##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended March 31, 2006
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number 001-31341
 Platinum Underwriters Holdings, Ltd.
  Bermuda
    
    98-0416483(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 The Belvedere Building69 Pitts Bay RoadPembroke, Bermuda
    
    HM 08(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
 o þ




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##### 



PagePART I  FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial StatementsConsolidated Balance Sheets as of March 31, 2006 (Unaudited) and
December 31, 2005
    
    1Consolidated Statements of Income and Comprehensive Income for the
Three Months Ended March 31, 2006 and 2005 (Unaudited)
    
    2Consolidated Statements of Changes in Shareholders Equity for the
Three Months Ended March 31, 2006 and 2005 (Unaudited)
    
    3Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2006 and 2005 (Unaudited)
    
    4Notes to Condensed Consolidated Financial Statements (Unaudited) for the
Three Months ended March 31, 2006 and 2005
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations for the Three Months Ended March 31, 2006 and 2005
    
    19Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    37Item 4. Controls and Procedures
    
    39PART II  OTHER INFORMATIONItem 6. Exhibits
    
    40SIGNATURES
    
    41EX-3.II.1: BY-LAWS OF PLATINUM HOLDINGSEX-10.1: AMENDED AND RESTATED QUOTA SHARE RETROCESSION AGREEMENTEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
 (Unaudited)March 31,
    
    
    December 31,2006
    
    
    2005ASSETSInvestments:Fixed maturity available-for-sale securities at fair value
(amortized cost  $3,208,066 and $2,936,152, respectively)
    
    $
    3,121,500
    
    
    $
    2,888,922Fixed maturity trading securities at fair value
(amortized cost  $101,832 and $99,141, respectively)
    
    
    99,821
    
    
    
    98,781Preferred stocks (cost  $8,735 and $8,735, respectively)
    
    
    8,169
    
    
    
    8,186Other invested asset
    
    
    5,000
    
    
    
    5,000Short-term investments
    
    
    80,609
    
    
    
    8,793Total investments
    
    
    3,315,099
    
    
    
    3,009,682Cash and cash equivalents
    
    
    570,030
    
    
    
    820,746Accrued investment income
    
    
    29,581
    
    
    
    29,230Reinsurance premiums receivable
    
    
    517,429
    
    
    
    567,449Reinsurance recoverable on ceded losses and loss adjustment expenses
    
    
    61,528
    
    
    
    68,210Prepaid reinsurance premiums
    
    
    30,860
    
    
    
    7,899Funds held by ceding companies
    
    
    266,541
    
    
    
    291,629Deferred acquisition costs
    
    
    105,699
    
    
    
    130,800Income tax recoverable
    
    
    10,600
    
    
    
    24,522Deferred tax assets
    
    
    36,723
    
    
    
    31,934Due from investment broker
    
    
    187
    
    
    
    157,930Other assets
    
    
    11,940
    
    
    
    14,344Total assets
    
    $
    4,956,217
    
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesUnpaid losses and loss adjustment expenses
    
    $
    2,371,916
    
    
    $
    2,323,990Unearned premiums
    
    
    474,433
    
    
    
    502,018Reinsurance deposit liabilities
    
    
    6,041
    
    
    
    6,048Debt obligations
    
    
    292,840
    
    
    
    292,840Ceded premiums payable
    
    
    38,106
    
    
    
    22,544Commissions payable
    
    
    142,826
    
    
    
    186,654Deferred tax liabilities
    
    
    960
    
    
    
    118Due to investment broker
    
    
    16,902
    
    
    
    259,834Other liabilities
    
    
    34,355
    
    
    
    20,080Total liabilities
    
    
    3,378,379
    
    
    
    3,614,126Shareholders EquityPreferred shares, $.01 par value, 25,000,000 shares authorized,
5,750,000 shares issued and outstanding
    
    
    57
    
    
    
    57Common shares, $.01 par value, 200,000,000 shares authorized,
59,190,300 and 59,126,675 shares issued and outstanding,
respectively
    
    
    592
    
    
    
    590Additional paid-in capital
    
    
    1,528,020
    
    
    
    1,527,316Unearned share grant compensation
    
    
    
    
    
    
    (2,467
    )Accumulated other comprehensive loss
    
    
    (76,029
    )
    
    
    (40,718
    )Retained earnings
    
    
    125,198
    
    
    
    55,471Total shareholders equity
    
    
    1,577,838
    
    
    
    1,540,249Total liabilities and shareholders equity
    
    $
    4,956,217
    
    
    $
    5,154,375
  -1-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
  2006
    
    
    2005Revenue:Net premiums earned
    
    $
    344,301
    
    
    $
    411,040Net investment income
    
    
    43,515
    
    
    
    26,905Net realized gains on investments
    
    
    65
    
    
    
    372Other income (expense), net
    
    
    (1,317
    )
    
    
    (356
    )Total revenue
    
    
    386,564
    
    
    
    437,961Expenses:Losses and loss adjustment expenses
    
    
    206,774
    
    
    
    237,698Acquisition expenses
    
    
    69,239
    
    
    
    93,249Operating expenses
    
    
    22,988
    
    
    
    20,008Net foreign currency exchange losses (gains)
    
    
    (275
    )
    
    
    1,798Interest expense
    
    
    5,450
    
    
    
    2,173Total expenses
    
    
    304,176
    
    
    
    354,926Income before income tax expense
    
    
    82,388
    
    
    
    83,035Income tax expense
    
    
    5,352
    
    
    
    9,947Net income
    
    
    77,036
    
    
    
    73,088Preferred dividends
    
    
    2,576
    
    
    
    Net income available to common shareholders
    
    $
    74,460
    
    
    $
    73,088Earnings per common share:Basic earnings per common share
    
    $
    1.26
    
    
    $
    1.69Diluted earnings per common share
    
    $
    1.16
    
    
    $
    1.49Comprehensive income:Net income
    
    $
    77,036
    
    
    $
    73,088Other comprehensive income:Net change in unrealized gains and losses on
available-for-sale securities, net of deferred tax
    
