##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number 001-31341
 Platinum Underwriters Holdings, Ltd.
  Bermuda
    
    98-0416483(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)The Belvedere Building69 Pitts Bay RoadPembroke, Bermuda
    
    HM 08(Address of principal executive offices)
    
    (Zip Code)
  
   
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
 o þ




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##### 



PagePART I  FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial StatementsConsolidated Balance Sheets as of June 30, 2006 (Unaudited) and
December 31, 2005
    
    
    1Consolidated Statements of Operations and Comprehensive Income for the Three
and Six Months Ended June 30, 2006 and 2005 (Unaudited)
    
    
    2Consolidated Statements of Changes in Shareholders Equity for the Six Months
Ended June 30, 2006 and 2005 (Unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2006 and 2005 (Unaudited)
    
    
    4Notes to Condensed Consolidated Financial Statements for the
Three and Six Months Ended June 30, 2006 and 2005(Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations for the Three and Six Months Ended June 30, 2006 and 2005
    
    
    23Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    50Item 4. Controls and Procedures
    
    
    52PART II  OTHER INFORMATIONItem 4. Submission of Matters to a Vote of Security Holders
    
    
    54Item 6. Exhibits
    
    
    55SIGNATURES
    
    
    56EX-10.1: TERMINATION ADDENDUMEX-10.2: EXCESS OF LOSS RETROCESSION AGREEMENTEX-10.3: QUOTA SHARE RETROCESSION AGREEMENTEX-10.4: TERMINATION ADDENDUMEX-10.5: EXCESS OF LOSS RETROCESSION AGREEMENTEX-10.6: ADDENDUM NO. 1 TO THE EXCESS OF LOSS RETROCESSION AGREEMENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
   (Unaudited)
    
    
    December 31,June 30, 2006
    
    
    2005ASSETSInvestments:Fixed maturity available-for-sale securities at fair value
(amortized cost  $3,208,911 and $2,936,152, respectively)
    
    $
    3,095,493
    
    
    $
    2,888,922Fixed maturity trading securities at fair value
(amortized cost  $119,796 and $99,141, respectively)
    
    
    116,262
    
    
    
    98,781Preferred stocks (cost  $8,735 and $8,735, respectively)
    
    
    7,699
    
    
    
    8,186Other invested asset
    
    
    5,000
    
    
    
    5,000Short-term investments
    
    
    75,576
    
    
    
    8,793Total investments
    
    
    3,300,030
    
    
    
    3,009,682Cash and cash equivalents
    
    
    710,830
    
    
    
    820,746Accrued investment income
    
    
    32,489
    
    
    
    29,230Reinsurance premiums receivable
    
    
    401,746
    
    
    
    567,449Reinsurance recoverable on ceded losses and loss adjustment expenses
    
    
    68,649
    
    
    
    68,210Prepaid reinsurance premiums
    
    
    29,174
    
    
    
    7,899Funds held by ceding companies
    
    
    250,077
    
    
    
    291,629Deferred acquisition costs
    
    
    98,532
    
    
    
    130,800Income tax recoverable
    
    
    14,695
    
    
    
    24,522Deferred tax assets
    
    
    33,469
    
    
    
    31,934Due from investment broker
    
    
    177
    
    
    
    157,930Other assets
    
    
    13,013
    
    
    
    14,344Total assets
    
    $
    4,952,881
    
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesUnpaid losses and loss adjustment expenses
    
    $
    2,343,605
    
    
    $
    2,323,990Unearned premiums
    
    
    449,672
    
    
    
    502,018Reinsurance deposit liabilities
    
    
    6,169
    
    
    
    6,048Debt obligations
    
    
    292,840
    
    
    
    292,840Ceded premiums payable
    
    
    41,147
    
    
    
    22,544Commissions payable
    
    
    141,823
    
    
    
    186,654Deferred tax liabilities
    
    
    
    
    
    
    118Due to investment broker
    
    
    3,567
    
    
    
    259,834Other liabilities
    
    
    35,227
    
    
    
    20,080Total liabilities
    
    
    3,314,050
    
    
    
    3,614,126Shareholders EquityPreferred shares, $.01 par value, 25,000,000 shares authorized,
5,750,000 shares issued and outstanding
    
    
    57
    
    
    
    57Common shares, $.01 par value, 200,000,000 shares authorized,
59,546,050 and 59,126,675 shares issued and outstanding,
respectively
    
    
    595
    
    
    
    590Additional paid-in capital
    
    
    1,539,027
    
    
    
    1,527,316Unearned share grant compensation
    
    
    
    
    
    
    (2,467
    )Accumulated other comprehensive loss
    
    
    (100,438
    )
    
    
    (40,718
    )Retained earnings
    
    
    199,590
    
    
    
    55,471Total shareholders equity
    
    
    1,638,831
    
    
    
    1,540,249Total liabilities and shareholders equity
    
    $
    4,952,881
    
    
    $
    5,154,375
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue:Net premiums earned
    
    $
    337,065
    
    
    
    431,470
    
    
    
    681,366
    
    
    $
    842,510Net investment income
    
    
    45,348
    
    
    
    28,904
    
    
    
    88,863
    
    
    
    55,809Net realized gains (losses) on investments
    
    
    14
    
    
    
    (555
    )
    
    
    79
    
    
    
    (183
    )Other income (expense)
    
    
    (2,324
    )
    
    
    588
    
    
    
    (3,641
    )
    
    
    232Total revenue
    
    
    380,103
    
    
    
    460,407
    
    
    
    766,667
    
    
    
    898,368Expenses:Losses and loss adjustment expenses
    
    
    187,464
    
    
    
    240,852
    
    
    
    394,238
    
    
    
    478,550Acquisition expenses
    
    
    76,052
    
    
    
    103,928
    
    
    
    145,291
    
    
    
    197,177Operating expenses
    
    
    23,392
    
    
    
    23,480
    
    
    
    46,380
    
    
    
    43,488Net foreign currency exchange losses
(gains)
    
    
    (414
    )
    
    
    160
    
    
    
    (689
    )
    
    
    1,958Interest expense
    
    
    5,450
    
    
    
    4,174
    
    
    
    10,900
    
    
    
    6,347Total expenses
    
    
    291,944
    
    
    
    372,594
    
    
    
    596,120
    
    
    
    727,520Income before income tax expense
    
    
    88,159
    
    
    
    87,813
    
    
    
    170,547
    
    
    
    170,848Income tax expense
    
    
    6,411
    
    
    
    19,828
    
    
    
    11,763
    
    
    
    29,775Net income
    
    
    81,748
    
    
    
    67,985
    
    
    
    158,784
    
    
    
    141,073Preferred dividends
    
    
    2,602
    
    
    
    
    
    
    
    5,178
    
    
    
    Net income available to common
shareholders
    
    $
    79,146
    
    
    
    67,985
    
    
    
    153,606
    
    
    $
    141,073Earnings per share:Basic earnings per share
    
    $
    1.34
    
    
    
    1.57
    
    
    
    2.60
    
    
    $
    3.26Diluted earnings per share
    
    $
    1.24
    
    
    
    1.39
    
    
    
    2.40
    
    
    $
    2.88Comprehensive income:Net income
    
    $
    81,748
    
    
    
    67,985
    
    
    
    158,784
    
    
    $
    141,073Other comprehensive income:Net change in unrealized gains and
losses on available-for-sale
securities, net of deferred taxes
    
    
    (24,580
    )
    
    
    33,051
    
    
    
    (59,895
    )
    
    
    (1,578
    )Cumulative translation adjustments,
net of deferred taxes
    
    
    171
    
    
    
    (46
    )
    
    
    175
    
    
    
    (37
    )Comprehensive income
    
    $
    57,339
    
    
    
    100,990
    
    
    
    99,064
    
    
    $
    139,458Shareholder dividends:Preferred dividends declared
    
    $
    2,602
    
    
    
    
    
    
    
    4,614
    
    
    $
    Preferred dividends declared per share
    
    
    0.45
    
    
    
    
    
    
    
    0.80
    
    
    
    Common dividends declared
    
    
    4,754
    
    
    
    3,462
    
    
    
    9,487
    
    
    
    6,911Common dividends declared per share
    
    $
    0.08
    
    
    
    0.08
    
    
    
    0.16
    
    
    $
    0.16
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
    2006
    
    
    2005Preferred shares:Balances at beginning of period
    
    $
    57
    
    
    $
    Balances at end of period
    
    
    57
    
    
    
    Common shares:Balances at beginning of period
    
    
    590
    
    
    
    430Exercise of share options
    
    
    4
    
    
    
    3Issuance of restricted shares
    
    
    1
    
    
    
