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Platinum Underwriters Holdings, Ltd. Reports Third Quarter 2006 Financial Results

Platinum Underwriters Holdings, Ltd. (NYSE: PTP) today reported net income of $84.9 million, or $1.28 per diluted common share, for the quarter ended September 30, 2006. The results for the quarter include net premiums earned of $339.6 million, a decrease of 20.9% from the same quarter last year, net favorable development of $20.0 million, compared with net favorable development of $31.6 million from the same quarter last year, and net investment income of $48.3 million, an increase of 32.5% from the same quarter last year.

Michael D. Price, Chief Executive Officer, commented: "Our strong underwriting performance in the third quarter benefited from the absence of severe catastrophes and favorable prior period development in our property reserves. Continued growth in investment income also contributed positively to our results."

Mr. Price added: "We believe market conditions are mixed with excellent opportunities in the U.S. for catastrophe-exposed business and declining profitability in other areas. Nevertheless, we believe there is meaningful opportunity to underwrite a profitable and diverse portfolio of treaty reinsurance, although narrower than in recent years."

Results for the quarter ended September 30, 2006 were summarized as follows:

-- Net income was $84.9 million or $1.28 per diluted common share.

-- Net premiums written were $298.0 million and net premiums earned were

$339.6 million.

-- GAAP combined ratio was 84.4%.

-- Net investment income, including interest on funds held, was $48.3

million.

Results for the quarter ended September 30, 2006 compared to the quarter ended September 30, 2005 were summarized as follows:

-- Net income increased $260.9 million.

-- Net premiums written decreased $112.2 million (or 27.4%) and net

premiums earned decreased $89.8 million (or 20.9%).

-- GAAP combined ratio decreased 71.5 percentage points.

-- Net investment income, including interest on funds held, increased

$11.9 million (or 32.5%).

Net premiums written for Platinum's Property and Marine, Casualty and Finite Risk segments for the quarter ended September 30, 2006 were $83.0 million, $202.3 million and $12.7 million, respectively, representing 27.8%, 67.9% and 4.3%, respectively, of the total net premiums written. Combined ratios for these segments were 41.6%, 99.6% and 116.9%, respectively. Compared to the quarter ended September 30, 2005, net premiums written decreased $50.3 million (or 37.7%) for Platinum's Property and Marine segment, decreased $14.4 million (or 6.6%) for the Casualty segment, and decreased $47.5 million (or 78.9%) for the Finite Risk segment.

Results for the nine months ended September 30, 2006 were summarized as follows:

-- Net income was $243.7 million or $3.68 per diluted common share.

-- Net premiums written were $901.0 million and net premiums earned were

$1,021.0 million.

-- GAAP combined ratio was 84.4%.

-- Net investment income, including interest on funds held, was $137.2

million.

Results for the nine months ended September 30, 2006 compared to the nine months ended September 30, 2005 were summarized as follows:

-- Net income increased $278.7 million.

-- Net premiums written decreased $425.9 million (or 32.1%) and net

premiums earned decreased $250.9 million (or 19.7%).

-- GAAP combined ratio decreased 24.1 percentage points.

-- Net investment income, including interest on funds held, increased

$44.9 million (or 48.7%).

Net premiums written for Platinum's Property and Marine and Casualty segments for the nine months ended September 30, 2006 were $333.9 million and $584.0 million, respectively, representing 37.1% and 64.8%, respectively, of the total net premiums written. Combined ratios for these segments were 55.0% and 97.5%, respectively. Compared to the nine months ended September 30, 2005, net premiums written decreased $119.4 million (or 26.3%) for the Property and Marine segment and $37.3 million (or 6.0%) for the Casualty segment.

Net premiums written for Platinum's Finite Risk segment for the nine months ended September 30, 2006 were ($16.8 million) representing (1.9%) of the total net premiums written. The combined ratio for this segment was 108.2% for the nine months ended September 30, 2006. Compared to the nine months ended September 30, 2005, net premiums written decreased $269.2 million (or 106.7%) for the Finite Risk segment primarily due to the termination of two quota share contracts. 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 $5.1 billion as of September 30, 2006. Total assets decreased $87.6 million (or 1.7%) from $5.2 billion as of December 31, 2005. Cash, cash equivalents and fixed maturity investments were $4.2 billion as of September 30, 2006, an increase of $352.9 million (or 9.2%) from $3.8 billion as of December 31, 2005.