    
    (35,315
    )
    
    
    (34,629
    )Cumulative translation adjustments, net of deferred tax
    
    
    4
    
    
    
    9Comprehensive income
    
    $
    41,725
    
    
    $
    38,468Shareholder dividends:Preferred dividends declared
    
    $
    2,012
    
    
    
    Preferred dividends declared per share
    
    
    0.35
    
    
    
    Common dividends declared
    
    
    4,733
    
    
    $
    3,449Common dividends declared per share
    
    $
    0.08
    
    
    $
    0.08
  -2-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
  2006
    
    
    2005Preferred shares:Balances at beginning of year
    
    $
    57
    
    
    $
    Balances at end of period
    
    
    57
    
    
    
    Common shares:Balances at beginning of year
    
    
    590
    
    
    
    430Exercise of share options
    
    
    1
    
    
    
    2Issuance of restricted shares
    
    
    1
    
    
    
    Balances at end of period
    
    
    592
    
    
    
    432Additional paid-in-capital:Balances at beginning of year
    
    
    1,527,316
    
    
    
    911,851Transfer of unearned common share grant compensation
    
    
    (2,467
    )
    
    
    Exercise of common share options
    
    
    1,435
    
    
    
    3,757Share based compensation
    
    
    1,736
    
    
    
    1,295Balances at end of period
    
    
    1,528,020
    
    
    
    916,903Unearned common share grant compensation:Balances at beginning of year
    
    
    (2,467
    )
    
    
    Transfer of unearned common share grant compensation
    
    
    2,467
    
    
    
    Balances at end of period
    
    
    
    
    
    
    Accumulated other comprehensive income (loss):Balances at beginning of year
    
    
    (40,718
    )
    
    
    12,252Net change in unrealized gains and losses on
available-for-sale securities, net of deferred tax
    
    
    (35,315
    )
    
    
    (34,629
    )Net change in cumulative translation adjustments,
net of deferred tax
    
    
    4
    
    
    
    9Balances at end of period
    
    
    (76,029
    )
    
    
    (22,368
    )Retained earnings:Balances at beginning of year
    
    
    55,471
    
    
    
    208,470Net income
    
    
    77,036
    
    
    
    73,088Preferred share dividends
    
    
    (2,576
    )
    
    
    Common share dividends
    
    
    (4,733
    )
    
    
    (3,449
    )Balances at end of period
    
    
    125,198
    
    
    
    278,109Total shareholders equity
    
    $
    1,577,838
    
    
    $
    1,173,076
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 
  2006
    
    
    2005Operating Activities:Net income
    
    $
    77,036
    
    
    $
    73,088Adjustments to reconcile net income to cash used in operations:Depreciation and amortization
    
    
    3,803
    
    
    
    4,931Net realized gains on investments
    
    
    (65
    )
    
    
    (372
    )Net foreign currency exchange (gains) losses
    
    
    (275
    )
    
    
    1,798Share based compensation
    
    
    1,736
    
    
    
    1,295Deferred income tax expense
    
    
    87
    
    
    
    (593
    )Trading securities activities
    
    
    717
    
    
    
    4,527Changes in assets and liabilities:Increase in accrued investment income
    
    
    (351
    )
    
    
    (3,464
    )(Increase) decrease in reinsurance premiums receivable
    
    
    50,020
    
    
    
    (58,235
    )(Increase) decrease in funds held by ceding companies
    
    
    25,088
    
    
    
    (24,743
    )(Increase) decrease in deferred acquisition costs
    
    
    25,101
    
    
    
    (13,517
    )Increase in net unpaid losses and loss adjustment expenses
    
    
    53,256
    
    
    
    119,840Increase (decrease) in net unearned premiums
    
    
    (50,546
    )
    
    
    82,486Decrease in reinsurance deposit liabilities
    
    
    (7
    )
    
    
    (14,484
    )Increase in ceded premiums payable
    
    
    15,562
    
    
    
    16,361Decrease in commissions payable
    
    
    (43,828
    )
    
    
    (9,701
    )Increase in funds withheld
    
    
    
    
    
    
    1,082Decrease in income tax recoverable
    
    
    13,922
    
    
    
    10,538Net changes in other assets and liabilities
    
    
    15,712
    
    
    
    (11,680
    )Other net
    
    
    (12
    )
    
    
    491Net cash provided by operating activities
    
    
    186,956
    
    
    
    179,648Investing Activities:Proceeds from sale of available-for-sale fixed maturity
securities
    
    
    179,119
    
    
    
    72,716Proceeds from maturity or paydown of available-for-sale fixed
maturity securities
    
    
    32,535
    
    
    
    21,155Acquisition of available-for-sale fixed maturity securities
    
    
    (572,201
    )
    
    
    (183,709
    )Increase in short-term investments
    
    
    (71,816
    )
    
    
    Net cash used in investing activities
    
    
    (432,363
    )
    
    
    (89,838
    )Financing Activities:Dividends paid to preferred shareholders
    
    
    (2,012
    )
    
    
    Dividends paid to common shareholders
    
    
    (4,733
    )
    
    
    (3,449
    )Proceeds from exercise of share options
    
    
    1,436
    
    
    
    3,759Net cash provided by (used in) financing activities
    
    
    (5,309
    )
    
    
    310Net increase (decrease) in cash and cash equivalents
    
    
    (250,716
    )
    
    
    90,120Cash and cash equivalents at beginning of year
    
    
    820,746
    
    
    
    209,897Cash and cash equivalents at end of period
    
    $
    570,030
    
    
    $
    300,017Supplemental disclosures of cash flow information:Income taxes paid (recovered)
    
    $
    (8,699
    )
    
    $
    10,200Interest paid
    
    $
    
    
    
