PLATINUM UNDERWRITERS HOLDINGS, LTD. HAMILTON, Bermuda, Oct. 15, 2014 /PRNewswire/ -- Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $29.1 million and diluted earnings per common share of $1.12 for the quarter ended September 30, 2014.
The results for the quarter include net premiums earned of $129.5 million, net favorable development of $23.5 million and net investment income of $17.5 million.
Michael D. Price, Platinum's Chief Executive Officer, commented, "Our results reflect favorable prior period development, investment results on a total return basis, and active capital management, as well as the impact of tornado and hail activity in North America which affected certain regional catastrophe covers and crop/hail programs. Our book value per common share was $68.34 as of September 30, 2014, an increase of 1.4% from June 30, 2014."
Mr. Price added, "Absent major events in the insurance or capital markets, we expect capacity for insurable risks to remain high, resulting in continued downward pressure on overall rate adequacy. With a strong balance sheet and broad market access, our talented and experienced underwriting, investment, and risk professionals are well positioned to assume and manage a variety of risks in the current challenging market environment."
Results for the quarter ended September 30, 2014 are summarized as follows:
-- Net income was $29.1 million and diluted earnings per common share were
$1.12.
-- Gross premiums written were $133.3 million and net premiums written were
$123.8 million.
-- Net premiums earned were $129.5 million.
-- Combined ratio was 82.8%.
-- Net investment income was $17.5 million.
-- Net realized gains on investments were $3.1 million.
Results for the quarter ended September 30, 2014 as compared with the quarter ended September 30, 2013 are summarized as follows:
-- Net income was $29.1 million compared with net income of $38.3 million.
-- Gross premiums written decreased $13.5 million (or 9.2%) and net
premiums written decreased $14.1 million (or 10.2%).
-- Net premiums earned decreased $5.9 million (or 4.4%).
-- Combined ratio increased 17.3 percentage points.
-- Net investment income decreased $0.2 million (or 1.3%).
-- Net realized gains on investments were $3.1 million compared with net
realized losses on investments of $0.3 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2014 were $50.2 million, $67.6 million and $6.0 million, respectively, representing 40.6%, 54.6% and 4.8%, respectively, of total net premiums written. Combined ratios for these segments were 78.5%, 85.7% and 87.3%, respectively. Compared with the quarter ended September 30, 2013, net premiums written decreased $9.0 million (or 15.2%), $2.4 million (or 3.5%) and $2.7 million (or 31.2%) in the Property and Marine, Casualty and Finite Risk segments, respectively.
Results for the nine months ended September 30, 2014 are summarized as follows:
-- Net income was $129.0 million and diluted earnings per common share were
$4.78.
-- Gross premiums written were $394.4 million and net premiums written were
$379.9 million.
-- Net premiums earned were $380.6 million.
-- Combined ratio was 70.1%.
-- Net investment income was $52.9 million.
-- Net realized gains on investments were $2.0 million.
Results for the nine months ended September 30, 2014 as compared with the nine months ended September 30, 2013 are summarized as follows:
-- Net income was $129.0 million compared with net income of $174.7
million.
-- Gross premiums written decreased by $35.6 million (or 8.3%) and net
premiums written decreased $39.1 million (or 9.3%).
-- Net premiums earned decreased $24.6 million (or 6.1%).
-- Combined ratio increased 7.8 percentage points.
-- Net investment income decreased $1.3 million (or 2.3%).
-- Net realized gains on investments decreased $22.7 million.
Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the nine months ended September 30, 2014 were $166.5 million, $194.1 million and $19.4 million, respectively, representing 43.8%, 51.1% and 5.1%, respectively, of total net premiums written. Combined ratios for these segments were 70.7%, 67.0% and 93.8%, respectively. Compared with the nine months ended September 30, 2013, net premiums written decreased $9.5 million (or 5.4%), $26.5 million (or 12.0%) and $3.2 million (or 14.0%) in the Property and Marine, Casualty and Finite Risk segments, respectively.
Total assets were $3.7 billion as of September 30, 2014, a decrease of $138.6 million (or 3.6%) from June 30, 2014 and a decrease of $237.7 million (or 6.1%) from December 31, 2013. Investable assets, consisting of investments, cash and cash equivalents, accrued investment income and net balances due from brokers, were $3.3 billion as of September 30, 2014, a decrease of $145.3 million (or 4.2%) from June 30, 2014 and a decrease of $207.6 million (or 5.9%) from December 31, 2013.