    1Balances at end of period
    
    
    595
    
    
    
    434Additional paid-in-capital:Balances at beginning of period
    
    
    1,527,316
    
    
    
    911,851Issuance of restricted shares
    
    
    (2,467
    )
    
    
    2,750Exercise of common share options
    
    
    10,486
    
    
    
    4,981Share based compensation
    
    
    3,692
    
    
    
    1,689Balances at end of period
    
    
    1,539,027
    
    
    
    921,271Unearned common share grant compensation:Balances at beginning of period
    
    
    (2,467
    )
    
    
    Shares issued
    
    
    
    
    
    
    (2,750
    )Amortization
    
    
    
    
    
    
    504Transfer of unearned common share grant compensation
    
    
    2,467
    
    
    
    Balances at end of period
    
    
    
    
    
    
    (2,246
    )Accumulated other comprehensive income (loss):Balances at beginning of period
    
    
    (40,718
    )
    
    
    12,252Net change in unrealized gains and losses on
available-for-sale securities, net of deferred tax
    
    
    (59,895
    )
    
    
    (1,578
    )Net change in cumulative translation adjustments,
net of deferred tax
    
    
    175
    
    
    
    (37
    )Balances at end of period
    
    
    (100,438
    )
    
    
    10,637Retained earnings:Balances at beginning of period
    
    
    55,471
    
    
    
    208,470Net income
    
    
    158,784
    
    
    
    141,073Preferred share dividends
    
    
    (5,178
    )
    
    
    Common share dividends
    
    
    (9,487
    )
    
    
    (6,911
    )Balances at end of period
    
    
    199,590
    
    
    
    342,632Total shareholders equity
    
    $
    1,638,831
    
    
    $
    1,272,728
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
    2006
    
    
    2005Operating Activities:Net income
    
    $
    158,784
    
    
    $
    141,073Adjustments to reconcile net income to cash provided by
operations:Depreciation and amortization
    
    
    7,801
    
    
    
    10,231Net realized (gains) losses on investments
    
    
    (79
    )
    
    
    183Net foreign currency exchange (gains) losses
    
    
    (689
    )
    
    
    1,958Share based compensation
    
    
    3,692
    
    
    
    2,193Deferred income tax expense
    
    
    5,051
    
    
    
    (2,176
    )Trading securities activities
    
    
    (9,603
    )
    
    
    4,329Changes in assets and liabilities:Increase in accrued investment income
    
    
    (3,259
    )
    
    
    (4,653
    )Decrease in reinsurance premiums receivable
    
    
    165,703
    
    
    
    3,591(Increase) decrease in funds held by ceding companies
    
    
    41,552
    
    
    
    (73,747
    )(Increase) decrease in deferred acquisition costs
    
    
    32,268
    
    
    
    (8,806
    )Increase in net unpaid losses and loss adjustment expenses
    
    
    10,898
    
    
    
    173,745Increase (decrease) in net unearned premiums
    
    
    (73,621
    )
    
    
    69,950Increase (decrease ) in reinsurance deposit liabilities
    
    
    121
    
    
    
    (14,368
    )Increase in ceded premiums payable
    
    
    18,603
    
    
    
    15,735Decrease in commissions payable
    
    
    (44,831
    )
    
    
    34,534Increase in funds withheld
    
    
    
    
    
    
    1,225Decrease in income tax recoverable
    
    
    9,827
    
    
    
    14,742Net changes in other assets and liabilities
    
    
    15,131
    
    
    
    6,436Other net
    
    
    (244
    )
    
    
    227Net cash provided by operating activities
    
    
    337,105
    
    
    
    376,402Investing Activities:Proceeds from sale of available-for-sale fixed maturity
securities
    
    
    190,248
    
    
    
    207,840Proceeds from maturity or paydown of available-for-sale fixed
maturity securities
    
    
    93,933
    
    
    
    66,796Acquisition of available-for-sale fixed maturity securities
    
    
    (663,027
    )
    
    
    (696,372
    )Net acquisitions of short-term investments
    
    
    (64,565
    )
    
    
    Net cash used in investing activities
    
    
    (443,411
    )
    
    
    (421,736
    )Financing Activities:Dividends paid to preferred shareholders
    
    
    (4,614
    )
    
    
    Dividends paid to common shareholders
    
    
    (9,487
    )
    
    
    (6,911
    )Proceeds from issuance of debt
    
    
    
    
    
    
    246,900Proceeds from exercise of share options
    
    
    10,491
    
    
    
    4,984Net cash provided by (used in) financing activities
    
    
    (3,610
    )
    
    
    244,973Net increase (decrease) in cash and cash equivalents
    
    
    (109,916
    )
    
    
    199,639Cash and cash equivalents at beginning of period
    
    
    820,746
    
    
    
    209,900Cash and cash equivalents at end of period
    
    $
    710,830
    
    
    $
    409,539Supplemental disclosures of cash flow information:Income taxes paid (recovered)
    
    $
    (3,366
    )
    
    $
    28,573Interest paid
    
    $
    10,740
    
    
    $
    3,671
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 1. Basis of Presentation
   Share-Based Compensation
    - 5 -




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
 AsReported
    
    Pro FormaThree months
ended June 30, 2005:Share-based compensation expense
    
    $
    507
    
    
    $
    1,595Net income
    
    
    67,985
    
    
    
    66,897Basic earnings per share
    
    
    1.57
    
    
    
    1.55Diluted earnings per share
    
    
    1.39
    
    
    
    1.37Six months
ended June 30, 2005:Share-based compensation expense
    
    
    1,802
    
    
    
    4,116Net income
    
    
    141,073
    
    
    
    138,759Basic earnings per share
    
    
    3.26
    
    
    
    3.21Diluted earnings per share
    
    $
    2.88
    
    
    $
    2.83
 Reclassifications
  2. Investments
  2006
    
    
    2005Fixed maturities
    
    $
    (66,675
    )
    
    $
    (3,179
    )Less  deferred taxes
    
    
    6,780
    
    
    
    1,601Net change in unrealized investment gains and losses
    
    $
    (59,895
    )
    
    $
    (1,578
    )
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
  UnrealizedFair Value
    
    
    LossLess than twelve months:U.S. Government
    
    $
    148,599
    
    
    $
    4,410Corporate bonds
    
    
    906,290
    
    
    
    38,171Mortgage-backed and asset-backed securities
    
    
    932,625
    
    
    
    36,910Municipal bonds
    
    
    121,118
    
    
    
    3,296Foreign governments and states
    
    
    13,060
    
    
    
    706Total
    
    
    2,121,692
    
    
    
    83,493Twelve months or more:U.S. Government
    
    
    30,413
    
    
    
    381Corporate bonds
    
    
    483,512
    
    
    
    16,691Mortgage-backed and asset-backed securities
    
    
    188,068
    
    
    
    10,263Municipal bonds
    
    
    76,038
    
    
    
    1,976Foreign governments and states
    
    
    27,113
    
    
    
    901Preferred stocks
    
    
    7,699
    
    
    
    1,035Total
    
    $
    812,843
    
    
    $
    31,247Total of securities with unrealized losses:U.S. Government
    
    $
    179,012
    
    
    $
    4,791Corporate bonds
    
    
    1,389,802
    
    
    
    54,862Mortgage-backed and asset-backed securities
    
    
    1,120,693
    
    
    
    47,173Municipal bonds
    
    
    197,156
    
    
    
    5,272Foreign governments and states
    
    
    40,173
    
    
    
    1,607Preferred stocks
    
    
    7,699
    
    
    
    1,035Total
    
    $
    2,934,535
    
    
    $
    114,740
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
   3. Earnings Per Share
  WeightedAverageNet
    
    
    Shares
    
    
    EarningsIncome
    
    
    Outstanding
    
    
    Per ShareThree months ended June 30, 2006:Basic earnings per share:Net income available to common
shareholders
    
    $
    79,146
    
    
    
    59,224
    
    
    $
    1.34Effect of dilutive securities:Common share options, restricted
common shares and common share
units
    
    
    
    
    
    
    751Conversion of preferred shares
    
    
    
    
    
    
    5,750Preferred share dividends
    
    
    2,602
    
    
    
    Adjusted net income for diluted
earnings per share
    
    $
    81,748
    
    
    
    65,725
    
    
    $
    1.24
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 WeightedAverageNet
    
    
    Shares
    
    
    EarningsIncome
    
    
    Outstanding
    
    
    Per ShareThree Months Ended June 30, 2005:Basic earnings per share
    
    $
    67,985
    
    
    
    43,293
    
    
    $
    1.57Effect of dilutive securities:Common share options and
restricted common share units
    