    $
    1,840
 
 -4-




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##### Table of Contents



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




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 AsReported
    
    Pro FormaShare-based compensation expense
    
    $
    1,295
    
    
    $
    2,521Net income
    
    
    73,088
    
    
    
    71,862Basic earnings per share
    
    
    1.69
    
    
    
    1.66Diluted earnings per share
    
    $
    1.49
    
    
    $
    1.46
 Reclassifications
  (2) Investments
  2006
    
    
    2005Fixed maturities
    
    $
    (39,353
    )
    
    $
    (41,158
    )Less  deferred taxes
    
    
    4,038
    
    
    
    6,529Net change in unrealized investment gains and losses
    
    $
    (35,315
    )
    
    $
    (34,629
    )
   UnrealizedFair Value
    
    
    LossLess than twelve months:U.S. Government and U.S. Government agencies
    
    $
    180,461
    
    
    $
    3,286Corporate bonds
    
    
    951,215
    
    
    
    28,514Mortgage-backed and asset-backed securities
    
    
    1,032,480
    
    
    
    29,807Municipal bonds
    
    
    122,219
    
    
    
    2,658Foreign governments and states
    
    
    13,189
    
    
    
    496Total
    
    $
    2,299,564
    
    
    $
    64,761
 -6-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 UnrealizedFair Value
    
    
    LossTwelve months or more:Corporate bonds
    
    $
    448,833
    
    
    $
    14,404Mortgage-backed and asset-backed securities
    
    
    100,364
    
    
    
    5,025Municipal bonds
    
    
    76,596
    
    
    
    1,781Foreign governments and states
    
    
    27,158
    
    
    
    863Preferred stocks
    
    
    8,169
    
    
    
    566Total
    
    $
    661,120
    
    
    $
    22,639Total of securities with unrealized losses:U.S. Government and U.S. Government agencies
    
    $
    180,461
    
    
    $
    3,286Corporate bonds
    
    
    1,400,048
    
    
    
    42,918Mortgage-backed and asset-backed securities
    
    
    1,132,844
    
    
    
    34,832Municipal bonds
    
    
    198,815
    
    
    
    4,439Foreign governments and states
    
    
    40,347
    
    
    
    1,359Preferred stocks
    
    
    8,169
    
    
    
    566Total
    
    $
    2,960,684
    
    
    $
    87,400
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 (3) Earnings Per Share
  WeightedAverageNet
    
    
    Shares
    
    
    EarningsIncome
    
    
    Outstanding
    
    
    Per ShareThree months ended March 31, 2006:Basic earnings per share:Net income available to
common shareholders
    
    $
    74,460
    
    
    
    59,097
    
    
    $
    1.26Effect of dilutive securities:Common share options,
restricted common shares and
common share units
    
    
    
    
    
    
    1,810Conversion of preferred
shares
    
    
    
    
    
    
    5,690Preferred share dividends
    
    
    2,576
    
    
    
    Adjusted net
income for diluted earnings per share
    
    $
    77,036
    
    
    
    66,597
    
    
    $
    1.16Three months ended March 31, 2005:Basic earnings per shareNet income available to
common shareholders
    
    $
    73,088
    
    
    
    43,163
    
    
    $
    1.69Effect of dilutive securities:Common share options and
restricted common share
units
    
    
    
    
    
    
    1,860Conversion of Equity
Security Units
    
    
    
    
    
    
    5,009Interest expense related to
Equity Share Units, net of
income tax benefit
    
    
    1,423
    
    
    
    Adjusted net
income for diluted earnings per share
    
    $
    74,511
    
    
    
    50,032
    
    
    $
    1.49
 (4) Operating Segment Information
  -8-




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Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
   Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended March 31, 2006:Net premiums written
    
    $
    165,264
    
    
    
    182,350
    
    
    
    (54,336
    )
    
    $
    293,278Net premiums earned
    
    
    131,544
    
    
    
    173,668
    
    
    
    39,089
    
    
    
    344,301Losses and LAE
    
    
    59,828
    
    
    
    116,565
    
    
    
    30,381
    
    
    
    206,774Acquisition expenses
    
    
    19,649
    
    
    
    41,354
    
    
    
    8,236
    
    
    
    69,239Other underwriting expenses
    
    
    10,028
    
    
    
    6,335
    
    
    
    925
    
    
    
    17,288Segment underwriting income (loss)
    
    $
    42,039
    
    
    
    9,414
    
    
    
    (453
    )
    
    
    51,000Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    43,580Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,317
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    (5,700
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,450
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    82,388Ratios:Losses and LAE
    
    
    45.5
    %
    
    
    67.1
    %
    
    
    77.7
    %
    
    
    60.1
    %Acquisition expense
    
    
    14.9
    %
    
    
    23.8
    %
    
    
    21.1
    %
    
    
    20.1
    %Other underwriting expense
    
    
    7.6
    %
    
    
    3.6
    %
    
    
    2.4
    %
    
    
    5.0
    %Combined
    
    
    68.0
    %
    
    
    94.5
    %
    
    
    101.2
    %
    
    
    85.2
    %
 -9-




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Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended March 31, 2005:Net premiums written
    
    $
    185,049
    
    
    
    215,669
    
    
    
    93,081
    
    
    $
    493,799Net premiums earned
    
    
    128,197
    
    
    
    184,768
    
    
    
    98,075
    
    
    
    411,040Losses and LAE
    
    
    60,040
    
    
    
    118,438
    
    
    
    59,220
    
    
    
    237,698Acquisition expenses
    
    
    21,989
    
    
    
    45,202
    
    
    
    26,058
    
    
    
    93,249Other underwriting expenses
    
    
    7,723
    
    
    
    7,313
    
    
    
    1,571
    
    
    
    16,607Segment underwriting income
    
    $
    38,445
    
    
    
    13,815
    
    
    
    11,226
    
    
    
    63,486Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    27,277Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,798
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (356
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    (3,401
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,173
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    83,035Ratios:Losses and LAE
    
