Platinum Underwriters Holdings, Ltd. Reports First Quarter 2007 Financial Results

HAMILTON, Bermuda, April 24 /PRNewswire-FirstCall/ -- Platinum Underwriters Holdings, Ltd. today reported net income of $72.8 million, or $1.08 per diluted common share, for the quarter ended March 31, 2007. The results for the quarter include net premiums earned of $284.8 million, a decrease of 17.3% from the same quarter last year, net favorable development of $13.9 million, compared with net unfavorable development of $1.2 million from the same quarter last year, and net investment income of $51.7 million, an increase of 18.8% from the same quarter last year.

Michael D. Price, Chief Executive Officer, commented: "Our strong first quarter results reflect solid underwriting performance and continued growth in investment income. Our book value per share increased 4.4% to $29.58 as of March 31, 2007. Net premiums earned were down compared with the same quarter last year primarily due to a greater focus on excess-of-loss business and the mild softening of the casualty market over time."

Mr. Price added: "We believe market conditions will remain good for the balance of the year and that we are well positioned with excellent ratings and incumbent status on a diverse and well priced portfolio of reinsurance business."

Results for the quarter ended March 31, 2007 were summarized as follows: * Net income was $72.8 million or $1.08 per diluted common share. * Net premiums written were $298.9 million and net premiums earned were $284.8 million. * GAAP combined ratio was 87.0%. * Net investment income was $51.7 million.

Results for the quarter ended March 31, 2007 compared to the quarter ended March 31, 2006 were summarized as follows:

* Net income decreased $4.2 million or 5.5%. * Net premiums written increased $5.6 million (or 1.9%) and net premiums earned decreased $59.5 million (or 17.3%). * GAAP combined ratio increased by 1.8 percentage points. * Net investment income increased $8.2 million (or 18.8%).

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended March 31, 2007 were $137.6 million, $152.2 million and $9.1 million, respectively, representing 46.1%, 50.9% and 3.0%, respectively, of the total net premiums written. Combined ratios for these segments were 74.0%, 98.2% and 72.7%, respectively, for the quarter. Compared to the quarter ended March 31, 2006, net premiums written decreased by $27.6 million (or 16.7%) for Platinum's Property and Marine segment and $30.2 million (or 16.5%) for the Casualty segment. Compared to the quarter ended March 31, 2006, net premiums written for the Finite Risk segment increased by $63.4 million (or 116.7%) primarily due to the termination of two quota share contracts in the quarter ended March 31, 2006. As previously disclosed, one of these contracts was terminated on a cut-off basis which

resulted in the return of approximately $56.6 million of previously written but unearned premium.

Total assets were $5.2 billion as of March 31, 2007, an increase of $108.4 million (or 2.1%) from $5.1 billion as of December 31, 2006. Cash, cash equivalents and fixed maturity investments were $4.4 billion as of March 31, 2007, an increase of $146.2 million (or 3.5%) from December 31, 2006.

Shareholders' equity was $1.9 billion as of March 31, 2007, an increase of $79.2 million (or 4.3%) from December 31, 2006. Book value per common share was $29.58 as of March 31, 2007 based on 59.8 million common shares outstanding, an increase of $1.25 (or 4.4%) from $28.33 based on 59.7 million common shares outstanding as of December 31, 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

The Company will host a teleconference to discuss the financial results on Wednesday, April 25, 2007 at 8:00 a.m. Eastern time. The call may be accessed by dialing 866-454-4208 (US callers) or 913-312-1238 (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 participate in the teleconference should register at least ten minutes in advance to ensure access to the call.