    
    
    
    
    
    1,707Conversion of Equity Security Units
    
    
    
    
    
    
    5,009Interest expense related to Equity
Share Units, net of income tax
benefit
    
    
    1,506
    
    
    
    Diluted earnings per share
    
    $
    69,491
    
    
    
    50,009
    
    
    $
    1.39Six Months Ended June 30, 2006:Basic earnings per share:Net income available to common
shareholders
    
    $
    153,606
    
    
    
    59,161
    
    
    $
    2.60Effect of dilutive securities:Common share options, restricted
common shares and common share
units
    
    
    
    
    
    
    1,312Conversion of preferred shares
    
    
    
    
    
    
    5,750Preferred share dividends
    
    
    5,178
    
    
    
    Adjusted net income for diluted
earnings per share
    
    $
    158,784
    
    
    
    66,223
    
    
    $
    2.40Six Months Ended June 30, 2005:Basic earnings per share
    
    $
    141,073
    
    
    
    43,224
    
    
    $
    3.26Effect of dilutive securities:Common share options and
restricted common share units
    
    
    
    
    
    
    1,807Conversion of Equity Security Units
    
    
    
    
    
    
    5,009Interest expense related to Equity
Share Units, net of income tax
benefit
    
    
    2,929
    
    
    
    Diluted earnings per share
    
    $
    144,002
    
    
    
    50,040
    
    
    $
    2.88
 4. Operating Segment Information
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
   Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended June 30, 2006:Net premiums written
    
    $
    85,624
    
    
    
    199,298
    
    
    
    24,840
    
    
    $
    309,762Net premiums earned
    
    
    113,092
    
    
    
    185,073
    
    
    
    38,900
    
    
    
    337,065Losses and LAE
    
    
    27,867
    
    
    
    127,824
    
    
    
    31,773
    
    
    
    187,464Acquisition expenses
    
    
    21,239
    
    
    
    45,168
    
    
    
    9,645
    
    
    
    76,052Other underwriting expenses
    
    
    9,006
    
    
    
    7,688
    
    
    
    1,019
    
    
    
    17,713Segment underwriting income (loss)
    
    $
    54,980
    
    
    
    4,393
    
    
    
    (3,537
    )
    
    
    55,836Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,362Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    414Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,324
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,679
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,450
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    88,159Ratios:Losses and LAE
    
    
    24.6
    %
    
    
    69.1
    %
    
    
    81.7
    %
    
    
    55.6
    %Acquisition expense
    
    
    18.8
    %
    
    
    24.4
    %
    
    
    24.8
    %
    
    
    22.6
    %Other underwriting expense
    
    
    8.0
    %
    
    
    4.2
    %
    
    
    2.6
    %
    
    
    5.3
    %Combined
    
    
    51.4
    %
    
    
    97.7
    %
    
    
    109.1
    %
    
    
    83.5
    %
 - 10 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended June 30, 2005:Net premiums written
    
    $
    134,953
    
    
    
    188,890
    
    
    
    99,116
    
    
    $
    422,959Net premiums earned
    
    
    140,669
    
    
    
    198,723
    
    
    
    92,078
    
    
    
    431,470Losses and LAE
    
    
    58,499
    
    
    
    127,531
    
    
    
    54,822
    
    
    
    240,852Acquisition expenses
    
    
    29,695
    
    
    
    47,963
    
    
    
    26,270
    
    
    
    103,928Other underwriting expenses
    
    
    8,240
    
    
    
    8,972
    
    
    
    1,333
    
    
    
    18,545Segment underwriting income
    
    $
    44,235
    
    
    
    14,257
    
    
    
    9,653
    
    
    
    68,145Net investment income and net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,349Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    588Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,935
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,174
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    87,813Ratios:Losses and LAE
    
    
    41.6
    %
    
    
    64.2
    %
    
    
    59.5
    %
    
    
    55.8
    %Acquisition expense
    
    
    21.1
    %
    
    
    24.1
    %
    
    
    28.5
    %
    
    
    24.1
    %Other underwriting expense
    
    
    5.9
    %
    
    
    4.5
    %
    
    
    1.4
    %
    
    
    4.3
    %Combined
    
    
    68.6
    %
    
    
    92.8
    %
    
    
    89.4
    %
    
    
    84.2
    %
 - 11 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalSix Months Ended June 30, 2006:Net premiums written
    
    $
    250,888
    
    
    
    381,648
    
    
    
    (29,496
    )
    
    $
    603,040Net premiums earned
    
    
    244,636
    
    
    
    358,741
    
    
    
    77,989
    
    
    
    681,366Losses and LAE
    
    
    87,695
    
    
    
    244,389
    
    
    
    62,154
    
    
    
    394,238Acquisition expenses
    
    
    40,888
    
    
    
    86,522
    
    
    
    17,881
    
    
    
    145,291Other underwriting expenses
    
    
    19,034
    
    
    
    14,023
    
    
    
    1,944
    
    
    
    35,001Segment underwriting income (loss)
    
    $
    97,019
    
    
    
    13,807
    
    
    
    (3,990
    )
    
    
    106,836Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,942Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    689Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,641
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,379
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,900
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    170,547Ratios:Losses and LAE
    
    
    35.8
    %
    
    
    68.1
    %
    
    
    79.7
    %
    
    
    57.9
    %Acquisition expense
    
    
    16.7
    %
    
    
    24.1
    %
    
    
    22.9
    %
    
    
    21.3
    %Other underwriting expense
    
    
    7.8
    %
    
    
    3.9
    %
    
    
    2.5
    %
    
    
    5.1
    %Combined
    
    
    60.3
    %
    
    
    96.1
    %
    
    
    105.1
    %
    
    
    84.3
    %Six months ended June 30, 2005:Net premiums written
    
    $
    320,002
    
    
    
    404,559
    
    
    
    192,197
    
    
    $
    916,758Net premiums earned
    
    
    268,866
    
    
    
    383,491
    
    
    
    190,153
    
    
    
    842,510Losses and LAE
    
    
    118,539
    
    
    
    245,969
    
    
    
    114,042
    
    
    
    478,550Acquisition expenses
    
    
    51,684
    
    
    
    93,165
    
    
    
    52,328
    
    
    
    197,177Other underwriting expenses
    
    
    15,963
    
    
    
    16,285
    
    
    
    2,904
    
    
    
    35,152Segment underwriting income
    
    $
    82,680
    
    
    
    28,072
    
    
    
    20,879
    
    
    
    131,631Net investment income and net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,626Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,958
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,336
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,347
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    170,848Ratios:Losses and LAE
    
    
    44.1
    %
    
    
    64.1
    %
    
    
    60.0
    %
    
    
    56.8
    %Acquisition expense
    
    
    19.2
    %
    
    
    24.3
    %
    
    
    27.5
    %
    
    
    23.4
    %Other underwriting expense
    
    
    5.9
    %
    
    
    4.2
    %
    
    
    1.5
    %
    
    
    4.2
    %Combined
    
    
    69.2
    %
    
    
    92.6
    %
    
    
    89.0
    %
    
    
    84.4
    %
 - 12 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 5. Income Taxes
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Expected income tax expense at 35%
    
    $
    30,856
    
    
    
    30,735
    
    
    
    59,691
    
    
    $
    59,797Effect of foreign income subject
to tax at rates other than 35%
    
    
    (23,587
    )
    
    
    (19,635
    )
    
    
    (46,813
    )
    
    
    (38,258
    )Tax exempt investment income
    
    
    (586
    )
    
    
    (438
    )
    
    
    (1,139
    )
    
    
    (964
    )U.S. withholding taxes deemed
taxable transfer to foreign
affiliate
    
    
    
    
    
    
    9,150
    
    
    
    
    
    
    
    9,150Other, net
    
    
    (272
    )
    
    
    16
    
    
    
    24
    
    
    
    50Income tax expense
    
    $
    6,411
    
    
    
    19,828
    
    
    
    11,763
    
    
    $
    29,775
 6.
    