    
    46.8
    %
    
    
    64.1
    %
    
    
    60.4
    %
    
    
    57.8
    %Acquisition expense
    
    
    17.2
    %
    
    
    24.5
    %
    
    
    26.6
    %
    
    
    22.7
    %Other underwriting expense
    
    
    6.0
    %
    
    
    4.0
    %
    
    
    1.6
    %
    
    
    4.0
    %Combined
    
    
    70.0
    %
    
    
    92.6
    %
    
    
    88.6
    %
    
    
    84.5
    %
 (5) Income Taxes
   2006
    
    
    2005Expected income tax expense at 35%
    
    $
    28,836
    
    
    $
    29,062Effect of foreign income subject to tax
at rates other than 35%
    
    
    (23,226
    )
    
    
    (18,623
    )Tax exempt investment income
    
    
    (553
    )
    
    
    (526
    )Other, net
    
    
    295
    
    
    
    34Income tax expense
    
    $
    5,352
    
    
    $
    9,947
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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 (6) Condensed Consolidating Financial Information
    -11-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Non-Condensed Consolidating Balance Sheet
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingMarch 31, 2006
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    13,074
    
    
    
    3,302,025
    
    
    
    
    
    
    $
    3,315,099Investment in subsidiaries
    
    
    1,455,307
    
    
    
    453,398
    
    
    
    439,328
    
    
    
    (2,348,033
    )
    
    
    Cash and cash equivalents
    
    
    121,333
    
    
    
    9,881
    
    
    
    438,816
    
    
    
    
    
    
    
    570,030Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    2,900,793
    
    
    
    (1,918,736
    )
    
    
    982,057Income tax recoverable
    
    
    
    
    
    
    1,920
    
    
    
    8,680
    
    
    
    
    
    
    
    10,600Other assets
    
    
    4,497
    
    
    
    4,049
    
    
    
    169,885
    
    
    
    (100,000
    )
    
    
    78,431Total assets
    
    $
    1,581,137
    
    
    
    482,322
    
    
    
    7,259,527
    
    
    
    (4,366,769
    )
    
    $
    4,956,217LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Reinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    4,947,661
    
    
    
    (1,914,339
    )
    
    $
    3,033,322Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    3,299
    
    
    
    7,394
    
    
    
    45,921
    
    
    
    (4,397
    )
    
    
    52,217Total liabilities
    
    
    3,299
    
    
    
    300,234
    
    
    
    4,993,582
    
    
    
    (1,918,736
    )
    
    
    3,378,379Shareholders Equity:Preferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    592
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    592Additional paid-in capital
    
    
    1,528,020
    
    
    
    192,036
    
    
    
    2,150,834
    
    
    
    (2,342,870
    )
    
    
    1,528,020Accumulated other comprehensive loss
    
    
    (76,029
    )
    
    
    (16,181
    )
    
    
    (95,956
    )
    
    
    112,137
    
    
    
    (76,029
    )Retained earnings
    
    
    125,198
    
    
    
    6,233
    
    
    
    204,817
    
    
    
    (211,050
    )
    
    
    125,198Total shareholders equity
    
    
    1,577,838
    
    
    
    182,088
    
    
    
    2,265,945
    
    
    
    (2,448,033
    )
    
    
    1,577,838Total liabilities and shareholders
equity
    
    $
    1,581,137
    
    
    
    482,322
    
    
    
    7,259,527
    
    
    
    (4,366,769
    )
    
    $
    4,956,217
 -12-




---



##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Non-Condensed Consolidating Balance Sheet
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingDecember 31, 2005
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedASSETSTotal investments
    
    $
    
    
    
    
    12,448
    
    
    
    2,997,234
    
    
    
    
    
    
    $
    3,009,682Investment in subsidiaries
    
    
    1,410,794
    
    
    
    448,839
    
    
    
    436,368
    
    
    
    (2,296,001
    )
    
    
    Cash and cash equivalents
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Reinsurance assets
    
    
    
    
    
    
    
    
    
    
    2,969,880
    
    
    
    (1,903,893
    )
    
    
    1,065,987Income tax recoverable
    
    
    
    
    
    
    5,874
    
    
    
    18,648
    
    
    
    
    
    
    
    24,522Other assets
    
    
    2,963
    
    
    
    4,086
    
    
    
    326,389
    
    
    
    (100,000
    )
    
    
    233,438Total assets
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    7,434,293
    
    
    
    (4,299,894
    )
    
    $
    5,154,375LIABILITIES AND SHAREHOLDERS
EQUITYLiabilities:Reinsurance liabilities
    
    $
    
    
    
    
    
    
    
    
    4,868,470
    
    
    
    (1,827,216
    )
    
    $
    3,041,254Debt obligations
    
    
    
    
    
    
    292,840
    
    
    
    
    
    
    
    
    
    
    
    292,840Other liabilities
    
    
    3,470
    
    
    
    2,243
    
    
    
    350,996
    
    
    
    (76,677
    )
    
    
    280,032Total liabilities
    
    
    3,470
    
    
    
    295,083
    
    
    
    5,219,466
    
    
    
    (1,903,893
    )
    
    
    3,614,126Shareholders Equity:Preferred shares
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57Common shares
    
    
    590
    
    
    
    
    
    
    
    6,250
    
    
    
    (6,250
    )
    
    
    590Unearned share grant compensation
    
    
    (2,467
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,467
    )Additional paid-in capital
    
    
    1,527,316
    
    
    
    192,036
    
    
    
    2,150,834
    
    
    
    (2,342,870
    )
    
    
    1,527,316Accumulated other comprehensive loss
    
    
    (40,718
    )
    
    
    (10,199
    )
    
    
    (52,840
    )
    
    
    63,039
    
    
    
    (40,718
    )Retained earnings
    
    
    55,471
    
    
    
    (663
    )
    
    
    110,583
    
    
    
    (109,920
    )
    
