----

----

| x      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|--------|------------------------------------------------------------------------------------------|
|   | For the quarterly period ended June 30, 2010                                        |
|   |                                                                                     |
|   | OR                                                                                       |
|   |                                                                                     |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   | For the transition period from __________ to __________                                  |

| Platinum Underwriters Holdings, Ltd.                   |
|--------------------------------------------------------|
| (Exact name of registrant as specified in its charter) |

| Bermuda                                                        |   | 98-0416483                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| The Belvedere Building69 Pitts Bay RoadPembroke, Bermuda |   | HM 08      |
|----------------------------------------------------------|--------|------------|
| (Address of principal executive offices)                 |   | (Zip Code) |

| Large accelerated filer |   X |                                          | Accelerated filer         |   |
|-------------------------|---------------|-----------------------------------------------|---------------------------|--------|
| Non-accelerated filer   |          | (Do not check if a smaller reporting company) | Smaller reporting company |   |

----

|                                                       |                                                                                                                                 | Page   |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                       |                                                                                                                                 |   |
| PART I  –  FINANCIAL INFORMATION |                                                                                                                                 |
|                                                       |                                                                                                                                 |   |
| Item 1.                                                    | Financial Statements                                                                                                                 |   |
|                                                       | Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009                                          | 1      |
|                                                       | Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2010 and 2009 (Unaudited) | 2      |
|                                                       | Consolidated Statements of Shareholders’ Equity for the Six Months Ended June 30, 2010 and 2009 (Unaudited)               | 3      |
|                                                       | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009 (Unaudited)                               | 4      |
|                                                       | Notes to the Consolidated Financial Statements for the Three and Six Months Ended June 30, 2010 and 2009 (Unaudited)            | 5      |
|                                                       |                                                                                                                                 |   |
| Item 2.                                                    | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                | 20     |
| Item 3.                                                    | Quantitative and Qualitative Disclosures about Market Risk                                                                           | 33     |
| Item 4.                                                    | Controls and Procedures                                                                                                              | 34     |
|                                                       |                                                                                                                                 |   |
| PART II  –  OTHER INFORMATION    |                                                                                                                                 |
| Item 1A.                                                   | Risk Factors                                                                                                                         | 34     |
| Item 2.                                                    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                          | 35     |
| Item 6.                                                    | Exhibits                                                                                                                             | 35     |
|                                                       |                                                                                                                                 |   |
| SIGNATURES                                                 | 35                                                                                                                                   |

----

| ITEM 1. | FINANCIAL STATEMENTS |
|---------|----------------------|

|                                                                                                                                |   | (Unaudited)        |      |   |                   |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
|                                                                                                                                |   | June 30, 2010 |      |   | December 31, 2009 |   |
| ASSETS                                                                                                                              |   |               |      |   |                   |   |
| Investments:                                                                                                                        |   |               |      |   |                   |   |
| Fixed maturity available-for-sale securities at fair value (amortized cost – $3,146,963 and $3,590,081, respectively)         |   | $                  | 3,172,459 |   |                   | $      | 3,514,052 |   |
| Fixed maturity trading securities at fair value (amortized cost – $152,906 and $136,426, respectively)                        |   |               | 161,365   |   |                   |   | 142,566 |   |
| Preferred stocks (cost – $812 and $1,879, respectively)                                                                       |   |               | 2,090     |   |                   |   | 3,897 |   |
| Short-term investments                                                                                                              |   |               | 89,825    |   |                   |   | 26,350 |   |
| Total investments                                                                                                                   |   |               | 3,425,739 |   |                   |   | 3,686,865 |   |
| Cash and cash equivalents                                                                                                           |   |               | 1,102,274 |   |                   |   | 682,784 |   |
| Accrued investment income                                                                                                           |   |               | 28,373    |   |                   |   | 29,834 |   |
| Reinsurance premiums receivable                                                                                                     |   |               | 160,729   |   |                   |   | 269,912 |   |
| Reinsurance recoverable on ceded losses and loss adjustment expenses                                                                |   |               | 15,288    |   |                   |   | 19,240 |   |
| Prepaid reinsurance premiums                                                                                                        |   |               | 12,748    |   |                   |   | 10,470 |   |
| Funds held by ceding companies                                                                                                      |   |               | 85,030    |   |                   |   | 84,478 |   |
| Deferred acquisition costs                                                                                                          |   |               | 38,994    |   |                   |   | 40,427 |   |
| Deferred tax assets                                                                                                                 |   |               | 41,787    |   |                   |   | 63,093 |   |
| Other assets                                                                                                                        |   |               | 23,787    |   |                   |   | 134,475 |   |
| Total assets                                                                                                                        |   | $                  | 4,934,749 |   |                   | $      | 5,021,578 |   |
|                                                                                                                                |   |               |      |   |                   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                          |   |               |      |   |                   |   |   |   |
| Liabilities                                                                                                                         |   |               |      |   |                   |   |   |   |
| Unpaid losses and loss adjustment expenses                                                                                          |   | $                  | 2,224,026 |   |                   | $      | 2,349,336 |   |
| Unearned premiums                                                                                                                   |   |               | 168,545   |   |                   |   | 180,609 |   |
| Debt obligations                                                                                                                    |   |               | 250,000   |   |                   |   | 250,000 |   |
| Commissions payable                                                                                                                 |   |               | 57,370    |   |                   |   | 90,461 |   |
| Other liabilities                                                                                                                   |   |               | 129,373   |   |                   |   | 73,441 |   |
| Total liabilities                                                                                                                   |   |               | 2,829,314 |   |                   |   | 2,943,847 |   |
|                                                                                                                                |   |               |      |   |                   |   |   |   |
| Shareholders’ Equity                                                                                                          |   |               |      |   |                   |   |   |   |
| Common shares, $.01 par value, 200,000,000 shares authorized, 41,094,952 and 45,942,639 shares issued and outstanding, respectively |   |               | 411       |   |                   |   | 459 |   |
| Additional paid-in capital                                                                                                          |   |               | 695,967   |   |                   |   | 883,425 |   |
| Accumulated other comprehensive income (loss)                                                                                       |   |               | 12,700    |   |                   |   | (70,005 | ) |
| Retained earnings                                                                                                                   |   |               | 1,396,357 |   |                   |   | 1,263,852 |   |
| Total shareholders' equity                                                                                                          |   |               | 2,105,435 |   |                   |   | 2,077,731 |   |
|                                                                                                                                |   |               |      |   |                   |   |   |   |
| Total liabilities and shareholders' equity                                                                                          |   | $                  | 4,934,749 |   |                   | $      | 5,021,578 |   |

----

|                                                                                                                                 |   | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------------|--------|-------------------------------|--------|
|                                                                                                                                 |   | 2010                            |         |   | 2009                          |   |   | 2010 |   |   | 2009 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |
| Revenue:                                                                                                                             |   |                            |         |   |                          |   |   |   |   |   |   |   |
| Net premiums earned                                                                                                                  |   | $                               | 191,432      |   |                          |   | 232,462 |   |   |   | 411,610 |   |   | $ | 480,214 |   |
| Net investment income                                                                                                                |   |                            | 35,372       |   |                          |   | 44,077 |   |   |   | 72,877 |   |   |   | 78,323 |   |
| Net realized gains on investments                                                                                                    |   |                            | 49,489       |   |                          |   | 10,794 |   |   |   | 54,946 |   |   |   | 31,364 |   |
| Total other-than-temporary impairment losses                                                                                         |   |                            | 1,777        |   |                          |   | (10,194 | ) |   |   | (10,861 | ) |   |   | (13,654 | ) |
| Portion of impairment losses recognized in accumulated other comprehensive income (loss)                                             |   |                            | (5,187       | )      |                          |   | 6,938 |   |   |   |  (10,651 | ) |   |   | 6,990 |   |
| Net impairment losses on investments                                                                                                 |   |                            |  (3,410 | )      |                          |   | (3,256 | ) |   |   |  (21,512 | ) |   |   | (6,664 | ) |
| Other income (expense)                                                                                                               |   |                            |  (144   | )      |                          |   | 5,212 |   |   |   | 129 |   |   |   | 5,444 |   |
| Total revenue                                                                                                                        |   |                            | 272,739      |   |                          |   | 289,289 |   |   |   | 518,050 |   |   |   | 588,681 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                            |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net losses and loss adjustment expenses                                                                                              |   |                            | 71,475       |   |                          |   | 124,945 |   |   |   | 236,043 |   |   |   | 269,109 |   |
| Net acquisition expenses                                                                                                             |   |                            | 44,088       |   |                          |   | 38,338 |   |   |   | 81,417 |   |   |   | 78,494 |   |
| Net changes in fair value of derivatives                                                                                             |   |                            | 30           |   |                          |   | 106 |   |   |   | 2,345 |   |   |   | 2,523 |   |
| Operating expenses                                                                                                                   |   |                            | 20,160       |   |                          |   | 22,906 |   |   |   | 41,901 |   |   |   | 43,774 |   |
| Net foreign currency exchange (gains) losses                                                                                         |   |                            |  (67    | )      |                          |   | (537 | ) |   |   |  (1,296 | ) |   |   | 459 |   |
| Interest expense                                                                                                                     |   |                            | 4,709        |   |                          |   | 4,756 |   |   |   | 9,469 |   |   |   | 9,511 |   |
| Total expenses                                                                                                                       |   |                            | 140,395      |   |                          |   | 190,514 |   |   |   | 369,879 |   |   |   | 403,870 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Income before income tax expense                                                                                                     |   |                            | 132,344      |   |                          |   | 98,775 |   |   |   | 148,171 |   |   |   | 184,811 |   |
| Income tax expense                                                                                                                   |   |                            | 8,205        |   |                          |   | 645 |   |   |   | 8,611 |   |   |   | 1,759 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                           |   |                            | 124,139      |   |                          |   | 98,130 |   |   |   | 139,560 |   |   |   | 183,052 |   |
| Preferred dividends                                                                                                                  |   |                            | –      |   |                          |   | – |   |   |   | – |   |   |   | 1,301 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to common shareholders                                                                                       |   | $                               | 124,139      |   |                          |   | 98,130 |   |   |   | 139,560 |   |   | $ | 181,751 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common share:                                                                                                           |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic earnings per common share                                                                                                      |   | $                               | 2.87         |   |                          |   | 1.94 |   |   |   | 3.15 |   |   | $ | 3.63 |   |
| Diluted earnings per common share                                                                                                    |   | $                               | 2.68         |   |                          |   | 1.90 |   |   |   | 2.95 |   |   | $ | 3.47 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                                                                |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                                           |   | $                               | 124,139      |   |                          |   | 98,130 |   |   |   | 139,560 |   |   | $ | 183,052 |   |
| Other comprehensive income – net change in unrealized gains and losses on available-for-sale securities, net of deferred taxes |   |                            | 34,833       |   |                          |   | 64,958 |   |   |   | 82,705 |   |   |   | 63,382 |   |
| Comprehensive income                                                                                                                 |   | $                               | 158,972      |   |                          |   | 163,088 |   |   |   | 222,265 |   |   | $ | 246,434 |   |
|                                                                                                                                 |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Shareholder dividends:                                                                                                               |   |                            |         |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Preferred shareholder dividends declared                                                                                             |   | $                               | –      |   |                          |   | – |   |   |   | – |   |   | $ | 2,602 |   |
| Dividends declared per preferred share                                                                                               |   |                            | –      |   |                          |   | – |   |   |   | – |   |   |   | 0.45 |   |
| Common shareholder dividends declared                                                                                                |   |                            | 3,400        |   |                          |   | 4,026 |   |   |   | 7,055 |   |   |   | 8,288 |   |
| Dividends declared per common share                                                                                                  |   | $                               | 0.08         |   |                          |   | 0.08 |   |   |   | 0.16 |   |   | $ | 0.16 |   |

----

|                                                                                            |   | 2010   |         |   | 2009   |   |
|-------------------------------------------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|
|                                                                                            |   |   |         |   |   |   |
| Preferred shares:                                                                               |   |   |         |   |   |   |
| Balances at beginning of period                                                                 |   | $      | –      |   |   | $      | 57 |   |
| Conversion of preferred shares                                                                  |   |   | –      |   |   |   | (57 | ) |
| Balances at end of period                                                                       |   |   | –      |   |   |   | – |   |
|                                                                                            |   |   |         |   |   |   |   |   |
| Common shares:                                                                                  |   |   |         |   |   |   |   |   |
| Balances at beginning of period                                                                 |   |   | 459          |   |   |   | 475 |   |
| Issuance of common shares                                                                       |   |   | 1            |   |   |   | – |   |
| Purchase of common shares                                                                       |   |   | (58          | )      |   |   | (37 | ) |
| Settlement of equity awards                                                                     |   |   | 3            |   |   |   | 2 |   |
| Conversion of preferred shares                                                                  |   |   | –      |   |   |   | 57 |   |
| Exercise of common share options                                                                |   |   | 6            |   |   |   | 1 |   |
| Balances at end of period                                                                       |   |   | 411          |   |   |   | 498 |   |
|                                                                                            |   |   |         |   |   |   |   |   |
| Additional paid-in capital:                                                                     |   |   |         |   |   |   |   |   |
| Balances at beginning of period                                                                 |   |   | 883,425      |   |   |   | 1,114,135 |   |
| Issuance of common shares                                                                       |   |   | 4            |   |   |   | 246 |   |
| Purchase of common shares                                                                       |   |   | (212,765     | )      |   |   | (101,346 | ) |
| Share based compensation                                                                        |   |   | 7,152        |   |   |   | 7,091 |   |
| Settlement of equity awards                                                                     |   |   | (966         | )      |   |   | (1,070 | ) |
| Exercise of common share options                                                                |   |   | 19,245       |   |   |   | 1,575 |   |
| Tax shortfall from share based compensation                                                     |   |   | (128         | )      |   |   | – |   |
| Balances at end of period                                                                       |   |   | 695,967      |   |   |   | 1,020,631 |   |
|                                                                                            |   |   |         |   |   |   |   |   |
| Accumulated other comprehensive income (loss):                                                  |   |   |         |   |   |   |   |   |
| Balances at beginning of period                                                                 |   |   | (70,005      | )      |   |   | (188,987 | ) |
| Cumulative effect of accounting change, net of deferred tax                                     |   |   | –      |   |   |   | (14,244 | ) |
| Noncredit component of impairment losses on available-for-sale securities, net of deferred tax  |   |   | 8,528        |   |   |   | (6,140 | ) |
| Net change in unrealized gains and losses on available-for-sale securities, net of deferred tax |   |   | 74,177       |   |   |   | 69,522 |   |
| Balances at end of period                                                                       |   |   | 12,700       |   |   |   | (139,849 | ) |
|                                                                                            |   |   |         |   |   |   |   |   |
| Retained earnings:                                                                              |   |   |         |   |   |   |   |   |
| Balances at beginning of period                                                                 |   |   | 1,263,852    |   |   |   | 883,717 |   |
| Cumulative effect of accounting change, net of deferred tax                                     |   |   | –      |   |   |   | 14,244 |   |
| Net income                                                                                      |   |   | 139,560      |   |   |   | 183,052 |   |
| Preferred share dividends                                                                       |   |   | –      |   |   |   | (1,301 | ) |
| Common share dividends                                                                          |   |   |  (7,055 | )      |   |   | (8,288 | ) |
| Balances at end of period                                                                       |   |   | 1,396,357    |   |   |   | 1,071,424 |   |
|                                                                                            |   |   |         |   |   |   |   |   |
| Total shareholders’ equity                                                                |   | $      | 2,105,435    |   |   | $      | 1,952,704 |   |