    Condensed Consolidating Financial Information
  - 13 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
    Condensed Consolidating Balance Sheet
June 30, 2006
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    12,018
    
    
    
    3,288,012
    
    
    
    
    
    
    $
    3,300,030Investment in subsidiaries
    
    
    1,516,727
    
    
    
    472,435
    
    
    
    349,074
    
    
    
    (2,338,236
    )
    
    
    Cash and cash equivalents
    
    
    121,607
    
    
    
    1,878
    
    
    
    587,345
    
    
    
    
    
    
    
    710,830Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    848,178
    
    
    
    
    
    
    
    848,178Income tax recoverable
    
    
    
    
    
    
    1,866
    
    
    
    12,829
    
    
    
    
    
    
    
    14,695Other assets
    
    
    4,310
    
    
    
    3,974
    
    
    
    70,864
    
    
    
    
    
    
    
    79,148Total assets
    
    $
    1,642,644
    
    
    
    492,171
    
    
    
    5,156,302
    
    
    
    (2,338,236
    )
    
    $
    4,952,881LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesReinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    2,982,416
    
    
    
    
    
    
    $
    2,982,416Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    3,813
    
    
    
    2,020
    
    
    
    32,961
    
    
    
    
    
    
    
    38,794Total liabilities
    
    
    3,813
    
    
    
    294,860
    
    
    
    3,015,377
    
    
    
    
    
    
    
    3,314,050Shareholders EquityPreferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    595
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    595Additional paid-in capital
    
    
    1,539,027
    
    
    
    192,036
    
    
    
    2,051,134
    
    
    
    (2,243,170
    )
    
    
    1,539,027Accumulated other comprehensive loss
    
    
    (100,438
    )
    
    
    (20,257
    )
    
    
    (125,499
    )
    
    
    145,756
    
    
    
    (100,438
    )Retained earnings
    
    
    199,590
    
    
    
    25,532
    
    
    
    209,040
    
    
    
    (234,572
    )
    
    
    199,590Total shareholders equity
    
    
    1,638,831
    
    
    
    197,311
    
    
    
    2,140,925
    
    
    
    (2,338,236
    )
    
    
    1,638,831Total liabilities and shareholders
equity
    
    $
    1,642,644
    
    
    
    492,171
    
    
    
    5,156,302
    
    
    
    (2,338,236
    )
    
    $
    4,952,881
 - 14 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Condensed Consolidating Balance Sheet
December 31, 2005
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    12,448
    
    
    
    2,997,234
    
    
    
    
    
    
    $
    3,009,682Investment in subsidiaries
    
    
    1,410,794
    
    
    
    448,839
    
    
    
    436,368
    
    
    
    (2,296,001
    )
    
    
    Cash and cash equivalents
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    1,065,987
    
    
    
    
    
    
    
    1,065,987Income tax recoverable
    
    
    
    
    
    
    5,874
    
    
    
    18,648
    
    
    
    
    
    
    
    24,522Other assets
    
    
    2,963
    
    
    
    4,086
    
    
    
    226,389
    
    
    
    
    
    
    
    233,438Total assets
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    5,430,400
    
    
    
    (2,296,001
    )
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS
EQUITYLiabilitiesReinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    3,041,254
    
    
    
    
    
    
    $
    3,041,254Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    3,470
    
    
    
    2,243
    
    
    
    274,319
    
    
    
    
    
    
    
    280,032Total liabilities
    
    
    3,470
    
    
    
    295,083
    
    
    
    3,315,573
    
    
    
    
    
    
    
    3,614,126Shareholders EquityPreferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    590
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    590Unearned share grant compensation
    
    
    (2,467
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,467
    )Additional paid-in capital
    
    
    1,527,316
    
    
    
    192,036
    
    
    
    2,050,834
    
    
    
    (2,242,870
    )
    
    
    1,527,316Accumulated other comprehensive loss
    
    
    (40,718
    )
    
    
    (10,199
    )
    
    
    (52,840
    )
    
    
    63,039
    
    
    
    (40,718
    )Retained earnings
    
    
    55,471
    
    
    
    (663
    )
    
    
    110,583
    
    
    
    (109,920
    )
    
    
    55,471Total shareholders equity
    
    
    1,540,249
    
    
    
    181,174
    
    
    
    2,114,827
    
    
    
    (2,296,001
    )
    
    
    1,540,249Total liabilities and
shareholders equity
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    5,430,400
    
    
    
    (2,296,001
    )
    
    $
    5,154,375
 - 15 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Consolidating Statement of Income
For the Three Months Ended
June 30, 2006
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    337,065
    
    
    
    
    
    
    $
    337,065Net investment income
    
    
    1,472
    
    
    
    227
    
    
    
    43,649
    
    
    
    
    
    
    
    45,348Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    14Other expense, net
    
    
    
    
    
    
    
    
    
    
    (2,324
    )
    
    
    
    
    
    
    (2,324
    )Total revenue
    
    
    1,472
    
    
    
    227
    
    
    
    378,404
    
    
    
    
    
    
    
    380,103Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    187,464
    
    
    
    
    
    
    
    187,464Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    76,052
    
    
    
    
    
    
    
    76,052Operating expenses
    
    
    5,551
    
    
    
    108
    
    
    
    17,733
    
    
    
    
    
    
    
    23,392Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    (414
    )
    
    
    
    
    
    
    (414
    )Interest expense
    
    
    
    
    
    
    5,450
    
    
    
    
    
    
    
    
    
    
    
    5,450Total expenses
    
    
    5,551
    
    
    
    5,558
    
    
    
    280,835
    
    
    
    
    
    
    
    291,944Income (loss) before income tax
expense (benefit)
    
    
    (4,079
    )
    
    
    (5,331
    )
    
    
    97,569
    
    
    
    
    
    
    
    88,159Income tax expense (benefit)
    
    
    
    
    
    
    (1,866
    )
    
    
    8,277
    
    
    
    
    
    
    
    6,411Net income (loss) before equity
in earnings of subsidiaries
    
    
    (4,079
    )
    
    
    (3,465
    )
    
    
    89,292
    
    
    
    
    
    
    
    81,748Equity in earnings of subsidiaries
    
    
    85,827
    
    
    
    22,765
    
    
    
    12,226
    
    
    
    (120,818
    )
    
    
    Net income
    
    
    81,748
    
    
    
    19,300
    
    
    
    101,518
    
    
    
    (120,818
    )
    
    
    81,748Preferred dividends
    
    
    2,602
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,602Net income available to common
shareholders
    
    $
    79,146
    
    
    
    19,300
    
    
    
    101,518
    
    
    
    (120,818
    )
    
    $
    79,146
 - 16 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Consolidating Statement of Income
For the Three Months Ended
June 30, 2005
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    431,470
    
    
    
    
    
    
    $
    431,470Net investment income
    
    
    47
    
    
    
    180
    
    
    
    28,677
    
    
    
    
    
    
    
    28,904Net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    (555
    )
    
    
    
    
    
    
    (555
    )Other income, net
    
    
    
    
    
    
    
    
    
    
    588
    
    
    
    
    
    
    
    588Total revenue
    
    
    47
    
    
    
    180
    
    
    
    460,180
    
    
    
    
    
    
    
    460,407Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    240,852
    
    
    
    
    
    
    
    240,852Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    103,928
    
    
    
    
    
    
    
    103,928Operating expenses
    
    
    4,633
    
    
    
    231
    
    
    
    18,616
    
    
    
    
    
    
    
    23,480Net foreign currency exchange losses
    
    
    1
    
    
    
    
    
    
    
    159
    
    
    
    
    
    
    
    160Interest expense
    
    
    22
    
    
    
    4,152
    
    
    
    
    
    
    
    
    
    
    
    4,174Total expenses
    
    
    4,656
    
    
    
    4,383
    
    
    
    363,555
    
    
    
    
    
    
    
    372,594Income (loss) before income tax expense (benefit)
    
    
    (4,609
    )
    
    
    (4,203
    )
    
    
    96,625
    
    
    
    
    
    
    
    87,813Income tax expense (benefit)
    
    
    
    
    
    
    (1,471
    )
    
    
    21,299
    
    
    
    
    
    
    
    19,828Net income (loss) before equity in
earnings of subsidiaries
    
    
    (4,609
    )
    
    
    (2,732
    )
    
    
    75,326
    
    
    
    
    
    
    
    67,985Equity in earnings of subsidiaries
    
    
    72,594
    
    
    
    18,647
    
    
    
    21,555
    
    
    
    (112,796
    )
    
    
    Net income
    
    $
    67,985
    
    
    
    15,915
    
    
    
    96,881
    
    
    
    (112,796
    )
    
    $
    67,985
 - 17 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Consolidating Statement of Income
For the Six Months Ended June 30, 2006
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    681,366
    
    
    
    
    
    
    $
    681,366Net investment income
    
    
    2,906
    
    
    
    447
    
    
    
    85,510
    
    
    
    
    
    
    
    88,863Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    
    
    
    
    79Other income (expense), net
    
    
    1,100
    
    
    
    
    
    
    
    (4,741
    )
    
    
    
    
    
    
    (3,641
    )Total revenue
    
    
    4,006
    
    
    
    447
    
    
    
    762,214
    
    
    
    
    
    
    
    766,667Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    394,238
    
    
    
    
    
    
    