    
    55,471Total
shareholders equity
    
    
    1,540,249
    
    
    
    181,174
    
    
    
    2,214,827
    
    
    
    (2,396,001
    )
    
    
    1,540,249Total liabilities and
shareholders equity
    
    $
    1,543,719
    
    
    
    476,257
    
    
    
    7,434,293
    
    
    
    (4,299,894
    )
    
    $
    5,154,375
 -13-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Consolidating Statement of Income
    
    
    
    
    
    
    
    
    
    Non-For the Three Months Ended
    
    Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingMarch 31, 2006
    
    Holdings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    344,301
    
    
    
    
    
    
    $
    344,301Net investment income
    
    
    1,434
    
    
    
    220
    
    
    
    41,861
    
    
    
    
    
    
    
    43,515Net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    65Other income (expense), net
    
    
    1,100
    
    
    
    
    
    
    
    (2,417
    )
    
    
    
    
    
    
    (1,317
    )Total revenue
    
    
    2,534
    
    
    
    220
    
    
    
    383,810
    
    
    
    
    
    
    
    386,564Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    206,774
    
    
    
    
    
    
    
    206,774Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    70,682
    
    
    
    (1,443
    )
    
    
    69,239Operating expenses
    
    
    5,321
    
    
    
    258
    
    
    
    15,966
    
    
    
    1,443
    
    
    
    22,988Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    (275
    )
    
    
    
    
    
    
    (275
    )Interest expense
    
    
    
    
    
    
    5,450
    
    
    
    
    
    
    
    
    
    
    
    5,450Total expenses
    
    
    5,321
    
    
    
    5,708
    
    
    
    293,147
    
    
    
    
    
    
    
    304,176Income (loss) before income tax
expense (benefit)
    
    
    (2,787
    )
    
    
    (5,488
    )
    
    
    90,663
    
    
    
    
    
    
    
    82,388Income tax expense (benefit)
    
    
    
    
    
    
    (1,920
    )
    
    
    7,272
    
    
    
    
    
    
    
    5,352Net income (loss) before equity
in earnings of subsidiaries
    
    
    (2,787
    )
    
    
    (3,568
    )
    
    
    83,391
    
    
    
    
    
    
    
    77,036Equity in income of subsidiaries
    
    
    79,823
    
    
    
    10,464
    
    
    
    10,837
    
    
    
    (101,124
    )
    
    
    Net income
    
    
    77,036
    
    
    
    6,896
    
    
    
    94,228
    
    
    
    (101,124
    )
    
    
    77,036Preferred dividends
    
    
    2,576
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,576Net income
available to common shareholders
    
    $
    74,460
    
    
    
    6,896
    
    
    
    94,228
    
    
    
    (101,124
    )
    
    $
    74,460
 -14-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Consolidating Statement of Income
For the Three Months EndedMarch 31, 2005
    
    
    
    
    
    
    
    
    
    Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedRevenue:Net premiums earned
    
    $
    
    
    
    
    
    
    
    
    411,040
    
    
    
    
    
    
    $
    411,040Net investment income
    
    
    25
    
    
    
    77
    
    
    
    26,803
    
    
    
    
    
    
    
    26,905Net realized gains on investments
    
    
    
    
    
    
    1
    
    
    
    371
    
    
    
    
    
    
    
    372Other income (expense), net
    
    
    
    
    
    
    
    
    
    
    (356
    )
    
    
    
    
    

    ( 356
    )Total revenue
    
    
    25
    
    
    
    78
    
    
    
    437,858
    
    
    

    



    
    437,961Expenses:Losses and loss adjustment expenses
    
    
    
    
    
    
    
    
    
    
    237,698
    
    
    
    
    
    
    
    237,698Acquisition expenses
    
    
    
    
    
    
    
    
    
    
    94,781
    
    
    
    (1,532
    )
    
    
    93,249Operating expenses
    
    
    3,241
    
    
    
    78
    
    
    
    15,157
    
    
    
    1,532
    
    
    
    20,008Net foreign currency exchange losses
    
    
    1
    
    
    
    
    
    
    
    1,797
    
    
    
    
    
    
    
    1,798Interest expense
    
    
    31
    
    
    
    2,142
    
    
    
    
    
    
    
    
    
    
    
    2,173Total expenses
    
    
    3,273
    
    
    
    2,220
    
    
    
    349,433
    
    
    
    
    
    
    
    354,926Income (loss) before income tax expense (benefit)
    
    
    (3,248
    )
    
    
    (2,142
    )
    
    
    88,425
    
    
    
    
    
    
    
    83,035Income tax expense (benefit)
    
    
    
    
    
    
    (750
    )
    
    
    10,697
    
    
    
    
    
    
    
    9,947Net income (loss) before equity in earnings of subsidiaries
    
    
    (3,248
    )
    
    
    (1,392
    )
    
    
    77,728
    
    
    
    
    
    
    
    73,088Equity in earnings of subsidiaries
    
    
    76,336
    
    
    
    17,953
    
    
    
    19,889
    
    
    
    (114,178
    )
    
    
    Net income
    
    $
    73,088
    
    
    
    16,561
    
    
    
    97,617
    
    
    
    (114,178
    )
    
    $
    73,088
 -15-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Condensed Consolidating Statement of Cash Flows
For the Three Months EndedMarch 31, 2006
    
    
    
    
    
    
    
    
    
    Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    $
    (3,320
    )
    
    
    5,621
    
    
    
    184,655
    
    
    
    
    
    
    $
    186,956Investing Activities:Proceeds from sale of available-for-sale fixed maturities
    
    
    
    
    
    
    
    
    
    
    179,119
    
    
    
    
    
    
    
    179,119Proceeds from maturity or paydown of available-for-sale fixed maturities
    
    
    
    
    
    
    302
    
    
    
    32,233
    
    
    
    
    
    
    
    32,535Acquisition of available-for-sale fixed maturities
    
    
    
    
    