----

|                                                               |   | 2010          |             |   | 2009   |     |
|--------------------------------------------------------------------|--------|---------------|------------------|--------|--------|----------|
|                                                               |   |          |             |   |   |     |
| Operating Activities:                                              |   |          |             |   |   |     |
| Net income                                                         |   | $             | 139,560          |   |   | $        | 183,052 |   |
| Adjustments to reconcile net income to cash used in operations:    |   |          |             |   |   |     |   |   |
| Depreciation and amortization                                      |   |          | 6,697            |   |   |     | 10,398 |   |
| Net realized gains on investments                                  |   |          | (54,946          | )      |   |     | (31,364 | ) |
| Net impairment losses on investments                               |   |          | 21,512           |   |   |     | 6,664 |   |
| Net foreign currency exchange (gains) losses                       |   |          | (1,296           | )      |   |     | 459 |   |
| Share based compensation                                           |   |          | 7,152            |   |   |     | 7,091 |   |
| Deferred income tax expense                                        |   |          | 3,227            |   |   |     | 3,818 |   |
| Trading securities activities, net                                 |   |          |  (30,559    | )      |   |     | 199,030 |   |
| Changes in assets and liabilities:                                 |   |          |             |   |   |     |   |   |
| (Increase) decrease in accrued investment income                   |   |          | 1,227            |   |   |     | (4,419 | ) |
| Decrease in reinsurance premiums receivable                        |   |          | 108,061          |   |   |     | 44,942 |   |
| (Increase) decrease in funds held by ceding companies              |   |          | (1,047           | )      |   |     | 15,885 |   |
| Decrease in deferred acquisition costs                             |   |          | 1,183            |   |   |     | 7,106 |   |
| Decrease in net unpaid losses and loss adjustment expenses    |   |          | (100,659         | )      |   |     | (83,580 | )  |
| Decrease in net unearned premiums                                  |   |          | (12,466          | )      |   |     | (26,827 | ) |
| Changes in net current income tax payable and recoverable     |   |          | (5,546           | )      |   |     | 3,301 |   |
| Changes in other assets and liabilities                            |   |          | (60,573          | )      |   |     | (11,682 | ) |
| Other net                                                          |   |          | –          |   |   |     | 12 |   |
| Net cash provided by operating activities                          |   |          | 21,527           |   |   |     | 323,886 |   |
|                                                               |   |          |             |   |   |     |   |   |
| Investing Activities:                                              |   |          |             |   |   |     |   |   |
| Proceeds from sale of fixed maturity available-for-sale securities |   |          | 2,056,935        |   |   |     | 368,546 |   |
| Proceeds from sale of preferred stocks                             |   |          | 2,634            |   |   |     | – |   |
| Proceeds from maturity or paydown of available-for-sale securities |   |          | 158,439          |   |   |     | 296,086 |   |
| Acquisition of available-for-sale securities                       |   |          |  (1,547,483 | )      |   |     | (1,301,166 | ) |
| Acquisition of trading securities                                  |   | ­– |             |   |   | (119,911 | ) |
| (Increase) decrease in short-term investments                      |   |          |  (63,375    | )      |   |     | 61,485 |   |
| Net cash provided by (used in) investing activities                |   |          | 607,150          |   |   |     | (694,960 | ) |
|                                                               |   |          |             |   |   |     |   |   |
| Financing Activities:                                              |   |          |             |   |   |     |   |   |
| Dividends paid to preferred shareholders                           |   |          | –          |   |   |     | (2,602 | ) |
| Dividends paid to common shareholders                              |   |          | (7,055           | )      |   |     | (8,288 | ) |
| Purchase of common shares                                          |   |          |  (212,823   | )      |   |     | (101,384 | ) |
| Proceeds from exercise of common share options                     |   |          | 19,251           |   |   |     | 1,576 |   |
| Net cash used in financing activities                              |   |          | (200,627         | )      |   |     | (110,698 | ) |
|                                                               |   |          |             |   |   |     |   |   |
| Effect of foreign currency exchange rate changes on cash           |   |          | (8,560           | )      |   |     | 4,692 |   |
|                                                               |   |          |             |   |   |     |   |   |
| Net increase (decrease) in cash and cash equivalents               |   |          | 419,490          |   |   |     | (477,080 | ) |
| Cash and cash equivalents at beginning of period                   |   |          | 682,784          |   |   |     | 813,017 |   |
|                                                               |   |          |             |   |   |     |   |   |
| Cash and cash equivalents at end of period                         |   | $             | 1,102,274        |   |   | $        | 335,937 |   |
|                                                               |   |          |             |   |   |     |   |   |
| Supplemental disclosures of cash flow information:                 |   |          |             |   |   |     |   |   |
| Income taxes paid (refunded)                                       |   | $             | 11,261           |   |   | $        | (5,610 | ) |
| Interest paid                                                      |   | $             | 9,375            |   |   | $        | 9,375 |   |

----

| 1. | Basis of Presentation and Significant Accounting Policies |
|----|-----------------------------------------------------------|

| 2. | Investments |
|----|-------------|

|                                               |   |           |      |   |                  |   |    | Gross Unrealized Losses |   |   |                       |   |
|----------------------------------------------------|--------|----------------|-----------|--------|-----------------------|--------|---------|-------------------------|--------|--------|----------------------------|--------|
|                                               |   | Amortized Cost |      |   | GrossUnrealized Gains |   |    | Non-OTTI                |   |   | Non-credit portion of OTTI |   |   | Fair Value |   |
| June 30, 2010:                                |   |           |      |   |                  |   |    |                    |   |   |                       |   |   |   |   |
| U.S. Government                                    |   | $              | 1,034,196 |   |                  |   | 21,849  |                    |   |   | –                    |   |   |   | – |   |   | $ | 1,056,045 |   |
| U.S. Government agencies                           |   |           | 100,000   |   |                  |   | 893     |                    |   |   | –                    |   |   |   | – |   |   |   | 100,893 |   |
| Corporate bonds                                    |   |           | 455,147   |   |                  |   | 22,434  |                    |   |   | 5,135                      |   |   |   | – |   |   |   | 472,446 |   |
| Commercial mortgage-backed securities              |   |           | 217,406   |   |                  |   | 7,159   |                    |   |   | 7,040                      |   |   |   | 225 |   |   |   | 217,300 |   |
| Residential mortgage-backed securities             |   |           | 231,213   |   |                  |   | 3,863   |                    |   |   | 33,882                     |   |   |   | 11,381 |   |   |   | 189,813 |   |
| Asset-backed securities                            |   |           | 41,593    |   |                  |   | 113     |                    |   |   | 8,799                      |   |   |   | 3,497 |   |   |   | 29,410 |   |
| Municipal bonds                                    |   |           | 992,150   |   |                  |   | 41,646  |                    |   |   | 4,211                      |   |   |   | – |   |   |   | 1,029,585 |   |
| Non-U.S. governments                               |   |           | 75,258    |   |                  |   | 1,809   |                    |   |   | 100                        |   |   |   | – |   |   |   | 76,967 |   |
| Total fixed maturity available-for-sale securities |   |           | 3,146,963 |   |                  |   | 99,766  |                    |   |   | 59,167                     |   |   |   | 15,103 |   |   |   | 3,172,459 |   |
| Preferred stocks                                   |   |           | 812       |   |                  |   | 1,278   |                    |   |   | –                    |   |   |   | – |   |   |   | 2,090 |   |
| Total available-for-sale securities                |   | $              | 3,147,775 |   |                  |   | 101,044 |                    |   |   | 59,167                     |   |   |   | 15,103 |   |   | $ | 3,174,549 |   |

----

|                                               |   |                 |      |   |                       |   |   |   |     |   | Gross Unrealized Losses |                             |   |   |             |   |
|----------------------------------------------------|--------|----------------------|-----------|--------|----------------------------|--------|--------|--------|----------|--------|-------------------------|----------------------------------|--------|--------|------------------|--------|
|                                               |   |  Amortized Cost |      |   |  GrossUnrealizedGains |   |   |   | Non-OTTI |   |                    |  Non-credit portion of OTTI |   |   |  Fair Value |   |
| December 31, 2009:                            |   |                 |      |   |                       |   |   |   |     |   |                    |                             |   |   |             |   |   |   |   |   |
| U.S. Government                                    |   | $                    | 614,224   |   |                       |   | 270    |   |     |   | 5,797                   |                             |   |   | –          |   |   | $ | 608,697 |   |
| U.S. Government agencies                           |   |                 | 100,000   |   |                       |   | 1,082  |   |     |   | –                 |                             |   |   | –          |   |   |   | 101,082 |   |
| Corporate bonds                                    |   |                 | 467,640   |   |                       |   | 18,446 |   |     |   | 9,100                   |                             |   |   | –          |   |   |   | 476,986 |   |
| Commercial mortgage-backed securities              |   |                 | 243,176   |   |                       |   | 376    |   |     |   | 26,253                  |                             |   |   | 2,279            |   |   |   | 215,020 |   |
| Residential mortgage-backed securities             |   |                 | 767,338   |   |                       |   | 3,158  |   |     |   | 39,142                  |                             |   |   | 16,651           |   |   |   | 714,703 |   |
| Asset-backed securities                            |   |                 | 84,396    |   |                       |   | 1,311  |   |     |   | 14,606                  |                             |   |   | 11,402           |   |   |   | 59,699 |   |
| Municipal bonds                                    |   |                 | 744,677   |   |                       |   | 19,172 |   |     |   | 4,348                   |                             |   |   | –          |   |   |   | 759,501 |   |
| Non-U.S. governments                               |   |                 | 568,630   |   |                       |   | 10,359 |   |     |   | 625                     |                             |   |   | –          |   |   |   | 578,364 |   |
| Total fixed maturity available-for-sale securities |   |                 | 3,590,081 |   |                       |   | 54,174 |   |     |   | 99,871                  |                             |   |   | 30,332           |   |   |   | 3,514,052 |   |
| Preferred stocks                                   |   |                 | 1,879     |   |                       |   | 2,018  |   |     |   | –                 |                             |   |   | –          |   |   |   | 3,897 |   |
| Total available-for-sale securities                |   | $                    | 3,591,960 |   |                       |   | 56,192 |   |     |   | 99,871                  |                             |   |   | 30,332           |   |   | $ | 3,517,949 |   |

|                                    |   |               |    |   |                   |   |
|-----------------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                                    |   | June 30, 2010 |    |   | December 31, 2009 |   |
|                                    |   |               |    |   |                   |   |
| Insurance-linked securities             |   | $                  | 25,901  |   |                   | $      | 25,682 |   |
| Non-U.S. dollar denominated securities: |   |               |    |   |                   |   |   |   |
| U.S. Government agencies                |   |               | 15,254  |   |                   |   | 16,423 |   |
| Corporate bonds                         |   |               | 64      |   |                   |   | 77 |   |
| Non-U.S. governments                    |   |               | 120,146 |   |                   |   | 100,384 |   |
| Total trading securities                |   | $                  | 161,365 |   |                   | $      | 142,566 |   |

|                                                        |   |                             |    |   |                           |   |    |   |   |   |    |   |
|-------------------------------------------------------------|--------|----------------------------------|---------|--------|--------------------------------|--------|---------|--------|--------|--------|---------|--------|
|                                                        |   | Three Months Ended June 30, |    |   | Six Months Ended June 30, |   |
|                                                        |   | 2010                             |    |   | 2009                           |   |    | 2010   |   |   | 2009    |   |
|                                                        |   |                             |    |   |                           |   |    |   |   |   |    |   |
| Gross change in unrealized investment gains and losses      |   | $                                | 45,056  |   |                           |   | 69,109  |   |   |   | 100,784 |   |   | $ | 52,101 |   |
| Less deferred tax                                           |   |                             | (10,223 | )      |                           |   | (4,151  | )      |   |   | (18,079 | )      |   |   | (2,963 | ) |
| Cumulative effect of accounting change, net of deferred tax |   |                             | – |   |                           |   | – |   |   |   | – |   |   |   | 14,244 |   |
| Net change in unrealized gains and losses                   |   | $                                | 34,833  |   |                           |   | 64,958  |   |   |   | 82,705  |   |   | $ | 63,382 |   |

----

|                                   |   | June 30, 2010 |    |   | December 31, 2009 |   |
|----------------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                                   |   | Fair Value         |    |   | UnrealizedLoss         |   |   | Fair Value |   |   | UnrealizedLoss |   |
|                                   |   |               |    |   |                   |   |   |   |   |   |   |   |
| Less than twelve months:               |   |               |    |   |                   |   |   |   |   |   |   |   |
| U.S. Government                        |   | $                  | – |   |                   |   | – |   |   |   | 594,343 |   |   | $ | 5,797 |   |
| Corporate bonds                        |   |               | 14,501  |   |                   |   | 403 |   |   |   | 34,393 |   |   |   | 281 |   |
| Commercial mortgage-backed securities  |   |               | 15      |   |                   |   | 20 |   |   |   | 18,101 |   |   |   | 244 |   |
| Residential mortgage-backed securities |   |               | 15,493  |   |                   |   | 753 |   |   |   | 540,606 |   |   |   | 10,446 |   |
| Asset-backed securities                |   |               | – |   |                   |   | – |   |   |   | 1,075 |   |   |   | 445 |   |
| Municipal bonds                        |   |               | 136,766 |   |                   |   | 4,148 |   |   |   | 187,159 |   |   |   | 4,244 |   |
| Non-U.S. governments                   |   |               | 4,898   |   |                   |   | 100 |   |   |   | 59,815 |   |   |   | 565 |   |
| Total                                  |   | $                  | 171,673 |   |                   |   | 5,424 |   |   |   | 1,435,492 |   |   | $ | 22,022 |   |
|                                   |   |               |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Twelve months or more:                 |   |               |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                        |   | $                  | – |   |                   |   | – |   |   |   | – |   |   | $ | – |   |
| Corporate bonds                        |   |               | 35,436  |   |                   |   | 4,732 |   |   |   | 59,423 |   |   |   | 8,819 |   |
| Commercial mortgage-backed securities  |   |               | 47,276  |   |                   |   | 7,245 |   |   |   | 160,039 |   |   |   | 28,288 |   |
| Residential mortgage-backed securities |   |               | 92,388  |   |                   |   | 44,510 |   |   |   | 94,969 |   |   |   | 45,347 |   |
| Asset-backed securities                |   |               | 28,669  |   |                   |   | 12,296 |   |   |   | 28,238 |   |   |   | 25,563 |   |
| Municipal bonds                        |   |               | 3,039   |   |                   |   | 63 |   |   |   | 3,015 |   |   |   | 104 |   |
| Non-U.S. governments                   |   |               | – |   |                   |   | – |   |   |   | 1,661 |   |   |   | 60 |   |
| Total                                  |   | $                  | 206,808 |   |                   |   | 68,846 |   |   |   | 347,345 |   |   | $ | 108,181 |   |
|                                   |   |               |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Total unrealized losses:               |   |               |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                        |   | $                  | – |   |                   |   | – |   |   |   | 594,343 |   |   | $ | 5,797 |   |
| Corporate bonds                        |   |               | 49,937  |   |                   |   | 5,135 |   |   |   | 93,816 |   |   |   | 9,100 |   |
| Commercial mortgage-backed securities  |   |               | 47,291  |   |                   |   | 7,265 |   |   |   | 178,140 |   |   |   | 28,532 |   |
| Residential mortgage-backed securities |   |               | 107,881 |   |                   |   | 45,263 |   |   |   | 635,575 |   |   |   | 55,793 |   |
| Asset-backed securities                |   |               | 28,669  |   |                   |   | 12,296 |   |   |   | 29,313 |   |   |   | 26,008 |   |
| Municipal bonds                        |   |               | 139,805 |   |                   |   | 4,211 |   |   |   | 190,174 |   |   |   | 4,348 |   |
| Non-U.S. governments                   |   |               | 4,898   |   |                   |   | 100 |   |   |   | 61,476 |   |   |   | 625 |   |
| Total                                  |   | $                  | 378,481 |   |                   |   | 74,270 |   |   |   | 1,782,837 |   |   | $ | 130,203 |   |