Net unrealized gains on available-for-sale investments, net of deferred taxes, were $87.5 million as of September 30, 2014, a decrease of $3.9 million from June 30, 2014 and an increase of $39.4 million from December 31, 2013.
During the quarter ended September 30, 2014, the Company repurchased an aggregate of 1,704,594 common shares for $104.9 million at a weighted average cost, including commissions, of $61.55 per share. During the nine months ended September 30, 2014, the Company repurchased an aggregate of 3,558,690 common shares for $215.7 million at a weighted average cost, including commissions, of $60.61 per share.
Shareholders' equity was $1.7 billion as of September 30, 2014, a decrease of $81.2 million (or 4.6%) from June 30, 2014 and a decrease of $50.1 million (or 2.9%) from December 31, 2013. Book value per common share was $68.34 as of September 30, 2014 based on 24.8 million common shares outstanding, an increase of $0.96 (or 1.4%) from $67.38 as of June 30, 2014 based on 26.4 million common shares outstanding and an increase of $6.27 (or 10.1%) from $62.07 as of December 31, 2013 based on 28.1 million common shares outstanding.
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 Thursday, October 16, 2014 at 8:00 a.m. Eastern time. The call may be accessed by dialing 888-737-3707 (US and Canadian callers) or 913-312-0936 (international callers) or in a listen-only mode via the Investor Relations section of Platinum's website at www.platinumre.com. Those who intend to participate in the teleconference should register at least ten minutes in advance to ensure access to the call. Please specify passcode 3096800.
The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern time on Thursday, October 16, 2014 until 11:00 a.m. Eastern time on Thursday, October 23, 2014. To access the replay by telephone, dial 888-203-1112 (US and Canadian callers) or 719-457-0820 (international callers) and specify passcode 3096800. The teleconference will also be archived on the Investor Relations section of Platinum's website at www.platinumre.com for the same period of time.
Non-GAAP Financial Measures
In presenting the Company's results, management has included certain financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including underwriting income or loss, related underwriting ratios and book value per common share, are referred to as non-GAAP. These non-GAAP financial measures may be defined or calculated differently by other companies. Management believes these measures 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 in the attached financial information in accordance with Regulation G.
About Platinum
Platinum Underwriters Holdings, Ltd. (NYSE: PTP) is a leading provider of property, casualty and finite risk reinsurance coverages, through reinsurance brokers, to a diverse clientele on a worldwide basis. Platinum operates through its principal subsidiaries in Bermuda and the United States. For further information, please visit Platinum's website at www.platinumre.com.
Safe Harbor Statement Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our current plans or expectations that are inherently subject to significant business, economic and competitive uncertainties and contingencies. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, us. In particular, statements using words such as "may", "should", "estimate", "expect", "anticipate", "intend", "believe", "predict", "potential", or words of similar import generally involve forward-looking statements. The inclusion of forward-looking statements in this press release should not be considered as a representation by us or any other person that our current plans or expectations will be achieved. Numerous factors could cause our actual results to differ materially from those in forward-looking statements, including, but not limited to, the occurrence of severe 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 estimated 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 financial strength ratings; our ability to raise capital on acceptable terms if necessary; our exposure to credit loss from counterparties in the normal course of business; the availability and cost of collateral arrangements in order to provide reinsurance; 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, including the effect of new entrants to the 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 retrocessional reinsurance on acceptable terms; foreign currency exchange rate fluctuations; 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 effect of technology breaches or failures on our business; the performance of our investment portfolio; 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 of income, premium or other taxes on Platinum Underwriters Holdings, Ltd. or its subsidiaries by other jurisdictions; 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 non-compliance with laws, regulations and taxation on transactions with international counter-parties; 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, and the fact that these dividends and other payments are often limited in amount by applicable laws; 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, 2013.