    394,238Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    145,291
    
    
    
    
    
    
    
    145,291Operating expenses
    
    
    10,872
    
    
    
    366
    
    
    
    35,142
    
    
    
    
    
    
    
    46,380Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    (689
    )
    
    
    
    
    
    
    (689
    )Interest expense
    
    
    
    
    
    
    10,900
    
    
    
    
    
    
    
    
    
    
    
    10,900Total expenses
    
    
    10,872
    
    
    
    11,266
    
    
    
    573,982
    
    
    
    
    
    
    
    596,120Income (loss) before income tax
expense (benefit)
    
    
    (6,866
    )
    
    
    (10,819
    )
    
    
    188,232
    
    
    
    
    
    
    
    170,547Income tax expense (benefit)
    
    
    
    
    
    
    (3,786
    )
    
    
    15,549
    
    
    
    
    
    
    
    11,763Net income (loss) before equity
in earnings of subsidiaries
    
    
    (6,866
    )
    
    
    (7,033
    )
    
    
    172,683
    
    
    
    
    
    
    
    158,784Equity in earnings of subsidiaries
    
    
    165,650
    
    
    
    33,227
    
    
    
    23,064
    
    
    
    (221,941
    )
    
    
    Net income
    
    
    158,784
    
    
    
    26,194
    
    
    
    195,747
    
    
    
    (221,941
    )
    
    
    158,784Preferred dividends
    
    
    5,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,178Net income available to common
shareholders
    
    $
    153,606
    
    
    
    26,194
    
    
    
    195,747
    
    
    
    (221,941
    )
    
    $
    153,606
 - 18 -




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Consolidating Statement of Income
For the Six Months Ended June 30, 2005
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    842,510
    
    
    
    
    
    
    $
    842,510Net investment income
    
    
    72
    
    
    
    257
    
    
    
    55,480
    
    
    
    
    
    
    
    55,809Net realized losses on investments
    
    
    
    
    
    
    1
    
    
    
    (184
    )
    
    
    
    
    
    
    (183
    )Other income, net
    
    
    
    
    
    
    
    
    
    
    232
    
    
    
    
    
    
    
    232Total revenue
    
    
    72
    
    
    
    258
    
    
    
    898,038
    
    
    
    
    
    
    
    898,368Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    478,550
    
    
    
    
    
    
    
    478,550Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    197,177
    
    
    
    
    
    
    
    197,177Operating expenses
    
    
    7,873
    
    
    
    308
    
    
    
    35,307
    
    
    
    
    
    
    
    43,488Net foreign currency exchange losses
    
    
    1
    
    
    
    
    
    
    
    1,957
    
    
    
    
    
    
    
    1,958Interest expense
    
    
    53
    
    
    
    6,294
    
    
    
    
    
    
    
    
    
    
    
    6,347Total expenses
    
    
    7,927
    
    
    
    6,602
    
    
    
    712,991
    
    
    
    
    
    
    
    727,520Income (loss) before income tax
expense
    
    
    (7,855
    )
    
    
    (6,344
    )
    
    
    185,047
    
    
    
    
    
    
    
    170,848Income tax expense (benefit)
    
    
    
    
    
    
    (2,221
    )
    
    
    31,996
    
    
    
    
    
    
    
    29,775Net income (loss) before equity
in earnings of subsidiaries
    
    
    (7,855
    )
    
    
    (4,123
    )
    
    
    153,051
    
    
    
    
    
    
    
    141,073Equity in earnings of subsidiaries
    
    
    148,928
    
    
    
    36,600
    
    
    
    41,444
    
    
    
    (226,972
    )
    
    
    Net income
    
    $
    141,073
    
    
    
    32,477
    
    
    
    194,495
    
    
    
    (226,972
    )
    
    $
    141,073
 - 19 -




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2006
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (4,744
    )
    
    
    (3,060
    )
    
    
    344,909
    
    
    
    
    
    
    $
    337,105Investing Activities:Proceeds from sale of available-for-sale
fixed maturities
    
    
    
    
    
    
    
    
    
    
    190,248
    
    
    
    
    
    
    
    190,248Proceeds from maturity or paydown of
available-for-sale fixed maturities
    
    
    
    
    
    
    726
    
    
    
    93,207
    
    
    
    
    
    
    
    93,933Acquisition of available-for-sale fixed
maturities
    
    
    
    
    
    
    (498
    )
    
    
    (662,529
    )
    
    
    
    
    
    
    (663,027
    )Increase in short-term investments
    
    
    
    
    
    
    
    
    
    
    (64,565
    )
    
    
    
    
    
    
    (64,565
    )Contributions to subsidiaries
    
    
    
    
    
    
    (300
    )
    
    
    300
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    
    
    
    
    (72
    )
    
    
    (443,339
    )
    
    
    
    
    
    
    (443,411
    )Financing Activities:Dividends paid to preferred shareholders
    
    
    (4,614
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,614
    )Dividends paid to common shareholders
    
    
    (9,487
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,487
    )Proceeds from exercise of share options
    
    
    10,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,491Net cash used in financing activities
    
    
    (3,610
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,610
    )Net decrease in cash and cash
equivalents
    
    
    (8,354
    )
    
    
    (3,132
    )
    
    
    (98,430
    )
    
    
    
    
    
    
    (109,916
    )Cash and cash equivalents at beginning of
period
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Cash and cash equivalents at end of period
    
    $
    121,608
    
    
    
    1,878
    
    
    
    587,344
    
    
    
    
    
    
    $
    710,830
 - 20 -




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2005
 Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (5,880
    )
    
    
    (1,157
    )
    
    
    383,439
    
    
    
    
    
    
    $
    376,402Investing Activities:Proceeds from sale of available-for-sale
fixed maturities
    
    
    
    
    
    
    
    
    
    
    207,840
    
    
    
    
    
    
    
    207,840Proceeds from sale of subsidiary shares
    
    
    
    
    
    
    
    
    
    
    193,000
    
    
    
    (193,000
    )
    
    
    Proceeds from maturity or paydown of
available-for-sale fixed maturities
    
    
    
    
    
    
    221
    
    
    
    66,575
    
    
    
    
    
    
    
    66,796Acquisition of available-for-sale fixed
maturities
    
    
    
    
    
    
    12
    
    
    
    (696,384
    )
    
    
    
    
    
    
    (696,372
    )Dividends from subsidiaries
    
    
    12,000
    
    
    
    
    
    
    
    
    
    
    
    (12,000
    )
    
    
    Contributions to subsidiaries
    
    
    
    
    
    
    (25,000
    )
    
    
    25,000
    
    
    
    
    
    
    
    Net cash provided by (used in)
investing activities
    
    
    12,000
    
    
    
    (24,767
    )
    
    
    (203,969
    )
    
    
    (205,000
    )
    
    
    (421,736
    )Financing Activities:Dividends paid to shareholders
    
    
    (6,911
    )
    
    
    
    
    
    
    (12,000
    )
    
    
    12,000
    
    
    
    (6,911
    )Proceeds from exercise of share options
    
    
    4,984
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,984Proceeds from issuance of debt
    
    
    
    
    
    
    246,900
    
    
    
    
    
    
    
    
    
    
    
    246,900Purchase of common shares
    
    
    
    
    
    
    (193,000
    )
    
    
    
    
    
    
    193,000
    
    
    
    Net cash provided by (used in)
financing activities
    
    
    (1,927
    )
    
    
    53,900
    
    
    
    (12,000
    )
    
    
    205,000
    
    
    
    244,973Net increase in cash and cash
equivalents
    
    
    4,193
    
    
    
    27,976
    
    
    
    167,470
    
    
    
    
    
    
    
    199,639Cash and cash equivalents at beginning of
period
    
    
    1,945
    
    
    
    8,204
    
    
    
    199,751
    
    
    
    
    
    
    
    209,900Cash and cash equivalents at end of period
    
    $
    6,138
    
    
    
    36,180
    
    
    
    367,221
    
    
    
    
    
    
    $
    409,539
 7. Retrocessional Reinsurance
  Gross
    
    Ceded
    
    NetFor the three months ended June 30, 2006:Premiums written
    
    $
    330,045
    
    
    
    20,283
    
    
    $
    309,762Premiums earned
    
    
    359,675
    
    
    
    22,610
    
    
    
    337,065Losses and LAE incurred
    
    $
    195,683
    
    
    
    8,219
    
    
    $
    187,464
 - 21 -




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. And Subsidiaries
 
 Gross
    
    Ceded
    
    NetFor the three months ended June 30, 2005:Premiums written
    
    $
    428,886
    
    
    
    5,927
    
    
    $
    422,959Premiums earned
    
    
    438,926
    
    
    