----

|                                                           |   | 2010   |    |   | 2009   |   |
|----------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Beginning balance, January 1                                   |   | $      | 18,695  |   |   | $      | – |   |
| Cumulative effect of accounting change                         |   |   | – |   |   |   | 2,300 |   |
| Credit losses on securities not previously impaired            |   |   | 7,728   |   |   |   | 2,728 |   |
| Additional credit losses on securities previously impaired     |   |   | 13,784  |   |   |   | 2,728 |   |
| Reduction for increases in cash flows expected to be collected |   |   | (291    | )      |   |   | – |   |
| Ending balance, June 30                                   |   | $      | 39,916  |   |   | $      | 7,756 |   |

|                                                 |   |                             |   |   |                           |   |   |   |   |   |   |   |
|------------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                 |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|                                                 |   | 2010                             |   |   | 2009                           |   |   | 2010   |   |   | 2009   |   |
|                                                 |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Fixed maturity securities                            |   | $                                | 35,716 |   |                           |   | 44,158 |   |   |   | 73,780 |   |   | $ | 77,724 |   |
| Short-term investments and cash and cash equivalents |   |                             | 381    |   |                           |   | 321    |   |   |   | 587    |   |   |   | 1,297 |   |
| Funds held                                           |   |                             | 465    |   |                           |   | 837    |   |   |   | 918    |   |   |   | 1,709 |   |
| Subtotal                                             |   |                             | 36,562 |   |                           |   | 45,316 |   |   |   | 75,285 |   |   |   | 80,730 |   |
| Less investment expenses                             |   |                             | 1,190  |   |                           |   | 1,239  |   |   |   | 2,408  |   |   |   | 2,407 |   |
| Net investment income                                |   | $                                | 35,372 |   |                           |   | 44,077 |   |   |   | 72,877 |   |   | $ | 78,323 |   |

----

|                                             |   |                             |   |   |                           |   |   |   |   |   |   |   |
|--------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                             |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |   |
|                                             |   | 2010                             |   |   | 2009                           |   |   | 2010   |   |   | 2009   |   |
|                                             |   |                             |   |   |                           |   |   |   |   |   |   |   |
| Gross realized gains on the sale of investments  |   | $                                | 54,249 |   |                           |   | 8,155  |   |   |   | 58,962 |   |   | $ | 30,317 |   |
| Gross realized losses on the sale of investments |   |                             | (6,358 | )      |                           |   | (156   | )      |   |   | (6,360 | )      |   |   | (549 | ) |
| Net realized gains on the sale of investments    |   |                             | 47,891 |   |                           |   | 7,999  |   |   |   | 52,602 |   |   |   | 29,768 |   |
| Mark-to-market adjustments on trading securities |   |                             | 1,598  |   |                           |   | 2,795  |   |   |   | 2,344  |   |   |   | 1,596 |   |
| Net realized gains on investments                |   | $                                | 49,489 |   |                           |   | 10,794 |   |   |   | 54,946 |   |   | $ | 31,364 |   |

|                                        |   |           |      |   |       |   |
|---------------------------------------------|--------|----------------|-----------|--------|------------|--------|
|                                        |   | Amortized Cost |      |   | Fair Value |   |
|                                        |   |           |      |   |       |   |
| Due in one year or less                     |   | $              | 95,214    |   |       | $      | 96,870 |   |
| Due from one to five years                  |   |           | 678,477   |   |       |   | 705,001 |   |
| Due from five to ten years                  |   |           | 1,400,756 |   |       |   | 1,443,426 |   |
| Due in ten or more years                    |   |           | 635,210   |   |       |   | 652,004 |   |
| Mortgage-backed and asset-backed securities |   |           | 490,212   |   |       |   | 436,523 |   |
| Total                                       |   | $              | 3,299,869 |   |       | $      | 3,333,824 |   |

| 3. | Fair Value Measurements |
|----|-------------------------|

| Level 1: | Valuations are based on unadjusted quoted prices in active markets for identical financial assets or liabilities; |
|----------|-------------------------------------------------------------------------------------------------------------------|

| Level 2: | Valuations of financial assets and liabilities are based on prices obtained from independent pricing vendors, index providers, or broker-dealers using observable inputs; and |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3: | Valuations are based on unobservable inputs for assets and liabilities where there is little or no market activity.  Management’s assumptions are used in internal valuation pricing models to determine the fair value of financial assets or liabilities. |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   |   |   |      |   | Fair Value Measurement Using: |   |
|----------------------------------------|--------|--------|-----------|--------|-------------------------------|--------|
|                                   |   | Total  |      |   | Level 1                       |   |   | Level 2 |   |   | Level 3 |   |
|                                   |   |   |      |   |                          |   |   |   |   |   |   |   |
| June 30, 2010                     |   |   |      |   |                          |   |   |   |   |   |   |   |
| Financial assets:                      |   |   |      |   |                          |   |   |   |   |   |   |   |
| U.S. Government                        |   | $      | 1,056,045 |   |                          |   | 1,056,045 |   |   |   | – |   |   | $ | – |   |
| U.S. Government agencies               |   |   | 116,147   |   |                          |   | – |   |   |   | 116,147 |   |   |   | – |   |
| Corporate bonds                        |   |   | 472,510   |   |                          |   | 23,221 |   |   |   | 449,289 |   |   |   | – |   |
| Commercial mortgage-backed securities  |   |   | 217,300   |   |                          |   | – |   |   |   | 217,300 |   |   |   | – |   |
| Residential mortgage-backed securities |   |   | 189,813   |   |                          |   | – |   |   |   | 189,813 |   |   |   | – |   |
| Asset-backed securities                |   |   | 29,410    |   |                          |   | – |   |   |   | 29,410 |   |   |   | – |   |
| Municipal bonds                        |   |   | 1,029,585 |   |                          |   | – |   |   |   | 1,029,585 |   |   |   | – |   |
| Non-U.S. governments                   |   |   | 197,113   |   |                          |   | 57,178 |   |   |   | 139,935 |   |   |   | – |   |
| Insurance-linked securities            |   |   | 25,901    |   |                          |   | – |   |   |   | 25,901 |   |   |   | – |   |
| Preferred stocks                       |   |   | 2,090     |   |                          |   | 2,090 |   |   |   | – |   |   |   | – |   |
| Short-term investments                 |   |   | 89,825    |   |                          |   | – |   |   |   | 89,825 |   |   |   | – |   |
| Total                                  |   | $      | 3,425,739 |   |                          |   | 1,138,534 |   |   |   | 2,287,205 |   |   | $ | – |   |
|                                   |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                 |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Derivative instrument                  |   |   | 2,509     |   |                          |   | – |   |   |   | – |   |   |   | 2,509 |   |
| Total                                  |   | $      | 2,509     |   |                          |   | – |   |   |   | – |   |   | $ | 2,509 |   |
|                                   |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Financial assets:                      |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government                        |   | $      | 608,697   |   |                          |   | 608,697 |   |   |   | – |   |   | $ | – |   |
| U.S. Government agencies               |   |   | 117,505   |   |                          |   | – |   |   |   | 117,505 |   |   |   | – |   |
| Corporate bonds                        |   |   | 477,063   |   |                          |   | 27,760 |   |   |   | 449,303 |   |   |   | – |   |
| Commercial mortgage-backed securities  |   |   | 215,020   |   |                          |   | – |   |   |   | 215,020 |   |   |   | – |   |
| Residential mortgage-backed securities |   |   | 714,703   |   |                          |   | – |   |   |   | 714,703 |   |   |   | – |   |
| Asset-backed securities                |   |   | 59,699    |   |                          |   | – |   |   |   | 59,699 |   |   |   | – |   |
| Municipal bonds                        |   |   | 759,501   |   |                          |   | – |   |   |   | 759,501 |   |   |   | – |   |
| Non-U.S. governments                   |   |   | 678,748   |   |                          |   | 35,311 |   |   |   | 643,437 |   |   |   | – |   |
| Insurance-linked securities            |   |   | 25,682    |   |                          |   | – |   |   |   | 25,682 |   |   |   | – |   |
| Preferred stocks                       |   |   | 3,897     |   |                          |   | 3,897 |   |   |   | – |   |   |   | – |   |
| Short-term investments                 |   |   | 26,350    |   |                          |   | – |   |   |   | 26,350 |   |   |   | – |   |
| Total                                  |   | $      | 3,686,865 |   |                          |   | 675,665 |   |   |   | 3,011,200 |   |   | $ | – |   |
|                                   |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                 |   |   |      |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Derivative instrument                  |   |   | 4,677     |   |                          |   | – |   |   |   | – |   |   |   | 4,677 |   |
| Total                                  |   | $      | 4,677     |   |                          |   | – |   |   |   | – |   |   | $ | 4,677 |   |

----

| U.S. Government                             | The fair values of U.S. Government securities are based on quoted prices in active markets for identical assets.  The fair value measurements are classified as Level 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|---------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| U.S Government agencies                     | Our U.S. Government agencies portfolio consists of securities issued by financial institutions guaranteed by the Federal Deposit Insurance Corporation.  The observable inputs used to price these securities may include the spread above the risk-free yield curve, reported trades and broker-dealer quotes.  The fair value measurements are classified as Level 2.                                                                                                                                                                                                                                                                                                                                      |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Corporate bonds                             | Our corporate bond portfolio is comprised of corporate issues and redeemable preferred stocks.  The observable inputs used to price corporate issues may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark securities, bids, credit risks and industry and economic indicators.  The fair value measurements are classified as Level 2.  Exchange traded redeemable preferred stocks are priced based on quoted prices in active markets for identical assets.  The fair value measurements are classified as Level 1.                                                                                                                |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Commercial mortgage-backed securities       | The fair values of CMBS are determined based on observable inputs that may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, bids, security cash flows and structures, delinquencies, loss severities and default rates.  The fair value measurements are classified as Level 2.                                                                                                                                                                                                                                                                                                                                                                                              |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Residential mortgage-backed securities      | Our RMBS portfolio is comprised of securities issued by U.S. Government agencies and by non-agency institutions.  The observable inputs used to price U.S. Government agency RMBS may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, bids, loan level information and prepayment speeds.  The observable inputs used to price non-agency RMBS may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, bids, security cash flows and structures, prepayment speeds, delinquencies, loss severities and default rates.  The fair value measurements are classified as Level 2.                                    |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Asset-backed securities (“ABS”) | The fair values of ABS are determined based on observable inputs that may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, bids, security cash flows and structures, type of collateral, prepayment speeds, delinquencies, loss severities and default rates.  The fair value measurements are classified as Level 2.                                                                                                                                                                                                                                                                                                                                                        |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Municipal bonds                             | The fair values of municipal bonds are determined based on observable inputs that may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark securities, bids, credit risks and economic indicators.  The fair value measurements are classified as Level 2.                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Non-U.S. governments                        | Our non-U.S. government bond portfolio consists of securities issued primarily by governments, provinces, agencies and supranationals as well as debt issued by financial institutions that is guaranteed by a non-U.S. government.  The fair values of non-U.S. government securities are determined based on observable inputs that may include the spread above the risk-free yield curve, reported trades and broker-dealer quotes.  The fair value measurements are classified as Level 1 or Level 2.                                                                                                                                                                                                   |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Insurance-linked securities                 | The fair values of insurance-linked securities are determined based on observable inputs that may include the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark securities, bids, credit risks and specific catastrophic events.  The fair value measurements are classified as Level 2.                                                                                                                                                                                                                                                                                                                                                                                        |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Preferred stocks                            | Non-redeemable exchange traded preferred stocks are priced based on quoted prices in active markets for identical assets.  The fair value measurements are classified as Level 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Short-term investments                      | Short-term investments are generally carried at amortized cost, which approximates fair value and are classified as Level 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Derivative instrument                       | The fair value of our derivative instrument is determined by management primarily using unobservable inputs through the application of our own assumptions and internal valuation pricing models.  Unobservable inputs used in the internal valuation pricing model include the unpaid contract premiums, probability of losses triggered under the covered perils for first and second events, the remaining time to the end of the annual contract period and the seasonality of risks.  The valuation is based on the use of significant unobservable inputs therefore the fair value measurement is classified as Level 3.  See Note 4 for additional disclosure on our derivative instrument. |