Shareholders' equity was $1.8 billion as of September 30, 2006, an increase of $233.3 million (or 15.1%) from $1.5 billion as of December 31, 2005. Book value per share was $26.97 as of September 30, 2006 based on 59.5 million common shares outstanding, an increase of $3.75 (or 16.1%) from $23.22 based on 59.1 million common shares outstanding as of December 31, 2005.

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 information concerning Platinum and its business segments.

Teleconference

Platinum will host a teleconference to discuss its financial results on Tuesday, October 24, 2006 at 8:00 a.m. Eastern time. The call can be accessed by dialing 800-289-0493 (US 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 Tuesday, October 24, 2006 until midnight Eastern time on Tuesday, October 31, 2006. To access the replay by telephone, dial 888-203-1112 (US callers) or 719-457-0820 (international callers) and specify passcode 9048784. 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. (NYSE: PTP) is a leading provider of property, casualty and finite risk reinsurance coverages, through reinsurance intermediaries, to a diverse clientele on a worldwide basis. Platinum operates through its principal subsidiaries in Bermuda, 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, 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 and Nine Months Ended September 30, 2006 and 2005

($ in thousands, except per share amounts)

Three Months Ended Nine Months Ended

September September September September

30, 2006 30, 2005 30, 2006 30, 2005

Revenue

Net premiums earned $339,609 429,388 1,020,975 $1,271,898

Net investment income 48,302 36,441 137,165 92,250

Net realized gains (losses)

on investments (57) (879) 22 (1,062)

Other income (expense) 1,714 (433) (1,927) (201)

Total revenue 389,568 464,517 1,156,235 1,362,885

Expenses

Losses and loss adjustment

expenses 191,428 564,618 585,666 1,043,168

Acquisition expenses 74,994 98,858 220,285 296,035

Other underwriting expenses 20,063 6,050 55,064 41,202

Corporate expenses 5,285 2,030 16,664 10,366

Net foreign currency exchange

(gains) losses 228 (88) (461) 1,870

Interest expense 5,452 6,839 16,352 13,186

Total expenses 297,450 678,307 893,570 1,405,827

Income (loss) before income

tax expense (benefit) 92,118 (213,790) 262,665 (42,942)

Income tax expense (benefit) 7,195 (37,766) 18,958 (7,991)

Net income (loss) 84,923 (176,024) 243,707 (34,951)

Preferred dividends 2,602 - 7,780 -

Net income (loss) attributable

to common shareholders $82,321 (176,024) 235,927 $(34,951)

Basic

Weighted average common

shares outstanding 59,537 43,785 59,287 43,459

Basic earnings (loss) per

common share $1.38 (4.02) 3.98 $(0.80)

Diluted

Adjusted weighted average

common shares outstanding 66,520 43,785 66,273 43,459

Diluted earnings (loss) per

common share $1.28 (4.02) 3.68 $(0.80)

Comprehensive income (loss)

Net income (loss) $84,923 (176,024) 243,707 $(34,951)

Other comprehensive income

(loss), net of deferred taxes 53,941 (36,355) (5,779) (37,970)

Comprehensive income (loss) $138,864 (212,379) 237,928 $(72,921)

Platinum Underwriters Holdings, Ltd.

Condensed Consolidated Balance Sheets

As of September 30, 2006 and December 31, 2005

($ in thousands, except per share data)

September 30, 2006 December 31, 2005

(Unaudited)

Assets

Investments $3,367,474 $3,000,889

Cash, cash equivalents and short term

investments 815,825 829,539

Reinsurance premiums receivable 385,052 567,449

Accrued investment income 30,356 29,230

Reinsurance balances (prepaid and

recoverable) 79,639 76,109

Deferred acquisition costs 90,195 130,800

Funds held by ceding companies 249,359 291,629

Other assets 48,885 228,730

Total assets $5,066,785 $5,154,375

Liabilities

Unpaid losses and loss adjustment expenses $2,358,801 $2,323,990

Unearned premiums 399,524 502,018

Debt obligations 292,840 292,840

Commissions payable 143,672 186,654

Other liabilities 98,420 308,624

Total liabilities 3,293,257 3,614,126

Total shareholders' equity 1,773,528 1,540,249

Total liabilities and

shareholders' equity $5,066,785 $5,154,375

Book value per common share $26.97 $23.22

Platinum Underwriters Holdings, Ltd.