    7,456
    
    
    
    431,470Losses and LAE incurred
    
    
    243,374
    
    
    
    2,522
    
    
    
    240,852For the six months ended June 30, 2006:Premiums written
    
    
    665,172
    
    
    
    62,132
    
    
    
    603,040Premiums earned
    
    
    722,886
    
    
    
    41,520
    
    
    
    681,366Losses and LAE incurred
    
    
    406,930
    
    
    
    12,692
    
    
    
    394,238For the six months ended June 30, 2005:Premiums written
    
    
    941,501
    
    
    
    24,743
    
    
    
    916,758Premiums earned
    
    
    863,901
    
    
    
    21,391
    
    
    
    842,510Losses and LAE incurred
    
    $
    487,269
    
    
    
    8,719
    
    
    $
    478,550
  
 - 22 -




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
 Business Overview
      - 23 -




---



##### Table of Contents



Results of Operations
 Three Months Ended June 30, 2006 as Compared with the Three Months Ended June 30, 2005
  2006
    
    2005
    
    IncreaseNet income
    
    $
    81,748
    
    
    
    67,985
    
    
    $
    13,763
   2006
    
    2005
    
    DecreaseNet premiums written
    
    $
    309,762
    
    
    
    422,959
    
    
    $
    (113,197
    )Net premiums earned
    
    $
    337,065
    
    
    
    431,470
    
    
    $
    (94,405
    )
  - 24 -




---



##### Table of Contents



2006
    
    2005
    
    DecreaseLosses and LAE
    
    $
    187,464
    
    
    
    240,852
    
    
    $
    (53,388
    )Losses and LAE ratios
    
    
    55.6
    %
    
    
    55.8
    %
    
    (0.2) points
   2006
    
    2005
    
    DecreaseAcquisition expenses
    
    $
    76,052
    
    
    
    103,928
    
    
    $
    (27,876
    )Acquisition expense ratios
    
    
    22.6
    %
    
    
    24.1
    %
    
    (1.5) points
  - 25 -




---



##### Table of Contents



2006
    
    2005
    
    DecreaseIncome tax expense
    
    $
    6,411
    
    
    
    19,828
    
    
    $
    (13,417
    )Effective income tax rates
    
    
    7.3
    %
    
    
    22.6
    %
    
    (15.3) points
  - 26 -




---



##### Table of Contents



Six Months Ended June 30, 2006 as Compared with the Six Months Ended June 30, 2005
  2006
    
    2005
    
    IncreaseNet income
    
    $
    158,784
    
    
    
    141,073
    
    
    $
    17,711
   2006
    
    2005
    
    DecreaseNet premiums written
    
    $
    603,040
    
    
    
    916,758
    
    
    $
    (313,718
    )Net premiums earned
    
    $
    681,366
    
    
    
    842,510
    
    
    $
    (161,144
    )
    - 27 -




---



##### Table of Contents



Increase2006
    
    2005
    
    (decrease)Losses and LAE
    
    $
    394,238
    
    
    
    478,550
    
    
    $
    (84,312
    )Loss and LAE ratios
    
    
    57.9
    %
    
    
    56.8
    %
    
    1.1 points
   2006
    
    2005
    
    DecreaseAcquisition expenses
    
    $
    145,291
    
    
    
    197,177
    
    
    $
    (51,886
    )Acquisition expense ratios
    
    
    21.3
    %
    
    
    23.4
    %
    
    (2.1) points
   - 28 -




---



##### Table of Contents



2006
    
    
    2005
    
    
    DecreaseIncome tax expense
    
    $
    11,763
    
    
    
    29,775
    
    
    $
    (18,012
    )Effective income tax rates
    
    
    6.9
    %
    
    
    17.4
    %
    
    (10.5) points
  Segment Information
  - 29 -




---



##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended June 30, 2006:Net premiums written
    
    $
    85,624
    
    
    
    199,298
    
    
    
    24,840
    
    
    $
    309,762Net premiums earned
    
    
    113,092
    
    
    
    185,073
    
    
    
    38,900
    
    
    
    337,065Losses and LAE
    
    
    27,867
    
    
    
    127,824
    
    
    
    31,773
    
    
    
    187,464Acquisition expenses
    
    
    21,239
    
    
    
    45,168
    
    
    
    9,645
    
    
    
    76,052Other underwriting expenses
    
    
    9,006
    
    
    
    7,688
    
    
    
    1,019
    
    
    
    17,713Segment underwriting income (loss)
    
    $
    54,980
    
    
    
    4,393
    
    
    
    (3,537
    )
    
    
    55,836Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,362Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    414Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,324
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,679
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,450
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    88,159Ratios:Losses and LAE
    
    
    24.6
    %
    
    
    69.1
    %
    
    
    81.7
    %
    
    
    55.6
    %Acquisition expense
    
    
    18.8
    %
    
    
    24.4
    %
    
    
    24.8
    %
    
    
    22.6
    %Other underwriting expense
    
    
    8.0
    %
    
    
    4.2
    %
    
    
    2.6
    %
    
    
    5.3
    %Combined
    
    
    51.4
    %
    
    
    97.7
    %
    
    
    109.1
    %
    
    
    83.5
    %Three months ended June 30, 2005:Net premiums written
    
    $
    134,953
    
    
    
    188,890
    
    
    
    99,116
    
    
    $
    422,959Net premiums earned
    
    
    140,669
    
    
    
    198,723
    
    
    
    92,078
    
    
    
    431,470Losses and LAE
    
    
    58,499
    
    
    
    127,531
    
    
    
    54,822
    
    
    
    240,852Acquisition expenses
    
    
    29,695
    
    
    
    47,963
    
    
    
    26,270
    
    
    
    103,928Other underwriting expenses
    
    
    8,240
    
    
    
    8,972
    
    
    
    1,333
    
    
    
    18,545Segment underwriting income
    
    $
    44,235
    
    
    
    14,257
    
    
    
    9,653
    
    
    
    68,145Net investment income and net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,349Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (160
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    588Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,935
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,174
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    87,813Ratios:Losses and LAE
    
    
    41.6
    %
    
    
    64.2
    %
    
    
    59.5
    %
    
    
    55.8
    %Acquisition expense
    
    
    21.1
    %
    
    
    24.1
    %
    
    
    28.5
    %
    
    
    24.1
    %Other underwriting expense
    
    
    5.9
    %
    
    
    4.5
    %
    
    
    1.4
    %
    
    
    4.3
    %Combined
    
    
    68.6
    %
    
    
    92.8
    %
    
    
    89.4
    %
    
    
    84.2
    %
 - 30 -




---



##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalSix Months Ended June 30, 2006:Net premiums written
    
    $
    250,888
    
    
    
    381,648
    
    
    
    (29,496
    )
    
    $
    603,040Net premiums earned
    
    
    244,636
    
    
    
    358,741
    
    
    
    77,989
    
    
    
    681,366Losses and LAE
    
    
    87,695
    
    
    
    244,389
    
    
    
    62,154
    
    
    
    394,238Acquisition expenses
    
    
    40,888
    
    
    
    86,522
    
    
    
    17,881
    
    
    
    145,291Other underwriting expenses
    
    
    19,034
    
    
    
    14,023
    
    
    
    1,944
    
    
    
    35,001Segment underwriting income (loss)
    
    $
    97,019
    
    
    
    13,807
    
    
    
    (3,990
    )
    
    
    106,836Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,942Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    689Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,641
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,379
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,900
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    170,547Ratios:Losses and LAE
    
    
    35.8
    %
    
    
    68.1
    %
    
    
    79.7
    %
    
    
    57.9
    %Acquisition expense
    
    
    16.7
    %
    
    
    24.1
    %
    
    
    22.9
    %
    
    
    21.3
    %Other underwriting expense
    
    
    7.8
    %
    
    
    3.9
    %
    
    
    2.5
    %
    
    
    5.1
    %Combined
    
    
    60.3
    %
    
    
    96.1
    %
    
    
    105.1
    %
    
    
    84.3
    %Six months ended June 30, 2005:Net premiums written
    
    $
    320,002
    
    
    
    404,559
    
    
    
    192,197
    
    
    $
    916,758Net premiums earned
    
    
    268,866
    
    
    
    383,491
    
    
    
    190,153
    
    
    
    842,510Losses and LAE
    
    
    118,539
    
    
    
    245,969
    
    
    
    114,042
    
    
    
    478,550Acquisition expenses
    
    
    51,684
    
    
    
    93,165
    
    
    
    52,328
    
    
    
    197,177Other underwriting expenses
    
    
    15,963
    
    
    
    16,285
    
    
    
    2,904
    
    
    