----

|                                                                                                                              |   | 2010   |    |   | 2009   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                                              |   |   |    |   |   |   |
| Beginning balance at January 1                                                                                               |   | $      | (4,677  | )      |   | $      | (4,753 | ) |
| Purchases, issuances and settlements                                                                                              |   |   | 4,513   |   |   |   | 4,829 |   |
| Sales, maturities and paydowns                                                                                                    |   |   | – |   |   |   | – |   |
| Total net realized gains (losses) included in earnings                                                                            |   |   | – |   |   |   | – |   |
| Total decrease in fair value of the derivative instrument included in earnings                                                    |   |   | (2,345  | )      |   |   | (2,523 | ) |
| Total net unrealized gains (losses) included in comprehensive income                                                              |   |   | – |   |   |   | – |   |
| Transfers in and/or out of Level 3                                                                                                |   |   | – |   |   |   | – |   |
| Ending balance at June 30                                                                                                    |   | $      | (2,509  | )      |   | $      | (2,447 | ) |
|                                                                                                                              |   |   |    |   |   |   |   |   |
| Total decrease in fair value of the derivative instrument included in earnings relating to liabilities outstanding for the period |   | $      | (2,345  | )      |   | $      | (2,523 | ) |

| 4. | Derivative Instrument |
|----|-----------------------|

| 5. | Income Taxes |
|----|--------------|

| 6. | Company Share Repurchases |
|----|---------------------------|

----

| 7. | Earnings per Common Share |
|----|---------------------------|

|                                                                                                  |   | NetIncome |    |   | WeightedAverageSharesOutstanding |   |    | EarningsperShare |   |
|-------------------------------------------------------------------------------------------------------|--------|-----------|---------|--------|----------------------------------|--------|---------|------------------|--------|
|                                                                                                  |   |      |    |   |                             |   |    |             |   |
| Three Months Ended June 30, 2010:                                                                |   |      |    |   |                             |   |    |             |   |
| Basic and diluted earnings per common share:                                                          |   |      |    |   |                             |   |    |             |   |
| Net income attributable to common shareholders                                                        |   | $         | 124,139 |   |                             |   | 43,225  |             |   | $ | 2.87 |   |
| Effect of dilutive securities - common share options, restricted common shares and common share units |   |      | – |   |                             |   | 3,024   |             |   |   |   |   |
| Adjusted net income for diluted earnings per common share                                             |   | $         | 124,139 |   |                             |   | 46,249  |             |   | $ | 2.68 |   |
|                                                                                                  |   |      |    |   |                             |   |    |             |   |   |   |   |
| Three Months Ended June 30, 2009:                                                                |   |      |    |   |                             |   |    |             |   |   |   |   |
| Basic and diluted earnings per common share:                                                          |   |      |    |   |                             |   |    |             |   |   |   |   |
| Net income attributable to common shareholders                                                        |   | $         | 98,130  |   |                             |   | 50,580  |             |   | $ | 1.94 |   |
| Effect of dilutive securities - common share options, restricted common shares and common share units |   |      | – |   |                             |   | 1,014   |             |   |   |   |   |
| Adjusted net income for diluted earnings per common share                                             |   | $         | 98,130  |   |                             |   | 51,594  |             |   | $ | 1.90 |   |
|                                                                                                  |   |      |    |   |                             |   |    |             |   |   |   |   |
| Six Months Ended June 30, 2010:                                                                  |   |      |    |   |                             |   |    |             |   |   |   |   |
| Basic and diluted earnings per common share:                                                          |   |      |    |   |                             |   |    |             |   |   |   |   |
| Net income attributable to common shareholders                                                        |   | $         | 139,560 |   |                             |   | 44,322  |             |   | $ | 3.15 |   |
| Effect of dilutive securities - common share options, restricted common shares and common share units |   |      | – |   |                             |   | 3,043   |             |   |   |   |   |
| Adjusted net income for diluted earnings per common share                                             |   | $         | 139,560 |   |                             |   | 47,365  |             |   | $ | 2.95 |   |
|                                                                                                  |   |      |    |   |                             |   |    |             |   |   |   |   |
| Six Months Ended June 30, 2009:                                                                  |   |      |    |   |                             |   |    |             |   |   |   |   |
| Basic and diluted earnings per common share:                                                          |   |      |    |   |                             |   |    |             |   |   |   |   |
| Net income attributable to common shareholders                                                        |   | $         | 181,751 |   |                             |   | 50,105  |             |   | $ | 3.63 |   |
| Effect of dilutive securities:                                                                        |   |      |    |   |                             |   |    |             |   |   |   |   |
| Common share options, restricted common shares and common share units                                 |   |      | – |   |                             |   | 1,114   |             |   |   |   |   |
| Conversion of preferred shares                                                                        |   |      | – |   |                             |   | 1,525   |             |   |   |   |   |
| Preferred share dividends                                                                             |   |      | 1,301   |   |                             |   | – |             |   |   |   |   |
| Adjusted net income for diluted earnings per common share                                             |   | $         | 183,052 |   |                             |   | 52,744  |             |   | $ | 3.47 |   |

| 8. | Operating Segment Information |
|----|-------------------------------|

----

|                                         |   | Propertyand Marine |    |    | Casualty |   |   | Finite Risk |   |   | Total        |   |
|----------------------------------------------|--------|--------------------|---------|---------|----------|--------|--------|-------------|--------|--------|--------------|--------|
| Three Months Ended June 30, 2010:       |   |               |    |    |     |   |   |        |   |   |         |   |
| Net premiums written                         |   | $                  | 74,105  |    |     |   | 72,628 |        |   |   | 4,985        |   |   | $ | 151,718 |   |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net premiums earned                          |   |               | 100,550 |    |     |   | 85,166 |        |   |   | 5,716        |   |   |   | 191,432 |   |
| Net losses and loss adjustment expenses      |   |               | 35,010  |    |     |   | 40,058 |        |   |   |  (3,593 | )      |   |   | 71,475 |   |
| Net acquisition expenses                     |   |               | 17,218  |    |     |   | 18,752 |        |   |   | 8,118        |   |   |   | 44,088 |   |
| Other underwriting expenses                  |   |               | 7,720   |    |     |   | 5,654  |        |   |   | 313          |   |   |   | 13,687 |   |
| Segment underwriting income                  |   | $                  | 40,602  |    |     |   | 20,702 |        |   |   | 878          |   |   |   | 62,182 |   |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net investment income                        |   |               |    | 35,372  |     |
| Net realized gains on investments            |   |               |    | 49,489  |     |
| Net impairment losses on investments         |   |               |    | (3,410  | )        |
| Net changes in fair value of derivatives     |   |               |    | (30     | )        |
| Net foreign currency exchange gains          |   |               |    | 67      |     |
| Other expense                                |   |               |    | (144    | )        |
| Corporate expenses not allocated to segments |   |               |    | (6,473  | )        |
| Interest expense                             |   |               |    | (4,709  | )        |
| Income before income tax expense             |   |               | $       | 132,344 |     |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Ratios:                                      |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net loss and loss adjustment expense         |   |               | 34.8    | %       |     |   | 47.0   | %           |   |   | (62.9        | %)     |   |   | 37.3 | % |
| Net acquisition expense                      |   |               | 17.1    | %       |     |   | 22.0   | %           |   |   | 142.0        | %      |   |   | 23.0 | % |
| Other underwriting expense                   |   |               | 7.7     | %       |     |   | 6.6    | %           |   |   | 5.5          | %      |   |   | 7.1 | % |
| Combined                                     |   |               | 59.6    | %       |     |   | 75.6   | %           |   |   | 84.6         | %      |   |   | 67.4 | % |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Three Months Ended June 30, 2009:       |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net premiums written                         |   | $                  | 113,405 |    |     |   | 87,459 |        |   |   | 7,253        |   |   | $ | 208,117 |   |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net premiums earned                          |   |               | 128,316 |    |     |   | 99,161 |        |   |   | 4,985        |   |   |   | 232,462 |   |
| Net losses and loss adjustment expenses      |   |               | 62,807  |    |     |   | 61,042 |        |   |   | 1,096        |   |   |   | 124,945 |   |
| Net acquisition expenses                     |   |               | 13,526  |    |     |   | 20,406 |        |   |   | 4,406        |   |   |   | 38,338 |   |
| Other underwriting expenses                  |   |               | 9,123   |    |     |   | 6,130  |        |   |   | 400          |   |   |   | 15,653 |   |
| Segment underwriting income (loss)           |   | $                  | 42,860  |    |     |   | 11,583 |        |   |   | (917         | )      |   |   | 53,526 |   |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net investment income                        |   |               |    | 44,077  |     |
| Net realized gains on investments            |   |               |    | 10,794  |     |
| Net impairment losses on investments         |   |               |    | (3,256  | )        |
| Net changes in fair value of derivatives     |   |               |    | (106    | )        |
| Net foreign currency exchange gains          |   |               |    | 537     |     |
| Other income                                 |   |               |    | 5,212   |     |
| Corporate expenses not allocated to segments |   |               |    | (7,253  | )        |
| Interest expense                             |   |               |    | (4,756  | )        |
| Income before income tax expense             |   |               | $       | 98,775  |     |
|                                         |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Ratios:                                      |   |               |    |    |     |   |   |        |   |   |         |   |   |   |   |   |
| Net loss and loss adjustment expense         |   |               | 48.9    | %       |     |   | 61.6   | %           |   |   | 22.0         | %      |   |   | 53.7 | % |
| Net acquisition expense                      |   |               | 10.5    | %       |     |   | 20.6   | %           |   |   | 88.4         | %      |   |   | 16.5 | % |
| Other underwriting expense                   |   |               | 7.1     | %       |     |   | 6.2    | %           |   |   | 8.0          | %      |   |   | 6.7 | % |
| Combined                                     |   |               | 66.5    | %       |     |   | 88.4   | %           |   |   | 118.4        | %      |   |   | 76.9 | % |

----

|                                         |   |   | Propertyand Marine |    |   |   | Casualty |   |   |   | Finite Risk  |   |   |   | Total   |   |
|----------------------------------------------|--------|--------|--------------------|---------|--------|--------|----------|--------|--------|--------|--------------|--------|--------|--------|---------|--------|
| Six Months Ended June 30, 2010:         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net premiums written                         |   | $      | 220,890            |    |   |   | 166,379  |   |   |   | 11,876       |   |   | $      | 399,145 |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net premiums earned                          |   |   | 228,356            |    |   |   | 173,068  |   |   |   | 10,186       |   |   |   | 411,610 |   |
| Net losses and loss adjustment expenses      |   |   | 161,637            |    |   |   | 71,588   |   |   |   | 2,818        |   |   |   | 236,043 |   |
| Net acquisition expenses                     |   |   | 33,449             |    |   |   | 36,479   |   |   |   | 11,489       |   |   |   | 81,417  |   |
| Other underwriting expenses                  |   |   | 16,419             |    |   |   | 12,124   |   |   |   | 651          |   |   |   | 29,194  |   |
| Segment underwriting income (loss)           |   | $      | 16,851             |    |   |   | 52,877   |   |   |   |  (4,772 | )      |   |   | 64,956  |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net investment income                        |   |   |               | 72,877  |   |
| Net realized gains on investments            |   |   |               | 54,946  |   |
| Net impairment losses on investments         |   |   |               | (21,512 | )      |
| Net changes in fair value of derivatives     |   |   |               | (2,345  | )      |
| Net foreign currency exchange gains          |   |   |               | 1,296   |   |
| Other income                                 |   |   |               | 129     |   |
| Corporate expenses not allocated to segments |   |   |               | (12,707 | )      |
| Interest expense                             |   |   |               | (9,469  | )      |
| Income before income tax expense             |   |   | $                  | 148,171 |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Ratios:                                      |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net loss and loss adjustment expense         |   |   | 70.8               | %       |   |   | 41.4     | %      |   |   | 27.7         | %      |   |   | 57.3    | %      |
| Net acquisition expense                      |   |   | 14.6               | %       |   |   | 21.1     | %      |   |   | 112.8        | %      |   |   | 19.8    | %      |
| Other underwriting expense                   |   |   | 7.2                | %       |   |   | 7.0      | %      |   |   | 6.4          | %      |   |   | 7.1     | %      |
| Combined                                     |   |   | 92.6               | %       |   |   | 69.5     | %      |   |   | 146.9        | %      |   |   | 84.2    | %      |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Six Months Ended June 30, 2009:         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net premiums written                         |   | $      | 255,140            |    |   |   | 185,473  |   |   |   | 12,776       |   |   | $      | 453,389 |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net premiums earned                          |   |   | 261,987            |    |   |   | 209,121  |   |   |   | 9,106        |   |   |   | 480,214 |   |
| Net losses and loss adjustment expenses      |   |   | 140,258            |    |   |   | 120,183  |   |   |   | 8,668        |   |   |   | 269,109 |   |
| Net acquisition expenses                     |   |   | 30,890             |    |   |   | 46,627   |   |   |   | 977          |   |   |   | 78,494  |   |
| Other underwriting expenses                  |   |   | 17,282             |    |   |   | 11,799   |   |   |   | 700          |   |   |   | 29,781  |   |
| Segment underwriting income (loss)           |   | $      | 73,557             |    |   |   | 30,512   |   |   |   | (1,239       | )      |   |   | 102,830 |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net investment income                        |   |   |               | 78,323  |   |
| Net realized gains on investment             |   |   |               | 31,364  |   |
| Net impairment losses on investments         |   |   |               | (6,664  | )      |
| Net changes in fair value of derivatives     |   |   |               | (2,523  | )      |
| Net foreign currency exchange losses         |   |   |               | (459    | )      |
| Other income                                 |   |   |               | 5,444   |   |
| Corporate expenses not allocated to segments |   |   |               | (13,993 | )      |
| Interest expense                             |   |   |               | (9,511  | )      |
| Income before income tax expense             |   |   | $                  | 184,811 |   |
|                                         |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Ratios:                                      |   |   |               |    |   |   |     |   |   |   |         |   |   |   |    |   |
| Net loss and loss adjustment expense         |   |   | 53.5               | %       |   |   | 57.5     | %      |   |   | 95.2         | %      |   |   | 56.0    | %      |
| Net acquisition expense                      |   |   | 11.8               | %       |   |   | 22.3     | %      |   |   | 10.7         | %      |   |   | 16.3    | %      |
| Other underwriting expense                   |   |   | 6.6                | %       |   |   | 5.6      | %      |   |   | 7.7          | %      |   |   | 6.2     | %      |
| Combined                                     |   |   | 71.9               | %       |   |   | 85.4     | %      |   |   | 113.6        | %      |   |   | 78.5    | %      |

| 9. | Condensed Consolidating Financial Information |
|----|-----------------------------------------------|

----

| Condensed Consolidating Balance SheetJune 30, 2010 |   | PlatinumHoldings |      |   | PlatinumFinance |   |    | Non-guarantor Subsidiaries |   |   | ConsolidatingAdjustments |   |   | Consolidated |       |
|---------------------------------------------------------|--------|------------------|-----------|--------|-----------------|--------|---------|----------------------------|--------|--------|--------------------------|--------|--------|--------------|------------|
|                                                    |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |
| ASSETS                                                  |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |
| Total investments                                       |   | $                | –   |   |            |   | 26,415  |                       |   |   | 3,399,324                |   |   |         | –    |   |   | $ | 3,425,739 |   |
| Investment in subsidiaries                              |   |             | 2,014,814 |   |            |   | 603,857 |                       |   |   | 406,534                  |   |   |         | (3,025,205 | ) |   |   | – |   |
| Cash and cash equivalents                               |   |             | 80,753    |   |            |   | 36,975  |                       |   |   | 984,546                  |   |   |         | –    |   |   |   | 1,102,274 |   |
| Reinsurance assets                                      |   |             | –   |   |            |   | – |                       |   |   | 312,789                  |   |   |         | –    |   |   |   | 312,789 |   |
| Other assets                                            |   |             | 13,501    |   |            |   | 3,226   |                       |   |   | 77,778                   |   |   |         | (558       | ) |   |   | 93,947 |   |
| Total assets                                            |   | $                | 2,109,068 |   |            |   | 670,473 |                       |   |   | 5,180,971                |   |   |         | (3,025,763 | ) |   | $ | 4,934,749 |   |
|                                                    |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY              |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Liabilities                                             |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Reinsurance liabilities                                 |   | $                | –   |   |            |   | – |                       |   |   | 2,449,941                |   |   |         | –    |   |   | $ | 2,449,941 |   |
| Debt obligations                                        |   |             | –   |   |            |   | 250,000 |                       |   |   | –                  |   |   |         | –    |   |   |   | 250,000 |   |
| Other liabilities                                       |   |             | 3,633     |   |            |   | 14,193  |                       |   |   | 112,105                  |   |   |         | (558       | ) |   |   | 129,373 |   |
| Total liabilities                                       |   |             | 3,633     |   |            |   | 264,193 |                       |   |   | 2,562,046                |   |   |         | ( 558      | ) |   |   | 2,829,314 |   |
|                                                    |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Shareholders’ Equity                              |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Common shares                                           |   |             | 411       |   |            |   | – |                       |   |   | 8,000                    |   |   |         | (8,000     | ) |   |   | 411 |   |
| Additional paid-in capital                              |   |             | 695,967   |   |            |   | 212,479 |                       |   |   | 1,875,609                |   |   |         | (2,088,088 | ) |   |   | 695,967 |   |
| Accumulated other comprehensive income                  |   |             | 12,700    |   |            |   | 26,135  |                       |   |   | 38,764                   |   |   |         | (64,899    | ) |   |   | 12,700 |   |
| Retained earnings                                       |   |             | 1,396,357 |   |            |   | 167,666 |                       |   |   | 696,552                  |   |   |         | (864,218   | ) |   |   | 1,396,357 |   |
| Total shareholders’ equity                        |   |             | 2,105,435 |   |            |   | 406,280 |                       |   |   | 2,618,925                |   |   |         | (3,025,205 | ) |   |   | 2,105,435 |   |
|                                                    |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Total liabilities and shareholders’ equity        |   | $                | 2,109,068 |   |            |   | 670,473 |                       |   |   | 5,180,971                |   |   |         | (3,025,763 | ) |   | $ | 4,934,749 |   |