    
    (498
    )
    
    
    (571,703
    )
    
    
    
    
    
    
    (572,201
    )Increase in short-term investments
    
    
    
    
    
    
    (554
    )
    
    
    (71,262
    )
    
    
    
    
    
    
    (71,816
    )Net cash used in investing activities
    
    
    
    
    
    
    ( 750
    )
    
    
    (431,613
    )
    
    
    
    
    
    
    (432,363
    )Financing Activities:Dividends paid to preferred shareholders
    
    
    (2,012
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,012
    )Dividends paid to common shareholders
    
    
    (4,733
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,733
    )Proceeds from exercise of share options
    
    
    1,436
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,436Net cash used in financing activities
    
    
    (5,309
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,309
    )Net increase (decrease) in cash and cash equivalents
    
    
    (8,629
    )
    
    
    4,871
    
    
    
    (246,958
    )
    
    
    
    
    
    
    (250,716
    )Cash and cash equivalents at beginning of period
    
    
    129,962
    
    
    
    5,010
    
    
    
    685,774
    
    
    
    
    
    
    
    820,746Cash and cash equivalents at end of period
    
    $
    121,333
    
    
    
    9,881
    
    
    
    438,816
    
    
    
    
    
    
    $
    570,030
 -16-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 Condensed Consolidating Statement of Cash Flows
For the Three Months EndedMarch 31, 2005
    
    
    
    
    
    
    
    
    
    Non-Platinum
    
    
    Platinum
    
    
    guarantor
    
    
    ConsolidatingHoldings
    
    
    Finance
    
    
    Subsidiaries
    
    
    Adjustments
    
    
    ConsolidatedNet cash provided by (used in)
operating activities
    
    $
    (3,084
    )
    
    
    (1,834
    )
    
    
    184,566
    
    
    
    
    
    
    $
    179,648Investing Activities:Proceeds from sale of
available-for-sale fixed maturities
    
    
    
    
    
    
    
    
    
    
    72,716
    
    
    
    
    
    
    
    72,716Proceeds from maturity or paydown of
available-for-sale fixed maturities
    
    
    
    
    
    
    118
    
    
    
    21,037
    
    
    
    
    
    
    
    21,155Acquisition of available-for-sale fixed
maturities
    
    
    
    
    
    
    

    
    
    
    (183,709
    )
    
    
    
    
    
    
    (183,709
    )Dividends from subsidiaries
    
    
    7,000
    
    
    
    
    
    
    
    
    
    
    
    (7,000
    )
    
    
    Net cash provided by (used in) investing
activities
    
    
    7,000
    
    
    
    118
    
    
    
    (89,956
    )
    
    
    (7,000
    )
    
    
    (89,838
    )Financing Activities:Dividends paid to shareholders
    
    
    (3,449
    )
    
    
    
    
    
    
    (7,000
    )
    
    
    7,000
    
    
    
    (3,449
    )Proceeds from exercise of share options
    
    
    3,759
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,759Net cash provided by (used in) financing
activities
    
    
    310
    
    
    
    
    
    
    
    (7,000
    )
    
    
    7,000
    
    
    
    310Net increase (decrease) in cash and cash
equivalents
    
    
    4,226
    
    
    
    (1,716
    )
    
    
    87,610
    
    
    
    
    
    
    
    90,120Cash and cash equivalents at beginning of
period
    
    
    1,945
    
    
    
    8,204
    
    
    
    199,748
    
    
    
    
    
    
    
    209,897Cash and cash equivalents at end of period
    
    $
    6,171
    
    
    
    6,488
    
    
    
    287,358
    
    
    
    
    
    
    $
    300,017
 (7) Share Based Compensation
   Dividend yield
    
    
    1.06
    %Risk free interest rate
    
    
    4.57
    %Expected option life
    
    5.3 years
  -17-




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##### Table of Contents



Platinum Underwriters Holdings, Ltd. and Subsidiaries
 
 WeightedAverageExerciseOptions
    
    
    PriceOutstanding  beginning of period
    
    
    3,918
    
    
    $
    23.93Granted
    
    
    238
    
    
    
    30.54Exercised
    
    
    73
    
    
    
    22.56Forfeited
    
    
    25
    
    
    
    27.67Outstanding  end of period
    
    
    4,058
    
    
    $
    24.32Options exercisable at end of period
    
    
    2,893
    
    
    $
    23.18
  Weighted
    
    
    
    
    
    ExercisableAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageRange of
    
    Number
    
    Contractual
    
    Exercise
    
    Number
    
    Exerciseexercise prices
    
    Outstanding
    
    Life
    
    Price
    
    Outstanding
    
    Price$22.50
    
    
    2,813
    
    
    
    6.59
    
    
    $
    22.50
    
    
    
    2,485
    
    
    $
    22.5022.51 - 25.00
    
    
    54
    
    
    
    6.91
    
    
    
    22.64
    
    
    
    42
    
    
    
    22.6025.01 - 30.00
    
    
    660
    
    
    
    6.85
    
    
    
    26.92
    
    
    
    252
    
    
    
    26.23$30.01 - $35.00
    
    
    531
    
    
    
    9.00
    
    
    $
    30.87
    
    
    
    114
    
    
    $
    31.33
 -18-




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005
 Business Overview
      -19-




---



##### Table of Contents



Results of Operations
  2006
    
    2005
    
    IncreaseNet income
    
    $
    77,036
    
    
    
    73,088
    
    
    $
    3,948
   2006
    
    2005
    
    DecreaseNet premiums written
    
    $
    293,278
    
    
    
    493,799
    
    
    $
    (200,521
    )Net premiums earned
    
    $
    344,301
    
    
    
    411,040
    
    
    $
    (66,739
    )
   -20-




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Increase2006
    
    2005
    
    (decrease)Losses and LAE
    
    $
    206,774
    
    
    
