Press on rates hits Platinum Q3 results

Competition for business and a downward pressure on rates contributed to a fall in profits and a shrinking of Platinum Underwriters’ book in the third quarter of 2014 as its profits and gross written premiums fell.

The reinsurer’s net income fell to $29.1 million in the third quarter of 2014, compared with $38.3 million in the third quarter of 2013. Its gross written premiums decreased by 9.2 percent to $133.3 million.

Its net premiums written fell by 10.2 percent to $123.8 million. Its combined ratio deteriorated 17.3 percentage points to 82.8 percent for the third quarter of 2014.

Michael Price, Platinum's chief executive officer, said: "Our results reflect favourable 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 programmes. Our book value per common share was $68.34 as of September 30, 2014, an increase of 1.4 percent from June 30, 2014.

"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."

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 percent, 51.1 percent and 5.1 percent, respectively, of total net premiums written.

Compared with the nine months ended September 30, 2013, net premiums written decreased $9.5 million (or 5.4 percent), $26.5 million (or 12.0 percent) and $3.2 million (or 14.0 percent) in the property and marine, casualty and finite risk segments, respectively.