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Balance Sheets
As of September 30, 2014 and December 31, 2013
($ and amounts in thousands, except per share data)
(unaudited)
September 30, December 31,
2014 2013
---- ----
Assets
Investments:
Fixed maturity securities $1,914,011 $1,961,265
Short-term investments 26,269 66,679
Cash and cash equivalents 1,339,149 1,464,418
Accrued investment income 20,184 20,026
Reinsurance premiums
receivable 135,113 138,454
Reinsurance balances (prepaid
and recoverable) 8,986 2,089
Funds held by ceding companies 90,385 119,241
Deferred acquisition costs 32,641 31,103
Reinsurance deposit assets 82,397 79,303
Other assets 37,024 41,307
Total assets $3,686,159 $3,923,885
========== ==========
Liabilities
Unpaid losses and loss
adjustment expenses $1,498,342 $1,671,365
Unearned premiums 130,366 126,300
Debt obligations 250,000 250,000
Commissions payable 53,775 78,791
Other liabilities 57,028 50,722
------ ------
Total liabilities $1,989,511 $2,177,178
---------- ----------
Shareholders' Equity
Common shares $248 $281
Additional paid-in capital - 10,711
Accumulated other
comprehensive income 87,471 48,084
Retained earnings 1,608,929 1,687,631
--------- ---------
Total shareholders' equity $1,696,648 $1,746,707
---------- ----------
Total liabilities and
shareholders' equity $3,686,159 $3,923,885
========== ==========
Book value per common share
(1) $68.34 $62.07
====== ======
(1) Book value per common share is a non-GAAP financial measure as defined by Regulation G
and is determined by dividing shareholders' equity by common shares outstanding of 24,827
and 28,143 at September 30, 2014 and December 31, 2013, respectively.
Platinum Underwriters Holdings, Ltd.
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
For the Three and Nine Months Ended September 30, 2014 and 2013
($ and amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2014 2013 2014 2013
---- ---- ---- ----
Revenue
Net premiums earned $129,463 $135,360 $380,561 $405,146
Net investment income 17,523 17,758 52,860 54,110
Net realized gains (losses) on
investments 3,109 (306) 1,998 24,698
Net impairment losses on
investments - (65) (224) (2,002)
Other income (expense) 86 1,426 2,797 2,503
--- ----- ----- -----
Total revenue 150,181 154,173 437,992 484,455
------- ------- ------- -------
Expenses
Net losses and loss adjustment
expenses 66,178 44,142 143,552 120,807
Net acquisition expenses 28,042 30,675 83,391 91,207
Operating expenses 18,607 20,672 58,324 59,695
Net foreign currency exchange
losses (gains) (102) 487 (255) (592)
Interest expense 4,789 4,782 14,363 14,341
----- ----- ------ ------
Total expenses 117,514 100,758 299,375 285,458
------- ------- ------- -------
Income before income taxes 32,667 53,415 138,617 198,997
Income tax expense 3,542 15,130 9,577 24,342
----- ------ ----- ------
Net income $29,125 $38,285 $129,040 $174,655
======= ======= ======== ========
Earnings Per Common Share
Weighted average common shares
outstanding 25,731 28,655 26,683 30,519
Basic earnings per common share $1.13 $1.34 $4.83 $5.71
Adjusted weighted average common
shares outstanding 26,002 29,065 27,001 30,949
Diluted earnings per common
share $1.12 $1.32 $4.78 $5.63
Comprehensive income
Net income $29,125 $38,285 $129,040 $174,655
Other comprehensive income
(loss) (3,880) (6,977) 39,387 (80,300)
------ ------ ------ -------
Comprehensive income $25,245 $31,308 $168,427 $94,355
======= ======= ======== =======
Platinum Underwriters Holdings, Ltd.