| Condensed Consolidating Balance SheetDecember 31, 2009 |   | PlatinumHoldings |      |   | PlatinumFinance |   |    | Non-guarantor Subsidiaries |   |   | ConsolidatingAdjustments |   |   | Consolidated |       |
|-------------------------------------------------------------|--------|------------------|-----------|--------|-----------------|--------|---------|----------------------------|--------|--------|--------------------------|--------|--------|--------------|------------|
|                                                        |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |
| ASSETS                                                      |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |
| Total investments                                           |   | $                | –   |   |            |   | 26,426  |                       |   |   | 3,660,439                |   |   |         | –    |   |   | $ | 3,686,865 |   |
| Investment in subsidiaries                                  |   |             | 2,023,276 |   |            |   | 546,946 |                       |   |   | 341,627                  |   |   |         | (2,911,849 | ) |   |   | – |   |
| Cash and cash equivalents                                   |   |             | 49,448    |   |            |   | 7,655   |                       |   |   | 625,681                  |   |   |         | –    |   |   |   | 682,784 |   |
| Reinsurance assets                                          |   |             | –   |   |            |   | – |                       |   |   | 424,527                  |   |   |         | –    |   |   |   | 424,527 |   |
| Other assets                                                |   |             | 13,649    |   |            |   | 6,265   |                       |   |   | 210,963                  |   |   |         | (3,475     | ) |   |   | 227,402 |   |
| Total assets                                                |   | $                | 2,086,373 |   |            |   | 587,292 |                       |   |   | 5,263,237                |   |   |         | (2,915,324 | ) |   | $ | 5,021,578 |   |
|                                                        |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                  |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Liabilities                                                 |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Reinsurance liabilities                                     |   | $                | –   |   |            |   | – |                       |   |   | 2,620,406                |   |   |         | –    |   |   | $ | 2,620,406 |   |
| Debt obligations                                            |   |             | –   |   |            |   | 250,000 |                       |   |   | –                  |   |   |         | –    |   |   |   | 250,000 |   |
| Other liabilities                                           |   |             | 8,642     |   |            |   | 1,641   |                       |   |   | 66,633                   |   |   |         | (3,475     | ) |   |   | 73,441 |   |
| Total liabilities                                           |   |             | 8,642     |   |            |   | 251,641 |                       |   |   | 2,687,039                |   |   |         | (3,475     | ) |   |   | 2,943,847 |   |
|                                                        |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Shareholders’ Equity                                  |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Common shares                                               |   |             | 459       |   |            |   | – |                       |   |   | 6,250                    |   |   |         | (6,250     | ) |   |   | 459 |   |
| Additional paid-in capital                                  |   |             | 883,425   |   |            |   | 212,608 |                       |   |   | 1,883,156                |   |   |         | (2,095,764 | ) |   |   | 883,425 |   |
| Accumulated other comprehensive loss                        |   |             | (70,005   | )      |            |   | (7,439  | )                          |   |   | (77,490                  | )      |   |         | 84,929     |   |   |   | (70,005 | ) |
| Retained earnings                                           |   |             | 1,263,852 |   |            |   | 130,482 |                       |   |   | 764,282                  |   |   |         | (894,764   | ) |   |   | 1,263,852 |   |
| Total shareholders’ equity                            |   |             | 2,077,731 |   |            |   | 335,651 |                       |   |   | 2,576,198                |   |   |         | (2,911,849 | ) |   |   | 2,077,731 |   |
|                                                        |   |             |      |   |            |   |    |                       |   |   |                     |   |   |         |       |   |   |   |   |   |
| Total liabilities and shareholders’ equity            |   | $                | 2,086,373 |   |            |   | 587,292 |                       |   |   | 5,263,237                |   |   |         | (2,915,324 | ) |   | $ | 5,021,578 |   |

----

| Condensed Consolidating Statement of OperationsFor the Three Months Ended June 30, 2010 |   | Platinum Holdings |    |   | Platinum Finance |   |    | Non-guarantor Subsidiaries |   |   | ConsolidatingAdjustments |   |   | Consolidated |     |
|----------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|---------|----------------------------|--------|--------|--------------------------|--------|--------|--------------|----------|
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |
| Revenue:                                                                                     |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |
| Net premiums earned                                                                          |   | $                 | – |   |             |   | – |                       |   |   | 191,432                  |   |   |         | –  |   |   | $ | 191,432 |   |
| Net investment income                                                                        |   |              | 21      |   |             |   | 47      |                       |   |   | 35,304                   |   |   |         | –  |   |   |   | 35,372 |   |
| Net realized gains on investments                                                            |   |              | – |   |             |   | – |                       |   |   | 49,489                   |   |   |         | –  |   |   |   | 49,489 |   |
| Net impairment losses on investments                                                         |   |              | – |   |             |   | – |                       |   |   | (3,410                   | )      |   |         | –  |   |   |   | (3,410 | ) |
| Other income (expense)                                                                       |   |              | (654    | )      |             |   | – |                       |   |   | 510                      |   |   |         | –  |   |   |   | (144 | ) |
| Total revenue                                                                                |   |              | (633    | )      |             |   | 47      |                       |   |   | 273,325                  |   |   |         | –  |   |   |   | 272,739 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Expenses:                                                                                    |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net losses and loss adjustment expenses                                                      |   |              | – |   |             |   | – |                       |   |   | 71,475                   |   |   |         | –  |   |   |   | 71,475 |   |
| Net acquisition expenses                                                                     |   |              | – |   |             |   | – |                       |   |   | 44,088                   |   |   |         | –  |   |   |   | 44,088 |   |
| Net changes in fair value of derivatives                                                     |   |              | – |   |             |   | – |                       |   |   | 30                       |   |   |         | –  |   |   |   | 30 |   |
| Operating expenses                                                                           |   |              | 6,448   |   |             |   | 66      |                       |   |   | 13,646                   |   |   |         | –  |   |   |   | 20,160 |   |
| Net foreign currency exchange gains                                                          |   |              | – |   |             |   | – |                       |   |   | (67                      | )      |   |         | –  |   |   |   | (67 | ) |
| Interest expense                                                                             |   |              | – |   |             |   | 4,709   |                       |   |   | –                  |   |   |         | –  |   |   |   | 4,709 |   |
| Total expenses                                                                               |   |              | 6,448   |   |             |   | 4,775   |                       |   |   | 129,172                  |   |   |         | –  |   |   |   | 140,395 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                            |   |              | (7,081  | )      |             |   | (4,728  | )                          |   |   | 144,153                  |   |   |         | –  |   |   |   | 132,344 |   |
| Income tax expense (benefit)                                                                 |   |              | – |   |             |   | (1,664  | )                          |   |   | 9,869                    |   |   |         | –  |   |   |   | 8,205 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before equity in earnings of subsidiaries                                      |   |              | (7,081  | )      |             |   | (3,064  | )                          |   |   | 134,284                  |   |   |         | –  |   |   |   | 124,139 |   |
| Equity in earnings of subsidiaries                                                           |   |              | 131,220 |   |             |   | 26,154  |                       |   |   | 25,932                   |   |   |         | (183,306 | ) |   |   | – |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net income                                                                                   |   | $                 | 124,139 |   |             |   | 23,090  |                       |   |   | 160,216                  |   |   |         | (183,306 | ) |   | $ | 124,139 |   |

| Condensed Consolidating Statement of OperationsFor the Three Months Ended June 30, 2009 |   | Platinum Holdings |    |   | Platinum Finance |   |    | Non-guarantor Subsidiaries |   |   | Consolidating Adjustments |   |   | Consolidated |     |
|----------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------------|--------|---------|----------------------------|--------|--------|---------------------------|--------|--------|--------------|----------|
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |
| Revenue:                                                                                     |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |
| Net premiums earned                                                                          |   | $                 | – |   |             |   | – |                       |   |   | 232,462                   |   |   |         | –  |   |   | $ | 232,462 |   |
| Net investment income                                                                        |   |              | 14      |   |             |   | 41      |                       |   |   | 44,022                    |   |   |         | –  |   |   |   | 44,077 |   |
| Net realized gains on investments                                                            |   |              | – |   |             |   | – |                       |   |   | 10,794                    |   |   |         | –  |   |   |   | 10,794 |   |
| Net impairment losses on investments                                                         |   |              | – |   |             |   | – |                       |   |   | (3,256                    | )      |   |         | –  |   |   |   | (3,256 | ) |
| Other income                                                                                 |   |              | 448     |   |             |   | – |                       |   |   | 4,764                     |   |   |         | –  |   |   |   | 5,212 |   |
| Total revenue                                                                                |   |              | 462     |   |             |   | 41      |                       |   |   | 288,786                   |   |   |         | –  |   |   |   | 289,289 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |   |   |   |   |   |
| Expenses:                                                                                    |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |   |   |   |   |   |
| Net losses and loss adjustment expenses                                                      |   |              | – |   |             |   | – |                       |   |   | 124,945                   |   |   |         | –  |   |   |   | 124,945 |   |
| Net acquisition expenses                                                                     |   |              | – |   |             |   | – |                       |   |   | 38,338                    |   |   |         | –  |   |   |   | 38,338 |   |
| Net changes in fair value of derivatives                                                     |   |              | – |   |             |   | – |                       |   |   | 106                       |   |   |         | –  |   |   |   | 106 |   |
| Operating expenses                                                                           |   |              | 6,616   |   |             |   | 111     |                       |   |   | 16,179                    |   |   |         | –  |   |   |   | 22,906 |   |
| Net foreign currency exchange gains                                                          |   |              | – |   |             |   | – |                       |   |   | (537                      | )      |   |         | –  |   |   |   | (537 | ) |
| Interest expense                                                                             |   |              | – |   |             |   | 4,756   |                       |   |   | –                   |   |   |         | –  |   |   |   | 4,756 |   |
| Total expenses                                                                               |   |              | 6,616   |   |             |   | 4,867   |                       |   |   | 179,031                   |   |   |         | –  |   |   |   | 190,514 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                            |   |              | (6,154  | )      |             |   | (4,826  | )                          |   |   | 109,755                   |   |   |         | –  |   |   |   | 98,775 |   |
| Income tax expense (benefit)                                                                 |   |              | 150     |   |             |   | (1,515  | )                          |   |   | 2,010                     |   |   |         | –  |   |   |   | 645 |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |   |   |   |   |   |
| Income (loss) before equity in earnings of subsidiaries                                      |   |              | (6,304  | )      |             |   | (3,311  | )                          |   |   | 107,745                   |   |   |         | –  |   |   |   | 98,130 |   |
| Equity in earnings of subsidiaries                                                           |   |              | 104,434 |   |             |   | 7,414   |                       |   |   | 5,083                     |   |   |         | (116,931 | ) |   |   | – |   |
|                                                                                         |   |              |    |   |             |   |    |                       |   |   |                      |   |   |         |     |   |   |   |   |   |
| Net income                                                                                   |   | $                 | 98,130  |   |             |   | 4,103   |                       |   |   | 112,828                   |   |   |         | (116,931 | ) |   | $ | 98,130 |   |

----

| Condensed Consolidating Statement of OperationsFor the Six Months Ended June 30, 2010 |   | PlatinumHoldings |       |   | PlatinumFinance |   |         | Non-guarantor Subsidiaries |   |   | ConsolidatingAdjustments |   |   | Consolidated |     |
|--------------------------------------------------------------------------------------------|--------|------------------|------------|--------|-----------------|--------|--------------|----------------------------|--------|--------|--------------------------|--------|--------|--------------|----------|
|                                                                                       |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |
| Revenue:                                                                                   |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |
| Net premiums earned                                                                        |   | $                | –    |   |            |   | –      |                       |   |   | 411,610                  |   |   |         | –  |   |   | $ | 411,610 |   |
| Net investment income                                                                      |   |             | 31         |   |            |   | 93           |                       |   |   | 72,753                   |   |   |         | –  |   |   |   | 72,877 |   |
| Net realized gains on investments                                                          |   |             | –    |   |            |   | –      |                       |   |   | 54,946                   |   |   |         | –  |   |   |   | 54,946 |   |
| Net impairment losses on investments                                                       |   |             | –    |   |            |   | –      |                       |   |   | (21,512                  | )      |   |         | –  |   |   |   | (21,512 | ) |
| Other income (expense)                                                                     |   |             |  (210 | )      |            |   | –      |                       |   |   | 339                      |   |   |         | –  |   |   |   | 129 |   |
| Total revenue                                                                              |   |             | (179       | )      |            |   | 93           |                       |   |   | 518,136                  |   |   |         | –  |   |   |   | 518,050 |   |
|                                                                                       |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Expenses:                                                                                  |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net losses and loss adjustment expenses                                                    |   |             | –    |   |            |   | –      |                       |   |   | 236,043                  |   |   |         | –  |   |   |   | 236,043 |   |
| Net acquisition expenses                                                                   |   |             | –    |   |            |   | –      |                       |   |   | 81,417                   |   |   |         | –  |   |   |   | 81,417 |   |
| Net changes in fair value of derivatives                                                   |   |             | –    |   |            |   | –      |                       |   |   | 2,345                    |   |   |         | –  |   |   |   | 2,345 |   |
| Operating expenses                                                                         |   |             | 12,721     |   |            |   | 135          |                       |   |   | 29,045                   |   |   |         | –  |   |   |   | 41,901 |   |
| Net foreign currency exchange gains                                                        |   |             | –    |   |            |   | –      |                       |   |   | (1,296                   | )      |   |         | –  |   |   |   | (1,296 | ) |
| Interest expense                                                                           |   |             | –    |   |            |   | 9,469        |                       |   |   | –                  |   |   |         | –  |   |   |   | 9,469 |   |
| Total expenses                                                                             |   |             | 12,721     |   |            |   | 9,604        |                       |   |   | 347,554                  |   |   |         | –  |   |   |   | 369,879 |   |
|                                                                                       |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                          |   |             | (12,900    | )      |            |   | (9,511       | )                          |   |   | 170,582                  |   |   |         | –  |   |   |   | 148,171 |   |
| Income tax expense (benefit)                                                               |   |             | –    |   |            |   |  (3,204 | )                          |   |   | 11,815                   |   |   |         | –  |   |   |   | 8,611 |   |
|                                                                                       |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before equity in earnings of subsidiaries                                    |   |             | (12,900    | )      |            |   | (6,307       | )                          |   |   | 158,767                  |   |   |         | –  |   |   |   | 139,560 |   |
| Equity in earnings of subsidiaries                                                         |   |             | 152,460    |   |            |   | 43,491       |                       |   |   | 37,004                   |   |   |         | (232,955 | ) |   |   | – |   |
|                                                                                       |   |             |       |   |            |   |         |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net income                                                                                 |   | $                | 139,560    |   |            |   | 37,184       |                       |   |   | 195,771                  |   |   |         | (232,955 | ) |   | $ | 139,560 |   |

