Background
Platinum Underwriters Holdings is a Bermuda holding
company organised in 2002, when founding shareholders The St. Paul Travelers,
a large US insurance company, Bermuda’s RenaissanceRe and others,
saw the opportunity to establish a specialty company.
Platinum essentially represented the reinsurance arm of the St. Paul
and the two companies entered into several agreements for the transfer
of continuing reinsurance business and certain related assets of St.
Paul to Platinum. Among these agreements were quota share retrocession
agreements under which Platinum assumed from St. Paul unpaid losses and
loss adjustment expenses.
The group
today employs about 160 people, and operates through three licenced reinsurance
subsidiaries: Platinum Underwriters Reinsurance, (Platinum US), Platinum Re
(UK) and Platinum Underwriters Bermuda. The group provides property and marine,
casualty and finite risk reinsurance coverages, through reinsurance intermediaries,
to a diverse global clientele of insurers and select reinsurers.
Platinum
Bermuda and Platinum UK were formed in 2002 and have no prior operating history
or loss reserves subject to development prior to January 1, 2002. Platinum
US had been an inactive licensed insurance company with no underwriting activity
prior to January 1, 2002. Platinum Ireland has no business operations other
than activity necessary to maintain its corporate existence and its ownership
of Platinum Finance and Platinum UK.
Platinum Finance’s activities have generally been limited to raising
funds for Platinum US through the issuance of senior notes. Platinum
Services’ activities are limited to providing administrative services
to the company, including legal, finance, actuarial, information technology
and human resources services.
On the property
side, with the help of RenaissanceRe, Platinum has developed a more efficient
use of catastrophe capacity through enhanced modelling capabilities. In the
casualty segment, Platinum has the benefit of relationships formed over many
years at St. Paul Re. These relationships, combined with an effective operating
platform and rigorous underwriting process, provide the foundation for the
company’s success.
Spotlight – A clear strategy
Platinum has been established in its first two years as a disciplined
risk manager and market leader in selected classes of property and casualty
reinsurance, through the following strategies:
- Operating
as a multi-class reinsurer.Platinum offers a broad range of
reinsurance coverage to ceding companies. Platinum believes that this
approach enables it to more effectively serve clients, diversify its
risk and leverage its capital.
- Focussing on profitability, not market share. Key
elements of this strategy are prudent risk selection, appropriate pricing
and adjustment of the business mix to respond to changing market conditions.
- Exercising disciplined underwriting and risk management. Platinum
exercises underwriting and risk management discipline by maintaining
a diverse spread of risk in its book of business across product lines
and geographic zones; emphasising excess-of-loss contracts over proportional
contracts; managing aggregate catastrophe exposure through the application
of sophisticated property catastrophe modelling tools; and monitoring
accumulating exposures on non-property catastrophe exposed coverages.
Operating from a position of financial strength.
Analysis
Platinum
has organised its worldwide reinsurance business around three operating
segments: property and marine, casualty, and finite risk. In each segment,
Platinum offers reinsurance products to providers of commercial and
personal lines of insurance.
Property
and marine: The segment includes principally property and marine reinsurance
coverages that are written in the United States and international markets.
This business includes catastrophe excess-of-loss reinsurance treaties, per-risk
excess-of-loss treaties and proportional treaties. Platinum writes a limited
amount of other types of reinsurance on an opportunistic basis.
Platinum provides reinsurance coverage for damage to property and crops.
Its catastrophe excess-of-loss reinsurance contracts provide a defined
limit of liability, permitting the company to quantify its aggregate
maximum loss exposure for various catastrophe events. Platinum also has
an agreement with an underwriting manager to underwrite property facultative
and programme reinsurance risks.
The company provides reinsurance coverage for marine and offshore energy
insurance programmes. Coverages reinsured include hull damage, protection
and indemnity, cargo damage, satellite damage and general marine liability.
Within marine, Platinum also writes commercial and general aviation reinsurance.
Marine reinsurance treaties include excess-of-loss as well as proportional
treaties.
Casualty:
The segment includes principally reinsurance treaties that cover umbrella
liability, general and product liability, professional liability, workers’ compensation,
casualty clash, automobile liability, surety and trade credit. This segment
also includes accident and health reinsurance treaties, which are predominantly
reinsurance of health insurance products.
Platinum generally writes casualty reinsurance on an excess-of-loss basis.
Finite
Risk: The segment includes principally structured reinsurance contracts
with ceding companies whose needs may not be met efficiently through traditional
reinsurance products. The classes of risks underwritten through finite risk
contracts are generally consistent with the classes covered by traditional
products.
Senior management
Chairman: Steve H. Newman
President and CEO: Gregory Morrison
COO: Michael Price
CFO: Joseph Fisher
Financial data
(half-year to June 30, 2005)
Net premiums earned: $843 million, up 33 percent
Net income: $141.1 million, up 35 percent
Shareholders’ equity: $1.273 billion, up 12 percent
Website
www.platinumre.com
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