Segment Reporting (Unaudited)
For the Three Months Ended September 30, 2014 and 2013
($ in thousands)
Three Months Ended September 30, 2014
-------------------------------------
Property and Marine Casualty Finite Risk Total
------------------- -------- ----------- -----
Net premiums written $50,201 $67,571 $6,015 $123,787
------- ------- ------ --------
Net premiums earned 53,500 69,474 6,489 129,463
Net losses and loss
adjustment expenses 24,749 37,865 3,564 66,178
Net acquisition expenses 9,778 16,470 1,794 28,042
Other underwriting
expenses 7,446 5,192 309 12,947
Segment underwriting
income (loss)* $11,527 $9,947 $822 22,296
------- ------ ----
Net investment income 17,523
Net realized gains (losses) on investments 3,109
Net impairment losses on investments -
Other income (expense) 86
Corporate expenses not allocated to segments (5,660)
Net foreign currency exchange (losses) gains 102
Interest expense (4,789)
Income before income taxes $32,667
-------
Underwriting ratios:*
Net loss and loss
adjustment expense 46.3% 54.5% 54.9% 51.1%
Net acquisition expense 18.3% 23.7% 27.6% 21.7%
Other underwriting expense 13.9% 7.5% 4.8% 10.0%
Combined 78.5% 85.7% 87.3% 82.8%
---- ---- ---- ----
Three Months Ended September 30, 2013
-------------------------------------
Property and Marine Casualty Finite Risk Total
------------------- -------- ----------- -----
Net premiums written $59,169 $69,992 $8,737 $137,898
------- ------- ------ --------
Net premiums earned 55,127 72,543 7,690 135,360
Net losses and loss
adjustment expenses 28,339 10,242 5,561 44,142
Net acquisition expenses 9,699 19,067 1,909 30,675
Other underwriting
expenses 7,747 5,727 342 13,816
Segment underwriting
income (loss)* $9,342 $37,507 $(122) 46,727
------ ------- -----
Net investment income 17,758
Net realized gains (losses) on investments (306)
Net impairment losses on investments (65)
Other income (expense) 1,426
Corporate expenses not allocated to segments (6,856)
Net foreign currency exchange (losses) gains (487)
Interest expense (4,782)
Income before income taxes $53,415
-------
Underwriting ratios:*
Net loss and loss
adjustment expense 51.4% 14.1% 72.3% 32.6%
Net acquisition expense 17.6% 26.3% 24.8% 22.7%
Other underwriting expense 14.1% 7.9% 4.4% 10.2%
Combined 83.1% 48.3% 101.5% 65.5%
---- ---- ----- ----
* Segment underwriting income or loss and related underwriting ratios are non-GAAP financial measures as defined by Regulation G. The underwriting ratios are calculated by dividing each item above by net premiums earned.
Platinum Underwriters Holdings, Ltd.
Segment Reporting (Unaudited)
For the Nine Months Ended September 30, 2014 and 2013
($ in thousands)
Nine Months Ended September 30, 2014
------------------------------------
Property and Marine Casualty Finite Risk Total
------------------- -------- ----------- -----
Net premiums written $166,464 $194,051 $19,386 $379,901
-------- -------- ------- --------
Net premiums earned 162,220 196,746 21,595 380,561
Net losses and loss adjustment expenses 61,759 68,086 13,707 143,552
Net acquisition expenses 30,050 47,748 5,593 83,391
Other underwriting expenses 22,901 15,957 947 39,805
------ ------ --- ------
Segment underwriting income (loss)* $47,510 $64,955 $1,348 113,813
------- ------- ------
Net investment income 52,860
Net realized gains on investments 1,998
Net impairment losses on investments (224)
Other income (expense) 2,797
Corporate expenses not allocated to segments (18,519)
Net foreign currency exchange (losses) gains 255
Interest expense (14,363)
-------
Income before income taxes $138,617
--------
Underwriting ratios:*
Net loss and loss adjustment expense 38.1% 34.6% 63.5% 37.7%
Net acquisition expense 18.5% 24.3% 25.9% 21.9%
Other underwriting expense 14.1% 8.1% 4.4% 10.5%
---- --- --- ----
Combined 70.7% 67.0% 93.8% 70.1%
---- ---- ---- ----
Nine Months Ended September 30, 2013
------------------------------------
Property and Marine Casualty Finite Risk Total
------------------- -------- ----------- -----
Net premiums written $175,946 $220,547 $22,540 $419,033
-------- -------- ------- --------
Net premiums earned 165,811 218,967 20,368 405,146
Net losses and loss adjustment expenses 35,426 75,243 10,138 120,807
Net acquisition expenses 27,624 53,384 10,199 91,207
Other underwriting expenses 22,493 17,120 1,002 40,615
------ ------ ----- ------
Segment underwriting income (loss)* $80,268 $73,220 $(971) 152,517
------- ------- -----
Net investment income 54,110
Net realized gains on investments 24,698
Net impairment losses on investments (2,002)
Other income (expense) 2,503
Corporate expenses not allocated to segments (19,080)
Net foreign currency exchange (losses) gains 592
Interest expense (14,341)
-------
Income before income taxes $198,997
--------
Underwriting ratios:*
Net loss and loss adjustment expense 21.4% 34.4% 49.8% 29.8%
Net acquisition expense 16.7% 24.4% 50.1% 22.5%
Other underwriting expense 13.6% 7.8% 4.9% 10.0%
---- --- --- ----
Combined 51.7% 66.6% 104.8% 62.3%
---- ---- ----- ----
* Segment underwriting income or loss and related 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.
SOURCE Platinum Underwriters Holdings, Ltd.