| Condensed Consolidating Statement of OperationsFor the Six Months Ended June 30, 2009 |   | PlatinumHoldings |    |   | PlatinumFinance |   |    | Non-guarantor Subsidiaries |   |   | ConsolidatingAdjustments |   |   | Consolidated |     |
|--------------------------------------------------------------------------------------------|--------|------------------|---------|--------|-----------------|--------|---------|----------------------------|--------|--------|--------------------------|--------|--------|--------------|----------|
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |
| Revenue:                                                                                   |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |
| Net premiums earned                                                                        |   | $                | – |   |            |   | – |                       |   |   | 480,214                  |   |   |         | –  |   |   | $ | 480,214 |   |
| Net investment income                                                                      |   |             | 44      |   |            |   | 61      |                       |   |   | 78,218                   |   |   |         | –  |   |   |   | 78,323 |   |
| Net realized gains on investments                                                          |   |             | – |   |            |   | – |                       |   |   | 31,364                   |   |   |         | –  |   |   |   | 31,364 |   |
| Net impairment losses on investments                                                       |   |             | – |   |            |   | – |                       |   |   | (6,664                   | )      |   |         | –  |   |   |   | (6,664 | ) |
| Other income                                                                               |   |             | 902     |   |            |   | – |                       |   |   | 4,542                    |   |   |         | –  |   |   |   | 5,444 |   |
| Total revenue                                                                              |   |             | 946     |   |            |   | 61      |                       |   |   | 587,674                  |   |   |         | –  |   |   |   | 588,681 |   |
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Expenses:                                                                                  |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net losses and loss adjustment expenses                                                    |   |             | – |   |            |   | – |                       |   |   | 269,109                  |   |   |         | –  |   |   |   | 269,109 |   |
| Net acquisition expenses                                                                   |   |             | – |   |            |   | – |                       |   |   | 78,494                   |   |   |         | –  |   |   |   | 78,494 |   |
| Net changes in fair value of derivatives                                                   |   |             | – |   |            |   | – |                       |   |   | 2,523                    |   |   |         | –  |   |   |   | 2,523 |   |
| Operating expenses                                                                         |   |             | 13,159  |   |            |   | 219     |                       |   |   | 30,396                   |   |   |         | –  |   |   |   | 43,774 |   |
| Net foreign currency exchange losses                                                       |   |             | – |   |            |   | – |                       |   |   | 459                      |   |   |         | –  |   |   |   | 459 |   |
| Interest expense                                                                           |   |             | – |   |            |   | 9,511   |                       |   |   | –                  |   |   |         | –  |   |   |   | 9,511 |   |
| Total expenses                                                                             |   |             | 13,159  |   |            |   | 9,730   |                       |   |   | 380,981                  |   |   |         | –  |   |   |   | 403,870 |   |
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before income tax expense (benefit)                                          |   |             | (12,213 | )      |            |   | (9,669  | )                          |   |   | 206,693                  |   |   |         | –  |   |   |   | 184,811 |   |
| Income tax expense (benefit)                                                               |   |             | 300     |   |            |   | (3,210  | )                          |   |   | 4,669                    |   |   |         | –  |   |   |   | 1,759 |   |
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Income (loss) before equity in earnings of subsidiaries                                    |   |             | (12,513 | )      |            |   | (6,459  | )                          |   |   | 202,024                  |   |   |         | –  |   |   |   | 183,052 |   |
| Equity in earnings of subsidiaries                                                         |   |             | 195,565 |   |            |   | 11,165  |                       |   |   | 5,454                    |   |   |         | (212,184 | ) |   |   | – |   |
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net income                                                                                 |   |             | 183,052 |   |            |   | 4,706   |                       |   |   | 207,478                  |   |   |         | (212,184 | ) |   |   | 183,052 |   |
| Preferred dividends                                                                        |   |             | 1,301   |   |            |   | – |                       |   |   | –                  |   |   |         | –  |   |   |   | 1,301 |   |
|                                                                                       |   |             |    |   |            |   |    |                       |   |   |                     |   |   |         |     |   |   |   |   |   |
| Net income attributable to common shareholders                                             |   | $                | 181,751 |   |            |   | 4,706   |                       |   |   | 207,478                  |   |   |         | (212,184 | ) |   | $ | 181,751 |   |

----

| Condensed Consolidating Statement of Cash Flows                    |   | Platinum |     |   | Platinum |   |    | Non-guarantor |   |   | Consolidating |   |   |         |     |
|--------------------------------------------------------------------|--------|----------|----------|--------|----------|--------|---------|---------------|--------|--------|---------------|--------|--------|--------------|----------|
| For the Six Months Ended June 30, 2010                        |   | Holdings |     |   | Finance  |   |    | Subsidiaries  |   |   | Adjustments   |   |   | Consolidated |     |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |
| Net cash provided by (used in) operating activities                |   | $        | (11,568  | )      |     |   | 9,240   |          |   |   | 23,855        |   |   |         | –  |   |   | $ | 21,527 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Investing Activities:                                              |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Proceeds from sale of fixed maturity available-for-sale securities |   |     | –  |   |     |   | – |          |   |   | 2,056,935     |   |   |         | –  |   |   |   | 2,056,935 |   |
| Proceeds from sale of preferred stocks                             |   |     | –  |   |     |   | – |          |   |   | 2,634         |   |   |         | –  |   |   |   | 2,634 |   |
| Proceeds from maturity or paydown of available-for-sale securities |   |     | –  |   |     |   | 79      |          |   |   | 158,360       |   |   |         | –  |   |   |   | 158,439 |   |
| Acquisition of available-for-sale securities                       |   |     | –  |   |     |   | – |          |   |   | (1,547,483    | )      |   |         | –  |   |   |   | (1,547,483 | ) |
| Increase in short-term investments                                 |   |     | –  |   |     |   | – |          |   |   | (63,375       | )      |   |         | –  |   |   |   | (63,375 | ) |
| Dividends from subsidiaries                                        |   |     | 243,500  |   |     |   | 20,000  |          |   |   | –       |   |   |         | (263,500 | ) |   |   | – |   |
| Net cash provided by investing activities                          |   |     | 243,500  |   |     |   | 20,079  |          |   |   | 607,071       |   |   |         | (263,500 | ) |   |   | 607,150 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Financing Activities:                                              |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Dividends paid to common shareholders                              |   |     | (7,055   | )      |     |   | – |          |   |   | (263,500      | )      |   |         | 263,500  |   |   |   | (7,055 | ) |
| Purchase of common shares                                          |   |     | (212,823 | )      |     |   | – |          |   |   | –       |   |   |         | –  |   |   |   | (212,823 | ) |
| Proceeds from exercise of  common share options          |   |     | 19,251   |   |     |   | – |          |   |   | –       |   |   |         | –  |   |   |   | 19,251 |   |
| Net cash used in financing activities                              |   |     | (200,627 | )      |     |   |    |          |   |   | (263,500      | )      |   |         | 263,500  |   |   |   | (200,627 | ) |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Effect of foreign currency exchange rate changes on cash           |   |     | –  |   |     |   | – |          |   |   | (8,560        | )      |   |         | –  |   |   |   | (8,560 | ) |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Net increase in cash and cash equivalents                          |   |     | 31,305   |   |     |   | 29,319  |          |   |   | 358,866       |   |   |         | –  |   |   |   | 419,490 |   |
| Cash and cash equivalents at beginning of period                   |   |     | 49,449   |   |     |   | 7,655   |          |   |   | 625,680       |   |   |         | –  |   |   |   | 682,784 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |     |   |   |   |   |   |
| Cash and cash equivalents at end of period                         |   | $        | 80,754   |   |     |   | 36,974  |          |   |   | 984,546       |   |   |         | –  |   |   | $ | 1,102,274 |   |

| Condensed Consolidating Statement of Cash Flows                    |   | Platinum |     |   | Platinum |   |    | Non-guarantor |   |   | Consolidating |   |   |         |    |
|--------------------------------------------------------------------|--------|----------|----------|--------|----------|--------|---------|---------------|--------|--------|---------------|--------|--------|--------------|---------|
| For the Six Months Ended June 30, 2009                        |   | Holdings |     |   | Finance  |   |    | Subsidiaries  |   |   | Adjustments   |   |   | Consolidated |    |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |
| Net cash provided by (used in) operating activities                |   | $        | (6,866   | )      |     |   | (9,448  | )             |   |   | 340,200       |   |   |         | – |   |   | $ | 323,886 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Investing Activities:                                              |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Proceeds from sale of available-for-sale securities                |   |     | –  |   |     |   | – |          |   |   | 368,546       |   |   |         | – |   |   |   | 368,546 |   |
| Purchase of subsidiary shares                                      |   |     | –  |   |     |   | – |          |   |   | (18,367       | )      |   |         | 18,367  |   |   |   | – |   |
| Proceeds from maturity or paydown of available-for-sale securities |   |     | –  |   |     |   | 668     |          |   |   | 295,418       |   |   |         | – |   |   |   | 296,086 |   |
| Acquisition of available-for-sale securities                       |   |     | –  |   |     |   | – |          |   |   | (1,301,166    | )      |   |         | – |   |   |   | (1,301,166 | ) |
| Acquisition of trading securities                                  |   |     | –  |   |     |   | – |          |   |   | (119,911      | )      |   |         | – |   |   |   | (119,911 | ) |
| Increase in short-term investments                                 |   |     | –  |   |     |   | – |          |   |   | 61,485        |   |   |         | – |   |   |   | 61,485 |   |
| Dividends from subsidiaries                                        |   |     | 65,000   |   |     |   | 20,000  |          |   |   | –       |   |   |         | (85,000 | ) |   |   | – |   |
| Net cash provided by (used in) investing activities                |   |     | 65,000   |   |     |   | 20,668  |          |   |   | (713,995      | )      |   |         | (66,633 | ) |   |   | (694,960 | ) |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Financing Activities:                                              |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Dividends paid to preferred shareholders                           |   |     | (2,602   | )      |     |   | – |          |   |   | –       |   |   |         | – |   |   |   | (2,602 | ) |
| Dividends paid to common shareholders                              |   |     | (8,288   | )      |     |   | – |          |   |   | (85,000       | )      |   |         | 85,000  |   |   |   | (8,288 | ) |
| Purchase of common shares                                          |   |     | (101,384 | )      |     |   | – |          |   |   | –       |   |   |         | – |   |   |   | (101,384 | ) |
| Proceeds from exercise of share options                            |   |     | 1,576    |   |     |   | – |          |   |   | –       |   |   |         | – |   |   |   | 1,576 |   |
| Proceeds from common share issuance                                |   |     | –  |   |     |   | 18,367  |          |   |   | –       |   |   |         | (18,367 | ) |   |   | – |   |
| Net cash provided be (used in) financing activities                |   |     | (110,698 | )      |     |   | 18,367  |          |   |   | (85,000       | )      |   |         | 66,633  |   |   |   | (110,698 | ) |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Effect of foreign currency exchange rate changes on cash           |   |     | –  |   |     |   | – |          |   |   | 4,692         |   |   |         | – |   |   |   | 4,692 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents               |   |     | (52,564  | )      |     |   | 29,587  |          |   |   | (454,103      | )      |   |         | – |   |   |   | (477,080 | ) |
| Cash and cash equivalents at beginning of period                   |   |     | 66,325   |   |     |   | 10,468  |          |   |   | 736,224       |   |   |         | – |   |   |   | 813,017 |   |
|                                                               |   |     |     |   |     |   |    |          |   |   |          |   |   |         |    |   |   |   |   |   |
| Cash and cash equivalents at end of period                         |   | $        | 13,761   |   |     |   | 40,055  |          |   |   | 282,121       |   |   |         | – |   |   | $ | 335,937 |   |

----

| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------------|

|                                                                                    |   | 2010   |    |   | 2009   |   |   | Increase (decrease) |   |
|-----------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|---------------------|--------|
|                                                                                    |   |   |    |   |   |   |   |                |   |
| Net income                                                                              |   | $      | 124,139 |   |   |   | 98,130 |                |   | $ | 26,009 |   |
| Weighted average shares outstanding used to calculate diluted earnings per common share |   |   | 46,249  |   |   |   | 51,594 |                |   |   | (5,345 | ) |
| Diluted earnings per common share                                                       |   | $      | 2.68    |   |   |   | 1.90   |                |   | $ | 0.78 |   |

----

|                                            |   |   |    |   |   |   |    |                |   |
|-------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|---------------------|--------|
|                                            |   | 2010   |    |   | 2009   |   |    | Increase (decrease) |   |
|                                            |   |   |    |   |   |   |    |                |   |
| Gross premiums written                          |   | $      | 83,967  |   |   |   | 120,498 |                |   | $ | (36,531 | ) |
| Ceded premiums written                          |   |   | 9,862   |   |   |   | 7,093   |                |   |   | 2,769 |   |
| Net premiums written                            |   |   | 74,105  |   |   |   | 113,405 |                |   |   | (39,300 | ) |
|                                            |   |   |    |   |   |   |    |                |   |   |   |   |
| Net premiums earned                             |   |   | 100,550 |   |   |   | 128,316 |                |   |   | (27,766 | ) |
| Net losses and LAE                              |   |   | 35,010  |   |   |   | 62,807  |                |   |   | (27,797 | ) |
| Net acquisition expenses                        |   |   | 17,218  |   |   |   | 13,526  |                |   |   | 3,692 |   |
| Other underwriting expenses                     |   |   | 7,720   |   |   |   | 9,123   |                |   |   | (1,403 | ) |
| Property and Marine segment underwriting income |   | $      | 40,602  |   |   |   | 42,860  |                |   | $ | (2,258 | ) |
|                                            |   |   |    |   |   |   |    |                |   |   |   |   |
| Ratios:                                         |   |   |    |   |   |   |    |                |   |   |   |   |
| Net loss and LAE                                |   |   | 34.8    | %      |   |   | 48.9    | %                   |   | (14.1) points |   |
| Net acquisition expense                         |   |   | 17.1    | %      |   |   | 10.5    | %                   |   | 6.6 points |   |
| Other underwriting expense                      |   |   | 7.7     | %      |   |   | 7.1     | %                   |   | 0.6 points |   |
| Combined                                        |   |   | 59.6    | %      |   |   | 66.5    | %                   |   | (6.9) points |   |