Segment Reporting

For the Three Months Ended September 30, 2006 and 2005

($ in thousands)

Three Months Ended September 30, 2006 (Unaudited)

Property Finite

Segment underwriting results and Marine Casualty Risk Total

Net premiums written $83,018 202,302 12,680 $298,000

Net premiums earned 97,686 214,427 27,496 339,609

Losses and loss adjustment expenses 17,181 149,698 24,549 191,428

Acquisition expenses 14,895 54,503 5,596 74,994

Other underwriting expenses 8,608 9,464 1,991 20,063

Total underwriting expenses 40,684 213,665 32,136 286,485

Segment underwriting

income (loss) $57,002 762 (4,640) 53,124

Net investment income 48,302

Net realized losses on investments (57)

Net foreign currency exchange losses (228)

Other income 1,714

Corporate expenses not allocated

to segments (5,285)

Interest expense (5,452)

Income before income tax expense $92,118

GAAP underwriting ratios:

Loss and LAE 17.6% 69.8% 89.3% 56.4%

Acquisition expense 15.2% 25.4% 20.4% 22.1%

Other underwriting expense 8.8% 4.4% 7.2% 5.9%

Combined 41.6% 99.6% 116.9% 84.4%

Three Months Ended September 30, 2005 (Unaudited)

Segment underwriting results

Net premiums written $133,350 216,659 60,177 $410,186

Net premiums earned 145,853 205,050 78,485 429,388

Losses and loss adjustment

expenses 373,761 129,218 61,639 564,618

Acquisition expenses 17,753 50,097 31,008 98,858

Other underwriting expenses 3,632 1,894 524 6,050

Total underwriting expenses 395,146 181,209 93,171 669,526

Segment underwriting

income (loss) $(249,293) 23,841 (14,686) (240,138)

Net investment income 36,441

Net realized losses on investments (879)

Net foreign currency exchange gains 88

Other expense (433)

Corporate expenses not allocated

to segments (2,030)

Interest expense (6,839)

Income (loss) before income

tax benefit $(213,790)

GAAP underwriting ratios:

Loss and LAE 256.3% 63.0% 78.5% 131.5%

Acquisition expense 12.2% 24.4% 39.5% 23.0%

Other underwriting expense 2.5% 0.9% 0.7% 1.4%

Combined 271.0% 88.3% 118.7% 155.9%

The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.

Platinum Underwriters Holdings, Ltd.

Segment Reporting

For the Nine Months Ended September 30, 2006 and 2005

($ in thousands)

Nine Months Ended September 30, 2006 (Unaudited)

Segment underwriting results Property Finite

and Marine Casualty Risk Total

Net premiums written $333,906 583,950 (16,816) $901,040

Net premiums earned 342,322 573,168 105,485 1,020,975

Losses and loss

adjustment expenses 104,876 394,087 86,703 585,666

Acquisition expenses 55,783 141,025 23,477 220,285

Other underwriting expenses 27,642 23,487 3,935 55,064

Total underwriting expenses 188,301 558,599 114,115 861,015

Segment underwriting

income (loss) $154,021 14,569 (8,630) 159,960

Net investment income 137,165

Net realized gains on

investments 22

Net foreign currency

exchange gains 461

Other expense (1,927)

Corporate expenses not

allocated to segments (16,664)

Interest expense (16,352)

Income before income tax expense $262,665

GAAP underwriting ratios:

Loss and LAE 30.6% 68.8% 82.2% 57.4%

Acquisition expense 16.3% 24.6% 22.3% 21.6%

Other underwriting expense 8.1% 4.1% 3.7% 5.4%

Combined 55.0% 97.5% 108.2% 84.4%

Nine Months Ended September 30, 2005

(Unaudited)

Segment underwriting results

Net premiums written $453,352 621,218 252,374 $1,326,944

Net premiums earned 414,719 588,541 268,638 1,271,898

Losses and loss

adjustment expenses 492,300 375,187 175,681 1,043,168

Acquisition expenses 69,437 143,262 83,336 296,035

Other underwriting expenses 19,595 18,179 3,428 41,202

Total underwriting expenses 581,332 536,628 262,445 1,380,405

Segment underwriting

income (loss) $(166,613) 51,913 6,193 (108,507)

Net investment income 92,250

Net realized losses on

investments (1,062)

Net foreign currency

exchange losses (1,870)

Other expense (201)

Corporate expenses not

allocated to segments (10,366)

Interest expense (13,186)

Income (loss) before

income tax benefit $(42,942)

GAAP underwriting ratios:

Loss and LAE 118.7% 63.7% 65.4% 82.0%

Acquisition expense 16.7% 24.3% 31.0% 23.3%

Other underwriting expense 4.7% 3.1% 1.3% 3.2%

140.1% 91.1% 97.7% 108.5%

The GAAP underwriting ratios are calculated by dividing each item above by net premiums earned.

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