighted average shares
outstanding 53,339 43,073 45,915 43,158
Basic earnings (loss) per
share $(1.94) $1.16 $(3.01) $1.96
Diluted
Weighted average shares
outstanding 53,339 49,819 45,915 50,261
Diluted earnings (loss) per
share $(1.94) $1.03 $(3.01) $1.81
Comprehensive income (loss)
Net income (loss) $(102,536) $49,922 $(137,487) $84,783
Other comprehensive income
(loss), net of tax (15,000) (4,193) (52,970) (6,522)
Comprehensive income (loss) $(117,536) $45,729 $(190,457) $78,261
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of December 31, 2005 and 2004
($ in thousands, except per share data)
December 31, December 31,
2005 2004
Assets
Investments $3,000,889 $2,246,971
Short term investments and cash and
cash equivalents 829,539 209,897
Receivables 567,449 580,048
Accrued investment income 29,230 23,663
Reinsurance balances (prepaid and
recoverable) 76,109 4,892
Deferred acquisition costs 130,800 136,038
Funds held 291,629 198,048
Other assets 228,730 22,438
Total assets $5,154,375 $3,421,995
Liabilities
Unpaid losses and loss adjustment
expenses $2,323,990 $1,380,955
Unearned premiums 502,018 502,423
Debt obligations 292,840 137,500
Commissions payable 186,654 181,925
Other liabilities 308,624 86,189
Total liabilities 3,614,126 2,288,992
Total shareholders' equity 1,540,249 1,133,003
Total liabilities and
shareholders' equity $5,154,375 $3,421,995
Book value per common share $23.22 $26.30
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Three Months Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands)
Three Months Ended
December 31, 2005
Property Finite
Segment underwriting results and Marine Casualty Risk Total
Net premiums written $121,703 187,813 81,262 $390,778
Net premiums earned 154,454 201,088 87,283 442,825
Losses and loss adjustment
expenses 264,442 136,422 61,393 462,257
Acquisition expenses 24,546 51,135 31,419 107,100
Other underwriting expenses 6,479 6,511 1,477 14,467
Total underwriting expenses 295,467 194,068 94,289 583,824
Segment underwriting income
(loss) $(141,013) 7,020 (7,006) (140,999)
Net investment income 37,195
Net realized capital losses (1,984)
Net foreign currency exchange
losses (241)
Other expense (385)
Corporate expenses not allocated
to segments (3,792)
Interest expense (6,820)
Loss on repurchase of debt (2,486)
Loss before income tax benefit $(119,512)
GAAP underwriting ratios:
Losses and LAE 171.2% 67.8% 70.3% 104.4%
Acquisition expense 15.9% 25.4% 36.0% 24.2%
Other underwriting expense 4.2% 3.2% 1.7% 3.3%
Combined 191.3% 96.4% 108.0% 131.9%
Three Months Ended
December 31, 2004
Segment underwriting results
Net premiums written $110,675 168,706 115,504 $394,885
Net premiums earned 131,712 186,929 114,295 432,936
Losses and loss adjustment
expenses 64,510 124,621 94,514 283,645
Acquisition expenses 18,869 45,884 30,182 94,935
Other underwriting expenses 6,547 3,107 399 10,053
Total underwriting expenses 89,926 173,612 125,095 388,633
Segment underwriting income
(loss) $41,786 13,317 (10,800) 44,303
Net investment income 26,242
Net realized capital gains 520
Net foreign currency exchange
gains 399
Other income 1,074
Corporate expenses not allocated
to segments (2,844)
Interest expense (2,316)
Income before income tax expense $67,378
GAAP underwriting ratios:
Losses and LAE 49.0% 66.7% 82.7% 65.5%
Acquisition expense 14.3% 24.5% 26.4% 21.9%
Other underwriting expense 5.0% 1.7% 0.3% 2.3%
Combined 68.3% 92.9% 109.4% 89.7%
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.
Platinum Underwriters Holdings, Ltd.
Segment Reporting
For the Year Ended December 31, 2005 and 2004 (Unaudited)
($ in thousands)
Twelve Months Ended
December 31, 2005
Segment underwriting Property Finite
results and Marine Casualty Risk Total
Net premiums written $575,055 809,031 333,636 $1,717,722
Net premiums earned 569,173 789,629 355,921 1,714,723
Losses and loss
adjustment expenses 756,742 511,609 237,074 1,505,425
Acquisition expenses 93,983 194,397 114,755 403,135
Other underwriting
expenses 26,074 24,690 4,905 55,669
Total underwriting
expenses 876,799 730,696 356,734 1,964,229
Segment underwriting
income (loss) $(307,626) 58,933 (813) (249,506)
Net investment income 129,445
Net realized capital
losses (3,046)
Net foreign currency
exchange losses (2,111)
Other expense (586)
Corporate expenses not
allocated to segments (14,158)
Interest expense (20,006)
Loss on repurchase of
debt (2,486)
Loss before income tax
benefit $(162,454)
GAAP underwriting ratios:
Losses and LAE 133.0% 64.8% 66.6% 87.8%
Acquisition expense 16.5% 24.6% 32.2% 23.5%
Other underwriting
expense 4.6% 3.1% 1.4% 3.2%
Combined 154.1% 92.5% 100.2% 114.5%
Twelve Months Ended
December 31, 2004
Segment underwriting
results
Net premiums written $504,439 677,399 464,175 $1,646,013
Net premiums earned 485,135 611,893 350,907 1,447,935
Losses and loss
adjustment expenses 349,557 418,355 251,892 1,019,804
Acquisition expenses 76,360 151,649 99,812 327,821
Other underwriting
expenses 27,827 19,086 6,224 53,137
Total underwriting
expenses 453,744 589,090 357,928 1,400,762
Segment underwriting
income (loss) $31,391 22,803 (7,021) 47,173
Net investment income 84,532
Net realized capital
gains 1,955
Net foreign currency
exchange gains 725
Other income 3,211
Corporate expenses not
allocated to segments (13,196)
Interest expense (9,268)
Income before income tax
expense $115,132
GAAP underwriting ratios:
Losses and LAE 72.1% 68.4% 71.8% 70.4%
Acquisition expense 15.7% 24.8% 28.4% 22.6%
Other underwriting
expense 5.7% 3.1% 1.8% 3.7%
93.5% 96.3% 102.0% 96.7%
The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.
First Call Analyst:
FCMN Contact: DVarga@PlatinumRe.com