----

|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
|-----------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|---------|--------------|--------|--------|-----------------|--------|
| Class of Business                             |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |    | Net Premiums |   |   | Net Development |   |
|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
| Property per risk excess-of-loss              |   | $                  | 3,596  |   |                    |   | 434     |         |   |   | 93              |   |   | $ | 4,123 |   |
| Catastrophe excess-of-loss (non-major events) |   |               | 5,087  |   |                    |   | 458     |         |   |   | 383             |   |   |   | 5,928 |   |
| Crop                                          |   |               | 10,806 |   |                    |   | (3,464  | )            |   |   | –         |   |   |   | 7,342 |   |
| Major catastrophes                            |   |               | (691   | )      |                    |   | – |         |   |   | (1,874          | )      |   |   | (2,565 | ) |
| Other property                                |   |               | 979    |   |                    |   | (427    | )            |   |   | 70              |   |   |   | 622 |   |
| Total                                         |   | $                  | 19,777 |   |                    |   | (2,999  | )            |   |   | (1,328          | )      |   | $ | 15,450 |   |

|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
|-----------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|---------|--------------|--------|--------|-----------------|--------|
| Class of Business                             |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |    | Net Premiums |   |   | Net Development |   |
|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
| Property per risk excess-of-loss              |   | $                  | 4,999  |   |                    |   | (23     | )            |   |   | 318             |   |   | $ | 5,294 |   |
| Catastrophe excess-of-loss (non-major events) |   |               | 1,485  |   |                    |   | 94      |         |   |   | 95              |   |   |   | 1,674 |   |
| Major catastrophes                            |   |               | (1,112 | )      |                    |   | – |         |   |   | 1,338           |   |   |   | 226 |   |
| Crop                                          |   |               | (4,860 | )      |                    |   | 5,200   |         |   |   | –         |   |   |   | 340 |   |
| Marine, aviation and satellite                |   |               | (2,294 | )      |                    |   | 291     |         |   |   | 203             |   |   |   | (1,800 | ) |
| Other                                         |   |               | 735    |   |                    |   | (254    | )            |   |   | –         |   |   |   | 481 |   |
| Total                                         |   | $                  | (1,047 | )      |                    |   | 5,308   |         |   |   | 1,954           |   |   | $ | 6,215 |   |

----

|                                 |   |   |   |   |   |   |   |                |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------------------|--------|
|                                 |   | 2010   |   |   | 2009   |   |   | Increase (decrease) |   |
|                                 |   |   |   |   |   |   |   |                |   |
| Net premiums written                 |   | $      | 72,628 |   |   |   | 87,459 |                |   | $ | (14,831 | ) |
|                                 |   |   |   |   |   |   |   |                |   |   |   |   |
| Net premiums earned                  |   |   | 85,166 |   |   |   | 99,161 |                |   |   | (13,995 | ) |
| Net losses and LAE                   |   |   | 40,058 |   |   |   | 61,042 |                |   |   | (20,984 | ) |
| Net acquisition expenses             |   |   | 18,752 |   |   |   | 20,406 |                |   |   | (1,654 | ) |
| Other underwriting expenses          |   |   | 5,654  |   |   |   | 6,130  |                |   |   | (476 | ) |
| Casualty segment underwriting income |   | $      | 20,702 |   |   |   | 11,583 |                |   | $ | 9,119 |   |
|                                 |   |   |   |   |   |   |   |                |   |   |   |   |
| Ratios:                              |   |   |   |   |   |   |   |                |   |   |   |   |
| Net loss and LAE                     |   |   | 47.0   | %      |   |   | 61.6   | %                   |   | (14.6) points |   |
| Net acquisition expense              |   |   | 22.0   | %      |   |   | 20.6   | %                   |   | 1.4 points |   |
| Other underwriting expense           |   |   | 6.6    | %      |   |   | 6.2    | %                   |   | 0.4 points |   |
| Combined                             |   |   | 75.6   | %      |   |   | 88.4   | %                   |   | (12.8) points |   |

|                                     |   |               |   |   |                    |   |   |         |   |   |            |   |
|------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|--------|--------------|--------|--------|-----------------|--------|
| Class of Business                        |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |   | Net Premiums |   |   | Net Development |   |
|                                     |   |               |   |   |                    |   |   |         |   |   |            |   |
| North American claims made               |   | $                  | 12,487 |   |                    |   | 5      |         |   |   | –         |   |   | $ | 12,492 |   |
| North American occurrence excess-of-loss |   |               | 7,340  |   |                    |   | (124   | )            |   |   | –         |   |   |   | 7,216 |   |
| North American umbrella                  |   |               | 2,427  |   |                    |   | (3     | )            |   |   | –         |   |   |   | 2,424 |   |
| Accident and health                      |   |               | 728    |   |                    |   | 295    |         |   |   | –         |   |   |   | 1,023 |   |
| Other                                    |   |               | (364   | )      |                    |   | 475    |         |   |   | 136             |   |   |   | 247 |   |
| Total                                    |   | $                  | 22,618 |   |                    |   | 648    |         |   |   | 136             |   |   | $ | 23,402 |   |

----

|                                      |   |               |   |   |                    |   |   |         |   |   |            |   |
|-------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|--------|--------------|--------|--------|-----------------|--------|
| Class of Business                         |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |   | Net Premiums |   |   | Net Development |   |
|                                      |   |               |   |   |                    |   |   |         |   |   |            |   |
| North American excess-of-loss claims made |   | $                  | 8,412  |   |                    |   | 545    |         |   |   | –         |   |   | $ | 8,957 |   |
| North American clash                      |   |               | 2,635  |   |                    |   | (4     | )            |   |   | 295             |   |   |   | 2,926 |   |
| International casualty                    |   |               | 2,028  |   |                    |   | (119   | )            |   |   | 62              |   |   |   | 1,971 |   |
| North American occurrence excess-of-loss  |   |               | 2,467  |   |                    |   | (533   | )            |   |   | 32              |   |   |   | 1,966 |   |
| North American umbrella                   |   |               | (2,941 | )      |                    |   | 4,176  |         |   |   | –         |   |   |   | 1,235 |   |
| Other                                     |   |               | 870    |   |                    |   | (145   | )            |   |   | 61              |   |   |   | 786 |   |
| Total                                     |   | $                  | 13,471 |   |                    |   | 3,920  |         |   |   | 450             |   |   | $ | 17,841 |   |

|                                           |   |   |   |   |   |   |   |                |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------------------|--------|
|                                           |   | 2010   |   |   | 2009   |   |   | Increase (decrease) |   |
|                                           |   |   |   |   |   |   |   |                |   |
| Net premiums written                           |   | $      | 4,985  |   |   |   | 7,253  |                |   | $ | (2,268 | ) |
|                                           |   |   |   |   |   |   |   |                |   |   |   |   |
| Net premiums earned                            |   |   | 5,716  |   |   |   | 4,985  |                |   |   | 731 |   |
|                                           |   |   |   |   |   |   |   |                |   |   |   |   |
| Net losses and LAE                             |   |   | (3,593 | )      |   |   | 1,096  |                |   |   |   |   |
| Net acquisition expenses                       |   |   | 8,118  |   |   |   | 4,406  |                |   |   |   |   |
| Net losses, LAE and acquisition expenses       |   |   | 4,525  |   |   |   | 5,502  |                |   |   | (977 | ) |
| Other underwriting expenses                    |   |   | 313    |   |   |   | 400    |                |   |   | (87 | ) |
| Finite Risk segment underwriting income (loss) |   | $      | 878    |   |   |   | (917   | )                   |   | $ | 1,795 |   |
|                                           |   |   |   |   |   |   |   |                |   |   |   |   |
| Ratios:                                        |   |   |   |   |   |   |   |                |   |   |   |   |
| Net loss and LAE                               |   |   | (62.9  | %)     |   |   | 22.0   | %                   |   |   |   |   |
| Net acquisition expense                        |   |   | 142.0  | %      |   |   | 88.4   | %                   |   |   |   |   |
| Net loss, LAE and acquisition expense ratios   |   |   | 79.1   | %      |   |   | 110.4  | %                   |   | (31.3) points |   |
| Other underwriting expense                     |   |   | 5.5    | %      |   |   | 8.0    | %                   |   | (2.5) points |   |
| Combined                                       |   |   | 84.6   | %      |   |   | 118.4  | %                   |   | (33.8) points |   |

----

|                                             |   |   |   |   |   |   |   |       |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
|                                             |   | 2010   |   |   | 2009   |   |   | Net change |   |
|                                             |   |   |   |   |   |   |   |       |   |
| Gross realized gains on the sale of investments  |   | $      | 54,249 |   |   |   | 8,155  |       |   | $ | 46,094 |   |
| Gross realized losses on the sale of investments |   |   | (6,358 | )      |   |   | (156   | )          |   |   | (6,202 | ) |
| Net realized gains on the sale of investments    |   |   | 47,891 |   |   |   | 7,999  |       |   |   | 39,892 |   |
| Mark-to-market adjustments on trading securities |   |   | 1,598  |   |   |   | 2,795  |       |   |   | (1,197 | ) |
| Net realized gains on investments                |   | $      | 49,489 |   |   |   | 10,794 |       |   | $ | 38,695 |   |

----

|                                                                                    |   |   |    |   |   |   |    |     |   |
|-----------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|----------|--------|
|                                                                                    |   | 2010   |    |   | 2009   |   |    | Decrease |   |
|                                                                                    |   |   |    |   |   |   |    |     |   |
| Net income                                                                              |   | $      | 139,560 |   |   |   | 183,052 |     |   | $ | 43,492 |   |
| Weighted average shares outstanding used to calculate diluted earnings per common share |   |   | 47,365  |   |   |   | 52,744  |     |   |   | 5,379 |   |
| Diluted earnings per common share                                                       |   | $      | 2.95    |   |   |   | 3.47    |     |   | $ | 0.52 |   |

|                                            |   |   |    |   |   |   |    |               |   |
|-------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------------------|--------|
|                                            |   | 2010   |    |   | 2009   |   |    | Increase(decrease) |   |
|                                            |   |   |    |   |   |   |    |               |   |
| Gross premiums written                          |   | $      | 236,512 |   |   |   | 265,933 |               |   | $ | (29,421 | ) |
| Ceded premiums written                          |   |   | 15,622  |   |   |   | 10,793  |               |   |   | 4,829 |   |
| Net premiums written                            |   |   | 220,890 |   |   |   | 255,140 |               |   |   | (34,250 | ) |
|                                            |   |   |    |   |   |   |    |               |   |   |   |   |
| Net premiums earned                             |   |   | 228,356 |   |   |   | 261,987 |               |   |   | (33,631 | ) |
| Net losses and LAE                              |   |   | 161,637 |   |   |   | 140,258 |               |   |   | 21,379 |   |
| Net acquisition expenses                        |   |   | 33,449  |   |   |   | 30,890  |               |   |   | 2,559 |   |
| Other underwriting expenses                     |   |   | 16,419  |   |   |   | 17,282  |               |   |   | (863 | ) |
| Property and Marine segment underwriting income |   | $      | 16,851  |   |   |   | 73,557  |               |   | $ | (56,706 | ) |
|                                            |   |   |    |   |   |   |    |               |   |   |   |   |
| Ratios:                                         |   |   |    |   |   |   |    |               |   |   |   |   |
| Net loss and LAE                                |   |   | 70.8    | %      |   |   | 53.5    | %                  |   | 17.3 points |   |
| Net acquisition expense                         |   |   | 14.6    | %      |   |   | 11.8    | %                  |   | 2.8 points |   |
| Other underwriting expense                      |   |   | 7.2     | %      |   |   | 6.6     | %                  |   | 0.6 points |   |
| Combined                                        |   |   | 92.6    | %      |   |   | 71.9    | %                  |   | 20.7 points |   |

----

|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
|-----------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|---------|--------------|--------|--------|-----------------|--------|
| Class of Business                             |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |    | Net Premiums |   |   | Net Development |   |
|                                          |   |               |   |   |                    |   |    |         |   |   |            |   |
| Property per risk excess-of-loss              |   | $                  | 12,950 |   |                    |   | (71     | )            |   |   | 164             |   |   | $ | 13,043 |   |
| Catastrophe excess-of-loss (non-major events) |   |               | 7,452  |   |                    |   | 351     |         |   |   | 524             |   |   |   | 8,327 |   |
| Crop                                          |   |               | 14,724 |   |                    |   | (3,463  | )            |   |   | –         |   |   |   | 11,261 |   |
| Property proportional                         |   |               | 2,928  |   |                    |   | (418    | )            |   |   | –         |   |   |   | 2,510 |   |
| Marine, aviation and satellite                |   |               | 1,059  |   |                    |   | (253    | )            |   |   | 301             |   |   |   | 1,107 |   |
| Major catastrophes                            |   |               | (691   | )      |                    |   | – |         |   |   | (1,466          | )      |   |   | (2,157 | ) |
| Total                                         |   | $                  | 38,422 |   |                    |   | (3,854  | )            |   |   | (477            | )      |   | $ | 34,091 |   |

|                                          |   |               |    |   |                    |   |    |         |   |   |            |   |
|-----------------------------------------------|--------|--------------------|---------|--------|-------------------------|--------|---------|--------------|--------|--------|-----------------|--------|
| Class of Business                             |   | Net Losses and LAE |    |   | Net Acquisition Expense |   |    | Net Premiums |   |   | Net Development |   |
|                                          |   |               |    |   |                    |   |    |         |   |   |            |   |
| Property per risk excess-of-loss              |   | $                  | 7,699   |   |                    |   | (249    | )            |   |   | 322             |   |   | $ | 7,772 |   |
| Catastrophe excess-of-loss (non-major events) |   |               | 8,055   |   |                    |   | 912     |         |   |   | 252             |   |   |   | 9,219 |   |
| Major catastrophes                            |   |               | (3,528  | )      |                    |   | – |         |   |   | 1,698           |   |   |   | (1,830 | ) |
| Crop                                          |   |               | (10,583 | )      |                    |   | 5,105   |         |   |   | –         |   |   |   | (5,478 | ) |
| Marine, aviation and satellite                |   |               | (5,730  | )      |                    |   | 214     |         |   |   | 690             |   |   |   | (4,826 | ) |
| Other                                         |   |               | 1,556   |   |                    |   | (283    | )            |   |   | –         |   |   |   | 1,273 |   |
| Total                                         |   | $                  | (2,531  | )      |                    |   | 5,699   |         |   |   | 2,962           |   |   | $ | 6,130 |   |

