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A.M. Best Affirms Ratings of Platinum Underwriters Holdings, Ltd. and Its Reinsurance Subsidiaries

^{Published on 2010-05-19 07:05:15 - Market Wire}
 

OLDWICK, N.J.--([ BUSINESS WIRE ])--A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of aaa of Platinum Underwriters Group (the group) (Bermuda) and its members. A.M. Best also has affirmed the ICR of abbba of Platinum Underwriters Holdings, Ltd. (Platinum) (Bermuda) (NYSE: PTP) and the debt ratings of Platinumand Platinum Underwriters Finance, Inc. The outlook for all ratings is stable. (See below for a detailed list of the companies and ratings.)

The ratings reflect the groupa™s superior capitalization, consistently strong operating results and well-established business position as a global, multi-line provider of reinsurance coverages. The ratings also reflect the groupa™s good financial flexibility, very strong liquidity and sound enterprise risk management capabilities.

Somewhat offsetting these strengths are the challenges that have occurred in the global reinsurance market including rate softening and increased competition in recent years, which are impacting the groupa™s ability to find new profitable business opportunities. However, Platinuma™s adherence to underwriting discipline should help insulate it from the potential for future underwriting losses and position it well to take full advantage of future market opportunities as they arise.

The group has generated very strong underwriting results over the most recent five-year period with a five-year average combined ratio of 93.5%. From an earnings perspective, net investment income continued to contribute to the bottom line due to the groupa™s growing invested asset base and positive operating cash flow measures.

Despite challenges related to natural catastrophes and investment market turmoil, Platinum generated a healthy 2009 earnings result with net income of $382 million, driven in part by favorable loss reserve development. Earnings through first quarter 2010 remained profitable, despite a negative underwriting impact from global natural catastrophes. The group monitors its exposures to catastrophe losses through several modeling techniques and limits the amount of capital exposed based on the modeling of a 1 in 250 year per occurrence event.

Platinum maintains conservative financial leverage measures as total debt-to-total capital was approximately 11% at year-end 2009 with strong interest coverage measures. Additionally, Platinuma™s asset allocation is conservative, with the vast majority held in highly rated fixed income holdings with diversification by industry sector and issuer.

The FSR of A (Excellent) and ICRs of aaa have been affirmed for Platinum Underwriters Group and its following members:

• Platinum Underwriters Reinsurance, Inc.
• Platinum Underwriters Bermuda, Ltd.

The following debt ratings have been affirmed:

Platinum Underwriters Finance, Inc.a"

-- abbba on $250 million 7.50% senior unsecured notes, due 2017

The following indicative ratings available under the shelf registration have been affirmed:

Platinum Underwriters Holdings, Ltd.a"

-- abbba on senior unsecured debt

-- abbb-a on subordinated debt

-- abb+a on preferred stock

For Besta™s Credit Ratings, an overview of the rating process and rating methodologies, please visit [ www.ambest.com/ratings ].

The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at [ www.ambest.com/ratings/methodology ].

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit [ www.ambest.com ].