    237,698
    
    
    $
    (30,924
    )Loss and LAE ratios
    
    
    60.1
    %
    
    
    57.8
    %
    
    2.3 points
   2006
    
    2005
    
    DecreaseAcquisition expenses
    
    $
    69,239
    
    
    
    93,249
    
    
    $
    (24,010
    )Acquisition expense ratios
    
    
    20.1
    %
    
    
    22.7
    %
    
    (2.6) points
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2006
    
    2005
    
    DecreaseIncome tax expense
    
    $
    5,352
    
    
    
    9,947
    
    
    $
    (4,595
    )Effective income tax rates
    
    
    6.5
    %
    
    
    12.0
    %
    
    (5.5) points
  Segment Information
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Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalThree months ended March 31, 2006:Net premiums written
    
    $
    165,264
    
    
    
    182,350
    
    
    
    (54,336
    )
    
    $
    293,278Net premiums earned
    
    
    131,544
    
    
    
    173,668
    
    
    
    39,089
    
    
    
    344,301Losses and LAE
    
    
    59,828
    
    
    
    116,565
    
    
    
    30,381
    
    
    
    206,774Acquisition expenses
    
    
    19,649
    
    
    
    41,354
    
    
    
    8,236
    
    
    
    69,239Other underwriting expenses
    
    
    10,028
    
    
    
    6,335
    
    
    
    925
    
    
    
    17,288Segment underwriting income (loss)
    
    $
    42,039
    
    
    
    9,414
    
    
    
    ( 453
    )
    
    
    51,000Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,580Net foreign currency exchange gains
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,317
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,700
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,450
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    82,388Ratios:Losses and LAE
    
    
    45.5
    %
    
    
    67.1
    %
    
    
    77.7
    %
    
    
    60.1
    %Acquisition expense
    
    
    14.9
    %
    
    
    23.8
    %
    
    
    21.1
    %
    
    
    20.1
    %Other underwriting expense
    
    
    7.6
    %
    
    
    3.6
    %
    
    
    2.4
    %
    
    
    5.0
    %Combined
    
    
    68.0
    %
    
    
    94.5
    %
    
    
    101.2
    %
    
    
    85.2
    %Three months ended March 31, 2005:Net premiums written
    
    $
    185,049
    
    
    
    215,669
    
    
    
    93,081
    
    
    $
    493,799Net premiums earned
    
    
    128,197
    
    
    
    184,768
    
    
    
    98,075
    
    
    
    411,040Losses and LAE
    
    
    60,040
    
    
    
    118,438
    
    
    
    59,220
    
    
    
    237,698Acquisition expenses
    
    
    21,989
    
    
    
    45,202
    
    
    
    26,058
    
    
    
    93,249Other underwriting expenses
    
    
    7,723
    
    
    
    7,313
    
    
    
    1,571
    
    
    
    16,607Segment underwriting income
    
    $
    38,445
    
    
    
    13,815
    
    
    
    11,226
    
    
    
    63,486Net investment income and net realized gains on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,277Net foreign currency exchange losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,798
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (356
    )Corporate expenses not allocated to segments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,401
    )Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,173
    )Income before income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    83,035Ratios:Losses and LAE
    
    
    46.8
    %
    
    
    64.1
    %
    
    
    60.4
    %
    
    
    57.8
    %Acquisition expense
    
    
    17.2
    %
    
    
    24.5
    %
    
    
    26.6
    %
    
    
    22.7
    %Other underwriting expense
    
    
    6.0
    %
    
    
    4.0
    %
    
    
    1.6
    %
    
    
    4.0
    %Combined
    
    
    70.0
    %
    
    
    92.6
    %
    
    
    88.6
    %
    
    
    84.5
    %
 Property and Marine
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Increase2006
    
    2005
    
    (decrease)Net premiums written
    
    $
    165,264
    
    
    
    185,049
    
    
    $
    (19,785
    )Net premiums earned
    
    $
    131,544
    
    
    
    128,197
    
    
    $
    3,347
   2006
    
    2005
    
    DecreaseLosses and LAE
    
    $
    59,828
    
    
    
    60,040
    
    
    $
    (212
    )Loss and LAE ratios
    
    
    45.5
    %
    
    
    46.8
    %
    
    (1.3) points
   2006
    
    2005
    
    DecreaseAcquisition expenses
    
    $
    19,649
    
    
    
    21,989
    
    
    $
    (2,340
    )Acquisition expense ratios
    
    
    14.9
    %
    
    
    17.2
    %
    
    (2.3) points
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Casualty
   2006
    
    2005
    
    DecreaseNet premiums written
    
    $
    182,350
    
    
    
    215,669
    
    
    $
    (33,319
    )Net premiums earned
    
    $
    173,668
    
    
    
    184,768
    
    
    $
    (11,100
    )
   Increase2006
    
    2005
    
    (decrease)Losses and LAE
    
    $
    116,565
    
    
    
    118,438
    
    
    $
    (1,873
    )Loss and LAE ratios
    
    
    67.1
    %
    
    
    64.1
    %
    
    3.0 points
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2006
    
    2005
    
    DecreaseAcquisition expenses
    
    $
    41,354
    
    
    
    45,202
    
    
    $
    (3,848
    )Acquisition expense ratios
    
    
    23.8
    %
    
    
    24.5
    %
    
    (0.7) points
   Finite Risk
   2006
    
    2005
    
    DecreaseNet premiums written
    
    $
    (54,336
    )
    
    
    93,081
    
    
    $
    (147,417
    )Net premiums earned
    
    $
    39,089
    
    
    
    98,075
    
    
    $
    (58,986
    )
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Increase2006
    
    
    2005
    
    
    (decrease)Losses and LAE
    
    $
    30,381
    
    
    
    59,220
    
    
    $
    (28,839
    )Loss and LAE ratios
    
    
    77.7
    %
    
    
    60.4
    %
    
    17.3 pointsAcquisition expenses
    
    $
    8,236
    
    
    