The teleconference will be recorded and a replay will be available from 11:00 a.m. Eastern time on Wednesday, April 25, 2007 until midnight Eastern time on Wednesday, May 2, 2007. To access the replay by telephone, dial 888- 203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 3003974. 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 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 and the United States. 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, Inc. 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, acts of terrorism, 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 Operations and Comprehensive Income (Unaudited) For the Three Months Ended March 31, 2007 and 2006 ($ in thousands, except per share amounts) Three Months Ended March 31, 2007 March 31, 2006 Revenue Net premiums earned $284,848 344,301 Net investment income 51,699 43,515 Net realized gains (losses) on investments (18) 65 Other expense (780) (1,317) Total revenue 335,749 386,564 Expenses Net losses and LAE 181,913 206,774 Net acquisition expenses 48,120 69,239 Other underwriting expenses 17,779 17,288 Corporate expenses 5,427 5,700 Net foreign currency exchange gains (42) (275) Interest expense 5,455 5,450 Total expenses 258,652 304,176 Income before income tax expense 77,097 82,388 Income tax expense 4,264 5,352 Net income 72,833 77,036 Preferred dividends 2,602 2,576 Net income attributable to common shareholders $70,231 74,460 Basic Weighted average common shares outstanding 59,718 59,097 Basic earnings per common share $1.18 1.26 Diluted Adjusted weighted average common shares outstanding 67,257 66,597 Diluted earnings per common share $1.08 1.16 Comprehensive income Net income $72,833 77,036 Other comprehensive income (loss), net of deferred taxes 9,385 (35,311) Comprehensive income $82,218 41,725 Platinum Underwriters Holdings, Ltd. Condensed Consolidated Balance Sheets As of March 31, 2007 and December 31, 2006 ($ in thousands, except per share data) March 31, 2007 Dec. 31, 2006 (Unaudited) Assets Investments $3,563,152 $3,350,162 Cash, cash equivalents and short-term investments 811,951 878,775 Reinsurance premiums receivable 364,173 377,183 Accrued investment income 32,597 32,682 Reinsurance balances (prepaid and recoverable) 57,069 67,636 Deferred acquisition costs 84,538 82,610 Funds held by ceding companies 235,319 238,499 Other assets 53,162 66,020 Total assets $5,201,961 $5,093,567 Liabilities Unpaid losses and loss adjustment expenses $2,411,319 $2,368,482 Unearned premiums 361,147 349,792 Debt obligations 292,840 292,840 Commissions payable 134,749 140,835 Other liabilities 64,623 83,557 Total liabilities 3,264,678 3,235,506 Total shareholders' equity 1,937,283 1,858,061 Total liabilities and shareholders' equity $5,201,961 $5,093,567 Book value per common share (a) $29.58 $28.33 (a) Book value per common share is based on shareholders' equity excluding capital attributable to preferred shares and actual common shares outstanding including unvested restricted common shares. Unvested restricted common shares were as follows: March, 31, 2007 - 81,759; December 31, 2006 - 86,937 Platinum Underwriters Holdings, Ltd. Segment Reporting For the Three Months Ended March 31, 2007 and 2006 ($ in thousands) Three Months Ended March 31, 2007 (Unaudited) Property Finite Segment underwriting results and Marine Casualty Risk Total Net premiums written $137,654 152,183 9,080 $298,917 Net premiums earned 119,710 154,019 11,119 284,848 Net losses and LAE 62,627 112,382 6,904 181,913 Net acquisition expenses 15,935 32,035 150 48,120 Other underwriting expenses 10,028 6,717 1,034 17,779 Total underwriting expenses 88,590 151,134 8,088 247,812 Segment underwriting income $31,120 2,885 3,031 37,036 Net investment income 51,699 Net realized losses on investments (18) Net foreign currency exchange gains 42 Other expense (780) Corporate expenses not allocated to segments (5,427) Interest expense (5,455) Income before income tax expense $77,097 GAAP underwriting ratios: Loss and LAE 52.3% 73.0% 62.1% 63.9% Acquisition expense 13.3% 20.8% 1.3% 16. Other underwriting expense 8.4% 4.4% 9.3% 6.2% Combined 74.0% 98.2% 72.7% 87.0% Three Months Ended March 31, 2006 (Unaudited) Segment underwriting results Net premiums written $165,264 182,350 (54,336) $293,278 Net premiums earned 131,544 173,668 39,089 344,301 Net losses and LAE 59,828 116,565 30,381 206,774 Net acquisition expenses 19,649 41,354 8,236 69,239 Other underwriting expenses 10,028 6,335 925 17,288 Total underwriting expenses 89,505 164,254 39,542 293,301 Segment underwriting income (loss) $42,039 9,414 (453) 51,000 Net investment income 43,515 Net realized gains on investments 65 Net foreign currency exchange gains 275 Other expense (1,317) Corporate expenses not allocated to segments (5,700) Interest expense (5,450) Income before income tax expense $82,388 GAAP underwriting ratios: Loss and LAE 45.5% 67.1% 77.7% 60.1% Acquisition expense 14.9% 23.8% 21.1% 20.1% Other underwriting expense 7.6% 3.6% 2.4% 5.0% Combined 68.0% 94.5% 101.2% 85.2% The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.