----

|                                 |   |   |    |   |   |   |    |                |   |
|--------------------------------------|--------|--------|---------|--------|--------|--------|---------|---------------------|--------|
|                                 |   | 2010   |    |   | 2009   |   |    | Increase (decrease) |   |
|                                 |   |   |    |   |   |   |    |                |   |
| Net premiums written                 |   | $      | 166,379 |   |   |   | 185,473 |                |   | $ | (19,094 | ) |
|                                 |   |   |    |   |   |   |    |                |   |   |   |   |
| Net premiums earned                  |   |   | 173,068 |   |   |   | 209,121 |                |   |   | (36,053 | ) |
| Net losses and LAE                   |   |   | 71,588  |   |   |   | 120,183 |                |   |   | (48,595 | ) |
| Net acquisition expenses             |   |   | 36,479  |   |   |   | 46,627  |                |   |   | (10,148 | ) |
| Other underwriting expenses          |   |   | 12,124  |   |   |   | 11,799  |                |   |   | 325 |   |
| Casualty segment underwriting income |   | $      | 52,877  |   |   |   | 30,512  |                |   | $ | 22,365 |   |
|                                 |   |   |    |   |   |   |    |                |   |   |   |   |
| Ratios:                              |   |   |    |   |   |   |    |                |   |   |   |   |
| Net loss and LAE                     |   |   | 41.4    | %      |   |   | 57.5    | %                   |   | (16.1) points |   |
| Net acquisition expense              |   |   | 21.1    | %      |   |   | 22.3    | %                   |   | (1.2) points |   |
| Other underwriting expense           |   |   | 7.0     | %      |   |   | 5.6     | %                   |   | 1.4 points |   |
| Combined                             |   |   | 69.5    | %      |   |   | 85.4    | %                   |   | (15.9) points |   |

|                                     |   |               |   |   |                    |   |   |         |   |   |            |   |
|------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|--------|--------------|--------|--------|-----------------|--------|
| Class of Business                        |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |   | Net Premiums |   |   | Net Development |   |
|                                     |   |               |   |   |                    |   |   |         |   |   |            |   |
| North American claims made               |   | $                  | 23,521 |   |                    |   | 2,271  |         |   |   | –         |   |   | $ | 25,792 |   |
| North American occurrence excess-of-loss |   |               | 24,680 |   |                    |   | (249   | )            |   |   | 7               |   |   |   | 24,438 |   |
| North American umbrella                  |   |               | 5,876  |   |                    |   | (2     | )            |   |   | –         |   |   |   | 5,874 |   |
| Financial lines                          |   |               | 1,831  |   |                    |   | 23     |         |   |   | 65              |   |   |   | 1,919 |   |
| International casualty                   |   |               | (1,310 | )      |                    |   | 289    |         |   |   | 223             |   |   |   | (798 | ) |
| Accident and health                      |   |               | 1,671  |   |                    |   | 1,173  |         |   |   | –         |   |   |   | 2,844 |   |
| Other                                    |   |               | (309   | )      |                    |   | 61     |         |   |   | 135             |   |   |   | (113 | ) |
| Total                                    |   | $                  | 55,960 |   |                    |   | 3,566  |         |   |   | 430             |   |   | $ | 59,956 |   |

----

|                                      |   |               |   |   |                    |   |   |         |   |   |            |   |
|-------------------------------------------|--------|--------------------|--------|--------|-------------------------|--------|--------|--------------|--------|--------|-----------------|--------|
| Class of Business                         |   | Net Losses and LAE |   |   | Net Acquisition Expense |   |   | Net Premiums |   |   | Net Development |   |
|                                      |   |               |   |   |                    |   |   |         |   |   |            |   |
| North American excess-of-loss claims made |   | $                  | 15,343 |   |                    |   | 434    |         |   |   | –         |   |   | $ | 15,777 |   |
| North American clash                      |   |               | 1,619  |   |                    |   | (29    | )            |   |   | 227             |   |   |   | 1,817 |   |
| International casualty                    |   |               | 1,525  |   |                    |   | (229   | )            |   |   | 139             |   |   |   | 1,435 |   |
| North American occurrence excess-of-loss  |   |               | 13,764 |   |                    |   | (434   | )            |   |   | 73              |   |   |   | 13,403 |   |
| North American umbrella                   |   |               | 3,661  |   |                    |   | 4,145  |         |   |   | –         |   |   |   | 7,806 |   |
| Other                                     |   |               | 697    |   |                    |   | (256   | )            |   |   | (595            | )      |   |   | (154 | ) |
| Total                                     |   | $                  | 36,609 |   |                    |   | 3,631  |         |   |   | (156            | )      |   | $ | 40,084 |   |

|                                         |   |   |   |   |   |   |   |                |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------------------|--------|
|                                         |   | 2010   |   |   | 2009   |   |   | Increase (decrease) |   |
|                                         |   |   |   |   |   |   |   |                |   |
| Net premiums written                         |   | $      | 11,876 |   |   |   | 12,776 |                |   | $ | (900 | ) |
|                                         |   |   |   |   |   |   |   |                |   |   |   |   |
| Net premiums earned                          |   |   | 10,186 |   |   |   | 9,106  |                |   |   | 1,080 |   |
|                                         |   |   |   |   |   |   |   |                |   |   |   |   |
| Net losses and LAE                           |   |   | 2,818  |   |   |   | 8,668  |                |   |   |   |   |
| Net acquisition expenses                     |   |   | 11,489 |   |   |   | 977    |                |   |   |   |   |
| Net losses, LAE and acquisition expenses     |   |   | 14,307 |   |   |   | 9,645  |                |   |   | 4,662 |   |
| Other underwriting expenses                  |   |   | 651    |   |   |   | 700    |                |   |   | (49 | ) |
| Finite Risk segment underwriting loss        |   | $      | (4,772 | )      |   |   | (1,239 | )                   |   | $ | (3,533 | ) |
|                                         |   |   |   |   |   |   |   |                |   |   |   |   |
| Ratios:                                      |   |   |   |   |   |   |   |                |   |   |   |   |
| Net loss and LAE                             |   |   | 27.7   | %      |   |   | 95.2   | %                   |   |   |   |   |
| Net acquisition expense                      |   |   | 112.8  | %      |   |   | 10.7   | %                   |   |   |   |   |
| Net loss, LAE and acquisition expense ratios |   |   | 140.5  | %      |   |   | 105.9  | %                   |   | 34.6 points |   |
| Other underwriting expense                   |   |   | 6.4    | %      |   |   | 7.7    | %                   |   | (1.3) points |   |
| Combined                                     |   |   | 146.9  | %      |   |   | 113.6  | %                   |   | 33.3 points |   |

----

|                                             |   |   |   |   |   |   |   |       |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
|                                             |   | 2010   |   |   | 2009   |   |   | Net change |   |
|                                             |   |   |   |   |   |   |   |       |   |
| Gross realized gains on the sale of investments  |   | $      | 58,962 |   |   |   | 30,317 |       |   | $ | 28,645 |   |
| Gross realized losses on the sale of investments |   |   | (6,360 | )      |   |   | (549   | )          |   |   | (5,811 | ) |
| Net realized gains on the sale of investments    |   |   | 52,602 |   |   |   | 29,768 |       |   |   | 22,834 |   |
| Mark-to-market adjustments on trading securities |   |   | 2,344  |   |   |   | 1,596  |       |   |   | 748 |   |
| Net realized gains on investments                |   | $      | 54,946 |   |   |   | 31,364 |       |   | $ | 23,582 |   |

----

|                                                          |   | Fair Value |      |   | Net Unrealized Gain (Loss) |   |    | Average Credit Quality |   |
|---------------------------------------------------------------|--------|------------|-----------|--------|----------------------------|--------|---------|------------------------|--------|
|                                                          |   |       |      |   |                       |   |    |                   |   |
| Available-for-sale securities:                                |   |       |      |   |                       |   |    |                   |   |
| U.S. Government                                               |   | $          | 1,056,045 |   |                       | $      | 21,849  |                   |   | Aaa |   |
| U.S. Government agencies                                      |   |       | 100,893   |   |                       |   | 893     |                   |   | Aaa |   |
| Corporate bonds:                                              |   |       |      |   |                       |   |    |                   |   |   |   |
| Industrial                                                    |   |       | 310,355   |   |                       |   | 15,974  |                   |   |  A3 |   |
| Finance                                                       |   |       | 15,236    |   |                       |   | (1,407  | )                      |   | Baa2 |   |
| Utilities                                                     |   |       | 66,391    |   |                       |   | 3,006   |                   |   |  A3 |   |
| Insurance                                                     |   |       | 57,243    |   |                       |   | 3,020   |                   |   |  A3 |   |
| Preferreds with maturity date                                 |   |       | 23,221    |   |                       |   | (3,294  | )                      |   | Baa2 |   |
| Mortgage-backed and asset-backed securities:                  |   |       |      |   |                       |   |    |                   |   |   |   |   |
| Commercial mortgage-backed securities                         |   |       | 217,300   |   |                       |   | (106    | )                      |   | Aa2 |   |
| U.S. Government agency residential mortgage-backed securities |   |       | 93,620    |   |                       |   | 3,813   |                   |   | Aaa |   |
| Non-agency residential mortgage-backed securities             |   |       | 89,117    |   |                       |   | (38,894 | )                      |   | Ba2 |   |
| Alt-A residential mortgage-backed securities                  |   |       | 7,076     |   |                       |   | (6,319  | )                      |   | Caa2 |   |
| Sub-prime asset-backed securities                             |   |       | 9,815     |   |                       |   | (11,852 | )                      |   |  B2 |   |
| Asset-backed securities                                       |   |       | 19,595    |   |                       |   | (331    | )                      |   | Aaa |   |
| Municipal bonds                                               |   |       | 1,029,585 |   |                       |   | 37,435  |                   |   | Aa2 |   |
| Non-U.S. governments                                          |   |       | 76,967    |   |                       |   | 1,709   |                   |   | Aa1 |   |
| Total fixed maturity available-for-sale securities            |   |       | 3,172,459 |   |                       |   | 25,496  |                   |   | Aa2 |   |
| Preferred stocks                                              |   |       | 2,090     |   |                       |   | 1,278   |                   |   | Ba3 |   |
| Total available-for-sale securities                           |   |       | 3,174,549 |   |                       |   | 26,774  |                   |   | Aa2 |   |
|                                                          |   |       |      |   |                       |   |    |                   |   |   |   |   |
| Trading securities:                                           |   |       |      |   |                       |   |    |                   |   |   |   |   |
| Insurance-linked securities                                   |   |       | 25,901    |   |                       |   | n/a     |                   |   | Ba3 |   |
| U.S. Government agencies                                      |   |       | 15,254    |   |                       |   | n/a     |                   |   | Aaa |   |
| Corporate bonds                                               |   |       | 64        |   |                       |   | n/a     |                   |   | Baa2 |   |
| Non-U.S. governments                                          |   |       | 120,146   |   |                       |   | n/a     |                   |   | Aaa |   |
| Total trading securities                                      |   |       | 161,365   |   |                       |   | n/a     |                   |   | Aa2 |   |
| Short-term investments                                        |   |       | 89,825    |   |                       |   | n/a     |                   |   | Aaa |   |
| Total investments                                             |   | $          | 3,425,739 |   |                       | $      | 26,774  |                   |   | Aa2 |   |

----

----

|   | • | severe catastrophic events over which we have no control; |
|--------|---------|-----------------------------------------------------------|

|   | • | the effectiveness of our loss limitation methods and pricing models; |
|--------|---------|----------------------------------------------------------------------|

|   | • | the adequacy of our liability for unpaid losses and loss adjustment expenses; |
|--------|---------|-------------------------------------------------------------------------------|

|   | • | our ability to maintain our A.M. Best and S&P ratings; |
|--------|---------|------------------------------------------------------------|

|   | • | our ability to raise capital on acceptable terms if necessary; |
|--------|---------|----------------------------------------------------------------|

|   | • | the cyclicality of the property and casualty reinsurance business; |
|--------|---------|--------------------------------------------------------------------|

|   | • | the highly competitive nature of the property and casualty reinsurance industry; |
|--------|---------|----------------------------------------------------------------------------------|

|   | • | our ability to maintain our business relationships with reinsurance brokers; |
|--------|---------|------------------------------------------------------------------------------|

|   | • | the availability of retrocessional reinsurance on acceptable terms; |
|--------|---------|---------------------------------------------------------------------|

|   | • | market volatility and interest rate and currency exchange rate fluctuation; |
|--------|---------|-----------------------------------------------------------------------------|

|   | • | tax, regulatory or legal restrictions or limitations applicable to us or the property and casualty reinsurance business generally; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------|

|   | • | general political and economic conditions, including the effects of civil unrest, acts of terrorism, war or a prolonged United States or global economic downturn or recession; and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

----

|                                      |   | Interest Rate Shift in Basis Points |      |
|-------------------------------------------|--------|-------------------------------------|-----------|
|                                      |   |                                | - 100bp   |   |   |   | - 50bp |   |   | Current |   |   |   | + 50bp |   |   |   | + 100bp |   |
|                                      |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total market value                        |   | $                                   | 3,509,506 |   |   |   | 3,422,081 |   |   |   | 3,333,824 |   |   |   | 3,248,140 |   |   | $ | 3,165,409 |   |
|                                      |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Percent change in market value            |   |                                | 5.3       | % |   |   | 2.6 | % |   |   | – |   |   |   | (2.6 | %) |   |   | (5.1 | %) |
|                                      |   |                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Resulting net appreciation (depreciation) |   | $                                   | 209,637   |   |   |   | 122,212 |   |   |   | 33,955 |   |   |   | (51,729 | ) |   | $ | (134,460 | ) |

| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

----

| ITEM 2.  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|---------------|-------------------------------------------------------------|

| Period                                    |   | Total Number of Shares Purchased |      |   | Average Price Paid per Share (1) |   |   | Total Number of Shares Purchased as Part of a Publicly Announced Program (2) |   |   | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program |   |
|-------------------------------------------|--------|----------------------------------|-----------|--------|----------------------------------|--------|--------|------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------|--------|
|                                      |   |                             |      |   |                             |   |   |                                                                         |   |   |                                                                       |   |
| April 1, 2010 – April 30, 2010 |   |                             | 106,700   |   |                             | $      | 37.10  |                                                                         |   |   | 106,700                                                                    |   |   | $ | 246,041,025 |   |
| May 1, 2010 – May 31, 2010     |   |                             | 2,663,700 |   |                             |   | 36.98  |                                                                         |   |   | 2,663,700                                                                  |   |   |   | 147,544,789 |   |
| June 1, 2010 – June 30, 2010   |   |                             | 1,299,040 |   |                             |   | 36.29  |                                                                         |   |   | 1,299,040                                                                  |   |   |   | 100,399,063 |   |
| Total                                     |   |                             | 4,069,440 |   |                             | $      | 36.76  |                                                                         |   |   | 4,069,440                                                                  |   |   | $ | 100,399,063 |   |

| (1) | Including commissions. |
|-----|------------------------|

| (2) | On August 4, 2004, our board of directors established a program authorizing the repurchase of our common shares.  Since that date, our board of directors has approved increases in the repurchase program from time to time, most recently on July 22, 2010, to result in authority as of such date to repurchase up to a total of $250.0 million of our common shares. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 6. | EXHIBITS |
|---------|----------|

| Exhibit Number |   | Description                                                                                                                                                                                                                                                            |
|----------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                                                                   |
| 10.1*          |   | Amended and Restated Employment Agreement dated July 22, 2010 between the Company and Michael D. Price. (1)                                                                                                                                                            |   |
| 10.2*          |   | Amended and Restated Employment Agreement dated July 22, 2010 between the Company and Michael E. Lombardozzi and Letter Agreement dated September 1, 2011 between Platinum Administrative Services, Inc. and Michael E. Lombardozzi attached as Exhibit B thereto. (1) |   |
| 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 Allan C. Decleir, 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 Allan C. Decleir, 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.                                                                             |   |

|                     | Platinum Underwriters Holdings, Ltd. |                                                                |
|--------------------------|--------------------------------------|---------------------------------------------------------------------|
|                     |                                 |                                                                |   |
| Date: July 26, 2010 | By:                                  | /s/  Michael D. Price                                     |   |
|                     |                                 | Michael D. Price                                                    |   |
|                     |                                 | President and Chief Executive Officer (Principal Executive Officer) |
|                     |                                 |                                                                |   |

| Date: July 26, 2010 | By:    | /s/  Allan C. Decleir                                                                   |   |
|---------------------|--------|---------------------------------------------------------------------------------------------------|--------|
|                |   | Allan C. Decleir                                                                                  |   |
|                |   | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
|                |   |                                                                                              |   |