    35,152Segment underwriting income
    
    $
    82,680
    
    
    
    28,072
    
    
    
    20,879
    
    
    
    131,631Net investment income and net realized losses on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,626Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,958
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    232Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,336
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,347
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    170,848Ratios:Losses and LAE
    
    
    44.1
    %
    
    
    64.1
    %
    
    
    60.0
    %
    
    
    56.8
    %Acquisition expense
    
    
    19.2
    %
    
    
    24.3
    %
    
    
    27.5
    %
    
    
    23.4
    %Other underwriting expense
    
    
    5.9
    %
    
    
    4.2
    %
    
    
    1.5
    %
    
    
    4.2
    %Combined
    
    
    69.2
    %
    
    
    92.6
    %
    
    
    89.0
    %
    
    
    84.4
    %
 - 31 -




---



##### Table of Contents



Property and Marine
  Three Months Ended June 30, 2006 as Compared with the Three Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    102,188
    
    
    
    136,933
    
    
    $
    (34,745
    )Ceded premiums written
    
    
    16,564
    
    
    
    1,980
    
    
    
    14,584Net premiums written
    
    
    85,624
    
    
    
    134,953
    
    
    
    (49,329
    )Gross premiums earned
    
    
    131,984
    
    
    
    143,756
    
    
    
    (11,772
    )Ceded premiums earned
    
    
    18,892
    
    
    
    3,087
    
    
    
    15,805Net premiums earned
    
    $
    113,092
    
    
    
    140,669
    
    
    $
    (27,577
    )
   2006
    
    
    2005
    
    
    DecreaseLosses and LAE
    
    $
    27,867
    
    
    
    58,499
    
    
    $
    (30,632
    )Loss and LAE ratios
    
    
    24.6
    %
    
    
    41.6
    %
    
    (17.0) points
  - 32 -




---



##### Table of Contents



2006
    
    
    2005
    
    
    DecreaseAcquisition expenses
    
    $
    21,239
    
    
    
    29,695
    
    
    $
    (8,456
    )Acquisition expense ratios
    
    
    18.8
    %
    
    
    21.1
    %
    
    (2.3) points
   Six Months Ended June 30, 2006 as Compared with the Six Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    309,179
    
    
    
    326,820
    
    
    $
    (17,641
    )Ceded premiums written
    
    
    58,291
    
    
    
    6,818
    
    
    
    51,473Net premiums written
    
    
    250,888
    
    
    
    320,002
    
    
    
    (69,114
    )Gross premiums earned
    
    
    280,963
    
    
    
    274,025
    
    
    
    6,938Ceded premiums earned
    
    
    36,327
    
    
    
    5,159
    
    
    
    31,168Net premiums earned
    
    $
    244,636
    
    
    
    268,866
    
    
    $
    (24,230
    )
  - 33 -




---



##### Table of Contents



2006
    
    
    2005
    
    
    DecreaseLosses and LAE
    
    $
    87,695
    
    
    
    118,539
    
    
    $
    (30,844
    )Loss and LAE ratios
    
    
    35.8
    %
    
    
    44.1
    %
    
    (8.3) points
   2006
    
    
    2005
    
    
    DecreaseAcquisition expenses
    
    $
    40,888
    
    
    
    51,684
    
    
    $
    (10,796
    )Acquisition expense ratios
    
    
    16.7
    %
    
    
    19.2
    %
    
    (2.5) Points
   Casualty
  - 34 -




---



##### Table of Contents



Three Months Ended June 30, 2006 as Compared with the Three Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    199,299
    
    
    
    188,990
    
    
    $
    10,309Ceded premiums written
    
    
    1
    
    
    
    100
    
    
    
    (99
    )Net premiums written
    
    
    199,298
    
    
    
    188,890
    
    
    
    10,408Gross premiums earned
    
    
    185,073
    
    
    
    198,919
    
    
    
    (13,846
    )Ceded premiums earned
    
    
    
    
    
    
    196
    
    
    
    (196
    )Net premiums earned
    
    $
    185,073
    
    
    
    198,723
    
    
    $
    (13,650
    )
   Increase2006
    
    
    2005
    
    
    (decrease)Losses and LAE
    
    $
    127,824
    
    
    
    127,531
    
    
    $
    293Loss and LAE ratios
    
    
    69.1
    %
    
    
    64.2
    %
    
    4.9 points
   Increase2006
    
    
    2005
    
    
    (decrease)Acquisition expenses
    
    $
    45,168
    
    
    
    47,963
    
    
    $
    (2,795
    )Acquisition expense ratios
    
    
    24.4
    %
    
    
    24.1
    %
    
    0.3 points
   - 35 -




---



##### Table of Contents



Six Months Ended June 30, 2006 as Compared with the Six Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    381,631
    
    
    
    404,659
    
    
    $
    (23,028
    )Ceded premiums written
    
    
    (17
    )
    
    
    100
    
    
    
    (117
    )Net premiums written
    
    
    381,648
    
    
    
    404,559
    
    
    
    (22,911
    )Gross premiums earned
    
    
    358,723
    
    
    
    383,951
    
    
    
    (25,228
    )Ceded premiums earned
    
    
    (18
    )
    
    
    460
    
    
    
    (478
    )Net premiums earned
    
    $
    358,741
    
    
    
    383,491
    
    
    $
    (24,750
    )
   Increase2006
    
    
    2005
    
    
    (decrease)Losses and LAE
    
    $
    244,389
    
    
    
    245,969
    
    
    $
    (1,580
    )Loss and LAE ratios
    
    
    68.1
    %
    
    
    64.1
    %
    
    4.0 points
   - 36 -




---



##### Table of Contents



2006
    
    
    2005
    
    
    DecreaseAcquisition expenses
    
    $
    86,522
    
    
    
    93,165
    
    
    $
    (6,643
    )Acquisition expense ratios
    
    
    24.1
    %
    
    
    24.3
    %
    
    (0.2) points
   Finite Risk
  Three Months Ended June 30, 2006 as Compared with the Three Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    28,558
    
    
    
    102,963
    
    
    $
    (74,405
    )Ceded premiums written
    
    
    3,718
    
    
    
    3,847
    
    
    
    (129
    )Net premiums written
    
    
    24,840
    
    
    
    99,116
    
    
    
    (74,276
    )Gross premiums earned
    
    
    42,618
    
    
    
    96,251
    
    
    
    (53,633
    )Ceded premiums earned
    
    
    3,718
    
    
    
    4,173
    
    
    
    (455
    )Net premiums earned
    
    $
    38,900
    
    
    
    92,078
    
    
    $
    (53,178
    )
 - 37 -




---



##### Table of Contents



Increase2006
    
    
    2005
    
    
    (decrease)Losses and LAE
    
    $
    31,773
    
    
    
    54,822
    
    
    $
    (23,049
    )Loss and LAE ratios
    
    
    81.7
    %
    
    
    59.5
    %
    
    22.2 pointsAcquisition expenses
    
    $
    9,645
    
    
    
    26,270
    
    
    $
    (16,625
    )Acquisition expense ratios
    
    
    24.8
    %
    
    
    28.5
    %
    
    (3.7) pointsLosses, LAE and acquisition expenses
    
    $
    41,418
    
    
    
    81,092
    
    
    $
    (39,674
    )Loss, LAE and acquisition expense
ratios
    
    
    106.5
    %
    
    
    88.0
    %
    
    18.5 points
   Six Months Ended June 30, 2006 as Compared with the Six Months Ended June 30, 2005
  Increase2006
    
    
    2005
    
    
    (decrease)Gross premiums written
    
    $
    (25,638
    )
    
    
    210,022
    
    
    $
    (235,660
    )Ceded premiums written
    
    
    3,858
    
    
    
    17,825
    
    
    
    (13,967
    )Net premiums written
    
    
    (29,496
    )
    
    
    192,197
    
    
    
    (221,693
    )Gross premiums earned
    
    
    83,200
    
    
    
    205,925
    
    
    
    (122,725
    )Ceded premiums earned
    
    
    5,211
    
    
    
    15,772
    
    
    
    (10,561
    )Net premiums earned
    
    $
    77,989
    
    
    
    190,153
    
    
    $
    (112,164
    )
 - 38 -




---



##### Table of Contents



Increase2006
    
    
    2005
    
    
    (decrease)Losses and LAE
    
    $
    62,154
    
    
    
    114,042
    
    
    $
    (51,888
    )Loss and LAE ratios
    
    
    79.7
    %
    
    
    60.0
    %
    
    19.7 pointsAcquisition expenses
    
    $
    17,881
    
    
    