    26,058
    
    
    $
    (17,822
    )Acquisition expense ratios
    
    
    21.1
    %
    
    
    26.6
    %
    
    (5.5) pointsLosses, LAE and acquisition expenses
    
    $
    38,617
    
    
    
    85,278
    
    
    $
    (46,661
    )Loss, LAE and acquisition expense
ratios
    
    
    98.8
    %
    
    
    87.0
    %
    
    11.8 points
   Financial Condition, Liquidity and Capital Resources
 Financial Condition
  March 31,
    
    
    December 31,
    
    
    Increase2006
    
    
    2005
    
    
    (decrease)Cash and cash equivalents
    
    $
    570,030
    
    
    
    820,746
    
    
    $
    (250,716
    )Fixed maturity securities
    
    
    3,221,321
    
    
    
    2,987,703
    
    
    
    233,618Preferred stocks
    
    
    8,169
    
    
    
    8,186
    
    
    
    (17
    )Short-term investments
    
    
    80,609
    
    
    
    8,793
    
    
    
    71,816Total
    
    $
    3,880,129
    
    
    
    3,825,428
    
    
    $
    54,701
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Sources of Liquidity
      -28-




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Liquidity Requirements
     Economic Conditions
  -29-




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Current Outlook
        -30-




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Critical Accounting Policies, Estimates and Judgments
  Premiums
   -31-




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-32-




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Unpaid Losses and LAE
      Propertyand Marine
    
    
    Casualty
    
    
    Finite Risk
    
    
    TotalCase reserves
    
    $
    425,284
    
    
    
    188,709
    
    
    
    81,378
    
    
    $
    695,371IBNR
    
    
    407,842
    
    
    
    994,019
    
    
    
    274,684
    
    
    
    1,676,545Total unpaid losses and LAE
    
    $
    833,126
    
    
    
    1,182,728
    
    
    
    356,062
    
    
    $
    2,371,916
  -33-




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-34-




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-35-




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Reinsurance
  Investments
   Income Taxes
   -36-




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Share-Based Compensation
   
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market and Credit Risk
    -37-




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Interest Rate Risk
  Interest Rate Shift in Basis Points- 100 bp
    
    - 50 bp
    
    Current
    
    + 50 bp
    
    + 100 bpTotal market value
    
    $
    3,327,750
    
    
    
    3,275,149
    
    
    
    3,221,321
    
    
    
    3,166,980
    
    
    $
    3,112,748Percent change in market value
    
    
    3.3
    %
    
    
    1.7
    %
    
    
    
    
    
    
    (1.7
    %)
    
    
    (3.4
    %)Resulting unrealized
appreciation / (depreciation)
    
    $
    17,852
    
    
    
    (34,749
    )
    
    
    (88,577
    )
    
    
    (142,918
    )
    
    $
    (197,150
    )
 Foreign Currency Risk
  Sources of Fair Value
  CarryingAmount
    
    Fair ValueFinancial assets:Fixed maturity securities
    
    $
    3,221,321
    
    
    $
    3,221,321Preferred stocks
    
    
    8,169
    
    
    
    8,169Other invested asset
    
    
    5,000
    
    
    
    5,000Short-term investments
    
    
    80,609
    
    
    
    80,609Financial liabilities:Debt obligations
    
    $
    292,840
    
    
    $
    290,725
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Item 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  FORWARD-LOOKING STATEMENTS
    (1)
    
    conducting operations in a competitive environment;(2)
    
    our ability to maintain our A.M. Best Company, Inc. rating;(3)
    
    significant weather-related or other natural or man-made disasters over which the
Company has no control;(4)
    
    the effectiveness of our loss limitation methods and pricing models;
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(5)
    
    the adequacy of the Companys liability for unpaid losses and loss adjustment
expenses, including, but not limited to, losses from Hurricanes Katrina, Rita and Wilma
and the possibility that estimates of losses and LAE from Hurricanes Katrina, Rita and
Wilma may prove to be materially different from estimates made to date;(6)
    
    the availability of retrocessional reinsurance on acceptable terms;(7)
    
    our ability to maintain our business relationships with reinsurance brokers;(8)
    
    general political and economic conditions, including the effects of civil unrest,
acts of terrorism, war or a prolonged U.S. or global economic downturn or recession;(9)
    
    the cyclicality of the property and casualty reinsurance business;(10)
    
    market volatility and interest rate and currency exchange rate fluctuation;(11)
    
    tax, regulatory or legal restrictions or limitations applicable to the Company or the
property and casualty reinsurance business generally; and(12)
    
    changes in the Companys plans, strategies, objectives, expectations or intentions,
which may happen at any time at the Companys discretion.
  
 PART II  OTHER INFORMATION
 
 Item 6. EXHIBITS
 ExhibitNumber
    
    Description3(ii).1
    
    Bye-Laws of Platinum Holdings.10.1
    
    Amended and Restated Quota Share Retrocession Agreement
dated April 11, 2006 between Platinum Bermuda and Platinum
US.31.1
    
    Certification of Michael D. Price, Chief Executive Officer
of Platinum Holdings, pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Exchange Act.31.2
    
    Certification of Joseph F. Fisher, Chief Financial Officer
of Platinum Holdings, pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Exchange Act.32.1
    
    Certification of Michael D. Price, Chief Executive Officer
of Platinum Holdings, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.32.2
    
    Certification of Joseph F. Fisher, Chief Financial Officer
of Platinum Holdings, pursuant to 18 U.S.C. section 1350,
as adopted pursuant to section 906 of the Sarbanes-Oxley
Act of 2002.
 -40-




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SIGNATURES
  Platinum Underwriters Holdings, LtdDate: April 27, 2006
    
    /s/ Michael D. PriceBy: Michael D. PricePresident and Chief Executive Officer(Principal Executive Officer)Date: April 27, 2006
    
    /s/Joseph F. FisherBy: Joseph F. FisherExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)
 -41-