    52,328
    
    
    $
    (34,447
    )Acquisition expense ratios
    
    
    22.9
    %
    
    
    27.5
    %
    
    (4.6) pointsLosses, LAE and acquisition expenses
    
    $
    80,035
    
    
    
    166,370
    
    
    $
    (86,335
    )Loss, LAE and acquisition expense
ratios
    
    
    102.6
    %
    
    
    87.5
    %
    
    15.1 points
   Financial Condition, Liquidity and Capital Resources
 Financial Condition
  - 39 -




---



##### Table of Contents



June 30,
    
    
    December 31,
    
    
    Increase2006
    
    
    2005
    
    
    (decrease)Cash and cash equivalents
    
    $
    710,830
    
    
    
    820,746
    
    
    $
    (109,916
    )Fixed maturity securities
    
    
    3,211,755
    
    
    
    2,987,703
    
    
    
    224,052Preferred stocks
    
    
    7,699
    
    
    
    8,186
    
    
    
    (487
    )Short-term investments
    
    
    75,576
    
    
    
    8,793
    
    
    
    66,783Other invested asset
    
    
    5,000
    
    
    
    5,000
    
    
    
    Total
    
    $
    4,010,860
    
    
    
    3,830,428
    
    
    $
    180,432
     Sources of Liquidity
   - 40 -




---



##### Table of Contents



Liquidity Requirements
   - 41 -




---



##### Table of Contents



Economic Conditions
  Current Outlook
    - 42 -




---



##### Table of Contents



- 43 -




---



##### Table of Contents



Critical Accounting Policies, Estimates and Judgments
  Premiums
    - 44 -




---



##### Table of Contents



Unpaid Losses and LAE
  - 45 -




---



##### Table of Contents



Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalCase reserves
    
    $
    397,329
    
    
    
    206,462
    
    
    
    103,308
    
    
    $
    707,099IBNR
    
    
    321,386
    
    
    
    1,060,336
    
    
    
    254,784
    
    
    
    1,636,506Total unpaid losses and LAE
    
    $
    718,715
    
    
    
    1,266,798
    
    
    
    358,092
    
    
    $
    2,343,605
   - 46 -




---



##### Table of Contents



- 47 -




---



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- 48 -




---



##### Table of Contents



Reinsurance
  Investments
   Income Taxes
   - 49 -




---



##### Table of Contents



Share-Based Compensation
   
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market and Credit Risk
   - 50 -




---



##### Table of Contents



Interest Rate Risk
  Interest Rate Shift in Basis Points- 100 bp
    
    
    - 50 bp
    
    
    Current
    
    
    + 50 bp
    
    
    + 100 bpTotal market value
    
    $
    3,316,040
    
    
    
    3,264,359
    
    
    
    3,211,755
    
    
    
    3,159,039
    
    
    $
    3,106,806Percent change in market value
    
    
    3.2
    %
    
    
    1.6
    %
    
    
    
    
    
    
    (1.6
    %)
    
    
    (3.3
    %)Resulting unrealized
appreciation / (depreciation)
    
    $
    (12,667
    )
    
    
    (64,348
    )
    
    
    (116,952
    )
    
    
    (169,668
    )
    
    $
    (221,901
    )
 Foreign Currency Risk
  - 51 -




---



##### Table of Contents



Sources of Fair Value
  CarryingAmount
    
    
    Fair ValueFinancial assets:Fixed maturity securities
    
    $
    3,211,755
    
    
    $
    3,211,755Preferred stocks
    
    
    7,699
    
    
    
    7,699Other invested asset
    
    
    5,000
    
    
    
    5,000Short-term investments
    
    
    75,576
    
    
    
    75,576Financial liabilities:Debt obligations
    
    $
    292,840
    
    
    $
    285,171
  
 Item 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  - 52 -




---



##### Table of Contents



Forward-Looking Statements
    (1)
    
    conducting operations in a competitive environment;(2)
    
    our ability to maintain our A.M. Best Company, Inc. rating;(3)
    
    significant weather-related or other natural or man-made disasters over which the
Company has no control;(4)
    
    the effectiveness of our loss limitation methods and pricing models;(5)
    
    the adequacy of the Companys liability for unpaid losses and loss adjustment expenses,
including, but not limited to, losses from Hurricanes Katrina, Rita and Wilma and the
possibility that estimates of losses and LAE from Hurricanes Katrina, Rita and Wilma may
prove to be materially different from estimates made to date;(6)
    
    the availability of retrocessional reinsurance on acceptable terms;(7)
    
    our ability to maintain our business relationships with reinsurance brokers;(8)
    
    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;(9)
    
    the cyclicality of the property and casualty reinsurance business;(10)
    
    market volatility and interest rate and currency exchange rate fluctuation;(11)
    
    tax, regulatory or legal restrictions or limitations applicable to the Company or the
property and casualty reinsurance business generally; and(12)
    
    changes in the Companys plans, strategies, objectives, expectations or intentions,
which may happen at any time at the Companys discretion.
  - 53 -




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   For
    
    
    WithheldH. Furlong Baldwin
    
    
    47,423,467
    
    
    
    823,088Jonathan F. Bank
    
    
    47,423,983
    
    
    
    822,572Dan R. Carmichael
    
    
    46,968,663
    
    
    
    1,277,892Robert V. Deutsch
    
    
    46,696,941
    
    
    
    1,549,614Steven H. Newman
    
    
    45,683,342
    
    
    
    2,563,213Michael D. Price
    
    
    46,968,912
    
    
    
    1,277,643Peter T. Pruitt
    
    
    47,423,467
    
    
    
    823,088
  For
    
    Against
    
    Abstain
    
    Broker Non-Votes39,384,829
    
    
    3,503,050
    
    
    
    439,431
    
    
    
    4,919,182APPROVAL OF THE 2006 SHARE INCENTIVE PLANFor
    
    Against
    
    Abstain
    
    Broker Non-Votes28,367,415
    
    
    14,951,942
    
    
    
    7,953
    
    
    
    4,919,245RATIFICATION OF SELECTION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE 2006 FISCAL YEARFor
    
    Against
    
    Abstain
    
    Broker Non-Votes47,235,265
    
    
    997,658
    
    
    
    13,632
    
    
    
    0
 - 54 -




---



##### Table of Contents



PART
II  OTHER INFORMATION
 
 Item 6. EXHIBITS
 ExhibitNumber
    
    Description10.1
    
    
    Termination Addendum effective as of December 31, 2005 to
Excess of Loss Retrocession Agreement by and between
Platinum Underwriters Bermuda, Ltd. (Retrocedant) and
Platinum Re (UK) Limited (Retrocessionaire) dated as of
April 1, 2005.10.2
    
    
    Excess of Loss Retrocession Agreement by and between
Platinum Underwriters Bermuda, Ltd. (Retrocedant) and
Platinum Re (UK) Limited (Retrocessionaire) dated as of
January 1, 2006.10.3
    
    
    Quota Share Retrocession Agreement by and between Platinum
Underwriters Bermuda, Ltd. and Platinum Re (UK) Limited
dated as of January 1, 2006.10.4
    
    
    Termination Addendum effective as of March 31, 2006 to
Excess of Loss Retrocession Agreement by and between
Platinum Re (UK) Limited (Retrocedant) and Platinum
Underwriters Reinsurance, Inc. (Retrocessionaire) dated as
of January 1, 2006.10.5
    
    
    Excess of Loss Retrocession Agreement by and between
Platinum Underwriters Bermuda, Ltd. (Retrocedant) and
Platinum Underwriters Reinsurance, Inc. (Retrocessionaire)
dated as of April 1, 2006.10.6
    
    
    Addendum No. 1 to the Excess of Loss Retrocession Agreement
by and between Platinum Underwriters Bermuda, Ltd.
(Retrocedant) and Platinum Re (UK) Limited
(Retrocessionaire) dated as of July 1, 2006.31.1
    
    
    Certification of Michael D. Price, Chief Executive Officer
of Platinum Holdings, pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Exchange Act.31.2
    
    
    Certification of Joseph F. Fisher, Chief Financial Officer
of Platinum Holdings, pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Exchange Act.32.1
    
    
    Certification of Michael D. Price, Chief Executive Officer
of Platinum Holdings, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.32.2
    
    
    Certification of Joseph F. Fisher, Chief Financial Officer
of Platinum Holdings, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.
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##### Table of Contents



SIGNATURES
  Platinum
Underwriters Holdings, LtdDate: July 31, 2006
    
    /s/ Michael D. PriceBy: Michael D. PricePresident and Chief Executive Officer(Principal Executive Officer)Date: July 31, 2006
    
    /s/Joseph F. FisherBy: Joseph F. FisherExecutive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
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